Posts Tagged ‘rent’

Mr. Obama’s Most Recent “2%” Sellout is his Worst Yet

Mr. Obama’s Most Recent “2%” Sellout is his Worst Yet

obamaobamaCourtesy of Michael Hudson

Now that President Obama is almost celebrating his willingness to renew the tax cuts enacted under George Bush for the super-rich ten years ago, it is time for Democrats to ask themselves how strongly they are willing to oppose an administration that looks increasingly like Bush-Cheney III. Is this what they expected by his promise of an end to partisan politics?

It is a reflection of how one-sided today’s class war has become that Warren Buffet has quipped that “his” side is winning without a real fight being waged. No gauntlet has been thrown down over the trial balloon that the president and his advisor David Axelrod have sent up over the past two weeks to extend the Bush tax cuts for the wealthiest 2% for “just” two more years. For all practical purposes the euphemism “two years” means forever – at least, long enough to let the super-rich siphon off enough more money to bankroll enough more Republicans to be elected to make the tax cuts permanent.

Mr. Obama seems to be campaigning for his own defeat! Thanks largely to the $13 trillion Wall Street bailout – while keeping the debt overhead in place for America’s “bottom 98%” – this happy 2% of the population now receives an estimated three quarters (~75%) of the returns to wealth (interest, dividends, rent and capital gains). this is nearly double what it received a generation ago – while the rest of the population has been squeezed, and foreclosure time has now arrived.

economy, obamaOne would not realize that the financial End Time is here from today’s non-confrontational White House happy-talk. Charles Baudelaire quipped that the devil wins at the point where he manages convince the world that he doesn’t exist. We might paraphrase this today by saying that the financial elites win the class war at the point where voters believe it doesn’t exist – and believe that Mr. Obama is trying to help the middle class, not reduce it to debt peonage and a generation of victimhood as the economy settles into debt deflation.

The first pretense is that “two years” will get us through the current debt-induced depression. The Republican plan is to make more Congressional and Senate gains in 2012 as Mr. Obama’s former supporters “vote with their backsides” and…
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SHELTER COSTS STILL DEFLATIONARY

SHELTER COSTS STILL DEFLATIONARY

Courtesy of The Pragmatic Capitalist

Last Friday’s CPI report was hardly cause for concern with regards to the inflation outlook.  The core year over year rate was astonishingly low at just 1.2% while the exclusion of food and energy actually reduced the year over year rate to just 1%.  While the PPI reports are clearly showing higher rates of inflation, it’s also clear from the consumer inflation data that these costs are not getting passed along.  This is just one more clear sign of weakness at the household sector.

While food and energy tend to catch the media spotlight (they are the most volatile and noticeable after all) they’re not the largest components of consumer costs even if you combine the two.  Shelter costs are by far the largest input in the consumer cost equation.  A look at last week’s data shows the deflationary tendencies in this data. Econoday highlighted this over the weekend:

“In the core, shelter costs continued to stand out—as weak.  Just when you thought they could not get softer, they did.  Shelter costs were flat in August after rising only 0.1 percent in each of the prior fourth months. Again, this reflects the weak housing market and also a sluggish travel market for lodging while away from home. Shelter costs are so week that on a year-ago basis they were down 0.5 percent in August.”

When we actually include housing costs in the equation we get a similar deflationary trend.  Based on my data housing costs are just marginally deflationary at -0.25% year over year.  I’ve taken the CPI data a step further and actually added the Case Shiller data.  Since roughly 70% of Americans are homeowners, I replaced 2/3rds of the housing component in the CPI data with the house price data.  Thus, we still account for the rental costs, but don’t entirely ignore the real cost of a mortgage.

The BLS has a relatively controversial way of calculating the housing component of the CPI – they use what is called owners equivalent rent (OER). This estimates what your house might rent for if you were so inclined. What’s misleading here is that the data doesn’t really reflect consumer costs and thus psychology. The last decade is a prime example. Rising home values have a wealth effect. Consumer spending is bolstered in such an environment.  Likewise, consumer spending will deteriorate…
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Ponzi “Shark Loans” Fuel China’s Housing Bubble; Home Sales Plunge 44% in Xiamen; Bubble Busts in Tianjin

Ponzi "Shark Loans" Fuel China’s Housing Bubble; Home Sales Plunge 44% in Xiamen; Bubble Busts in Tianjin

Courtesy of Mish

BEIJING - JUNE 25: Salespeople sit unoccupied during the 2010 Beijing Summer Real Estate Trade Fair onJune 25, 2010 in Beijing, China. A new policy introduced in April restricts families from buying more than one additional home, and prevents non-local residents from buying an additional home unless they have worked in Beijing for more than a year. In the declining real estate market several new housing developments have seen no sales so far this month. (Photo by Feng Li/Getty Images)

China’s property bubble is now on the verge of collapse. Transaction volumes are significantly down and declining volume is how property bubbles always burst. In simple terms, the pool of greater fools eventually runs out.

In China’s case, the pool of fools is heavily involved in "loan shark" schemes where speculators hope property values rise fast enough to cover the interest.

Ponzi Loan Shark Operations Fuel Bubble 

Please consider The Secret Engine Behind China’s Housing Bubble- The Ponzi Shark Loan Finance

In this article we will show how the ponzi shark loan scheme works and why we think the regime in China will fall. Our research is based on sources INSIDE CHINA

This is how this Ponzi scheme works:

Local officials, [required by] the government to produce double digit GDP growth numbers, give real estate developers permits to build housing projects in return for bribes. They also get bribes in return for allowing the shark loan companies to operate under their jurisdiction. Some of them are active partners in shark loan businesses. Every scheme has a ring leader whose job is to collect money from all the participants in the Ponzi scheme. When some of these Ponzi schemes blow up, the party leaders always get bailed out first.

Most of the funds that are collected in this classic Ponzi finance go to local land purchases and real estate development. Part of the funds are used in order to pay back the rolling loan. The short term interest rate in this black market is very high and ranges between 20%-150% annual rate. The sources of the Ponzi funds are diverse, as ordinary citizens, banks with corrupted bank officials, and state enterprises play the game.

A reader wrote to us this email two weeks ago, which triggered our in depth research:

“My hometown is Zhejiang, now I live in shanghai, my sister pledged her home to bank, she lived in Hangzhou, she bought her home around 500,0000rmb five years ago, now her home worth 2 million RMB, so she can get huge loan from bank, she gave this loan to a shark loan company with 30% return every year, she has been doing and living on this for 4 years, she is a middle school


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Zero Hedge

How An Anbang Default Could Rock The Market: Wall Street Explains

Courtesy of ZeroHedge. View original post here.

Last June, when looking at the most unstable of China's mega conglomerates Anbang Insurance (the others are HNA, China Evergrande and Dalian Wanda), we said that "Anbang's troubles could soon become systemic."  Half a year later, that's exactly what happened when in a "surprising" twist, the $315 billion insurer was bailed out by Beijing, just days after we pointed out the tremendous surge in the yield on its bonds.

...

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ValueWalk

Antifragile By Nassim Taleb Animated Book Review

By VW Staff. Originally published at ValueWalk.

Antifragile: Things That Gain from Disorder By Nassim Taleb Animated Book Review

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Insider Scoop

Earnings Scheduled For February 23, 2018

Courtesy of Benzinga.

Companies Reporting Before The Bell
  • Public Service Enterprise Group Inc. (NYSE: PEG) is expected to report quarterly earnings at $0.56 per share on revenue of $2.51 billion.
  • Huntsman Corporation (NYSE: HUN) is projected to report quarterly earnings at $0.64 per share on revenue of $2.10 billion.
  • Pi...


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Phil's Favorites

Defeating Nonsense with Evidence

 

Defeating Nonsense with Evidence

Courtesy of 

Most of the market commentary you come across, including a lot of mine, is nonsense – even if it’s well meaning nonsense.

Of course we’re trying to interpret things as they happen – it’s human nature to want to understand what’s going on. The thing is, it’s probably best to use evidence as a starting point, rather than just repeating old wives tales, rules of thumb and opinions you hear in the media that sound better than they actually are.

At least, that’s what we try to do.

I want to make sure you don’t miss either of these ...



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Digital Currencies

US Olympians Are Turning To Bitcoin To Offset Competition-Related Costs

Courtesy of ZeroHedge. View original post here.

As many college athletes know all too well, funding for more niche sports like - for example - luge is often lacking, and securing more often requires hours of fundraising by the team's boosters.

Which is why, ahead of the Winter Games in PyeongChang, some teams started getting creative. For instance, fundraisers for the US luge team have started accepting donations in bitcoin. Indeed, the team has raised several thousand dollars worth of bitcoin.

...



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Chart School

'Bull Trap' in Dow Jones Industrial Average

Courtesy of Declan.

Starting to see evidence that the February bounce in markets is fading. The Dow Jones Industrial Average finished with a 'bull trap' as it ducked below breakout support despite finishing above yesterday's close. Volume dropped as relative performance against tech indices took a marked step lower. Troubling times for the 'flight-to-safety' route.


The Semiconductor Index had looked like it was ready to mount a challenge of the January 'bull trap' but the last couple of days have seen a second attempt at a reversal ...

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Biotech

What is 'right to try,' and could it help?

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

What is 'right to try,' and could it help?

In this March 18, 2011 photo, Cassidy Hempel waved at hospital staff as she was being treated for a rare disorder. Her mother Chris, left, fought to gain permission for an experimental drug. AP Photo/Marcio Jose Sanchez

Morten Wendelbo, Texas A&M University and Timothy Callaghan, ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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