September 27, 2016

The Availability Of Liquidity And Financial Pain

A report from the Associated Press. “Pale green and 8 feet tall, tightly packed corn stalks reach to the horizon throughout the Midwest in what is likely to be the biggest harvest the U.S. has ever seen. Aside from a sense of pride in breaking the previous record by nearly a billion bushels, farmers won’t benefit. They’ll lose money on virtually every cob. It’ll be the third consecutive year in which most corn farmers will spend more than they’ll earn. The growing has been too good and the resulting glut of corn depressed prices to a decade-low. It’s a similar story for soybeans, the second most common Midwest crop.”

“As a result, farmers are cutting costs, dipping into savings or going further into debt. The drop in farm profits raises questions about agriculture’s boom-and-bust cycles and why people adhere to what at times is seemingly not a sustainable business model. The less-established farmers who rent expensive farmland or went into debt to purchase land or new equipment are ‘the ones I worry about,’ said Harold Wolle, a fifth-generation family farmer from south-central Minnesota.”

“But sixth-generation Iowa farmer Grant Kimberley, who farms with his father, cautions that all is not well for those who’ve been doing this for a while, either. ‘It’s getting to a tougher stage even for farms that are more established. Everybody’s feeling it now, especially guys like my dad. He’s 65 years old and has done really well and built things up, but we hope this doesn’t last forever because you hate to see a lot of those gains they’ve made over the years virtually get eroded,’ Kimberley said.”

The Farmers Exchange. “Purdue University agricultural economist Chris Hurt came to Goshen with a message about the farm economy: ‘Something’s got to give.’ With bumper corn and soybean crops forecast, farmers will have more bushels to sell. But with crop prices lagging below the cost of production, those extra bushels won’t be worth as much. Hurt said the farm economy is nearing the middle of a five-year stretch in which costs are higher than revenues. Currently, farmers are earning almost $600 per acre on a corn-soybean rotation, while the cost of production is $718 per acre.”

“Back in 2012, when crop prices were high, farmers were earning $824 per acre while costs averaged $707. Hurt expects to see a gradual pullback in farmland values and cash rent prices. According to Purdue’s own survey, farmland values reached a peak of $7,976 per acre in 2014. They are now at $7,041 per acre and are expected to decline further, reaching $6,020 per acre in 2019.”

“Next year, cash rents will decline by 4 percent to 6 percent, he said. The current cash rent price for average farmland in north central Indiana is $202 per acre, down 11 percent from 2015. Rather than prices going up, Hurt said the best chance for improved margins is for costs to come down. ‘One thing we do know from the marketplace,’ Hurt said, ‘that is, if there’s enough financial pain, things will eventually adjust.’”

The Des Moines Register. “A panel of farm leaders explored how much further rents and land values will fall, how growers will fare in growing mega mergers mania, the ag economy and other issues at the Iowa Bankers Association’s annual convention in Des Moines. Even though farmland values have fallen — nearly 9 percent over the past year, according to a new survey this month — tight supplies, low interest rates and investors looking for alternatives to the stock market have help slow price declines across the state, experts said.”

“‘We’re really puzzled why people pay what they’re paying’ for farmland in some areas, said Bruce Rastetter, CEO of Summit Agricultural Group, a diverse farming and investment business in north Iowa, even with investors wanting to jump out of the stock market. Already, price declines are hurting some buyers who purchased when values were at their peak. Bruere said it’s difficult for a seller to get the same $12,000 he paid for land a couple years ago. ‘There are some tough conversations being had right now,’ he said.”

“Typically, on Sept. 1, landowners terminate Iowa farmland leases to negotiate higher rents, said Steve Bruere, president of Peoples Co., a Clive farm management and real estate group. ‘This is the first time in our farm management business that we’ve seen farmers terminate the lease’ to negotiate lower rents, he said. ‘A lot of it was driven by conversations with lenders, who said, ‘Hey, are you going to lose money or make money? Are you entering the year with an expected loss?’”

“‘This is the fourth year we’ve been in that environment. With liquidity drying up, those conversations have gotten a lot more real. The days of $400 and $500 (an acre) rents are over,’ he said.”

“Rastetter said: ‘A couple years ago … we had $1,200 gross acre revenue. Today the reality is that we’re at $600, and there is significant amount of pain going on. Maybe a lot of people aren’t talking about it. I assume a lot of you lenders are talking privately. … You will and should see those tough negotiations on cash rents. Instead of $300 and $350, I think you should be $225 and $250, and even then it’s a challenge to make money.’”

The High Plains Journal. “A new report from the Rabobank Food & Agribusiness Research and Advisory group finds in order for U.S. agricultural commodity production activity to remain economically viable, land rent must decline. The report, ‘The Land Value Wave Dips: Land Values Set to Decline Further, Despite Sticky Rental Prices,’ explores the impact of low commodity prices on land values and rent prices.”

“The report goes on to note that from 2006 to 2013, significant increases in commodity prices, due to surging demand, signaled the need for more land to be converted to row crop production. The subsequent steep increases in agricultural land values have pulled enough acres into row crop production to oversupply most commodities, both domestically and globally.”

“‘The result of this oversupply has been to drive agri commodity price levels below breakeven. After two years of economic losses at the farm level—which resulted largely from the significant drop in commodity prices—the cost of renting land remains sticky and unsustainably high,’ notes report author and Rabobank senior analyst Sterling Liddell.”

“‘The most significant driver in the deteriorating economics of farming is a 40 percent to 50 percent decline in commodity row crop prices and the inability for some costs—particularly land—to decline at the same rate,’ the report said. ‘The lack of decline is primarily a result of ample working capital that was available following the 2006-13 surge in profit margins. The availability of liquidity in the farm business and farmers’ desire to control land in the longer term, combined with land owners’ reluctance to accept reduced income, have led to a bidding process which kept rental values above breakeven levels.’”

“According to Rabobank, in 2017-18 and moving forward, rent values need to begin dropping in order to balance with lower commodity prices over the long term. ‘We believe this will lead to the valuation of land also adjusting lower,’ notes Liddell. ‘If rental costs remain sticky at unsustainable levels through the 2017-18 growing period, individual land assets face the threat of much deeper devaluation, as nutrient and crop protection programs are cut and abandonment (usage changes) increases.’”

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Comment by Ben Jones
2016-09-27 14:43:53

‘Eighteen years ago hog prices collapsed when packer slaughter capacity was challenged and market hogs had to be slotted. It became a buyers-market. Packers simply dictated what price they would give for hogs. The cash market dropped to 8 cents a pound for a brief period before bottoming out. Packer slaughter capacity is possibly going to be challenged this fall.’

‘I’m not predicting there’s going to be anything close to the debacle that occurred in the fall of 1998. We have been concerned enough, however, to purchase deep out of the money puts to hold in the event of tremendous price weakness.’

‘We’ve known for months that 2016 would experience record large pork production, and these predictions are proving to be accurate. In addition to record large tonnage in pork, poultry production is record large and beef production, while not record large, is indeed rising compared to last year. It is highly likely that per capita meat production will reach a record at some point soon. This has not been experienced since 2007. Weekly hog slaughter continues to rise earlier than expected this fall. The kill for the week ending Sept. 24 at 2.466 million, was up by nearly 5% from the previous week and up 8% compared to the year-ago actual kill. This kill also represents the third largest weekly kill on record, ever! If slaughter rates of this magnitude persist for very long, severe downward price adjustments will likely occur.’

‘When hog supplies are out of balance with demand, typically pork packer processing margins improve rather dramatically. Basically, the leverage resides with the packer in times of supply excess. They crack the cash hog market lower in larger proportion compared to weakness in the product. This allows margins to improve. Currently pork packer processing margins are not only profitable but they reside at record levels. This too, is a warning sign that lower prices are likely on the horizon.’

‘The latest export data was very disappointing from the view point that rising exports will help absorb record large production. July pork exports were up less than 2% compared to July of 2015. Trade with our largest customer during July, Mexico, was off by 10%. Exports to Japan, our second-largest customer was down 6%. Pork trade to China and Hong Kong were higher and help with the overall trade picture, but increased pork trade with China just never seems to meet expectations.’

‘It’s my opinion this has consistently been the case ever since the Chinese purchased Smithfield. Most believed that when China purchased Smithfield that pork exports to China would surge. Frankly, it has not worked out that way. Lower product prices are going to be necessary in the weeks ahead to clear product through both the domestic and export channels.’

‘On a broad scale, it appears “the world” is also expanding pork production. We believe that production is currently expanding in Brazil, China and Russia. The only major pork producer that’s likely not in expansion mode appears to be the European Union.’

Comment by Professor Bear
2016-09-27 21:41:03

‘I’m not predicting there’s going to be anything close to the debacle that occurred in the fall of 1998. We have been concerned enough, however, to purchase deep out of the money puts to hold in the event of tremendous price weakness.’

A lot more than hog prices were collapsing in 1998. It seems that when it rains it pours when it comes to asset bubble collapse.

Comment by azdude
2016-09-28 07:03:24

Deflation fighters to the rescue!

Comment by Ben Jones
2016-09-27 15:02:54

‘Farmland prices can teach investors a lot about asset bubbles’

‘June 26, 2015′

‘A once red-hot market in farmland that has subsequently cooled off with few ill effects offers a case in point. As recently as 2013, a sharp rise in U.S. farmland prices was prompting warnings. But since then, prices for prime crop-growing dirt have started to soften, but gently and with few ill effects.’

‘When it comes to farmland, it was Kansas City Federal Reserve Bank President Esther George who made clear in January 2012 that soaring prices were on the radar. She noted at the time that each week seemed to bring “a new tale of dizzying prices at the most recent farmland auction” and that “well-informed, concerned voices” across the region were wondering if these marked a potential bubble.’

‘Her concern certainly seemed justified. After all, it was the collapse of a credit-fueled 1970s farmland bubble that led to the devastating farm crisis of the 1980s.’

‘And it is the Fed’s job to be on the lookout for such irrational exuberance.’

‘As the chart above shows, the rise also accompanied a massive rally in crop prices fueled by surging demand in China and emerging markets, which in turn fueled a large jump in farm income.’

‘Since then, however, crop prices have fallen back sharply in the wake of a pair of bumper crops of corn and soybeans. Farm income, which tends to be volatile, is projected to fall sharply in 2015.’

‘Meanwhile, the average price for Iowa farmland fell nearly 9% in 2014 to $7,943 an acre, according to the Iowa State survey. Farmland data from regional Federal Reserve Banks also show a softening of prices across prime row-crop growing areas of the Midwest.’

“The fundamentals were good. Now they’re less good and the market is behaving accordingly,” said Brent Gloy, an agricultural economist at Purdue University.’

‘Agricultural economists have also argued that measures of the rate of return on farmland never got far out of line with those for other long-term alternative investments. Gloy and others argue that in a bubble, land prices would have continued rising even as the underlying outlook for the stream of cash flows deteriorated.’

‘The recent pullback in commodity prices and farm income has, so far, led to an orderly softening of farmland prices rather than the collapse that would offer the telltale, after-the-fact confirmation of a bubble.’

“It is good that we’re seeing the markets react in a way that you would expect them to react. It would be probably more concerning if we saw corn prices go from $8 to $3 and there not be any correction or any adjustment in the pace of land price growth,” said Nathan Kauffman, an Omaha-based economist with the Kansas City Fed.’

‘But Kauffman isn’t ready to sound the all-clear, either.’

‘Jim Farrell, president of Farmers National Co., an Omaha, Neb.-based land management and real-estate firm, said farmland prices are behaving like a “typical market that is gone through a substantial bull run.”

‘Prices more or less plateaued in the winter of 2012-13, when crop prices were at their highs in the wake of a drought. Subsequently, there is been a transition from a torrid seller’s market to a buyer’s market, he said, with the amount of land for sale down by around 30% to 40% from where it was two years ago. Crucially, however, the number of prospective buyers has fallen by around the same amount, which has prevented the market from falling apart.’

‘So was it wrong for regulators and economists to worry? Probably not, said Gloy. It made sense for the Kansas City Fed, in particular, to be out front sounding the alarm.’

“We have had a bubble in agriculture (in the past) and it wasn’t pretty,” he said. “From the regulator’s standpoint, I think it makes sense to say these things can get out of control [and to remind people] of the fundamentals.”

Comment by Ben Jones
2016-09-27 15:08:42

‘We’re really puzzled why people pay what they’re paying’ for farmland in some areas, said Bruce Rastetter’

‘Farm to market: Taking stock of the agricultural land grab
Constance Gustke, special to
Thursday, 21 Jan 2016′

‘Individual investors, for the most part, have stayed away from the big agricultural bets being placed on global food demand increasing over time, driving up land prices even further. Institutions, like the mega pension fund TIAA-CREF, the super-wealthy investor set and overseas agricultural giants are still snapping up land this year, and potentially scouting what will seem like bargains years from now as farm real estate values have started to decline.’

‘The situation leaves Paul Pittman, CEO of Farmland Partners (FPI) REIT, frustrated. His company’s stock price has been badly beaten up — down more than 20 percent since its 2014 IPO. Yet the dividend has been hiked up three times, Pittman said, and now yields close to 5 percent.’

‘The farmland REIT continues to acquire more acreage. Farmland Partners currently owns 257 farms with an aggregate of 107,838 acres (including 126 farms totaling 32,963 acres under contract), including acreage in Arkansas, Colorado, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, Texas and Virginia. And Pittman is continuing to bag more land in undervalued areas, like the Southeast.’

“There’s an excess amount of water there,” said Pittman, whose REIT doesn’t own farmland in water-challenged California.’

‘Yet the stock trades at a substantial discount to its net asset value, according to Daniel Altscher, a senior research analyst at FBR Capital Markets. He has a buy rating on the stock. “Everything is going well,” he said.’

“This is a new asset class, and so it’s misunderstood,” said Pittman, a former investment banker. “These are still early days for farmland REITs.”

‘Pittman said the entire agricultural stock complex, from Deere and Monsanto to the farm REITs, has been hit in the commodities slump. “The rate of growth is going down, but not consumption,” he said. “It’s not too low demand, but it’s too much supply.”

Comment by Blue Skye
2016-09-27 18:04:21

“This is a new asset class, and so it’s misunderstood”

No one ever understands a mania, except those living in it.

Farmland, a new asset class!

Comment by Bill, Just South of Irvine
2016-09-27 19:38:11

Actually owning farmland as part of a portfolio is a good idea. I like the REIT idea.

Comment by Rental Watch
2016-09-28 12:16:00

I think it depends. If the farmland REIT simply leases land to farmers (but doesn’t sell agricultural products), then that makes sense to me. If the farmland REIT generates income based on the products they produce, then you are pretty exposed to all the risks of farming, which might be what you want, but then you rely on the REIT to have multi-faceted experience in agriculture–which is a higher bar.

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Comment by scdave
2016-09-28 04:20:56

Farmers enjoy the same juice that the all other asset classes do…Low interest rates but they get one bonus card because they are poor farmers…Price supports…Its not a surprise that the cost per acre has gone through the roof…

Comment by azdude
2016-09-28 07:02:23

kiss your interest of your savings goodbye for the rest of your life. might as well buy facebook and twitter.

What happened to myspace?

Comment by Ben Jones
2016-09-27 15:10:18


Comment by Bill, Just South of Irvine
2016-09-27 19:39:43

Wow! Best to dollar cost average in that stuff!

Comment by Professor Bear
2016-09-27 21:43:04

Based on the early-1980s peak, it looks like it would be a good idea to wait a few years until the current collapsing bubble bottoms out before folks who are still liquid venture to get in.

Comment by phony scandals
2016-09-28 05:35:08

That chart makes it easy to understand why there were no Farm Aid concerts until 1985.

Farm Aid
From Wikipedia

Farm Aid started as a benefit concert held September 22, 1985, in Champaign, Illinois, to raise money for family farmers in the United States. The concert was organized by Willie Nelson, John Mellencamp and Neil Young, spurred on by Bob Dylan’s comments at Live Aid earlier in that year that he hoped some of the money would help American farmers in danger of losing their farms through mortgage debt.

Comment by Rental Watch
2016-09-28 12:20:53

$2,147 in 1980 dollars = $6,276 in 2016 dollars.
$1,214 in 1990 dollars = $2,237 in 2016 dollars.

Given demand for food, and need for yield (aging demographics), my bet would be that any price under $3,000 per acre would be a pretty damn good entry point.

Whether we see that price in the next 5-10 years is anyone’s guess.

Comment by Ben Jones
2016-09-27 15:51:36


Comment by Professor Bear
2016-09-27 21:44:33

Assuming the vertical scale is in nominal dollars, it would probably make more sense to draw the graph on a log scale, as we all know how much the value of the nominal dollar has collapsed since 1913.

Comment by Professor Bear
2016-09-27 23:58:57

Poor Trump. Poor, poor Trump. A trap was set, and he stepped right into it.

US presidential debates
Donald Trump fumbles his primetime moment
Hillary Clinton looks to have checked Republican’s momentum with solid first debate performance
13 hours ago
by: Demetri Sevastopulo in Washington

​Immediately after his first presidential debate, Donald Trump entered the media “spin room” and told ​reporters that ​his battle with Hillary Clinton had gone even better than expected. But ​his subsequent criticism of the moderator and microphone hinted that he did not buy his own spin: “They gave me a defective mic,” he said. “Was that on purpose?”

Over the 15 months since he launched his campaign, Mr Trump has praised the media when he has done well, and lashed out when his performance was mediocre. While he and his surrogates argued that he was “presidential” in the first of three debates on Monday night, most experts agreed that the man who brilliantly needled his rivals in the primary let Mrs Clinton get under his skin.

“Trump played distracted defence. He spent too much time explaining his tax returns, views on the Iraq war and other … dead ends and not nearly enough time holding Hillary accountable for her own record,” said Chad Kolton, a former Bush administration official. “It was a terrible performance that will likely blunt any momentum he had.”

Ahead of the encounter, some of the strategists who prepped the Republicans for the primary debates said one key to beating Mr Trump was not taking his bait. But Mrs Clinton went one step further. She turned the tables on her opponent, and accused him of being a racist who rips off ordinary Americans and has avoided paying federal income tax.

“I had said she should not take his bait. Instead what happened is he took her bait,” said Robert Klaffky, a strategist who helped Ohio governor John Kasich prepare for the Republican debates. “I’ve never seen him do that so repeatedly.”

Comment by palmetto
2016-09-28 06:05:04

heh-heh, Trump told the Janet Yellen where to get off.

Of course, the larger question here is will the Fed resign. Or be fired.

Comment by Professor Bear
2016-09-28 06:33:04

That was dumb. For starters, the U.S. President has no authority to fire the Fed chair. If course, Yellen could choose to resign in case Trump wins the election.

Comment by palmetto
2016-09-28 07:04:55

And THAT was dumber. For starters, there’s the Fed, and there’s the Fed Chair. The topic of the article deals with whether or not Yellen will resign if Trump wins, given that he’s given her a good pantsing, not if Trump will fire her.

The last statement is sarcastic and refers to the Fed as a whole. And it should be fired, as in end the Fed. It can be done, if there’s the political will.

Do brush up on your reading comprehension.

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Comment by MightyMike
2016-09-28 09:40:50

If firing the Fed means Congress abolishing the Fed, then the Fed resigning would have to refer to the Fed voting to abolish itself. It doesn’t have the authority to do that. You can’t fault the professor’s reading comprehension. Your statements are incomprehensible.

Comment by Blue Skye
2016-09-28 11:17:49

He said Yellen resigning. That’s not the same as the Fed abolishing itself…

Comment by MightyMike
2016-09-28 11:36:32

I was referring to palmetto’s statement: “Of course, the larger question here is will the Fed resign. Or be fired.”

Comment by Blue Skye
2016-09-28 07:15:00

“The Federal Reserve Act establishes both 14-year terms for members of the board and four-year terms for the chair and adds: “each member shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President.”

Will Trump hang the portrait of Andrew Jackson in the Oval Office?

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Comment by palmetto
Comment by phony scandals
2016-09-28 07:05:29

Signaled and Triggered #RiggedDebate - YouTube - 339k - Cached - Similar pages
11 hours ago … Hillary Clinton and Lester Holt

Comment by palmetto
2016-09-28 07:17:07

What the heck is with that eye of hers? Geez.

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Comment by Cracker Bob
2016-09-28 07:49:21

“I had said she should not take his bait. Instead what happened is he took her bait,”

Probably been 30-40 years since anybody wanted to take her bait.

Comment by phony scandals
2016-09-28 09:16:44

I bet I know where she hid her Pocket Constitution.

Hillary’s New Anti-Trump Poster Child is a Porn Star Accused of Driving a Murder Getaway Vehicle & Threatening to Kill a Judge

Yes, really!

Paul Joseph Watson - September 28, 2016 - 225k - Cached - Similar pages

Comment by Karen
2016-09-28 00:48:21

“Average Value Per Acre of Iowa Farmland”

There aren’t even words to describe the insanity contained in that chart.

I bet if they used a starting point of 1850 or 1750 (or 1650 or 1550) instead of 1950, that nearly flat line at the beginning would extend all the way back in time.

Sometimes the enormity of what has and is going on overwhelms me.

Imagine if this reverts to the mean.

Comment by Professor Bear
2016-09-28 05:08:35

Not sure how to find “mean reversion” on a chart denominated in ever-inflating fiat currency?

Comment by Blue Skye
2016-09-28 06:36:24

It shouldn’t be that difficult to take the value of the dollar out of it. P/E is one way. Land price / whole farm rent would be a lagging proxy. Unfortunately, half of farmer’s “profits” for decades has been the increase in land prices.

Corn has dropped in price well over 50%. Farmers who rent to grow are not making a profit. Rent is following down with a time lag. Land price is rolling over. The “profit” in farmland has gone poof.

“the 2015 survey show that the statewide average value of farmland fell by 3.9 percent…”

“The average estimated value of Iowa farmland is now about $7,633 per acre.”

Cornfield rent is $250.

Let’s call historical rent/land price 8%. That’s a P/E of 12. Now it is 30.

If you consider how falling rents will figure into this you might conclude that a blood bath is the path of “reversion to mean”.

Comment by taxpayers
2016-09-28 05:18:18

so if we bail out farmers, homeowners,students
it adds up

Comment by azdude
2016-09-28 05:32:30

“But the Fed got the result it intended. It wanted to inflate prices to save the banks from their stupidity and criminality. Decisions were made at the highest levels of the Fed and the Federal Government to not only let the banks off the hook, but to rescue them. The only way to do that was to forego prosecution of massive criminal wrongdoing, and to engineer price inflation, so that the criminal perpetrators of the fraud that drove the Great Bubble would be free to re-offend.

The Fed has created a situation where the housing industry is so dependant on the massive interest rate subsidy that any uptick in rates is likely to cause a cataclysm. The Fed and its cohorts are responsible for this mess. They have left themselves, and us, with no way out.”

Comment by Raymond K Hessel
Comment by azdude
2016-09-28 06:18:32

300 billion / year has been taken from savers in US so wall street can have their casino.

300 * 8 years= 2.4 trillion transfer

Comment by Raymond K Hessel
2016-09-28 06:24:05

This is what 95% of the electorate voted for in 2008 and 2012. Let’s give the sheeple what they ask for, and deserve.

Comment by azdude
2016-09-28 06:55:24

Do u think they will for it again?

Stocks and homes!

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Comment by Cracker Bob
2016-09-28 07:55:25

Sure, maybe Romney could have done a leveraged buy-out of the US. But, he would have taken his $Trillion fee right off the top before firing everybody, leaving a shell and selling the assets in bankruptcy. Brilliant!

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Comment by oxide
2016-09-28 10:44:15

No, Romney is still one of the corporate kleptocracy. Let’s all vote for Gary Johnson and abolish the minimum wage! Woo-hoo!

Comment by MightyMike
2016-09-28 09:49:50

300 billion / year has been taken from savers in US so wall street can have their casino.

300 * 8 years= 2.4 trillion transfer

Where’d you get those numbers? You should look up how much people have saved by re-financing their mortgages.

Comment by Blue Skye
2016-09-28 14:29:22

Savers don’t have mortgages.

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Comment by MightyMike
2016-09-28 15:20:33

Well, some do, but that’s beside the point. The lower interest rates must have saved ordinary middle income homeowners a lot of money.

Comment by Rental Watch
2016-09-28 16:04:13

Well, some do, but that’s beside the point. The lower interest rates must have saved ordinary middle income homeowners a lot of money.

Only if they refinanced…I’m still amazed at the number of people who are paying more than 6% in a 4% rate market, and don’t need to…more than 1 million mortgages meet refinance criteria (low enough LTV, high enough credit scores, etc.), but are paying more than 6% on their rate.

Comment by FED Up
2016-09-29 00:34:32

“With mortgage rates pushed down to all time lows, house prices have consequently inflated at a rate that offsets the buyer’s savings in the interest component of the mortgage. Meanwhile American savers have lost not only massive purchasing power, but also have been forced to consume principal. The Fed has not stimulated sales but it has succeeded in transferring wealth away from those who can least afford it to those who least deserve it.”

Comment by Apartment 401
2016-09-28 06:07:05

Drudge links this at the top of the right column to rally the base:

No “smaller government” or “less regulation” or “lower taxes” happening here.

Comment by palmetto
2016-09-28 06:37:56

Drudge may find himself out of a gig in four days, if that internet hand over takes place.

Comment by snake charmer
2016-09-28 08:42:39

Despite repeated references to Iran by both Trump and Clinton during the debate, I heard no explanation as to why the country currently is considered to be an enemy of the United States.

Comment by Apartment 401
2016-09-28 06:13:00

The bigger the house, the bigger your losses to depreciation:

My highest electric bill this summer almost hit $80. My lowest one last winter was less than $30. Buy an oversized depreciating house, and you’re gonna lose alot of money.

Comment by Raymond K Hessel
2016-09-28 06:29:01

How awesome would it be if Yellen the Felon was forced to resign following a Trump victory? Sure, some new Goldman Sachs stooge would take her place, but it would be the first time since Ron Paul that a presidential candidate has called out this evil organization.

Comment by azdude
2016-09-28 06:30:04

“Flurry of Fed speakers to hit Wall Street; watch out for Yellen” @ cnbc

Everyday it is some bs headline

Comment by dandroidz
2016-09-28 06:56:43

What’s wrong the billions of Govt $$$ subsidies not enough to help these corn farmers? What’s next, a new ethanol blend requirement of 80-20 gasoline to help with their woes? Everyone remember the attempt to push flex-fuel E85? When I see GM vehicles with this badge I just think “What a tool bag”, enjoy that lackluster efficiency compared to traditional gas or diesel. Heck research has shown that the push for 15% ethanol blend leads to more emissions and worse wear and tear on the engines.

Comment by azdude
2016-09-28 06:58:27

more debt = more demand for fiat

Comment by Njguy
2016-09-28 07:24:32

I’m in Beijing….I’ll report when I get past the great firewall

Comment by Carl Morris
2016-09-28 10:53:11

The Great Firewall is HBB friendly. It’s just FB and Google type stuff that requires a VPN.

Comment by Njguy
2016-09-29 02:44:26

My wi-fi free but it stinks

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