Posts Tagged ‘home ownership’

Hussman Blasts Geithner, Bernanke, Keynes; Why Keynesian Stimulus Always Fails

Hussman Blasts Geithner, Bernanke, Keynes; Why Keynesian Stimulus Always Fails

Courtesy of Mish 

In his latest post, John Hussman takes a well deserved swipe at illegal Fed operations, Geithner, Bernanke, and Keynesian stimulus.

Please consider a few snips from Implications of a Likely Economic Downturn.

…. With regard to "stimulus" plans, my difficulty with last year’s policies is not so much an aversion to government spending as it is a rebuke of the notion that government spending is by its nature stimulative or beneficial to the economy. The issue is how this real value is used. Is it used to advance socially useful outcomes which private individuals, through some failure of coordination, could not achieve? Or is it used to defend bondholders, industries, and institutions with which the policymakers are most closely aligned?

The Keynesian view is that government spending is simply a monolithic letter "G." Keynes cared little about the productivity or lack thereof to which public resources were devoted, even writing " If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again… there need be no more unemployment." The only difference between Keynes and Tim Geithner is evidently that Geithner prefers to place the bottles a bit closer to Wall Street.

…Meanwhile, I continue to believe that both Bernanke and Geithner’s hands should be tied quickly. If we have learned anything over the past 18 months, it is clear that these bureaucrats can misallocate an enormous quantity of public resources with mind-numbing speed. The diversion of public resources to the bondholders of failing financials – to precisely the worst stewards of capital in society – is not stimulative, but ruthless. A second economic downturn should encourage the repudiation of the policies that Bernanke and Geithner pursued during the first.

Basic ethical principle dictates that policy makers should not burden ordinary Americans to pay the losses that well-informed bondholders voluntarily took when they lent money to failing institutions. From my perspective, it is urgent to recognize that Fannie Mae and Freddie Mac obligations are not legally obligations of the U.S. government, that its backing was always at best implicit, and that even the Treasury’s distressingly generous 3-year promise


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The Root of the Housing Bubble Remains Unchanged

Introduction, courtesy of Michael Panzner of Financial Armageddon‘Who Benefits?’

It’s not often that I highlight material from the same blog more than once over the course of a few days or weeks. But then again, there are not too many commentators who are as thoughtful and insightful as Charles Hugh Smith, author of Survival+ and publisher of Of Two Minds blog, a long-time favorite of mine. Last time around, he gave us a no-holds barred assessment of the so-called recovery. In "The Root of the Housing Bubble Remains Unchanged," he suggests, among other things, that for many people, there’s little to gain — and lots to lose — from pursuing the traditional American dream.

The Root of the Housing Bubble Remains Unchanged

Courtesy of Charles Hugh Smith

Banks and Wall Street profited immensely from millions of unqualified home buyers reaching out for the simulacrum of middle class "ownership."

The fundamental root of the housing bubble--the collusion of the Central State and banks to extend home ownership to millions of citizens who did not qualify for that burden-- remains firmly in place.

The Federal government continues to pour tens of billions of dollars into this "home ownership should be for everyone" project via subsidies to Fannie Mae, Freddie Mac and FHA. Mortgage lenders have been delighted to write mortgages in our completely nationalized market in which the government backs literally 99% of all mortgages and the Federal Reserve bought $1.2 trillion in mortgages that no sane private investor would touch.

Fannie Mae seeks $8.4 billion from government after loss: Fannie Mae, the largest U.S. residential mortgage funds provider, on Monday asked the government for an additional $8.4 billion after the company lost $13.1 billion in the first quarter. 

Because of current trends in housing and financial markets, Fannie Mae expects to continue having a net worth deficit in future periods and to need to tap more funding from the Treasury.

"Promoting sustainable homeownership and maintaining ready access to liquidity are our guiding principles in serving the residential markets," said Michael Williams, the firm’s chief executive.

The government has relied heavily on both companies, which buy mortgages from lenders to stimulate more lending, to stabilize the housing market.

In other words, the housing market would collapse without this massive Federal support, and there is no end to the losses this subsidy will require. Propping up the…
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Wall Street Titans Use Aliases to Foreclose on Families While Partnering With a Federal Agency

Wecome to Pam Martens!  Pam wrote this article for CounterPunch and kindly allows us to reprint it here. This is Part One of CounterPunch’s Special Investigation Series - I’m looking forward to additional great articles by Pam. – Ilene

Wall Street Titans Use Aliases to Foreclose on Families While Partnering With a Federal Agency

By PAM MARTENS

A federal agency tasked with expanding the American dream of home ownership and affordable housing free from discrimination to people of modest means has been quietly moving a chunk of that role to Wall Street since 2002.  In a stealth partial privatization, the U.S. Department of Housing and Urban Development (HUD) farmed out its mandate of working with single family homeowners in trouble on their mortgages to the industry most responsible for separating people from their savings and creating an unprecedented wealth gap that renders millions unable to pay those mortgages. This industry also ranks as one of the most storied industries in terms of race discrimination.  Rounding out its dubious housing credentials, Wall Street is now on life support courtesy of the public purse known as TARP as a result of issuing trillions of dollars in miss-rated housing bonds and housing-related derivatives, many of which were nothing more than algorithmic concepts wrapped in a high priced legal opinion.  It’s difficult to imagine a more problematic resume for the new housing czars.

To what degree this surreptitious program has contributed to putting children and families out on the street during one of the worst economic slumps since the ’30s  should be on a Congressional short list for investigation.  HUD’s demand for confidentiality from all bidders and announcement of winning bids to parties known only as “the winning bidder”  deserves its own investigation in terms of obfuscating the public’s right to know and the ability of the press to properly fulfill its function in a free society. 

Despite three days of emails and phone calls to HUD officials, they have refused to provide the names of the winning bidders or the firms that teamed as co-bidders with the winning party.  Obtaining this information independently has been akin to extracting a painful splinter wearing a blindfold and oven mitts. 

That a taxpayer-supported Federal agency conducts a competitive bid program of over $2 billion and then refuses to announce the names of the winning bidders is beyond contempt for the American people.  If the
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Collapse Of The “Ownership Society”

Collapse Of The "Ownership Society"

Courtesy of Mish

Bush’s "ownership society" has collapsed under the dead weight of debt. There is too much debt and too little income to support it. Please consider President shifts focus to renting, not owning.

The Obama administration, in a major shift on housing policy, is abandoning George W. Bush’s vision of creating an “ownership society’’ and instead plans to pump $4.25 billion of economic stimulus money into creating tens of thousands of federally subsidized rental units in American cities.

The idea is to pay for the construction of low-rise rental apartment buildings and town houses, as well as the purchase of foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates.

Analysts say the approach takes a wrecking ball to Bush’s heavy emphasis on encouraging homeownership as a way to create national wealth and provide upward mobility for low- and working-class families, especially minorities. Housing and Urban Development Secretary Shaun Donovan’s recalibration of federal housing policy, they said, shows that the Obama White House has acknowledged that not everyone can or should own a home.

In addition to an ideological shift, the move is a practical response to skyrocketing foreclosure rates, tight credit, and the economic crisis.

Barney Frank The Hypocrite

"I’ve always said the American dream should be a home – not homeownership," said Representative Barney Frank, chairman of the House Financial Services Committee and one of the earliest critics of the Bush administration’s push to put mortgages in the hands of low- and moderate-income people.

What a distortion of reality. Barney Frank was in the pocket of Fannie Mae and Freddie make and their biggest supporter for years. Now he plays on semantics in an unbelievable lie. He would have been better off keeping his mouth shut, but political hacks seldom if ever can.

It’s Better To Rent

The "Rentership Society" as Calculated Risk dubs it, reminds me of a chart I put together way back in Spring of 2005. Note the lower right hand corner of the top chart.

 

San Diego Home Prices (with thanks to piggington)

The above charts are from It’s a Totally New Paradigm written March 26, 2005. Here are some excerpts from that post.

  • Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that "South Florida is


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Phil's Favorites

How tech firms make us feel like we own their apps - and how that benefits them

 

How tech firms make us feel like we own their apps – and how that benefits them

ESB Professional/Shutterstock

Courtesy of Melody Zou, Warwick Business School, University of Warwick

Possessions are going out of fashion. An endless stream of media reports claim millennials – that amorphous mass of people...



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Insider Scoop

Earnings Scheduled For July 16, 2019

Courtesy of Benzinga.

Companies Reporting Before The Bell
  • Goldman Sachs Group Inc (NYSE: GS) is projected to report quarterly earnings at $5.00 per share on revenue of $9.13 billion.
  • Domino's Pizza, Inc. (NYSE: DPZ) is expected to report quarterly earnings at $2.02 per share on revenue of $836.92 million.
  • JPMorgan Chase & Co. ...


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Zero Hedge

US Beekeepers Lost 40% Of Honeybee Colonies Last Year, UMD-Led Survey Finds

Courtesy of ZeroHedge. View original post here.

Recent budget cuts by the Trump Administration slashed funding for the US Department of Agriculture's annual Honey Bee Colonies report that has recently detailed a collapse in the bee population across the nation. Now researchers will be observing a new study, one that hasn't been affected by spending cuts, shows beekeepers lost 40.7% of their bee colonies from April 2018 to April 2019.

The nationwide survey administered by the University of ...



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Kimble Charting Solutions

Silver/Gold Ratio Making A Bullish Reversal?

Courtesy of Chris Kimble.

Silver (NYSEARCA: SLV) is an important cog in the precious metals world. Not only is it a core precious metal but it is often a leading indicator for metals bulls.

Silver is a good risk-on / risk-off indicator. When it is out-performing Gold, it is risk-on. When it is under-performing, it is risk-off. It’s been the latter for the better part of the past 8 years.

And when the trend remains down, which historically means that metals rallies will be sold.

The Silve...



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Digital Currencies

Bitcoin Breaks Back Below $10k, Crypto-Crash Accelerates As Asia Opens

Courtesy of ZeroHedge. View original post here.

Update 2010ET: Having briefly stabilized after this morning's weakness, cryptos are tumbling once again as Asian markets open.

Bitcoin has broken below $10,000 again...

*  *  *

While all eyes are on Bitcoin as it slides back towards $10,000, the real mover in the last 12 hours has been Ethereum after...



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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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ValueWalk

Professor Shubha Ghosh On The Current State Of Gene Editing

 

Professor Shubha Ghosh On The Current State Of Gene Editing

Courtesy of Jacob Wolinsky, ValueWalk

ValueWalk’s Q&A session with Professor Shubha Ghosh, a professor of law and the director of the Syracuse Intellectual Property Law Institute. In this interview, Professor Ghosh discusses his background, the Human Genome Project, the current state of gene editing, 3D printing for organ operations, and gene editing regulation.

...

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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker.

Charts show us the golden brick road to high prices.

GLD Gann Angle has been working since 2016. Higher prices are expected. Who would say anything different, and why and how?

Click for popup. Clear your browser cache if image is not showing.



The GLD very wide channel shows us the way.
- Conservative: Tag the 10 year rally starting in 2001 to 2019 and it forecasts $750 GLD (or $7500 USD Gold Futures) in 10 years.
- Aggressive: Tag the 5 year rally starting in 1976 to 2019  and it forecasts $750 GLD (or $7500 USD Gold Futures) in 5 years.

Click for popup. Clear your browser cache if ima...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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

Free eBook - "My Top Strategies for 2017"

 

 

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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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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