Chimera Worth Trillions

Gallup issued a report Monday showing that a decisive majority of Americans-62 percent- say that social media has no influence on their purchasing decisions. A meager 5 percent said that social media had a great deal of influence on their purchasing decisions. This comes on the heels of another study showing that brand engagement has been plummeting on Facebook over the last year, and that the company is debating charging people to promote their content . ----- Social media and synergy value yet again proven ephemeral.

Executive Overreach

The [SCOTUS] said [24 Jun 2014] that the Environmental Protection Agency lacks authority in some cases to force companies to evaluate ways to reduce carbon dioxide emissions. This rule applies when a company needs a permit to expand facilities or build new ones that would increase overall pollution. Carbon dioxide is the chief gas linked to global warming.
The decision does not affect EPA proposals for first-time national standards for new and existing power plants. The most recent proposal aims at a 30 percent reduction in greenhouse gas emissions by 2030, but won’t take effect for at least another two years.

-----

I honestly have no idea why the Obama administration has taken this path. 

Housing Looking Toppy

Inflection points are notorious to predict and impossible not to see in retrospect. Looks more and more like It is that time again. Remember August 2006? Yes, eight long years ago. Here's what I wrote:

Inflection Point Aug 2006

 Nothing like disaster staring you personally in the face to sharpen the mind and narrow focus to the important facts. These things are “brainers.” The problem is so many people sleepwalking or in denial. It is important to remember that housing is priced at the margins. That’s also why the bubble won’t be as injurious to the general economy as some here believe. Imagine getting a letter in the mail saying you won a million dollars. Next day you get another letter saying a mistake was made, you only won $400,000. Did you just lose $600,000? Only if you went out the night before spent it all (MEW). [Calculations below.] I’m not too worried about the coming and needed recession even if it is late and thereby harder than necessary. The jobs that will be lost are largely parasitical and not ultimately productive nor are they the jobs we wish to have created in a modern economy. Obsolete jobs are best cleared out. A recession will ease our crushing immigration pressures here in California as well. Schools are already talking about closing buildinngs, saving billions. Lower taxes, less crowded schools; what’s not to like? Maybe the national psyche can find enough breathing space to heal as well.

More at the link.  

Back to 2014.  Are we any better now?  Yes.  Much, much better.  Back then there weren't many paying attention.  Back then the blogosphere was lonely.  Back then there were very few who ever dare suggest a plateau never mind a massive decline.  I took no end of respectful dissent for suggesting "stickiness" was a thing of the past. 

Okay, on to the data.  

First, the Zero Hedge observation:

The Great Bifurcation continues apace.  As usual California leads the way. 

Second, Dataquick and the the American Community Survey (JCHS):

The typical monthly mortgage payment that California buyers committed themselves to paying last month was $1,523, up from $1,496 the month before and up from $1,157 a year earlier. ~ DQ

 JCHS ~ The recent deterioration in rental affordability comes after a decade of lost ground. The share of cost-burdened renters increased by a stunning 12 percentage points between 2000 and 2010, the largest jump in any decade dating back at least to 1960. The cumulative increase in the incidence of housing cost burdens is astounding. In 1960, about one in four renters paid more than 30 percent of income for housing. Today, one in two are cost burdened. Even in 1980, following two decades of worsening affordability, the cost-burdened share of renters was just above a third.

Prices, both rent and purchase need to come down to come back in line.  Higher wages, lower prices, lower interest rates, transfer rates.  Any guesses as to the mix that gets us back in balance?  I'll post mine after a bit. 

RWR Ten Years On

February 6, 1911 - June 5, 2004

Spend a few minutes at the Reagan Foundation. 

WASS CA files

From Fox and Hounds a guest post from George Runner of the FTB:

California consumers currently pay 71 cents per gallon in taxes every time they fill up their tanks. That’s the highest gas tax rate in the country. The average American pays less—about 50 cents per gallon. That translates into hundreds of dollars a year in higher taxes for Californians.
Adding insult to injury, Californians are double taxed for gas. Sales tax is calculated after excise taxes have already been added.

-----

Why is it that dedicated revenue streams ultimately devolve into wealth transfers? 

Ponzi Reversal

It's usually the home builder perpetrates the Ponzi scheme.  At least this time they are the victim.

Sacramento Bee:
Court papers show his second largest creditor is Jack Sweigart, owner of Sacramento homebuilder JTS Communities, who loaned him $19.9 million. Sweigart couldn’t be reached for comment.

His second largest creditor is the Cemo Family Charitable Foundation, which has already sued Wannakuwatte for $7.1 million. The foundation is led by Sacramento real estate executive Sammy Cemo.

...

Prosecutors said Wannakuwatte conned investors and banks to loan money to his medical-supply business, International Manufacturing Group, by claiming he had $100 million worth of contracts to sell latex gloves to veterans hospitals. In fact, his contracts with those hospitals came to just $25,000 a year.

U.S. Attorney Benjamin Wagner said last month that the Wannakuwatte case is “very possibly” the largest Ponzi scheme in the region’s history.

-----

Seems to me the more government involvement in an economic sector the more opportunity for mischief. 

100k Comments

"You wanna know how I lost my virginity? Well, so do I." (h/t Veronica Mars)

There's a bunch of parasites just itching for my 100,000th comment on HCN.  If they weren't so intent on insult and misrepresentation I would have less than half that. 

How long should I make them wait? 

All Your Data Are Belonging To US (as in the FedGov)

Washington Examiner excerpt:

Earlier this year, Cordray tried to assuage concerned lawmakers during a Jan. 28 hearing of Hensarling's panel, saying repeatedly the database will only contain “aggregate” information with no personal identifiers.
But under the April register notice, the database expansion means it will include a host of data points, including a mortgage owner’s name, address, Social Security number, all credit card and other loan information and account balances.
The database will also encompass a mortgage holder’s entire credit history, including delinquent payments, late payments, minimum payments, high account balances and credit scores, according to the notice.
The two agencies will also assemble “household demographic data,” including racial and ethnic data, gender, marital status, religion, education, employment history, military status, household composition, the number of wage earners and a family’s total wealth and assets.

 -----

FedGov got your back... and your front and your sides and your data.  The master control program (MCP) will encompass some 95% of all outstanding mortgages.  Now you know why the 1% are paying all cash. 

New Employment Record?

Next week's BEA report is expected to tout an all time high in civilian employment. Here are two graphs to keep in mind while digesting that tidbit.

Total hours worked per working age adult.

FTE estimate.  Employment plus 1/2 part time for economic reasons. 

Late Spring

Funny how we never hear much about things like the second latest Washington D.C. cherry blossom bloom this year 

Year	Green Color in Buds	Florets Visible	Extension of Florets	Peduncle Elongation	Puffy White	Peak Bloom
2014	3/16	3/23	3/31	4/4	4/7	4/10
2013	3/11	3/17	3/26	3/31	4/4	4/9
2012	2/29	3/8	3/12	3/14	3/15	3/20
2011	2/28	3/9	3/16	3/19	3/22	3/29
2010	3/14	3/19	3/21	3/23	3/26	3/31
2009	3/8	3/12	3/18	3/23	3/27	4/1
2008	2/19	3/11	3/17	3/19	3/24	3/29
2007	3/5	3/20	3/25	3/27	3/28	4/1
2006	2/28	3/13	3/14	3/16	3/22	3/30
2005	3/7	3/22	3/31	4/3	4/4	4/9
2004	3/4	3/12	3/15	3/22	3/27	3/31
2003	3/17	3/23	3/25	3/27	3/29	4/2
2002	3/7	3/14	3/18	3/20	3/27	4/2
2001	2/26	3/11	3/20	3/25	3/30	4/6
2000	2/29	3/8	3/9	3/10	3/14	3/17
1999	3/16	3/22	3/26	3/30	4/1	4/5
1998	2/13	3/1	3/8	3/10	3/23	3/27
1997	2/21	3/2	3/10	3/13	3/20	3/26
1996	2/29	3/15	3/18	3/25	3/30	4/4
1995	3/8	3/17	3/20	3/22	3/27	4/2
1994	3/8	3/20	3/25	3/29	4/1	4/5
1993	3/15	3/22	3/28	4/2	4/5	4/11
1992	3/7	3/15	3/23	3/31	4/1	4/5

or the snowstorm in SoCal last week:

or all the ice still on Lake Superior over Memorial Day.

Flips Failing Again

What was old is still old.  This time it is paying too much on the purchase and still expecting a profit.

1619 Linnet Rd Wrightwood, CA 92397

  

May 22, 2014	Price Changed	$194,900	—
Apr 23, 2014	Price Changed	$209,900	—
Mar 19, 2014	Listed (Active)	$229,900	—
Dec 12, 2013	Delisted (Withdrawn)		—
Dec 03, 2013	Listed (Active)		—
Nov 25, 2013	Sold (Public Records) This home was foreclosed and bank-owned.	$221,790	—
Dec 01, 1989	Sold (Public Records)	$116,500	—	Public Records

  -----

Six months of no interest.  Smallish, ordinary, expensive.  Seems even low interest rates are no longer enough. 

Mian and Sufi Aren't Even Sloppy

Sebastian of HCN posting repute has become a believer in these two.  Even Calculated Risk has promoted them to sidebar status.  Me?  Not so much.  Here is a recent example:

Mian and Sufi have done what CR has never done.  Produced a graph that doesn't start at zero without a note to that effect.  Here it is:

Pretty damming of the growing inequality trend eh?  Not when redrawn with the zero:

And how about those choices?  First quintile versus third quintile.  Well obviously you don't pick or include the fourth or fifth cohorts.  They never had any assets by themselves.  And including them with the middle 20% would flatten the curve M&S are seeking to draw.  Same thing for not using the top two segments in the wealthy numerator.  It too would drag down the inequality curve. 

Sure, keep reading M&S just don't trust them. 

So Many Face Palms

Federal dollars will no longer be available to fund a day laborer site in Thousand Oaks, so the City Council will be asked Tuesday night to have general fund money cover the bill.
For 11 years, the city has been qualified to use Community Development Block Grant money for expenses at the site on Royal Oaks Avenue.
Work by the city’s contractor to coordinate activities at the site was classified as code enforcement, which aligned the work with construction work and other improvements in Old Town West. It was “complementary actions to address deterioration in the neighborhood,” according to a report prepared for the council.
With the improvement work now complete, the federal Department of Housing and Urban Development has alerted the city that as of June 30, it can no longer use the block grant money.
City staff is asking the council to approve $36,000 for July 1 through Dec. 31. The money will pay for a contract with Cyrus Urban Inter-Church Sustainability of Oxnard, a faith-based, nonprofit that monitors activities at the day laborer site.

Peak CRE

More evidence that we are getting ahead of demand.

1 WTC tenant looking to halve its commitment

The China Center, the first private-sector tenant to sign on for office space at One World Trade Center, is negotiating to halve its commitment there, according to sources familiar with the organization's real-estate decision making.
The downsizing would bring the group, which aims to give Chinese businesses a foothold in the city by providing them with offices and other amenities like conference and dining space, to about 100,000 square feet.
The firm's decision to slash its space comes after news that the owners of One World Trade Center, a partnership between the Port Authority of New York and New Jersey and the Durst Organization, were slashing asking rents in the 1,776-foot tall, more than 3 million-square-foot tower, due to a lack of demand. The Wall Street Journal reported Tuesday that the landlord reduced rental rates to $69 per square foot from $75 per square foot at the tower, which cost a record $3.9 billion to build.

-----

It may be worthwhile to note this is on the heels of recent Chinese industrial spying kerfuffle.  Still.  Look at those numbers.  Insane.  

Obamacare and From NPR No Less

And so they dropped their new plan. They just stopped paying the premium.

That's the takeaway quote from a very damning anecdote reported by NPR this morning:

Frustrated By The Affordable Care Act, One Family Opts Out

Rachel was skeptical, but Nick went online and started shopping. He had trouble getting through the glitchy website at first, but eventually he picked a plan just for his wife. It was a gold plan HMO through Blue Cross Blue Shield for about $375 a month.

In January, as soon as the plan began, Nick printed out a list of obstetricians from the plan's website. ...

Rachel recalls two days in January when she sat down and called every doctor on the list of 28. According to her, most of the practices told her, in one way or another, that they didn't take the plan.

"Some would just come right out and say, 'We don't take Obamacare,' " she says.
"Or the best one was, 'The doctor takes it here at the actual practice, but whatever hospital you use ... does not take that insurance.' "

...

"It was mind numbing," she says, "because I was just sitting there thinking, 'I'm paying close to $400 a month just for me to have insurance that doesn't even work. So what am I paying for?' "

...

Louis Adams, a spokesman for , says he went down that same list a month after Rachel had checked. He says most of the 28 obstetricians do take the HMO insurance.

 -----

Of course one story does not make a failure.  Right?  

Sunday Night Futures on Monday

I like sleek delivery of information.  It surprises me that in this case CNBC delivers.

http://www.cnbc.com/id/101647519

Much better than most pages.  Bloomberg is laden with too many ads. 

100 Years Later

With apologies to Katharine Lee Bates

O beautiful for spacious skies,
 [watch the no fly zones and drone corridors]

For amber waves of grain,
 [subsidized ethanol is colorless]

For purple mountain majesties
Above the fruited plain!
America! America! God shed His grace on thee,
 [Unless your religion forbids mentioning a deity of course]

And crown thy good with brotherhood
From sea to shining sea!
O beautiful for pilgrim feet,
 [land grabbing zealots]

Whose stern impassion'd stress
A thoroughfare for freedom beat
Across the wilderness!
 [Federal lands off limits to grazing]

America! America!
God mend thine ev'ry flaw,
 [flaws?]

 Confirm thy soul in self-control,
 [unless your sins are due to a difficult upbringing]

Thy liberty in law!
 [no comment required]

O beautiful for heroes proved In liberating strife,
 [VA waiting list]

Who more than self their country loved,
And mercy more than life!
 [subject to mandatory sentencing guidelines]

America! America! May God thy gold refine
 [coinz!]

Till all success be nobleness,
And ev'ry gain divine!
 [For surely God is a capitalist]

O Beautiful for patriot dream
That sees beyond the years
Thine alabaster cities gleam,
Undimmed by human tears!
America! America! God shed His grace on thee,
And crown thy good with brotherhood
From sea to shining sea!

 ------

1913 and look how far we've deviated.  

Memorial Day 2014

Sgt. Andrew C. Edwards polishes the American flag on a Marine Corps memorial for the veterans of the battle for Iwo Jima on the top of Mount Suribachi.

The flowers are in bloom

Spring is Here

Pride of Madera

Allen's Hummingbird