Glenn Beck: The primary problem...



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GLENN: My name is Glenn Beck, along with Pat Gray and Steve Burguiere, otherwise known as Stu, our executive producer, and Stu has been following all of the charts, all of the numbers for the election. It is yet another primary day today. We had quite a heated discussion this morning on who we would vote for if we were in Delaware today, and I would go with what's her face.

PAT: O'Donnell?

GLENN: Whatever.

STU: It's in theory. We should make the point that we don't know anything really.

GLENN: Nope, don't. Nope.

STU: It's one of those things like the way it is presented as O'Donnell is the real conservative in the race.

PAT: And Mike Castle is, of course, not.

STU: Moderate.

PAT: And really that's accurate. I mean, I think he's pretty moderate.

GLENN: Oh, yeah. Yeah, yeah.

PAT: He's a pretty well known RINO. But the problem is in Delaware O'Donnell in the polls at least trails the Democrat candidate, whatever his name is, by 11 points. And Castle leads the Democrat by 11 points. So there's a 22 point swing there. So you want the conservative, but you're torn because there is a chance.

GLENN: Torn between two lovers.

STU: Oh, sing it.

PAT: Or in this case

GLENN: Okay, here's the thing.

STU: (Laughing).

GLENN: Here's the thing. America, may I, may I express that these two very intelligent men have become clowns today.

STU: Have we?

GLENN: Yeah.

PAT: Wow.

GLENN: Here's how. You guys, what is the definition of insanity?

STU: Let me look that up.

PAT: Glenn Beck?

(Laughter by all).

GLENN: Oh, man.

PAT: That is rich.

GLENN: You got me on that one.

PAT: That's rich.

GLENN: Okay. So what is the definition of insanity? It's doing the same thing.

PAT: Doing the same thing over and over and expecting different results.

STU: The second album from melodic death metal band Darkane. It's like I don't understand what that has to do with this conversation.

PAT: I don't, either.

GLENN: Here's the thing. We find ourselves in this same situation. This is the argument that people gave for John McCain.

STU: No.

GLENN: Yeah, it is.

STU: It's totally different situation.

PAT: It is a different situation.

STU: Totally different situation.

PAT: And here's why.

GLENN: He was running for president.

PAT: Let's at least lay out the scenario.

GLENN: Yes.

PAT: There's obviously most people think Republicans win back the House, but there's also a chance now that they could do the ten person swing in the Senate and regain control of the Senate as well, and Delaware is one of the keys, if not the key to making that happen. So you want the best chance possible. As much as we aren't all about Republicans, we are about conservative values and there's a better chance we might see some and put a stop to some of this madness if

STU: Wow, that was not the whole scenario. He cut you off.

PAT: I know.

GLENN: Because I get it.

PAT: You get it but others may not.

STU: And there's more to it, I think.

GLENN: Are you calling the American people stupid?

PAT: No, I'm not.

GLENN: That's what I heard, Stu.

PAT: Wow.

GLENN: Is that what you heard?

STU: That's what Cass Sunstein said, the Homer Simpson America. That's what Pat Gray believes.

GLENN: Wow. Here he is.

PAT: You had a chance to turn on me, you turn.

STU: I'm Arlen Specter. Any party that wants me.

PAT: Really?

STU: Yeah.

PAT: Arlen "Stu" Specter.

GLENN: Here's the

PAT: I didn't leave Pat Gray's position. Pat Gray left me.

GLENN: How many tea party people have destroyed the Republican candidate.

PAT: I'm not done.

STU: Many. Many, many, many. I don't know the number.

GLENN: I think it's like we're up to eight now, isn't it?

STU: I would say probably more than that.

GLENN: Eight where no, no, no. Eight where everyone thought, no, they don't have even a chance.

STU: Yeah, I mean, and Christine O'Donnell is one of these.

GLENN: Yeah.

STU: She ran against Biden last time and lost by 30.

GLENN: Okay. So here you have the tea party movement. And me personally, I would vote for what's her face. I know nothing about her.

STU: Right.

GLENN: Because you've got to break the back of the people like Trent Lott. If you don't, if you don't get progressives out of the Republican Party, if you don't chase with a broom people like John McCain, people like Lindsey Graham, the republic doesn't stand a chance. It's not going to work. It won't last. Because there's no choice. There is suicide by gunshot to the head or suicide by cocaine powder, slowly.

STU: But I think there's a larger picture here, and just look at it in a different way for a second.

GLENN: Yeah.

STU: You're talking about taking, accepting a progressive as a Republican presidential candidate. Well, we can take we've had nonprogressive Republican. We had a Ronald Reagan. We can get Ronald Reagan in that position.

GLENN: Here's the problem no, no, no.

STU: There's no evidence we can get Ronald Reagan in the Senate in Delaware right now.

GLENN: Here is and I get that. But you've got to look at

STU: It's okay in Massachusetts maybe but not Lindsey Graham in South Carolina.

GLENN: I get it.

STU: We can get Jim DeMint in South Carolina.

GLENN: I get it that you have to have more liberal conservatives in places like California or Massachusetts, and I understand about Lindsey Graham because there's no excuse for Lindsey Graham.

STU: None.

GLENN: None. However, we're running out of time. And if anybody thinks that this November election is going to be the end all and be all and it's going to solve our problems and it's I don't even know if it slows our problems down. With them winning the House and the Senate. Don't, don't you dare think that it's beyond the realm of possibilities. Tonight we're going to show you I mean, what, did we just spend two hours this morning working on some stuff that we're going to bring on the radio show and television tonight about Frances Fox Piven and what's happening in England, all of the ties over there, what's happening with Cass Sunstein and nudging, and also what's happening with people on violence. I mean, I'm just not convinced that when you get a Republican let's just say you win the Republican Senate and the Republican House of Representatives and they say we're going to start cutting. You're not going to have enough to override a veto. So you are going to start cutting, and what is the president going to do? The president is going to they are already doing it with John Boehner. How many times has he said the name John Boehner in the last 24 hours? John Boehner has no power yet. He's already saying he's already said that it was the Republicans that stopped healthcare. No, they didn't have a chance to stop healthcare. It was your own people. He's blaming it on the Republicans for the taxes. Well, excuse me? You've already got, what, four, five Democrats that say, we're not standing with the president on tax hikes. We've got to have we've got to continue the Bush tax cuts or it will kill the economy.

So what you're going to have is the president is going to have all this fuel and he's going to go right directly mark my words. Van Jones is already doing it right directly to the most progressive, most violent, the worst of the worst on the left. And stir them up, get out into the streets, cause trouble. It's coming. It's what's coming.

Now, you have a choice. You either stand on your principles or you continue to make the same mistake that we always make. I've made it my whole life, too. And you say, well, but I want to win, I want to make sure. Not to win win, but we've got to compromise, we've got to... yeah, you do, but at some point you have to say enough. Enough is enough. And I we're running out of time, gang.

STU: I really think that that's an argument to not advocate for running Scott Brown in every state, where the Republicans could run Scott Brown everywhere and probably win 80 Senate seats and what good would that do? But when you're talking about look at Utah. You take Bennett and you replace him with Mike Lee, and everyone acknowledges that's a move, I don't know, two steps to the right. In, you know, in Delaware a move two steps to the right might be Biden to Castle. We're saying do we want two steps to the right or no steps to the right in Delaware. Because like, again, under the scenario like when she loses

GLENN: I want people like Trent Lott to be shut down in the Republican Party. Trent Lott said, and if I may quote, these tea party people, they're a danger to us and we've got to shut them down. If they come in, we've got to coopt them. They need to be this, to me, this election is not about the Democrats as much as it is about the Republicans. Those people like Trent Lott and all these people that have, they think, a lock on power, because they can convince you that, well, you're going to have to come the minute you compromise they go, see, they'll do it every time. They have to have us. They'll accept us because they need us.

STU: It's a good point.

PAT: It's a great point.

STU: My mind is not made up on that. And I think that, like, to me there's a difference because a vote is a personal choice. To me there's no question who you vote for.

GLENN: Yes.

STU: There's that sort of, who you kind of, the back of your mind kind of root for, it might be different in this scenario.

GLENN: Oh, yeah. No, you know what

STU: It's kind of evil maybe, but

GLENN: Oh, no. You know what? When you do

PAT: You are just flat out wrong on this, Stu. What, are you communist or something? You are just completely wrong on this.

STU: Thanks, Pat.

GLENN: You make a great point on this, and the point is there are times that you do things that you're like, oh, crap, I don't want to do this. And you're hoping, you're hoping that it doesn't happen that way. You know what I mean?

STU: Right.

GLENN: You do it and you're like, okay. But you're hoping that it doesn't lead to something you know, for instance, in my church you have to, you know, everybody serves. I mean, I could become see how frightening this could be. I could become the bishop in my church. It's all voluntary. It's lay clergy. So you don't volunteer. If you want the job, you usually don't get the job. And everybody just does something else. Well, I go to church and I know that's a possibility and I keep going to church and I'm really hoping no, let me rephrase this because you don't want it, you usually get it. I really want the job of bishop.

STU: (Laughing).

GLENN: You see what I mean?

STU: Right.

GLENN: But it doesn't there's a lot of things in life that you do that you're like, oh, crap. And you root

STU: Right.

GLENN: for the other thing to happen.

STU: Sure.

GLENN: But you still stand there. And that's where we need to be. You still stand where you need to be.

STU: Yeah, I think personally and I've always felt this with a vote. You always should vote for the person you think would be the best person to win.

GLENN: Yes.

STU: You should never vote for who you think should win or who you think might win, you know, in terms of political thing.

GLENN: You compromise.

STU: But I think when you're looking at it as an overall perspective

GLENN: This is why he said, George Washington said that parties would be the death of us. Because they would collude, they would become corrupt, et cetera, et cetera, and then we would play this game. Instead of parties, vote for the individual. Vote for the person. And look, I haven't done this before. I haven't done this before. But we have to. Because of the people like Trent Lott that say, these tea party people, we'll just coopt them. And they will. And they will.

STU: I'm just glad you brought some sense to this unlike Pat who's been ridiculous the entire time.

PAT: I don't even know where you're coming from today.

STU: You're way off your base today, Pat.

PAT: Over to the dark side or with the Communist Party.

GLENN: I think you both are

STU: I'm with Glenn. I stand with Glenn. I don't know where you are.

GLENN: I think you are both clowns and you need to have your mic turned off.

[NOTE: Transcript may have been edited to enhance readability - audio archive includes full segment as it was originally aired]

Trouble ahead for the housing market

CHRIS J RATCLIFFE/AFP/Getty Images

Our good friend John Rubino over at DollarCollapse.com just released an analysis titled US Housing Bubble Enters Stage Two: Suddenly Motivated Sellers.

He reminds us that housing bubbles follow a predictable progression:

  • Stage One: Mania -- Prices rise at an accelerating rate as factors like excess central bank liquidity/loose credit/hot foreign money drive a virtuous bidding cycle well above sustainably afforable levels.
  • Stage Two: Peak -- Increasingly jittery owners attempt to sell out before the party ends. Supply jumps as prices stagnate.
  • Stage Three: Bust -- As inventory builds, sellers start having to lower prices. This begins a vicious cycle: buyers go on strike not wanting to catch a falling knife, causing sellers to drop prices further.

Rubino cites recent statistics that may indicate the US national housing market is finally entering Stage Two after a rip-roaring decade of recovery since the bursting of the 2007 housing bubble:

  • the supply of homes for sale during the "all important" spring market rose at 3x last year's rate
  • 30 of America's 100 largest cities now have more inventory than they did a year ago, and
  • mortage applications for new homes dropped 9% YoY

Taken together, these suggest that residential housing supply is increasing as sales slow, exactly what you'd expect to see in the transition from Stage One to Stage Two.

If that's indeed what's happening, Rubino warns the following comes next:

Stage Two’s deluge of supply sets the table for US housing bubble Stage Three by soaking up the remaining demand and changing the tenor of the market. Deals get done at the asking price instead of way above, then at a little below, then a lot below. Instead of being snapped up the day they’re listed, houses begin to languish on the market for weeks, then months. Would-be sellers, who have already mentally cashed their monster peak-bubble-price checks, start to panic. They cut their asking prices preemptively, trying to get ahead of the decline, which causes “comps” to plunge, forcing subsequent sellers to cut even further.
Sales volumes contract, mortgage bankers and realtors get laid off. Then the last year’s (in retrospect) really crappy mortgages start defaulting, the mortgage-backed bonds that contain their paper plunge in price, et voila, we’re back in 2008.

Rubino's article is timely, as we've lately been seeing a proliferation of signs that the global boom in housing is suddenly cooling. I've also recently encountered similar evidence that the housing market in my own pocket of northern California is weakening, and I'm curious to learn if other PeakProsperity.com are seeing the same in their hometowns.

The Global Housing Bubble

Housing, as they accurately say, is local. Conditions differ from region to region, making generalizations of the overall market difficult.

That said, the tsunami of $trillions printed by the world's central banking cartel since 2008 clearly found its way into the housing market.

The world real estate market is HUGE, over $200 trillion. That dwarfs the global debt and equity markets. So it's no surprise the central authorities did all they could to reverse the losses the GFC created for property owners.

As a result, many of the most popular locations to live are now clearly in bubble territory when it comes to home prices:

UBS map of global housing bubbles

The chart above displays the most bubblicious major cities around the world in red. But it's important to note that the merely 'overvalued' markets denoted in yellow, and even some of the green 'fair-valued' ones, are still wildly-unaffordable for the average resident.

For example, in "yellow" San Francisco, where the median home now costs $1.6 million, prices are well-above the excesses seen during the previous housing bubble:

And in 'fair-valued' New York City, the median household must spend 65% of its annual income on housing alone.

Is it any wonder that 70% of millennials who don't yet own a home fear they'll never be able to afford one?

Signs Galore Of Topping Markets

At the end of a speculative bubble, it's the assets that are most overvalued that correct first and correct hardest.

So we would expect that as the highest-priced real estate markets fare from here, the general real estate market will follow.

When we take a closer look at what's currently going on with the red-hot real estate markets noted in the chart above, we indeed see evidence supportive of Rubino's claim that the decade-long Stage One mania may now be ending.

Here's a spate of recent headlines about these cities:

Sure looks like Rubino's predicted Stage Two symptoms of rising supply and stagnating prices.

Local Signs, Too

As mentioned, I live in northern California, quite close to Santa Rosa.

Things here aren't as nuts as they are in San Franscico; but it's still a moderately-affluent region with lots of second homes. It's one of the semi-frothy areas I'd expect to see cooling off in first should there be a downwards turn in macroeconomic conditions.

Located less than an hour north of San Francisco, residential housing prices here have roughly increased 2x over the past six years as the Bay Area has boomed. Supply has been in chronic shortage, exacerbated by the loss of thousands of structures burned during last October's destructive Tubbs fire.

But recently, for the first time in many years, realtors here are beginning to talk of a softening they're seeing in the local housing market.

Median sale prices dropped from May to June, which is counter to previous years. And several towns are seeing year-over-year declines in median price -- something unheard of over the past 7 years.

Meanwhile, the days-on-market ratio for properties is beginning to creep up.

Of the greatest concern to the realtors in my area: bidding wars are no longer happening. Houses are selling either at or below asking prices now. That's a *big* development in a market where houses have routinely sold for $50-100K+ above the listing price.

In a similar vein, I'm hearing evidence of the softening rents down in San Franscico and the East Bay (Oakland/Berkeley). Wolf Richter has done a good job chronicalling the substantial volume of newly-constructed units that have recently hit the market threatening to depress rents, and I've heard from a multi-family unit owner down there how landlords in the area are now finding their rents ~$500 too high for the market to bear.

This is all early and anecdotal data. It's too little at this point to claim definitively that my local housing market has entered Stage Two.

But I'm curious to hear from other PeakProsperity.com readers. What are you observing in your local markets? Are you seeing similar signs of concern?

Please share any insights you have in the Comments section below. Collectively, we may be able to add clarity, in one direction or another, to Rubino's hypothesis.

Prepping For Stage Two

Whatever the timing, Stage Two is an inevitability for today's ridiculously-overpriced real estate markets. It's not a matter of if it (as well as Stage Three) arrives, but when.

Given the data above, I think Rubino is correct in his assessment. Or at least, correct enough that prudent action is warranted today.

This makes even greater sense when considered along with the current trends of rising interest rates and quantitative tightening. Remember, home prices and interest rates have a mathematically inverse relationship: as rates go up, home prices must go down (all else being equal). And as central banks start withdrawing in earnest the excess liquidity that inflated property values to their current nose-bleed heights, expect further downward pressure on prices.

To drive the urgeny home even harder, we haven't even yet talked about the damage an economic recession and/or a painful correction in the financial markets would wreak on the real estate market. With the current expansion cycle the second-longest on record and our all-time-high markets looking increasingly vulnerable, it seems very unlikely we'll avoid at least one of those crises in the near to mid-future.

Here are worthwhile steps we recommend at this point:

  • Consider selling: If you're a homeowner and are not committed to remaining in your property for the next decade+, do some scenario planning. If prices fell 20%, how much of a financial and emotional impact would that have on you? If you have substantial equity gains in your home, Stage Two is the time to protect them. If you have little equity right now, make sure you're fully aware of the repercussions you'll face should you find yourself underwater on your properity. What will your options be should you lose your job in the next recession? Whether to hold, or sell now and rent, is a weighty decision; and the rationale differs for each household -- so we strongly recommend making it with the guidance of your professional financial advisor.
  • Raise cash: The vicious cycle that begins as Stage Two transitions into Stage Three is deflationary. Lower prices beget lower prices. During this period, cash is king. By sitting on it, your purchasing power increases the farther home prices drop. And when the dust settles, you'll be positioned to take advantage of the resulting values in the real estate market. We've written at length about the wisdom of this strategy given current market conditions, as well as how, while waiting for lower prices, you can get 30x the return on your cash savings than your bank is willing to pay you, with lower risk. Our recent report on the topic is a must-read.
  • Educate yourself: Yes, real estate is overpriced in a number of markets. But it has been and will remain one of the best ways available to the non-elites to amass income and tangible wealth. And as mentioned, when the next Stage 3 brings prices down, there will be value to be had -- potentially extreme value. If you aren't already an experienced real estate investor, now is the time to educate yourself; so that you'll be positioned to take informed action when the time to buy arises. Our recent podcast interview on Real Estate Investing 101 is a good place to start.

In Part 2: The Case For Starting To Build A (Small) Short Position, we conduct a similar analysis into the overvaluation and growing vulnerability of the financial markets (which are highly likely to correct much faster, sooner and more violently than the housing market), including the details on a recent short position we've started building.

The tranquil "free ride" the financial and housing markets have had for nearly a decade are ending. The string of easy gains with little effort are over now that the central bank money spigots are turning off at the same time the "greater fools" pocketbooks are tapping out.

For a brief time, prices will waiver, as investors remain in denial and refuse to sell at lower prices. But soon that denial will turn to panic, and prices will plummet.

Make sure you're positioned prudently before then.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

It's a bad day when you've stepped in dog poop.

But it's an even worse day when you're stepping in human poop — especially when underneath the poop is a dirty needle. That's the glory that is San Francisco today.

The city doesn't know what to do. There's more human feces in the street than ever before. This is starting to look like human evolution in reverse. And I want to be a helper in this situation.

RELATED: What the 💩 is going on in San Francisco?

And so, as a helper, I've got an idea for San Francisco. And I'm going to share it with you — free — at absolutely no cost to you. This is a public service.

We made a little sign — "No Human Pooping" — because I think that's clear enough, even for those who may be high on heroin, to understand.

Feel free to download and print as many copies as you'd like, and post them on your property. Or click the buttons below to share on social media.

Something has got to be done about this 💩.

Click here to download your printable copy of the sign.

What the 💩 is going on in San Francisco?

Justin Sullivan/Getty Images

Finally, a beautiful Sunday in your picturesque bayside city. You paid good money to move here. Not cheap. The $150,000 range leaves you just about middle class. In Ohio, that'd buy you a small town. But this is better than Ohio, you tell yourself. Sure, the city isn't as scenic as the postcards, but here you are, at the YMCA fields. You're coaching your kid's soccer team. And today is the co-ed Under-8 soccer final. Really, it's their World Cup. You bought the good oranges and Capri-Sun—the special edition kind with cold-sensitive images on the front. You worked hard for this moment.

RELATED: Illegal Immigrant Hits Jackpot and Is Awarded $190K From San Francisco for Deporting Him

Your job is demanding. Sometimes, you're there 60, 70 hours a week. But somebody needs to coach this soccer team so here you are. And, what. What is that. Your son, he's dribbling past the kid shoving dandelions into the ant hill, and, is he going to score a goal? Yes. Yes, he is, but all of a sudden, right as your son's leg angled back to kick the ball, you hear an animalistic scream behind you. You turn around, and see a man shrieking as he squats over the sidewalk. What is he doing, you ask yourself quickly. Oh, God. You know what he's doing.

Following the death of Mayor Ed Lee, San Francisco Mayor London Breed inherited quite a mess. San Francisco is in shambles. Despite topping nearly every list of the nation's highest cost-of-living prices, San Francisco has been plagued by homelessness, often with unbelievable negative consequences.

I'd like to add that, the segment begins with footage of Mayor Breed walking around San Francisco, and as she passes a group of homeless people, at least one person is openly injecting themselves with a needle.

I shouldn't even have to say this, but helping disadvantaged people is a good thing. The Bible is very clear on the subject.

"Speak up for those who cannot speak for themselves, for the rights of all who are destitute. Speak up and judge fairly; defend the rights of the poor and needy." - Proverbs 31:8-9

San Francisco's approach to dealing with the poor is in fact detrimental to the poor.

"Whoever oppresses the poor shows contempt for their Maker, but whoever is kind to the needy honors God." - Proverbs 14:31

"Looking at his disciples, [Jesus] said: "Blessed are you who are poor, for yours is the kingdom of God. Blessed are you who hunger now, for you will be satisfied. Blessed are you who weep now, for you will laugh." - Luke 6:20-21

San Francisco's approach to dealing with the poor is in fact detrimental to the poor. Walk around the city and you'll see a lot of thousand-dollar tents that function as homes, gifts from good-natured but ultimately misguided people, who function more as enablers than rescuers. The city has set up injection sites, where homeless heroin addicts are provided with clean syringes and allowed to shoot up without punishment. May God bless them. And may we help them in a better way.

Revolutions are started by youth. And the left is desperate for young blood, or, worse, for fresh blood. They're turning on their own.

As reported by the Los Angeles Times, Sen. Dianne Feinstein is more often considered too radical. In a show of force, California Democrats have chosen Feinstein's opponent, Kevin de León, over her.

RELATED: 'I remember thinking liberals were the good guys': Dave Rubin on why he really left the left

Lynne Standard-Nightengale, a member of the Amador County Democratic Central Committee, said she wanted to "send a message."

I just think we need a younger, progressive person there. The Democratic Party in California has moved to the left, and he personifies those values.

Feinstein and de Leon will face each other again in November because California has an open primary system in which the top two finishers face each other, regardless of party.

The left is going hard left. When Dianne Feinstein is not left enough for you—where are the press reports of the extremists taking over? The trend is spreading. A growing number of Trump's base are former Democrats, who voted for Obama.

When Dianne Feinstein is not left enough for you—where are the press reports of the extremists taking over?

So, in response, Democrats are prowling after a new base, a new young base, who's never voted before.

Thankfully, many have predicted that the next generation of voters will be the most conservative generation since pre-WW2. I guess they've watched as their older siblings (or parents) have returned from college with pink hair, atheism, exorbitant debt, and infinite genders, only to decide that personal responsibility, a moral compass, and belief in God are preferable.