Mortgage Rate v 10 year Rate Spread

Banks making bank. 

"Mind the gap."

Spreading the Stupid #004

KP says "I can't move my brain!"

The stupid, it never stops.

KarmaPolice

wrote on Mon, 12/15/2014 - 2:47 pm

No snow:
Climate Prediction Center - seasonal Outlook

  Idiot thinks prediction trumps truth:

NOAA Snow Cover Map

Spreading the Stupid #003

In its never ceasing quest to make the rest of the world near as stupid Karma Police recent intoned:

Of course OPEC is winning.
Did you think that they didn't know that the entire shale "revolution" was built on overvalued debt and 50 year old technology?

Correct me if I am wrong but GPS, earth penetrating radar, supercomputing, 3d visualization, gravimetric satellites and the like are a bit newer than circa 1964.

Speaking of which, where's my flying car?  

Why the US is in Decline

Hot Wheels loses Ferrari diecast contract to Chinese company

Doubly sad as Ferrari is reported to be considering corporate relocation as part of the planned IPO next spring.   Probably true given the vociferous denials. 

You Might Be One of "Them" If...

Stagflationary Mark and I have been trading "them vs us" comments for some time and I thought we should expand on just exactly who "THEY" are.  So, here's a quick list to hlp get the suggestions rolling in:

You might be one of "them if...

• The rent going up is a good thing.

• "Lost the remote" means filing a missing persons report.

• News that your teenager dented the Maybach is met with "Which one?" 

• "Buying a Dell" means an entire county in Ireland.

• Depth charts for the Panama canal cause you to change you boating plans.  

• When informed on your yacht "The crew are revolting" you reply "Yes but at least they aren't unionizing."  

• The rent going up is a good thing.

Best entertain me with suggestions in the comments lest I throw a tantrum for being ignored. 

Spreading the Stupid #002

KP's choice of avatar. 

Stupider by post Karma Police has thus intoned:

KarmaPolice wrote on Wed, 12/10/2014 - 7:16 am

dilbert dogbert wrote:

Coming to a week near you. Snow! Wonderful Snow!

That's the problem with the Pineapple Express....no snow.

 What does the weather.com site have to say?

Thanks to an atmospheric river known as the Pineapple Express, more soaking rain and mountain snow is on the way for California, the epicenter of the nation's most widespread exceptional drought.

-----

How about those pineapples?  

My Glob! They've killed Kenny Mortgages!

Source Thompson Reuters.  (Updates with latest data).

Look at the top graph.  Back in early 2012 rates were 4% and activity was index 800.  Now, with rates again at 4% the activity is index 400.  Stop worrying about the absolute rate.  It doesn't matter. 

Spreading the Stupid #001

Don't be delinquent.

Given the amount of stupid Karma Police at Hoocoodanode is paid to promulgate I hope a three digit numbering scheme in the title is enough.

-----

KarmaPolice wrote on Mon, 12/8/2014 - 7:52 am 

Sebastian wrote:

This suggests that the best tool to increase home ownership, particularly among individuals and families who don't currently own a home, is to reduce the down payment requirements on mortgage loans...
Just a matter of time as the process continues.

I will respectfully disagree with you. Loan performance is at a historical high. Why? Because loan requirements are appropriate.
The US housing market has been in a bubble for 50 years...and it's coming to an end. 

----- 

Well, what about the truth?  Unsurprisingly quite the opposite:

Federal Reserve Loan Performance most recent data (updates)

Residential delinquencies are higher than any time prior to Q4 2008.  Ever.  Since records began.  

As a side observation; there is probably an epic parabolic fail in there someplace. 

Electric Car Environmental Impact

Any questions?

This is a lithium mine in Nevada. 

This is an oil well on Pico Blvd in Los Angeles. 

Models All the Way Down

The latest from the climate modeling idiots:

A new study by researchers at the University of Exeter has found early warning signals of a reorganisation of the Atlantic oceans’ circulation which could have a profound impact on the global climate system.
The research, published today in the journal Nature Communications, used a simulation from a highly complex model to analyse the Atlantic Meridional Overturning Circulation (AMOC), an important component of the Earth’s climate system.

 Need we continue?  

It showed that early warning signals are present up to 250 years before it collapses, suggesting that scientists could monitor the real world overturning circulation for the same signals.

Great.  Let us observe 2 or 3 cycles and make some rough predictions.  

...
“We don’t know how close we are to a collapse of the circulation, but a real world early warning could help us prevent it, or at least prepare for the consequences” adds co-author Professor Tim Lenton.   

 Well... duh.  

The study is the most realistic simulation of the climate system in which this type of early warning signal has been tested.

 Okay, up until now I've just been snarky but this, this is a crime against humanity.  I am serious.   It is a model.  An untested/untetable model.  This is shouting "FIRE!" in a theater. 

“The best early warning signals in the model world are in places where major efforts are going into monitoring the circulation in the real world – so these efforts could have unexpected added value’ adds Professor Lenton.

Bulshit.  The number of climate measuring locations have been drastically scaled back.  

‘Early warning signals of Atlantic Meridional Overturning Circulation collapse in a fully coupled climate model’ by Chris Boulton, Lesley Allison and Timothy Lenton is published today in the journal Nature Communications.
Date: 8 December 2014

Peer reviewed no doubt.  

Party Like It's 1999? Not

The number of people Unemployd and marginally employed, U-6.  Not percent but number:

We are a long way from 1999. 

There is No Climate!

There now that the presumed denial is out of the way, a serious discussion.  

One of the things I never noticed before.  There are far fewer reporting sites contribution to the world temperature database.  For a long time I thought it unfortunate but necessary.  After all a properly sited station can only degrade until it is no longer considered reliable for the purposes of measuring climate temperatures.  Often these are places like airports where the stations continue to do important work like keeping airplanes from crashing but not for climate measurement.  So, this never raised my interest until...

Coincidence?  A massive "purge" of the reporting stations and a simultaneous spike in temperature?  

Okay, then how about the second graph?  One location reporting since 1659 and do you see where humans started driving climate?  

Employment Report 04 Dec '14

Today's DoL report (pdf) has an interesting year over year comparison:

The total number of people claiming benefits in all programs for the week ending November 15 was 2,249,458, an increase of 128,753 from the previous week. There were 4,112,807 persons claiming benefits in all programs in the comparable week in 2013.

 Nearly 2 million people off the rolls.  Notice I didn't say they found employment. 

Rainfall Tracking Website

Seven day rainfall totals as of 3 Dec 14. 

Repeated for those interested,  Ventura Watershed District Precipitation Interactive. 

Give and Take Retail Sales

It will be a few days before we settle out on the figures for Thanksgiving, Black Friday, Wild Weekend, Cyber Monday, and now Giving Tuesday.  Early reports are for modest net gains year over year.  One strong component is new vehicle sales.  Good for the totals but likely to pull from other retail spending.  Cyber Monday sales preliminary +8% which is a big miss for analysts expecting +13% but not for people who weren't impressed by the stuff and prices.

What I expect is a strong falloff in general retail sales over the next several weeks.

Update 2: Black Friday Fatigue? Thanksgiving Weekend Sales Slide 11 Percent

Sales, both in stores and online, from Thanksgiving through the weekend were estimated to have dropped 11 percent, to $50.9 billion, from $57.4 billion last year, according to preliminary survey results released Sunday by the National Retail Federation. Sales fell despite many stores’ opening earlier than ever on Thanksgiving Day.

And though many retailers offered the same aggressive discounts online as they did in their stores, the web failed to attract more shoppers or spending over the four-day holiday weekend than it did last year, the group said. The average person who shopped over the weekend spent $159.55 at online retailers, down 10.2 percent from last year.

Update 1: CNBC talking heads in CYA mode.

Analysts casted doubt Monday about a widely watched shopping poll that indicated Black Friday weekend sales fell 11 percent from last year.
"I don't believe any way whatsoever sales were down 11 percent over the weekend," Gerald Storch, CEO of Storch Advisors, told CNBC. "That number is a bad outlier."
The projection came from a survey by Prosper Insights & Analytics for the National Retail Federation. The survey of shoppers reported that total spending in stores and online for the weekend through Sunday fell to $50.9 billion from $57.4 billion last year. It also indicated the average person spent $159.55 online, down 10 percent from last year.

 Gotta love it.  "Casted."

Zillow "Culture" Not a Role Model for Anything

A disturbing article on SFGate spotlighting Zillow's corporate environment. 

Excerpt:

Kremer, an Orange County resident who worked in sales at Zillow, claims her managers did nothing to stop the abuse. Her attorneys described a “culture of degrading women … pervasive throughout Zillow’s leadership.”

Text – and photo – messages filed along with the lawsuit appear to support Kremer’s claims of harassment. In them, male employees proposition Kremer, text her a sexually explicit photo and discuss misogynistic behavior by their coworkers.

Zillow on Tuesday acknowledged Kremer was mistreated while denying her claims that the sexual harassment is widespread at the company.

“When this allegation was first made, we immediately investigated these claims and as a result took quick action and terminated a sales employee in our Irvine (California) office,” Zillow spokeswoman Jill Simmons said by email. “The allegations in the complaint do not reflect Zillow’s culture or workplace and are completely inconsistent with our values.

“We don’t tolerate harassment of any kind.”

 -----

 Hat Tip to an anonymous source for bringing this to my attention.  As Zillow is poised to vastly enlarge its presenc in the Real Estate arena this is one of many issues to watch carefully.  I am strong in standing against demonstrated cultures of abuse.  That said let' see how this plays.  Young brash companies make mistakes just like people.  There are growing pains.  Zillow needs to be proactive.  They are betting very large at disrupting the RE space and this is the kind of leverage the entrenched interests will exploit.  "Just another black hat" won't effect positive change. 

ADP Nov '14

Oh the contortions some go through to score a point.

The ADP report for November 2014 is out.  Let the spin begin. 

Mark Zandi, chief economist of Moody’s Analytics, said, “Steady as she goes in the job market. Monthly job gains remain consistently over 200,000. At this pace the unemployment rate will drop by half a percentage point per annum. The tightening in the job market will soon prompt acceleration in wage growth.” 

Of course that is what used to be called static analysis.  There are nearly 400,000 new worker age monthly entrants and nowhere near that number retiring.  But who am I to call out my betters?   ADP: Private Employment increased 208,000 in November

 And don't worry that concensus (misspelling on purpose) was was too high.  They are merely the best economists the field has to offer. Hat Tip to CincoX for pointing out the CR called this an "increase." 

Teardowns Bring Tears

An interesting story from Marketwatch:

This summer, my parents sold the 2,000-square-foot split-level they bought in a suburb of New York City in the early 1970s. The buyer, a Bronx-based developer of everything from office complexes to strip malls, plans to demolish the house to make way for something bigger and grander—a five-bedroom McMansion with stainless-steel appliances, custom millwork, surround sound, and a master suite with a marble bathroom and radiant heat.

  Probably the eventual fate of the Dawghause as we too are in an area ripe for true mansionization. 

The American Squeeze

A WSJ Article lays bare any fantasy that the lower and middle classes are even holding ground.

Excerpt:

The American middle class has absorbed a steep increase in the cost of health care and other necessities as incomes have stagnated over the past half decade, a squeeze that has forced families to cut back spending on everything from clothing to restaurants.

Health-care spending by middle-income Americans rose 24% between 2007 and 2013, driven by an even larger rise in the cost of buying health insurance...

-----

Sure, we all know this from personal experience.  Do you know who doesn't "know" this?  The psychopaths who calculate disposable income.  That's right.  Personal Disposable Income is calculated before subtracting out insurance.  

ACS 2012 Median Household Income

Relative median household income by Census tract.

..but wait!  There's more.  Over the past 12 years there has been an increase in workers per household.

More people working harder for less.

The ACS data is a wealth of information for those who can look past the headlines. 

Over the next few days I'll be using both the 2012 ACS and the October release of 2013 housing characteristics. 

A note of thanks for the people that continue to stop by here.  Quite refreshing compared to other blogs. 

"Kangaroo Kitteh" doesn't care.

Too Soon!

So, what did I get?  A 128Gb USB 3.0 flash drive for $28 and a 480Gb SSD for $149.  I'm definitely not doing my job stimulating the economy.  

Oil Prices as QE4

First a little math.

VMT per capita this year 9400 miles.  
Rough average price per gallon for 2014; $2.90. Average fleet fuel mileage 22 mpg.
After all that call it $100 per month per person.
A 10% price decline is $10/mo/pers. 

Maybe this poor thing could buy new clothes that fit with her equivalent of a 2% raise.  
 

First 1% First World Problems

Mistaking your $90,000 all electric car for someone else's $90,000 all electric car. 

Wordspeak of the Year

Over at CR Bill has nominated "employment" as his word of the year.  His claim is:

In May 2014, employment

 surpassed the pre-recession peak, 

and 2014 will be the best year for 

employment since the '90s.

I guess if by employed you mean a job, any job no matter how meager. 


Here's the truth about the recovery in "jobs":

Sore Thumb Sticks out in New Home Sales

Little noticed in the 26, Nov '14 Census Bureau release of New Home Sales is an interesting change in month over month numbers.  It's a shame there isn't a decent econ blog out there to call attention to this stuff.  

September '14 Median Sales price $261,700

September '14 Average Sales price $314,200

October '14 Median Sales price $305,000

October '14 Average Sales price $401,100

Am I the only one who thinks a 20% jump in the median price is unusual?

Latest New Sales release.  PDF updated monthly.  

Early Market Close With Painted Ticker

The fast data are taking a pause in the end of year run up.  Case-Shiller paused as expected.  New home sales and mortgage apps are down more than might be just noise.  We see holiday spending plans are down yoy after being down yoy.  Part of that however is the massive "baby bust" fallout from the extended recession so don't worry.  Other datums are likewise not as extreme as the raw numbers would suggest.  The very rapid strengthening of the dollar causes lots of distortions.  The huge influx of foreign capital likewise.  And don't forget medium and long interest rates going "the wrong" way due to low inflation.  And full circle; low inflation (deflation) means putting off the 75" flatscreen until it is 40% cheaper next year.  And the poor retailers, offering 0% interest?  That's not good enough.  

Lots to discuss.  Suggestions for the extended weekend are welcome although in the interests of comity I may limit weather discussions to one no holds barred knock down drag out post so everyone can bitch or gloat as is their wont.  

Banking Concentration Just like GINI

Do I need to draw you a picture?  The rest of the pdf is Table 1177. FDIC...

Peripheral Tunnel/Canal, Same Thing

I wonder how many people realized what they were voting for when they approved the bond measures.  

Mercury News:
The overall cost for the tunnels is politically sensitive. State voters will be asked to approve a water bond to pay for parts of it in November, and polls have shown that the more government projects cost, the less likely voters are to support them. Water agencies around the state would sell bonds to pay for much of it also, and the higher the borrowing costs, the higher they will have to raise water rates on the public.
Many large public projects are funded with money from bonds. But the tunnels project would rely on bond borrowing to cover a huge percent of its costs: roughly 85 percent. By comparison, the financial plan for Brown's other major project, high-speed rail, relies on state bonds for only 12 percent of its funding -- $8 billion of the $68 billion price tag -- with the rest, he hopes, to come from Congress, private companies and others.

EDIT:  Hat tip to sm_landlord for this pdf file "The Time the Canal was Defeated."  This also proves the old saw of politics; yes means yes forever and no means until next time. 

Rural Gentrification and How Fast Things Change

This from last year but worth the wait as another year of no water is making things worse(better?).  

The LA Times reports: "There's too many doctors and lawyers moving in here and putting in their Chateau Cashflow," said Zan Overturf, owner of a Paso Robles plant nursery who has seen local business dry up because of the water shortage. Battle lines have been drawn. On one side are wine producers, who feel besieged and undeserving of all the blame. On the other are rural residents, who worry over their housing values and ask how soon before their faucets cough dust? In normally placid Paso Robles, some residents are privately boycotting the offending wineries. One homeowner was shocked to find his "Save Our Wells!" bumper sticker torn off his car. "We used to think we were so lucky to live here," said Jan Seals, 60, a Bay Area tech-industry transplant whose well water dropped 70 feet in the decade she and her husband have lived outside Paso Robles. "Now we've got two choices: drill another well or put our house on the market. But I wouldn't buy our house given the situation with the basin."

-----

  
Funny and sad. Where to begin? Chalk it up to first world problems of the 1%. 

Go Ahead Insult Your Hosts

Despite warnings from his own embassy Obama ripped into the Australian administration for walking back their climate change policies.

From "The Australian":

Despite repeated Australian requests, White House officials refused to provide a text of the speech to their Australian hosts in advance, and did not provide a summary of what would be contained in the speech.
Mr Obama’s repeated references to the climate change debate in Australia, his accusation that Australia was an inefficient user of energy and his repeated references to the Great Barrier Reef, which has figured heavily in the climate change debate, have led observers to conclude that the speech was a deliberate swipe at the Abbott government.
Historians of the US-Australia relationship are unable to nominate a case of a visiting president making such a hostile speech for the host government.

And the pushback courtesy Radio Australia:


Foreign Minister Julie Bishop has criticised US president Barack Obama for a speech in Brisbane last weekend in which he claimed climate change threatened the Great Barrier Reef.
Speaking to 7.30 from New York, where she is attending a meeting of the United Nations Security Council, Ms Bishop said "there was an issue regarding [Mr Obama's] statement" and she could "understand the Queensland Government's concern".
In a speech at University of Queensland, Mr Obama had said that: "Here, a climate that increases in temperature will mean more extreme and frequent storms, more flooding, rising seas that submerge Pacific islands ... The incredible natural glory of the Great Barrier Reef is threatened."
Ms Bishop told 7.30: "We are demonstrating world's best practice in working with the World Heritage Committee to ensure that the Great Barrier Reef is preserved for generations to come.
"I think that President Obama might have overlooked that aspect of our commitment to conserving the Great Barrier Reef."

I understand the dynamics of a failed Presidency but I don't understand the seeming deliberate attempts to destroy the institution in the process.  

Housing as Part of Just Getting By

Housing sometime around when inflation took off started to take a bigger and bigger bite out of the household budget. 

Las Vegas Is Not All Bright Lights

This is the Valley of Fire State Park. I have a dozen more tedious tourist type photos if anyone requests. 

Additional perspectives:

Demographics for Liberal Apologists

Bill over at CR was making slow progress in accepting the new reality of working longer and at greater rates into old age but appears to have relapsed.

This is hopefully going to put the issue to rest. It won't of course because there is a strong need to deny just how radically the US job market has changed and worse how much worse it compares to most of the rest of the developed world.  In this respect it is as much an embarrassment as is how we treat retirement. 

this Made Me Laugh

I Bow to the Will of the People

I've highlighted the "priority" President Obama has chosen to address.  Whose priority? 

A Better Employment Estimate

 

A look at the last ten years of employment counting Full Time equivalents.

Now.  How about another look?  This time adjusting for working age (16-64) population growth?