Monday, May 2, 2016

Whatever you subsidize . . .

By Donald Sensing

... you get more of: Here's Why Govt. Housing Vouchers Cause More Poverty

Federal officials spend more tax dollars on Section 8 housing vouchers than they do on cash welfare, and the program often perpetuates poverty rather than alleviating it, according to an urban housing expert. 
“Its incentives are completely skewed,” Howard Husock, vice president for policy research and director of the Social Entrepreneurship Initiative at the Manhattan Institute, told The Daily Caller News Foundation. 
“You’ve ‘hit the lottery’ and you’re set for life,” said Husock, referring to those who receive housing assistance for decades, a lifetime or even generations, while others wait for years on a waiting list. “Not only do you hit the lottery and you can sit back and have a housing unit for life, but remember, your deal is you pay 30 percent of your income in rent, but what it means is for every additional dollar you earn, you pay an addition [sic] 30 cents in rent," he said.

Voucher recipients pay 30 percent of their income in rent no matter how much they earn, which stifles motivation to earn more, Husock said. Federal housing assistance, unlike the five-year cap imposed on welfare benefits in 1995, has no time limit. Husock, author of, “America’s Trillion-Dollar Housing Mistake: The Failure of America’s Housing Policy,” calls it “welfare unreformed.”
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Friday, April 29, 2016

Oil Prices Just Hit a 2016 High - Unexpectedly!

By Donald Sensing

Here's Why Oil Prices Just Hit a 2016 High - Fortune:



It has to do with a surprise drop in
U.S. crude stockpiles.

Crude oil prices hit 2016 highs on Tuesday on the back of a rally in the gasoline market and after an industry group reported a surprise draw in U.S. crude stockpiles.
Analysts seem always to be taken entirely by surprise.

Are we witnessing The Collapse of the Old Oil Order?
Sunday, April 17th was the designated moment. The world's leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices. Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels. In anticipation of such a deal, oil prices had begun to creep inexorably upward, from $30 per barrel in mid-January to $43 on the eve of the gathering. But far from restoring the old oil order, the meeting ended in discord, driving prices down again and revealing deep cracks in the ranks of global energy producers.

It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market. Most of all, however, it demonstrated that the petroleum-fueled world we've known these last decades -- with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers -- is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.
Methinks the writer has missed the boat. Saudi Arabia definitely wanted (and still wants) oil prices to rise. The Saudis make a very good profit at $70 per barrel, which happens to be the price point where American fracking becomes marginally profitable. So in the Saudis' mind, seventy bucks is an optimum price: it funds their programs and lifestyles and is not high enough to bring massive fracking operations back into the market.

Besides, if Doha was the "debacle" the writer says, then why did spot-market oil hit its year high today? Let's take a look at oil prices since the April 17 (a Sunday) "debacle," using as a proxy the United States Oil Fund, which rises or falls in a 1:1 direct ratio with spot prices. That is, if spt oil rises two percent, USO's share price rises two percent. Here is USO's chart starting April 18, the day after Doha's "debacle."


So if you had bought USO at opening on April 18 (disclosure: I am not invested in this fund and never have been) at $9.985, you could sell today, 11 days later, for $11.39, a 14 percent profit! Some debacle!

Here is USO's chart for the last three months.


Note the rise since the beginning of April. The Doha conference came and went and pretty much no one noticed. After all, no one in the oil biz expected Doha to do anything. The pretty much shrugged it off before it was held and after it adjourned.

I covered why Iran's promise to pump at full capacity means nothing much because they can pump all they want but they can't ship it anywhere.

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Sunday, April 24, 2016

When you've lost the gays on the bathroom issue . . .

By Donald Sensing

... maybe it's time to rethink the whole LBGT thing, ya know? Drop the T.

We are a group of gay/bisexual men and women who have come to the conclusion that the transgender community needs to be disassociated from the larger LGB community... .

There are several areas in which the ideology of the trans community is at odds with or actively hostile to that of women and gay men; among the most important are: ...

• The infringement of the rights of individuals, particularly women, to perform normal everyday activities in traditional safe spaces based on sex; this is most pernicious in the case of men claiming to be transgender demanding access to bathrooms, locker rooms, women’s shelters and other such spaces reserved for women.
Wonder what Bruce Springsteen has to say?

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What do Leftists really want?

By Donald Sensing

They want to be approved by the the people they approve of. Leftism is one big circle of self congratulation.

Liberals embrace the smug life

And they win and give approval to one another through controlling the language of the debates. I don't know about you, but I never let the Left define the terms I use.

How Democrats Win Debates by Corrupting English

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Saturday, April 23, 2016

"Worth more than 10 battleships ..."

By Donald Sensing

"Worth more than 10 battleships or five armed divisions is a sense of American political resolve" - retired US Marine Gen. James Mattis. 

And today we have none of the above. 
Mattis: 'I Don't Understand' Speculation about Presidential Run

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Thursday, April 21, 2016

Iran's tanker problem

By Donald Sensing

Iran Is Ready To Flood The World With Oil

Iran reportedly has about 50 million barrels of oil floating off its coast in Iran-owned tankers, about half of which departed for Asian ports this month.


The problem for Iran is that it has no more than 60 tankers in its fleet. About half of them are parked for storage and another 20 or so are not seaworthy, at least not for sailing the open oceans. So all Iran has to do is rent foreign-flagged tankers, right?
There is just one problem: nobody wants to give their spare tanker capacity to Iran.

According to Reuters ship owners, who are not short of business in a booming tanker market, are unwilling to take Iranian cargoes.

One stumbling block is residual U.S. restrictions on Tehran which are still in place and prohibit any trade in dollars or the involvement of U.S. firms including banks – a major hurdle for the oil and tanker trades, which are priced in dollars.

As a result only eight foreign tankers, carrying a total of around 8 million barrels of oil, have shipped Iranian crude to European destinations since sanctions were lifted in January, according to data from the tanker-tracking source and ship brokers.
I beg you to pardon me for a moment while I break down and cry that Iran can't make more billions of dollars to pay terrorists.

Furthermore, tanker companies are not standing in line waiting for Iranian bids.
Whether it is due to politics or simple business precautions, Paddy Rodgers, chief executive of leading international oil tanker company Euronav, said at present there was “no great urgency to do business in Iran”.

“There is not a premium to do business in Iran and there is plenty of other business – the markets are busy, rates are good. So there is no stress on wanting to do it,” he told Reuters. “I don’t really want to set up a euro bank account in Dubai in order to trade with Iran – that would crazy.”

Michele White, general counsel with Intertanko , an association which represents the majority of the world’s tanker fleet, said: “We have witnessed a reluctance by our members generally to return to Iranian trade given the prohibition on use of the U.S. financial system – essentially no U.S. dollars.”

One can almost smell Saudi intervention here, which we first described two weeks ago when we reported that not only has Saudi Arabia banned Iran from sailing in its territorial waters, but has taken proactive steps to slow Iran’s efforts at increasing oil exports, interfering with third parties and making Iran’s procurement of vessels virtually impossible.
And then they told me that Iran can't ship their oil anywhere!
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The giant sucking sound of evaporating Chinese wealth

By Donald Sensing

This Will Be The Largest Evaporation of Wealth In Modern History

The Chinese people are fanatical savers; even the poorer adults save an average of 30 percent of their income, and the wealthier save 60 percent or more.

But if diversification and asset allocation are the key to preserving wealth, then the Chinese get an F!

The reason: 75% of their wealth is in real estate, with the rest largely in cash. They’ve over-invested in one illiquid and bubbly asset that they wrongly believe can only go higher. Relative to income, China has seven of the 10 most expensive cities in the world.
Seven of the 10 most expensive cities in the world, relative to income, are in China. Ratios of 30:1 for dwellings are common in "Tier 1" cities.
In urban areas, real estate has bubbled up between five and seven times just since 2000. It’s even greater than the unprecedented housing bubble in Japan in the 1980s, which suffered a 60% collapse that it’s never recovered from – even 25 years later.

A 60% collapse is the minimum the Chinese should expect. But it would actually take 80% to get back to the pre-bubble values of early 2000.

This would be devastating to the Chinese. It is estimated that household wealth in China is $27.2 trillion, or about three times GDP. With 75% of that in real estate, that comes out to $20.4 trillion.

If real estate falls 60% as it did in Japan, that would mean $12.2 trillion in wealth would just disappear.

And if it falls 80%-plus due to the larger size of China’s bubble like I expect, we’re talking $16 trillion or more evaporating!
The ripple throughout the rest of the world's economies will be deep and long lasting.

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Socialist Power!

By Donald Sensing

Venezuela to ration electricity in power crisis

Which tells you everything you need to know about the power of socialism.

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Wednesday, April 20, 2016

Andrew Jackson must go!

By Donald Sensing

Buh-bye, Old Hickory! Harriet Tubman is your successor:


I am all for taking that Democrat Jackson off the $20 and replacing him with an African-American, gun-toting, Republican woman!

NB: This is not the official portrait, it is a shop job by FB friend Juliette Akinyi Ochieng.

Update: Then of course there is this:



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Tuesday, April 19, 2016

A short economics course for the Left

By Donald Sensing

The New Minimum Wage | The Weekly Standard

Not that they will read it or that it will do any good even if they do.

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