Rising Defaults By Foreign Investors
A report from The Australian. “As a renowned teacher of English in China, Liu Jiabing planned well for his daughter’s education. He chose a good university in Australia, and bought an apartment in Melbourne that is due to settle next month. But now the apartment near Monash University that he bought off the plan for $600,000 is keeping him up at night. ‘At the very first, I was told I only had to pay 20 per cent downpayment,’ Mr Liu, who works at a prestige foreign language school in Nanjing, in China’s east, told The Australian. ‘Then they told me I had to pay 30 per cent, and later 40 per cent, as the banks won’t lend and we have to borrow from small financial organisations. Last night I was told I have to pay 55 per cent for down-payment. But how am I supposed to find so much in cash in such a short time? I still have to pay my daughter’s university fees.’”
“Mr Liu is just one of those Chinese parents who buy homes, usually new apartments, before sending their children to Australian universities. However, these buyers are now struggling to settle their purchases after all the big banks shut down lending to overseas buyers. They may have to pay in cash, resell at a loss or simply lose the 10 per cent deposit.”
“AC Property, a Melboune-based property portal, has four or five calls every day from buyers who seek to resell their off-the-plan apartments after finding it hard to settle. ‘We have been referring our clients to mortgage brokers to see if they can get alternative finance, but we haven’t seen a single case of success so far,’ said AC Property director Esther Yong.”
“Mr Li, who declined to give his first name, is one of those resellers after the Melbourne CBD apartment his parents bought two years ago failed to settle. ‘Everything looked fine when my parents bought it two years ago, and we were told they could get bank finance as overseas buyers,’ said Mr Li, a sales representative in the telco industry. ‘But now they could not get finance and could not settle.’”
“Mr Li’s parents, based in Guangzhou, in China’s south, have already missed the settlement deadline of July 18 for the apartment they bought for $440,000. The developer is now charging them about $150 a day as penalty, which is pushing Mr Li to resell as soon as possible. ‘It’s OK if we can just get back 5 per cent, but we haven’t got any buyer yet,’ he said. ‘If we walk away, the worst thing is that we lose the 10 per cent deposit. But if we find ways to settle it, I am not sure what we can make out of this, as the market is not looking pretty.’”
“Boxing Overseas, a Nanjing-based agent specialising in Australian properties, only sold two properties last month, compared with about 30 in previous months. ‘The market is really bad now, particularly after July,’ said managing director Jim Huang. ‘I have heard some agent having over 40 properties at default, which means the buyers just give up the 10 per cent deposit.’”
The Courier Mail. “Queensland’s two biggest financial bosses on Thursday renewed their concern about the wave of inner-city apartments arriving in Australia. Their comments follow uncertainty about whether a rush of building in recent years will result in a glut. Bank of Queensland CEO Jon Sutton, appearing at a Committee for Economic Development of Australia conference, warned of rising defaults in the inner-city apartment market. He said too much apartment building was occurring across Australia.”
“‘There are two apartment buildings outside my office where there are no lights on at night,’ Mr Sutton said. ‘My understanding is there has been rising defaults by buyers of those apartments, particularly foreign investors.’”
The Chinchilla News. “Australia’s residential building boom will soon start to run out of steam, with construction of new unit blocks set to halve by 2020, a report has predicted. The Building in Australia 2016-2031 report says new home building will begin to slow from its 2015-16 peak in the coming year as a ‘tsunami of supply’ impacts the market.”
“BIS Shrapnel associate director Kim Hawtrey said while a lack of supply and low interest rates had driven building activity to its current peak, the major markets - with the exception of New South Wales - would soon shift into oversupply. ‘Low interest rates have unlocked significant pent-up demand and underpinned the current boom in activity, but with population growth slowing and a strong backlog of dwellings due for completion, new supply will outpace demand,’ Mr Hawtrey said. ‘This will see the national deficiency of dwellings gradually eroded and most key markets will begin to display signs of fatigue.’”
“Despite building activity starting to slow, however, the report’s author said work starting on new homes would still track at a historic high over the next 12 months. The findings also indicated investors who once drove the ‘apartment boom’ would no longer fuel the market due to financial restrictions.”
“‘With investors facing finance restrictions and first home buyers sidelined, it will be up to upgraders/downsizers to help cushion the decline in activity,’ Mr Hawtrey said. ‘But we’re not confident, given that the national stock deficiency will have been largely satisfied by 2017.’”
‘‘At the very first, I was told I only had to pay 20 per cent downpayment,’ Mr Liu. ‘Then they told me I had to pay 30 per cent, and later 40 per cent, as the banks won’t lend and we have to borrow from small financial organisations. Last night I was told I have to pay 55 per cent for down-payment. But how am I supposed to find so much in cash in such a short time?’
I wonder how long this global central bank buying spree of bonds and stocks is gonna last?
Rule No. 1 for climbing out of a hole: STOP DIGGING!
Either that, or eventually dig yourself into such a deep hole that there is no escape.
Markets
New Tool for Central Banks: Buying Corporate Bonds
Bank of England to purchase up to £10 billion in corporate loans
The Bank of England is venturing into the credit markets at the outset of its effort to counter the economic harm caused by the U.K.’s recent vote to leave the European Union.
Photo: Neil Hall/Reuters
By Sam Goldfarb and Christopher Whittall
Aug. 4, 2016 6:37 p.m. ET
Central banks have a new favorite tool for boosting lackluster growth: corporate-debt purchases.
Two months after the European Central Bank started buying corporate bonds, the Bank of England said Thursday that it would adopt a similar strategy. It will buy as much as £10 billion ($13.33 billion) of U.K. corporate debt starting in September as part of a larger package of stimulus measures, including £60 billion of additional government-bond purchases.
The move, investors and analysts say, is likely to drive down borrowing costs even further around the globe for large companies already benefiting from ultralow interest rates.
But the decision again raises concerns about possible side effects of unconventional monetary policies, including excessive risk taking by investors, and faces substantial skepticism from investors who doubt such programs meaningfully address the global economy’s core deficiencies, centering on soft demand for goods and services.
Already this year, negative-interest-rate policies and aggressive bond buying by central banks in Japan and Europe have helped create trillions of dollars of negative-yielding government bonds. That in turn has driven down corporate-bond yields, leading to robust debt issuance among companies in the U.S., if not all developed countries.
In the U.S., the average yield of investment-grade corporate bonds was 2.85% Wednesday, compared with 3.67% at the end of 2015, according to Barclays PLC data. The average spread to Treasury yields also has shrunk, to 1.48 percentage points from 1.72. Companies have issued $519.2 billion of investment-grade corporate bonds this year, just below their pace at this time last year when issuance ultimately reached a record $794.6 billion, according to Dealogic.
“Any time a central bank is going to engage in or expand a bond-buying program, it’s going to lead more capital in search of Treasurys and corporate bonds within the U.S. market because this is the only place within the developed world that offers any yield,” said Scott Kimball, a portfolio manager of the $1 billion BMO TCH Core Plus Bond Fund.
…
Hey p-bear, I didn’t see this from yesterday:
===================
Comment by Professor Bear
2016-08-07 06:00:19
“Prime refers to a FICO score. It does NOT indiciate to whether the loan required full PITI on Day 1.”
Your definition of prime only makes sense in a world where government-sourced and -guaranteed lending is the only game in town. If a loan is privately funded without a government guarantee, the lender has to worry about getting his money back. In this case, other factors besides the FICO score become important.
For instance, no matter how good the borrower’s credit, if he uses a low-rate, low-downpayment loan to overload his household balance sheet with a home he can’t afford the loan is subprime with respect to default risk, regardless of how stellar the FICO score or whether some ad hoc rule-of-thumb rating system grades the borrower as a ‘prime’ lending risk.
I am surprised you don’t get it. This is not rocket science.
====================
The text that I bolded is moot.
The “other factor” other than FICO, obviously, is income. If the buyer has the income to cover the full PITI, then it is a home he *can* afford. Even at a low rate and low-downpayment. And if there’s no blind government guarantee, then the bank will do diligent underwriting to verify this income to make sure they get their money back, just as you say. This is what banks used to do before the FICO score was invented in 1989, before the definition of Prime was changed to rely on the new-fangled FICO, and before (private sector) Fannie and Freddie ran amok.
So, back to your non-guaranteed bank loans. If the buyer does *not* have the income to pay the full PITI, the he will NOT be a subprime risk for default. You know why? Because the bank would have denied the loan in the first place. No loan –> no risk of defaulting on that loan.
A buyer simply can’t “overload his household balance sheet with a home he can’t afford,” like he could in 2006. Now, the buyer has to convince a bank to say Yes to him. And without the gov backing, they aren’t going to depend on the FICO shortcut anymore to determine whether to say Yes.
Incorrect Donk.
The borrower didn’t have the income or FICO to pay the full PITI so he borrowed 97%. No skin in the game.
That is the very definition of subprime.
And there it is again. He didn’t have the income, but according to you, “he borrowed” anyway. My point is that if he didn’t have the income, then he DIDN’T borrow. Because nobody allowed him to borrow. He was prevented from borrowing.
WHY is this so hard for people?
It wasn’t so much not having income per se, but rather not having the income to overpay for the overpriced home that required a 3 percent down payment loan to enable the buyer to make the purchase. And this overpayment due to subprime financing is what enables prices to continue climbing to ever less affordable levels…until the music stops when they run out of rope.
Not rocket science…
Don’t buy stuff you cannot afford.
Don’t buy stuff you cannot afford.
or live fast die young, go big!
I’m having a cold beer watchn the olympics. I saved 20 bucks by not going out. Money I can put towards a casino run.
I don’t have cable TV, since I refuse to see my hard-earned money going to corproate media proganda outlets that I despise. I don’t watch NBC for the same reason.
I’m not sure that I can afford to pay 20 years of rent, from age 65-85, on a retiree income. So I took steps to avoid it.
And paid triple 20 years rent instead.
Why did China lend (or *poof* or print or whatever) trillions of dollars to build ghost cities that no one will live in, when they could have founded world-class Universities for their millions of students? I realize they have universities. But either they aren’t very good or there are not enough of them, if the kids are cheating like f*ck to get into — and through — Aus and US schools.
In fact, the central planners could have “stolen” the American or European systems of education. And for good measure, they could have instituted mandatory English in the primary schools (or at least beam in American satellite TV), just like Europe. Why didn’t they?
Why invest in their own universities when they can game the American higher ed system by stealing SAT tests for their home preparatory courses? Then once the Chinese are in the schools, they can simply pay for their coursework to be done for them back in China, and cruise on up to a STEAM degree here in the States. All using freshly minted Yuans.
Whom you mean by “they?”
It’s the government central planner “theys” who failed to build up their school system. That failure forced individual Chinese family “theys” to send their kids to the US (and send Chinese money right into American coffers). Or do you think it was by central design to send the kids to the US?
Here’s a comment to the last link:
‘Once Wayalla Steelworks closes, than see what’s happen with the Building industries…
It’s only a matter of time and China rubbing their hands..!
Didn’t they they say.. “Australia you will regret”
What happen to our meddling regime, did they wake up to that lassoing of Aussie industries out of Business..???
Someone is pulling the rope tighter and tighter…!!
There is an old saying ” give ‘m enough rope and they hang them self’s.”…
LOL.’
‘Mr Li, who declined to give his first name, is one of those resellers after the Melbourne CBD apartment his parents bought two years ago failed to settle. ‘Everything looked fine when my parents bought it two years ago, and we were told they could get bank finance as overseas buyers,’ said Mr Li, a sales representative in the telco industry. ‘But now they could not get finance and could not settle.’
‘Mr Li’s parents, based in Guangzhou, in China’s south, have already missed the settlement deadline of July 18 for the apartment they bought for $440,000. The developer is now charging them about $150 a day as penalty, which is pushing Mr Li to resell as soon as possible. ‘It’s OK if we can just get back 5 per cent, but we haven’t got any buyer yet,’ he said. ‘If we walk away, the worst thing is that we lose the 10 per cent deposit. But if we find ways to settle it, I am not sure what we can make out of this, as the market is not looking pretty’
Already stopped making payments? ‘if we find ways to settle it, I am not sure what we can make out of this’
In other words, eff-U developers. I can’t see a buck in it so we’re walking. Of course, now the developers will have a bunch of condos to unload and here come the fire sales! More defaults! Ya’ll don’t step on each others necks heading for the exits.
Ben, I wonder if the developers will be the losers. Apparently the developers today are selling investment units so that they can buy the land and also get proper building permits, etc. Then they use that equity (the units are not a charge against the land) to get bank financing to build. Along the way they have been picking up massive deposits. Of course, in Canada, they don’t put a shovel in the ground until 70% of the condos are contracted for.
If contracts don’t close yes the banks lose something, but the unit holders probably would lose everything. They account for about 20% of the overall project cost.
The deposits are supposed to be held in trust - but if you believe they are not being played with I have a bridge for sale.
“Mr Li, who declined to give his first name,….”
Is he the only Li in the directory?
We’re working towards 100% down and then you get terrific terms on the remaining mortgage.
That’s a good point: ‘if we find ways to settle it, I am not sure what we can make out of this’
You don’t want to give out your name, your parents have already defaulted, you are hemming and hawing about sticking with the obligation in a nationwide paper, and you probably wonder why your credit is getting slashed.
Honolulu, Hawaii Housing Prices Plunge 12% YoY As International Housing Demand Evaporates
http://www.zillow.com/honolulu-hi-96816/home-values/
‘‘There are two apartment buildings outside my office where there are no lights on at night,’ Mr Sutton said. ‘My understanding is there has been rising defaults by buyers of those apartments, particularly foreign investors.’
And those lights have been out all this time Jon. There were reports of utility usage months ago saying big swaths of condos weren’t using any water. But it was all fun while it lasted! Last week I posted a NYC broker bragging that Chinese were “buying entire towers” in Australia.
The Chinese don’t seem to like the mountains.
CalifoH20
Keep this in mind the next time you pick on Bambi.
Mona Lisa Vito: [comes out of the bathroom] Imagine you’re a deer. You’re prancing along, you get thirsty, you spot a little brook, you put your little deer lips down to the cool clear water… BAM! A f#ckin bullet rips off part of your head! Your brains are laying on the ground in little bloody pieces! Now I ask ya. Would you give a f#ck what kind of pants the son of a bitch who shot you was wearing?
My Cousin Vinny Deer Hunting - YouTube
https://www.youtube.com/watch?v=2JSNr9NxOdA - 259k -
Liquidate assets, get rid of debt as quickly as possible and hold onto every dollar you’ve got. You’ll thank us later.
WIth Yellen hellbent on debasing the dollar into worthlessness, better to convert a healthy percentage of FedBux into real money, i.e. pre-1964 silver coinage, physical precious metals, and life’s essentials such as food. Look to Venezuela as an example of what is in store for us once Comrade Hillary and the Comrades of Proven Worth (D) install their collectivist kleptocracy.
If your dollars are so worthless, send them to me.
I tried that line years ago.
Still waiting for the first goldbug to send his worthless fiatscos my way…
‘South Australians need to open their wallets and start splurging to help reinflate an economy beset by myriad woes, writes Malcolm King.’
‘Adelaide retailers are offering discounts of up to 75 per cent in a desperate hunt to find the magic point at which consumers will open their purses and wallets and spend. Weak consumer demand in SA is being driven by unemployment and under-employment, debt and an ageing population (older people spend less), which forces down prices.’
‘Job advertisements in SA were in freefall in the May quarter, down 11 per cent across the board and 13.8 per cent in the private sector, according to the ABS.’
‘Nationally, wage growth is now at levels not seen since the recession of the early 1990s. Private-sector wages in Adelaide struggle to punch above the local inflation rate, and low wage growth has not created full-time jobs.’
‘The best test of economic theory is to leave the comfort of a textbook and spreadsheets and walk in to shops to ask people what is going on. A walk through Rundle Mall, the Elizabeth Shopping Centre and Westfield at West Lakes tells a sorry story.’
‘Many of the shops are deserted or have “for lease” signs pasted across their display windows. Elderly people sit and drink tea at the cafes and many of the “pop-up” stalls have gone. Sales staff look like shags on a rock among a sea of stock.’
‘I asked a checkout woman in Coles at West Lakes how business was and she said: “I’ve been here (Coles) four years and this is the worst I’ve seen it. Pension day is okay.”
‘Hold on to your lap rugs when the winter power bills hit, as these will further drive down retail spends. The combination of flat salary growth and the loss of full-time jobs means that as the winter electricity tariff bites, there will not be the commensurate ability to pay.’
‘In 15 years of writing about economics, generational and organisational change, I have not seen such a raft of wicked and serious problems as that which now confronts the great state of South Australia. If there is a devil in economics, it has made a home here.’
‘While it may sound counter-intuitive, now is the time to go out and spend, spend, spend and help reinflate the economy – that’s if you’ve got a job.’
People worried about their own household’s bleak financial outlook won’t give a flying fig about spending money they don’t have to “stimulate the economy.”
“I’ve been here (Coles) four years and this is the worst I’ve seen it. Pension day is okay.”
I had to look up Coles. It appears to be a smaller version of SuperWalMart. Food, household essentials, and some basic clothing. And people still aren’t shopping except on Pension Day? What are they eating?
And what is a “shag on a rock among a sea of stock?”
Apple is still one of the major brands propping up the Nasdaq. What happens if the South China Sea heats up and Chinese suddenly decide it’s “unpatriotic” to own an Apple iPhone? Or China suddenly threatens to expropriate and nationalize US assets in China unless we start seeing things their way?
https://next.ft.com/content/5af2897a-5549-11e6-befd-2fc0c26b3c60
“Rising Defaults By Foreign Investors”
Nobody could have seen it coming, especially given that these wealthy foreign investors only purchase with cash.
How does one default on a cash purchase?
Lynden, WA Housing Prices Crater 6% YoY As Housing Demand Plummets Statewide
http://www.zillow.com/lynden-wa/home-values/
Serious questions:
1) Can the central banks ever unwind their bond purchases without crashing the global economy?
2) If yes, what if they never unwind them?
You can’t taper a Ponzi. Period.
But can you tapir a Ponzi?
Or is it, you can paper a Ponzi?
“Speculation is the root of all recessions and unemployment.”
Oil’s Drop Stokes Worries About a Slippery Slope in Stocks, Junk Bonds
Some money managers fear the recent slide in crude will erode investor sentiment and spread to U.S. shares and high-yield debt
A pumpjack in North Dakota. U.S. crude prices are down 18% since early June.
Photo: Alex Milan Tracy/Sipa Press/Associated Press
By Ben Eisen and Timothy Puko
Aug. 7, 2016 2:57 p.m. ET
Concern is again growing that the oil market could turn into a negative for stocks and high-yield bonds, despite Friday’s record closes in the S&P 500 and Nasdaq Composite indexes.
U.S. crude for September delivery dropped below $40 a barrel on Tuesday, marking its lowest close since April and the 10th decline in 12 trading sessions, before rebounding to end the week at $41.80. Oil is down 18% since early June.
Though the decline has been driven largely by a surplus of crude, some money managers fear tumbling oil prices will erode investor sentiment and spread to other markets from U.S. stocks to riskier bonds. Many investors blame oil declines in part for the broad rout early this year that sent the Dow Jones Industrial Average down more than 10%.
The correlation between U.S. oil prices and the S&P 500 stock index climbed to a multiyear high on Jan. 21, at 0.97, as crude collapsed and recession fears increased. A correlation of 1 shows asset prices are moving in lockstep, while minus-1 shows they are moving opposite and zero reveals their moves are unrelated.
…
Still loving the cheap gas. Filled up again Saturday at Costco for $2.199.
I don’t understand how Costco can sell gasoline for $2.20/gal when the major oil companies ask $2.80 or more?
down the street there is a station that is a dollar cheaper than the chevron across the street. And they keep saying there is no profit in selling gas.
I always find it odd when there are two stations and one is $0.10 or more expensive. I suppose they figure the benefit to the driver/convenience depending on traffic direction, intersection location will outweigh the price difference? Or they just don’t give a $h!t, and figure people need gas.
Which place has cleaner toilets?
Trick question, neither have restrooms!
Not so. On many a road trip, my wife has insisted on paying the Chevron premium in exchange for a clean toilet.
costco doesn’t have a separate rent to pay, how much does it cost costco to put in a couple of pumps and take away say 25 parking spaces?
“take away say 25 parking spaces?”
It’s the thin margin on a lot of cheap gas purchases versus the possibility of 25 more customers filling their carts with merchandise. Parking is always tight but available around Costco anyway, so I doubt loss of parking spaces 50 yards from the door is a big deal.
It all depends if they are allowed to take away the parking spaces.
Projects usually are not developed with an over-abundance of parking–they are developed to meet the minimum standards that are legal (pursuant to zoning), and commercially viable (needs for the business). Often times, zoning is the limiting factor.
In other words, developments are frequently completed with the minimum parking required under zoning, so you usually can’t just remove 25 parking spaces and add a gas station. You typically need to have excess land to do so.
SFR housing developments don’t need park lots.
Is Dry Bulk Shipping About To Break Down?
Western Bulk Chartering
By Jens Ismar 2016-07-18 19:12:38
Industry commentary is dominated by talk of poor markets and financial challenges facing the industry, and not without good reason. For those of us in dry bulk shipping, the market since the beginning of 2014 has been the worst downturn since the mid-eighties. Access to finance and liquidity will likely continue to be a pressing corporate issue for shipowners until the markets recover, and the longer this takes - the worse the situation will get.
In the current low-rate and relatively low-volatility environment, margin creation and arbitrage is challenging for commercial operators like charterers. In addition, we are starting to recognize a more tangible and direct consequence of the prolonged dire market on our business: a lag in vessel maintenance and upkeep of the vessels we charter in. Every time a vessel or a piece of machinery is not working to its potential – or not working at all – our ability to manage risk and protect margins is impacted.
The Tangible Impact of the Market Downturn
Within the dry bulk sector, we are facing a rising tide of mechanical faults and operational disruptions due to not only poor maintenance, but also even possibly poor design and construction. At best, the implication is breakdowns, lost revenues and a significant increase in the number of claims and disputes between owners and charterers. For many, legal action and higher insurance premiums will follow. The worst-case scenario is that ships, and possibly human lives, will be lost.
Western Bulk Chartering, as a major charterer of handysize to ultramax tonnage, has first-hand experienced of this notable development following the market downturn. Vessel performance has reduced and breakdowns have increased; manifested predominantly in unstable performance of cranes and grabs.
Some shipowners cannot even afford proper hold cleaning as agreed in the charter party prior delivery of the ship to charterers! We fear that what we are seeing now is the canary in the mine, and that the consequences of continued lack of care and upkeep will affect both ships and crew safety even worse.
As With Many Things in Life – You Get What You Pay For
There have also been some very concerning statistics on marine claims coming from the recent Nordic Association for Marine Insurers’ (Cefor) Annual Report for 2015. The breakdown of quality of shipbuilding countries tells an important story, and highlights the issues the industry now faces after building vessels for the lowest possible price at inexperienced yards and/or because of lack of follow up by owners during construction.
You do get what you pay for; when buying a car, a watch, and when building and maintaining ships. Surprisingly this report received relatively little media coverage, investigation or follow-up. If you have not read it, you should, for it is rare for Cefor to make such bold statements on one particular market segment.
Although not conclusive, Cefor observes significant difference in maritime claims between Chinese and Korean/Japanese built vessels. This may not add up to an indictment of Chinese construction techniques and skill, as they correctly point out that China has made major strides in modernizing its shipbuilding industry in the past few years. However, what we may well be facing is the real price of the last eight years’ race to the bottom, as the industry has sought to build more ships for the lowest possible price. As with all budget machinery, something has to give in the end.
As the number of poorly constructed or maintained ships continues to grow as a percentage of the overall global fleet, it is fair to ask “is this build-origin of a ship” going to increase performance risk? Is there now a need for independent third parties, such as RightShip, to play a greater role in assessing vessel risk within the industry? Moreover, what responsibility lies with the class societies, who themselves are facing cost pressure?
…
When cash flow gets thin, the first thing to go is preventative maintenance and repair wether it be a ship, a car or real estate….
They’re better of dumping it on the market for whatever it will fetch.
China’s July exports slide worse than expected
By MarketWatch
Published: Aug 7, 2016 11:56 p.m. ET
BEIJING–China’s exports continued to fall in dollar terms in July from a year earlier, as global demand for goods from the world’s second-largest economy remained sluggish.
Exports slid 4.4% from a year earlier, following a decline of 4.8% in June, the General Administration of Customs said Monday. The figures indicate that China’s overseas shipments, once an important engine of growth, are continuing to drag on its overall economic performance.
…
must devalue Yuan more….
Will foreign funny money (Yuan) cause defaults any quicker than the US home grown funny money?
Ask Donk Craterton.
Sell in August, and don’t come back until … August?
By Shawn Langlois
Published: Aug 8, 2016 7:32 a.m. ET
http://www.marketwatch.com/story/sell-in-august-and-dont-come-back-until-august-2016-08-08?mod=MW_story_top_stories
Makes you wonder what the ulterior motive of these big investors are. Soros is a shark, so for him to be pulling out of equities and making calls to leave the market, its just odd. These investor fat cats must want massive selloffs to then swoop up shares for major discounts, or they are trying to facilitate the typical Sept drop, despite the markets reaching new highs? Idk, I’m not an investor or market savvy guy, but reading into these statements by big time Wall St guys is way too fishy.
Why not sell today knowing the prices will be much lower later?
Monetary easing has “reached its limits” and the central banks, having printed more than $16 TRILLION in “stimulus” have no ammo left to deal with the next big financial crisis. Bullish, right?
http://www.businessinsider.com/barclays-research-on-the-shrinking-effectiveness-of-monetary-and-fiscal-policy-2016-8
Why can’t (won’t) they just double-down on their printing efforts?
There’s a whole lot of doubling-down afoot these days…
Yellen will prop up the markets by any means necessary to try to assure a Hillary victory. That probably means QE4 in the Fall, followed by NIRP after the election.
The super-rich, the sole beneficiaries of hope n’ change, are increasing in number while the slow pauperization of the middle class continues.
http://www.wsj.com/articles/the-rich-get-richer-as-billionaires-increase-in-number-1470628860
Phony valuations
Manufacturers know that NIRP is coming, and are hoarding cash rather than entrusting it to the banks.
http://www.telegraph.co.uk/business/2016/08/07/manufacturers-shunning-bank-finance-and-hoarding-cash/
As the stock market gets pumped up artificially by the Fed’s financial crack cocaine, the deterioration of the real economy is accelerating.
http://investmentresearchdynamics.com/as-the-stock-market-levitates-economic-activity-deteriorates/
But…but…green shoots!
http://www.businessinsider.com/the-richest-people-in-the-world-are-frightened-2016-8
The loss of Constitutional freedoms is necessary to assuage hurt feelings and micro-aggression. Forward!
http://www.thedailysheeple.com/federal-agency-suggests-that-gadsden-flag-may-be-racist_082016
From the article:
———–
The Equal Employment Commission decided that the flag wasn’t racist, but their decision came with a caveat. They said that the Gadsden flag could be “interpreted to convey racially-tinged messages in some contexts,” and that “Certainly, Complainant ascribes racial connotations to the symbol based on observations that it is sometimes displayed in racially-tinged situations.”
———-
So, the headline of the right-wing article says that the EEC suggested the flag was racist, but the text of the right-wing article says straight out that the EEC labeled the flag as not-racist. In reality, it was a member of the public who complained about the flag.
But the headline sucked you in, didn’t it.
The stupidity, it burns.
http://boston.cbslocal.com/2016/08/06/pokemon-go-fort-phoenix-fairhaven-damage/
Germans are souring on open-borders globalism. What are the ramifications of growing anti-EU popular sentiment for Merkel’s ability to continue putting German taxpayers on the hook for endless bailouts of the insolvent PIIGS banks?
http://www.aljazeera.com/news/2016/08/majority-germans-eu-turkey-refugee-deal-160808074625566.html
Story related to me by my BIL. His old boss (Bakersfield School Dist) retired and bought a house in Santa Cruz around 2000. He thought that the grass was greener elsewhere, sold at a nice profit, moved to New Zealand and built a house. Then he found out he had to come back to the US for his medical and that after a certain age he could only live there 3 months out of the year (so much for reaping huge property windfall). It was costing him so much money that he sold out early this year and moved to Oklahoma the only place he could afford to live (now 80 yrs old) now on his pension.
Waited until after he dumped another fortune into another rapidly depreciating asset before investigating immigration rules?
dumb.borrowed.money.
A single-wide in Tornado Alley?
I’m sure he has toughened nylon straps to batten down the hatches during tornado season
Why Oklahoma, and not, say, Kentucky or Tennessee or New Mexico or Mississppi? You can buy a basic $75K house in almost every state.
Hell we and our competitors build them brand new for $50/sq ft in every state.
Big Mac - we all know you dont have a job.
My no-show job is occupying the vast empty space between your ears.
“and moved to Oklahoma the only place he could afford to live”
18471 Algonac St Detroit, MI 48234
$10,000
4 beds
2 full baths
1,200 sq ft
6,970 sq ft lot
6620 Eagle St Detroit, MI 48210
$3,500
3 beds
1 full bath
1,152 sq ft
3,920 sq ft lot
Those listings don’t show the 5-figure back-tax bills that you will owe to the city upon purchase.
No $5k toilets. You must be in shock.
Detroit wipes out the old property taxes and still can’t get paid for the current ones.
Detroit’s foreclosure crisis is partly self-inflicted
By Tracy Samilton • Jul 22, 2016
Detroit’s death spiral of foreclosures is partly self-inflicted, says the ACLU, because it is overvaluing properties so people can’t afford their taxes - and denying the poorest of the poor an exemption from paying the taxes.
The first thing you notice about the street in front of Walter Hicks’ home is it’s peaceful. There are lots of trees, chirping birds, and most of the lawns are mowed.
But then you see that the houses on either side of Hicks’ home are boarded up. And there are lots of boarded up homes all down the street.
That doesn’t seem to put even a little dent in his pride of ownership.
“Well, I got the house through the auction in 2012,” says Hicks. “I got it for $2,400. And I been here ever since, and I love my house. I always wanted my own house and this is my first house. Picture windows – I got three picture windows, one on the front, one on the side, and one on the back. I always wanted something like that.”
But shortly after taking possession, Hicks got his first property tax bill. The city said his house was worth $45,000, and based the property taxes on that assessment.
“There’s no way it’s worth that much,” he says, when a private appraiser set the value at $9,000.
Even so, the overvaluation shouldn’t have mattered. Hicks lives on less than $16,000 a year in disability, which means he qualifies for Detroit’s exemption from property taxes due to poverty.
Many cities in Wayne County have the application for the exemption online. Not Detroit. To get the exemption, Hicks had to catch the bus to city hall. Once he got there he got a ticket, waited in line, and then filled out an application – all in order to get an application sent to him in the mail.
When it arrived, Hicks compiled copies of the supporting documents, filled out the form, and sent it in.
Months later he got a denial, no reason given. But since he couldn’t afford to pay the taxes, he ignored them.
The second year, he didn’t try applying for the exemption.
But the third year, he got one of the dreaded yellow bags hung on the handle of his home. Inside was a notice from Wayne County saying his house would be foreclosed and sold in public auction to someone else.
http://michiganradio.org/post/detroits-foreclosure-crisis-partly-self-inflicted - 78k - Cached - Similar pages
Jul 22, 2016 .
“Poorer Than Your Parents? New Study Shows 81% Of Americans Worse Off Than In 2005″
http://zerohedge.com/news/2016-08-08/poorer-your-parents-new-study-shows-81-americans-worse-2005
Need more news like this to show the Boomers and Gen-Xers whom think millenials just sit around and want $100,000 handed to them.
I usually thank them for voting for these policies we are experiencing before I was a twinkle in my fathers eye.
Poorer than our parents, more jobs overseas, 1150% college tuition increases over 25 yrs, homes that are easily 100% overvalued. Yep, I’m just lazy.
By virtue of the fact tens of millions paid 300% premiums for a rapidly depreciating asset in 2000-2005, is it any wonder they’re poorer 11 years later?
No. But it is a wonder they are still overpaying for rapidly depreciating and overtaxed assets for ever higher prices at ever greater multiples of income.