Thursday, June 19, 2014

Friday June 20 Housing and Economic stories


Bring Your Own Guillotine: Anti-Monarchy Protests Break Out Across Spain - (www.zerohedge.com) The news of Spain's King Carlos' abdication this morning warranted barely a headline in the US media. However, once again, the simmering social unrest of nations full of repressed citizens burst into action as widespread anti-monarchy protests erupted across Spain. On the heels of last week's European elections that saw extreme left and extreme right parties, it seems the Spanish monarchy's move has lit the blue touch paper in a nation still suffering from record high unemployment and record high suicide rates. Protesters carried guillotines and chanted "Neither king nor master" and "Long live the struggle of the working class" demanding a referendum. A Pre-Franco Republic flag covers a guillotine at one anti-monarchy protest...

LEAKED: Embarrassing Memo Could Ruin Argentina's Chances Of Getting Back In The World's Good Graces - (www.businessinsider.com) Argentina is really trying to show the world that it's making good on its debts lately, but a memo leaked on an Argentine blog last week could negate every last show of faith, according to Reuters. That's because the memo suggests that perhaps the country isn't eager to pay off all of its creditors. It all comes down to what the Supreme Court thinks next week, in a decision that could send the ailing country into default (worst-case scenario). Here's the backstory: Since Argentina's economic crash in 2001, the country has been a pariah of the international financial community. Now it is facing the consequences of its isolation — it's running out of cash. The head of its Central Bank says dollar reserves are now at $28.5 billion. These are dire straights, so Argentina is running around paying debts left and right. For example, it just cleared $9.7 billion worth of arrears it owes The Paris Club last week. A memo leaked out around the same time, however, is casting doubt on the country's sincerity in terms of one key matter — its ongoing court case against U.S. hedge fund managers who refuse to restructure $1.3 billion of debt dating back to 2001.

America’s Insatiable Demand For More Expensive Cars, Larger Homes And Bigger Debts - (www.theeconomiccollapseblog.com) One of the things that this era of American history will be known for is conspicuous consumption.  Even though many of us won't admit it, the truth is that almost all of us want a nice vehicle and a large home.  They say that "everything is bigger in Texas", but the same could be said for the entire nation as a whole.  As you will see below, the size of the average new home has just hit a brand new record high and so has the size of the average auto loan.  In the endless quest to achieve "the American Dream", Americans are racking up bigger debts than ever before.  Unfortunately, our paychecks are not keeping up and the middle class in the United States is steadily shrinking.  The disparity between the lifestyle that society tells us that we ought to have and the size of our actual financial resources continues to grow.  This is leading to a tremendous amount of frustration among those that can't afford to buy expensive cars and large homes. 

Did the Regulators Just Ring the Bell on the Deal making Spree of 2009-2014  - (www.zerohedge.com) Most analysts miss major changes in the financial system. The reason for this is that they only look at the economic data for signs of what’s happening. If you’re looking for a competitive edge in your forecasts, however, you need to learn to “read between the lines” on news releases. Which is why I believe 99% of analysts are overlooking the following story (hat tip Bill King’s King Report). Three longtime banks for private equity firm KKR & Co LP (KKR.N) have snubbed a request for a $725 million buyout loan over concerns it is too risky to pass muster with U.S. regulators, sources familiar with the situation said on Thursday.  The banks had funded a similar deal six months earlier… Now, the three banks have refused to bankroll a bid by KKR-owned Brickman to buy rival landscaping company ValleyCrest Companies LLC, as they seek to cut back on making new loans that do not comply with the leveraged lending guidelines, the sources said. Dell Inc DELL.O founder Michael Dell's investment firm owns ValleyCrest. It is unusual for banks that lead the financing of a leveraged buyout of a company not to be tapped for smaller follow-on financings.

The Velocity Of Money In The U.S. Falls To An All-Time Record Low - (www.theeconomiccollapseblog.com) When an economy is healthy, there is lots of buying and selling and money tends to move around quite rapidly.  Unfortunately, the U.S. economy is the exact opposite of that right now.  In fact, as I will document below, the velocity of M2 has fallen to an all-time record low.  This is a very powerful indicator that we have entered a deflationary era, and the Federal Reserve has been attempting to combat this by absolutely flooding the financial system with more money.  This has created some absolutely massive financial bubbles, but it has not fixed what is fundamentally wrong with our economy.  On a very basic level, the amount of economic activity that we are witnessing is not anywhere near where it should be and the flow of money through our economy is very stagnant.  They can try to mask our problems with happy talk for as long as they want, but in the end it will be clearly evident that none of the long-term trends that are destroying our economy have been addressed.





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