The Truce Is Over: Ukraine President Urges Restart Of Military Action

Ukraine’s Acting President Turchynov appears to be calling for an official break in the “truce” deal…

  • *UKRAINE’S TURCHYNOV URGES RESTART OF ANTI-TERRORIST OPERATION
  • *TURCHYNOV SAYS ‘TERRORISTS’ HOLDING EAST UKRAINE REGION HOSTAGE
  • *TURCHYNOV SAYS EAST UKRAINE SEPARATISTS SUPPORTED BY RUSSIA

So much for Joe Biden’s peace-keeping salvation mission to Kiev…




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EU Confidence Hits 7-Year High (Just Don’t Tell The Record Number Of Unemployed)

Pre-crisis levels of confidence… never before seen bond yields… stocks surging back toward record highs… just don't tell the record number of unemployed Europeans…

 

Peripheral bond yields continues to plunge (as ECB QE hopes are front-run en masse)…

 

Remember what happens when the ECB actualy switches from promises to actions…

Lower pane is the weekly purchases of bonds by the ECB and the upper pane is the now all-important spread between Italian and Spanish bonds and the German Bund – higher being more risky.

 

Well that plan didn't work so well eh? It would appear that during the 2010 period spreads doubled from 100bps to 200bps and once again during the 2011 period, spreads almost doubled from 260bps to over 500bps in Spain.

 

The new Greek issue is back at par.

 

And EU Confidence soars to its highest since 2007…

 

Just don't tell the record numbers of unemployed Europeans

 

Charts: Bloomberg 


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“Welcome To The Recovery”… And Your Parents’ Home: Surge In Number Of Middle Age Californians Living With Their Parents

In the latest indication of just how strong the US “recovery” is, we find that the number of Californians 50 to 64 who live in their parents’ homes has surged in recent years, which as the LA Times less than sarcastically adds, reflects “the grim economic aftermath of the Great Recession.” Wait, don’t they mean the great recovery? Because isn’t the S&P just 10 points from its all time closing high? Maybe all those middle-age Californians are merely seeking their comfort (and spare bedrooms) of their parents so they can all use the family E-trade terminal together.

But since everyone knows the latest handout to the population by the administration is ObamaTrade in which everyone gets $100,000 to BTFATH, we know that is not the case, so surely the LA Times is joking.

Unfortunately, it isn’t.

Here are the details – “for seven years through 2012, the number of Californians aged 50 to 64 who live in their parents’ homes swelled 67.6% to about 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development. Many more young adults live with their parents than those in their 50s
and early 60s live with theirs. Among 18- to 29-year-olds, 1.6 million
Californians have taken up residence in their childhood bedrooms,
according to the data. Though that’s a 33% jump from 2006, the pace is half that of the 50 to 64 age group.

Here, once again, we run into the lack of that R(ecovery) word again:

The jump is almost exclusively the result of financial hardship caused by the recession rather than for other reasons, such as the need to care for aging parents, said Steven P. Wallace, a UCLA professor of public health who crunched the data.

 

The numbers are pretty amazing,” Wallace said. “It’s an age group that you normally think of as pretty financially stable. They’re mid-career. They may be thinking ahead toward retirement. They’ve got a nest egg going. And then all of a sudden you see this huge push back into their parents’ homes.”

Hmmm, if it’s not the recovery, maybe it was the snow in the winter? After all that explained all the bad economic data in the past 3-6 months. Surely the polar vortex is the reason for all this renewed family circle “warmth?”

The surge in middle-aged people moving in with parents reflects the grim economic reality that has taken hold in the aftermath of the Great Recession.

 

Long-term unemployment is especially acute for older people. The number of Americans 55 and older who have been out of work for a year or more was 617,000 at the end of December, a fivefold jump from the end of 2007 when the recession hit, according to the Bureau of Labor Statistics.

 

As with Rohr, those in their 50s move in only as a last resort. Many have exhausted savings. Some have jobs but can’t shoulder soaring rents in areas such as Los Angeles or San Francisco.

 

Whatever the cause, moving in with Mom and Dad exacts a bruising emotional toll. Even asking to move the family in was difficult for Rohr.

Maybe not. Actually, in retrospect, maybe there was no recovery at all. Maybe the Second Great Depression – when one ignores the HFT-rigged and Fed-manipulated market hitting daily all time highs – has just been getting worse and worse.

“I said ‘Mom, I’m so sorry but I don’t know what to do,‘” she said. “I dreaded it. If it wasn’t for my boys I wouldn’t have done it. I would have lived in my car.”

 

Jenny Chung Mejia knows how tough it can be. As a public policy consultant at the Insight Center for Community Economic Development in Los Angeles, she helps people and communities regain their economic health.

 

“It’s unexpected vulnerability at this point in your life,” she said. “When you’re supposed to be the provider, sort of the rock for yourself and your family and maybe your parents, the table just gets turned on you and the rug gets pulled out from under you.”

 

That’s what happened to Janine Rosales, who moved into her mother’s San Francisco home two years ago after a career of mostly low-paying jobs left her unable to afford the city’s towering rents.

 

For Rosales, 53, it represented a personal defeat, an unofficial marker of unmet goals in life. 

 

“I sit here sometimes and I see baby pictures of myself and my teenage years and remember all the dreams I had,” Rosales said. “I never thought I’d end up where I am.

Fear not Rosales: every personal defeat and failure in life can be quickly converted into a win, if only on paper – just remember to BTFATH, and failing that, BTFD. The same goes for your parents:

The situation is also trying on elderly parents.

 

They feel the anxiety afflicting their children. Aging people on fixed incomes also worry that the extra money they spend on utilities or food will drain their own limited retirement savings. 

 

“When I use up all of my money, who’s going to help me?” said Rohr’s mother, Penny Goulart.

Well, there’s always Aunt Janet, and all those activisit who made billions in the past two months buying calls on a stock they knew would be acquired.

Either way, always repeat: the recovery, the recovery, the recovery:

Rohr is applying frantically for jobs. She’s willing to do anything but has had no luck.

Or not. Still, remember to smile, because it will only get worse beofre it gets much worse. Some context: “About half of all Italians between 24 and 35 still live with their parents, compared with 14% in the U.S.” … All coming to America’s “recovery” next.




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Gold Tumbles To 2-Month Lows… Because It’s Tuesday

Gold is down 6 days in a row and has broken back down to its lowest since mid-February (under its 200DMA once again).

 

 

As it seems someone wanted out in a hurry as Europe closed…

 

The reason… aside from growth stocks are rallying which must mean the economy is fixed and therefore no need for the world's central banks to print any more money (oh wait apart from the BoJ and ECB)… is unclear… though we suspect the driver is to do with the following crucial chart…

 

h/t @Not_Jim_Cramer

 

Of course, gold is still the winner in 2014 (for now)…

 

Charts: Bloomberg




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Mortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

In February, I highlighted the fact that subprime loans were about to make a return in my piece: Subprime Mortgages are Back…This Time Marketed as “Second Chance Purchase Programs.” In that article, I posited that with the “all cash” private equity shops and hedge funds no longer able to make good returns through buying new homes to rent, these investors would need some sucker to sell to in order to realize a return (Blackstone’s purchases have plunged 70% recently). That sucker, as always, will be the retail muppets, and those muppets will be lured in through subprime. This is now starting to happen in earnest.

The following article from the Wall Street Journal is both depressing and disturbing. Rather than allowing home prices to reset at a lower level after the 2008 crash where normal buyers could afford a sane 20% mortgage, our central planners decided to do “whatever it takes” to re-inflate the housing bubble. This was achieved through wealthy investment pools buying properties for all cash. The trouble is, with home prices now inflated by these financial buyers and no real increase in wages, homes are simply unaffordable. So what do you do? You bring back subprime and get the peasants long real estate with essentially zero money down all over again. Truly remarkable.

From the Wall Street Journal:

While standards remain tight by historical measures, lenders have started to accept lower credit scores and to reduce down-payment requirements.

 

One such lender is TD Bank, Toronto-Dominion Bank’s U.S. unit, which on Friday began accepting down payments as low as 3% through an initiative called “Right Step,” geared toward first-time buyers and low- and moderate-income buyers. TD initially launched the program last year with a 5% down payment. It keeps the product on its books and doesn’t charge for insurance. Borrowers also don’t need to put down any of their own cash if a family, state or nonprofit group provides a down-payment gift.

So a measly 5% downpayment wasn’t good enough. They had to drop it to 3%. Frightening.

The changes also are a recognition by lenders that the business of refinancing old mortgages, which had been a huge profit center for banks, is nearly tapped out. To generate future profits, banks will have to compete for borrowers who may not have perfect credit or large down payments.

 

Valley National Bank, a community bank based in Wayne, N.J., lowered down-payment requirements to 5% from 25% this month on mortgages for certain buyers in New York, New Jersey and Pennsylvania. Next month, Arlington Community Federal Credit Union, based in Arlington, Va., will begin accepting 3% down payments on mortgages up to $417,000, down from 5%.

Yes, you read that right, 25% to 5%. Holy fuck.

Over the past year, however, more than one in six loans made outside of the FHA included down payments of less than 10%, the highest share since 2008, according to figures from data firm Black Knight Financial Services. That still is lower than the nearly 44% of the market they accounted for at the peak of the housing bubble in early 2007.

 

While smaller lenders are trying to appeal to first-time buyers, larger lenders are gradually reducing down payments for jumbo loans—those too large for government backing—to woo wealthy customers. EverBank began accepting down payments of 10.1% for jumbo borrowers with strong credit this year, down from 20%, and Wells Fargo reduced to 15% from 20% its minimum down payment for jumbos last year. Bank of America made the same change for mortgages of up to $1 million.

 

Any easing should give more options to first-time buyers like Nathan Davenport, 26, who purchased a one-bedroom condo for $195,000 in Atlanta this month with a 5% down payment. Mr. Davenport, who works for a phone-and-Internet services provider, says he has a high credit score but was worried that if he waited longer to save up for a larger down payment he would be priced out of the market.

 

“Twenty percent of this price and only being out of college a handful of years would have been really hard to pull off,” Mr. Davenport said.

I’m sorry, but on what sort of bizarro crackhead planet is putting 3% down toward an asset mean you are “buying it.”

The Truman Show rolls on…

Full article here.




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The Squeeze Continues… “Most Shorted” Stocks Are Screaming Higher

Yesterday we noted the dramatic squeeze of the “most shorted” stocks as they outperformed the broad market five-fold. The rout continues to gather pace as this morning sees the “most shorted” index soaring back near last week’s highs and up almost 8% from Wednesday’s lows.

 

“most shorted” stocks are ripping higher off last week’s lows…

 

But this week has seen the real pressure applied…

 

Charts: Bloomberg




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Existing Home Sales Drop To Lowest Since July 2012; All-Cash Buyers, Investors Are 50% Of March Transactions

Another month, another drop in existing home sales, which in March declined once again from 4.60MM units to 4.59MM. While the good news was that this number did beat the consensus estimate of 4.56MM (based on a a range of 4.50MM to 4.85MM from 75 economist surveyed), the bad news was that once again, a near majority of the upside was once again due to investors and other all-cash buyers, who accounted for 50% of all sales. That and that like last time, of course, this was the worst existing home sales number since July 2012.

Some of the other data highlights:

  • Existing-home sales fell 0.2% after falling 0.4% prior month
  • 5.2 months supply in March vs. 5.0 in Feb.
  • Inventory rose 4.7% to 1.99m homes
  • 1st-time buyers 30% of total sales; all cash 33%; investors 17%
  • Distressed sales 14% of total sales; of which foreclosures 10%; short sales 4%
  • Median home price rose 7.9% from last year to $198,500

Everyone’s favorite NAR talking head Larry Yun had this to say:

Lawrence Yun, NAR chief economist, said that current sales activity is underperforming by historical standards. “There really should be stronger levels of home sales given our population growth,” he said. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”

 

Yun expects some improvement in the months ahead. “With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly.”

But only if it doesn’t snow, or rain, and certainly not if it is windy or the sun is shining just the wrong shade of strong.  Remember in an artificial, centrally-planned economy represented by a rigged market, the phrase priced to perfection takes on a whole new meaning.

Some more details from the report:

All-cash sales comprised 33 percent of transactions in March, compared with 35 percent in February and 30 percent in March 2013. Individual investors, who account for many cash sales, purchased 17 percent of homes in March, down from 21 percent in February and 19 percent in March 2013. Seventy-one percent of investors paid cash in March.

 

Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.04 million in March, the same as February, but are 7.3 percent below the 4.36 million pace a year ago. The median existing single-family home price was $198,200 in March, which is 7.4 percent above March 2013.

 

Existing condominium and co-op sales declined 1.8 percent to an annual rate of 550,000 units in March from 560,000 in February, and are 8.3 percent below the 600,000 level in March 2013. The median existing condo price was $200,800 in March, up 11.6 percent from a year ago.

 

Regionally, existing-home sales in the Northeast rose 9.1 percent to an annual rate of 600,000 in March, but are 4.8 percent below March 2013. The median price in the Northeast was $244,700, up 3.2 percent from a year ago.

 

Existing-home sales in the Midwest rose 4.0 percent in March to a pace of 1.04 million, but are 10.3 percent below a year ago. The median price in the Midwest was $149,600, which is 5.9 percent above March 2013.

 

In the South, existing-home sales declined 3.0 percent to an annual level of 1.92 million in March, and also are 3.0 percent below March 2013. The median price in the South was $173,000, up 6.7 percent from a year ago.

 

Existing-home sales in the West fell 3.7 percent to a pace of 1.03 million in March, and are 13.4 percent below a year ago. The median price in the West was $289,300, which is 12.6 percent higher than March 2013.

Finally, remember that all of the above is largely BS – the NAR is, as the name implies, an association of realtors, and as such it is in their best interest to perpetually skew the picture as far rosier than it is, just so prospective buyers aren’t spooked by the reality behind the crumbling fake facade.




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Richmond Fed Rebounds But Wages Tumble To 12-Month Lows

After 2 dismal missing months in a row, the Richmond Fed manufacturing survey rebounded dead-cat-bouncedly with its biggest MoM rise since August. The bulk of the gains were a huge swing in New Orders (from -9 to +10) but average workweek was stagnant and wages dropped to their lowest in 12 months. Sadly, for those extrapolating this surge to ‘escape velocity’ growth any minute now, the Richmond Fed’s six-month forward outlook saw shipments, new orders, employees, wages, and capex all drop

 

 

But what really matters – wages – has seen the biggest 2-month drop in 3 years and dropped to its lowest in a year…

 

Charts: Bloomberg




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