The Housing Bubble

“Rio, Fortescue drive iron ore output despite China risks.”

Q. And they are doing this because?

A. It’s what they do, it’s all they’ve got.

http://finance.yahoo.com/news/rio-fortescue-drive-iron-ore-093946270.html

Cash definitely rules in a land desperate for the stuff…

“Greece prepares second wave of privatizations”

http://finance.yahoo.com/news/greece-prepares-second-wave-privatizations-091523554

‘He Lies!’ They Commanded (Or are the fact checkers on the web reliable to determine who is telling the truth)

Obama has run many ads saying, as well, that Romney would raise taxes on the middle class. Romney denies he would do any such thing. Obama’s argument is that “a think tank” said that his numbers can’t add up — that it’s impossible to find enough tax breaks for the rich to offset the tax-rate reductions Romney favors — and that if Romney wanted to cut those tax rates without raising the deficit, he might have to raise middle-class taxes. The think tank said Obama was distorting its report by saying that Romney would definitely raise middle-class taxes.

PolitiFact, one of the fact-checking groups, amazingly rated Obama’s claim “mostly true.” FactCheck.org said it was “not true.”

http://www.nationalreview.com/articles/329964/he-lies-they-commanded-ramesh-ponnuru?pg=2

So, which lie is true, which lie is false, or which is partially true is open to discussion. You can’t always rely on your fact checker and you’ll still have to consider all of the facts in a matter “if you want to know the real truth”.

Liberals’ green-energy contradictions
Washington Post | October 15, 2012 | Charles Lane

Al Gore is about 50 times richer than he was when he left the vice presidency in 2001. According to an Oct. 11 report by The Post’s Carol D. Leonnig, Gore accumulated a Romneyesque $100 million partly through investing in alternative-energy firms subsidized by the Obama administration.

Two days after that story ran, Mitt Romney proclaimed at a rally in Ohio’s Appalachian coal country: “We have a lot of coal; we are going to use it. We are going to keep those jobs.” Thousands cheered.

The juxtaposition speaks volumes about the Democratic Party, and about modern liberalism generally. As the Democrats become more committed to, and defined by, a green agenda, and as they become dependent on money from high-tech venture capitalists and their lobbyists, it becomes harder to describe them as a party for the little guy — or liberalism as a philosophy of distributive justice.

But that’s not the worst contradiction in the Democrats’ doing-well-by-being-green ethos. Green energy is not cost-competitive with traditional energy and won’t be for years. So it can’t work without either taxpayer subsidies, much of which accrue to “entrepreneurs” such as Gore, or higher prices for fossil energy — the brunt of which is borne by people of modest means.

Consider California’s “net metering” subsidy for solar-panel users. As the New York Times reported in June, the program hugely benefits well-off consumers who can afford to install photovoltaic panels. They get sun power for their homes — plus an excess supply that utilities must buy. Thus utilities must also pay to keep them on the grid. Those costs get passed along to everyone else — including low-income customers.

It’s one thing to lose your job because a competing firm built a superior mouse trap; it’s quite another, justice-wise, to lose it because a competitor talked the government into taking its side.

Liberals’ green-energy contradictions

The point remains: Government, with its inevitable susceptibility to lobbying and favoritism, should not be picking winners and losers, whether through green subsidies or tax breaks for oil and gas.

It’s one thing to lose your job because a competing firm built a superior mouse trap; it’s quite another, justice-wise, to lose it because a competitor talked the government into taking its side.

http://www.washingtonpost.com/opinions/charles-lane-liberals-green-energy-contradictions/2012/10/15/8c251ba2-16e6-11e2-8792-cf5305eddf60_story.html

are there any bank deals left?

Yep, yep, yep and yep.

54% DTI - Insanity. There is nothing left except Ramen noodles.

FYI (from Wikipedia) - The two main kinds of DTI

The first DTI, known as the front-end ratio, indicates the percentage of income that goes toward housing costs, which for renters is the rent amount and for homeowners is PITI (mortgage principal and interest, mortgage insurance premium [when applicable], hazard insurance premium, property taxes, and homeowners’ association dues [when applicable]).

The second DTI, known as the back-end ratio, indicates the percentage of income that goes toward paying all recurring debt payments, including those covered by the first DTI, and other debts such as credit card payments, car loan payments, student loan payments, child support payments, alimony payments, and legal judgments.

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Zillow Housing Forum and The Bearish View
Calculated Risk Blog | 10-14-2012 | Bill McBride

Hanson thinks we are just seeing a stimulus bounce and that prices will start falling again. Here are a few of Hanson’s comments (from notes and memory - Zillow will have a video of the forum available this week).

Hanson argued there is a substantial “shadow inventory” that will come on the market. He talked about the number of homes with negative equity (CoreLogic puts the number at 10.8 million, Zillow put the number at 15.1 million). Hanson also mentioned 6 million delinquent mortgages (LPS puts the number of properties delinquent or in foreclosure at 5.45 million).

And Hanson also mentioned the 6 million recent modifications (he called modified loans the “new subprime” because he thought a large number would default again). Hanson talked about the high “Back-End Debt-to-Income Ratio” even after modification. What Hanson was referring to was the HAMP programs were the borrowers have substantial debt payments in addition to their mortgage payment (student loan, car, other installment loans). In the most recent HAMP report, the back-end DTI was 53.6% after modification, and the front end DTI (principal, interest, taxes, insurance and homeowners association and/or condo fees) was 31%. With these high back-end ratios, Hanson argued many of these people would default (that is why he called it the “new subprime”).

Hanson mentioned several big numbers: 15 million with negative equity, 6 million modifications (more counting other retention programs), 6 million properties currently delinquent. No question there are significant issues for borrowers with negative equity, as an example they will have difficulty moving for a new job, and, as Hanson noted this limits the move-up market. But we can’t add these numbers together because that would mostly be double counting. Most (but not all) of the seriously delinquent borrowers have negative equity - and if they don’t, they can sell their homes and avoid foreclosure.

And most of the modifications have negative equity. And probably all of the listed (visible inventory) contingent short sales have negative equity. So when we are talking about unlisted inventory that will be forced on the market over the next 2 to 3 years, we can mostly ignore negative equity and focus on current and expected delinquencies.

As far as modifications, Hanson focused on the HAMP data (about 1.08 total permanent modifications so far, and about 23% have defaulted). And I agree that many more of these HAMP modifications will default over the next couple years. But there are another 4.6 million proprietary modification programs completed too (these are lender specific programs). Some of this data is available from Hope Now. The lenders also offered additional retention plans. (removed) These borrowers may redefault when the mortgage rates adjust, but that is several years from now - so this isn’t imminent forced inventory on the market.

The most important short term numbers are the 2.02 million properties currently in foreclosure pre-sale inventory (in the foreclosure process) and the 1.52 million properties that are 90 or more days delinquent, but not currently in foreclosure. Many of these properties will be sold as short sales (many are already listed as “short sale contingent”). A large number of these properties that are in foreclosure are located in judicial states, and that means there will not be a huge wave of foreclosures, but a steady stream in those states as the foreclosures work through the courts (and that could keep house prices from increasing).

If you bought a house 1998-2012, you’ve lost money. Alot of money.

Let It Be Known That No Financial Crisis Was Ever Caused by Stable Money
Forbes | 10/16/2012 | Nathan Lewis

There aren’t many blanket statements you can make about economics. Usually, “it depends.” But, there’s one thing I can say with a fairly high degree of confidence:

No economic crisis was ever caused by stable money.

Of course, many crises happened during the gold standard era, before floating currencies appeared in 1971. In the two centuries before 1971, people got into financial trouble for all kinds of reasons. Banks lent money to people that couldn’t pay it back. Businesses invested in ideas that turned out to be not so hot. Governments borrowed and spent more than they should have. Destructive domestic tax increases were imposed. Countries got into tariff wars with each other. There were even a few World Wars, Civil Wars, communist revolutions, and so forth.

None of them were caused by money that was too stable.

Since 1971, we’ve had a colossal number of crises worldwide that have been caused by unstable money. The entire world had an inflation problem during the 1970s, as the U.S. dollar was devalued from $35/oz. of gold in 1971 to around $350/oz. afterwards. In the 1980s, all of Latin America erupted into currency catastrophe, and spent the next decade in a debilitating hyperinflation. The 1990s witnessed Japan destroy itself with a currency that rose and rose, while all of the Soviet sphere collapsed into hyperinflation. Mexico blew up again in 1995. In 1997-98, another round of currency disasters swept through Asia, and also knocked out Brazil and Russia. Argentina blew up in 2001. Since then, the world has been in another round of currency depreciation, with the dollar’s value sinking from the $350/oz. level to around $1700/oz. today. This will not end happily either.

Buying a house was the worst financial decision of my life, I have discovered.

My now ex-husband and I bought a house in 1989. It cost $227,000 which was actually cheap at the time.

Here’s what I’ve spent on my home.

Mortgage $418,042
Taxes 68,309
Association fees 57,321
Insurance 15,316
========
$558,443
Plumbing, remodel 132,938
========
$691,381

Had I rented for the 272 months I lived there, I could have gotten a place (without paying for utilities) for $2053 a month…and rent wasn’t $2053 a month back in 1989.
I’m actually LOSING for having had a house.
$691,381 (what I paid from 1989 on)
423,000 (what I’ll net after sale)
========
$268,381 = how much money I would have been ahead if I had just rented since 1989.

Any thoughts on why Vikram Pandit would suddenly resign from Citi?

http://www.cnbc.com/id/49429100

It will never end as long as government is involved in keeping “college” affordable.

It is ironic - isn’t it? The more government gets involved, the more they try “help” keep costs down, the more money government spends - the more educational costs go up.

It is also the same with housing and health care.

The only way to reduce the cost of college is to get government OUT of financing/guaranteeing educational costs. This also includes allowing student debt to be wiped out in bankruptcy.

Nearly overnight, college cost would start the long journey DOWN back to affordability.

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Well-Off Will Benefit Most From Change to Student Debt Relief Plan, Study Says
New York Times | October 16, 2012 | ANDREW MARTIN

With nearly one in six student loan borrowers in default, the federal government is making changes to its income-based repayment plan to help borrowers with relatively high debt and low incomes keep up with their payments.

But a report that will be released on Tuesday by the New America Foundation, a nonprofit and nonpartisan policy institute, says the changes ultimately will provide only marginal help for low-income borrowers who are at the greatest risk of default.

Rather, the changes would provide big benefits to middle- and high-income borrowers, particularly for those seeking a graduate degree, the authors found. The report says that at least one financial planning company is telling law school students that the changes could allow them to write off $100,000 in student debt.

…

The New America Foundation report says the changes to income-based repayment could provide some benefits to all participants. But the primary beneficiaries would be high-income, high-debt participants who could make relatively small payments for 20 years and then have a large part of their debt forgiven, the authors said.

The foundation cites as an example advice given by financial planners such as the Advantage Group in California.

“Stop wasting your money on student loan payments,” says the Advantage Group Web site. The firm notes that an average graduate from California Western School of Law owes more than $145,000 in student loans, amounting to monthly payments of more than $1,690.

But the changes introduced by the Obama administration could allow a graduate making $70,000 a year to reduce monthly payments to $448 a month and “have over $100,000 of debt forgiven,” the Advantage Group says.

WSJ - Citigroup CEO Vikram Pandit Resigns:

“Citigroup Inc Chief Executive Vikram Pandit is stepping down, effective immediately, and will be succeeded by Michael Corbat.

“Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup,” Mr. Pandit said in a statement.

Mr. Pandit became CEO at Citigroup in December 2007 and spent the earlier part of his career at Morgan Stanley.

President and Chief Operating Officer John P. Havens also resigned.

Mr. Havens had been planning to retire from Citi at year-end but decided, in light of Mr. Pandit’s resignation, to leave the company now.”

Do you notice the similarity between posers who are paid to post pretend political views on blogs and those people who were paid to live in otherwise-vacant homes to show they were occupied?

We are becoming a pretend society of paid prostitutes. I find the trend quite disturbing.

WSJ - Gas Market Stung by Rapid Traders:

“Veteran natural-gas trader John Woods has a simple trading strategy around data on U.S. gas stockpiles: Stay away.

Mr. Woods and other floor traders on the New York Mercantile Exchange used to look forward to the weekly report of gas-inventory figures by the U.S. Energy Information Administration, widely considered the best reading of gas supply and demand in the U.S. Traders would be glued to their computers before the data’s release at 10:30am on Thursdays, ready to dive into the busiest trading window of the week.

But in the past few months, unusual trading patterns have pushed many seasoned traders to the sidelines. One reason for the irregular activity is a strategy known as “banging the beehive,” in which high-speed traders send a flood of orders in an effort to trigger huge price swings just before the data hit.”

Paul Ryan pretends to volunteer at soup kitchen.

http://thinkprogress.org/election/2012/10/15/1017651/ryan-soup-kitchen/?mobile=nc

“They showed up there and they did not have permission. They got one of the volunteers to open up the doors… The photo-op they did wasn’t even accurate. He did nothing. He just came in here to get his picture taken at the dining hall.” - President of the Mahoning County St. Vincent De Paul Society, Brian J. Antal

The U.S. is going to build its way back to prosperity…

Oct. 16, 2012, 10:00 a.m. EDT
Oct. builder sentiment edges up to six-year high
By Steve Goldstein

WASHINGTON (MarketWatch) - Builder confidence in October edged higher to mark the sixth gain in a row and the top reading in more than six years, a trade group said Tuesday in the latest indicator of a revival in the housing market. The National Association of Home Builders/Wells Fargo housing market index nudged up 1 point to 41, marking the highest level since June 2006. Economists polled by MarketWatch anticipated a slightly better read of 42. Still, the index - which historically has a very strong correlation with single-family housing starts - has surged from as low as 17 in Oct. 2011, even though it hasn’t reached the 50 level indicating more builders than not see good conditions. In October, the component measuring current sales conditions stayed at 42 and the component measuring sales prospects for the next six months stayed at 51. The index measuring traffic of prospective buyers rose 5 points to 35, the highest level since April 2006.

DO NOT buy housing now. Tell everyone.

Clinton takes Obama off Libya hook

Yeah, right. What about the mantra that the coverup was worse than the crime in Watergate???

Is this case that doesn’t apply. In Libya we lost 4 patriats. In Watergate no one died.

California Central Valley leads nation – again – in foreclosures

http://www.centralvalleybusinesstimes.com/stories/001/?ID=21876

5 Reasons Why You Shouldn’t Buy a House Right Now

http://www.dailyfinance.com/2012/09/07/buying-a-home-5-reasons-not-to-right-now/

DO NOT buy housing now.

Rental vacancy rates at multi-decade highs.

With massive rental inventory like this, how can rental rates ever stop falling?

http://img192.imageshack.us/img192/7616/vacancym.jpg

“Wealthy home sellers capitulate, high end prices drop”

http://usatoday30.usatoday.com/money/economy/housing/story/2012-08-05/high-end-real-estate-sales-cnbc/56753732/1

Who can forget the heady days of the housing boom when property flippers would follow condo developers around like hungry wolves, waiting to pounce on new projects before one grain of earth had moved?

Property auctions for single family homes weren’t any different, as novice buyers were scooping up multiple properties only to flip them for a profit in a matter of weeks.

Those days are gone; the price appreciation is gone, and the funding is gone…but apparently the flippers are back. Some of them never left. Close to 100,000 properties were flipped in the first six months of this year, according to RealtyTrac, which defines flipping as a home bought and sold within six months. That is a 25 percent jump from a year ago. But flipping is not what it used to be.

“There is this kind of middle man investor who is doing the flipping,” says RealtyTrac’s Daren Blomquist, who ran a webinar last month titled, “Why Property Flipping is Flying High in 2012.” Blomquist says the difference for today’s flippers is that they must add value to the home before selling, because price appreciation alone won’t net the profit they seek. That means rehabbing, which can be pricey, depending on the condition of the property. Many of the distressed homes now that flippers seek have been either ransacked by former owners or left vacant and untended for years.

“You don’t see any of that highly speculative flipping where it’s solely reliant on the home prices going up for the flip to work,” says Blomquist, which is why many flippers are middle men. They flip to other investors in order to get the profit they need. “It’s probably easier to flip to another investor because this person is an experienced buyer and should have their ducks in a row in terms of being able to finance the property, if not pay up front in cash.”

Large-scale, big money investors, like hedge funds, have flooded the single family real estate market, looking for rental properties that will produce good yield. While some have their own teams attending foreclosure auctions and doing the rehabilitation and remodeling, many would rather buy turn-key products, even if the price is slightly higher. The “pure” property flip appears to be less popular, although in some stronger markets it is certainly still happening.

“I have seen a return of flipping, but only at the individual or small investor level. In some cases, these investors are targeting larger, institutional investors as potential buyers,” says Rick Sharga of Carrington Mortgage Holdings, a large fund investing in single family rentals. “I haven’t seen institutional investors doing much flipping (although they will occasionally sell off a few properties from a pool if the homes don’t fit their business model).”

Investors planning a REIT would not be flippers, Sharga notes, as what they need is a large pool of rental homes delivering the cash flow a REIT would require. Most of the larger investors are paying market price (sometimes a little less, sometimes more), which makes profitable flipping difficult.

Until the rental market chills and the housing market shows strong price gains, pure property flipping will not be nearly as lucrative as it once was. On the positive side, continued strength in the single family rental market and the ensuing large investors interest offers smaller investors willing to do the dirty work a large pool of cash-heavy buyers.

Who’s buying Glenn Beck’s $129 made in America jeans?

$4 million to build a home that is now only worth $700,000?

——————————————————–

Popcorn lung couple who won $20m in lawsuit forced to sell $3.9m house
The Daily Mail Online | October 15, 2012 | Helen Pow

A Missouri couple has filed for bankruptcy just eight years after winning a $20 million lawsuit against the makers of a butter popcorn flavoring that gave one of them lung disease.

But just eight years later, the two are being forced to sell the home they built for $3.9 million to pay off creditors, after their financial situation went spectacularly downhill.

According to the Joplin Globe, the Peoples listed the current value of their residence and 10.5 acres of land at just $700,000 and personal property assets of nearly $33,000.

But their liabilities are listed at more than $611,000, including a $482,876 mortgage with U.S. Bank. The couple’s case against the butter flavouring companies was the first of several brought by workers and their spouses.

Since winning the lawsuit, Cassandra Peoples has also been employed by Smith Midwest Realty as a realtor. Social networking sites also indicate she helps run PJ’s Country Bakery in Joplin, Missouri.

It’s over for RMoney - Honey Boo Boo(?) prefers Obama.

In the bit’s bucket yesterday, Mugsy mentioned a coworker who is planning on buying a different, much cheaper now house and letting the bank foreclose or shortsell the bubble-priced house they currently owned.

I said “Kudos for doing the fiscally responsible thing!” and several posters jumped on it as if we should be shocked and angered by Mugy’s coworker for not ‘living up to his promises’ etc.

I find it crazy that people on THIS blog would hold such corporate loving attitudes. A mortgage is a business contract with two acceptable outcomes. 1) Pay the money back. 2) Forfeit the house. Mugsy’s coworker is choosing 2 since the house is costing him X dollars, and he could buy a comparable house for, say, X/2 dollars. He’s not breaking any contracts or laws, and is doing what’s best for his family.

As for the repercussions people talked about, like having to pay cash for cars, or dinged credit reports, the coworker is doing a smart thing in buying before forfeiting, so he can get a good rate before his credit is dinged. Landlords don’t like bad credit, either, and housing is often the largest expense, and having to move periodically when renting could be much worse than having to save up to buy a new car from the credit rating perspective.

I just shake my head in wonder why people would call it ‘immoral’ for the coworker to exactly fulfill the terms of the contract. If he were fighting foreclosure with no intent of ever paying to get a free ride, I would be happy to jump on the bandwagon saying he’s a jerk, but he’s being straightforward and fulfilling the terms of his contract. If business did the same thing, everybody would shrug and say “business decision” but when a PERSON dares make a business decision, suddenly they are immoral scum and the bank is suddenly a victim. Bah!

investment property. lots of people I work with are buying.. I don’t know ..?

Investing in your 401(k): The mistake people make is not that they invest in their 401(k) but that they invest only in their 401(k). Successful retirees diversify their income streams by investing in income producing vehicles such as investment properties to provide an alternative income stream in retirement. With interest rates so low right now, and a continued inventory of foreclosures and short sales, purchasing rental property may be an alternative investment for pre-retirees who don’t mind owning tangible assets and managing them.

Investment property owners get tax breaks along the way, too. Expenses such as depreciation and property management fees may be deductible, and if modified adjusted gross income is $150,000 or more, the losses are suspended but they carry forward to offset future rental income or capital gains when the property is sold. If the property has been held for more than one year, gains are taxed at favorable long-term capital gain tax rates.

Tip: Invest in, but also “think outside,” the 401(k). A Roth IRA provides tax-free income in retirement. Taxable accounts have advantages, too. With individual securities and mutual funds, you can “harvest” losses—matching your long-term losses against any long-term capital gains—to reduce tax liability. You can’t do that with a traditional pre-tax 401(k)—every dime you withdrawal is taxable at the higher ordinary income tax rates.

There seems to be one boom banking industry

The figures, released to coincide with World Food Day, reveal nationally 109,294 adults and children in the UK received emergency food aid between April and September. This compares with a total of 128,697 in the whole of 2011-12.

The 13,947 people in the West Midlands turning to food banks over the past six months compares to 2,254 in the East Midlands; 9,770 in the North West; 15,015 in London and 20,988 in the South West.

Trussell Trust Executive Chairman Chris Mould said: “Day in, day out, food banks already meet UK parents who are going without food to feed their children, or are forced to consider stealing to stop their children going to bed hungry.

http://www.thisisstaffordshire.co.uk/14-000-turning-food-banks-survive/story-17090253-detail/story.html

PHOENIX (AP) — Cash donations and food, especially proteins, are sorely needed at metro Phoenix food banks as they struggle with a severe shortage of supplies and unchecked increase in demand.

Normally, the banks’ stock of food decreases in summer and early fall, but that decrease has been exacerbated by Congress’ postponement of a vote on the Farm Bill and a recent peanut-butter recall, which forced food banks to discard that crucial source of protein.

http://www.mohavedailynews.com/articles/2012/10/16/news/state/doc507d0fb900125194668427.txt

TORONTO, Oct. 15, 2012 /CNW/ - On World Food Day, October 16, 2012, Food Banks Canada is asking Canadians to take action in support of people who are hungry

World Food Day occurs annually on October 16 to mark the date of the founding of the Conference of the Food and Agriculture Organization (FAO) of the United Nations. Organizations, agencies, businesses and individuals are marking World Food Day across the globe. The goal of the day is to strengthen awareness around the issue of food security and the struggle against hunger and poverty globally. Sadly, even Canada is not immune to this problem.

http://www.northumberlandview.ca/index.php?module=news&type=user&func=display&sid=17890

Taipei, Oct. 1 (CNA) Taiwan officially became part of the Global FoodBanking Network Monday, a move that is expected to improve the country’s food banks and help it gain access to more international resources to assist the disadvantaged and needy.

At the induction ceremony in Taipei, the Taiwan People’s Food Bank Association became the 24th member of the Chicago-based non-profit global organization, linking Taiwan with a network of food banks worldwide, said David Liu, chairman of the association.

http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aSOC&ID=201210010019

Homebuilder index came out today (barometer on how builders are feeling).

Overall, the number increased from 40 to 41 (with 50 being the delineating factor between builders feeling good and bad), but most meaningful, IMHO is looking at the regional data.

NE, up from 31 to 34
Midwest, down from 45 to 41
South, up from 39 to 42
West, up from 44 to 49

It is worth noting that on the way down, this index was a leading indicator of the coming crash. By August 2006, the Western Index fell below 50, and was at 32 at year-end 2006, 18 at the end of 2007, 7 at the end of 2008.

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Food prices have been rising steadily around the world and this summer’s drought isn’t the only reason why, according to Frederick Kaufman, author of “Bet the Farm: How Food STOPPED Being Food.”

Kaufman tells The Daily Ticker that the price of global grains — the primary dietary staple for most people on the planet — have tripled since 2002 after decades of stability. “Something new has come to this market and we’re seeing absolute levels of volatility that we’ve never seen before,” Kaufman says.

That new development, he notes, is the exponential growth of commodity derivatives. U.S. derivatives trading in wheat alone has surged from $10 billion to $300 billion in less than a year, says Kaufman. “Speculators are completely overwhelming” the commodity futures market, says Kaufman, “subverting a market that has worked so well for over a hundred years.”

Traditionally the commodity futures market has allowed food producers and manufacturers to hedge price risk in a market that also includes speculators. There have been position limits on this type of speculation since 1936 but since 1999, those limits have been lifted for some big banks as Wall Street looked for more ways to make money. That paved the way for the increased speculation in the market today.

Kaufman says more speculation exacerbates food prices. Higher food prices have led to a global food crisis and civil unrest in the Mideast and North Africa.

Related: Food is the New Oil and Land the New Gold: Lester Brown

According to the UN’s Food and Agriculture Organization, which is holding a week-long meeting in Rome on world food security, 870 million people around the world—or one in eight—are starving or undernourished.

“While the chance of food prices returning to levels seen in 2008 and 2011 in the coming months may be slim, they remain at historically high levels, and the underlying factors driving them are here to stay,” the organization says in a press release.

The UN FAO cites population growth and a growing middle class in the developing world as factors boosting demand for grain-intensive protein and rising energy costs. “High food prices, therefore, are here to stay,” it says.

Kaufman says the U.S. should be concerned about this global situation. Higher food prices can cause civil unrest and become a national security concern for this country, which itself has 17 million households that are at risk of going hungry.

That mean ole David Dayen is raining all over the housing recovery parade. Again. Evidence below:

Puncturing the Housing Optimism Bubble

Fun-filled quote:

People aren’t selling their homes to “step up” into new ones because they cannot come up with the down payment. Banks are keeping other homes in their inventory off the market to structure supply. So prices, which are artificially derived at this point, does not necessarily account for sales. In fact, as we move out of summer, we are likely to see a sales drop. Sales in California fell 16% month-over-month in September, and it was even a 2.7% drop year-over-year.

If you look at the market as a whole without being seduced by the rhetoric, you’ll see this a bit more clearly.

Under water homeowners trying to find a foreclosure defence lawyer.

http://www.youtube.com/watch?v=2HxVeI9IPgs - 170k -

Posted: 3:23 p.m. Tuesday, Oct. 16, 2012

Battery maker A123 files for bankruptcy protection

By TOM KRISHER

The Associated Press

DETROIT —
After years of struggling with weak sales and mounting losses, electric-car battery maker A123 Systems filed for bankruptcy protection and reached a deal to sell its automotive assets Tuesday.

Auto parts maker Johnson Controls will pay $125 million for A123’s auto business, which includes two Michigan factories and the lithium-ion battery technology used in cars like the Fisker Karma and upcoming Chevrolet Spark.

A123’s demise as an independent business reflects the problems of the electric-car industry. Americans have been slow to buy the vehicles because they’re expensive, and many models have limited range and can run out of power on longer trips. Lackluster sales of EVs and batteries left A123 Systems Inc. with huge losses and a plunging market value.

The company’s stock price, which traded for more than $20 on the day of its initial public offering in 2009, fell to 6 cents in late-day trading Tuesday.

The bankruptcy filing also spawned more Republican criticism of the Obama administration, which used stimulus money to support alternative energy businesses including A123 Inc., electric-car companies, and solar-panel maker Solyndra LLC.

The company warned that it might not be able to stay in business unless it got more financing, and just two months ago, it announced a $450 million lifeline from Chinese auto parts maker Wanxiang Group Corp. But A123 said Tuesday that the deal has been scrapped.

Republicans argue that grants and loans to alternative energy companies like A123 were a waste of stimulus money. They point out that Solyndra, a politically connected and now-bankrupt company, left taxpayers on the hook for $528 million after it failed to repay a government loan.

Democrats counter by saying the losses were expected when Congress created the high-risk program, which is intended to boost cutting-edge projects that would have trouble getting private financing. They say the “vast majority” of companies that received loans are still expected to pay them back in full, with interest.

Andrea Saul, spokeswoman for Republican Mitt Romney’s campaign, said in an e-mail that the bankruptcy is “yet another failure for the President’s disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work.”

The bastards are grinding me down.

I’m a bit nostalgic for the old days when this blog was mostly about the housing bubble and not politics.

Here you go folks. If you didn’t believe that the entire housing issue isn’t muddied and obfuscated by realtard scum here on this blog and in the media…. here is more evidence of propagandized lies.

Go here….

http://www.timesunion.com/business/press-releases/article/The-Foreclosure-Inventory-Flood-That-May-Never-3897959.php

Disregard the headline as you know it’s a flat out lie. Look just under heading… see the link? Here it is….. now visit here and read it.

http://www.prweb.com/

That’s right. You can write your own article and get it printed and put into syndicate with a just a few bucks….

Now check out there client list.

http://service.prweb.com/who-uses-it/industry/real-estate/

The extent of the distortions, propaganda and misrepresentation of fundamentals goes deep folks. You even see it right here on this blog.

Posted: 5:21 p.m. Tuesday, Oct. 16, 2012

County mortgages surge amidst low rates and shrinking home supply
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By Kimberly Miller

Palm Beach Post Staff Writer

Palm Beach County recorded a 65 percent increase in mortgages last month compared to the same time in 2011, a likely result of rock bottom interest rates and a scramble for remaining steals.

There were 4,017 mortgages recorded in September, according to a county clerk of courts report released Tuesday, which also noted a slowdown in new foreclosure filings last month.

Skip McDonough, of Family Mortgage in Jupiter, said mortgage volume has been on the rise the last four months with dwindling housing inventory and interest rates still well below 4 percent.

Last week, Freddie Mac reported the average 30-year fixed mortgage interest rate rose from 3.36 percent to 3.39 percent. A year earlier, the 30-year fixed rate was 4.12 percent.

“We’ve had the lowest rates in the history of residential lending so people who even refinanced two years ago could justify refinancing again,” he said. “Bargains are also disappearing like crazy and people are motivated to make a move sooner.”

Palm Beach County’s overall inventory of single-family homes was down to less than a five-month supply in August. That’s 57 percent below where it was in August 2011, according to the Realtors Association of the Palm Beaches.

McDonough said banks have not loosened standards for lending money, meaning top credit scores, documented income and money down are still a necessity.

“Those guidelines have not softened at all,” he said.

While the clerk’s report found a 24 percent decrease in September foreclosures from August and a 5 percent drop from last year, total filings for 2012 are still expected to exceed 2011, said Clerk Sharon Bock.

There were 11,639 new foreclosure cases filed through September of this year compared to a total of 12,154 in all of 2011.

Rope-a-Dope indeed.
Poor Mitt. This is truly painful….

Wow. Romney’s really freaking out in the debate. Candy just told him to sit down……Is “His Majesty” Romney not used to people confronting him?

Coolness and Fact vs Frantic and Jack.

Look to the eyebags. Last week Obama looked like death warmed over. This debate had Gov. Romney in need of a B-12 series. Kudos to Candy Crowley for keeping it on point.

“For the record, that 15 million is LESS THAN 5% of the population.”

And your point is?

So is it safe to say the presidential election outcome hinges on the last debate? Or did Obama already deliver the knockout punch?

My son showed me this site. I thought it was clever.

http://www.romneytaxplan.com/

The Republican spin doctors are going to deluge the HBB with rationalizations bright and early tomorrow about what they wish would have happened in the second debate, but didn’t?

And you can bet the Republican talk show hosts will be licking their wounds, while openly accusing Obama of bullying Romney.

Oct. 17, 2012, 1:02 a.m. EDT
Obama debate win gets campaign back on track
Commentary: Romney stumbles as president attacks, charms, inspires
By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) — Barack Obama won the debate and got his campaign back on track.

The presidential election is far from over, but the president accomplished his major goals during Tuesday’s town-hall-style debate with Republican candidate Mitt Romney.

After his dominating performance Tuesday, no one is talking about the sleepwalking president anymore. If anything, they’re calling him a bully for the way he slapped Romney around.
…

I guess nobody gave this guy the memo about how the global central banking cartel is printing the global economy’s problems away?

Markets
Michael Belkin Predicts 40% Stock Market Drop

Hedge Fund Consultant Michael Belkin spoke at The Big Picture conference, predicting a 40% stock market drop in the coming 12-15 months. Belkin joins Sam Mamudi to discuss his case for a market drop.

10/15/2012 1:43:26 PM