Nearly one out of every three U.S. home sales in the first quarter was a foreclosure property as steep price discounts boosted demand for distressed real estate, RealtyTrac said in a new report on Wednesday.
Foreclosure homes accounted for 31 percent of all residential sales in the first quarter of 2010, with the average sales price of properties that sold while in some stage of foreclosure nearly 27 percent below homes that were not in the process, Irvine, California-based RealtyTrac said.
"In a normal market, only 1 to 2 percent of home sales are foreclosures, so this is certainly a significant level," Rick Sharga, senior vice president at RealtyTrac, said in an interview.
The long-term mortgage, which began as a Depression-era remedy to keep Americans in their homes, may be out of step, given the current housing crisis.
Could it be time to say good-bye to the popular 30-year mortgage?
"The 30-year mortgage is outdated, the standard fixed-rate mortgage is outdated, and it has to be improved," housing expert Robert J. Shiller told CNBC.
Amid all the market doom and gloom, the world’s largest gold fund is quietly celebrating another major milestone: SPDR Gold Shares, an exchange-traded fund backed by physical bullion, has recently surpassed $50 billion in assets.
Senate Democrats are working on a new way to jump-start their stalled election-year jobs agenda while saving unemployment benefits for hundreds of thousands of laid-off workers.
The plan is to create one bill that combines the unemployment benefits with an extension of a popular tax credit for people who buy new homes.
Markets Make A Definitive Statements
Equity markets sharply lower. Euro sharply lower. Commodities under significant pressure. Gold opens lower and recovers $16 from the low to be up on the day.
1/ The type on inflation being discounted by Gold requires business activity to be putrid.
2/ This type on inflation is hyperinflation, which is a currency event, not an economic demand phenomenon.
3/ Rather than a singular currency loss of confidence igniting hyperinflation, it will be all Western currencies moving against each other with intolerable, to business, volatility.
4/ All Western governments will practice QE to infinity, as we return to credit market problems. The statement of the G 20 and Prince Charles cutting down on caterers is all smoke and MOPE.
5/ Gold is NOT a commodity.
6/ Gold is a currency
7/ Gold is the currency of choice.
8/ Gold is going to becoming the reserve asset of choice by central banks
9/ Ownership of gold means you are your own central bank.
Conclusion:
The arguments between inflation and deflation revealed itself today to be purely semantical.
Gold is headed in this move to $1650 with its normal drama.
"New Jersey's defined pension systems are underfunded by more than $170 billion, an amount equivalent to 44 percent of gross state product and 328 percent of the state's explicit government debt," said authors Eileen Norcross and Andrew Biggs.
The report says the state has five defined benefit pension plans that cover 770,000 public workers, and more than a quarter million retirees depend on $6 billion per year in benefits.
Officials maintain pension plans are underfunded by $44.7 billion when the return on investment is 8.25 percent. The study used calculations consistent with private-sector accounting methods and, when they are applied, the state's underfunded benefit obligations go from $44.7 billion to $173.9 billion.
"It is estimated if state pension assets average a return of 8 percent, New Jersey will run out of funds to meet its pension obligations in 2019. If asset returns are lower than 8 percent, they will run out of funds sooner," the report says.
How much sooner?
Under certain assumptions the well could go dry as early as 2013.
'Monster' Quantitative Easing Coming
Roberts is predicting the central banks are going to have to start pumping more money into the system.
"With fiscal policy off the agenda, we have always expected more quantitative monetary easing," he wrote. "And this time will be different. We have always argued that buying of bonds is less efficient than guaranteeing yield levels, and that yields are the key, not raising money supply, given demand for credit is dead."
The small southern California city of Maywood has hit on a unique solution to its budget crisis. Crushed by the recession and falling tax revenues, the city is disbanding its police force and firing all public sector employees.
Maywood has opted for an extreme solution, by contracting out all public services, including the most basic, to save cash. But it is not alone.
Hi Eric,
I've just watched gold get taken down $18 in 20 minutes or so. And I'm thinking - what's to stop the cartel/bullion banks from just using the trillions of dollars to cap the price?
It seems like cycles don't matter - they just take it down when they want. You almost question why bother with it all.
Just speaking out of frustration. I want to believe in a upside price blast, but all I keep seeing is price take downs.
A
Consumer spending rose slightly in May, as Americans remain reluctant to open their wallets amid a slow economic recovery.
Leaders of the world's most important economies agreed to ambitious targets for getting deficits under control, pledging to cut them in half by 2013, according to a statement made following the G-20 summit this weekend in Toronto.
Consumer sentiment rose in June to its highest since January 2008 while reports of job losses were down sharply from a year ago, a survey showed on Friday.
A gauge of current economic conditions also rose to its highest since January 2008, according to the Thomson Reuters/University of Michigan's Surveys of Consumers.
In a rare move, Iran has declared a state of war on its northwestern border, debkafile's military and Iranian sources report. Iranian Revolutionary Guards Corps men and equipment units are being massed in the Caspian Sea region against what Tehran claims are US and Israeli forces concentrated on army and air bases in Azerbaijan ready to strike Iran's nuclear facilities.
Key members of the five-man Board are quietly mulling a fresh burst of asset purchases, if necessary by pushing the Fed's balance sheet from $2.4 trillion (£1.6 trillion) to uncharted levels of $5 trillion. But they are certain to face intense scepticism from regional hardliners. The dispute has echoes of the early 1930s when the Chicago Fed stymied rescue efforts.
Californians don’t see much evidence that the worst economic contraction since the Great Depression is coming to an end.
Unemployment was 12.4 percent in May, 2.7 percentage points higher than the national rate. Lawmakers gridlocked over how to close a $19 billion budget gap are weighing the termination of the main welfare program for 1.3 million poor families or borrowing more than $9 billion in the bond market. California, tied with Illinois for the lowest credit rating of any state, is diverting a rising portion of tax revenue to service debt, Bloomberg Markets magazine reports in its August issue.
While elected officials spent much of their time working out the details of regulating complex derivatives and grappling with whether banks ought to make big bets with their own money, they also set a number of new rules that will directly affect consumers.
Lawmakers shook hands on the compromise legislation at 5:39 a.m. after Obama administration officials helped broker a deal that cracked the last impediment to the bill -- a proposal to force banks to spin off their lucrative derivatives trading business.
Deutsche Bank has a new and improved index of U.S. financial conditions, and this index just slumped back towards the lows of our recent crisis.
The end of the Federal homebuyer tax credit in April slowed down Lennar Corp.'s May results and hurt fiscal second-quarter revenue, but the homebuilder reversed a year-ago loss as it cut costs.
People talk about cycles and super cycles as if they occurred out of nowhere. They all happen by design. As an example, the economy has improved, but that is because of $800 billion in stimulus and Fed spending. The growth that evolved was tepid at best. Now that the economy is trailing off, the stimulus having expended itself, and the question is what comes next? The only way to stave off recession/depression is to have another stimulus plan. That, of course, doesn’t affect the root causes - it just gains time.
Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.
This is the end
Beautiful friend
This is the end
"German policy is a danger for Europe, it could destroy the European project," said Soros, who earned $1 billion in 1992 by betting against the British pound.
Hi Eric,
I have enjoyed your insights while reading Jim Sinclair website. He often says silver is a game but that it may rise a higher percentage than gold. With deflation and inflation (hyperinflation) occurring possibly at the same time, what do you think will happen to the prices of silver coins (example: Morgan silver dollars) in a failing economy? Will prices of rare coins rise with the price of silver, or will it fall in relative value since not many can afford it? I would appreciate your thoughts since Jim always recommends an exit strategy. Thanks,
CIGA Ralph
In its May 12 situation report on the BP oil spill, the U.S. Department of Energy (DOE) noted that there was a risk to “a number of power plants” that draw cooling water directly from the Gulf of Mexico or adjacent salt water sources. “If the water supply for these facilities becomes contaminated with oil, cooling water systems could be damaged,” the report said. It’s just one of many risks to business and infrastructure in the Gulf that could long persist even after the flow of oil is stopped.
WBTV reporter Sarah Batista noticed there was a black substance stuck to the inside of the oyster.
"That is definitely tar, that is not on oysters, "said Robertson.
The rich grew richer last year, even as the world endured the worst recession in decades.
A stock market rebound helped the world's ranks of millionaires climb 17 percent to 10 million, while their collective wealth surged 19 percent to $39 trillion, nearly recouping losses from the financial crisis, according to the latest Merrill Lynch-Capgemini world wealth report.
Britain's budget chief took the wraps off his "unavoidable budget" Tuesday -- an austere spending plan that raises taxes and cuts spending as it attempts to help the government slash its $1.3 trillion debt.
Stocks waver after surprise drop in sales of existing homes, lower rating on BNP Paribas
Dear Jim,
The BP crisis in the Gulf of Mexico has rightfully been analyzed from the ecological perspective. People's lives and livelihoods are in grave danger. But that focus has equally masked something very serious from a financial perspective, in my opinion, that could lead to an acceleration of the crisis brought about by the Lehman implosion.
People are seriously underestimating how much liquidity in the global financial world is dependent on a solvent BP. BP extends credit – through trading and finance. They extend the amounts, quality and duration of credit a bank could only dream of. The Gold community should think about the financial muscle behind a Company with 100+years of proven oil and gas reserves. Think about that in comparison with what a Bank, with few tangible assets, (truly, not allegedly) possesses. (No wonder they all started trading for a living!) Then think about what happens if BP goes under. This is no bank. With proven reserves and wells in the ground, equity in fields all over the planet, in terms of credit quality and credit provision – nothing, can match an oil major. God only knows how many assets around the planet are dependent on credit and finance extended from BP. It is likely to dwarf any Banking entity in multiples.
And at the heart of it all are those dreadful OTC Derivatives – again! Banks try and lean on major oil companies because they have exactly the kind of credit-worthiness that they themselves lack. In fact, major oil companies, conversely, spend large amounts of time both denying Banks credit and trying to get Bank risk off of their books in their trading operations. Oil companies have always mistrusted Bank creditworthiness and have largely considered the banking industry a bad financial joke. Conversely, Banks plead with oil companies to let them trade beyond one year in duration. Banks even used to do losing trades with Oil Companies simply to get them on their trading register...a foot in the door so that they could subsequently beg for an extension in credit size and duration. For the Banks, all trading was based on what the early derivatives giant, Bankers Trust, named their trading system: RAROC- or – Risk Adjusted Return on Credit. Trading is a
function of credit bequeathed, mixed with the risk of the (trading) position. As trading and credit are intertwined, we might do well to remember what might happen to global liquidity and markets if BP suffers what many believe to be its deserved fate of bankruptcy. The Intercontinental Exchange (ICE) has already been and will be further undermined by BP's distress. They are one of the only “hard asset” entities backing up this so-called “Exchange”.
If BP does go bust (regardless of it is deserved), and even if it just badly wounded and the US entity is allowed to fail, the long-term OTC Derivatives in the oil, refined products and natural gas markets that get nullified could be catastrophic. These will kick-back into the Banking system. BP is the primary player on the long-end of the energy curve. How exposed are Goldman sub J. Aron, Morgan Stanley and JPM? Probably hugely. Now credit has been cut to BP. Counter-parties will not accept their name beyond one year in duration. This is unheard of. A Giant is on the ropes. If he falls, the very earth may shake as he hits the ground.
As we are beginning to see, the Western pension structure, financial trading and global credit are all inter-twined. BP is central to this, as a massive supplier of what many believe(d) to be AAA credit. So while we see Banks roll over and die, and Sovereign
entities begin to falter... we now have a major oil company on the verge of going under. Another leg of the global economic “chair” is being vicious kicked out from under us. Ecological damage is not just an eco-event on its isolated own. It has been added to the list of man-made disasters jeopardizing the world economy. The price tag and resultant knock-on effects of a BP failure could easily be equal to that of a Lehman, if not more. It is surely, at the very least, Enron x 10.
All the counter-party risk associated with the current BP situation means the term curve of the global oil trade has likely shut down. Here we have yet another credit-based event causing a lock-up in markets that will now impede trade and commerce. It looks like an exact replication of the 2008 credit market seizure could ensue all over again – and it could probably be a lot worse. The world is in a far more delicate state now.
Although never really discussed, the world is highly reliant on BPs provision of long-term credit to many core industries. Who makes good on all the outstanding paper that so many smaller oil, gas and electricity companies, airlines, shipping companies, local bus, railway and transportation networks that rely on BPs creditworthiness and performance for? It doesn't take a genius to figure out how this could all unwind. If BP has to be bailed-out, like a bank, the system will have to print even more unimaginable amounts of money.
The market, intellectually lazy and slow to realization, as it often is, probably has not woken up to it yet – but the BP crisis could unleash damage similar to the Banking crisis. A BP failure through bankruptcy could make Lehman look small in comparison, and shake the financial house of cards we live in even more severely. If the implicit danger of the possibilities imbedded in such an event doesn't make an individual now turn towards Gold at full speed, it is likely that nothing will.
Respectfully yours,
CIGA Pedro
The 20 world leaders at an economic summit in Toronto next weekend will find themselves in a country that has avoided a banking crisis where others have floundered, and whose economy grew at a 6.1 percent annual rate in the first three months of this year. The housing market is hot and three-quarters of the 400,000 jobs lost during the recession have been recovered.
Saudi Arabia, the world’s fourth-largest holder of foreign exchange reserves, is sitting on more than twice as much gold as previously thought, according to new estimates that point to the revival of bullion as part of emerging economies’ official reserves.
“Politicians have talked a lot about layoffs during this recession,” writes Bloomberg columnist Joe Mysak.
“In most cases, that talk is an empty threat. Nobody wants to fire teachers, or firemen, or policemen, in the name of efficiency or good government.”
Eric --
I really enjoy your insights. I check in here all the time to see what you're thinking.
Can I ask you, what indicators do you think are most valuable? And where could I find out more about REV(E) and MOVB(E), which I'd never heard of before visiting your site. And finally: what trading platforms have these 2 indicators.
Sorry to ask so many questions, but I'm very impressed with your use of these indicators and whatever else you use. Your recent "call" on what stocks would do was very impressive.
THANK YOU,
Newman
World stock markets rallied Monday on China's decision to allow its currency to appreciate against the dollar, a move that will allow it to keep interest rates low and will help rebalance growth in the world economy.
(NYSE: BAC - News) and other banks are preparing new fees on basic banking services as they try to replace revenue lost to regulatory rules, in a push that is expected to spell an end to free checking accounts for many Americans.
Gold, up 15% this year, is heading for its 10th consecutive annual gain, the longest winning streak since at least 1920.
The oil emanating from the seafloor contains about 40 percent methane, compared with about 5 percent found in typical oil deposits, said John Kessler, a Texas A&M University oceanographer who is studying the impact of methane from the spill.
That means huge quantities of methane have entered the Gulf, scientists say, potentially suffocating marine life and creating "dead zones" where oxygen is so depleted that nothing lives.
"This is the most vigorous methane eruption in modern human history," Kessler said.
Just because a company pays a dividend now is no guarantee that it will forever, or that the company will even continue to exist. Nor is it any guarantee that the underlying stock is stable.
Money is a game of perception and confidence. This is the main reason why everything can look so normal, right before the wall of confidence come tumbling down and all hell breaks loose. Martin Armstrong alludes to this rapid progression in his commentary How all systems can collapse overnight.
Add earnings warnings and lower estimates to the widening mess of oil spillage, BP PLC's fight for its life and Europe's debt crisis this summer.
The number of people filing new claims for jobless benefits jumped last week after three straight declines, another sign that the pace of layoffs has not slowed.
Initial claims for jobless benefits rose by 12,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. It was the highest level in a month and overshadowed a report that consumer prices remain essentially flat.
Fitch Ratings Ltd. forecasts that most borrowers who get lower mortgage payments under a federal government program will default within 12 months.
Among those with loans that aren't backed by any federal agency, the redefault rate within a year is likely to be 65% to 75% under the Obama administration's Home Affordable Modification Program, or HAMP, according to a report to be released Wednesday by Fitch, a New York-based credit-rating firm. Almost all of those who got loan modifications have already defaulted once.
Diane Pendley, a managing director at Fitch, said the failure rate was likely to be high largely because most of these borrowers were mired in credit-card debt, car loans and other obligations.
Spending cuts by state and local governments from New York to California may act as a drag on the economy into 2011, only the second time in more than a half century that such reductions have restricted growth for three consecutive years.
banks and thrifts missed making a May 17 payment to the U.S. government under its main bank bailout program, signaling a rising number of lenders are struggling to meet their obligations.
Hi Jim,
Hope you're well.
Reading articles like this and hearing my mom and other friends speak of gov't entitlements like its a requirement makes me feel that the "American way of life" is probably the biggest ponzi scheme ever. People know their cities and states are broke, yet still want what they deserve/need. One could argue they planned retirement based on these promises, but everyone should eat less cake now since every one of us are suffering; except banksters and politicians. This is now how any of America's forefathers envisioned todays America.
All the best,
CIGA Omid
Republicans and a dozen Democratic defectors in the Senate dealt a defeat to President Barack Obama Wednesday, just days after he pressed Congress to renew pieces of last year's economic stimulus bill.
"I'm very concerned about the cost of the bill," said Susan Collins, R-Maine.
In another sign of the firms' financial disintegration, Freddie Mac and Fannie Mae, the giant mortgage finance companies operating in government conservatorship, said Wednesday they are delisting their common and preferred stocks from the New York Stock Exchange.
Housing starts fell to a five-month low in May but industrial output rose, evidence of an uneven recovery that has kept inflation at a minimum.
As the government's tax incentives for homebuyers expired, new home building dropped 10 percent to a seasonally adjusted annual rate of 593,000 units, the lowest level since December, the Commerce Department said on Wednesday.
