A sharp jump in mortgage rates from May to June are now beginning to weigh on the housing recovery. The two-month delay can be attributed to several factors—first and foremost that most potential home buyers lock in mortgage rates early, and sale closings can take up to two months to be finalized.
Second, there may also have been a surge in homebuying because of the rise, as those on the fence suddenly jumped in, fearing rates would continue going up and they would be priced out of the market. Those factors have now expired.
2---Japan growth slows in second quarter, adds to sales tax uncertainty, Reuters
Japan's economic growth slowed more than expected in the second quarter, offering ammunition to those seeking to temper a planned sales-tax increase even as government debt has risen past 1,000 trillion yen ($10.4 trillion).
But as the sharp slowdown was driven by an unexpected fall in corporate capital spending while personal spending remained hardy, the data may encourage Prime Minister Shinzo Abe to proceed with the tax hike and soften the pain by offering tax breaks to boost business investment.
The sales-tax rise is meant as a first step toward tackling Japan's enormous public debt.
The world's third-largest economy grew by an annualized 2.6 percent in April-June, government data showed on Monday, a third straight quarter of expansion but below both market expectations of 3.6 percent growth and a downwardly revised 3.8 percent rate in the first quarter.
Abe, whose top priority has been to spur growth and pull Japan out of 15 years of deflation, faces in coming weeks what he has called the tough decision of whether to go ahead with the tax increase.
Under a multi-party agreement last year, the tax is to rise to 8 percent from 5 percent next April and to 10 percent in October 2015. But the government must certify that the economy is strong enough to withstand the pain of the fiscal tightening.
3---The housing rebound is over, golden truth
one cannot compare today’s housing metrics with 7, 17, 27 or 57 years ago. That’s because today 50% of all mortgage’d homeowners — throughout history the most influential demand cohort — are LOCKED-IN due to negative equity, “effective” negative equity, a legacy HELOC not written off preventing them from getting a mortgage, and/or insufficient income/credit needed for a mortgage loan. - Housing market consultant, Mark Hanson (LINK)I finished the final part of my 3-part housing market series published by Seeking Alpha with my analysis of why the housing market is about head south - quickly. In this section I focus primarily on the market for existing sales. The combination of the big mortgage rate spike in May and June, the fact that big investment funds are largely done accumulating properties they can't rent out and a few other factors have led me to conclude that the 18 month bounce in the housing market is done and the bear market will resume:
As these factors become more apparent to a wider audience, potential home buyers will postpone purchase plans, banks will pullback on mortgage funding and those looking to take advantage of the price run-up will try to sell their home before the bottom drops out of the market again. In other words, the "negative feedback cycle" that drove the popping of the original housing bubble will exert itself, taking the market ultimately to new lows.
4---5 million mortgages still delinquent, naked capitalism
Of 49,823,992 active mortgages in June, LPS reported that 4,785,000 home loans, or 9.61% of all first lien mortgages, were at least one payment delinquent or in foreclosure at the end of June; of those, 1,983,000 homes loans were at least 30 days but less than 90 days late; another 1,344,818 mortgages were 90 or more days delinquent, but not yet in foreclosure, and 1,458,000 properties, were in the foreclosure process, ie, they had received at least one notice but their home had not yet been seized.. That foreclosure inventory was down from 1,335,000 in May, and at 2.93% of all mortgages, represents the first time homes in foreclosure fell below 3% of tracked properties since early 2009. There were 109, 042 foreclosure starts in June, the lowest monthly number of new foreclosures in a month since the crisis began..
5---Rental World: California adds more than 500,000 renters while the homeownership rate declines amidst a boom. California food stamp users jump from 2.2 million in 2008 to nearly 4 million today, Dr Housing Bubble.
6----The Euro: A Pre-Mortem, Krugman, NYT
7--China’s real estate bubble, 60 Minutes repeat
8---Obama’s press conference: The smiling face of a police state, wsws
9---The subversion of due process in America, wsws
(Obama: No law left unbroken)
The Obama administration is using information obtained through its illegal surveillance programs to target Americans for criminal investigations unrelated to terrorism.
According to Reuters reports published last week, information gathered by the National Security Agency (NSA)—including electronic wiretaps and phone records—is being shared with the Drug Enforcement Agency (DEA), a division of the Justice Department. A shadowy interagency unit that includes the DEA, the FBI and the NSA, called the Special Operations Division (SOD), uses this information to target US citizens for investigation and prosecution, including for narcotics crimes....
In a direct conspiracy to subvert due process and the rule of law, the DEA and other police agencies conceal their use of such information from attorneys, judges and the public. Reuters describes how federal law enforcement agencies that utilize such evidence in criminal prosecutions are trained to “recreate” the investigative trail in a manner that violates defendants’ constitutional right to a fair trial.
The Fourth Amendment, part of the Bill of Rights, provides that the “right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.” It requires the police to show “probable cause” and obtain a court warrant “particularly describing the place to be searched, and the persons or things to be seized” before a search or seizure of documents is carried out.
The various surveillance programs involving the seizure and analysis of the telephone records, emails, text messages and other communications of virtually every American and untold millions of people around the world, exposed in recent weeks by whistleblower Edward Snowden, are in flagrant violation of the Fourth Amendment.
According to longstanding precedent, evidence obtained from warrantless or illegal searches is inadmissible in a criminal trial. Prosecutors are, moreover, legally required to turn over exculpatory evidence—such as the existence of tainted evidence—to criminal defendants and their attorneys. These legal doctrines, derived from the Bill of Rights, are essential to a fair trial. The DEA-NSA-FBI conspiracy circumvents this entire system of legal protections, railroading people to jail on the basis of fraud and the use of illegally obtained evidence.
How does this work in practice? The NSA might, for example, intercept a text message that includes the word “marijuana” through one of its mass surveillance programs. It could then forward to the Special Operations Division the identity of the person who sent the message..