by ilene - July 29th, 2014 3:28 pm
Courtesy of Lee Adler
As usual, the Conference Board and all the major media press release repeaters put a positive spin on the highest reading of Consumer Confidence (aka the Con Con Con) since October 2007. None of the media echo chamber reports pointed out that October 2007 was the beginning of the worst bear market in US stocks since 1973-74. So I thought it important that the issue be given a little perspective (as I did recently with the Thompson Rhoiders Michigan Con Index).
First things first, the Con Con Con is an amalgamation of the results of two survey questions presented to “consumers” (aka real people). One question asks people how they view the current status of the economy, which is useful because most people are capable of seeing the present reasonably accurately. The other question is what they think conditions will be in 6 months, as if anybody knows the answer to that. While real people may be far better at answering that question than Wall Street and academic economists and media echo chamber pundits… I mean really… Ask a stupid question get a stupid answer. So then the Con Con Con takes the useful index of Present Conditions and combines it with a completely stupid index of what people think the future holds, and thereby creates a stupid and useless composite index.
Given that, let’s just focus on the one measure that might be meaningful, the Present Conditions index. The chart created by Briefing.com, with a little technical analysis and annotations added by yours truly, gives us that which is missing in the media echo chamber reporting… perspective. The graph speaks for itself. The long term trend is down. Note that the index is based on the average reading in 1985 being 100. The peak reading of around 185 was reached at the end of the tech bubble. Another peak around 140 was reached at the top of the housing bubble, when virtually everybody had a home equity ATM. The current reading remains below the 1985 average at about half the peak level.
Perspective on the Con Con Com – Click to enlarge
Whopping 35% Have Debt in Collection! Delinquent Debt in America: By Region and Metro Area, Where Is?
by ilene - July 29th, 2014 3:21 pm
Courtesy of Mish.
The Urban Institute has an interesting 14-page synopsis on Delinquent Debt in America.
By percentage, the number of people in collections is largely concentrated in the South, while amount owed shows no geographic pattern. The Urban Institute uses 2013 credit bureau data from TransUnion to measure how many Americans are reported as at least 30 days late, not including late payment of mortgages. The institute also examines how many Americans have debt in collections and the amount of this debt.
In order to have credit card debt, one first must have credit. However, some without traditional credit show up as delinquent on account of late utility, medical, or other bills.
The key general finding is: Of those with credit files, an astonishing 35% have debt in collections.
- 5.3% (Roughly 1 out of 20) of people with a credit file are at least 30 days late on a credit card or other non-mortgage account (e.g., automobile loan, student loan). In other words, they have debt that has been reported as past due to the credit bureau.
- The share of people with debt past due ranges from 4.6% in the West, North Central, and Middle Atlantic divisions to 7.5% in the West South Central division.
- Three states have less than 4% of the population with debt past due: Utah, Washington, and New Jersey.
- Three states have more than 7% of the population with debt past due: Louisiana, Texas, and Mississippi.
- Nearly 40% of the high-concentration census tracts in the country are in Louisiana or Texas.
- Areas with lower household incomes have more people with debt past due, but the correlation is only -0.3. So, while income matters, the concentration of delinquent debt is not simply an income story.
- Of those with credit files, an alarming 35% have debt in collections.
- Debt in collection ranges less than $25 to more than $125,000. The average amount owed in collections is $5,178.
- Nevada, which was hard hit by the housing crisis, tops the list of past-due states: 47% of people with a credit file in Nevada have reported debt in collections. The District of Columbia and an additional 12 states (11 in the South) are over the 40 percent mark: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Texas,
by ilene - July 29th, 2014 1:46 pm
Stocklemon of Citron discusses the potential merger of the internet real estate companies Zillow and Trulia and the problems they face. ~ Ilene
The stock market and the real estate industry are all abuzz about the possible merger of Zillow (NASDAQ:Z) and Trulia (NASDAQ:TRLA). The media is now filled with stories proclaiming that the combined company will instantly become an internet advertising juggernaut that wields pricing power over the entire internet real estate industry.
You cannot read a single article or analyst commentary that doesn’t invoke the magic phrase “Pricing Power”. Without the slightest thought whatsoever, the combination of Zillow and Trulia is supposed to give the combined entity the power to triple ad revenue from real estate agents. Nothing could be further from the truth – and we have the proof.
by ilene - July 29th, 2014 1:27 pm
Submitted by Tyler Durden.
We have been warning for years that as a result of the Fed's disastrous policies, America's middle class is being disintegrated and US adults are surviving only thanks to insurmountable debtloads. But not even we had an appreciation of how serious the problem truly was. We now know, and it is a shocker: according to new research by the Urban Institute, about 77 million Americans have a debt in collections.
The breakdown by region:
As the Washington Post reports, that amounts to 35 percent of consumers with credit files or data reported to a major credit bureau, according to the study released Tuesday by the Urban Institute and Encore Capital Group's Consumer Credit Research Institute. "It’s a stunning number," said Caroline Ratcliffe, senior fellow at the Urban Institute and author of the report. "And it threads through nearly all communities."
The report analyzed 2013 credit data from TransUnion to calculate how many Americans were falling behind on their bills. It looked at how many people had non-mortgage bills, such as credit card bills, child support payments and medical bills, that are so past due that the account has since been closed and placed in collections.
Researchers relied on a random sample of 7 million people with data reported to the credit bureaus in 2013 to estimate what share of the 220 million Americans with credit files have debts in collection. About 22 million low-income adults who did not have credit files were not represented in the study.
While we understand why someone owing tens if not hundreds of thousands can just do what the US government does so well, and simply decide to stop paying their debt (if unlike the government, without the option to roll it), what is scary is that there are people who are in collection on amount as tiny as $25.
The debts sent to collections ranged from $25 on the low end and to more than $125,000 on the high end. Many consumers were burned for relatively small amounts — about 10 percent of the debts were smaller than $125,
by ilene - July 29th, 2014 12:26 pm
Courtesy of Lee Adler
I won’t go into the specifics of the worst housing indicator in the world, released today and dutifully spewed by the world’s mainstream financial infomercial outlets. If you want to pick through that type of garbage, go read the Wall Street Journal or Bloomberg or watch CNBC. You can get the irrelevant and misleading data on US housing prices there.
Presented as a public service, here’s a review of a several housing price indicators which are timely and are not smoothed and lagged to the point of silliness as the Case Shiller Index is. They show that as of right now, the US housing price bubble continues to inflate, in spite of weak demand.
First let’s look at a couple of real time or near real time indicators of the housing trend, DepartmentofNumbers.com’s real time listing prices for late July, and Redfin’s real time contract prices from June. Before you complain that listing prices aren’t sale prices, the fact is that since this data has been published in 2006, the subsequently released lagging data on actual sale prices has shown that the trend of listing prices has been absolutely accurate in showing the direction of US housing prices in real time. Naturally, they are higher than sale prices, but they trend in the same direction and turn at the same points in time. The lagged data reported by various organizations differ in only one material respect. They’re lagged. Listings data is real time. It accurately shows what the market is doing right now, which is starting the usual seasonal second half pullback that begins every year in late summer, while continuing the powerful uptrend track it has been on.
US Home Sale Prices
The DepartmentofNumbers.com’s data represents real time listing prices collected from 54 of the largest markets in the US. Redfin collects all contract prices in real time in the 19 large markets it serves. Their sample is skewed by the fact that Redfin serves only large, active, desirable markets, and therefore it overstates price increases relative to the nation as a whole, but again, its direction has proven to be accurate. If the prices of 19 large,…
by ilene - July 29th, 2014 11:49 am
Courtesy of The Automatic Earth.
Arthur Rothstein Elm Street, Theater Row, Dallas Jan 1942
I don’t think it’s ever a good sign, no matter how funny it may look, when the US state Department makes one think of Monty Python. But it does. With a Silly Claims instead of Silly Walks department. Would these people really sit around a big table in the evening and brainstorm about what anti-Russia statement to feed to the press the next morning? What else could possibly be going on here? I mean, just look at this bit from the New York Times:
The United States has concluded that Russia violated a landmark arms control treaty by testing a prohibited ground-launched cruise missile, according to senior American officials, a finding that was conveyed by President Obama to President Vladimir V. Putin of Russia in a letter on Monday. It is the most serious allegation of an arms control treaty violation that the Obama administration has leveled against Russia [..]
At the heart of the issue is the 1987 treaty that bans American and Russian ground-launched ballistic or cruise missiles capable of flying 300 to 3,400 miles. That accord, which was signed by President Ronald Reagan and Mikhail S. Gorbachev, the Soviet leader, helped seal the end of the Cold War and has been regarded as a cornerstone of American-Russian arms control efforts.
Russia first began testing the cruise missiles as early as 2008, according to American officials, and the Obama administration concluded by the end of 2011 that they were a compliance concern. In May 2013, Rose Gottemoeller, the State Department’s senior arms control official, first raised the possibility of a violation with Russian officials. The New York Times reported in January that American officials had informed the NATO allies that Russia had tested a ground-launched cruise missile [..]
If we are to believe the NYT, Russia started testing the system 6 years ago, it then took the US at least 3 years to ‘conclude’ it was ‘a compliance concern’, another 18 months or so to ‘raise the possibility of a violation with Russian officials’, 8 more months after that to inform NATO – and have the NYT write it up – and another half year…
by ilene - July 29th, 2014 11:05 am
Courtesy of Pam Martens.
In 2012, Wall Street Journal reporter, Scott Patterson, released his 354-page prescient overview of U.S. market structure titled, Dark Pools: High Speed Traders, A.I. Bandits, and the Threat to the Global Financial System. (For those whose computer prowess is limited to turning on a laptop, like millions of fellow Americans, “A.I.” means artificial intelligence – machines teaching themselves to think like humans, but faster.)
Patterson comes to an epiphany on page 339 of his book, writing in the notes section: “The title of this book doesn’t entirely refer to what is technically known in the financial industry as a ‘dark pool.’ Narrowly defined, dark pool refers to a trading venue that masks buy and sell orders from the public market. Rather, I argue in this book that the entire United States stock market has become one vast dark pool. Orders are hidden in every part of the market. And the complex algorithm AI-based trading systems that control the ebb and flow of the market are cloaked in secrecy. Investors – and our esteemed regulators – are entirely in the dark because the market is dark.” (The italics in this excerpt are as they appear in the hardcover book.)
We totally agree with Patterson that U.S. markets are the darkest they have ever been in history – from their early origins in the bright sunlight under the Buttonwood tree at 68 Wall to today’s secretive, unregulated stock exchanges known as dark pools that trade in private across America – the lights have gone out. And as each light has flickered and dimmed, public confidence has drained from the system, leaving it today as the unsafe battlefield of hedge funds, high frequency traders and dark pool operators.
Wall Street and its sycophants began this journey into darkness with their push to run their own private justice system on Wall Street in the 1980s. Called mandatory arbitration, Wall Street was given a green light by the U.S. Supreme Court in its 1987 decision, Shearson/American Express v. McMahon. Since then, cases filed by both customers and employees against Wall Street firms, which could shed critical light and serve as an early warning system on patterns of fraud and…
by ilene - July 29th, 2014 8:45 am
Courtesy of Larry Doyle.
In early 1990 after 7 fabulous years learning the ins and outs of Wall Street while working at The First Boston Corporation, I departed that venerable firm for the rough around the edges ways of Wall Street that defined Bear Stearns. I had been cautioned by some not to make that move. I am glad that I disregarded that advice.
The relationships and business acumen I gained during my 7 years (1990-1997) at “the Bear” made all the difference in the world during my days in those large Wall Street banks.
As with most organizations, the tone and culture that emanates throughout the company is set at the top. In 1990, Bear Stearns was led by Wall Street legend Alan “Ace” Greenberg. Last Friday I felt a real sadness when I learned of his passing. While I have little regard let alone respect for most of the senior level management on Wall Street, Ace Greenberg was different. I held him in the highest regard and had untold respect for him. Why so? Let me count the ways.
Ace was a winner. He cared. He was ultra-competitive but knew that rules were not meant to be broken.
He was a bridge back to the days of Wall Street partnerships when one’s word actually meant something. While many of Wall Street’s most senior executives would stroll or saunter into their offices that were typically larger than most Manhattan apartments, Ace would spend the bulk of his day firmly entrenched at his desk and meaningfully accessible right there on the trading floor.
He was renowned for writing regular memos that went throughout the firm under his pen name of Haimchinkel Malintz Anaynikal. They were absolutely priceless and filled with a simple but precious wisdom that often got lost on Wall Street amidst the sea of egos and sociopaths that ran large parts of the industry.
His writing was collected into a short book entitled Memos from the Chairman.
His direction that paper clips and elastic bands should never be purchased by anybody within the firm because more than enough of these items could be found and saved from the incoming mail went straight to instilling a real discipline around managing expenses.…
by ilene - July 29th, 2014 4:42 am
Courtesy of Mish.
The war in Ukraine is going so well that soldiers are unpaid and men are ordered to serve whether they want to or not.
Hats off to a group of women who confront a Ukrainian soldier and burn military writs right in front of the soldier’s face.
Writ Burning Video
Video link: Ukrainians Burn Writs
- Woman to Ukrainian soldier: Who are you?
- Soldier: I am the head of the local recruiting center.
- Woman: Why are you bringing military writs?
- Soldier: It’s an order from above. I can’t explain all the details but you can read about it on the internet
- Soldier: When did you get the writs?
- Very disgruntled woman: Yesterday evening.
- Another Woman: This one we got recently.
- Soldier: Yes, we’re sending those to put the potential recruits under control.
- Yet another woman: We don’t need it. We don’t need any war.
- Multiple women chime in with the same thing at once about not wanting war.
- Very disgruntled woman: We’ve been told that the police will handle those who refuse to sign the writs for mobilization. What does that mean?
- Soldier: It’s an official order for total mobilization.
- Another woman: We’ve been told those fairy tales many times. They told us those who refuse to go to war will go to jail for 5 years.
- Soldier: I ask you, did we take anyone to war so far?
- Woman: When you take someone it will be too late to worry.
- Another woman: We’ve never been on Maidan. We didn’t touch anyone. We don’t need it.
- Very angry man gesturing: Take your recruit list and make sure no one will be taken to war.
- Soldier – finally admitting the truth: They will take your sons anyway.
- Same angry Man: Who will take them?
- Soldier: The state
- Same angry man: We don’t give a damn about your country and your war!
- Large group gathers writs and sets them on fire.
- Background conversation: mostly untranslated but also containing We are sickened of the authorities.
- More background conversation: The authorities flee like rats from a sinking ship, but they come here and take our sons and send them to death. They all made the mess and now they need us to clean it up.
- Fire takes
by ilene - July 29th, 2014 1:24 am
Israel has all the proof it needs that world opinion will never consider its right to exist important. The Obama White House, and a lot of the US News Media, portray the Hamas-Israel conflict as something like an amateur soccer match, with the uneven score (40-odd Israeli soldiers killed versus 1000-plus Palestinians, mostly civilians) showing that the contest is unfair, that Israel has “gone too far,” that they have entered the same moral zone as Hitler, Stalin, and Pol Pot, carrying out a “genocide.”
Of course, this is a real hot war, not a diversity training exercise, or a self-esteem course, or any sort of the kindergarten psychotherapy that has come to form the basis of American thought and policy. And a vicious world opinion uses America’s own moral fecklessness the way Hamas uses women and babies to shield its rocket installations.
Apparently world opinion also doesn’t take seriously Israel’s founding maxim, “never again,” meaning that Israelis will not passively wait for world opinion to save them from an enemy that plainly and clearly seeks to annihilate them, as happened 1933-45. The Hamas organization is explicitly dedicated to the destruction of Israel. That is not a rhetorical gimmick; it is its declared unwavering primary goal.
The claim that Israel seeks to annihilate the Palestinians is simply a lie. Israel seeks to stop rocket attacks and tunnel invasions, and as long as Hamas is dedicated to those actions, they can expect a forceful Israeli reaction. The sealed border of Gaza has been part of that reaction, to counteract the traffic in war materials and the ready supply of suicide bombers who, Hamas declares, “love death more than the Israelis love life.”
The Hamas war leaders are killing their own people to score public relations points. The particulars of the Hamas arsenal embedded among the civilian Gaza population are so firmly established that the facts are hardly worth rehearsing. Anyway, the world doesn’t care about those facts. Israel’s will to exist is an annoyance to it.
Of course, Gaza is just one flash point in an Islamic region much more broadly inflamed in conflict between different Islamic brands and their political subsidiaries. The