Debt Rattle November 5 2014
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Mathew Brady Units of XX Army Corps, Army of Georgia on Pennsylvania Avenue, Washington DC May 24 1865 • Ayn Rand vs Adam Smith: The Only Midterm Elec
[See the full post at: Debt Rattle November 5 2014]This just kills me:
“Bill Gross, in his second investment outlook since joining Janus Capital Group Inc., said yesterday that fiscal spending may be needed to fight the “growing possibility” of deflation, because central bank policies have pushed up only asset prices and not prices in the real economy.”
I guess he doesn’t do the shopping in his household. Amazing, isn’t it, that a man who is dripping in money is saying that we need to fight against lower prices by deliberately pushing prices higher. I think he needs to get his head out of his Janus.
The day that people started to put their hard-earned money into pension funds run by the likes of this idiot is the day they lost their way. He’s just another one of the financial engineers we’ve allowed to take over our lives, an extension of Wall Street and the central banks.
“Qian Kaishen and his wife almost gave up in August on buying a bigger home. As apartments at Shanghai Villa, a project they liked near the city’s Hongqiao Airport, started selling, the money they had saved for the deposit was tied up in a 5%-return investment. Then property agency E-House China Holdings Ltd. offered the couple a 280,000 yuan ($45,546) one-year bridge loan at zero interest.”
Zero interest. Now, why would anyone do that? “The company [E-House] collects a 1 percent fee from borrowers like Qian, E-House’s Ma said. Developers who want to boost sales subsidize the interest payments to investors and provide guarantees or deposits to E-House against potential defaults by the borrowers.”
Hey, developers, why don’t you just lower your prices? And how good are those guarantees? If this is the company at the link below, then the shares have been as high as $34.00, as low as $3.00, and now sit at $9.70, fluctuating up and down, depending on government stimulus and policies.
“Pickens says that the big issue in the energy market isn’t OPEC or the strong dollar; he says it’s supply and he also says domestic drillers are to blame. “Domestic oil companies need to stop drilling for oil,” Pickens insisted on CNBC’s “Street Signs.” “We’ve overdrilled oil (in the U.S). Now we’ve gotten ourselves in a spot. We need to slow down.” In other words, the abundance of oil that’s now accessible in North America because of improved technology has generated a supply imbalance.”
“We need to slow down” is exactly what happened with mortgage foreclosures. You get too much out there, and before you know it, prices go down. Whoops! Can’t have that. Same thing with hoarding of copper, aluminum and oil by the likes of our upstanding corporate citizens, Goldman Sachs and J.P. Morgan. Hoard it and keep the price up. Or Club Fed buying up all the bonds so that rates are kept down.
But when it comes to labor costs, well, the floodgates are opened as wide as Obama’s golf swing, or jobs are shipped overseas. Can’t have labor costs going up as that might cut into stock prices, dividends and bonuses, and we all know yachts don’t come cheap these days.
Voting doesn’t change a thing because the same bought clowns keep getting elected. All we can do is stop or steeply curtail the buying of their products. Just step off as much as you can.
“Debt on Wheels” – sub-prime auto loans. Unbelievable! Average length of new car loan is 66 months. Average monthly new-vehicle payment is $474.00. One in four new auto loans last year went to borrowers who were considered sub-prime. Dealers are lending more than the value of the vehicle – 110% on new cars and 133% on used cars – because borrowers need cash to pay for sales taxes and fees. They are given the money to pay for the taxes and fees? (Laugh machine on!) 388,000 cars repossessed in the first three months of this year.
“This is the mess Bernanke created by fixing interest rates at zero for nearly 6 years. Zirp (zero interest rate policy) unavoidably leads to excessive risk taking by yield-crazed speculators. The voracious appetite for subprime securities (ABS–Asset-Backed Securities) has even surprised the bond issuers who are constantly beating the bushes looking for sketchier products.”
Many come with that sought-after “Triple A” designation (which should be drawn in crayon) so that pension funds can get in on the fun. Gosh, isn’t capitalism fun?
Whomever is responsible for U.S. economic policy is bat shit crazy.
I think there is no “whomever”; it’s on a broken auto-pilot.
Greed is a very ugly condition, no?
Thailand won’t sign an FTA with the U.S. and that may well ease its passage through this fucked up, global, economic maelstrom. But then, what the hell do I know?
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