HOW THE WALL STREET SHYSTERS ARE CREATING AN ARTIFICIAL HOUSING FRENZY

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Posted on 23rd March 2013 by Administrator in Economy |Politics |Social Issues

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Doctor Housing Bubble with details about our “strong” “normal” housing recovery. He is based in California at ground zero of this ridiculousness. The Wall Street/K Street master plan is in full display with 35% of home purchases by investors and another 25% through 3% down FHA guaranteed loans. Another 30% are distressed sales. So, you have about 10% of home sales in Southern California that are between a normal seller and a normal buyer. It’s fascinating that home sales are supposedly booming in California, but the homeownership percentage continues to decline. This will surely end well.

The Frenzy is back:  Low inventory creates bidding wars and mania for California real estate.  Low inventory shifting buyer psychology.  Video of mania in action.

The housing mania is definitely back in California.  Low interest rates are one thing but those that are out in the market to buy are finding it tougher and tougher to contend with all cash buyers and people that are simply willing to go with large above sticker price offers.  The low inventory environment has shifted how people now perceive the market.  One of the craziest stats I saw was that last month, over 35 percent of Southern California purchases came from all cash buyers.  This is an all-time record.  FHA insured loans made up another 25 percent of all purchases.  Given the higher mortgage insurance premium costs, there is little reason to go this way instead of a conventional mortgage.  Yet you have two groups; those that are investors with all cash and those that can barely get a down payment together.  Yet low inventory is pushing prices up to record levels.  The psychology has definitely shifted and you can see this from various examples.

 

San Diego mania

A reader sent over this video:

bubbleinfo

 

Offer without looking at property in person.  10 offers.  People flowing in like a herd.  Welcome to the California housing market.  The dynamics are different this time but low inventory has shifted buying behavior.  A survey conducted by Redfin also highlights this change:

redfin survey low inventory

The biggest jumps occurred in:

-People ready to pay more (this is a big jump in simply one quarter)

-People looking at new areas

-People looking for unlisted homes

Taking a break?  No way!  Time to go shopping for a home and join the herd above.  You do not want to miss out in this current mania.  The current momentum is clearly unsustainable and anyone looking to buy in a somewhat desirable neighborhood today without a big down payment or solid amounts of cash is simply looking for a dragged out headache.  Are you willing to make an offer without even looking at the property?  Are you willing to go way over asking price?  These are things you may need to do if you want to purchase in this current market in California.

What is interesting is that even with all this renewed buying, the homeownership rate really isn’t going up:

HomeownershipRate-Annual2-1024x560

Why?  First, you have a giant amount of investor buying.  Some may not even be in the state.  So in places like the Inland Empire you have many would-be owner occupied homes converting into rentals pushing the rental rate up.  As we discussed in a previous article, the rate isn’t going up because you simply have owner-occupied going to owner-occupied (i.e., Beverly Hills with no population growth).  The first time buyer is probably the most impacted here.

Take a look at inventory levels in Santa Monica and Pasadena: santa monica and pasadena

Pasadena inventory is down nearly 60 percent in the last two years.  The median list price has gone up from $559,000 to $738,000 which reflects what sellers are expecting to get.  The trend seems to be playing out nationwide:

nationwide inventory

Anyone out there braving this current market and looking to purchase?  The attitude seems to be that it is only going to get more expensive and inventory is going to get even more constrained.

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Tax The Rich: CA Teachers Union vid

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Posted on 5th December 2012 by Stucky in Economy

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Quick post. This just released video (8min) is generating a hell of a lot of buzz.

Here’s the link; (hopefully Admin can embed it for me)

http://www.youtube.com/watch?v=cwg4DB-EeEA

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In other drugereport news;

French men sperm count drops by a third. I guess even French soerm have the ability to retreat. Also, WHO counts these sperm? Does the job pay well? Is this a job where you can jack off, and get away with it?

Also, a story about a woman who suffered suffered from persistent genital arousal disorder, a debilitating condition marked by continuous sexual arousal …….. relief provided only after masturbating for HOURS on end. Holy shit, I didn’t know THAT was a ‘disorder’. Hopefully, it only applies to women, or I’m in deep shit.

Lastly, you might want to watch this vid about a Detroit councilwoman who said regarding Obama — we voted for you now bail us out.

 http://www.myfoxdetroit.com/story/20264712/detroit-councilwoman-to-obama-we-supported-you-now-support-us

CALIFORNIA – ABOUT TO TAX ITSELF TO DEATH

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Posted on 10th November 2012 by Administrator in Economy |Politics |Social Issues

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Mike Shedlock describes how Californians have voted for their own demise.

Prepare for Demise of California; Liberals Will Get All the Government (and Tax Hikes) They Want

On Tuesday voters in California went the wrong way on three propositions.
  1. Voters approved Proposition 30 “temporarily” increasing the state sales tax and income tax on individuals making over $250,000.
  2. They voted against Proposition 31 that would allow the governor to cut the budget in fiscal emergencies.
  3. They voted against Proposition 32 would prevent unions from making campaign donations via members’ dues.

Moreover, and worse yet, Democrats picked up two more votes in the state legislature giving them a supermajority, capable of passing any tax hikes they want.

Those results are so awful I suggest you prepare for the demise of California.

Indeed California’s Liberal Supermajority is about to run the state into the ground and taxpayers are going to get all the government they ever wanted.

The main check on Sacramento excess has been a constitutional amendment requiring a two-thirds majority of both houses to raise taxes. Although Republicans have been in the minority for four decades, they could impose a modicum of spending restraint by blocking tax increases. If Democratic leads stick in two races where ballots are still being counted, liberals will pick up enough seats to secure a supermajority. Governor Jerry Brown then will be the only chaperone for the Liberals Gone Wild video that is Sacramento.

The high Democratic turnout in moderate and right-leaning districts helped the party pick up three seats in the senate and four in the assembly.

So now Californians will experience the joys of one-party, union-run progressive governance. Mr. Brown is urging lawmakers to demonstrate frugality and the “prudence of Joseph.” As he said the other day, “we’ve got to make sure over the next few years that we pay our bills, we invest in the right programs, but we don’t go on any spending binges.” That’s what all Governors say. Trouble is, merely paying the state’s delinquent bills will require tens of billions in additional revenues if lawmakers don’t undertake fiscal reforms.

With no GOP restraint, liberals can now raise taxes to pay for all this. [$200 billion in unfunded liabilities, the California State Teachers' Retirement System in need of $10 billion annually for the next 30 years to amortize its debt, $73 billion in outstanding bonds for capital projects and $33 billion in voter-authorized bonds, etc.]

They’ll probably start by repealing Proposition 13′s tax cap for commercial property. Democrats in the Assembly held hearings on the idea this spring. Then they’ll try to make it easier for cities to raise taxes.

The greens want an oil severance tax. Other Democrats want to extend the sales tax to services, supposedly in return for a lower rate, but don’t expect any “reform” to be revenue neutral. Look for huge union pay raises and higher pension benefits.

The silver lining here is that Americans will be able to see the modern liberal-union state in all its raw ambition. The Sacramento political class thinks it can tax and regulate the private economy endlessly without consequence. As a political experiment it all should be instructive, and at least Californians can still escape to Nevada or Idaho.

Law of the Funnel in Action

Big government and absurdly strong unions destroyed Greece and Spain. Expect no less for California.
Many large California corporations that can flee, will flee. Those stuck in California will see massive tax hikes (with many more to come) just so public unions and administrators can collect absurdly high salaries and benefits that most citizens can only dream about.

Please see the Law of the Funnel for a description as to what just happened.

Mike “Mish” Shedlock  http://globaleconomicanalysis.blogspot.com

Read more at http://globaleconomicanalysis.blogspot.com/#vpH3GhKkXLPgXLwv.99

CALIFORNIANS VOTE THEMSELVES A $6 BILLION TAX INCREASE TO PROTECT GOVERNMENT UNIONS

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Posted on 7th November 2012 by Administrator in Economy |Politics |Social Issues

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Gotta love those Californians. Tax the rich some more and make it more expensive to buy shit and then hand it over to government union workers. This proposition won easily. The best part is that a tax increase passed on November 6 is being retroactively implemented as of January 1. I wonder how many more productive people will leave the State so the parasites and free shit army can wallow in their putrid socialist swamp of diversity and delusion.  

Proposition 30:

  • Raises California’s sales tax to 7.5% from 7.25%, a 3.45% percentage increase over current law. (Under the Brown Tax Hike, the sales tax would have increased to 7.75%)
  • Creates four high-income tax brackets for taxpayers with taxable incomes exceeding $250,000, $300,000, $500,000 and $1,000,000. This increased tax will be in effect for 7 years.
  • Imposes a 10.3% tax rate on taxable income over $250,000 but less than $300,000–a percentage increase of 10.6% over current policy of 9.3%. The 10.3% income tax rate is currently only paid by taxpayers with over $1,000,000 in taxable income.
  • Imposes an 11.3% tax rate on taxable income over $300,000 but less than $500,000–a percentage increase of 21.5% over current policy of 9.3%.
  • Imposes a 12.3% tax rate on taxable income over $500,000 up to $1,000,000–a percentage increase of 32.26% over current policy of 9.3%.
  • Imposes a 13.3% tax rate on taxable income over $1,000,000–a percentage increase of 29.13% over current “millionaires tax” policy of 10.3%.
  • If this proposition is passed in November, 2012, the income tax will apply retroactively to all income earned or received since the first of the year (1 January, 2012).
  • Based on California Franchise Tax Board data for 2009, the additional income tax is imposed on the top 3% of California taxpayers.
Prop 30: Supporters say passage of Jerry Brown tax measure signals end of Prop 13′s tax revolt
By Lisa M. Krieger lkrieger@mercurynews.com San Jose Mercury News
Posted:
MercuryNews.com
 

In passing Gov. Jerry Brown’s tax increase, California voters signaled a symbolic end to the tax revolt of 1978, when they adopted Proposition 13′s limits on property taxes, supporters said Wednesday.

Proposition 30, a $6 billion-a-year package of tax increases that the governor campaigned furiously for in the final weeks of the campaign, passed with a 54 percent majority, averting major cuts to public education.

The tax package raises income taxes on the wealthy and sales taxes for everyone else.

Most of the money is earmarked for K-12 schools and community colleges, which have suffered due to lack of stable financial support. Brown had warned that failure of the measure would have triggered immediate cuts to schools.

“Californians looked at the state of our schools and said: ‘They are fundamental to who we are, and our future. We need to support public education, because it is a huge driver of our progress,’ ” said UC-Los Angeles history professor Jon Christensen, former director of Stanford’s Bill Lane Center for the American West. “That is a very, very heartening change.”

Rival measure Proposition 38, backed by millionaire civil rights attorney Molly Munger, was rejected. She spent more than $47 million to promote this measure, which would have increased income taxes on most Californians to raise an estimated $10 billion a year for schools and to pay down state debt.

Proposition 30 raises money through a quarter-cent sales tax increase, along with an income tax surcharge on people earning more than $250,000 per year.

The tax measure won its strongest support among voters in the Bay Area and Los Angeles. It passed in Santa Clara County with 62 percent of the vote; Alameda, 73 percent; Contra Costa County, 59 percent; Santa Cruz, 73 percent; Marin, 68 percent and San Francisco, 76.8 percent.

The tax measure held a precarious position in hours leading up to the election, with support below 50 percent, which typically dooms tax initiatives. Brown lobbied hard on Monday to boost support for the measure, traveling to five cities, from San Francisco to San Diego.

Its surprising victory shows that undecided voters made a last minute decision to boost taxes, defying conventional wisdom, noted Christensen. Undecided voters usually vote no on tax measures.

The measure faced opposition funding from outside the state, when an Arizona group called Americans for Responsible Leadership donated millions to fight against it.

But the No on 30 campaign lacked the funding, organization and platform of Proposition 30, said opponents.

“It had several factors working in its favor,” said Aaron McLear of the No on 30 campaign. “One was the five-to-one fundraising advantage — the ‘yes’ had $57 million, while the ‘no’ had $13 million. Also, there was the power of a very effective bully pulpit by the governor, that controlled the narrative. And the infrastructure of the Democratic Party and public employee unions was a completely unmatched political machine. We don’t have anything like that on our side.”

The passage of Proposition 30 represents a rebuke to 1978′s Proposition 13, which capped property taxes and required a two-thirds vote to pass any future tax increases. This created financial stress for schools, due to funding cutbacks.

Supporters of Brown’s measure said they have grown distressed over the deteriorating condition of public education in California, which many supporters trace to the passage of Proposition 13.

“We have seen the bitter fruits that Prop. 13 has visited on our land. I voted for it because education is clearly the best thing we do as a community,” said Charles Ogle, a Menlo Park tool maker. “When I was growing up, the schools were great, and it seems very unfair that today’s kids haven’t had that advantage. The promise of the Master Plan was broken. For me, that was a ‘wake up’ call.”

Kit Miller of Palo Alto, another supporter of Prop. 30, said “Paying taxes to fund education is basic logic — it’s sad we have lost so many years of revenue for the schools. But now we can make California a leader in education again.”

University of California President Mark G. Yudof welcomed the vote, saying “The passage of Proposition 30 represents an opportunity for California and its political leadership to put public higher education back on a pathway toward fiscal stability. This is an opportunity of great importance, not only to the University of California and other higher education segments, but also to the state as a whole.”

“The majority of Californians decided that the collective interests of the state outweigh one’s own immediate interests,” said SJSU’s Linguistics and Language Development professor Stefan Frazier.

“In the long run, of course, we all benefit. Investing in education during a recession is the best way of getting out of it.”

COULD THE DATA MANIPULATION BE ANY MORE BLATANT?

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Posted on 11th October 2012 by Administrator in Economy |Politics |Social Issues

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Below is the blaring MSM headline about the plunge in unemployment claims this morning. The talking heads on CNBC and the rest of the worthless journalists paid by the MSM dutifully reported that this confirms last week’s fake unemployment report. One little problemo. The Dept of Labor mentioned that one large state did not report their data. Only California is big enough. This isn’t a little statistical anomaly. It’s a fucking mistake. California, with 2 million people unemployed out of the 12 million in the whole country, accounts for 17% of all the claims in the country. If they don’t report their data properly, the whole press release is a sham. Isn’t it convenient that this little anomaly happens three weeks before the election. Must be another one of those coincidences.

Jobless claims plunge to four-year low

Claims fall 30,000 to 339,000, well below expectations

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — The number of U.S. workers who filed new applications for unemployment benefits dropped sharply, by 30,000, last week to 339,000, the lowest level in more than four years, the Labor Department reported Thursday in what may have been the result of a statistical fluke.

 
Economists polled by MarketWatch had expected initial claims in the week of Oct. 6 to rise 1,000 to a seasonally adjusted 368,000. Last week’s number was revised up by 2,000 to 369,000.

The four-week average of new claims, meanwhile, dropped 11,500 to 364,000, the lowest level since late March. The moving average is considered a more accurate barometer of employment trends because it smooths out quirks in the weekly data.

Today’s data seemingly fit with the improvement in the labor market seen in the latest monthly jobs report, issued last Friday. The U.S. added 114,000 net jobs in September and the unemployment rate fell below 8% for the first time since President Barack Obama took office. Read more on payrolls report.

“Maybe the unemployment rate drop wasn’t a fluke?” said Robert Brusca, chief economist at FAO Economics.

Still, analysts were cautious about reading too much into one week’s report. They noted that seasonal adjustment factors tend to be positive at the start of a quarter.

A Department of Labor analyst said that a single large state was responsible for most of the drop in claims.

“This suggests that the plunge in seasonally adjusted claims likely overstates some recent labor market progress, though we continue to note that trends in claims are looking more positive,” said Gennadiy Goldberg, an interest rate strategist at TD Securities.

Added Stephen Stanley of Pierpont Securities: “The formula for the size of a claimant’s benefit check is derived based on an average of their last few quarters of pay (the more you were earning before being laid off, the bigger your unemployment check would be). Thus, in many cases, it pays for a laid-off worker to game the formula by waiting until the beginning of the next calendar quarter to file (if they can wait that long), as they may have been getting paid more in the quarter when they were laid off than in the quarter that rolls out of the equation if they wait.”

“As a result, there is an accumulation of claims that are likely submitted over a period of several weeks but not processed until the turn of the quarter. Apparently, the state in question (and it pretty much has to be California to account for anything close to 30,000) forgot to include that stockpile of unprocessed claims in their tally for this week (which is the first week of a new calendar quarter). Since the seasonal factors expected an unadjusted surge of almost 20% in the period to account for the quarterly filing pattern, failure to adhere to that pattern in the raw data (unadjusted claims were only up 8.6%) creates a big drop seasonally adjusted.”

U.S. stocks (SNC:SPX)   were stronger Thursday after the report. Read Market Snapshot.

In the week of Sept. 29, the number of people who continued to receive benefits under state unemployment programs declined 15,000 to a seasonally adjusted 3.27 million. The four-week average of continuing claims fell by 7,750 to 3.28 million.

About 5 million people received some kind of state or federal benefit in the week ended Sept. 22, down 43,970 from the prior week. Total claims are reported with a two-week lag. There were 6.8 million people receiving benefits in the same week in 2011.

In a separate report, the government said that the trade gap widened in August to $44.2 billion as exports declined for the third straight month.