Residential Rental Market and Inflation
Submitted by
CalculatedRisk on Wed, 05/20/2009 - 5:32pm (130 comments)
in
User login
Recent posts
- Streitfeld: Grim Housing Choice
- Schedule for Week of September 5th
- Summary for Week ending Sept 4th
- More stories on the long term unemployed
- Another potential home seller chases the market down
- Unemployment Rate and Level of Education
- Update: Total people receiving unemployment benefits
- Duration of Unemployment
- Unofficial Problem Bank List increases to 844 institutions
- NFIB: Small Businesses Still Not Hiring
- Rail Traffic increases 5.7% in August compared to August 2009
- Employment Diffusion Indices
- ISM Non-Manufacturing Index declines in August
- Employment-Population Ratio, Part Time Workers, Unemployed over 26 Weeks
- August Employment Report: 60K Jobs ex-Census, 9.6% Unemployment Rate
Who's online
There are currently 33 members and 78 guests online.
Currently online
- sportsfan
- steinly
- Unhappy American
- SixOunces
- GDD9000
- Juvenal Delinquent
- Jonathan
- Citizen AllenM
- LoserBeachBum
- ResistanceIsFeudal
- Anonymous Bosch
- alambka
- alkaloids
- ldmeier
- skk
- dreamer
- skip
- furiouschads
- Nuke
- Anak
- Comrade Dazed and Amused
- bearly
- feralpig
- DCRogers
- Disempowered Paper Pusher
- Blailey
- localandbitter
- Tim waiting for 2012
- MLM
- MB
- EEngineer
- RockyR
- Comrade Canadien avec popcorn
Nemonster?
I will accept that inflation is real when I see it..
American standards of living need to fall further to bring them into line with our output and that of other countries.
"With falling rents, house prices need to fall further to bring the house price-to-rent ratio back to historical levels."
So true. Just today I read how Phoenix is booming, BOOMING!, because REO sales have cut substantially into inventory. A year ago, people were buying REOs here because the price was so low -- now they are 20-30% underwater. Until the banks come clean and show their inventory, no one knows what the inventory is.
CR,
I am waiting for the GS report that predicts the sun will rise tomorrow.. or the one that predicts at least one tropical storm in the atlantic during hurricane season.
Angry Saver,
Or theirs have to go up.. your choice. Ok.. it is not your choice, but humor yourself.
//American standards of living need to fall further to bring them into line with our output and that of other countries.//
otishertz,
shill, noun, informal
an accomplice of a hawker, gambler, or swindler who acts as an enthusiastic customer to entice or encourage others.
I did not give Birinyi an out. I said his numbers were wrong. Misleading or deceitful would be selectively using real numbers, his are literally fictitious. That's the difference between bullst and st.
As for last night's thread, feel free to disagree but if you are prepared to read down to the base level data the BEA is up front. You could argue the merits of GDP and how it doesn't value things like the black market (eg nanny adds to GDP but stay at home parent does not) or environmental benefits (air purification, soil quality vs fertilizer, fresh water vs desalinization),; that's a different argument. You could also argue that such inferences like Productivity are deceitful, where the name does not actually reflect what is being measured.
The problem was the data itself. People really were buying MBS at those values, houses were selling for that much, financial earnings were recorded at 40% of the S&P500, Dubai did build those skyscrapers, China's exports were going in the double digits year after year. That is a credit bubble, we have the legacy of net loss trades all around us — we have lost not only the inflated valuations, but we have missed the investment benefits which accrue from real productive growth. The BEA didn't invent such things, it just recorded what was there.
I don't know if you're just trying to have fun or what, but if you want to insult me please allow me the courtesy of putting some thought into it
Walter Sobyz: Your wheel! At fifteen m-p-h I roll out! I double back, grab one of 'em and beat it out of him! The uzi!
The Dude: Uzi?
Walter Sobyz: You didn't think I was rolling out of here naked!
EHP,
By that definition.. all canucks are shills who peddle their fake superiority.
//shill, noun, informal
an accomplice of a hawker, gambler, or swindler who acts as an enthusiastic customer to entice or encourage others.//
CR
I have been wondering what the effect on GDP has been from vacant homes having an imputed rent applied to them. If rents are falling will OER fall and then have a double whammy when chain weighted dollars are used to calculated real GDP.
In short has the decline in real GDP been greater than reported because imputed rental value on vacant homes has been propping up it up.
580x monthly rent for a 25 year old tract home wasn't sustainable? Hoocoodanode? it was only 12x stated income for gosh sake!
Tom Stone,
You could never work at a financial institution with that attitude.. Drink the delicious koolaid
//580x monthly rent for a 25 year old tract home wasn't sustainable? Hoocoodanode? //
All it takes is a suspension of disbelief. That's what the theatre is all about. Come on, people, there are green shoots everywhere. Just believe. The guy who developed in Florida -- Miami? -- almost 100 years ago, said, "if you can dream it, you can do it." I read about that in "Reader's Disgust," years ago, when I was a teenager.
OER increases slowed during the housing bubble.
CR I thought you may be interested in this for your housing posts like this
A Low Impact Woodland Home for under $5,000
http://bit.ly/2N6M
Some key points of the design and construction:
* Dug into hillside for low visual impact and shelter
* Stone and mud from diggings used for retaining walls, foundations etc.
* Frame of oak thinnings (spare wood) from surrounding woodland
* Reciprocal roof rafters are structurally and aesthaetically fantastic and very easy to do
* Straw bales in floor, walls and roof for super-insulation and easy building
* Plastic sheet and mud/turf roof for low impact and ease
* Lime plaster on walls is breathable and low energy to manufacture (compared to cement)
* Reclaimed (scrap) wood for floors and fittings
* Anything you could possibly want is in a rubbish pile somewhere (windows, burner, plumbing, wiring...)
* Woodburner for heating - renewable and locally plentiful
* Flue goes through big stone/plaster lump to retain and slowly release heat
* Fridge is cooled by air coming underground through foundations
* Skylight in roof lets in natural feeling light
* Solar panels for lighting, music and computing
* Water by gravity from nearby spring
* Compost toilet
* Roof water collects in pond for garden etc.
"By definition, no "too-big-to-fail" bank can ever be truly cut loose."
So we cut away at the definition. Too big for whom or what to fail? The corporate logo? Ticker symbol? Underlying borrowers, creditors? The risk is to whose system, Timmy and Ben? Show me why a new system would be worse than one which rewards failure.
This certainly adds a new wrinkle to our low-ball calculations. No longer can you just compute fundamental value based upon equivalent rent. Now you have to account for falling rents as well.
OER is the wild guess of a homedebtor asked by the BLS,
"If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?"
Falling rents and rising vacancies yet the REIT sector has seen recent upgrades, equity gains upwards of 30%. CRE is valued on balance sheets as if it's 2007 again.
re: Imputing rents into GDP
What you want to do is go to here and read up about National Income and Product Accounts (NIPA).
All of GDP is broken down into 7 accounts. The government uses the totals of income and expenditure from each of those 7 directly measurable accounts to deliver the final GDP reports. By the final report, housing costs would represent a shift in GDP contribution and not a difference in the total.
edit: the reason why it would only represent a shift is because all accounts must reconcile. If someone suddenly reports an income of $10tn then there must be accounts somewhere suddenly reporting an expenditure of $10tn. If you want to chase a rabbit down a hole, go for the discrepancy between the GDP as calculated by income versus production (or whatever 2 they separately estimate)
price/rent ratio becomes very interesting when the numerator and denominator are both going down. Is there any history on that? Another equation?
Please, CR, use a source other than Golden Schmucks.
You sully your good name by 'associating' with those criminals.
I believe we have had some anecdotal evidence of falling rents from those on this board?
I had a situation like that myself in dot-com land after the dot-com crash. Roomie and I were living month-to-month, got an offer under our door one day to lower our rent if we would re-up for a lease. Which we correctly interpreted as a sign of weakness, and negotiated for an even lower rate for a shorter term.
It was a while ago, but I believe the numbers were: 2200 original rent, 2000 offered for 12 months, 1850 signed for 6 months. Something in that ballpark.
I would suspect similar deals are being struck now. If you are in a lease and it is near expiration, I would strongly suggest you negotiate it downward.
Based on the number of homes that were once for sale in my neighborhood, but are now for lease for far less than carrying cost, I would assume there are deals to be had.
That chart corresponds with our renting experience. We're renting a Single Family Home in Durham,NC since Jan 2008.
Original asking rate was $2500/month. When there was no movement, they dropped it to $1995/month.
Did a 4 month extension in Feb 2009, at which time I asked about lowering the rent, was told the owner was considering raising the rent, so we just renewed at the same rate.
Just renegotiated a 12 month extension (home prices have a way to go on the downside around here) and got a 2.5% rate reduction. It helped to point out that a comparable, but smaller, home 3 doors down is now renting for $1600/month.
Meanwhile, prices here are down roughly 5% annually, and the equity we pulled out of our home sale last year is earning 2% in an FDIC insured account. Monthly housing costs (PITI) are slightly less in the rental than when we were "owners".
Yet, people think we're being financially irresponsible renting. The math is not that difficult.
EvilHenryPaulson (profile) wrote on Wed, 5/20/2009 - 8:39 pm
I don't know if you're just trying to have fun or what, but if you want to insult me please allow me the courtesy of putting some thought into it
EHP,
I didn't track back to see what this was in reference to, but for what it's worth, you always count as a gentleman and a scholar in my book ...
In NYC, a lot of it's done with perks for moving in, in the hopes that next year the owner can leverage inertia, the hassle of moving in a dense city, and the joy of inflation. 2 free months; free flatscreen; no fee; perhaps the agent is an aspiring actress.
EvilHP
I think they count imputed rent as income to the owner. So they could be potentially overestimating it both ways. Therefore have we reported more income than the economy actually created due to vacant houses littering the countryside.
"Yet, people think we're being financially irresponsible renting. The math is not that difficult. "
In spite of the housing bust, it is very difficult to disabuse people of the notion that Homeownership = American Dream. It is deeply ingrained in the culture, and in my mind, what led us into this mess (you can blame soooo many participants - the GSEs, the rating agency, Bush, Barney, etc - but at the root of it all was the notion that "housing prices never decline", which leads to the idea that owning a home is to achieve the American Dream).
The sooner we kill that false premise, the better.
OT, Re: commodity inflation due to declining dollar.
It's a very popular trade now, but don't these metals have to go into a finished product. China won't stockpile reserves for ever, will they? And weak dollar or not, there's oil busting out of every nook and cranny in the world.
Ben Haig "Im in control here."
Alexander Bernanke "There is no fucking money, man."
OT about my crdit card notice from Chase today regarding "changes to my account"
Rate going to prime plus 20.99% effective with the next billing cycle. Farther back in the fine print "...without prior notice, we may close your account or suspend your credit privileges at any time for any reason, including account inactivity."
Obviously getting all the ducks lined up so pending legislation doesn't get in the way of profits.
Chainsaw,
A lot of people on this and other housing blogs considered selling into the bubble and renting. I know I did. But I never pulled the trigger. I couldn't past the hassle of moving and then buying again in the future.
From a financial perspective, renting was definitely the way to go. The math was a no-brainer.
Hank Geithner: I'm as outraged as anyone, Senator.
Barney Dodd: No I am.
Nancy Obama: I'm going to do something about this.
American standards of living need to fall further to bring them into line with our output and that of other countries.
Yup - but that isn't inflationary or deflationary... money supply & velocity of money determine that. We could have inflation & a fall in standard of living or deflation and a fall in standard of living... I find it difficult to have an increase in standard of living if either deflation or inflation occur - I think we need a stable money supply w/ resultant stable pricing to have any hope at achieving that. IMHO.
CR Wrote:
This is important for house prices too. With falling rents, house prices need to fall further to bring the house price-to-rent ratio back to historical levels.
Well, this is NOT a normal functioning market.....that's why Jeff Mackie's Head EXPLODED
Credit card issuers prey on inertia too. Consumers have to play the shell game with their money or credit too. Those stored data entry templates let your fingers do the walking.
In case you missed it, and I don't think CR picked it up...
Inquiry Focuses on Ex-Pension Official for Bush - NY Times
Inquiry Focuses on Ex-Pension Official for Bush
The former Bush administration official in charge of the federal agency that guarantees pensions for 44 million Americans is under investigation over his contacts with several major Wall Street firms seeking to obtain lucrative contracts. The former official, Charles E. F. Millard, is also being investigated on suspicion of soliciting help from one of the winning firms in his search for a new job once he left office.
Agency officials are now considering canceling contracts that Goldman Sachs, JPMorgan Chase and BlackRock won late last year — worth up to $100 million in fees over a decade — to collectively manage $2.5 billion from the agency’s $49 billion portfolio.
Nobody quite understood why, just before the bear market began, the PBGC decided to make a major shift of its in-hock investment portfolio into stocks.
Now, they do.
Lucifer, stating the obvious is sometimes good! Besides I like the REIT rental data ....
Money Man, maybe someone with the right skills will modify that video - and his head will actually explode. It seemed he was close (I hope he was having fun - and is OK).
best to all.
ghostfaceinvestah wrote:
...which leads to the idea that owning a home is to achieve the American Dream
There is a powerful incentive in the tax code to push people into owning a house and it causes a real distortion in home prices.
otis hertz,
Do you have any thoughts on the report about the S&P PE report..? You sure aree quiet on the subject....
Just kidding
Regarding CRE rents... another anecdote.
I just noticed that a company I have known and used off & on for 20 years had moved. I dropped the owner a line and she said their clueless landlord tried to stick'em with a rent increase, so they up & moved into a much larger, nicer place for half the price.
This is in Burbank!
@Angry Saver,
We needed to move locally to get nearer the school where my wife teaches and our children attend. My wife was originally a little dubious about renting, but now she's really happy we did it.
We'd owned 3 homes from 1993 to 2008 (CA and NC), and we'd forgotten how much freedom there is in renting. We do our best to take care of this place, but it doesn't weigh on us if the floor creaks or the laundry room is too small. It's just a place to stay for a time.
I do hear you on the hassle factor. I probably could have gotten a comparable place for less than we're renewing at, but I'm not going to go through the trouble and expense of moving us and our 3 kids to save $100/month.
The only risk would be a V shaped recovery in housing prices, but I really don't see that happening. I think we still have some room to go around here (we trail the hot parts of the country), and then I think we'll go sideways for awhile. At least in the mid-range of the market, which is where we'll be looking.
BTW, haven't check today's comment threads... any good commentary on the CA props??
Tomorrow morning would be a pretty good buying op in TBT, if you don't have any.
TBT has been on a roll lately. But today,when the Fed minutes came out, some speculators obviously used the knee-jerk to drive TBT down by 2%. The Fed minutes said that well, maybe the Fed should buy more long-Ts at some point, more than those they already bought. It was actually a neutral or bullish announcement for TBT, in that it was just Fed rhetoric instead of Fed conviction. But the knee-jerkers won for a couple of hours.
Buy yourself some TBT and hold it until 30-year Ts hit 5.5%. Shouldn't take more than a year and worth at least 30%.
Samdog,
To me the process is much more important than the result. Sensibly insane is fine, incoherently insane is not. I had no problems with CashOnlyHousing last night, they brought up a good point that the artificially amortized housing expenditure for GDP was marked at $1.5tn. (average monthly expense per housing unit would be $976.56).
I just got ticked off someone would try to drag the discussion into a ditch because any notion contrary to their anti-establishment perspective must be a paid for lie. That is nothing more than simplifying situations to the point where they are comforted by the answers they get. I'm the exact opposite where I'm happy to be wrong — which is often enough — so long as I learn something. Immiscible personalities, but I take the high ground that reducing the discussion to senselessly attacking 'the powers that be' does not belong here by virtue of majority
according to km4.
mudhuts are the new black.
REITs are what you would refer to as "repairing the balance sheet" for the new emerging renter class.
Macke pulled all his hair out already, its time for him to get some cheap hair club for men commercials cash for the trading account.
the theme is:
my market is more irrational than your sovereignty.
"I just got ticked off someone would try to drag the discussion into a ditch because any notion contrary to their anti-establishment perspective must be a paid for lie. That is nothing more than simplifying situations to the point where they are comforted by the answers they get."
EHP, now I know why I never see you posting on tickerforum. (:
fyi about some of the deragatory comments re first time hombuyers in the last thread...
FYI, most all of us here that are renters qualify as first time HB... we have owned 4 homes but sold in 2004 and have not owned in the last 3 years so we qualify for the 8K ..
so comments that FTHB are usually inept and inexperienced i would agree but as usual the government does not define a FTHB as a FTHB......
rich (profile) wrote on Wed, 5/20/2009 - 9:32 pm reply Ignore user In case you missed it, and I don't think CR picked it up...
Inquiry Focuses on Ex-Pension Official for Bush - NY Times...
Inquiry Focuses on Ex-Pension Official for Bush
WASHINGTON (AP) — The former director of the government's pension agency took the Fifth Amendment Wednesday when senators asked about allegations that he had inappropriate contacts with Wall Street firms while running the operation, which insures the pensions of 44 million Americans.
Charles E.F. Millard denies that he had improper communications with the firms that recently won multimillion-dollar contracts to advise the agency on a new strategy to invest its assets more heavily in stocks, real estate and private equity rather than more conservative fixed-income treasury securities.
The article requested is no longer available.
Comrade Coinz,
There is a powerful incentive in the tax code to push people into owning a house and it causes a real distortion in home prices.
When I did our taxes this year I ran a scenario where we had continued paying the mortgage interest on the home we sold in Jan 2008. The tax savings would have been significant, but they are quite trivial when I plug them into a spreadsheet I'm using to track our housing cost and change in housing equity. They reduce our overall savings by about 12%. And I'm using a very conservative 3% depreciation in our old home's value.
Every situation would be different of course, but again I think many people overestimate the value of their mortgage interest deduction.
And then there are property taxes, which seem to be going up everywhere around here as counties and cities scramble to cover their budget holes.
CR,
Neat post, a very CR-like use of data.
I was meaning to ask you about mean reversion in these diffusion indexes. This one, and the PMIs, measure change from the previous survey, so maybe it's not a big problem. But the NAHB Housing Market Index, for instance, is more vague:
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.”
It would seem the longer the downturn (or upturn) the more likely you would see mean reversion. Obviously, if things stay bad long enough, bad becomes fair.
Is mean reversion much of a factor?
There's something I don't like about the notion of house price/rents returning to "historical levels". Too long in RM committee today. Now skeptical and critical of everything. Damned blue sky pissed me off too.
C
Chainsaw... ditto... we just figured we spent since june 2004 125K on rent, all things considered in the DC MSA we would have lost 300K had we bought... but we are seeing what may be a little inner W uptick, false beat considering recast chart posted earlier...but cant see them coming down much more than 10-15% and if they do collapse in 2011 and we have already bought we will be fine.... but we are actively turning away homes for sale as opposed to actively looking... i know now there is a difference..
"now I know why I never see you posting on tickerforum. (:"
Oh, man... that place has gone round the bend, as they say...
EvilHenryPaulson (profile) wrote (in reply to...) on Wed, 5/20/2009 - 9:40 pm
Samdog,
" ... where I'm happy to be wrong, so long as I learn something. Immiscible personalities"
EHP,
Same here. For the most part, I see a lot of bright, experienced people posting. Plus, there are those with a pretty quick wit, which is always entertaining.
)
I just come for the free insight, not to start any debates or try to convince anyone of my POV (not that I don't stir the pot every so often ...
Hey, what can I say? Inquiring minds want to know ....
EHP says, "I don't know if you're just trying to have fun or what, but if you want to insult me please allow me the courtesy of putting some thought into it"
i have no issues whatsoever with your data analysis. you are quite good.
i reacted to what i saw as an apologetic stance on your part to fraudulent stats. i get angry about liars and shot off at you for not being as angry as me. that wasn't fair and i apologize.
like i said before, you are a kinder man than i.
rich,
Already holding some TBT. May add more.
What are your thoughts on a weak dollar hedge? I know about UDN, but some of the other currencies it's correlated against seem suspect also (GBP and YEN). Are there more straightforward ways to hedge against a devalued dollar? I'm not comfortable with the oil hedge, as I see that as a short term momentum move, and if I've learned anything it's that I'm not a trader.
Samdog,
Start a debate!!! Best way to learn something is having people contribute numerous conflicting perspectives...
poic,
It's because I don't like making accounts, and I seldom even read Denninger's posts probably because I am not a day trader.
Counterpointer
Was the surplus inventory situation of Detroit ever brought up?
Samdog,
Sorry if I used your post as a chance to scratch an itch
otishertz,
No, you filtered my post so that you saw it as apologizing for Birinyi. I said his figures were simply wrong, and expanded on that in the reply at the beginning of this thread. At best, you used my post to go off on a misdirected rant. If it were a misunderstanding with me, you could have initiated a conversation about it. I don't want to pile on you, I've probably said enough with regards to the BEA data and I'll leave it at that.
The tax incentive is not so much to own a house, it is to own a mortgage, and even that is overrated but fools many people (google mortgage deduction snake oil).
EHP - no, not surplus inventory, just a bunch of wienies carping that early March scenarios were now of course completely outdated since the Great Turnaround was basically here so how about another look at capital and risk appetite. I was working up some snide theatrics as soon as someone dared mention green shoots or bottoms.
It was like watching credulity bingo.
C
we just figured we spent since june 2004 125K on rent, all things considered in the DC MSA we would have lost 300K had we bought
FD,
$300K is a pile of money. Most will never save that much. I lived in the DC area during the 1980s - Seminary Road, King St., Chevy Chase and a house boat on the Anacostia. A nice 3 bedroom townhome was ~ $80K then. I enjoyed the area, especially the ethnic restaurants.
weep for debate.
the law is:
The feudal US aristcoracy is constrained by the Global Oligarchs promoting Emperor US dollar resulting in the lack of a true soveriegn emperor that rents the castle from the revolting taxpayers.
-for the illiterati- Yu is constrained by globalization as result of US dollar hegeonomy culminating in destabalization designed to create serfs.
edit + done and doner.
Saver,,,
ill clrify, we would have lost 300K in home "value" depreciation..funny about the house boat,we just paid cash for our emergency world goes to hell in a handbasket motor yacht, not huge, not expensive toys are being turned in for pence's
@chainsaw,
The mortgage deduction and property tax deduction add up a huge tax savings in high priced areas. A colleague of mine calculated that he pays and extra $700/mo renting over making the same payment on mortgage (in SoCal). It is more than that for me. Of course, I'd much rather be renting right now.
EvilHenryPaulson (profile) wrote on Wed, 5/20/2009 - 10:02 pm
"Samdog,
Sorry if I used your post as a chance to scratch an itch"
EHP,
No problem.
Like I said earlier, I've been watching your posts quite some time; you provide data analysis and cite sources -- you don't appear to ever go for ad hominem attacks (like one certain person, initial "J").
ehp,
what can i say? i'm a hothead. my filter did see your tone as apologist.
i am trying to agree with the semantics of how this:
"That's what I meant when I said they made no sense, not by any measure. At this point Birinyi could only be using proprietary data that does not believe companies earned so little. It's not misleading or deceitful. It is simply wrong"
meant this:
"I did not give Birinyi an out. I said his numbers were wrong. Misleading or deceitful would be selectively using real numbers, his are literally fictitious. That's the difference between bullst and st."
to my filter, "literally fictitious" in this instance is the same as saying "deceitful".
however, i do admit it was my bad for getting you all fluffed up about it.
Oh, great. Now the government will try to find a way to prevent rents from falling.
"In spite of the housing bust, it is very difficult to disabuse people of the notion that Homeownership = American Dream."
This is so true. I was talking to a co-worker the other night and he and his girlfriend want to start looking to buy later this year. They're both 21 and she just had a baby. I begged him to wait at least until fall 2010 and 2011-12 would be even better. We're in Las Vegas and the "good" areas of town are starting to capitulate. What can you do?
God help me, but I got killed in TBT and yeah, have started to think about getting back in. I took about a 40% bath on the mofo...fortunately, just a small investment.
And then, several days ago, read an article about China looking to seriously back their currency with Gold...so why buy American Fiat when you're shifting to that kind of backing?
Also considering going back to the well on TWM in the near future. As rates start to rise, the small caps will take hits.
"The tax incentive is not so much to own a house........"
....the incentive when we bought (and paid for) this pile of sand wasn't so much the price as everything else - no mortgage or rent, no water or trash bills, no HOA BS, lowest utilities (partial active/passive solar), and the finest damned cukes, tomatoes, peppers, sweet relish, sweet butter, cheese and raw milk in the Country. Oh.....did I mention I don't miss the $1800 a month mortgage payments?
ANYONE can do it. Pick a place you want to live and make a deal with the home or landowner - many are wanting out. An old boy I know picked up a 1+ acre lot with improvements (elect., water, septic tank, hookup) for $4600. He moved an old trailer on it - instant home. He's figuring he'll pay for it by next spring.
BTW, Gold ATMs are going to be HOT! Mark my words. HOT HOT!
German firm plans gold ATM machine - Wall Street Examiner Forums
One more for the ruinous Byzantine who thinks he can run courts and prisons without any stinkin' unions.
Comment by 1 currency now -yogi from thread 'Japan’s GDP Declines at 15.2% Annual Rate'
everyone needs to keep in mind that Barney has the MID on the table to be reduced to pay for many things, one of which is to make up the difference in tax revenue from the change in AMT income among other things, many folks dont realize that the MID is not always been around....easy come easy go... feel sorry that count on it
And then, several days ago, read an article about China looking to seriously back their currency with Gold...so why buy American Fiat when you're shifting to that kind of backing?
Watch TWO things:
(1) China surplus to USA [trade data - periodic not good real time]
(2) USD:CNY [much better real time barometer of where their head is at]
They will maintain USD:CNY as long as they can run surpluses... if they give up on wanting to run big surpluses, then they stop buying T's and it will show up in USD:CNY.
Until then it doesn't matter if PBoC [or SAFE] buy gold or oil or whatever - as long as they are the stock boy for WalMart they will need to process & recycle the WalMart dollar... watch the yuan.
everyone needs to keep in mind that Barney has the MID on the table to be reduced to pay for many things
Trouble is, messing with the last great deduction for the masses will have an inverse effect on the housing market they are so desperately trying to prop up.
Chainsaw,
Aside from TBT, my best bets for a weak dollar hedge are gold and silver plays, commodities, oil stocks and Canadian currency (FXC).
My gold and silver plays are SLV, GLD, SLW, AEM, GDX.
For commodities, DBA, DBB, FCX and AA.
In oil, I have XLE, BP and COP.
All of these have done really well lately except AEM. But today, AEM was up 6%+, to above $50. I think it's a buy-and-hold to $100.
look back... you might get a chuckle.
edit doner.
Black Star Ranch,
They are charging 30% premiums for the gold ATMs. Why wouldn't someone just go to a local coin dealer or buy online?
coinz....you cant open a web business or something else and write some of your rent off?...nevada corporation.. 500 sq ft or so...its very similar based off area home used for business..tell them you have a portable phone and take calls everywhere....
I have done well on TWM in the past. But after studying the volatile-slippage in the double short ProShares, I decided it's not worth it to buy more TWM.
Yesterday, I bought more RWM (single short R2000) instead. The difference is that with RWM, you can be off in your timing and still not get killed, before it turns to profit.
I agree with you that small caps are vastly overvalued for the current climate.
here is the discourse from last night that prompted me to accuse EHP of having an apologetic tone.
CashOnlyHousing (profile) wrote on Tue, 5/19/2009 - 11:04 pm
* reply
* Ignore user
I've been digging. GDP is more of a sham than I thought.
Under PCE - Services, Housing has increased 2.7% from Q1 08 to Q1 09, Server is Busy...
This is an outright lie, and I intend to show why. I plan to do more research and present it to you all.
So far I have figured out that they have NO ACTUAL NEW DATA to compute these values.
Once you really start digging into the BEA and Census websites and methodology papers you realize that it is total crap that could be produced by a few college educated people, but I bet tens or hundreds of millions are spent on this. Of course the majority of the money surely goes to make the website appear professional.
The fucking methodology paper was last updated in 1990! http://www.bea.gov/scb/pdf/national/nipa/methpap/methpap6.pdf
The data they use for housing services is comprised of decennial census of housing(COH), survey of residential finance(conducted at the same time as the COH), biennial american housing survey, current population survey(CPS), and CPI. The paper claims the CPS is updated quarterly, but the latest data available via census.gov is from 2007!
So the only new data we have is from the CPI, which I haven't dug into yet. I would be it's more made up bullshit.
I forgot to mention for those who haven't heard before, much of the housing services is IMPUTED! They make up part of the GDP saying that people pay rent to themselves!!
If any of you believe our economy has only contracted a total of ~3% you are morons!
Look around, the economy has easily contracted 10%, probably 15-20% from the peak. At least that is what my gut tells me and it has been way more accurate than the numbers for the last 5 years that i've been paying attention.
EvilHenryPaulson (profile) wrote on Tue, 5/19/2009 - 11:10 pm
* reply
* Ignore user
CashOnlyHousing
Reminds me of when I looked up everything the government ever published on 'productivity'. We should coin some kind of fraud measure that compares references to something as an appeal to authority, and actual scientific work to support that position
EvilHenryPaulson (profile) wrote (in reply to...) on Tue, 5/19/2009 - 11:18 pm
* reply
* Ignore user
COH
I should add, there are multiple ways to measure GDP. From an expenditure perspective, estimating what owners spend on housing would just be assumed to be a stable trend. They eventually reconcile to actual data when they get the tax data in for the final release.
Under CPI they have done the same monkey-business with Owner's Equivalent Rent to keep CPI up, or with Nonfarm Payrolls where they used the birth/death fudge factor to boost payrolls. Not so much outright lying, as keeping the blinders on to make things appear better than they are. Similar to how China tries to smooth out their data reports. It's a dangerous gamble to assume things won't get worse because the eventual catching-up could destroy credibility.
CashOnlyHousing (profile) wrote on Tue, 5/19/2009 - 11:21 pm
* reply
* Ignore user
HAHAHAHAHAHA
"""
Rent and rental equivalence weights for index aggregation
The expenditure weight in the CPI for rent is obtained by directly asking sampled renter households the following question:
What is the rental charge to your CU for this unit including any extra charges for garage & parking facilities? Do not include direct payments by local, state or federal agencies. What period of time does this cover?
However, the expenditure weight in the CPI for rental equivalence is obtained by directly asking sampled owner households the following question:
If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?
"""
So housing services part of GDP is updated quarterly by WISHING RENT PRICES of homeowner WHO DONT RENT! No other quarterly data exists!
If you use GDP in any equation your are an idiot! There is no point. It has negative real value.
CashOnlyHousing (profile) wrote on Tue, 5/19/2009 - 11:27 pm
* reply
* Ignore user
EHP-
I'm familiar with some of the ways they fake the CPI numbers.
I don't agree that they will eventually reconcile the data, much of it is never based on any scientific surveys. They also don't impute housing as a service for home owners in order to capture what they spend, because they explicitly state in the methodology that utilities, maintenance etc. are separate.
I believe it is as bad or worse than outright lying. The only credibility they have is by default because of their size and power, not because of any rational reason
EvilHenryPaulson (profile) wrote on Tue, 5/19/2009 - 11:35 pm
* reply
* Ignore user
CashOnlyHousing
You can measure GDP 3 main ways.
Income, expenditure, value added.
It's easier to estimate expenditures for early data (where housing services comes in)
It's more accurate to use tax data to tally incomes for the final data
It's not the outrageous story you first thought
CashOnlyHousing (profile) wrote on Wed, 5/20/2009 - 12:01 am
* reply
* Ignore user
"It's easier to estimate expenditures for early data (where housing services comes in)
It's more accurate to use tax data to tally incomes for the final data
It's not the outrageous story you first thought "
That makes no sense if you read what I wrote. Tax data is the early data compared to the housing services data.
I agree that it's very much more accurate to use tax data, and that directly supports by beliefs that true real GDP has declined 15% or more, and that reported GDP is completely outrageous.
EvilHenryPaulson (profile) wrote on Wed, 5/20/2009 - 12:16 am
* reply
* Ignore user
CashOnlyHousing
You are mixing up Expenditure with Income. Tax data is the standard for final release (there is preliminary, advance, and final releases in consecutive months). Expenditures are easier to estimate than income, because you only have to poll a few larger businesses. Where they don't have samples, they fill in the blanks with the trended estimates which by definition miss turning points in the economy. If you don't believe me, write an op-ed for bloomberg/ft/reuters/wsj about what would be a big story
Even if you disagree with the BEA, take the perspective of "you can never understand your enemy until you learn to love them"
CashOnlyHousing (profile) wrote on Wed, 5/20/2009 - 12:25 am
* reply
* Ignore user
EHP-
Are you saying that the final release of the housing services portion of GDP comes from tax data?
The methodology makes no mention of tax data for that component. I don't see how tax data could ever be used for an "imputed" value, since it would no longer be imputed.
BTW, that component is ~10% of GDP.
Also I've just begun on my quest to completely discredit the GDP data. Though I am quite obsessive/compulsive so we'll see how long my interest lasts...
Something I haven't looked into yet is how they adjust the housing services data for cpi inflation since the only quarterly changes come from the CPI itself. Seems it should cancel itself out.
Another reason I completely distrust the numbers is due to the lack of actual data available. They don't list formulas or collected data in any detail.
EvilHenryPaulson (profile) wrote on Wed, 5/20/2009 - 12:38 am
* reply
* Ignore user
COH
BEA GDP News Release: Gross Domestic Product
Full Release http://www.bea.gov/newsreleases/national/gdp/2009/pdf/gdp109a.pdf
Table 9. Relation of Gross Domestic Product, Gross National Product, and National Income
That's where tax data comes in for the final release, which is 2 months away for 09Q1
Keep in mind, the housing services you are focussing on (table 2) are annualized percent changes. It's also not 10% of GDP, perhaps 10% of the net change in GDP (?) Not sure where you were going with that
The sham isn't in the data collection. It is in the data itself. A loan that will never be repaid, control fraud as William Black puts it. It's the credit bubble that is/was the sham.
CashOnlyHousing (profile) wrote on Wed, 5/20/2009 - 12:47 am
* reply
* Ignore user
"Keep in mind, the housing services you are focussing on (table 2) are annualized percent changes. It's also not 10% of GDP, perhaps 10% of the net change in GDP."
Nope. I was using
Table 1.5.5. Gross Domestic Product, Expanded Detail
[Billions of dollars] Seasonally adjusted at annual rates
Server is Busy...
GDP 14,075.5
Services, Housing 1,535.5
10.9% of GDP using the GDP numbers, not annualized percent changes.
CashOnlyHousing (profile) wrote on Wed, 5/20/2009 - 12:51 am
* reply
* Ignore user
Also, unless their methodologies are incorrect, they don't use any tax data for the housing services component. Any revisions won't be completed until those surveys i mentioned above are completed.
Do you think Japan's GDP would be down 15% if the calculated it like we calculate ours? Hell no, they (apparently) have real statistics. We could do the same if there was any integrity in the federal government.
EvilHenryPaulson (profile) wrote (in reply to...) on Wed, 5/20/2009 - 1:04 am
* reply
* Ignore user
hmph
108mn households -> $1,184.41 monthly housing expenditure per household
~70mn mortgages -> $1,827.38 monthly housing expenditure per mortgaged household
Is that high/low?Maybe they include hotels under housing services? House insurance? Property taxes? I think maintenance goes under the 'other' category. Utilities has its own category. Oh, house purchases could be the overlooked bit if they chose to tally things that way.
...
I don't know what fits into each subcategory without looking deeper than my desire to sleep will allow for. I would consider comparing to the ~$14tn in us mortgages, but the range of options for monthly payments means logging off is the best choice
CashOnlyHousing (profile) wrote on Wed, 5/20/2009 - 1:15 am
* reply
* Ignore user
I need to go to sleep too, but one last thought.
If a house is already built, even if the person is paying a mortgage, that should not count in GDP. Nobody is doing any service or producing any good because of the transfer of funds. Like you mentioned all the real stuff is being counted elsewhere, such as maintenance and utilities.
--- - .. ... .... . .-. - --.. (homepage, profile) wrote on Wed, 5/20/2009 - 4:56 am
* reply
* Ignore user
hell yes Cashonlyhousing!
go get them Killer!
--- - .. ... .... . .-. - --.. (homepage, profile) wrote on Wed, 5/20/2009 - 6:35 am
* reply
* Ignore user
EHP why are you trying to knock COH off track?
"The sham isn't in the data collection. It is in the data itself. A loan that will never be repaid, control fraud as William Black puts it. It's the credit bubble that is/was the sham."
pardon, but the data collection is as much a sham as the lies in the mass media about the data.
blame the bubble?
BRS
BINGO! Don't tell them they need to stay in debt playing follow the leader and then the can blame some one else for their missing retirement, house repo car repo etc.
I bought the ugly old house in the old elite neighborhood out of the city. Next to nothing in expenses no mortgage water sewer bills!
Why does it take most a life time to learn?
.............most people here think ahead further than the average user of these machines. These will appeal to the impulsive $40 buyer. I see our bar patrons put 5-10X that amount in our slots - and get nothing back. This would appeal to them. Kind of like a lotto ticket - only it's an automatic instant winner. The vig is large but not as large as sinking $100 in a vid poker machine.
oilshertz,
ehp moved on already and were burning daylight...
quick distraction....
http://www.shakira.znane.com/shakira3.jpg
otishertz,
It's fine, I don't like fighting on the internet and I want to leave it at that. It's not like 2 threads have been representative of us or the correspondence between us.
dryfly,
I would refine that there is some relatively static amount which the trade surplus must be larger than for it to sustain the positive feedback which reinvestment/currency placement brings. Also, I think a big story has been the drop of FDI in China with regards to their ability to sustain currency intervention.
Why does it take most a life time to learn?
I started thinking in 2002-2003 and sold the house in 2004. In retrospect, I'd say that most people are culturally brainwashed with the "image / sex / career / house / kids" paradigm until their forties. I speculate that one factor may be mortality. It's easy to intellectually acknowledge mortality but personal mortality takes a lot of living & experience. Call it the "inflection point" of life, the point where you realize that you're more than halfway finished and wonder why you're wasting your time dealing with morons & egos.
what is a "RM committee"?
I was trying to 'take it outside with Byz', as it is still simmering, but oh well. I loved the old companion shortcuts.
Apparently I didn't move on soon enough, there's definitely some repetition in that mega post which could make use of the edit feature to delete.
Nice segway with Shakira, which ties back into when a few days ago I said Colombia made a good choice of countries to move to should things get too crazy in North America
oops didn't mean to copy all that yogi and byz in there.
edited it out
NorkaWest,
RM = Risk Management / Risk Mitigation
no hard feelings EHP.
i should try to be more conciliatory, like you.
Been buying physical gold after selling my ETF position. Are assay cards really important?
".....the point where you realize that you're more than halfway finished and wonder why you're wasting your time dealing with morons & egos."
........I was a slow learner - I didn't get it till I got off the booze & smoke - along about the 8th inning. What a waste.
ties back into when a few days ago I said Colombia made a good choice of countries to move to should things get too crazy in North America
Is kidnapping Gringos still a major industry in Columbia? in the 1980s, corporate security would give us a lecture on the company's ransom policy before we visited Bogota.
Ehp-Yeah that sounds like a good choice, Uruquay or Equador work too.. the real cartel is hanging out in DC....I keep thinking Tim G as Tony Montana
Shakira is caliente!
The mortgage deduction never was for the masses.
1/3 of households rent.
40% of the other 2/3 do not itemize.
Only about 60% of "homeowners" (~40% of households) itemize and some of those have no mortgage (some renters might itemize too).
Only about 20% of the mortgage deduction amount (the IRS' total) benefits the bottom-income half of mortgage deducters (if I recall correctly from old data).
About 80% of the mortgage deduction benefits a minority of "rich" debtors (top-income half of mortgage deducters) (if I recall correctly from old data).
This man has moved on, still aiming higher.
Here teaching his kid some magic tricks:
YouTube - Dickie Betts show how to play Jessica
@Not One Cent : Thanks for that link in the last thread. I was very curious just what PBGC claimed to be on the hook for...
Not one cent. JP
Could you post the link again? Thanks
I'd like to see that there chart go back to some recession periods like 1989; 2001 was nothing!
NorkaWest,
I can't speak for everyone, but I wouldn't have a problem. I've got a couple friends from Colombia; Cali and Cartagena I think. I'm pretty good at integrating myself into groups. I have a decent track record of handling myself in danger situations. They could kidnap me, but there would be no point. If it did happen, I wouldn't worry about it.
.
The areas that did have guerilla problems were away from the urban areas. Things have quieted down a lot in the last 5 years. Also, if things do get crazy in the USA, that changes the power structure and areas of conflict in Colombia.
creditcriminalslovetarp,
I can say good things about Ecuador. I know Uruguay is one of the wealthier and more stable countries, don't know what it would mean for someone leaving the USA amidst international crisis.
double post redaction
I have 3 friends from Colombia, all of whom left about 30 years ago and don't go back often. They all remember their childhood fondly, but none has ever considered repatriating.
"Is kidnapping Gringos still a major industry in Columbia? in the 1980s, corporate security would give us a lecture on the company's ransom policy before we visited Bogota."
A Spanish business woman I met in 1986, who'd been posted to Bogota previously, confirmed that impression. She even received an anonymous phone call there that told her to mind her own bloody business. The call began: "Listen, sweetheart..."
My favorite Bogota story was about a foreign visitor whose passport was robbed. He went up to a cop in Bogota to complain, and was arrested for not having a passport.
I knew a Columbian whose friends had offered to get him into a certain lucrative business there. They had become extremely well-off, but he told me he'd decided he didn't want to spend the rest of his life sitting with his back to the wall, facing the entrance, every time he patronized a restaurant. He emigrated to the States, and the last I heard he was working at the NY State Unemployment Office as a bureaucrat handling intake.
I would refine that there is some relatively static amount which the trade surplus must be larger than for it to sustain the positive feedback which reinvestment/currency placement brings. Also, I think a big story has been the drop of FDI in China with regards to their ability to sustain currency intervention.
I think FDI is HIGHLY over-rated right now due to the surpluses... they don't need it, in fact are quite picky about what FDI is invested in... I know because I talk to those folks doing it. Also this is believed to be very hot money... build factories when RMB:USD 8:1 then sell when RMB:USD 6:1... even if you don't make a profit operating the facility you gain on the currency exchange. I absolutely KNOW some companies who are expecting to do exactly that.
FDI was huge circa 2004... might be huge again after the dollar blows up [then they'll want FDI in anything except dollars]. Right now it isn't a huge factor EXCEPT for target industries & there they really want both the investment & the technology.
As far as the trade surplus point & threshold - I agree 100%, there is a tipping point where the Chinese throw in the towel and RUN [don't walk] from the dollar. But that one is gonna leave a mark... they'll have to be ready to 'lock down' the street if they do that. Regardless - these guys [and gals] aren't dumb... if the trade isn't there anymore they won't force it and the dollar & T's will be casualties big time.
But the trade surplus data and USD:CNY should hint there is trouble... I don't see trouble yet... just anecdotal evidence it might not be as far off as 'it was'.
Bob_in_MA, good question - and it is probably a factor. The NAHB has never seen a downturn like this one - I think I told the story of a couple of builders I spoke with in the Inland Empire ... they had sold their first homes in a couple of years this Spring, and a few sprinkles in the desert seemed like a flood to them!
best wishes
I'm pissed today. I just get angry at this whole ridiculous system in America. The news today regarding Pension Benefits Guarantee Corporation pisses me off. As a 28 year old with 2 children; let me say; we will not pay. I'm rooting for Ben to print and inflate everything away. I've not seen one damn policy that says, "Hey, let's try to pass on some wealth to the future... let's try to save some wealth for the future". It's all, "This is mine! mine! mine! ours! ours! ours!". W-T-F!
I say one word to those... I will not pay. I"m not going to pay for the PGBC, I'm not going to pay for the automaker bailouts, I'm not going to pay for social security and medicaid. No mas! I'm not going to pay for the bank bailouts. I'm rooting for Ben to print. I'm not holding any dollars. All those bailouts and entitlements will all bankrupt America, have already bankrupted America for my generation and my children's generation! Where are the jobs going to be when we've given them all to China! What is the point of propping up housing prices? So we can pay for that too!? What's the point of bringing democracy to Iraq and Afghanistan when things are so shitty at home! Woohoo... double-digit unemployment!
And the worst thing is the older generations don't care, they don't get it, they sit back and whine about all the promises that were made to them (that obviously couldn't be kept!) and say "we need this". I say BK California, and BK New York, and Ohio and whatever other state. BK everyone, BK America.
At one time I'd say we had a great country to live in with great values. I wish I could have experienced that country. But now we have a country completely BK of values. I know my grandparents all had their parents live together when they were in their old age, but there are many from my parents generation that could care less about taking care of mom and dad.. and for what? They are so busy and so important making their stupid nickel and dime from the man? You know what's happened to be lately... I've had to go to my job late like 10-15 minutes from my scheduled time and it has eaten into my leave... why? 'Cause my kids are young and its tiring for my wife to take care of them and I want to give her some sleep in. Of course I don't do this when we have important meetings, but I feel guilty doing it. Why should I feel guilty? Is my work going to give my wife a little break? Why? Everyone works for their stupid nickel and dime... the reason most of the populace hasn't woken up is not because they watch American Idol; its because all they can see are the nickel and dime's that fall at their feet, that pay the mortgage and rent. They are so busy working for the man that they don't realize the man has multiplied... the man has grown... the man is a beast... the man wants to run all of our lives and give us back nickel and dimes while extracting a pound of flesh for our happiness... and for what? A stupid McMansion? A beast of a house so we can seclude ourselves from our children? So that we can live busy ilves pretending that all the stupid activities we force on our kids enrich their lives?
Did our grandparents fight in wars for freedom and liberty, so that we could become slaves to the corporations?
Sorry, I know people say "we used to have a Christian country", I don't want to say that. I just believe at some point this country had values and beliefs that went beyond "mine, mine, mine!" or "I want more of this, this, this!". Sorry; just very angry at seeing our government and everyone else run up the tab for our generation and our children's generation. Maybe we'll be able to make a bigger impact on a broken country.
Colombia is a neat country. They're gearing up for a lot of infrastructure investment right now. I think it's on the order of $16bn US. They've got a novel approach to funding it in the works. The structure hasn't been finalized yet, though, so, no links. I'll post the prospectus when it arrives if I can.
The country itself is beautiful and the people are great. A lot of those central american countries have been painted with a fairly (negative) broad brush.There's not a lot to fear these days. I'm not sure there ever was.
As an aside, I wouldn't characterize any of these places as "emerging economies". My take is that they are fairly stable second order economies "moving at their own pace".
Also, free trade agreements would help tamp down the pace of Chinese deal-making. They need a different kind of American support going forward.
"...might be huge again after the dollar blows up...."
Implying it's a certainty?
Wouldn't Costa Rica be better than Colombia? I mean, really. Who wants to live in lawlessnes?
yogi, you are a Betts fan extraordinaire, no doubt about it.
I played Jessica at work today. It's always good for a pickmeup.
There is still hope for the younger generation...
Check out Jeff Beck and Tal Wilkenfeld - this is an amazing little girl...
YouTube - Jeff Beck with Tal Wilkenfeld at Crossroads 2007 Live
JP, you are welcome.
Tim, What PBGC guarantees (PBGC.gov)
YSLP. Do something. Step up. Organize. Demonstrate. It's going to take people getting pissed before the power structure changes.
Peacefully pissed. If that makes sense.
I shouldn't have said FDI was a big story, but perhaps something having an outsized impact because of its timing. Minor in the scheme of things
Of note though is how they are concentrating their exposure by converting some South American trade to direct Renminbi swap lines. That lets them keep control of more dollars, enables the status quo to run a bit longer than otherwise possible.
I don't think they are stupid, but you could reduce their boom in trade to nothing more than ultimately selling at a much lower price once they cash in their dollars. At the same time, they didn't have the freedom to operate a sustainable foreign exchange system because of investors' irrational and repeated flights to the dollar or pound.
YLSP, those kids are the most important people in the world.
Take good care of them and let the rest sort itself out. The rest don't mean nothing.
Man. I have children, too. I don't want them growing up to live in squalor. Continue on the path we are on, and...
"why? 'Cause my kids are young and its tiring for my wife"
Wife.
Kids.
Mortgage.
You made bad decisions.
Dump them all and be free!
"...might be huge again after the dollar blows up...."
Implying it's a certainty?
I think it is a certainty - I just don't know (1) how much energy others will put in to try to 'defend' the dollar and (2) how soon they throw in the towel & give up on it and the US consumer market.
The only thing holding up the dollar is the desire on the part of MANY countries, not just Chinese, to have PREFERENTIAL access to our consumer market. The 'XXXX Tiger' model [fill in XXXX with Asian, E European, Celtic, etc.] of massive export growth generated off a combination of cheap labor & currency manipulation & 'transfer price tax avoidance' is the only game in town. So the players will do everything in their power to stay in the game.
It might take a while for a new game to develop... or heaven help us if there is no game after this one plays out.
But the game is unsustainable - they can't keep lending us the money to consume then expect their loas to be good.
Here is another paradox... when China manipulates the USD:CNY... they aren't doing it to just make yuan cheap vs dollar... the REAL ratio they are worried about is the CNY:JPY so that they maintain competitive access to US market vis-a-vis their competitors... but they can't easily control CNY:JPY... so they make sure the CNY:USD is more competitive than JPY:USD. Japanese, Koreans & others try to do the same but the Chinese are the big kids on the block now... they set the pace the rest have to struggle to keep up with. Watch the yuan.
In short the trade war is between the merchantilists primarily in Asia, the dollar is their weapon of choice, our consumer market is the battle ground and our workers & domestic industry is the unavoidable collateral damage.
"....if things do get crazy in the USA.......:
.....all Hell will be broke loose every place else. I'll die here this time, thank you.
Wife.
Kids.
Mortgage.
You made bad decisions.
Dump them all and be free!
Broward, bite your tongue. It ain't all bad.
Of note though is how they are concentrating their exposure by converting some South American trade to direct Renminbi swap lines. That lets them keep control of more dollars, enables the status quo to run a bit longer than otherwise possible.
I don't think they are stupid, but you could reduce their boom in trade to nothing more than ultimately selling at a much lower price once they cash in their dollars. At the same time, they didn't have the freedom to operate a sustainable foreign exchange system because of investors' irrational and repeated flights to the dollar or pound.
Exactly - I agree with both points.
Got to meet him in person last week, sat down on his bus for an hour after the show. A gracious talent, but never will compromise. He tries not to hold a grudge. (Of course we told him it was the best thing that could have happened to him, don't know if he could tell that we really meant it)
He said the record company wanted the band to play disco like everyone else in the late 70's, when the records weren't selling well, but he laughed. So now he puts out his own discs.
At the show, the slide guitar man broke a string during a solo, kept going like it was nothing, seamless change. Dickie breaks a string during the Ramblin' encore, the song almost over, the whole crowd standing and cheering. He has to change right away. The backup Gibson is out of tune. He throws it on the floor (never seen it before) and storms around, finally finding a Fender. Already has the whole crowd standing and cheering during an encore of a song he's played ten thousand times, and he was killing to get his last licks in.
Wow - how old is Dickie Betts? It's like the geriatric crew now for the old bands. But true fans don't care.
Not one cent --OER is the wild guess of a homedebtor asked by the BLS,
"If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?"
EXACTLY. At some sort of theoretical level, you can argue that OER should be used in CPI calculations. But since there's really no good way to come up with a figure for OER they should be using something different.
My favorite Bogota story was about a foreign visitor whose passport was robbed. He went up to a cop in Bogota to complain, and was arrested for not having a passport. That may be what the paperworks says, but the problem with foreign visitors is that they don't realize that you should always bribe the policemen, because they're much cheaper than judges.