October 26, 2013

Halloween Is Coming!

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SCARY STINK BUG





Tea Party Halloween



MONSTERS AND POLITICS

September 21, 2013

Bernanke’s Head Fake Sends Stocks Soaring

Weekend Edition September 20-22, 2013


Not Convincing
Bernanke’s Head Fake Sends Stocks Soaring

by MIKE WHITNEY


Fed chairman Ben Bernanke shocked the world on Wednesday when he announced there would be no change in the Fed’s $85 billion-per-month asset purchase program dubbed QE. The announcement sparked a buying frenzy on Wall Street where all three major indices shot to record highs. The Dow Jones Industrial Average (DJIA) climbed 146 points to 15,676 while the S & P 500 logged another 38 points to 1,725 on the day. Bonds and gold also rallied big on the news with the yield on the benchmark 10-year US Treasury dipping sharply to 2.69 percent (from 2.85 percent the day before) while gold rose more than 4.1 percent to $1,364. The US dollar was hammered savagely on the news, dropping to a seven-month low against a basket of major currencies. According to Reuters, the buck “saw its biggest one-day slide in more than two months” and “has fallen to levels not seen since well before Fed Chief Ben Bernanke first floated the idea of reducing the stimulus in May.”

Bernanke attempted to justify his reversal (some are calling it a “head fake”) on continuing weakness in the economy, particularly high unemployment and tightening in the financial markets. He also implied he was worried about the possibility of a government shutdown and the impact that would have on the anemic recovery.

http://www.counterpunch.org/2013/09/20/bernankes-head-fake-sends-stocks-soaring/

April 7, 2012

Dr. Housing Bubble 04/06/12

[h3] The monster lurking in the shadow inventory – 12 million Americans underwater with nearly 6 million delinquent or in foreclosure with their mortgages. The hidden benefit of not paying your mortgage.[/h3]

Shadow inventory coming online in 2012 is going to have the biggest impact on the housing market. With a weak jobs report that shows a labor force that declined by 164,000 you realize that demographic trends are now in full play here. With banks now moving on delinquent properties the supply will be moving higher while traditional inventory remains low. This is happening. We noted that in Southern California, over 50 percent of all MLS inventory is now composed of short sales showing that banks are now willing to sell homes for less than the original mortgage balance. One of the more interesting trends is the aggressive pricing we are seeing on some of these listings. Of those in actual foreclosures, nearly half have made no mortgage payment in two years. Now that banks are moving on these properties that hidden stimulus will be pulled away. Think about not paying rent or a mortgage for two full years. Let us take a look at the current state of the shadow inventory.

Distressed inventory pipeline

Over 5,800,000+ homes are either delinquent or in the foreclosure process:
shadow inventory 2012 chart

http://www.doctorhousingbubble.com/shadow-inventory-second-wave-foreclosure-defaults-short-sales-hidden-benefits-stimulus-of-not-paying-mortgage/

March 16, 2012

Dr. Housing Bubble 03/13/12

The future of the American housing market just became more complicated:
The impact of the mortgage settlement and financial tectonic plates shifting.[/b


March 13. 2012

Buying a home is something embedded in the American economic DNA. Purchasing a home is the biggest financial decision most households will make in their entire lives. In the past the act of buying a home was more of a ritualistic rite of passage; you scrimp and save for the down payment, you purchase a home where your family will set roots, and eventually you will aim for that mortgage burning party. The entire process was accelerated in the last decade to create a perpetual churn. A mortgage was merely a temporary tool in the non-stop property ladder progression to the top. The equation did not leave room for falling home prices or a weakened economy. So we are left with a battle for the soul of US housing. Do we go back to more tested ways of a boring housing market where banks actually verify financials or do we juice up the machine again? The only issue is that the market no longer believes in the new way of financing housing and the government now has to step in to soften the withdrawal with loans such as FHA insured products. Yogi Berra once said it’s tough to make predictions, especially about the future. But the past is set in granite stone. What will the future look like for the American housing market?

http://www.doctorhousingbubble.com/future-of-the-american-housing-market-home-buying-young-and-mortgage-settlement/

March 15, 2012

Subprime at the Car Lot

March 14, 2012

On the Road to Catastrophe
Subprime at the Car Lot

by MIKE WHITNEY

“Can you think of a better business model than being a Wall Street bank? You hand out 500 million credit cards to 118 million households, even though 60 million of the households make less than $50,000. You then create derivatives where you package billions of subprime credit card debt and convince clueless dupes to buy this toxic debt as if it was AAA credit. When the entire Ponzi scheme implodes, you write-off $200 billion of bad debt and have the American taxpayer pick up the tab by having your Ben puppet at the Federal Reserve seize $450 billion of interest income from senior citizens and re-gift it to you through his zero interest rate policy. You then borrow from the Federal Reserve at 0% and charge an average interest rate of 15% on the $800 billion of credit card debt outstanding, generating $120 billion of interest and charging an additional $22 billion of late fees…”

– Jim Quinn, The Burning Platform

Have you ever read a better description of how banking really works? It’s just one big looting operation that’s backstopped by the bandits at the Federal Reserve. Just think about it; millions of hard-working people were taken to the cleaners in an $8 trillion mortgage-laundering scam, and yet, not one of the miscreants who concocted the coup has ever seen the inside of a jail. How’s that for justice?

http://www.counterpunch.org/2012/03/14/subprime-at-the-car-lot/

March 13, 2012

Four Charts of Interest on Fed-Speak Day

(March 13, 2012)

We interrupt the regularly scheduled Part 2 of Money from Nothing to post four charts of interest on Fed-Speak day. Part 2 will be published tomorrow, Wednesday.

Here are four charts to ponder on Fed-Speak Day, the devotional time set aside to reassure us that all is well due to the god-like competence of the Federal Reserve. Let's start with a chart of M2 money supply, i.e. "Fed printing." Note that the "recovery" was so strong and self-sustaining in 2010 that the Fed had to goose money supply as frantically as it did in the global financial meltdown of 2008. We'd hate to see how much they'd have to print if we (gasp) ever had another recession....

http://www.oftwominds.com/blogmar12/4charts-Fed3-12.html