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 on: July 24, 2014, 04:44:02 PM 
Started by Crafty_Dog - Last post by ppulatie

Such rubbish from Wesbury.

Why are people deciding to rent rather than buy? 

1. They can't afford the homes and the loans.
2. Income growth is stagnate except for the upper class.
3. 50% of current homeowners cannot sell due to low or negative equity.
4. 25-34 age group doesn't have the money to buy thanks to student debt.
5. Home construction is bouncing on the bottom still, even with poor analytics to derive the numbers.
6. Homeownership is still higher than traditional norms.  We should be no more than 63% and not the current 65%.

Yes, financing is still more difficult that the past, but does anyone seriously want to go back to the go-go lending of 2005?  Also, check out FHA.  15-20% default rates within the first two years of origination.  That is huge.  And that is what idiot Wesbury wants to go back to.

Wesbury, you are out of the game. Go to the locker room and play with your buddy Krugman.......

 on: July 24, 2014, 03:17:50 PM 
Started by G M - Last post by Crafty_Dog

 on: July 24, 2014, 02:54:06 PM 
Started by Crafty_Dog - Last post by Crafty_Dog

 on: July 24, 2014, 02:46:52 PM 
Started by Dog Dave - Last post by Crafty_Dog

 on: July 24, 2014, 02:45:33 PM 
Started by Crafty_Dog - Last post by Crafty_Dog

 on: July 24, 2014, 02:44:01 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
second post-- be sure to see first one


Nouri al-Maliki, the only prime minister Baghdad has known since the United States invaded Iraq and overthrew Saddam Hussein, may soon lose his job as his country struggles to form a government. Like al-Maliki, Iraq's next head of state will almost certainly be beholden to Tehran, even as he manages an insurgency that threatens to tear the country apart.

Al-Maliki owes his tenure largely to his ability to placate U.S. and Iranian interests. For eight years he was able to keep his Shiite coalition intact, but his tactics alienated Iraq's once-dominant Sunnis and the Kurds, who were once allied with the Shia. In some ways, his exclusion of the country's minority populations explains why the country is fraying.
Government Formation

There are several factors in Iraq's struggle to form a government. The Kurds have sought more autonomy by assuming control over oil-rich areas. More important, the ongoing Sunni rebellion, led by the Islamic State, has overrun large swaths of Syria and central Iraq, and rebels have captured parts of Mosul and Tikrit.

It is under these circumstances that Iran is trying to forge a new power-sharing agreement among al-Maliki's erstwhile allies. While replacing the prime minister with someone likewise friendly to Iran will be difficult, it appears Tehran has narrowed down its choices to four candidates: Vice President Adel Abdul-Mahdi, National Alliance chair Ibrahim al-Jaafari, al-Maliki's former chief of staff and close adviser Tariq Najm, and Ahmed Chalabi, the onetime darling of the George W. Bush administration.

The international community has clamored for al-Maliki's departure ever since the Islamic State began its campaign of violence, which is brutal even by Iraq's standards. But the momentum really turned on the prime minister July 21, when Iranian Foreign Minister Javad Zarif said his country did not support al-Maliki. Specifically, Zarif said in a CNN interview that Tehran would support whomever the Iraqi people elected. Zarif's statement comes after Iranian national security chief Ali Shamkhani traveled to Iraq to meet with al-Maliki, Iraq's top cleric, Grand Ayatollah Ali al-Sistani, and several other Shiite, Sunni and Kurdish leaders.
Iraqi Parliamentary Elections Results
Click to Enlarge

The problem for Iran is that al-Maliki, his party (Hizb al-Dawah) and the State of Law coalition constitute Iraq's political establishment, which Tehran has no interest in dislodging. Baghdad's ruling coalition is based on a delicate balance of power within the Shiite community and, more broadly, Iraq's three main population groups. In fact, the outcome of the April 30 elections, which gave the State of Law coalition a majority in parliament, validated Iran's strategy. And even though there were rising calls for al-Maliki's ouster, Iran was unprepared to replace him because it was dealing with an even bigger crisis: Syria.

But the Islamic State offensive has forced Iran to reconsider its strategy. Not only has the jihadist assault emboldened Kurdish separatists, it has also forced Iran to work with its Shiite allies to elect Salim al-Jubouri, a prominent Sunni politician, as parliamentary speaker. (Tehran needs as many Sunni partners as possible so that it can help manage the Islamic State-led uprising.) By Aug. 15, Iraqis should also select the president and his vice president, though internal rivalries among the Kurds, who typically occupy the presidency, could delay this process.
Iran's Endorsement

But these posts are not nearly as important as the premiership, a fact that Iraq's minorities understand well. In this context, determining the next prime minister is no longer a purely internal matter among the Shia; they will have to consider the Kurds and the Sunnis. Already there have been signs of discord between rival Shiite parties. A member of Hizb al-Dawah, Heidar al-Abadi, recently was elected as one of the country's two deputy parliamentary speakers (one post always goes to a Shi'i). The move may be part of a compromise whereby al-Maliki surrenders the premiership. Bayan Jabr Solagh, a former interior and finance minister and a senior leader of the Shiite Islamic Supreme Council of Iraq, went so far as to say that since al-Maliki's party got the deputy speaker post, it should not be given the premiership.
Potential Iraqi Prime Ministers
Click to Enlarge

Meanwhile, Chalabi reappeared to submit his own candidacy for the deputy speaker's position. Interestingly, Chalabi took 107 votes -- 42 fewer than al-Abadi -- which was enough to force a run-off. After Chalabi agreed to withdraw his candidacy, al-Abadi won the second round with 188 votes. Chalabi's move showed that he may not have enough votes to win the premiership, but he does have the numbers to block al-Maliki from retaining his post.

Chalabi's maneuvering has fueled speculation that he is staging his political comeback. Already he has the support of the two main rivals of al-Maliki's party, the movement of Muqtada al-Sadr and the Islamic Supreme Council of Iraq, which enabled him to be elected as a lawmaker. Islamic Supreme Council of Iraq chief Ammar al-Hakim has even said Chalabi is one of his top candidates for prime minister. Chalabi has considerable support from the Kurds, and with his secular credentials, he also has influence among the Sunnis.

However, there are some obstacles to Chalabi's election. Al-Maliki's bloc has 92 seats while Islamic Supreme Council of Iraq and the Sadrists combined have 63. Legally, the largest parliamentary bloc is entitled to the premiership. This is why other Shiite stalwarts such as Abdul-Mahdi and Solagh, who are Islamic Supreme Council of Iraq members, are not strong contenders for the job. If al-Maliki is replaced, the premiership is still likely to stay with Hizb al-Dawah. That leaves Deputy Prime Minister for Energy Affairs Hussain al-Shahristani, an independent politician in the State of Law, on the outside -- unlikely to succeed al-Maliki despite being one of his top lieutenants. 

There are several members in Hizb al-Dawah that are suitable for the premiership. These include national security adviser Falah al-Fayadh, al-Maliki's closest adviser, Najm, and Ali al-Adeeb, who is seen as the second-in-command in the party. Ultimately, the premiership will be determined according to an internal power-sharing agreement that all the main stakeholders endorse.

In geopolitics, personalities matter more in the short term than in the long term. This is particularly true in Iraq, where a functional three-way power-sharing arrangement has yet to take hold. According to a July 22 report by the Kurdish news website Khandan, Shamkhani told the leaders of the National Alliance that Tehran approved of the list of four candidates. All these candidates are close to Iran, and though the Sunni insurrection has weakened Iraq, the state remains firmly under Iranian influence, even if al-Maliki's successor is untested.

Read more: Iraq's Prime Minister May Be Replaced | Stratfor

 on: July 24, 2014, 02:41:52 PM 
Started by Crafty_Dog - Last post by Crafty_Dog


News of an impending deal to bring oil exports back online is likely to create more problems for Libya's embattled central government rather than solve them. After the fall of Moammar Gadhafi's regime, Tripoli has found that such deals usually trigger a larger competition between various armed groups demanding often-competing concessions, further destabilizing the country. As long as Libya depends on cooperation from the various armed groups within its borders to maintain stability, its reliance on negotiating and granting concessions (rather than using force) to end protests and fighting will perpetuate the very pattern of extortion and violence by militias that Tripoli is trying to end.


Libyan media outlets are reporting that members of the government-funded Petroleum Facilities Guards and Tripoli have reached an initial deal allowing for a temporary resumption of exports at the 90,000 barrels-per-day Marsa el Brega loading facility in eastern Libya. The deal, brokered by tribal elders from Marsa el Brega, is provisional. The guards whose protests closed the facility last week are demanding pay increases and, more controversially, the reinstatement of Brig. Idris Bukhamada, the former commander of the Petroleum Facilities Guards. The protestors are giving the government 20 days to meet their demands, though this process likely will be complicated by the impending dissolution of the outgoing General National Congress in favor of a new transitional political body, the House of Representatives, expected to take place in early August.

Bukhamada was removed in deals between the General National Congress and a group of renegade Petroleum Facilities Guards in April and earlier this month. Ibrahim Jathran, a former regional commander of the Petroleum Facilities Guards and leader of the breakaway group that has kept much of Libya's eastern oil exports offline for nearly a year, demanded that his forces be reincorporated into the larger body of the guards. Leveraging his control over the majority of eastern Libyan export capacity, Jathran also pushed the government to appoint new leadership for the force, effectively ousting Bukhamada, his professional and regional rival. The replacement was Ali al-Arash, a man seen as closer to Jathran than to the government and whose leadership has been contested and ultimately rejected by the Bukhamada loyalists within the Petroleum Facilities Guards.
Libya's Urban and Rural Power Centers
Click to Enlarge

The episode underscores the difficulty in reaching lasting arrangements in Libya's increasingly fragmented political and social order. Stratfor has long noted the temporary nature of agreements reached by the weak central government and the highly competitive tribal, militia and ethnic groups that have dominated post-Gadhafi Libya. It is nearly impossible to make concessions to one group without angering its competitors, and nearly all of the rival groups are able to control and take critical infrastructure -- including airports, pumping stations, oil refineries and export terminals -- offline.

The outgoing government and its successor body now must choose to either acquiesce to the demands of Bukhamada's supporters at Marsa el Brega and bring the terminal and its airstrip back online, or placate Jathran, whose forces still guard the bulk of eastern Libya's export capacity. While Jathran is present at more ports, Bukhamada's cousin, Col. Wanis Bukhamada, is head of Bengahzi's Sawaiq special forces currently fighting alongside retired Gen. Khalifa Hifter's anti-Islamist forces in the east.

The embattled central government's considerations go beyond pay scales and leadership structures of embittered petroleum guards into broader issues of renegade national forces, anti-incumbency movements and a risk of larger-scale fighting between the country's many competing armed groups. The central government will have a difficult time reaching a deal with one group of Petroleum Facilities Guards that does not violate the terms of its deal with the other, and risks angering both -- resulting in cutoffs of all or some of Libya's eastern oil terminals. Those on strike are unlikely to modify or lessen their respective demands, making a limited restart followed by a partial shutoff or delay from either Marsa el Brega or other eastern terminals the most realistic outcome. Such an outcome would occur within weeks rather than months

This unpredictability and the government's lack of enforcement capabilities is causing other larger, structural issues for a government keen to export what oil it can while some fields and terminals are still open. Buyers are demanding discounts -- rumored to be between $1-2 per barrel for now -- for spot purchases, making it more difficult for the National Oil Company to sign months-long supply contracts to traders who are wary of Libya's ability to guarantee stable, ongoing supply deals. After nearly a year of halted exports, Libyan crude supplies have become largely displaced in international markets. Buyers are also hesitant to buy Libyan crude blends of volatile and unknown quality at current prices, especially since the central government has been prevented from testing crude flows into coastal storage tanks and monitoring the additional processing necessary to refine crude blends.

Tripoli now has to deal with a national force tasked with protecting its oil fields and infrastructure that effectively is split into two camps: Jathran supporters and Bukhamada supporters, with both possessing questionable loyalty at best to the national government. Regional militias and tribal and ethnic groups continue to maintain a disjointed system of local fiefdoms, largely preventing the national government from controlling their oil resources and critical infrastructure. This scenario makes it quite probable that either Marsa el Brega or other eastern terminals, such as Ras Lanuf and As Sidra, will start cutting off oil exports again in the near future as Libya destabilizes rapidly beyond the point of political reconciliation.

Read more: Oil Export Deal Could Further Destabilize Libya | Stratfor
Follow us: @stratfor on Twitter | Stratfor on Facebook

 on: July 24, 2014, 02:32:30 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
 East Africa Rising
Global Affairs
Wednesday, July 23, 2014 - 03:04 Print Text Size
Global Affairs with Robert D. Kaplan

By Robert D. Kaplan and Mark Schroeder

The Greater Indian Ocean is the maritime organizing principle of geopolitics, uniting the entire arc of Islam (including the Red Sea and the Persian Gulf), East Africa, the Indian subcontinent and Southeast Asia. But while economic dynamism has focused more on the Indian subcontinent and Southeast Asia over the past quarter-century, lately the most intriguing success story has been East Africa. So while the situations look dire in Ukraine and Gaza this week, take a moment to look at a part of the world -- once deemed hopeless -- that is quietly experiencing a regeneration.

From Mozambique northward to the confines of Somalia even, there has been sustained progress and renewed hope. Over the past ten years, annual GDP growth rates have averaged 8 percent in Mozambique, 7 percent in Tanzania, 5 percent in Kenya and 10 percent in Ethiopia. Tens of billions of dollars are in the process of being poured into Mozambique and Tanzania to tap into vast offshore deposits of natural gas intended to feed growing demand in both South and East Asia, at the other end of the Indian Ocean. Meanwhile, hydrocarbon exploration is occurring in northwestern Kenya and off of Kenya's coast, as well as in the interior reaches of East Africa, particularly in the Great Rift Valley basin stretching through parts of Uganda, the Democratic Republic of the Congo and Tanzania.

East Africa and Neighboring Countries
Click to Enlarge

Exploring for energy is not the only development in East Africa. A growing middle class with an attendant consumer sector -- along with increased economic and political integration -- is contributing to significant foreign interest in building road, harbor, rail and power projects that will connect these Indian Ocean countries with Africa's interior. Such projects will also make these countries a maritime and energy center on which the Indian subcontinent and Asia partly depend.

Even Somalia, long isolated because of its civil war and Islamist insurgency, is no longer quite as cut off from global economic interests as it once was. The radical al Shabaab group is still a guerrilla threat, but it has lost substantially the capability of defeating and replacing the Somali government. A multiyear effort by African Union peacekeepers, with extensive Western security and economic backing, has led to the group's degradation. And thanks to counterpiracy operations from a host of world navies, Somali piracy is just not the threat it once was. As Somalia slowly and tenuously moves in the direction of stabilization, there is interest from foreign companies in exploring for minerals in the country's interior and for hydrocarbons off the Somali coast -- for the rich offshore natural gas fields of Somalia's southern neighbors may extend farther north.

Even the eastern Democratic Republic of the Congo -- to the west of Kenya, Uganda and Rwanda -- may be on the long march to greater stability as peacekeepers from South Africa, Tanzania and Malawi have been making some headway against Rwandan-backed guerrillas there. If this trend continues, there is sure to be more foreign interest in the region's vast yet underdeveloped mining sector, even as Uganda becomes a hub for a cross-border trade in hydrocarbons and consumer goods for central-east Africa. Rwanda, too, has attracted investment in its agriculture and light manufacturing sectors -- the fruit of greater stability there also.

Of course, nearby South Sudan has been going in the opposite direction, toward greater dissolution. The Western-encouraged breakup of Sudan in 2011 has thus far tragically backfired, with tribal animosities inflamed by an internal battle over the hydrocarbon spoils of the new nation in the south. Unity in South Sudan existed only as long as there was a common threat in Khartoum. That threat now absent, distrust has spiraled into a seemingly irreconcilable armed conflict between the once brothers-in-arms.

The overall trend in this vast region is dominated by increasing foreign investment in the pursuit of natural resources, but this level of investment would simply not be possible without greater political and economic stabilization itself. Governments here and elsewhere in Africa are no longer driven by the same statist ideas of the sort that once dominated the continent, especially during the Cold War when socialism was the philosophical avatar of too many African leaders. While little may have changed in terms of who rules over these African states (with often the same political parties in control as during the Cold War), the difference has come in the reward of capital now within reach for the resources over which these governments hold sovereignty. Put another way, the opportunity cost of not developing a country's resources is a political calculation leaders in East Africa are no longer willing to wager.

Certainly the defeat of the Soviet Union had a positive effect on Africa, albeit delayed and indirect, but it has not been Western liberalism that has succeeded in Africa so much as pragmatism. For it is the institution of the ruling party that affirms political continuity across much of the East Africa region, even as countries in East Africa have achieved consistent and strong economic growth. After all, Ethiopia's government is by no means a democratic regime; neither is Rwanda's. Yet Ethiopia has averaged a 10 percent annual growth in GDP and Rwanda 8 percent over the past decade or so. Thus, to say that Western-style democracy has succeeded in Africa is a narrow version of the truth. More truthful is the fact that what is transpiring constitutes Asian-like pragmatism with African characteristics. Further encouraging this is the large-scale presence of the Chinese nearly everywhere in Africa, scouring for minerals, metals and hydrocarbons, and building transportation infrastructure as a consequence. For the Africans, the Chinese are, in part, symbols of economic dynamism without the stern moral lectures about democracy that they get from the West.

Examples of Asian-like pragmatism are in evidence throughout the continent. Banished are political leaders in countries such as Mozambique and Tanzania, willing to oppose the development of vast reaches of their countries -- and the economic potential therein -- for the sake of internal political control. Others, such as the political leadership of Uganda and Rwanda, will embrace economic liberalism, as long as political freedoms do not challenge the ruler's interests. East Africa has the edge over regions elsewhere in the continent because of its geographical links to Asia and the Indian subcontinent by way of the Indian Ocean.

The real test will come as the wealth from natural resources continues to accumulate. Will that money be stolen by new elites or will it diffuse throughout societies, so that the result is more modern middle classes that can, in turn, stabilize and expand effective institutions and a culture of civility and human rights? The risk of another descent into rampant corruption and misrule is real, since hydrocarbon and mineral wealth are of the kind whose profits can be concentrated into relatively few hands. The bottom-line question is this: Will the presidency control the hydrocarbons, such as is the case in Angola or Nigeria, or will the institutions of the state and the private sector be empowered to develop and adjudicate the pursuit of Africa's emerging resources?

One thing is clear: Economic change is so ever-present and vibrant throughout East Africa that the region's geographical orientation itself may be changing. Rather than be part of a once-lost and anarchic continent, the area from Mozambique north to Ethiopia may be in the process of becoming a critical nodal point of the dynamic Indian Ocean world.

Read more: East Africa Rising | Stratfor

 on: July 24, 2014, 02:27:45 PM 
Started by G M - Last post by Crafty_Dog

 on: July 24, 2014, 02:00:16 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
New Single-Family Home Sales Declined 8.1% in June To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 7/24/2014

New single-family home sales declined 8.1% in June to a 406,000 annual rate, coming in well below the consensus expected pace of 475,000. Sales are down 11.5% from a year ago.

Sales declined in all major areas of the country.

The months’ supply of new homes (how long it would take to sell the homes in inventory) rose to 5.8 in June from 5.2 in May. The increase in the months’ supply was due to a slower sales pace along with an increase in inventories.

The median price of new homes sold was $273,500 in June, up 5.3% from a year ago. The average price of new homes sold was $331,400, up 8.3% versus last year.

Implications: Forget about new home sales for a minute. New claims for unemployment insurance dropped 19,000 last week to 284,000, the lowest since February 2006, which was at the peak of the housing boom. The Labor Department said there was nothing unusual about last week’s reports from the states, but noted the data are often volatile this time of year due to summer-related auto plant shutdowns. This suggests there were fewer shutdowns than normal last week. Continuing unemployment claims declined 8,000 to 2.50 million. Plugging these figures into our payroll models, which are rated #1 by Bloomberg for the past two years, suggests nonfarm payrolls increased 218,000 in July, while private payrolls grew 216,000. These forecasts will likely change next week as we get data from ADP and Intuit, as well as one more week of unemployment claims. On the housing front, new single-family home sales dropped steeply in June and were revised substantially lower in May. Today’s report came in well below even the most pessimistic forecast for sales in June. This does not mean we are back in a housing recession; home construction remains in an upward trend and new homes sales have been hovering in the same range for the past two years. There are a few key reasons why new home sales remain so low. First, the homeownership rate remains depressed as a larger share of the population is deciding to rent rather than own. Second, buyers have shifted slightly from single-family homes, which are counted in the new home sales data, to multi-family homes (think condos in cities), which are not counted in the report. Third, financing is still more difficult than it has been in the past. The inventory of new homes rose in June, but still remains very low and most of the inventory gains are for homes not started, instead of homes completed. Homebuilders still have plenty of room to increase both construction and inventories. Once again, the housing recovery remains intact, despite the fits and starts which are to be expected when the overall economy is a Plow Horse, not a Race Horse.

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