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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Phil's Favorites

Corporate boards are supposed to oversee companies but often turn a blind eye

 

Corporate boards are supposed to oversee companies but often turn a blind eye

Courtesy of Siri Terjesen, American University Kogod School of Business

A lot of giant companies are getting into big trouble these days.

When Boeing 737 Max aircraft crashed in Indonesia and Ethiopia, killing a total of 346 people in October 2018 and March 2019, the disasters raised serious questions about the safety of the aviation leader’s anti-stall system.

When some 5,000 Wells Fargo employees fra...



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Zero Hedge

iPhone X Sales Collapse Triggers Serious Breach Of Contract With Samsung 

Courtesy of ZeroHedge. View original post here.

In an exclusive, ChannelNews reveals Apple is facing hundreds of millions of dollars in penalty payments to Samsung because iPhone demand has fallen.

Apple "demanded" that Samsung construct one of the world's biggest OLED manufacturing facilities exclusively for iPhone screens.

...



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Kimble Charting Solutions

Wilshire 5000 Creating A Triple Top? An Important Breakout Test Is In Play!

Courtesy of Chris Kimble.

The stock market has been on fire of late, rallying up to the edge of price resistance on several indexes. Today, we look at one of those stock market indexes: the Wilshire 5000.

The Wilshire 5000 tracks all of the stocks in the US market, so it is a broad-based index that carries significant importance when gauging the health of the overall US stock market.

Looking at the long-term “weekly” chart above, it is pretty clear that the index is at an important price juncture.

The Wilshire 5000 spent the last 25 years trading within a rising price channel (1)...



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Insider Scoop

Jefferies Upgrades Deere, Cites 'Significantly Improved Farmer Income Outlook'

Courtesy of Benzinga.

Farmer buying power will remain pressured for 2019, but this will change for the better next year and will help support Deere & Company (NYSE: DE), according to Jefferies.

The Analyst

Jefferies' Stephen Volkmann upgraded Deere from Hold to Buy with a price target lifted from $150 to $190....



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Chart School

Formula for when the Great Stock Market Rally ends

Courtesy of Read the Ticker.

When valuations for the boring water company or the boring electric company is trading like your Facebook, Apple, Amazon or Netflix or Google (ie FANG) you know something is wrong.

This is when a seriously over valued market is screaming at you.

Of course the reader must understand in a world where money printing goes super nuts (Zimbabwe style) the stock market may go hyper inflationary and picking a time frame for a top is never a good idea, but we are not there yet. There is no Ben Bernanke helicopter money to the masses yet (ie MMT). 

To see when water company's (and such like) are nearing the crazy FANG like valuations a review of the Dow Jones Utility Index channel shows us how history can repeat. The c...

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ValueWalk

The "Tesla Killer" Car Is Nowhere In Sight

 

The “Tesla Killer” Car Is Nowhere In Sight

By Jacob Wolinsky, ValueWalk

Here’s some catnip for the Tesla bulls on this email list: my analyst, Kevin DeCamp, a longtime TSLA shareholder and car owner, took a test drive of the Jaguar I-PACE and, while it “looks great and is fun to drive… it is lacking in a few areas where Tesla really shines.” He concludes that “Tesla may end up killing itself, but the “Tesla killer” car is nowhere in sight.”

The Tesla Killer Hasn’t Arrived Yet: My Test Drive of the Jaguar I-PACE

By Kevin DeCamp

As a long-time, devoted Tesla...



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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

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

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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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"

 

 

Here's a free ebook for you to check out! 

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.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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