Friday, May 31, 2013
You are expected to work, pay taxes, obey the law and consume.
Anything beyond that, and no one really cares what you do.
When you work, you are not only generating the revenue to pay taxes and consume but usually are so absorbed in your own life and hopefully to government, so utterly exhausted at the end of each day, you don't have time or interest to follow the daily corruptions and economic Lies they spew..
A remote channel 'click' -- that took care of that..
When you pay taxes, obviously it gives the government the revenue necessary to throw away on needless war and other frivolities most people would never willingly pay for if allowed to directly specify what areas of government were to receive their taxes.
And obeying the law is obvious-- no one wants others to do them physical, emotional or economic harm. Of course government isn't so much concerned with that-- it is more interested in making sure you don't galvanize protest and do so publicly..
Quite OK to say whatever you wish in protest "pens" far away from where the targets of such demonstration may hear.. Better yet, pick up a stuffed teddy bear in the privacy of your home and scream at that..
And oh yes.. the fourth thing -- Consume.
And on that count, government and the Fed is worried.
See, we're not consuming enough, especially the 'Millennials"
"They’re narcissistic. Apathetic. Pampered. And addicted to their four-inch screens.
If you believe the conventional wisdom about the millennial generation — those 16 to 34 years of age, by most calculations — you’ve got considerable reason to worry about the future of the U.S. economy.
Millennials show far less interest in buying cars, homes and other big-ticket items than their parents did at the same age, which has generated an intense effort among companies that produce those things to crack the code of these crazy kids and figure out how to sell them stuff."
That means more insipid commercials filled with taglines and awful puns, where strategically every race, gender, ethnicity, sexual orientation and age demographic is represented in a 15 second spot...
Because we all know all it takes for a Hispanic or lesbian or a Sikh to buy a product is seeing a representation of them in the far background smiling goofily at a car or truck since we must be all too stupid to buy something for real reasons like price or quality or value...
But we digress...
"Millennials seem to scoff at the open road. The percentage of 16-to-24-year-olds with a driver’s license has dropped sharply since 1997, and is now below 70% for the first time since 1963...
Millennials, as a whole, are also buying homes later than prior generations, having children later and delaying their careers. It’s as if America’s youth are rejecting social conventions that generations have held in common for decades...
The national unemployment rate is 7.5%, but it’s 16.1% for 16-to-24-year-olds. Many baby boomers are working longer, to rebuild wealth lost during the recent recession, which has pushed the retirement age to the highest level in more than two decades. That has reduced turnover in the labor force, further limiting openings for younger workers in an already challenging job market."
As Scooby Doo would say, "Ro-Ro!" (Uh Oh ! translated for adults)
Its the greed and short-sightedness of the system that has altered the spending habits of a generation of young people.
No one in power has the guts to come clean and admit going to college is an Utter waste of money and most should not be attending. And parents don't seem to possess original thought so they keep pushing it on their children..
And no one in any position of power wishes to create meaningful jobs that pay a good wage. Everyone is content with us being a finance economy filled with lots of temp jobs or a service economy or an entertainment and porn economy.. anything but a manufacturing one.
In reality, this has been going on for generations but is just more dramatic in the present-- this expectation that everyone must start at the absolute bottom with shit wages and no benefits and work, work, work their way up slow and incremental in little turtle crawls until by the time they make good money, they are choked with bills and responsibilities, hate their job and hate their life..
Doesn't matter if you're brilliant or super-talented or exceptional.. Nope-- bottom. No exceptions-- Everyone climbs the ladder and sells their soul rung by rung...
Besides, no boss has a strong enough ego and self-esteem to hire the person who will ultimately replace him/her...
So what has happened is this: Young people are desperately needed to consume yet not given the jobs to create the wages needed much less enough income and social security taxes to keep the ball rolling and are tens of thousands in debt before allowed to take their first legal drink at a bar...
One of the most popular little sayings from President Kennedy came from his Inaugural address where he espouses, "Ask not what your country can do for you, but what you can do for your country"
Its clever.. has a nice cadence.. but it is also utterly wrong...
The correct slogan should be "Ask not what I should do for my country when my country does not care of me. Ask what my country shall do to improve the quality of my life, and to make it so"
Squeaky wheels get the grease
Posted by Susquehanna at Friday, May 31, 2013
Thursday, May 30, 2013
"According to DataQuick, compared with the first quarter 2012, sales prices for the 1st quarter of this year have jumped 26 percent in East Palo Alto, 28 percent in Antioch, 34 percent in Union City and a whopping 51 percent in East Oakland."
That's in a 12 month period.
If that stat doesn't conjure up the word 'bubble', we're not sure what will..
It is abnormal for home prices to increase 26 to 34 percent in a one year cycle, much less 51% increase.. Those values occur based on speculation and flipping.
A person who bought the home in 2002 for $108,300 and put down a deposit of $25,000 with the rest as a 4% mortgage for 30 years ended up making monthly payments of $349.95
The person who bought the same home 3 years later after those G-D flippers spiked the home value to $208,200, based on the same $25k down and the same 4% mortgage ended up making monthly payments of $874.62
And who do you think is more likely to default on their mortgage-- someone paying about $350/month or someone paying about $875??
Of course that mindset can be quite naive.. As if the inflated home prices only work to benefit sellers and when one becomes the buyer, suddenly they're immune to the price gouge.
Everyone wants desperately to believe its 2005 again..
No one wants to remember 2008..
No one wants any reality or Truth to get in the way of their single-minded pursuit to make as much money as humanly possible while on their short time on Earth before God calls them away and leaves everything hoarded behind for tax collectors to sift through.
Its both funny and maddening.. Home prices back in the peak of the last popped bubble were overall inflated by 30-50%. They weren't the Real market values.
But people didn't like seeing the drop.. Didn't want to acknowledge the reality that the home prices of 2001 which post-bubble dropped back down by 2011 were the accurate valuations.
So they now celebrate the re-emergence of the housing bubble as if it will raise prices back to where it once was and should have stayed rather than seeing the truth that it never should have risen that quickly in the first place!
There will always be home sales.. No matter how good or bad things are; Always be buyers and sellers.
True story... We knew someone who back during the Bush years was heavily into buying and 'flipping' properties. And this individual truly believed the increasing home values would go on forever.. For privacy sake we won't mention the person's name, age or even their gender..
But suffice to say, when the bubble 'popped' this individual was woefully unprepared for the consequences.. Ultimately the only option was filing for bankruptcy.
We were told by this person that at the time of filing, this poor soul had possession of 5 homes-- one of them was that individual's legal address and the other 4 were homes purchased with the intent of flipping. We found out each home had been bought with merely 3% down and the other 97% mortgaged.
So between the four homes, it would be a fair estimate to say banks were on the hook for at minimum half a million dollars ($500k) they'd never recoup from the mortgagee, but would have to hope to get some percentage back during the foreclosure and re-sale process.
And this acquaintance was not exceptional in any way shape or form
This person was the Norm.
Because the Federal Government and the Fed refuses to allow the banks to take losses and allow home prices to naturally fall to pre-2002 levels, you now have a repeat of the mid 2000's both for professional vultures and for everyday folk..
It always happens-- greedy people who aren't content or fulfilled living a comfortable life, seeking greater fortune and thinking they know it all, then crying the loudest when it goes belly-up..
Always forgetting economics work in cycles.
Call it Economic Gravity.
Posted by Susquehanna at Thursday, May 30, 2013
Wednesday, May 29, 2013
Not a four-figure drop but.. its something.. and yet nothing worth writing about.
So we want to take a moment or two and go back to addressing yesterday's post-- all that BS excitement and happiness that home prices have risen the highest in 7 years.
We explained yesterday many reasons why its all a mirage and this has really no impact on everyday people trying to sell their normal homes to buyers..
While there may be a greater number of homes being sold today than that the worst part of the current recession-depression, the sellers may be Americans but the buyers of those homes, mainly the higher priced ones, are Foreigners.
We don't mean immigrants.. That wouldn't be a bad thing..
No we mainly mean foreigners for investment purposes.
So if you go on these type of websites.. pick out your luxurious home or spacious condo-- one that half the time you won't even bother to live in and then buy it.
And everyone is happy--
The seller is more than happy-- usually by this stage its the bank selling the property which was foreclosed upon..
The real estate agent is super happy to be getting a nice commission for really doing little to nothing but assist the foreign well-to-do in deceiving his/her own government..
And all those rats, roaches and other pieces of Shit that profit off Wall Street love hearing how the real estate market is now 'fixed'...
Everyone love it except well.. Americans. But what do they know.. Our economy is so horrible, most really can not afford new homes.
Corporate media makes no mention and thus no one minds..
Let's go back a moment to yesterday.. In Case-Schiller's top 20 city index, Miami was listed at #10 in the nation, experiencing a 10.7% increase in home sales..
The following is from the Miami Herald, 11/7/12-- We think the information is still relevant to the points we are conveying (in blue font):
Venezuelans continue to make more international real-estate purchases in Miami than any other foreign group, 16 percent, while Argentineans have leaped to second place with a 15 percent share, and Brazilians rank third at 14 percent, according to a new report from the Miami Association of Realtors...
Foreign buyers have played a vital role in lifting Miami out of the depths of the real estate downturn, and the agents came to network and to tap into the city’s allure to international investors and vacation-home buyers.
“I have clients there [in Fortaleza, Brazil] who want to buy here,” said Geovania Heller, one of many Brazilian real estate agents who attended the session Monday. “Prices are still better here than in Brazil.”
Real-estate agents from Russia, Ukraine, Germany and France, among others, joined with a large contingent of Brazilian brokers for the three-day event...
All told, Latin Americans accounted for 70 percent of the international real estate transactions in Miami and Miami Beach. Western Europeans accounted for 18 percent of foreign sales...
Francisco Angulo, an international specialist with Coldwell Banker in Miami Beach, said discretion is important in dealing with Venezuelans in their home country. Forget about taking out a newspaper ad to tout a seminar on buying real estate outside Venezuela: “Nobody will show up,’’ Angulo said. “People want to be low key.’’"
Remember, we mentioned a few months ago there's a loophole in the Patriot Act where real estate agents are not legally bound to inquire where the money comes from on foreign real estate transactions where other entities would be if large amounts of foreign funds were entering the nation.
And understand this-- this post isn't about Xenophobia..
Its actually a severe attack and indictment on the US-- its government and financial apparatus. This perpetual con game played upon its populace like you would find in non-democratic governments..
Honestly, who gives a damn in the US housing market is healthy if a vast majority of Americans can't even afford to be players in the real estate game. They must learn instead to be content to be perpetual renters.
We say this axiom often... 'The Squeaky Wheel Gets the Grease'
Average people-- the only hope and its a long shot admittedly is outward open protest and demonstration.. Something akin to the Civil Rights and Women's Liberation movement, the anti Vietnam protests and so on..
This takes time.. patience... work.. Takes talking to friends and neighbors.. creating organizations and merging with others when there's common interest and goals..
There's no guarantee of being heard, but you have a better chance of having grievances addressed when its 100,000 'squeaking' at once vs one or two...
Because 'We the People' are not feared by anyone in power..
And elections just aren't enough anymore.
Tuesday, May 28, 2013
Of course when the market is happy, no one with half a kernel of brainpower should be, but we'll put that truth aside for a moment...
Why is Wall St so jubilant?
"The S&P/Case-Shiller house-price index of 20 big metropolitan areas rose a seasonally adjusted 1.1% in March from February, the largest monthly gain since April 2006" (AP)
"Consumer confidence strengthened in May to the highest level in more than five years, suggesting Americans' attitudes were resilient in the face of belt-tightening in Washington... its index of consumer attitudes jumped to 76.2 from an upwardly revised 69 in April" (Reuters)
To quote Shaggy, "Like Wow!"
What a recovery we're all witnessing.. How could anyone dispute that 1-2 power punch of super-duper groovy good news, ehh?
Its really not that difficult actually...
What are the three biggest mover-shaker cities on the top-20 list?
Phoenix, San Francisco and Las Vegas with home price increases of over 20% year to year... And what were some of the US cities that suffered the most dramatically with home prices falling the most precipitously back in the early days of this recession-depression?
Yep.. same three cities.
New York: 2.6%, Cleveland: 4.9% and Boston: 6.7%.. All cities that felt very minor effects from the market crash of 2008 and kept their prices relatively steady throughout the past five years.
Major cities like Philadelphia, Houston and Detroit aren't even on this list.. That means for many major cities and municipalities, home sale growth was either less than 2.6% and/or negative i.e. drop in home prices...
OK, so.. next Q-- why would certain cities like Phoenix and Las Vegas spike?
2) Fannie Mae and Freddie Mac now guarantees 100% of all mortgages meaning when banks lend money to home buyers, the government takes on a totality of the risk.
This allows banks to once again lend without any direct affect or impact of a buyer defaulting in the future. Taxpayers now assume all risk
3) There is a shadow housing inventory.. For every home released by the banks post-foreclosure to be listed for sale, there's another 1-2 homes purposely kept off the market especially in cities hurt most by the housing drop.
4) Super-low interest rates based on the Federal Reserve's policy of killing savers and fiscally responsible people while encouraging Americans to acquire massive amounts of debt, which is the only 'engine' driving this global economy...
5) That most despicable scum called speculators or house 'flippers' who buy homes they have no intention in living in, making a couple cosmetic adjustments and reselling at 5-15% profit.
In all likelihood, the jackals sell the homes to other flippers to do the same, and so on.. This was a big reason for the crash of home values in 2007, not the weak background checks or the dramatic APR rate change after 12-24 months..
And they're doing it again...
6) Foreign money buying up cheap US properties as investments and means to hide from their own nation's tax collectors...
So in summary, nothing about this housing recovery is organic or 'Real'.. Its all based on smoke and mirrors and buttressing and puppet strings and other chicanery giving life where little exists.
How will you know there's a true recovery? When the Fed stops manipulating the interest rates so low so banks can borrow cheaply and inflate the market. If people are buying homes when a 30 year mortgage is 4.5-7.25% instead of at 2.25%..
Then you notice the signs that say "Everything in store 50-70% off"
Is that a successful business operation?
If it appeases Wall Street, to some it would be...
So now let's debunk all that Consumer Confidence nonsense...
The second week of every month the Consumer Confidence Board asks responders their opinions on their confidence as consumers presently. Every fourth week, responders are asked how more or less confident they will feel six months into the future.
2) As we've stated before, in a population of over 310 million people, they only phone poll 5,000 individuals which is less than one hundred-thousandths of one percent.
If the findings are ever negative, Wall Street will dismiss and shoo it away quicker than a fly from a face, rationalizing the super small sample size.. And when the findings are positive, they're taken as an accurate reflection of the public's mood.
And afterwards when you maxed out your cards and there's still no good paying job awaiting, the market will just giggle at you..
Let's try to tie this all up by using the example of a very sick patient..
He/she is lying in a coma-- motionless, eyes closed... tubes feeding it intravenously .. machines controlling the ability to breathe, etc..
If someone grabbed the comatose person's leg and lifted it,is that 'walking'? If the big toe was held onto by another and moved back n forth, did the patient really wiggle it? If a person can not actively feed themselves or breathe on their own, is that 'improvement'?
We guess if you can make profit off the illusion, you'd say 'Yes!'
The 'body' of course is the US economy. (Its actually the global economy but not enough time today to delve into all that)
And that's not true..
It is all illusionary.
To buy a home, you need a good paying job... Not Mickey D.
Without a good paying job, there's few good options
If someone wants a home badly, right now they're putting down a mere 3-5% down. That's a debt burden of 95% to 97% over 30 years, which is what government desperately needs... You indebted.
Remember, the system is set up to profit both from your debt-ridden spending spree and your ultimate financial downfall (debt collectors, sheriff notices, foreclosure, bankruptcy).. Its' win-win for them..
And here's the simple truth about consumer confidence:
When you have money, you feel confidence..and when you don't have money, you don't feel confident about anything..
And if magically you took away people's ability to use credit cards with exception of bank cards directly connected to one's checking account, then polled people, you'd see a confidence survey in utter free fall.
Don't believe any of the lies the media tells you about the economy. More importantly, don't increase your spending habits based on these untruths...
When your personal life's economic fortunes improve, then you will know what's the best spending habits for you
Posted by Susquehanna at Tuesday, May 28, 2013
Monday, May 27, 2013
This is what Memorial Day was before Congress decided to lump all dead of all wars into this holiday in the early 1920s and call it 'Memorial Day'
It was originally meant to honor those who died Specifically in the Civil War when passed into law in 1868... Not even those who fought and died in the Revolution, War of 1812 or Mexican War were to be included in Decoration Day; a mostly somber occasion.
600,000 human beings on both sides killed in four years (not counting all those who survived with missing limbs)
A war fought so Wall Street could be in control of the price of cotton on their trading floors and not the southern plantation owners who would get better prices exporting to England
A war fought because northern industrialists paying a nickle a day to their poverty-stricken immigrant labor force were resentful they were still paying a nickle more than their southern agrarian counterparts.
Of course some were noble; some did fight to emancipate the slaves..
Most Northern soldiers did not.
Lincoln did not..
Nonetheless, this is what Illinois Senator candidate Abraham Lincoln said in the 2nd of the famous Lincoln-Douglas debates on August 27, 1858 addressing a question on race (in blue font):
"I will say, then, that I am not, nor ever have been, in favor of bringing about in any way the social and political equality of the white and black races -- that I am not, nor have ever been, in favor of making voters or jurors of Negros, nor of qualifying them to hold office, nor to intermarry with white people; and I will say in addition to this that there is a physical difference between the white and black races which prevents them from living together on terms of social and political equality.
And inasmuch as they can not so live, while they do remain together there must be the position of superior and inferior, and I as much as any other man, am in favor of having the superior position assigned to the white race"
So you get in touch with the everyday man's religious moral side to do right by God and thus you attach liberation to the fight..
Hmm.. after a victory of course... Can't look too desperate..
And when re-election looks like a major improbability, what to do?
What to do?
And you send another General westward-- a mentally insane man who dealt with nervous breakdowns and once tried to kill himself in a fit of depression... You send this man into the heartland of the south with the sole goal of targeting the civilian populations-- homes and farms looted then set ablaze.. all livestock stolen so the people would starve.. women raped..
You could accurately say Sherman was America's first Terrorist.
When successful, the ends truly Do justify the means.
So we take a moment to remember those who've fallen 150-ish years ago and tip our caps...
And now its time for more BBQ'ing.. chicken cutlets and burgers marinated in hickory brown sugar glaze.. Yumm Yumm~