Friday November 29 Housing and Economic stories

TOP STORIES:

Bitcoins banned in Thailand - (www.telegraph.co.uk) Thailand has become the first country to ban bitcoins after the central bank ruled it is not a currency. In a statement on its website, Bitcoin Company Limited said it had given a presentation to the Bank of Thailand about how the currency works in a bid to operate in the country. However, at the end of the meeting, "senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets... Bitcoin activities are illegal in Thailand". The ruling means it is illegal to buy and sell bitcoins, buy or sell any goods or services in exchange for bitcoins, send any bitcoins to anyone outside of Thailand, or receive bitcoins from anyone outside the country.

Clinton: Obama should 'honor' health-care pledge - (www.cnbc.com) President Barack Obama should consider changes to his health-care law to honor his pledge to allow consumers to keep their health-care plans if they so desire, former President Bill Clinton said in an interview released Tuesday. Clinton told the website OZY that the implementation of the Affordable Care Act has been, on balance, a good thing. "The big lesson is that we're better off with this law than without it," Clinton said. But he also lent some credence to GOP attacks on the law. "I personally believe, even if it takes a change in the law, the president should honor the commitment the federal government made to those people and let them keep what they got," Clinton said. The former president was referencing the pledge Obama made repeatedly during his sales job of the health-care law that if individuals liked their current health-care plan, they could keep it. In an interview with NBC News last week the president apologized for cancellations many individual policy holders are receiving and said his administration is looking at ways to change that part of the law.

Obamacare buyers: Young, female and pricey tastes - (www.cnbc.com) And the Bluegrass State's data show that people who are enrolling in private Obamacare insurance plans there are often young women with more expensive tastes in insurance than might have been expected. But at the same time, the bulk of interest in health-care coverage is, like the rest of the country, coming from the poor and uninsured. Experts told CNBC.com that they would be surprised if the federal government even matches Kentucky, much less surpasses it, in the level of detail in its enrollment data, given widespread expectations that very few people have actually enrolled in Obamacare insurance through the federal marketplace. Federal authorities to date have refused to reveal that data since the Oct. 1 launch of the Obamacare marketplaces—even under pressure from Congress—and have not committed to breaking down the enrollment data to the extent Kentucky has. The Wall Street Journal late Monday, citing two unnamed sources, said the federal government's marketplace has enrolled fewer than 50,000 people in private insurance since October, well below its initial target of 500,000 for just the month of October.

Dallas Fed president Richard Fisher: QE won't last forever - (www.cnbc.com) The Federal Reserve's monetary stimulus program cannot continue forever, Richard Fisher, President of the Federal Reserve Bank of Dallas told CNBC on Tuesday. "We've changed and impacted the markets because of our intervention and I understand there's sensitivity, but markets should also bear in mind that this program cannot go on forever," he said. "The balance sheet is $4 trillion and there are limits to what the Federal Reserve can do," Fisher, who is in Melbourne speaking at an Economic Development for Australia function, added. There has been intense speculation in recent months over when the Fed will start to scale back its $85 billion-a-month asset purchase program, also known as quantitative easing.

OSX becomes second Batista company to file for bankruptcy - (www.reuters.com) Brazilian shipbuilder OSX Brasil SA filed for bankruptcy protection on Monday, becoming the second company controlled by former billionaire Eike Batista to seek court protection from creditors in just over a week. The move, confirmed by the company shortly after a source told Reuters the filing was underway, follows a decision by the OSX board on Friday to pursue bankruptcy proceedings. The petition was made to the same court in Rio de Janeiro where Batista's oil company OGX Petróleo e Gas Participações SA sought protection from creditors on October 30. That case, citing 11.2 billion reais in debt ($4.8 billion), was Latin America's largest bankruptcy filing.

OTHER STORIES:

Easier to get a mortgage? For some … - (www.cnbc.com)

Diller to Feds: Show us the JPMorgan money - (www.cnbc.com)

Nouriel Roubini Explains The Biggest Economic Problem Right Now - (www.businessinsider.com)

Confessions of a Quantitative Easer - (online.wsj.com)

Earnings, but Without the Bad Stuff - (www.nytimes.com)

Larry Summers argues Ben Bernanke's policies have failed - (www.nytimes.com)

Thursday November 28 Housing and Economic stories

TOP STORIES:

Desert Hot Springs, California, May Weigh Bankruptcy - (www.bloomberg.com) Desert Hot Springs, California, a resort town near Palm Springs, may become the first city since Detroit to seek bankruptcy protection from creditors after a sharp drop in revenue, according to a staff report. The city of 26,000 will run out of cash by March 31, according to a memo to the City Council from Amy Aguer, the interim director of finance and administration. She urged the council to declare a fiscal emergency at its Nov. 9 meeting, a prerequisite under state law for a Chapter 9 filing. If approved, Desert Hot Springs, about 110 miles (177 kilometers) east of Los Angeles, would join two other California cities in bankruptcy court: San Bernardino, with a population of 210,000, and Stockton, with 292,000 residents, the biggest U.S. city to enter Chapter 9 proceedings untilDetroit sought protection in July. “I’m just blindsided,” Mayor Yvonne Parks said yesterday when asked about the fiscal crisis. “There isn’t anything that could explain this. That’s what blows my mind.”

New China Cities: Shoddy Homes, Broken Hope - (www.nytimes.com) Three years ago, the Shanghai World Expo featured this newly built town as a model for how China would move from being a land of farms to a land of cities. In a dazzling pavilion visited by more than a million people, visitors learned how farmers were being given a new life through a fair-and-square deal that did not cost them anything. Today, Huaming may be an example of another transformation: the ghettoization of China’s new towns. Signs of social dysfunction abound. Young people, who while away their days in Internet cafes or pool halls, say that only a small fraction of them have jobs. The elderly are forced to take menial work to make ends meet. Neighborhood and family structures have been damaged. Most worrying are the suicides, which local residents say have become an all-too-familiar sign of despair.

Surprise tactics sweep central banking - (www.reuters.com)  After slashing interest rates to almost nothing and printing trillions of dollars, central banks are becoming increasingly reliant on another policy weapon: sucker punching markets. The European Central Bank shocked investors and forecasters last Thursday by cutting its main refinancing rate to a record low, reacting to a shock decline in inflation. It was the second big central bank surprise in less than two months, after the U.S. Federal Reserve decided in September not to trim its monthly bond purchase stimulus. And beyond the immediate impact on financial markets, central banks' shock therapy tactics have also had a lasting effect. The yield on the U.S. 10-year Treasury bond -- one measure of government borrowing costs -- fell sharply in the aftermath of the Fed's decision, and it shows no signs of revisiting September's peaks for the year any time soon. The ECB's rate cut helped weaken the euro more than 1 percent against the dollar, and most economists polled by Reuters reckon it will put the currency on a firmly lower path from here -- huge help for the fragile euro zone recovery. 

U.S. Postal Service to deliver Amazon packages on Sundays  - (www.latimes.com) The postal service will deliver Amazon packages on Sundays in the L.A. and New York metropolitan areas at no extra charge starting this week. The service will expand to other cities next year. Giant online retailer Amazon.com Inc. is turning up the heat on rivals this holiday season and beyond under a new deal with the U.S. Postal Service for delivering packages on Sundays. Starting this week, the postal service will bring Amazon packages on Sundays to shoppers' doors in the Los Angeles and New York metropolitan areas at no extra charge. Next year, it plans to roll out year-round Sunday delivery to Dallas, New Orleans, Phoenix and other cities. Getting packages on Sundays normally is expensive for customers. United Parcel Service Inc.doesn't deliver on Sundays, according to a spokeswoman. And FedEx Corp. said Sunday "is not a regular delivery day," though limited options are available. The deal could be a boon for the postal service, which has been struggling with mounting financial losses and has been pushing to limit general letter mail delivery to five days a week.

Be Prepared For Stocks To Crash 40%-55% - (www.businessinsider.com) The stock market continues to set new highs, which is exciting and fun for those of us who own stocks. I own stocks, so I'm certainly enjoying it. I hope stocks continue to charge higher, but I can't find much data to suggest that they will. I only have a vague hope that the Fed will continue to pump air into the balloon and corporations will continue to find ways to cut more costs and grow their already record-high earnings. Meanwhile, every valid valuation measure I look at suggests that stocks are at least 40% overvalued and, therefore, are likely to produce lousy returns over the next 10 years. Which valuation measures suggest the stock market is very overvalued? These, among others:

·   Cyclically adjusted price-earnings ratio (current P/E is 25X vs. 15X average)

·   Market cap to revenue (current ratio of 1.6 vs. 1.0 average)

·   Market cap to GDP (double the pre-1990s norm)

OTHER STORIES:

[Morgenson] Earnings, but Without the Bad Stuff - (www.nytimes.com)

Italy PM urges Germany to move on growth - (www.reuters.com)

Abenomics Faces Emerging Pressures - (online.wsj.com)
ECB split stokes German backlash fears - (www.ft.com)

Exclusive: Supporters of China's disgraced Bo Xilai set up political party - (www.reuters.com)

Analysis: U.S. retailers tread tight path in shortened holiday race - (news.yahoo.com)

Global Economy: Surprise tactics sweep central banking - (www.reuters.com)

Desert Hot Springs, California, May Weigh Bankruptcy - (www.bloomberg.com)

Fed Still Seen Tapering in March Even as Job Growth Picks Up - (www.bloomberg.com)

Central Banks Renew Reflation Push as Prices Weaken - (www.bloomberg.com)
Fed unveils Plan B for withdrawing QE - (www.ft.com)

Wednesday November 27 Housing and Economic stories

TOP STORIES:

San Mateo foresees ‘silver tsunami’ of aging Baby Boomers who can’t afford home prices - (www.sfgate.com)  Newly elected San Mateo City Council member Joe Goethals called it a “silver tsunami.” While the imagery is striking, the facts are sobering: By 2030, almost a quarter of San Mateo County’s population is expected to be older than 65 — and a new study has found that nearly 20 percent of Californians in this age group live in poverty. The study by Stanford’s Center on Poverty and Inequality and the Public Policy Institute of California aimed to provide a more comprehensive and rigorous accounting of poverty statistics than the U.S. Census Bureau. Dubbed the California Poverty Measure, or CPM, the research took housing costs into account when determining poverty levels. For San Mateo County, the study determined that 18.4 percent of residents earned less than the poverty threshold of $36,504, a much higher figure than the Census estimate of 6.7 percent. San Mateo city officials, aware that it’s hard to find a one-bedroom apartment for under $2,000 a month, have begun to explore ways to serve a rapidly aging demographic. But at an Oct. 16 forum, Mayor David Lim and several council members said the affordability problem remains easier to identify than to solve. One solution advanced by the state legislature, which Lim supported, would have allowed San Mateo to adopt an ordinance to require below-market-rate housing on 15 percent of all rental units.

Payback Time for Subprime - (www.chartporn.org)  Settlement and fines for mortgage abuses are starting to add up to real money. Of course, as Matt Taibbi points out, this is still just a drop in the proverbial bucket compared to the related profits and scale of activities that took place.

Bernanke Giving Pledges To Screw Savers Out Of Interest Longer - (www.bloomberg.com)  From Patrick’s  blog at www.Patrick.net! This was supposed to be the year that Herb Harrison found a newer, bigger home to replace his current house in Framingham, Massachusetts. Then, in May, mortgage rates began to rise and he put his hunt on hold. “My wife and I looked at each other and said ‘no way,’” said Harrison, who works in information technology. “It was something we thought about when rates were at rock-bottom, but once the rates spiked, we decided to stay where we are.” Now shoppers like the Harrisons are getting another chance, thanks to Federal Reserve Chairman Ben S. Bernanke. After five months of public speculation about when the Fed would end its housing stimulus sent mortgage costs to a two-year high in September, the U.S. central bank last week pledged a continuation of the bond buying responsible for last year’s all-time low 3.36 percent for a 30-year fixed loan. Interest rates may now hold at close to 4 percent through early next year, said Joel Naroff, president of Naroff Economic Advisors. This was supposed to be the year that Herb Harrison found a newer, bigger home to replace his current house in Framingham, Massachusetts. Then, in May, mortgage rates began to rise and he put his hunt on hold. “My wife and I looked at each other and said ‘no way,’” said Harrison, who works in information technology. “It was something we thought about when rates were at rock-bottom, but once the rates spiked, we decided to stay where we are.” Now shoppers like the Harrisons are getting another chance, thanks to Federal Reserve Chairman Ben S. Bernanke. After five months of public speculation about when the Fed would end its housing stimulus sent mortgage costs to a two-year high in September, the U.S. central bank last week pledged a continuation of the bond buying responsible for last year’s all-time low 3.36 percent for a 30-year fixed loan. Interest rates may now hold at close to 4 percent through early next year, said Joel Naroff, president of Naroff Economic Advisors.

Consumer confidence in homebuying hits all-time low - (www.housingwire.com)  Consumer confidence in housing significantly widened last month, as most taxpayers were turned off by the federal government shutdown and the ongoing debt ceiling debate, taking a toll on American’s outlook toward the housing market. The share of consumers who believe it’s a good time buy a house declined to 65% — an all-time low — while the number of those who believe mortgage rates will go up in the next year fell to 57%, according to Fannie Mae’s latest monthly survey. It’s important to note that the survey was conducted primarily in the first two weeks of October – before the government shutdown ended and the debt ceiling agreement was reached.

Downgrade heaps pressure on Hollande - (www.ft.com) S&P criticises France’s high tax rates for stifling growth. François Hollande’s stuttering effort to revive the French economy suffered another setback when Standard & Poor’s lowered the country’s credit rating and criticised its high taxes and flagging structural reforms.

The ratings downgrade came after a testing few weeks for the French president that have featured strikes by Brittany farmers and professional footballers over taxes that are among the highest in the western world. Mr Hollande’s approval ratings have slipped to record lows. “The downgrade reflects our view that the French government’s current approach to budgetary and structural reforms to taxation, as well as to product, services and labour markets, is unlikely to substantially raise France’s medium-term growth prospects,” S&P said in a statement on Friday.

OTHER STORIES:

Germany Clashes With France Over Power to Close Failing Banks - (www.bloomberg.com)
Draghi running out of bazookas from ECB's arsenal - (www.cnbc.com)

Draghi Aggression Shows Pledges Backed by Rate Surprise - (www.bloomberg.com)

Asia Bond Risk Set for Biggest Weekly Increase Since September - (www.bloomberg.com)

France Credit Rating Cut to AA by S&P on Growth Outlook - (www.bloomberg.com)

Buyers react to rising mortgage rates with long-term rate locks - (www.ochousingnews.com)

Why Fannie and Freddie Are Paying Back Uncle Sam - (online.wsj.com)

CA worst poverty in nation when housing costs considered - (www.contracostatimes.com)  

Want to keep your job. RENT - (money.cnn.com)   

Tuesday November 26 Housing and Economic stories

TOP STORIES:

Italy to join deflation club? - (www.telegraph.co.uk) Jonathan Tepper from Variant Perception has a scary note this morning on Italy's deflation risk, just in time for the ECB's pitched battle today. Or at least one assumes that there will be blood on the floor in Frankfurt as doves show their fangs (excuse the grotesque mixed metaphor). If there is not a bloodbath given how far the ECB has undershot its inflation and M3 targets, then why not? The first chart shows falling inflation. The underlying rate after austerity taxes are stripped out is even worse.  The second shows the debt trajectory. They are linked of course. One is a function of the other. When you understood this elementary point, you understand the essence of the EMU crisis. Berlin feigns not to understand it.

In first month, the vast majority of Obamacare sign-ups are in Medicaid - (www.washingtonpost.com)  The first month of the new health law’s rollout reveals an unexpected pattern in several states: a crush of people applying for an expansion of Medicaid and a trickle of sign-ups for private insurance. This early imbalance — in some places, nine out of 10 enrollees are in Medicaid — has taken some experts by surprise. The Affordable Care Act, which expanded Medicaid to cover millions of the poorest Americans who couldn’t otherwise afford coverage, envisions a more even split with an expanded, robust private market. “When we first saw the numbers, everyone’s eyes kind of bugged out,” said Matt Salo, who runs the National Association of Medicaid Directors. “Of the people walking through the door, 90 percent are on Medicaid. We’re thinking, what planet is this happening on?” The yawning gap between public and private enrollment is handing Republicans yet another line of criticism against President Obama’s health overhaul — that the law is primarily becoming an expansion of a costly entitlement program.

Stand by...a hefty drop's on the way: Nomura's Janjuah - (finance.yahoo.com) Global stock markets are set to peak in the next few months but hungry investors should beware, according to Bob Janjuah, Nomura's uber-bearish strategist, who believes a hefty dip in global stock markets is just around the corner. The end of this quarter till the end of the first quarter of 2014 is the buying window Janjuah sees as "the risk-on top", he said in a client note on Tuesday. After that he predicts a 25 percent to 50 percent sell-off over the last three quarters of 2014. "While my target for this high in the S&P over the next five months remains anchored around 1,800, an 'extreme' upside target could see the S&P (^GSPC) trade up to 1,850," he said. "I am looking - as a proxy guide - for the VIX (CBOE Volatility Index) index (^VIX) to trade down at 10 between now and end (the first quarter of 2014) before I would recommend large-scale positioning for a major risk reversal over the last three quarters of 2014 and over 2015." As an extra cautionary measure, Janjuah added that an interim sell-off could occur before the end of November due to markets having priced in all the recent good news on growth. There's a possibly a period of risk-off this month could take the the S&P from 1,775 to perhaps 1,650/1,700, or even as low as the 1,600/1,650 area, he said. 

Squeezed middle class looks to dollar stores - (money.cnn.com) With the economy recovering at only a snail's pace, consumers are still feeling pinched and are on the hunt for the best bargains. For many, that now means shopping at dollar stores. "Massive unemployment and declining wages are squeezing people out of the middle class," said Kristin Bentz, executive director at private equity firm PMG Venture Group. "These people can't even afford Wal-Mart now and are trading down to dollar stores." The decline of the middle class and its impact on retailers was a hot topic at the Stocktoberfest conference last month hosted by social investing site StockTwits. Bentz and Joseph Brusuelas, a senior economist with Bloomberg Briefs, both spoke about the trend.

US Infrastructure Spending Collapse - (www.businessinsider.com)  Well,  there it is, the collapse in infrastructure spending that everyone is talking about. It's from BSA Research. The chart was first spotted by Cardiff Garcia at FT Alphaville. Yves Smith at Naked Capitalism is also writing about it. The key thing, as Yves notes, is that the chart includes state and local infrastructure spending, which explains why they were was such a furious collapse right after the bust, as state and local governments furiously slashed spending. The tragedy of course is that with inflation non-existent and a huge surplus of excess labor, this would have made an incredibly good time to spend like crazy on infrastructure, fixing everything and putting people to work.

OTHER STORIES:

The Rise And Fall Of The Largest Corporation In History - (www.businessinsider.com)

ECB cuts rates to ward off deflation - (money.cnn.com)

U.S. planned layoffs rise in October - (www.reuters.com)

Stand by...a hefty drop's on the way - (finance.yahoo.com)

Why Deflation is a Bad Thing - (www.businessinsider.com)

October U.S. jobs report seen muddied by government shutdown - (www.reuters.com)

Deflation risk may spur new ECB rate cut - (money.cnn.com)

Market Failure and Government Failure - (www.nytimes.com)