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Housing Prices Are Being Dangerously Distorted by Big Institutional Money

Do we really want to live through Housing Bubble 2.0?
Tuesday, June 4, 2013, 10:20 AM

The airwaves are full of stories of economic recovery. One trumpeted recently has been the rapid recovery in housing, at least as measured in prices.

The problem is, a good portion of the rebound in house prices in many markets has less to do with renewed optimism, new jobs, and rising wages, and more to do with big money investors fueled by the ultra-cheap money policies of the Fed.

On my recent trip to Salt Lake City, Utah, after presenting to a bi-partisan audience in the Capitol building, a gentleman came up to me and introduced himself as a real estate agent.  He explained that he'd been seeing something very strange over the past six months, where very well capitalized, out-of-state private equity funds had been buying up huge swaths of residential real estate with cash. He wanted to know if I knew anything about this.

Of course I had been tracking this phenomenon for a while. But I had not been aware that Salt Lake City had been one of the targets, so I asked him how the deals worked there.  Apparently, the hedge funds make "full ask" price offers, sight unseen and without conditions (such as inspections and the like), for whole baskets of available properties, typically in the middle to lower price ranges.

The effect, not surprisingly, is that regular home buyers are being outbid and eventually priced out of the market.  Over time, these full cash offers at the ask get noticed and home sellers begin to raise their asking prices. For a young family saving to obtain the required 20% down, a 10% hike in price on a median house translates into an additional $3k - $4k that they must have to set aside to make the deal work (assuming they've not just been priced out of the house they wanted to buy).

The impact, he told me, is that a growing number of young families are finding themselves unable to obtain their first home. 

They can thank Ben Bernanke for this.  Here's why.

The Back Story

The housing propaganda machine has been turned on in full force, as exemplified by this article in the Wall Street Journal that headlined the front page:

Home Sales Power Optimism

May 28, 2013

Home prices surged during the first quarter at their fastest pace in nearly seven years, the latest sign of a sustained warm-up in an economic recovery that has otherwise been marked by starts and stops.

The housing-market revival—and an accompanying report on consumer confidence—adds new grist for a debate inside the Federal Reserve about how far to push its easy-money policies, including an $85 billion-a-month bond-buying program which has helped to keep mortgage rates near historic lows, boosted asset prices and begun to stimulate hiring and spending.

Over the past year, the share of foreclosed property sales has fallen, particularly in California cities, Las Vegas, and Phoenix, which have posted the largest year-on-year price growth

The latest reports were big factors driving financial markets Tuesday. Stock investors, encouraged by the strong data, sent the Dow Jones Industrial Average to a new high

There you have it.  The rising house prices are being presented as  a signal of a "sustained economic recovery" that feeds into consumer confidence and as reason to propel the stock market to new all-time highs.  What's not to like in that narrative?

However, if you value context, the above article will leave you disappointed because it omits the main driver of house price gains in the areas mentioned: big, institutional money seeking rental income and future capital gains.

As the article noted:

Many of the largest home-price gains have come in the West, including many markets hit hardest by the foreclosure crisis.

In March, prices were up by 22.5% in Phoenix from one year earlier, and by 22.2% in San Francisco. Other cities with double-digit gains included Las Vegas (20.6%); Atlanta (19.1%); Detroit (18.5%); Los Angeles (16.6%); Portland, Ore. (12.8%); Minneapolis (12.5%); San Diego (12.1%); Tampa, Fla. (11.8%); Miami (10.7%); and Seattle (10.6%).

The fact that big funds with big money have been very aggressive cash buyers in the formerly hardest-hit markets is very well documented and has been for well over a year.  How such important context gets left entirely out of an article about house-price appreciation in exactly those same markets is something of a mystery, at least from the standpoint of honest journalism.

Here's just one article out of many that have observed and reported on this issue:

Wall Street Institutions Behind Home Price Surges in Markets Like Phoenix

Mar 18, 2013

The March MarketPulse report from CoreLogic examines the rise of institutional investors and the effects they are having on distressed inventory. The analysis, compiled by CoreLogic deputy chief economist Sam Khater, looked at 16 major U.S. housing markets where bank-owned inventory (REOs) have been relatively high since the housing bubble burst.

He assessed whether local activity was comprised of mom-and-pop individual investors or institutional investors, defined as either entities that have purchased five-plus properties a year under the same name or under an incorporated name.

Here’s what Khater found: institutional investors have been targeting specific markets and then accelerating purchases of REOs in those markets, driving down distressed inventories and leading to notable increases in REO prices that have in turn led to larger market upticks.

Institutional investors have focused buying efforts strongly on south and southwestern cities that were hit hardest by the foreclosure crisis. The cities where investors activity has been particularly robust in the past year are Atlanta, Ga., Detroit, Mich., Las Vegas, Nev., Phoenix, Ariz., and Calif.’s Los Angeles, Riverside and Sacramento.

“In Q4 2012, Phoenix REO prices were 37% higher than a year ago, followed by Las Vegas (30%) and several California markets. All six markets with rising shares of institutional investors experienced double-digit increases and were among the top nine for REO price appreciation.

“More importantly, the ripple effects are greatly impacting the broader market. Lower-end home prices in markets with rising shares of institutional investors are up 15% from a year ago, compared to only 6% for the remaining markets.”

Institutions are most active in five states: Florida, Georgia, Arizona, Nevada and California. Interestingly the metro area that welcomed the most institutional activity in 2012 was Miami, Fla., with firms funding 30% of all sales. Single-family home prices for the Miami metro area rose about 11% in 2012 (including distressed homes), according to CoreLogic.

Institutional investors accounted for 21% of all sales in Charlotte, N.C., 19% in Las Vegas, and 18% in Orlando.

With up to 30% of all home sales in some markets going to funds that have been notable for buying with cash at the asking price, it is not hard to conclude that the big funds are driving up prices.

A simple comparison of the Case-Schiller Index, which the media trumpeted as revealing that housing has recovered with the list of areas where the big money funds have been most active, shows (noted by green circles over the blue bars) the following:

That is, the places where the biggest price increases have been noted are the same places that giant institutional funds are buying up tens of thousands of properties at the ask.

Where the first 'rebound' seen after a market correction is the prices of the asset merely stabilizing (because the yr/yr comparisons eventually head to zero), the most recent gains are definitely at levels that have been associated with bubbles and eventual corrections.

(Source)

Here are a few more articles for context, each of which demonstrates the obvious impact of institutional money on various key housing markets:

Hedge funds crowd first-time buyers out of housing market

Dec 10, 2012

There are still a whole lot of foreclosed houses out there. You would think that means it's a great time for first-time buyers to purchase a house. But that's not the case: One reason, private equity firms are buying up huge numbers of single-family houses. Wall Street wants to turn them into rentals.

Jonathan Shidler is a realtor in California. Lately he gets at least one call every day from a hedge fund manager who wants to buy single-family houses in bulk.

He says they are buying them like a financial instrument, "which is fine and dandy. But what's different about these instruments is people live in them. You put your key in it and go inside. You get naked inside of it. So it makes it a little more personal."

Wall Street has been investing in residential housing for decades. What is new is the scale of these purchases. Hedge funds are buying thousands of single-family houses around the country, especially in states hardest hit by the housing crash, like California.

"This is a 1,200 square foot house with detached two-car garage, O'Rafferty said as he put a key into a ranch style home on a corner lot. The house he showed is what he calls "The gold standard of entry-level homes."

This is the type of home that hedge funds are snapping up. O'Rafferty put this house on the market on a Friday. By Monday he had 17 offers.

Those offers came from two types of buyers: Investors looking to turn a profit and families looking to get a piece of the American dream. These days O'Rafferty almost always sells to the investor.

Blackstone Buys Atlanta Homes in Largest Rental Trade

Apr 25, 2013

Blackstone Group LP (BX) bought 1,400 properties in Atlanta, some eligible for federal low-income housing subsidies, in the biggest bulk purchase for the fledgling homes-for-lease industry.

The private-equity firm, which has spent more than $4 billion on 24,000 rental properties in the last year making it the largest buyer in the U.S., purchased the residences from Building and Land Technology, said Marcus Ridgway, chief operating officer of Invitation Homes, Blackstone’s single- family rental division.

In the past twelve months, Blackstone has raised over $8 billion to buy up medium- and low-priced housing, while JP Morgan has initiated a fund to buy up to 5,000 homes.  Morgan Stanley has raised a billion dollars to buy up to 10,000 homes. 

If it strikes you as odd that the big banks would be bailed out by the taxpayers and then turn around and use that same money to buy homes to then rent back to those same taxpayers, then we hold the same view.

This trend has been running for so long, and it is so obvious, that it really raises a very important question as to exactly how such context can be left out of any article on the recent rebound in house prices.

As we saw with bonds being driven to generational lows, the Fed's distorting buying habits shaped the prices for the entire bond market, ranging from Treasurys to corporate junk.  Nobody in their right mind would ever consider the prices of bonds to be telling us anything useful about risk, reward, the future, or even current conditions without noting that their current prices are heavily manipulated to the upside.

Similarly, the stock market is clearly being driven upwards on a sea of Fed-supplied liquidity, and everybody knows that once if that Fed money dried up today, the stock market would fall like a stone.

Housing is no different.  As big as the market is, prices are driven at the margins, and the buying pressure of institutional money snapping up thousands and thousands of properties in a single market in a single month means that this money, too, is having a distorting effect and is driving prices upwards.

Unfortunately, it seems like the lessons of 2008 went entirely unlearned. 

Conclusion (to Part I)

It seems entirely wrong that the Fed bailed out big banks and made money excessively cheap for institutions, and that this is being used to price ordinary people out of the housing market.  Said another way, the Fed prints fake money out of thin air, and some companies use that same money to buy real things like houses and then rent them out to real people trying to live real lives.

In Part II: And the Smart Money is Already Withdrawing, we examine the growing pile of data warning that we are re-entering bubble territory in a number of housing markets. At the same time, we are also beginning to see the very same hedge funds that have re-inflated these prices slink out of the market now that the party is kicking into higher gear all while new buyers are increasingly having to abandon prudence to buy into markets where the fundamentals simply aren't there to merit it.

Didn't we just learn a few short years ago how this all ends?

Click here to read Part II of this report (free executive summary; enrollment required for full access).

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17 Comments

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1840
Damn You, Bernanke!

Someone should tie Ben Bernanke to a chair and make him read this article. Then put him in front of a lie detector and ask him a whole bunch of questions...

Poet

Grover's picture
Grover
Status: Platinum Member (Offline)
Joined: Feb 16 2011
Posts: 507
Bernanke's Dream

Bernanke has stated that housing price recovery is key to getting the economy back on the right track. He has done everything he can to support his cause. Lower interest rates make expensive housing affordable to a debt slave. Lower bond yields makes all other asset classes appear attractive. If the big money puts more houses on the rental market, supply/demand means that rental prices will drop or remain stable for quite some time. The CPI measures owner equivalent rent, not house prices. This will lower inflation (in the perverse way they measure it.) As a bonus, the banks can emerge from the last crisis less harmed.

Bernanke wants to exit the Fed on a high note. He will get oodles of praise from MSM for ressurrecting the housing market. After he is gone, fundamentals will put prices where they belong. Then, the MSM will pine for the old days when Bernanke had things under control.

Has the building industry responded to higher housing prices by overbuilding yet?

Grover

Michael_Armstrong's picture
Michael_Armstrong
Status: Member (Offline)
Joined: Aug 28 2011
Posts: 7
RE Bubble 2.0

My wife and I have been looking for an entry-level property to purchase and live in around Greater Cleveland. We are willing to pay cash too. Even there, prices have been skyrocketing the past few months and supplies are tight. Prices have gone up far more than the Case Shiller index's 2.6%. My anecdotal evidence says a 60% increase since January alone. Homes are selling quickly. I have researched the buyers who have bought properties we looked at recently or wanted to buy but did not move fast enough on and they have all been bought by out of town investors. Properties new to the market are being listed at 2005 bubble prices too.

So, renting might be an option before we buy. Not. Even rental prices have jumped 30-40%. Why? Many of these rentals are owned by out of town investors who do not understand the local market but want their money back ASAP. Their so-called investment properties will sit empty until this bubble pops. And we will put our money elsewhere.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 1163
hedge funds buying housing

I am of two minds on this one.

Had all that mortgage fraud been prosecuted, with all that criminogenic behavior punished the way Bill Black suggested it should have been, and the banks themselves been restructured as they should have been, I'd be ok with the hedge funds buying up all those houses.  Better that rather than them remaining vacant.  As it is - it kinda seems like the bankers got a fine for all their fraud, which might have cost them a few months profit and a few years of poor stock performance, while the homeowners paid the price, especially with vanished downpayments - millions of families mult-igenerational savings completely wiped out in a flurry of negative equity.  And right now those fraud-committing bankers are making even more money now than they were prior to the crash.  So that bit seems wrong to me.  Bankers got away almost free, while homeowners had to follow the rules and pay the price.  Not surprising, since the Fed and government operates on behalf of the bankers.  Depressing, but not surprising.

I also think there's a lot of risk buying housing right now.  When mortgage rates rise to 6%, do we imagine home prices will stay the same, or even rise?  Affordability drops when rates rise, removing buyers from the market.  My guess is, home prices will drop when rates return to normal - absent a sudden shocking rise in incomes.

Yet is it not like the move in housing is all that dramatic.  On the y/o/y chart it looks great but on the longer term home price index chart - less so.  Here's the SPCS20RSA from FRED:

Do we imagine Hedge Funds will be able to manage their SFH collection effectively?  Its untested.  And a SFH is not as good a rental candidate as an apartment is.  This is a risky play.  I wonder also if it has been done with borrowed money.

To me whether this works out is all about rates.  Current prices depend on low rates - and low rates depend on the Fed's funny business continuing to work.  It won't, eventually.  Once again we await the arrival of the long-delayed bond vigilantes.

And I think that awaits a Japan/Europe denouement.

But regardless, since the bankers didn't have to suffer much for their fraud, but the homeowners ended up suffering massively, the whole outcome does seem more than a bit unfair to me.

KathyP's picture
KathyP
Status: Bronze Member (Offline)
Joined: Jun 19 2008
Posts: 79
Check Out Other Rentals

Over the years, we have found good, inexpensive rentals via word of mouth from friends and co workers.  Ask around at work if anyone knows someone else who is looking for a good renter.  Somebody's aunt or grandmother might have a little house or duplex in a decent neighborhood and is willing to accept a relatively low rent from a good reliable tenant.  We've lived in the guest house of a large estate house purchased by friends, and a duplex owned by a co-worker's aunt.  They weren't fancy by any means, so save your granite countertops and stainless steel appliances for when you're ready to buy.  But we found many good neighbors in safe lower income neighborhoods.  With the right rental, you can save a lot of money to put elsewhere.  In the Cleveland area, why not buy a live aboard boat?

Good luck.

Time2help's picture
Time2help
Status: Gold Member (Online)
Joined: Jun 9 2011
Posts: 387
RE: Check Out Other Rentals

KathyP wrote:

With the right rental, you can save a lot of money to put elsewhere.  In the Cleveland area, why not buy a live aboard boat?

Good luck.

I'll second the boat idea, did the livaboard gig for about 10 years myself.  Bought an old 30 foot sailboat and restored her, she put me through college with a $300 monthly slip fee (aka rent payment).  No pesky room mates and you get a waterfront location to boot.  They come with all the furniture included, plus VHF/UHF comms, and are designed for "off grid" living.  Stock her up an you have an ideal "bug out" vehicle.  Just ask Arthur...

LogansRun's picture
LogansRun
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Posts: 1368
Lessons unlearned by whom?

"Unfortunately, it seems like the lessons of 2008 went entirely unlearned." 

If you mean that the lessons of the last bubble have been unlearned by the Fed and the Banking Cartel Members, you're absolutely wrong.  They know EXACTLY what they're doing, and will continue to do it until the bubble burst.  

CM, you know better than most of us, the history of the Fed, and the International Banking Cartel.  This is the exact same game they've played for centuries in order to separate wealth from the Lower/Middle Class.  But this time, since the bubble's are so close together, they're going after the wealth of the Upper Middle Class and Semi Wealthy.  

I really wish from here on out, you'd start to write your stories/reports with the understanding that:  This is a planned event, and again, the Fed/Banking Cartel and members know what they're doing.  History doesn't lie, and it does repeat itself....especially when it comes to the Banking Elite!

EverNewEcoN's picture
EverNewEcoN
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Joined: Jun 5 2013
Posts: 1
Free Reserves In Lieu Of Losses; Buying MBS's Not At Market Valu

http://www.ritholtz.com/blog/2012/08/understanding-price-dispersions/

 

"44% of Homeowners With a

Mortgage Can't Sell"

Shanthi Bharatwaj, Zillow, 5/24/2013

http://www.thestreet.com/story/11933280/1/44-of-homeowners-with-a-mortgage-cant-sell-zillow.html?cm_ven=RSSFeed

 

"Underwater homeowners

find they've become

accidental landlords"

Diana Olick cnbc.com, May 24, 2013

http://www.nbcnews.com/business/underwater-homeowners-find-theyve-become-accidental-landlords-6C10064290

 

http://pages.citebite.com/c1e7w0g5t0rar

 

http://www.truthdig.com/eartotheground/item/the_housing_shell_game_20130503/

http://www.zerohedge.com/news/2013-05-21/goldman-confirms-recovery-hopes-have-gone-slowdown-deepens

http://www.businessinsider.com/keith-jurow-us-housing-recovery-mirage-2013-4?page=1

http://pages.citebite.com/v1i5c9f0h7akf

http://finance.yahoo.com/blogs/daily-ticker/housing-bubble-2-0-david-stockman-133026817.html

http://www.cnbc.com/id/100435276

 

http://www.banks.com/articles/foreclosure-starts-surge-32-states

(I think this and the mortgage release program

http://goo.gl/kb1XL

will actually start to hammer on the r.e. market.)

 

http://www.zerohedge.com/news/2013-05-28/keeping-recovery-dream-alive-3-big-banks-halt-foreclosures-may

 

http://www.zerohedge.com/news/2013-04-10/housing-recovery-shifts-contraction#comment-3433151

 

http://www.rickackerman.com/2013/03/real-estate-bounce-setting-up-a-second-crash/

 

http://www.zerohedge.com/news/2013-05-22/mortgage-applications-have-biggest-may-collapse-financial-crisis

 

http://www.zerohedge.com/news/2013-05-21/housing-unrecovery-here-lumber-enters-bear-market

 

Banks Squeeze Market Supply

Further To Juice Prices

Fountain Valley News By Way Of

ochousingnews.com, 5/31/2013

http://ochousingnews.com/news/banks-squeeze-market-supply-further-to-juice-prices

 

Mortgage Apps Plunge

Fastest Since 2009

http://www.zerohedge.com/news/2013-05-29/cash-and-tarry-mortgage-applications-plunge-fastest-rate-2009

Big Investors Split;

Suckers Take Over

Both ZeroHedge, 5/29/2013

http://www.zerohedge.com/news/2013-05-29/meanwhile-big-investors-quietly-slip-out-back-door-housing-stupid-money-jumps

 

Keeping The 'Recovery'

Dream Alive; 3 Big Banks Halt

Foreclosures In May

Zerohedge, 5/28/2013

http://www.zerohedge.com/news/2013-05-28/keeping-recovery-dream-alive-3-big-banks-halt-foreclosures-may

 

http://www.businessinsider.com/keith-jurow-us-housing-recovery-mirage-2013-4

 

livsez's picture
livsez
Status: Bronze Member (Offline)
Joined: Dec 1 2008
Posts: 67
Lessons unlearned

LR, I'm not so sure I would agree.  From where I'm sitting, I prefer to look at it as if CM is talking about those who chose the blue pill.  You see, I'm one of those people living in 2 worlds.  I have a lot of friends and family I care deeply about who are still in a haze nibbling around the edges.  They're just now starting to trust what I've been talking about for all these years.  I find the way Chris writes leaves it available to more diverse interpretations while taking careful considersation as to where people are at in the 6 stages of Awareness.  It's more inclusive.  But I hear you loud and clear, because I'm just as frustrated as you are about it all.

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1368
I understand.  But

I understand.  But disagree. 

I want to read a clear and reasoned report based on reality, not fiction.  And to continue to write from a position of "lack of understanding", when you KNOW that's not the case, helps no one to truly understand the situation.

Now how to go about it initially isn't that hard.  Start with the history of Central Banks, and move forward to today.  Will it take a couple of reports?  Sure.  But I truly believe, people that will want to understand, will come to understand, with some education from a trusted figure (CM).

livsez wrote:

LR, I'm not so sure I would agree.  From where I'm sitting, I prefer to look at it as if CM is talking about those who chose the blue pill.  You see, I'm one of those people living in 2 worlds.  I have a lot of friends and family I care deeply about who are still in a haze nibbling around the edges.  They're just now starting to trust what I've been talking about for all these years.  I find the way Chris writes leaves it available to more diverse interpretations while taking careful considersation as to where people are at in the 6 stages of Awareness.  It's more inclusive.  But I hear you loud and clear, because I'm just as frustrated as you are about it all.

KathyP's picture
KathyP
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Joined: Jun 19 2008
Posts: 79
"Planned Event"

LR,

 This is a planned event, and again, the Fed/Banking Cartel and members know what they're doing.  History doesn't lie, and it does repeat itself....especially when it comes to the Banking Elite!

I would tend to agree if the "planning" that occurs is impromptu, based on opportunities the cartel detects in the present circumstances.  I recall an online conversation I had years ago with Mike Folkerth, author of The Biggest Lie Ever Believed.  The lie was that growth would go on forever, much the same as part of Chris' message.  I could not believe that whatever I was commenting about was not a carefully planned series of events.  Mike replied that he thought that the people behind the events were master opportunists taking maximum advantage of current circumstances to benefit themselves and that preplanning the entire series of events was beyond their intentions or intelligence.

I tend to believe that the "cartel" is desperate to maintain the status quo, and blindly grasp at any opportunities they perceive as doing so, without actually thinking through the possible consequences, beyond their own gains.  So, the intention is to maintain the status quo and the illusion that all is well, but the intelligence to foresee the consequences is absent. (Not that they give a damn about this country or its citizens, beyond their ability to exploit them).

I also appreciate Chris' and PP's avoidance of a particular point of view and sticking with facts and careful analysis.  It allows us all to bring our own points of view to the information and believe what we wish about the facts.

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
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Posts: 1368
Respectfully.....

Again, I disagree and history shows I'm right.  

Go back and look at the history of the "Cartel" whether it be in its current form, or a previous, the "Cartel" has done the same over and over again.  Have they jumped on opportunities to increase their power?  Of course.  But most of those opportunities came because they had the power to create them.  Simple.

Problem - Reaction - Solution

And this comment: " I also appreciate Chris' and PP's avoidance of a particular point of view and sticking with facts and careful analysis".  Doesn't make sense, especially when the FACTS ARE as stated above.  As I said, this is VERY WELL DOCUMENTED, you just need to get away from what the Government has been lying to you about for over a century.

KathyP wrote:

LR,

 This is a planned event, and again, the Fed/Banking Cartel and members know what they're doing.  History doesn't lie, and it does repeat itself....especially when it comes to the Banking Elite!

I would tend to agree if the "planning" that occurs is impromptu, based on opportunities the cartel detects in the present circumstances.  I recall an online conversation I had years ago with Mike Folkerth, author of The Biggest Lie Ever Believed.  The lie was that growth would go on forever, much the same as part of Chris' message.  I could not believe that whatever I was commenting about was not a carefully planned series of events.  Mike replied that he thought that the people behind the events were master opportunists taking maximum advantage of current circumstances to benefit themselves and that preplanning the entire series of events was beyond their intentions or intelligence.

I tend to believe that the "cartel" is desperate to maintain the status quo, and blindly grasp at any opportunities they perceive as doing so, without actually thinking through the possible consequences, beyond their own gains.  So, the intention is to maintain the status quo and the illusion that all is well, but the intelligence to foresee the consequences is absent. (Not that they give a damn about this country or its citizens, beyond their ability to exploit them).

I also appreciate Chris' and PP's avoidance of a particular point of view and sticking with facts and careful analysis.  It allows us all to bring our own points of view to the information and believe what we wish about the facts.

Saffron's picture
Saffron
Status: Silver Member (Offline)
Joined: Aug 29 2009
Posts: 238
also respectfully ...

KathyP wrote:

Mike replied that he thought that the people behind the events were master opportunists taking maximum advantage of current circumstances to benefit themselves and that preplanning the entire series of events was beyond their intentions or intelligence.

Someone in the know once said "Follow the money" ;-)

Even master opportunists would find themselves in an occasional "inopportune" situation and consequently ... lose ... something. Instead the lower/middle class falls into poverty and the upper middle class is starting to struggle; but somehow the top 1% still manages to get richer. Every low-level thief trying to take maximum advantage of circumstances should be so consistently, accidentally lucky!

I do not think they need to preplan specific events to be guiding things. When you read about propaganda you come to see that once certain ideas are imbedded, the public itself will lead the events ... even if it is to their detriment.

And that is why we do no favors skirting around the information ... either by omission or by using politically correct wording designed to ruffle no feathers ... it's still continuing their propaganda. 

While I agree with LR, I can understand why CM writes the way he does. I am a member of a nutrition education foundation that isn't shy about publishing items unpopular with our food cartels. In the past year they've had a lot of trouble with their website. Could be a coincidence, I suppose.

Jim H's picture
Jim H
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Posts: 1464
Logan's highly rated comment...

LogansRun had said,

I really wish from here on out, you'd start to write your stories/reports with the understanding that:  This is a planned event, and again, the Fed/Banking Cartel and members know what they're doing. 

Jesse writes on today's Gold and Silver price raids, and agrees with Logan's point;

http://jessescrossroadscafe.blogspot.com/2013/06/gold-daily-and-silver-w...

The metals were hit with a fairly determined bear raid today for two reasons:

a) it was a Non-Farm Payrolls day with a weak number (as I suggested last night)
b) it was a Friday.

In the late stages of a system in decay, there is a great deal of formula and ritualization in what were once considered meaningful actions.

That is it. Nothing more, nothing less.   It was as expected.   Nothing has changed.

People underestimate the depths of greed and uncaring selfishness that predominate in the cultures on Wall Street and, unfortunately, in the government and even universities.    And the love of many will grow cold...

It will have an end.  It always does.   The irony of course is that these jokers think that the system is going to blow up again, they are grabbing as much as they can as fast as they can, and when the time comes, they will once again stick the public with the losses.  

They know what they are doing.  They do not care.

Arthur Robey's picture
Arthur Robey
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Posts: 2311
Acid test.

If they put mirrors in space to illuminate New York at night we will know that they are deadly afraid of lampposts.

nah415's picture
nah415
Status: Member (Offline)
Joined: Jun 9 2013
Posts: 1
The American Dream

“That's why they call it the American Dream, because you have to be asleep to believe it.”

― George Carlin

 

Herbert's picture
Herbert
Status: Member (Offline)
Joined: Jun 24 2013
Posts: 5
Distorting facts and lying

Distorting facts and lying with stats is nothing new. With that being said, the housing sector recovery hasn’t been at an equal pace across the U.S. This has formed pockets where the housing market has hardly inched up.

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