May 2014 – Page 5

How China Hides Its Tumbling Housing Market: It Simply Ignores It

Recently we showed that in order to goose its fading all-important housing market (to China housing is like the stock market to the US: both mission-critical bubbles designed to give a sense of comfort and boost the “wealth effect”), China has first resorted to zero money down mortgages across various markets, and secondly to such gimmicks as “buy one floor, get one free.” However, that’s only part of the story. Even worse is what is not being disclosed to the general public: such as the true state of the housing market in China. Because according to a recent report on Sina, quoted on Investing In Chinese Stocks, when it comes to revealing just how bad things are domestically, Chinese developers are simply pulling a page out of biotech ETF playbooks, and simply not reporting price drops greater than 15%!

From Investing In Chinese Stocks (ICS):

Taking a page from the climate scientists who hid the cooling trend in global temperatures, Hangzhou government will hide the cooling trend in the real estate market. Any price decline more than 15% below the list price will not be entered into the online registry. Developers are not forbidden from cutting prices and no sales will be stopped, though at least one developer expressed concern that advance sales permits may not be issued if the price cuts are deemed too large.

In other words, clear the market supply imbalance, but don’t see at market clearing prices, got that? Good luck.

ICS goes on to show an example on the ground of just how profound the chaos is on the ground in China now that homes are suddenly in an air pocket with no (immediate) bailout coming from the government: according to at least one real estate agent, price cuts alone would be enough to kill his firm, and that is assuming sale pick up in the first place.

Hangzhou held a 4-day real estate exhibition recently. Attendance was 230,000, but only 32 homes were sold. These numbers are an improvement from 2013 and 2012 though. One state-owned developer said that price cuts cannot cure the market. The government must step in and ease buying restrictions, ease borrowing limitations, reduce bank reserve requirements, allow people to borrow for second and third homes, etc., in order to instill confidence in the market. The developer also said the media and experts were giving one sided reports, causing more chaos in the market, while buyers are more strongly adopting the wait and see attitude. He said buyers have no bottom line, if you cut 10%, they want 15%, if you cut 15% they want 20%. His firm has used price cuts of 10% and he hasn’t sold a home in 3 months. He said with government support, they can survive, but small private firms are not so confident.

A real estate agent said that even if sales pick up, price cuts will kill the firm. He said the government is more nervous than the industry because if land sales stop, they might not even be able to pay the wages of government workers. He expects, and hopes, the government will do something to rescue the market.

Dr. Ye Hongwei, Assistant Director of the Real Estate Investment Research Center, Zhejiang University, said the national government would not ease policy. He said there are really only two areas that might ease: buying restrictions and credit limits. The credit limits are set at the central government level and are unlikely to ease. The buying restrictions are set locally, but so far only small cities have enacted these policies. Wenzhou has seen prices fall for 30 straight months and there has been no real easing (aside from a small change last August). He said easing in Hangzhou is unlikely: it is a sensitive real estate market and a bellwether for the national real estate market.

Finally, another developer bluntly told reporters: the Chinese real estate market is not a fully free market, if the government wants to intervene they can. Also, these officials have a bright future, they don’t need this risk, so a big policy easing is unlikely.

Well, if it doesn’t work out for China’s real estate industry (which according to SocGen indirectly impacts up to 80% of China’s GDP), all those millions of people whose livelihood depends on flipping a bubble from one group of great fool to a group of greater fools, they can just open E-Trade accounts and do the same in the US only with stocks. There the number of transactions is also declining but at least prices are rising to fresh record highs day after day.

via Zero Hedge http://ift.tt/1jBTFkx Tyler Durden

“You Say Potato, Mrs. Obama. I Say, Please Stop Micromanaging Our Diets and Our Schools.”

Earlier this week, First Lady Michelle Obama took
to the pages of
The New York Times to denounce “anti-science”
Republicans (are there any other kind?) who want to let recipients
of WIC buy potatoes via the program. “The House of Representatives
is considering a bill to override science by mandating that white
potatoes be included on the list of foods that women can purchase
using WIC dollars.” What bastards!

She also had harsh words for other House members (Republicans,
I’m guessing) who “want to make it optional, not mandatory, for
schools to serve fruits and vegetables to our kids. They also want
to allow more sodium and fewer whole grains than recommended into
school lunches.” Sons of bitches!

In a piece for Time, I suggest that the First Lady’s
attitude should disturb all of us for various reasons. Including
this one:

“As parents, we always put our children’s interests first,” she
writes. “We wake up every morning and go to bed every night
worrying about their well-being and their futures.”

If she really believes that, then why not treat poor people with
the same respect we treat middle- and upper-middle class folks? If
we’re going to supplement their incomes, why not give them a cash
payment and let them figure out how to make the best use of it?

Similarly, if we can’t trust our schools to figure out how best
to fill their students’ stomachs, why the hell are we forcing our
children to attend such institutions in the first place? When is
the last time you heard kids who attend schools of choice—whether
private, religious, or public charters (which enroll
disproportionately high numbers of low-income students)—even
mention food?

Mrs. Obama’s op-ed is predicated upon the notion that the
nutrition and programs she champions have reduced
obesity in Americans. I note that there’s scant evidence for that,
especially given the fact that obesity rates stopped rising
somewhere between six and 10 years before her husband was elected
president.

Read the whole thing.

My Reason colleague Elizabeth Nolan Brown has
been
all over this story like Cheez Whiz on a Steak-umm.

from Hit & Run http://ift.tt/1mSfuRF
via IFTTT

5 Things To Ponder: Yogi-Isms

Submitted by Lance Roberts of STA Wealth Management,

As we wrap up a holiday shortened trading week, there are several things to ponder this weekend. Will the breakout of the S&P 500 of the trading range it has been stuck in since February hold? Is the negative print of GDP in the first quarter simply a weather related anomaly, or something else? Is the decline in interest rates telling us something important? Are the currently high levels of complacency and bullishness in the markets a warning sign? Or, is this just a continuation of the bull market cycle that started over five years ago with plenty of room left to run.

This week I thought I would have a little fun by including some of Yogi Berra's more famous quotes to the selected reading list.

"I always thought that record would stand until it was broken?" – Yogi Berra

Earlier this week, I discussed the break out of the S&P 500 and reviewed the "Three Stages Of A Bull Market." The more interesting chart was the similarity between now and 2011. While no two market periods ever repeat exactly, the important note is that in 2011, the markets had also broken out to new high as the Federal Reserve was ending QE 2. Today, as the markets again ratchet to new highs, the Fed is also exiting QE 3. It is a point worth noting.

1) Is The Stock Market Behaving Like 2007? by John Kimelman via Barron's

"The parallels between May 2007 and May 2014 are unmistakable, with broad market strength masking underlying weakness," according to the post. "That is not to say what happens next will play out in the same fashion this time around as it most certainly will not. But at the same time, to completely ignore what the market is telling us here would be foolish as well."

"You've got to be very careful if you don't know where you are going because you might not get there." – Yogi Berra

2) The US Is Trapped In The Perils Of Linear Thinking by Stephen Roach via Zero Hedge

"Quantitative easing, or QE (the Federal Reserve’s program of monthly purchases of long-term assets), began as a noble endeavor – well timed and well articulated as the Fed’s desperate antidote to a wrenching crisis. Counterfactuals are always tricky, but it is hard to argue that the liquidity injections of late 2008 and early 2009 did not play an important role in saving the world from something far worse than the Great Recession.

The Fed’s mistake was to extrapolate – that is, to believe that shock therapy could not only save the patient but also foster sustained recovery. Two further rounds of QE expanded the Fed’s balance sheet by another $2.1 trillion between late 2009 and today, but yielded little in terms of jump-starting the real economy."

"In theory there is no difference between practice and theory. In practice there is." – Yogi Berra

3) Forced To Take Risk? by Carl Richards via NYT

"More risk, even if you’re 'forced' into it, does not guarantee being 'richly compensated.' And treating REITs and utilities like bonds is nuts because — reality check — they’re NOT bonds. Both of these statements are excellent examples of really bad ideas being presented as advice, but because they appear in a respected publication, investors may be tempted to assume that it’s a prudent strategy.

Our job as investors is to ask at least one more question if what we’re hearing sounds either too good to be true or contradicts what we already know to be true."

"I never blame myself when I'm not hitting. I just blame the bat and if it keeps up, I change bats. After all, if I know it isn't my fault that I'm not hitting, how can I get mad at myself?" – Yogi Berra

4) Stephanie Pomboy Interview On Why The Fed Has To Reverse Course by Lawrence Strauss via Barrons

"The No. 1 thing is that investors generally have underestimated the impact that QE [quantitative easing] has had on the economy and the degree to which it has supported growth. As a consequence, they have underestimated the cost the tapering [of monthly Treasury bond purchases by the Fed] would have, and that is starting to come into focus. People will realize that the economy really has not achieved any self-sustaining momentum and that it requires continued stimulus. I liken it to a car on a flat road that has no momentum. When you take your foot off the gas, the car just stops moving. That's essentially what the Fed is doing."

"Baseball Is 90% mental, the other half is physical." – Yogi Berra

5) It's Really Quite Out There by Joe Calhoun via Alhambra Partners

"Normally I would take this as evidence of complacency, something I generally don’t like in my markets since it is so often followed by sheer terror. But I think this is something different than previous periods of quiet. The recent nearly complete lack of volatility is, I think, a product of a very confusing environment. It isn’t that investors are complacent about risk but rather more that they are paralyzed into inaction as they wait on more information about the economy and other factors. We can see this in the AAII weekly sentiment poll where the largest contingent resides in the Neutral camp at 43.2% of the respondents. That is 13% higher than the long term average while the bull and bear camps are both less than their long term averages. We also see it in the volume statistics for a range of assets from stocks to forex to commodities."

"If you come to a fork in the road, take it." – Yogi Berra

via Zero Hedge http://ift.tt/U1uOCe Tyler Durden

Police Filmed Wrongly Arresting Libertarian Gubernatorial Candidate

Minneapolis police are backpedaling after wrongly arresting,
citing, and injuring Minnesota Libertarian Party gubernatorial
candidate Chris Holbrook yesterday.

According to a
local ABC affiliate, Holbrook and “party members [were] sorting
literature and getting ready to get signatures for his upcoming
campaign”—their sixth consecutive day doing so—when “park patrol
approached them and said they were violating a park ordinance and
they had called the police.”

Officer Brian Woodfill told the candidate that he needed a
permit to be petitioning, told him stop filming the cops, and then
cited him for allegedly violating Park Board Ordinance PB2-15, “use
of parks, parkways and waters for financial gain.” Petitioning is
not actually within the scope of this ordinance.

As Holbrook describes it, the incident was a bit brutal. He

told BenSwann.com:

“The officers asked for my ID which I refused because I had
committed no crime. He ordered that we stop filming him with our
cell phone cameras which he said was illegal. He then grabbed me,
twisted my arm and smashed me against his vehicle.”

Holbrook says that his shoulder was wrenched and injured and the
handcuffs actually cut through the skin and Holbrook’s arm causing
it to begin bleeding.

He explained on
his Facebook fanpage, “It was very painful, and when I asked the
officer to loosen the cuffs they were tightened (hence the
screaming).” Holbrook eventually sought medical attention for his
injuries.

Park Police Chief Jason Ohotta personally apologized to
Holbrook, dismissed the citation, and today announced that an
internal investigation will take place.

Watch the incident below. See two more clips of Holbrook’s day
in the park here
and
here.

from Hit & Run http://ift.tt/1mSawEB
via IFTTT

Behold! The Epic Treasury Short Covering This Week

It must be technicals, right? As we discussed here, there are numerous reasons for rates to be low and going lower but the world of talking-heads will have us all believe that this is simple positioning and the rally is ‘short covering’. In the interests of helping to dismiss that myth, here is CFTC’s 10Y Treasury Futures Total Shorts… showing the ‘dramatic’ short covering that occurred this week…

Charts: Bloomberg

via Zero Hedge http://ift.tt/1nBlgL9 Tyler Durden

Handy Guide Tells You What Rights Border Patrol Is Violating When They Pound on You

I’ve written recently about the

ongoing tensions in Arivaca, Arizona, between local residents
and the U.S. Border Patrol agents who run a checkpoint on the road
in and out of town. The locals don’t like being scrutinized and
interrogated every time they go shopping or to school, and the feds
don’t like being challenged. Border Patrol agents also behaved
badly in the case of
Larry Kirschenman, who they roughed up at the Nogales port of
entry. And they misbehaved when they apparently slashed
Clarisa Christiansen‘s tires while rousting her well within the
boundaries of the United States.

Given the wide range of surliness and abuse meted out by these
uniformed guardians of the dotted line on the map and roadbocks
elsewhere, just how are we supposed to know just what rights
they’re violating when they detain us, trash our property, or knock
us around?

Fortunately, the American Civil Liberties Union of Arizona
publishes a handy
guide to your rights when encountering members of the Border
Patrol. Agents may not respect it, but you can use it as a
checklist for keeping track during your meetings—and possibly for
planning a legal response in the aftermath.

Among the disregarded rights you are likely to encounter at
checkpoints within the U.S.:

Agents should not ask questions unrelated to verifying
citizenship, nor can they hold you for an extended time without
cause.

Simply driving around:

Border Patrol “roving patrols” cannot pull over vehicles to
question occupants about their immigration status unless agents
have a “reasonable suspicion” of an immigration violation or crime.
Reasonable suspicion is more than just a “hunch.

And at border crossings:

• Cannot use excessive force.

• Cannot conduct more intrusive searches such as strip searches
or repeated detentions unless they have “reasonable suspicion” of
an immigration violation or crime.

• Should not damage personal property during an inspection.

The guide is available in both
English and
Spanish so you can follow along with the bouncing baton during
your Border Patrol encounters.

from Hit & Run http://ift.tt/1mS8u7l
via IFTTT

Liberal Harvard Groupthink Criticized By… Michael Bloomberg?

Harvard University Former New York City Mayor Michael Bloomberg is
infamous for his liberty-unfriendly views on
racial profiling,
gun control and
public health. But as the saying goes, even a broken, miserably
authoritarian clock is right twice a day.

Bloomberg, who delivered the commencement address to Harvard
University’s graduating class yesterday, harshly criticized the
climate of leftist indoctrination at Ivy
League campuses.

“There was more disagreement among the old Soviet
politburo than there is among Ivy League donors,” he said, noting
that 96 percent of Harvard faculty members and administrators
donated to President Obama’s re-election campaign.

Bloomberg warned that some campuses seem determined to
root out all dissenting views.

“Today on many college campuses, it is liberals trying to
oppress conservatives, even as conservative faculty members are in
danger of becoming an endangered species,” he said.

The dangers of groupthink at American universities have rarely
been more apparent. Over the past few weeks, intolerant students
and faculty at campus after campus have succeeded in their efforts
to shut down events featuring non-liberal viewpoints. Speakers from
all across the ideological spectrum suffered persecution, as long
as they subscribed to at least one opinion deemed unacceptable by
the forces of political correctness.

Predictably, some Harvard students opposed Bloomberg as a
commencement speaker, given his support for heavy-handed police
tactics and racial profiling.

“It’s unsettling to me, [for] someone to speak who advocates a
racist policy when you want students of color on campus to feel
comfortable,”
said Harvard junior Keyanna Wigglesworth in a statement to
CNN. “It’s confusing and I don’t think it’s what Harvard
stands for.”

This view that the emotional comfort of students is more
important than fostering a climate of open inquiry is disturbingly
common and even increasing,
according to a recent report by the Foundation for Individual
Rights in Education. FIRE President Greg Lukianoff wrote:

“FIRE has informally tracked disinvitation incidents for a long
time, but the attention paid to the problem this year because of
the prominence of the speakers at issue led us to systematically
evaluate the problem,” said FIRE President Greg Lukianoff. “The
data confirms what we and many others suspected: The desire to
silence speakers on campus is strong—and disturbingly,
‘disinvitations’ are becoming more common.”

More on
campus free speech battles here.

from Hit & Run http://ift.tt/1tv1gXR
via IFTTT

Carney Following Shinseki Out the Door in D.C., Clinton Defends Benghazi Response in Book, Ban Lifted on Using Medicare to Pay for Sex Change Surgery: P.M. Links

Veterans Affairs Secretary

Eric Shinseki is resigning amid the massive scandal about
delays in medical care and its cover up, to the surprise of
probably few. However, the White House also announced
Press Secretary Jay Carney will also be stepping down, leaving
Josh Earnest as his replacement to stand before the White House
press corps and explain why he can’t answer any of their
questions.
Hillary Clinton’s forthcoming book, Hard Choices, has
a chapter devoted to the deadly consulate attack in
Benghazi, Libya, where she defends the State Department’s
response and complains about the politicization of the
incident.
The Department of Health and Human Services today announced the
end of a 30-year ban on allowing
Medicare to help fund sex reassignment surgery for transgender
people.
The Obama Administration is streamlining the rules for the

export of liquefied natural gas while at the same time planning
a major crackdown on pollution from coal plants. Winners of
government regulations, meet losers of government regulations.
A meeting of officials to announce
reforms to the Port Authority of New York and New Jersey has
been canceled with no explanation.
Southwest Airlines was fined for advertising cheap flights to
three cities but then not actually offering any seats at that fare
rate. Southwest says the inclusion of those cities in the ads was a
mistake.

Follow us on Facebook
and Twitter,
and don’t forget to sign
up for Reason’s daily updates for more
content.

from Hit & Run http://ift.tt/1nBkIos
via IFTTT

David Harsanyi on Why the Supreme Court Doesn’t Need Term Limits

Well-known political scientist Norm Ornstein has
come up with a way to deal with our dawdling
government: term
limiting Supreme Court justices. It’s hardly a new idea among
those on the left who believe that a bunch of old codgers are
holding up progress by taking all things too literally.

But this should be about the long game, David Harsanyi argues.
It’s pretty clear that through lifetime appointments, the Founding
Fathers wanted to shield judges from the political pressures of the
day. An excellent byproduct of having ancient, long-serving
justices is that they are far likelier to be impervious to fleeting
populist bugaboos and contemporary preferences.

Justices may be bewildered by technology, but on the bright
side, some of them still believe that protecting free speech is
more vital to a liberal state than sticking it to some plutocratic
oilmen.

View this article.

from Hit & Run http://ift.tt/1nBkL3C
via IFTTT

“Buy Bonds & Stocks In May; Buy Every Day!”

Dow Transports were the best performing US equity index in May, rising 5.5% – the best May in 23 years (and best month since Oct 2013). The Dow and Russell 2000 also managed to scrape out gains for May. May also saw bond-buying (the best month since Jan) and gold-selling (worst month since Dec). Treasuries flattened for the 3rd month in a row as 2s30s dropped to 1 year lows. On the week, stocks soared (as “most shorted” were squeezed to death – best 2-weeks in 2014) but VIX has its best week in the last 5, bond yields tumbled and the curve flattened (10Y -8bps, 2Y +2.5bps), gold and silver were clubbed (down 3-4%) for the worst week in 8 months. Amid all this angst the USD ended unch. The S&P overtook gold YTD today but bonds remain 2014’s best performer.

For all those still paying attention – following the worst GDP print since 2011, we have the biggest drop in consumer spending since 2009… and two consecutive all-time record highs in the S&P 500 and just shy of record highs for the Dow!!!! (thanks to a buying frenzy that started at 330ET… as always)

Buy in May… Buy Every Day…Stocks.. S&P 5th all-time high of last 6 days…yay! Trannies best May in 23 years