Thursday, March 6, 2014

Today's Links

1---A Depressingly Simple Explanation For The Weak Recovery, Business Insider

While household debt dynamics appear to have stabilized and deleveraging is largely complete, income inequality can continue to rise in the U.S. and consumption remain depressed because wealthier households typically save a greater share of income and have a lower propensity to spend per dollar of income. In addition, permanently tighter lending standards have left many households unable to access credit or unwilling to do so. So it is both a demand and a supply story as it relates to credit. But the main point is that income gains have been mediocre for a broad swath of middle income households for some time, and borrowing temporarily masked the demand drag. In combination these factors have been a contributing factor to the slow recovery of U.S. consumption and economic growth.

There you go. Mediocre income gains for the 95% and no easy access to credit to compensate for that. Depressingly simple.

2--- Fed's Fisher Admits Stocks Are At "Eye-Popping Levels", zero hedge

In his speech in Mexico City, Fisher said some indicators like the price-to-projected forward earnings, price-to-sales ratios and market capitalization as a percentage of GDP, are at levels not seen since the dot-com boom of the late 1990s.

 He noted that margin debt is pushing up against all-time records.

 "We must monitor these indicators very carefully so as to ensure that the ghost of 'irrational exuberance' does not haunt us again," Fisher said. While a few Fed officials have mentioned unease about stock prices, Fisher's comments are the most pointed to date.

 Fisher did not spare the bond market, saying that narrow spreads between corporate and Treasury debt "reflect lower risk premia on top of already abnormally low nominal yields."

3---Aid for the Ukraine “Will Be Stolen” – Former Ukrainian Minister of Economy , Testosterone Pit

4---Productivity in 2013 Matched 20-Year Low , WSJ
Businesses struggled to squeeze much more out of their workers last year

The easing of productivity is a bit of a double-edged sword. The weak gains hold back the economy’s potential to grow. But it also could signal that businesses are finding it more difficult to meet demand with their existing workforce and equipment.
If companies can’t squeeze more out of current workers, they might need to ramp up hiring and capital investment.

5---Interview: Fed’s Dudley Says ‘Pretty High’ Threshold to Change Taper Path, WSJ

Fed officials have stressed their plan for winding down the bond-buying program is not on a preset course. They could cut the purchases faster if economic growth picks up more than they expect, or they could slow down the reductions, or “tapering,” if the recovery stumbles.
“If the economy decided it was going to grow at 5% or the economy decided it wasn’t going to grow at all, those would be the kind of changes in the outlook that I think would warrant changing the pace of taper,”  Mr. Dudley said Thursday.

Economic reports on job gains, retail spending, home sales and factory output have all been disappointingly weak since the start of the year, though many analysts caution the data likely have been distorted somewhat by cold weather in parts of the country. Fed officials have greeted this swoon cautiously. Fed Chairwoman Janet Yellen said in congressional testimony last week it was unclear how much of the softness was weather-related.

Mr. Dudley is latest of several Fed officials who have said it would take more than weak data to change their plans to reduce the bond buying: It would take weak data that fundamentally changes their expectations for continued improvement in the labor market and overall economic growth.
Mr. Dudley said that he still expects, “the economy should do better” this year relative to last, growing at around 3% this year

6---Ukraine Protest Leaders Hired Kiev Snipers, antiwar
Snipers Fired on Both Police and Other Protesters

7--Spring fails in Ukrainian plunderland, op ed news

Here's the US's exceptionalist promotion of "democracy" in action; Washington has recognized a coup d'etat in Ukraine that regime-changed a -- for all its glaring faults -- democratically elected government. 

And here is Russian President Vladimir Putin, already last year, talking about how Russia and China decided to trade in roubles and yuan, and stressing how Russia needs to quit the "excessive monopoly" of the US dollar. He had to be aware the Empire would strike back. 

Now there's more; Russian presidential adviser Sergey Glazyev told RIA Novosti, "Russia will abandon the US dollar as a reserve currency if the United States initiates sanctions against the Russian Federation."  

So the Empire struck back by giving "a little help" to regime change in the Ukraine. And Moscow counter-punched by taking control of Crimea in less than a day without firing a shot -- with or without crack Spetsnaz brigades (UK-based think tanks say they are; Putin says they are not). 

Putin's assessment of what happened in Ukraine is factually correct; "an anti-constitutional takeover and armed seizure of power."....

On the Pipelineistan front, Ukraine heavily depends on Russia; 58% of its gas supply. It cannot exactly diversify and start buying from Qatar tomorrow -- with delivery via what, Qatar Airways?  ...

Geoeconomically, the Empire needs Ukraine to be out of the Eurasian economic union promoted by the Kremlin - which also includes Kazakhstan and Belarus. And geopolitically, when NATO Secretary General, the vain puppet Anders Fogh Rasmussen, said that an IMF-EU package for the Ukraine would be "a major boost for Euro-Atlantic security", this is what clinched it; the only thing that matters in this whole game is NATO "annexing" Ukraine, as I examined earlier.

 It has always been about the Empire of Bases - just like the encirclement of Iran; just like the "pivot" to Asia translating into encirclement of China; just like encircling Russia with bases and "missile defense". Over the Kremlin's collective dead body, of course.

8---The fascist danger in Ukraine, wsws

9---Purchase Application Volumes Down to 18-Year Low, MReport

10--What happens to prices when Wall Street buys homes, cnbc

Between 2011 and 2013, institutional investors, defined as those who purchased at least 10 properties in a calendar year, accounted for 3.87 percent of all home sales across 1,264 counties, according to a new study by RealtyTrac. Those counties were selected because rental data was available and allowed RealtyTrac to create a so-called "heat map" to show institutional investors' impact in those counties. The average home price appreciation in those counties was 14 percent and the increase in rents on three-bedroom homes was 7 percent

RealtyTrac Vice President Daren Blomquist elaborated on the overall market for institutional investor home buyers:
"In 2011 institutional investors—purchasing at least 10 residential properties in a calendar year—purchased 219,000 residential properties nationwide, representing 5.12 percent of all residential sales. That increased to 259,000, representing 5.82 percent of all residential sales in 2012, and 354,000, representing 7.40 percent of all sales in 2013. That's a 44 percent increase in the institutional investor share of the residential sales market from 2011 to 2013."
Certain markets that were particularly hard hit by the housing crash, like Phoenix and Las Vegas, saw a far higher share of investors and far higher home price appreciation as a result. These investors, at times, accounted for nearly half of all home sales, and home prices soared well above 20 percent.

Now, as investors slow their purchases, home prices are following suit. In Phoenix, for example, active listings are now up 47 percent from a year ago, even though the supply of distressed homes (foreclosures and short sales) are down 13 percent, according to the Center for Real Estate Theory and Practice at Arizona State University. Prices are still up 21 percent from a year ago, but down 4 percent from the previous month, the first monthly drop since last summer.

"Demand has been weakening since July, especially demand from investors," noted Michael Orr, the center's director. "The situation has changed dramatically from January 2013 when the luxury market was 10 percent smaller than the low end market in terms of dollars spent. In contrast, 99 percent more dollars were spent on homes over $500,000 in January 2014 than on homes under $150,000."
Nationwide, home price gains are slowing, despite monthly fluctuations. Trulia's chief economist Jed Kolko points to quarterly comparisons: "The quarter-over-quarter change in asking prices topped out at 3.5 percent in April 2013 and now, at 1.9 percent, the increase is just over half of that peak," Kolko wrote in a report. However, he pointed out, home prices are still rising much faster than the historical norm

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