Saturday, October 18, 2014

Today's Links

Today's Quote: "All the participants, on all sides, are very suspect, if not criminally insane. It may be the end of the world. To which I say … Good riddance. Nice try, humans; in fact, GREAT TRY … but good riddance. ISIS … Ebola … Climate Change … nuclear radiation … The Empire … Which one will do us in first? … Have a nice day." Bill Blum, Empire Report


 “Everyone has a plan until they get punched in the  face.” – Mike Tyson

“If you can't dazzle them with brilliance, baffle them with bullshit.” W.C. Fields. 




1---Countering Tech’s Damaging Effect on Jobs, WSJ


It is well known that median household incomes are lower today than they were 15 years ago. But declining labor-force participation explains only a portion of this drop. Since 2000, corrected for inflation, the weekly earnings of full-time wage and salary workers at the median have declined slightly. And remarkably, average hourly wages adjusted for inflation are lower than they were 40 years ago.
To be sure, workers get benefits as well as wages, and employers must pay for both. The cost of benefits—especially health care—has been rising faster than wages. It is easy to conclude that total compensation has been rising briskly even if wages have stalled. But the facts don’t bear out this conjecture.


Between 1981 and 2014, according to calculations based on the Bureau of Labor Statistics, wages corrected for inflation rose at the anemic rate of 0.3% a year. (At that pace, it would take 230 years for wages to double.) But total compensation—wages plus benefits—hasn’t done much better, rising at only 0.6% a year. Workers feel stuck because they are stuck. When they look at an economy that has expanded much faster than their wages and benefits in recent decades and even since 2009, they have a right to ask: Where’s our share and why haven’t we gotten it?


2---The American oligarchy, wsws


Late last month, Forbes magazine reported that the 400 richest people in the United States saw their wealth grow 14 percent over the past year. The following week, the Organization for Economic Cooperation and Development reported that global social inequality has eclipsed the pre-Great Depression highs of the 1920s.
This week, Credit Suisse reported that the top one percent of the world’s population control nearly half of all wealth, with the ultra-rich concentrated in the United States.


This was followed by the release of a paper by economists Emmanuel Saez and Gabriel Zucman showing that wealth in the US is increasingly monopolized not merely by the wealthiest 10 percent or even the top 1 percent, but by the top 0.1 percent. They concluded, “Virtually all the increase in the top 10 percent and top 1 percent shares over the last three decades is due to the rise in the top 0.1 percent share, from 7 percent in the late 1970s to 22 percent in 2012.”


Even US Federal Reserve Chair Janet Yellen, who is overseeing the continued handout of oceans of cash to the financial markets, felt compelled to warn of the “extent of and continuing increase in inequality in the United States.” She noted in remarks Friday, “By some estimates, income and wealth inequality are near their highest levels in the past hundred years, much higher than the average during that time span and probably higher than for much of American history before then....


Money buys elections. The 2012 election, the most expensive election cycle in history, was decided by some $6.3 billion in campaign cash. An analysis of elections to the House of Representatives found that 93 percent were decided by which candidate raised the most money. In the 2004 elections, a stunning 98 percent of victorious candidates out-spent their opponents.


3---FHFA Head Mel Watt Pushes Banks To Make Extreme Risk Home Loans, zero hedge


Watt's speech on Oct 20


Fannie Mae (FNMA), Freddie Mac and their regulator are nearing agreement with mortgage issuers on efforts to boost lending and ease banks’ concerns that they will get stuck with bad loans when borrowers default.
The initiatives include a consensus on when defaulted loans are so flawed that lenders must buy them back from the two mortgage-finance companies, a key sticking point in efforts to unlock credit, according to three people familiar with the discussions. The steps are part of a broader push to increase lending after banks had to repurchase billions of dollars of mortgages that were issued during the housing bubble.


Melvin L. Watt, the director of the Federal Housing Finance Agency, will clarify in a Oct. 20 speech at the Mortgage Bankers Association conference in Las Vegas how some loans can be permanently exempted from the threat of buybacks, said the people, who asked not to be identified because the plans aren’t public. Watt will also discuss an effort that would allow borrowers to put down as little as three percent of the purchase price on loans backed by Fannie Mae and Freddie Mac (FMCC), enabling borrowers with lower incomes to access the mortgage market, the people said. The two companies currently require a five percent down payment on most loans.


4---'Zombie' homes haunt Florida neighborhoods, center for public integrity
Aborted foreclosures leave thousands of properties in legal limbo


5---Low Down Payment Mortgages Have Much Higher Default Rates, Dean Baker


That is a fact that would have been worth mentioning in a Washington Post article on plans by Fannie Mae and Freddie Mac to lower the down payment requirements on the mortgages they purchase. The delinquency rate, which closely follows the default rate, is several times higher for people who put 5 percent or less down on a house than for people who put 20 percent or more down.
Contrary to what some folks seem to believe, getting moderate income people into a home that they subsequently lose to foreclosure or a distressed sale is not an effective way for them to build wealth, even if it does help build the wealth of the banks.


6---Roll Out the Fire Hoses (Here Comes QE4) , Daily Reckoning


Yes, dear reader. Things are setting up pretty much as expected. That is to say in a way that seems logically coherent, but is nevertheless incomprehensible. Liquidity is drying up. Volatility is returning. The leaves are falling. Investors are getting nervous. And Fed officials are promising more cash and credit, neither of which they actually possess.
You’ll recall that stocks fell when QE1 and QE2 ended. Why shouldn’t they fall now that QE3 is ending too? No doubt, they will. And that will set little feet running in predictable, but preposterous, directions.


7---More QE? These Charts Show the Pauperization of Workers in the UK and America since 2008 , wolf street


8---German journo: European media writing pro-US stories under CIA pressure (VIDEO), RT


German journalist and editor Udo Ulfkotte says he was forced to publish the works of intelligence agents under his own name, adding that noncompliance ran the risk of being fired. Ulfkotte made the revelations during interviews with RT and Russia Insider.
“I ended up publishing articles under my own name written by agents of the CIA and other intelligence services, especially the German secret service,” Ulfkotte told Russia Insider. He made similar comments to RT in an exclusive interview at the beginning of October.
“One day the BND (German foreign intelligence agency) came to my office at the Frankfurter Allgemeine in Frankfurt. They wanted me to write an article about Libya and Colonel Muammar Gaddafi...They gave me all this secret information and they just wanted me to sign the article with my name,” Ulfkotte told RT.
“That article was how Gaddafi tried to secretly build a poison gas factory. It was a story that was printed worldwide two days later.”


9--Putin press conference, RT


Russian President Vladimir Putin has said that the current low oil prices are “no tragedy” for the Russian budget, stressing that they may soon see an upward correction


10--‘Oversupply and weakening demand growth behind oil price fall’, RT


11--"Geopoliticians discuss the Russian response to America's 'declaration of war' ", Saker
must see Q&A


12--US attack on Russia  is based on Zbigniew Brzezinski’s “strategy of weak spots RT




13---Israel Is Cautiously Arming Syria's Rebels -- And Has A Fragile Unspoken Truce With An Al Qaeda Affiliate BI
"Some rebel groups maintain constant contact with the IDF, including frequent secret meetings reportedly held in Tiberias, but only a modest amount of weapons have been provided to them, mainly rocket-propelled grenade launchers.
Within the next few months, however, a wider scope of military aid may prove necessary as these non-Islamist battalions — composed mainly of local youths — fight to defend their supremacy in the south against JN and ISIS. An upgraded support program could also help draw many fighters away from JN, particularly those who hail from local towns and do not necessarily share al-Qaeda's ideology."

14--War on Terror?
"Only 4 Percent Of Drone Victims In Pakistan Identified As Al Qaeda Members



This situation stems back to the increased demand for second mortgages during the financial crisis. Homeowners sought to take cash out of appreciating homes or finance purchases without private mortgage insurance, pushing demand to historic levels.   Right now the debate revolves around if the market, and better yet borrowers, can handle this looming increase in payments.
According to a recent panel discussion held by the Urban Institute's Housing Finance Policy Center, “The volume of outstanding second mortgages peaked in 2007, at the height of the housing boom, at just over $1.1 trillion. Piggyback loans--second liens that accompany a first lien at signing, also known as “simultaneous seconds” — were a staple of the time, with as many as 45% of purchasers in coastal and bubble areas using a piggyback loan to subsidize the down payment on a first mortgage, hoping to eliminate the need for mortgage insurance.”...


“This recent rise in HELOC originations indicates that an increasing number of homeowners are gaining confidence in the strength of the housing recovery and, more importantly, have regained much of their home equity lost during the housing crisis,” said Daren Blomquist.
But not everyone agrees that this surge in demand is a good thing.
Lynn Effinger, executive vice president of business development for ZVN Properties, wrote an exclusive blog for HousingWire in response to the RealtyTrac report, saying that the number of homeowners getting HELOCs signals that many who have seen some return of equity to their home may be tapping into it to offset higher costs and stagnant wages, or even loss of income


17---Credit nation? HELOCs up 20.6% year-over-year, HW

Highest level of home equity loans since June 2009


1 comment:

  1. Your posts get better and better. It's tragically clear that lessons are never learned by our masters.

    ReplyDelete