Nov202013
Quantitative easing and mortgage interest rate stimulus bail out Wall Street, not Main Street
The populace was sold on quantitative easing and mortgage interest rate stimulus as a measure to save “Main Street.” It was said this money pumped into the economy would create jobs, and the combination of jobs, increased incomes, and low mortgage rates would cause a boom in housing which would elevate loanowners above water. What was sold as a big benefit to Main Street has instead devolved into another massive bailout of the banking industry with few tangible benefits to the people the programs were ostensibly designed to help out.
Proponents of these policies can point to the rapid increase in house prices over the last 18 months as a sign of success. While it’s true that many loanowners have emerged from beneath their debts, this policy wasn’t designed to keep them in their homes. The interest rate stimulus has merely elevated prices so when the terms of loan modifications increase borrower costs and push them out, the lender losses less money. (See: 2014 will see the “Rise of the Short Sale”)
The policy of mortgage interest rate stimulus can only be characterized as a success from the perspective of a banker. Higher house prices are helping them recover more money from their bad bubble-era loans. Wouldn’t the real measure of success from the perspective of Main Street have people remain in their homes rather than simply improve the bank’s bad debt recovery?
And what about future buyers? They are being forced to pay bubble-era peak prices and endure a much higher cost of ownership. Is that a success for Main Street? It looks much more like a success for lenders. Not just do they recover more on their bad loans, they also get more interest income because they are making large loans to today’s homebuyers. It’s a win-win for the banks.
However, the biggest back-door bailout of them all is the quantitative easing policies of the federal reserve. Basically, the central bank is printing money, some of it has flowed into mortgage bonds to drive down mortgage rates, but much of it has made it’s way onto bank balance sheets and into deposits at the federal reserve who pays those banks interest on the money the federal reserve prints. Not a bad deal — for the banks.
Andrew Huszar: Confessions of a Quantitative Easer
We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.
By Andrew Huszar — Nov. 11, 2013 7:00 p.m. ET
I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.
Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system’s free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs.
The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed’s central motivation was to “affect credit conditions for households and businesses”: to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative “credit easing.”
The federal reserve can only create money by loaning money. It can’t merely print dollars and put them into circulation. It generally buys US Treasury notes (Government debt) to print money, but it now also buys mortgage-backed securities (private debt).
How much of this money has made it’s way to Main Street? Does the average American feel the benefits at this point?
In its almost 100-year history, the Fed had never bought one mortgage bond.
Many people forget this program had no precedent. We take it for granted today as a permanent part of the financial landscape, unfortunately. It was not always that way.
Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.
It wasn’t long before my old doubts resurfaced. Despite the Fed’s rhetoric, my program wasn’t helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans.
I can’t hold the banks at fault for this one. Availability of money to lend wasn’t their problem — which is unfortunate since that’s the only problem the federal reserve can do anything about. The real problem for banks was the lack of good prospects for loans to give the money to.
The idea of a federal reserve and counter-cyclical interest rate policy emerged from observations on 19th century economic busts where the availability of capital to lend made the downturn much worse than it would have been if more capital were available.
In purely economic terms, mortgage interest rates should have skyrocketed in 2007 and 2008 when lenders realized risk was mis-priced. For as equity-crushing as the collapse in house prices was, can you imagine how bad it would have become if mortgage rates had risen to 12%? So much capital would have been removed from the system that no money would have been available to loan to anyone. Those savers with capital would have loved it as interest rates went sky high, but the economy would have suffered for a very long time. That’s the scenario the federal reserve is created to prevent.
The problem with a bust like the last one is that liquidity was not the problem. There was no shortage of money to lend.
The problem was insolvency. Nobody had the income to support the debts they already had. Insolvency is a much more serious problem than liquidity, and the federal reserve has only one tool to deal with it — ultra-low interest rates. They can make the marginally insolvent borrower solvent again by lowering their cost of debt, but that’s about it. Adding liquidity does nothing to improve the problem of insolvency. Potential borrowers need stable and expanding incomes, and they need to pay down the debts they already have. That takes time — a long time. We’re at five years and still counting.
More insidiously, whatever credit they were extending wasn’t getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.
Wall Street needed to make more money to make up for the massive loan write-downs they were making. The above chart showing declining loan balances didn’t happen because people took money out of their savings and paid down debt. Those reductions were caused by bank write downs, mostly on mortgage debt.
Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street. The banks hadn’t just benefited from the lower cost of making loans. They’d also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed’s QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.
I want to make sure you understand how this part of the bailout worked.
Mortgage bond prices are inversely related to interest rates. Interest rates go down when bond prices go up. Since the federal reserve was buying a lot of bonds to drive down rates, the prices of bonds rose a great deal. The banks knew this was coming, so they loaded up on 10-year Treasuries and other bonds, held them while the federal reserve bid up prices, then sold these bonds to the federal reserve at nosebleed prices. In that way, banks made billions in capital gains by taking the money given to them by the federal reserve, buying bonds, then selling them back to the federal reserve. It was free money given to the banks by manipulating bond prices — and they made transaction fees on these deals to boot.
That’s a pretty good deal for the banks, wouldn’t you say?
You’d think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2.
The banks weren’t healthy yet, so we will have QE3, QE4, and QE infinity if necessary. Until house prices reach peak bubble values everywhere — not just in Irvine — the federal reserve will keep printing money. They may taper at some point, but they will keep printing until the banks are no longer exposed.
Chart of non-preforming real estate loan exposureWhere are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion.
Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history.
Free-market capitalism was a casualty of the Great Recession. We now live in a world of centralized financial planning not dissimilar to the old Soviet Union.
And the impact? Even by the Fed’s sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. By contrast, experts outside the Fed, such as Mohammed El Erian at the Pimco investment firm, suggest that the Fed may have created and spent over $4 trillion for a total return of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S. economic output). Both of those estimates indicate that QE isn’t really working.
Unless you’re Wall Street. Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.
I have made the argument for months that the housing market bottomed due to decisions made in the boardrooms of the major banks. It’s a cartel arrangement. Those 0.2% of institutions that control 70% of the assets made a conscious decision not to foreclose on delinquent mortgage squatters, deny short sale approval to those who do want out, and cut deals with the rest until house prices get back to the peak.
It’s been argued that these banks are just doing what they’re told by the government. Well, the government told them to modify instead of foreclose from 2008-2011, and it didn’t dry up the MLS inventory of foreclosures. I’ve even explored the possibility that loanowner bailout, HARP 2.0, bottomed the housing market, but I remain unconvinced.
Something changed in mid to late 2011 that caused the number of foreclosures processed to decline significantly — and it wasn’t that they ran out of people to foreclose on. Was it a secret meeting in a smoky room? That’s how JP Morgan did it in 1907. We may never know, but what we can see from the evidence is that policies changed, and the distressed inventory was removed from the MLS causing house prices to bottom.
As for the rest of America, good luck. Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. Yes, those financial markets have rallied spectacularly, breathing much-needed life back into 401(k)s, but for how long? Experts like Larry Fink at the BlackRock investment firm are suggesting that conditions are again “bubble-like.” Meanwhile, the country remains overly dependent on Wall Street to drive economic growth.
Even when acknowledging QE’s shortcomings, Chairman Bernanke argues that some action by the Fed is better than none (a position that his likely successor, Fed Vice Chairwoman Janet Yellen, also embraces).
(See: Yellen Signals Continued QE Undeterred by Bubble Risk)
The implication is that the Fed is dutifully compensating for the rest of Washington’s dysfunction. But the Fed is at the center of that dysfunction. Case in point: It has allowed QE to become Wall Street’s new “too big to fail” policy.
Do you still believe quantitative easing and mortgage interest rate stimulus was designed to help you? I think it was designed to help the banks, and the evidence supports that view.
What it all boils down to is… keep the debt-serfs ignorant and eventually, you can take everything they own.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/11/Central%20Banks%20and%20GDP%20growth.png
http://confoundedinterest.files.wordpress.com/2013/11/fredgraph-2.png?w=585
Apparently, quantitative easing isn’t doing much for employment. Of course, rather than being interpreted as a sign of failure, it’s a signal to supporters that we need more of it.
Whenever a government policy fails, the government responds by increasing the policy and making the resultant bureaucracy larger.
Hello … IR … according to the BLS the unemployment rate has declined the last 5 years. Do you not believe them?
Check out the second link above that shows the employment population ratio. It tells a much more accurate story than the easily manipulated unemployment rate.
BTW, I know you were be facetious.
Cash buying continues unabated
Contrary to what some are reporting, Realtor.com’s National Housing Trend Report for October indicates the homebuying season hasn’t come to a close just yet.
“Instead of the usual seasonal slowdown, October data show the 2013 fall market moving at a fast pace,” said Errol Samuelson, president of Realtor.com.
“Inventory has returned to last year’s levels, but prices continue to strengthen and homes are moving significantly faster compared to this time last year,” Samuelson continued.
Realtor.com’s data shows the median list price in October was relatively untouched by the yearly seasonal dragfalling just 0.25 percent month-over-month to $199,000—7.57 percent above its year-ago level.
Eighty-five percent of the 146 markets covered in the report showed yearly improvements in median list price, and only 19 reported annual declines.
Compared to September, national inventory was down to 1.9 million, a decline of 0.71 percent from September and 1.51 percent from October 2012.
While the country continues to struggle with inventory problems, local trends indicate growth in supply
Lenders ease down payment requirements to attract more borrowers
The average down payment on a 30-year, fixed-rate mortgage loan in the third quarter of this year was 15.73 percent, according to Charlotte, North Carolina-based LendingTree, an online marketplace connecting potential borrowers with lenders.
The third-quarter average is down 2.74 percent from the previous quarter, according to LendingTree, which suggested in a press release that the drop is due to a slight loosening of standards by lenders across the nation.
“Lenders are putting more focus on purchase mortgages and are adjusting minimum requirements to attract borrowers,” said Doug Ledba, founder and CEO of LendingTree.
“With home values improving, the risk of borrowers defaulting on loans has decreased, giving lenders more confidence to lend with less cash down from qualified borrowers,” Ledba said.
Of course they’re going to make it easier to get a mortgage because they (the banks) are desperately trying to protect home vales. They know what’s at stake. They must have new buyers come in and pay higher prices.
But the rules of economic nature will ultimately win in the coming future.
Tic, Tic, Tic
click to see his graphs.
MORTGAGE PURCHASE APPLICATIONS PLUNGE 8.37%, REFI APPS DOWN 15.84% : CONFOUNDED INTEREST
It’s one of those “To seasonally adjust or not seasonally adjust. That is the question” days.
To begin with, according to the Mortgage Bankers Association (MBA) weekly mortgage survey of applications, applications rose 5.82% from the preceding week. That is the headline at the Mortgage Bankers Association webpage.
Now for the seasonal adjustment question.
Once again, mortgage purchase applications on a seasonally adjusted basis rose 5.82% from the preceding week indicating that it was a positive report given that it is November.
But if we look at raw (unadjusted) data, we see a weekly decline of 8.37% from the previous week. This continues the downward trend since the global surge in sovereign rates on May 1st.
Take your pick. Frankly, the raw (unadjusted) data shows a clearer picture of what is happening to the residential mortgage market.
And if I overlay the seasonally adjusted purchase applications (yellow) over the raw (unadjusted) data, you can see the enormous seasonal component to purchase applications in the Spring and Summer. The turn of the year is the “zona de muerta” for purchase applications. And we are headed there.
Despite whatever spin put on mortgage application numbers, the reality on Main Street is less rosy.
California mortgage jobs market takes a hit
The industry continues to prune mortgage operation branches in attempts to offset rising rates and impending regulations, with both Rushmore Loan Management Services and SunTrust Mortgage filing layoff notices in California.
Rushmore Loan announced its plan to cut 101 employees by the end of the year in a Worker Adjustment and Retraining Act filing with the state. But it is not an issue localized to California. There are many factors impacting mortgage business nationwide. Currently, the average 30-year, fixed-rate mortgage sits at 4.44%, compared to 3.59% in May 2013.
As a result, the rising rates have brutally impacted refinance applications, with spiking mortgage rates taking a big chomp out of applications and smaller nibbles out of sales later, Trulia’s (TRLA) chief economist Jed Kolko said. Many mortgage firms are instead focusing on purchase mortgage applications, though there are some contractions being felt in that arena as well.
“Over the last few months, the mortgage industry in general and Rushmore Home Loans in particular have experienced a significant decline in mortgage origination volume,” said Hope Margarit, director of marketing and communications with Rushmore.
“With an overall industry slowdown expected to continue into 2014, the company was forced to right-size the organization. We are sorry to lose so many dedicated and talented employees, but this is a necessary step to ensure the overall strength of the organization in light of weaker market conditions,” Margarit added.
As HousingWire reported on Nov. 15, Rushmore Loan recently received approval to act as a Freddie Mac seller/servicer, strengthening the companies business.
Meanwhile, SunTrust’s layoffs fall in the with the lender’s previous announcement to cut 800 jobs nationwide in mid-October and plans to eliminate 89 positions in Irvine, Calif.
In a central-planned economy/marketplace, any investor ‘worth his salt’ will NOT factor seasonally adjusted ‘anything’ into their financial models. As a result, it’s useless data.
Veterans Day is a banking holiday.
ZeroHedge goes through the numbers
Home Sales Plunge At Fastest Rate In 16 Months
It seems, despite the Fed’s efforts to unscamble the treasury complex’s eggs, that the rate shock of a taper/no-taper decision has become sticky in the housing market. With the fast money exiting, existing home sales missed expectations for the 4th month in a row – dropping to the lowest annualized number since June (very much against the trend in recent years). This is the biggest month-over-month drop in existing home sales since June 2012 but, of course, NAR has an excuse… “low inventory is holding back sales.” So, in other words, they could sell loads more houses if only there were more available for sale (or prices were lower…)…
This is not a “seasonal” thing… and in fact is very much against the seasonals of the last few years…
Clearly, there are many buyers trying to pick through the listings. What is available is dominated by properties with incurable defects. I feel sorry for anyone who decided not to purchase …
Jimmy hablar con ambos lados de su boca una vez más; ie.,
what is available is dominated by props with incurable defects, yet you feel sorry for anyone who decided not to purchase?
LOL’
Mortgage Default Increase in October
Mortgage defaults remained flat in October with the first-mortgage default rate increasing slightly to 1.30% from 1.28% in September, the latest S&P/Experian Consumer Credit Default Indices report reveals.
The data is compiled and released by the S&P Dow Jones Indices and Experian.
“Consumer financial well-being is in a good shape,” said David Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices. “The indices remain at pre-financial crisis levels and are stable.”
The second mortgage default rate posted similar results, marginally increasing to 0.72% in October, compared to 0.69% in September.
As a whole, the national default rate was unmoved from September, remaining frozen at 1.38% for the month of October.
Three cities – Chicago, Los Angeles and New York – saw declines in their default rates year-over-year, Blitzer noted.
Out of the five cities the company covers, Miami was the only one to see a default rate above 2%.
Meanwhile, Dallas, one of the more stable housing markets during the housing crisis, experienced a rising default rate, with it lifting to 1.35% from 1.23%.
We more
cow bellHARP.You’re spinning a little bit hard on this one.
“As a whole, the national default rate was unmoved from September, remaining frozen at 1.38% for the month of October.“
Got you to read it, right?
Freddie Mac: Rates Will Rise, Credit Will Tighten in 2014
The next year brings a bevy of unprecedented changes to the mortgage market as it shifts from a refinance to purchase business.
Despite all of this, in an environment of rising interest rates and tightening loan criteria, Freddie Mac still believes most of the nation’s housing will remain affordable. The issue that remains, is getting responsible mortgages to the homeowners who deserve them.
Frank Nothaft, chief economist at Freddie, released the enterprise’s 2014 outlook report in conjunction with a HousingWire webinar he participated in.
“The big shift ahead will occur as the single-family mortgage market begins transitioning from a rate-and-term refinance dominated market, to the first purchase-dominated market we’ve seen since 2000,” Nothaft said. “The emerging purchase market should gather momentum in the coming year.”
[Wishful thinking]
The webinar, titled Competitive lending in the Qualified Mortgage world, also took a hard look at the challenges lenders will face after the ruling comes into effect in January.
Craig Crabtree, general manager of Equifax Mortgage Services, spoke at length of the critical importance of underwriting and outlined the types of mortgage products that would likely be prohibited under the QM.
However, the panelists, who also included Equifax chief economist Amy Crews Cutts, stressed that even with all of these new restricitions in mind, customers should not be made to suffer.
Crabtree produced a slide, suggesting that 7% of homeowners surveyed would rather spend a night in jail than go through the mortgage process again. A full 23% of homeowners said they would rather gain 10 pounds than get a new mortgage.
Crews Cutts emphasized the need to close quicker in order to reduce the quiet period between when a homeowner commits to buying a home and when they close the mortgage. “In a case study of 105,000 mortgage applications, 14% took on new debt during the quiet period and 40% of those increase DTI by 3% or more,” she said.
In another study of 2013 mortgage applications, Equifax found 20% of potential homeowners also carried undisclosed debt.
“That’s important from a GSE repurchase perspective as well,” Crews Cutts said.
Doesn’t anyone knows if this will be true of refinances next year?
On on owner occupied refi’s the borrower will need to supply a counseling cert from a HUD class.
I need to take a class to refinance???? Lovely…
The FHA is a predatory lender
According to the FDIC’s Inspector General: “Predatory lending typically involves imposing unfair and abusive loan terms on borrowers, often through aggressive sales tactics; taking advantage of borrowers’ lack of understanding of complicated transactions; and outright deception.”
The Federal Housing Administration’s (FHA’s) mortgage insurance practices qualify as predatory under this standard.
First, FHA mortgage insurance pricing grossly overcharges lower-risk borrowers. Hundreds of thousands of borrowers have been steered by mortgage lenders and real estate brokers to use FHA mortgage insurance rather than less expensive private alternatives. In FY 2013 alone, nearly 200,000 home purchasers with FHA-insured loans could have saved an estimated $710 million over the life of their loans, or nearly $4,000 in individual savings.
Second, the FHA counts on a borrower’s lack of understanding of the complicated nature of FHA insurance as well as the expectation that the FHA would not intentionally permit borrowers to be steered into financially disadvantageous transactions. FHA’s premiums add up to about 10 percent of the initial mortgage amount over the average life of a loan. Since FHA does not price for credit risk, it needs to overcharge low-risk borrowers so it may subsidize the rates charged on high-risk borrowers.
When Congress established the FHA in 1934, cross-subsidization between low-and high-risk borrowers was explicitly prohibited. Today, the FHA program is all about cross-subsidies; the average low-risk borrower with a $150,000 mortgage is overcharged about $9,000. This amount is much larger than the pricing difference between FHA and private mortgage insurance, since FHA benefits from many subsidies-not paying taxes, no need to earn a return on capital (if it had any capital), and taxpayers absorbing its administrative costs-which enable the organization to mask monumental losses on their high risk loans.
Bernanke backs Yellen: Taper depends on economy
Federal Reserve Chairman Ben Bernanke said on Tuesday the Fed would maintain its ultra-easy U.S. monetary policy for as long as needed and only begin to taper bond buying once it is assured that improvements in the labor market would continue.
He noted that the fed funds rate can remain near zero ‘well after’ the unemployment rate hits 6.5 percent and that unemployment targets are thresholds, not triggers. The U.S. unemployment rate is currently at 7.3 percent.
In a speech to the National Economists Club that echoed dovish comments by his nominated successor, Janet Yellen, Bernanke also said that while the economy had made significant progress, it was still far from where officials wanted it to be.
“The FOMC remains committed to maintaining highly accommodative policies for as long as they are needed,” he said in prepared remarks, referring to the policy-setting Federal Open Market Committee.
“I agree with the sentiment, expressed by my colleague Janet Yellen at her testimony last week, that the surest path to a more normal approach to monetary policy is to do all we can today to promote a more robust recovery,” he said.
“Asset purchases are not on a preset course,” he noted, adding that the bond purchase pace will remain “contingent on the Committee’s economic outlook.”
Financial markets showed little immediate reaction to Bernanke’s comments, with equity markets in Asia mixed, U.S. stock futures trading lower and the dollar down marginally against other major currencies.
“Bernanke offered little additional guidance on the possible timing of when the Fed might start to slow the pace of its asset purchases,” Paul Ashworth, chief U.S. economist at Capital Economics, said in a note.
Talk of when the Fed may start to taper its $85 billion-a-month bond-buying program has dominated markets for months, with a decision by the central bank to keep policy unchanged in September taking investors by surprise.
The “Obamacare Shock” – One California Employer’s Terrifying True Story
My company, based in California, employs 600. We used to insure about 250 of our employees. The rest opted out. The company paid 50% of their premiums for about $750,000/yr.
Under obamacare, none can opt out without penalty, and the rates are double or triple, depending upon the plan. Our 750k for 250 employees is going to $2 million per year for 600 employees.
By mandate, we have to pay 91.5% of the premium or more up from the 50% we used to pay.
Our employees share of the premium goes from $7/week for the cheapest plan to $30/week. 95% of my employees were on that plan. Remember, we used to pay 50% now we pay 91.5% and the premiums still go up that much!!
The cheapest plan now has a deductible of $6350! Before it was $150. Employees making $9 to $10/hr, have to pay $30/wk and have a $6350 deductible!!! What!!!!
They can’t afford that to be sure. Obamacare will kill their propensity to seek medical care. More money for less care? How does that help them?
Here is the craziest part. Employees who qualify for mediCAL (the California version of Medicare), which is most of my employees, will automatically be enrolled in the Federal SNAP program. They cannot opt out. They cannot decline. They will be automatically enrolled in the Federal food stamp program based upon their level of Obamacare qualification. Remember, these people work full time, living in a small town in California. They are not seeking assistance. It all seems like a joke. How can this be the new system?
Pelosi, pass the bill to find out what’s in it? Surprise! You’ve annihilated the working class.
http://www.zerohedge.com/news/2013-11-20/obamacare-shock-one-california-employers-terrifying-true-story
Let’s do some basic math muchacho…
Old Plan:
Employee Share – 50% – $7/wk
Employer Share – 50% – $7/wk
Per employee yearly cost = $364 (Wow! That’s some cheap-ass healthcare.)
New Plan:
Employee Share – 8.5% – $30/wk
Employer Share – 91.5% – $353/wk
Per employee yearly cost = $18,356
According to the author they went from covering 250 employees for $750k per year, to covering 600 employees for $2MM per year. Yet when you do the math, both numbers are wildy off.
$364 * 250 employees = $91,000
$18,356 * 600 employees = $11,000,000
So yes, the story is terrifiying.. It’s also not true.
Amazingly, this piss poor excuse for an article was found in ZeroHedge. Imagine that. What is surprising though, is that el O would be so easily duped..
Facts are stubborn.
I’m with you on this one. The impact of Obamacare is not as dire as people either fear it will be or want it to be.
And the article overlooks the obvious other side of this issue. The employees being covered now have much better health insurance plans even if they may not get raises for a while.
Uh…. merely posting a link to a piece sans comment/opinion equates to being duped?
Thx for the ribsplittage.
PS: I hope things work-wise pick-up for you soon 😉
I like the article, and frankly, lies will get you into the Whitehouse. I am noticing a node in the graphs at Zillow on the newest available data that correlates with Obamacare and I also think the dump is due to this new tax. Usually the US GDP is huge enough to plow through any buffer and the country always does good. Better health care is like asking a cop for help.
Ah, so you weren’t duped, but were wholeheartedly participating in the spread of misinformation. Thanks for clarifying. 😉
Can the Fed manufacture sub 4% mortgage rates again?
Watch out! Worrisome housing signs appear in West
They say all real estate is local, but the West has more recently been an indicator of what is to come for the rest of the nation. It was the first region to crash in the mid-2000’s and the first to show signs of recovery toward the end of the last decade. Now the tides have turned again.
Sales of existing home sales nationally fell 3.2 percent in October from the previous month, but in the West they were down 7 percent. The West was also the only region to see a year-over-year decline in home sales.
“In the West region there is a significant shortage of inventory, so you have buyers who are looking for the right home unable to find it and unwilling to commit,” said Lawrence Yun, chief economist for the National Association of Realtors. “But because of the inventory shortage, one is still seeing strong price increases in the West.”
California is a glaring example. The median price paid for a California home in October was $357,000, up over 25 percent from a year ago, according to San Diego-based DataQuick. This was the 20th-consecutive month of annual price gains and the 11th month where those gains exceeded 20 percent.
As distress, in the form of foreclosures and short sales, move out of the West, there are far fewer low-end homes to buy. Just 6.6 percent of California homes sold in October were foreclosures, the lowest level since 2007. Supplies are down 26 percent in San Francisco, according to the California Association of Realtors, and that is pushing many buyers to condos instead of single family homes.
Condominium sales nationwide were actually up over 3 percent in October month-to-month, according to the NAR, while sales of single-family homes fell over 4 percent.
I completely agree. I have been trying to find a decent property in several beach cities. Unfortunately, many of the dogs have now been listed … properties in busy locations seem to be everywhere. For this reason, I have been unable to pull the trigger on something. This is likely the reason the west is showing some slowing … not enough qualitty. Fortunately, I picked up a decent property early in the year. I am hoping to get another before the spring price jump.
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