Bits Bucket And Craigslist Finds For October 24, 2006
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
October 24, 2006
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Name:Ben Jones
Location:Northern Arizona, United States
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mdc earning down 60%/ canrate 48 %
looks like more and more builders highlight their cash and borrowingcapacity to stand this downturn. what a difference 6 month make…….
Diluted earnings per share of $1.06 vs. $2.62 in 2005 (minus 60%)
* Net income of $48.7 million, compared with $121.0 million in 2005
* Pre-tax inventory impairments and project cost write-offs of $29.4 million
* Total revenues of $1.08 billion; $1.17 billion in 2005
* Closed 2,955 homes at an average selling price of $358,200
* Financial services and other profits of $13.0 million vs. $9.6 million in 2005
* Net orders for 2,120 homes valued at $678.1 million vs 3.551 and valued $1.22b (-40% / value -44%)
* Quarter-end backlog of 5,661 homes valued at $2.10 billion vs 9.057 $3.29b (-37% $ -36% )
* Unrestricted cash and available borrowing capacity of $1.36 billion
* Cash flow from operations of $70.9 million in 2006 third quarter
enabled us to reduce our lots under control by more than 25% since the beginning of the year, with less than 3% of our stockholders’ equity at risk for our 11,000 optioned lots. In addition, our investment in land declined by almost $100 million in the third quarter alone, which contributed to our generating more than $70 million in cash flow from operations during this period. As a result, we ended the quarter with $1.36 billion in available cash and borrowing capacity, up 25% from last September.”
The Company closed 2,955 homes and produced home gross margins of 22.7% in the 2006 third quarter, compared with 3,686 home closings and home gross margins of 28.8% for the comparable period in 2005
The SG&A expenses for the three and nine months ended September 30, 2006 included project cost write-offs of $9.5 million and $23.0 million, respectively, compared with $2.5 million and $5.2 million of such costs for the same periods in 2005.
We experienced reduced home gross margins in each of our markets except Utah and Delaware Valley, with the most significant decreases occurring in Nevada and California, as has been the case in the previous 2006 quarters, as well as in Virginia, due to increased competition and extreme inventory pressures in that market. The $19.9 million in inventory impairment charges we recognized during the third quarter, which are not included in our home gross margins, primarily relate to five projects in California where we experienced a much slower than anticipated home order pace and significantly increased sales incentive requirements.”
Similar to our 2006 second quarter, we deferred $18.5 million in profits related to certain homes closed in the third quarter for which the Company’s mortgage subsidiary originated high loan-to-value loans for our homebuyers and still held the loans in inventory at the end of the quarter. However, we more than offset this deferral by recognizing $30.7 million in profits that had been deferred in the second quarter, resulting in a net increase to homebuilding profits for the 2006 third quarter of $12.2 million. This net increase in profits raised third quarter home gross margins by 90 basis points and average selling prices by $4,100.”(?)
canrate 48,5%!!!!!
plus a very good pice on
dow 36,000 wasn’t wrong, just early.
this shows me that the top is near. you really should read this stuff.
feels like fools day…..
http://immobilienblasen.blogspot.com/
of course the stock is up on the good news.
Up 2% now and pulling all the other builders 1% to 2% on the good news. Unbelievable! How high would they go if they announced going BK!
look at ford yesterday.
today higher before the 5.8 b$ loss and restating earnings 5 years.
this market is really weired.
Here’s a nice thick slab of red meat for this board courtesy DJNF:
“Tsy Paulson: Hopes Equity Mkt Strength Offsets Housing”
“Tsy Paulson: Hopes Equity Mkt Strength Offsets Housing”
Looks like we know where the next bubble is after all. Buy now or be priced out forever.
The builder stock prices have attained a temporarily high plateau today…
http://tinyurl.com/fzeuw
I love how they lump “cash” and “borrowing capacity” together as if they’re the same thing.
land deals on EBAY- check out that vacation area near you -whoosh see that leverage on the downside
October 24, 2006
Note: One must scratch beyond the surface to know the root cause of the Housing Bubble.
Nature Of the Beast
Over time, monarchies degrade the monarchs, aristocracies degrade the aristocrats, capitalism degrades the capitalists and democracies degrade the demos. Such are the dictates of Human Nature. Hence, econo-political systems come and go. It would be no different for Americans. The idea that Americans are special and their system is special is hubris at the very least and idiotic thinking at the worst.
My examination into the economic, investment and political behavior of capitalists (from my family background I am a born capitalist, although very modest and simple one) and American People has its roots in their behavior first in borrow-and-spend (consumption debt), then in stocks and lately in housing. How far have the American People been degraded by the long march of Democracy In America, as foreseen by Tocqueville? Below the level of “industrious animals,” which they passed some 30-40 years ago. And how far American capitalists, exemplified by the bankers and financiers of New York City (BFNYC), degraded? Easily to the level of evildoers (where do you suppose “Toxic Mortgages” really originate?). We don’t need to go to wars to eliminate evildoers; they are mostly right here at home. Greenspan will go down in American history as the biggest evildoer. The Maestro was nothing more than a masterful manipulator at the expense of the American People by helping BFNYC push consumption debt (mortgages are consumption debt) on the American middle-class like never before. This from a man who preached his friends that debt is bad. But, it is okay to push on others and suck their financial blood? Unfortunately, BFNYC are born-and-bred financial bloodsuckers and Greenspan became a great facilitator to these parasites. Financially, they will suck American households dry. Just wait and watch.
How are American People useful to their rulers? As voters, as taxpayers, and, most importantly, as CONSUMERS! They are no better than serfs, except for the fact that the form of serfdom has changed with the technology. American People have fully traveled Hayek’s Road To Serfdom and suffer from The Fatal Conceit that Hayek warned against.
Americans are BRED to be dupes, with massive propaganda, to serve the interests of their capitalist masters. I don’t know of better-trained slaves than the highly educated Americans, including the imported ones, in terms of obeying and producing for their masters. The “education” lies in training them to produce more so that their masters can collect their “fair share.” A brainwashed human being could be very useful and compliant producer, far better than a trained farm animal.
American-born dupes have been unable to refute the evidence and arguments that I have presented and some of them use their time in being jerks. Like, Jas, why are you here? Why don’t you leave America? Ah, you would like a dictator and you may just be the man. Etc. etc. What better proof do you need of my observations? These dupes can’t tolerate someone who displays better human quality of thought than they do?
There are lots of Americans that Americans themselves hate and are angry with, e.g., liberals versus conservatives. They just don’t want to know the real source of the anger among Americans – the current econo-political system that pits one group against another.
The greatest stock market bubble, the greatest housing bubble, and the greatest debt bubble in American history wouldn’t lead to the Greater Depression? I know why Americans are in denial of the outcome that is fully baked in the US economic cake. Because the Greater Depression would be the best evidence of the fact that American capitalists are evildoers and American People are dupes. Otherwise, the Greater Depression would be impossible.
Sorry, someone has to look where others refuse to.
Jas Jain
Jas.
Good Writing, but????????
Your last paragraph just does not make any sense.
I can see where most of the rest of your screed comes from,but that last bit…….
Yeah, I DO know “your screed comes from”!!!!!!!!!!!!!!
Jas Jain
Jas Jain, you are an enigma to me. Are you just trying to get over your guilt at having made your fortune due to good timing on your Cisco options while others were far less fortunate? Did you have this perspective as a bright young engineer ready to take on the world? Are you just trying to keep potential competitors away?
I’m asking because it seems like you have plenty of potential to be quite satisfied (knowledge, resources, comforts, etc) yet your posts seem almost despondant and I’m curious.
I know how much Americans resort to psychobabble when they can’t refute the arguments. Shooting the messenger is a common practice. What message do you have problem with?
I must have hit a raw nerve.
Jas Jain
I agree with the message, but think the messanger is a little too bombastic. You seem like you could be as potentially as well prepared as anyone for a coming depression (which has been building for 30 some years now), but rather than encouraging others to prepare you just seem like you want to blame the decisions that got us all to this point, which are not written into history.
My own thought is that the only thing that will pull the US out of a depression will be that American optimisim and ingenutity that built this country and you seem intent on crushing it. Perhaps I’m misreading you, but that is how it sounds to me.
Finally you decry stocks and options as scams and frauds, yet your current abundance was provided by them. Yep, you got a great deal and were either very precient or lucky in your timing to convert them to more stable value items. Yet your rants against the financial institutions (which I agreen need reform) sure sound like you intend to throw the baby out with the bathwater.
In summary, there’s plenty of blame to go around for everyone, but at this point blasting the structural flaws of the Titanic or the captian’s stupidity in his course selection does far less good than preparing the rescue ship and life boats. You have both time and resources to do great good during a depression, but assigning blame (even though it is deserved) doesn’t seem like the best use of them.
Yes, but the point is some people don’t even know they’re in trouble (they don’t want to know).
Everyone must take responsibility for their own actions. Wether you know the rules of the game or not.
The evidence is there to see. We’ve been sold a bill of goods and sold down the road by the wealthy class who calls the shots.
If this stuff is outside your belief system, perhaps you have a closed mind.
Ya catch more flies with honey than with vinegar, regardless of how open your bucket is.
I appreciate the sentiments in your piece. Even before I read yout comment about ‘psychobabble,’ I thought it was too broadly sweeping an analysis to applicable: interesting but untimately meaningless.
Perhaps you are resorting to psychobabble yourself.
P.S. Not shooting nthe messenger, Just trying to understand the message.
An sstute comment.
This wannabe-socialist writes: “Americans are BRED to be dupes, with massive propaganda” without a hint of irony.
Then goes on to write this pap:
“The idea that Americans are special and their system is special is hubris at the very least and idiotic thinking at the worst.”
“We don’t need to go to wars to eliminate evildoers; they are mostly right here at home.”
“How are American People useful to their rulers?”
“They are no better than serfs…”
“They just don’t want to know the real source of the anger among Americans – the current econo-political system that pits one group against another.”
“American capitalists are evildoers and American People are dupes.”
Talk about being duped by propaganda. Get yourself out of San Francisco, before you pull a Manson on a “capitalist” family.
Their Royal Highnesses do have a problem with criticism. Serious one. There is no hope for improving the situation until the widespread misery leads to the collapse of the current system. We shall find out in 20 years or so, but before that there WILL BE lot of suffering.
Jas Jain
Yes, we’ll find something out in 20 years, but I doubt you’ll be lucky enough to have predicted what it will be. 20-some years ago I got to hear all about how “the japs will own everything in this country”, yet look around and I don’t see that it happened.
I don’t care if your message is spot on or not: The tone of your writing is that of an arrogant, no-it-all, spoiled brat. Before you talk about hubris, take the plank out of your eye.
Bluto’s post was astute and well-reasoned. Curious that Jain is unable to engage in dialogue on a similar level,but is reduced to bombast and pedantry.
“the japs will own everything in this country”
“Japs”?! I’m sorry, but I think I’ll be unable to take your comments as being non-biased.
I think he was quoting the highly biased sentiment that was quite popular through the late 1980s that was commonly expressed with that (or a very similar sometimes more and sometiems less polite) biased statement.
Let’s hope so.
Their Royal Highnesses do have a problem with criticism
Indeed, Jas, you seem to be among the ‘Royal Highnesses’ group.
Your comments remind me of the aristocrats in France saying before the revolution, ‘If only the peasants could be more like us.’
nnvmtgbrkr: Notice how the sentence in question was in quotes?
I don’t care if your message is spot on or not: The tone of your writing is that of an arrogant, no-it-all, spoiled brat. Before you talk about hubris, take the plank out of your eye.
Agreed.
Why do so many people fall for the IO ARM, buy more house than they can afford (think 30Y fixed as a guide to what you can afford). Are they so greedy & hellbent on outdoing the jones ??? They should know that their ARM ARE going to adjust upward. Unlike me who instead of getting a bigger house (and toys with cash out refi, sure go out & get that new Corvette take 60K cashout, pay for the damm thing for the next 30 years). I refinanced a year ago, lowered the payments & didn’t touch my equity. I am in a modest place, say 200K out in the fringe burbs of northern Chicago, and am very happy I am not a slave to the mortgage goddess. Are others so silly to believe that IOARMs are NOT extremly high risk ??? WHAT IS WRONG WITH YOU DO YOU REALLY NEED THAT OVERPRICED HOUSE, CAN YOU BE 100% CERTAIN OVER THE LONG HAUL THAT YOU WILL KEEP YOUR JOB, HOUSING PRICES WILL KEEP GOING UP ? When I mentioned to my co-workers that if home prices slide by say 10% they may lose all their equity … the room grew silent…
They fall for the I/O arm and buy more house than they can afford because they have the expectation that their wages will increase with inflation. They also think they’re somehow hedging against rent increases by using this method.
It’s a paradigm that has worked since interest rates started heading down in about 1982.
The cashing out (other than to afford new toys) is often to cover other debts, because if they’ve been salaried, in the last five years they simply haven’t had significant wage increases.
I don’t get it either, Bob. The only thing I can figure is that after watching so many TV commercials that constantly extol the virtues of consumption, the masses have been brainwashed. It doesn’t make any sense to take on the kind of risks these folks do, let alone, willingly hand all that money to the lenders to ‘live the American Dream’. Note too, when their high risk ventures fail, something else other than their own actions are always to blame.
Thats what happens when the success of your economic terrorism policy depends on getting the masses to believe, “If you just work a little harder, you too will be rich like us”. Well the masses are figuring out the hard way that they will never be “rich” no matter how hard they work. And now the enslavement begins as they realize the rags to riches story foisted on them was a lie.
People take the I/O, options arms etc. because lenders and realators say that those are the kind of loans that everyone is doing and this is what you can afford. People don’t sit down, consider their income, budgets and career prospects and ask, “Can I really afford this?” Often, they don’t really look at the loan agreement and say, “Let’s see, after the teaser rate expires, the new interest should be about X% and my monthly payment should be $Y. Lenders should be required to show examples of how interest resets and rate changes can effect the monthly rate. Instead, they are often sending out advertising saying: “you can now get this huge loan at a very low month rate. It’s a great deal (if you don’t read and understand the page of fine print below).
FB’S continue to race towards insolvency! They have not let up on the gas one bit it seems. I think they might ease up a tad after they sail over the cliff.
http://www.washingtonpost.com/wp-dyn/content/article/2006/10/23/AR2006102301162.html
“Despite concerns expressed by federal regulators about the growth of nontraditional mortgages, their popularity among borrowers continues to rise, according to statistics released yesterday. About 26 percent of mortgage loan originations by dollar volume in the first six months of 2006 were interest-only loans, according to the Mortgage Bankers Association, a trade group in the District. Such loans do not require borrowers to pay down the principal.
Another 13 percent were “option” adjustable-rate loans, which allow customers to pick their payment amount, including a low-cost choice that covers neither the full interest nor the principal. In comparison, in the last six months of 2005, 25 percent of mortgages were interest-only and 8 percent were option products. Until 2000, less than 2 percent of consumers had interest-only or similar loans. Most people bought their homes with traditional, fixed-rate loans that allow borrowers to steadily pay off their mortgages until they are free of housing debt.”
The picture of lemmings jumping to their death is a fitting metaphor.
Recency bias, extrapolation, and seeing what everyone else is doing and doing that are why people are taking out these loans, etc. It’s worked for the last 5-9 years so they assume it will work in the future. Just like how after the Depression no one wanted to touch stocks and during the Internet bubble no one could imagine why you’d want to own anything else. Nassim Taleb’s book Fooled By Randomness is a good look at the logical fallacies that doom most people to irrational economic behavior.
I used to think things like the Kondratieff Wave and Prechter’s work with Elliot waves were statistical voodoo. I don’t know that they have any precision but there is an underlying sense to them. Especially the idea of a long term change in social mood represented by the principle of the Kondratieff wave makes sense because coming out of a depression people are very risk averse, and as time passes and people prosper from taking risk and the bad old memories fade people tend to throw caution to the wind.
I really hope we can avoid a depression or even a serious recession, but it’s hard to see how things can continue as they have without paying the piper.
Get a clue man. Time is running short!
“Talk about being duped by propaganda. Get yourself out of San Francisco, before you pull a Manson on a “capitalist” family”
Get a clue man. Time is running short!!!
If you take an aerial view of many suburban subdivisions, and see how closely packed the houses are, the depressing sameness, etc., and how they go on and on for miles, it does become apparent that we are serfs. Serfs with plasma TVs, cell phones and big SUVs, but serfs nonetheless.
The situation in America, I’m afraid, is far worse than most of us can even imagine.
Indeed — other countries don’t have suburbs, only rolling wilderness sprinkled with tasteful museums and environmentally-friendly coffee houses.
So we are serfs for choosing to like in a faceless, bland suburban cookie-cutter sprawl?
I have to play devil’s advocate here, since I myself don’t live in quite such a place because our older neighborhood has houses spread awkwardly and spaciously and of varying ages and acrchitectures. But many of my friends do live in the serf villages, and the important thing is this: They CHOOSE to live there. Seriously.
Most of us do have the choice of living in a peaceful rural farm environment, or alternatively in a densely compacted city. We simply choose not to, for whatever reason, usually economic. Yet if I wanted to live in the middle of Kentucky on a farm, I could, so long as I give up lots of nice things my income buys me now. Likewise for serious urban life, so long as I spend my money on high rents rather than nice things. Sure, my kids might not get the kind of school I want. Should I have everything I have now AND be able to live in a community of my dreams/fantasies? That’s not real life.
In the end, where we live is our choice. I am not forced to live in the suburbs or a small bedroom town; however, I find that doing so gives me what *I* think is a good mix of what I want in life. And I think that’s what most (not all, most) of Americans feel. For those that don’t feel that way, I have to ask, why don’t you bite the bullet and move?! And don’t begrudge the others their own choice of what they want.
I see both sides but certainly agree that many people fall into the ’similar trap’ doing whatever is espoused in the latest home fashion magazine or E! tv show. Too many people are serfs who cannot independently think for themselves.
I’d certainly rather have people be able to choose to be idiots than to be dictated to by an all-knowing central planner. The markets have a certain justice to them. People pursue happiness as they see fit and if they make bad decisions then they pay the consequences. In a perfect world, everyone would be as enlightened as all of us on this blog, but we don’t live anywhere near perfect.
You want close together? try San Francisco. Houses are built shoulder to shoulder there. Or try London, or Paris, or New York City.
A big lawn to water and weed and mow every weekend? No thanks. Besides, the fertilizer is bad for the environment, and grass is a huuuge waste of water. All I need is a little courtyard area at home, proximity to open spaces and water, and I am happy.
Small lots are here to stay: Not enough land left for big lots, not enough demand for big lawns.
If you don’t choose to live in a desert, you don’t have to water your lawn. 4 out of 5 years there is sufficient rain that’s no problem. The 5th year? Well my motto is “brown grass don’t need mowing. The only maintenance I do on my lawn is mowing every week or so, although I DO prune the bushes occasionally.
I used to think that way. Children made me understand that for us, it was wrong. We lived in a little south Orange County box, a short walk from the beach. But the kids had nowhere to play on our own property (I use that term loosely), and at their ages I don’t want them going to the beach alone.
So we are moving somewhere, where there is plenty of land, tons of larger plots of land for each house, Texas
Of course understanding that the phrase “larger plots” is relative. Larger compared to anything we’d ever get in California, even if we spent a million dollars.
i know what you mean… we live in a townhouse next to the beach (zero land) but we go to the park with them… it gets us off the couch. it is tough to beat opening the back door and letting them run around… just dont show them photos of the old beach place when they are 10 or older and no longer just play in the back yard… they will kill you if they learn you once had them in socal by the beach.
Yes. If we are working jobs because we have to. We are wage slaves at best.
For those of you that have jobs you like and/or don’t have to work count your blessings and pray things don’t change.
However, this blog is about the winds of change approaching.
I treat your bizarre rants as seriously as I treat David Liarrhea’s market wisdom.
I agree with most of what you said Jas, it’s actually refreshing to see someone else who thinks that way. I am just amazed at the “follow the herd” that we have in this country now, I am shocked at how blind some people are. Facts mean nothing to some people; but more and more, it seems to be most people.
How can you not see the corruption that is all around you? How can you not realize that people are lying to you? Do some research; the Internet is the saving grace of the last 20 years, imho! Anyone with half a brain and some time can figure out just about anything with a computer and Google.
I hate it when I know I am right, and I meet people who just can’t understand/comprehend what I am telling them. Its sad, in a way, but also a testiment to the power to the American system! Even with the facts staring you in the face, you choose to look the other way. Its like people have been brainwashed (the line is blue!), and just can’t wake up enough to see that they are just following the heard off a frieking cliff.
Did you really used to work for Cisco? I am a storage engineer/systems engineer by trade, but spend plenty of time working on Cisco gear.
“…people have been brainwashed…”
Yes they are. Drugged and Hypotized to be exact.
Most poeple don’t want to know, even members of my family. Don’t rock the boat!
They don’t understand the risk of having your “head in the sand.”
However, more and more people are waking up. It’s amazing. From dishwashers to engineers.
There is hope yet!
I agree with you, Jas. One only needs to look at who is the valedictorian of the high school classes in American schools these days. Usually someone with an Indian or Chinese name.
The dumbing down of this once-great country is a real shame.
Amen TxChick and Jas… What’s worse is you have economic extremist nutjobs marching lockstep and repeating the mantra of the corporately elected government we currently have. NOBODY… not ONE person I know is in agreement with the constant drumbeat of “the economy is roaring” propaganda repeated by the MSM.
Er. Um. That valedictorian with an Indian or Chinese name *is* an American, just as much as someone with an Irish/French/Polish/German… name…
Folks there are stupid people and smart people of all ethnicities.
“Folks there are stupid people and smart people of all ethnicities.”
Lord if that isn’t ever true. I’ve taught courses at all different grade levels — from middle school to university. If you want ethnic stereotypes shattered, nothing will do it faster than teaching.
“Folks there are stupid people and smart people of all ethnicities.”
There’s also such a thing as an educated idiot. Plenty of people with advanced degrees who practically need help on how to wipe their butt. Knowledge and wisdom are not necessarily the same thing.
What does the ethnicity of high school valedictorians have to do with the dumbing down of America?
I think she is referring to the fact that most of the learned scholars in our country are imports and subsequent to obtaining the free primary education and very affordable secondary education that this country affords, then go back to where they came from and compete with us. They earn less and henceforth jobs leave here and go overseas.
White Americans are majoring in physical therapy and sports therapy while Chinese and Indians are majoring in physics, medicine, engineering, etc. Just visit any college campus, there are Chinese in colleges where there are no Chinese in the local community. I’m not racist (for those who dont know I am mostly black, partly Irish and partly Native American). But understand when all of the middle class no longer has jobs and has to live on maybe 20% of what they were used to, then things will get really ugly. Maybe racial wars, maybe another civl war, etc. Our country has many good things in relation to most other countries. We have a good educational system - if people would just take advantage of it. We have a strong democracy - if people would just vote using some sense. We had a good Protestant work ethic - if people would just continue to follow it and quit looking for the easy way to make riches. But the country also has some problems that need to be resolved and quickly. The whole r.e. greed thing is just a symptom of a greater issue with ourselves. And we are all part of the problem - and we should all be part of the solution. But the name calling and throwing insults - you all need to grow up. This used to be a very good blog - with respect shown for one another. Now I see that there are people making rude comments and saying stupid stuff. I hope it gets better.
tough to outsource rubbing your back! gotta be local.
Working for a multi-billion dollar company that moves workers around quite a lot, I can tell you that foreign workers who get to the USA do everything possible to stay in the USA. Indians, Chinese, British, New Zealanders, Germans; you name the nationality and they want to stay. As a German guy I work with said, if you want job security stay in Europe and do the same job for the next 30 or 40 years. If you want opportunity to improve your lot in life and a greater breadth of life experiences, come to America. (He’s been here for about 15 years.)
“One only needs to look at who is the valedictorian of the high school classes in American schools these days. Usually someone with an Indian or Chinese name.”
Or someone who has learned to cheat and manipulate better than the rest. According to many studies, cheating is no longer considered immoral by our youngsters. Obviously, by taking a hard look at our society today, they’ve come to appreciate that lying, cheating, and manipulating or not wrong, but rather an efficient way to get things done and to get what you want. Yeah, our future here looks real bright!
And high test scores/grade do not indicate a person’s ability to lead or be creative — two qualities I think Americans value highly (or at least two qualities that have, in the past, helped vault America to success). Conformity is often just as highly valued in some immigrant communities as doing well in school; it makes for technically skilled worker bees. That’s useful, sure, but the entrepreneurial spirit (which I so quaintly believe in) is another thing altogether.
Jas Jain,
I haven’t read your other posts, but please do tell us what sort of economic system you find preferable, and how to implement.
My children are in private school and I do a lot of home-schooling. I’ve never been a fan of the Prussian method of one-size-fits-all schooling. So I hope they learn logic and critical thinking.
Truly, though, consumer debt is a personal choice. Greenspan doesn’t “thrust” it on individuals, but sure, he was an enabler. Just like here in Virginia I have freedom to purchase wine, I have to be careful. As long as certain weak humans have desire for and access to easy money, they’ll take it. It’s just one of life’s temptations along with other forms of harmful things.
Jas posts speak directly to a mindless and directionless society, easly led in whatever direction one might want to lead them. We’re talking about leadership here. Economic and cultural leadership. Rather a lack of it. We haven’t had any such leadership in MANY years and we are now seeing the end results. Where did our leaders go? You know where but most won’t admit it. They’re too brainwashed and busy peddling misinformation.
Economic and cultural leadership? You mean like Alexander Hamilton and Jonathan Edwards?
“Where did our leaders go? ”
They were assissinated in the ’60’s
Seriously!
Is it any wonder all we have gotten since are coporate but boys!
–
“I haven’t read your other posts, but please do tell us what sort of economic system you find preferable, and how to implement.”
This is one of the things that I find disgusting about Americans. (This is not directed at you, personally).
Why do you suppose that a good critic is also a good solutions generator?
More importantly, if I think that the stage is already set for the Greater Depression, because of the stupidity of the population and the crooked nature of our leaders, what implementable solutions are there?
The best I can do is to warn people so that they can be better prepared than most. I don’t believe in mass movements, but some people can be helped by the knowledge of what lies ahead.
Jas Jain
Keep pumpin’ it out, Jas. You’re going to be labeled a socailist, a commie, anti-American, a doomer, and so-on and so-on. But someone has got to say it, and so far you’re doing a pretty good job.
Socialism, Communism, Capitalism are scams, labels to direct hatred, labels to direct your attention away from the truth.
For instance, we’ve all been taught that capitalism needs lassie-faire or hands off. This means government regulations, tax policies, etc. But it also applies to corporate intervention in the free market system. Bribery, coercion, and murder are not the tools of a free market. The free market is a myth! What we really have is socialism for the wealthy class. After all that is who is running the show.
Why do you think the dollar is worth 20% of what is was in 1972? While real wages are stagnant or have declined? Why is it that our manufacturing jobs have left the country, thereby, hollowing out the US economy? Why is it that we have gone from the world’s largest creditor nation to the world’s largest debtor nation in 35+ years? Are these all just coincidences? Or are they the policy of the FED? Well of course it’s the FED (and US government) who are controlled by… (come on you can say it)…member banks (bankers); who are controlled by the world’s wealthiest families.
It’s all just a coincidence folks. Nothing to worry about just go back to sleep.
Most of the history of this country is fathers, mothers, and children working. Parents don’t send their children to work unless they have no choice. That’s right, for most of the history of this country, two working parents did not make enough money to feed, house, and clothe themselves without sending their children to work. We’ve only gotten things like the 40-hour workweek and health benefits by people saying enough is enough!
In case you haven’t noticed folks, our pensions and health care have been under attack for that 35+ years also!
It’s not about Capitalism vs. Communism. It’s about taking control of your life. They way to start to do that is educating yourself! Not with the corporate controlled media, but by thinking outside the box of our “public schooled” train of thought and the rhetoric of liars dressed in suits.
Get a clue or get what’s coming to you!
Amen, suspicious!
And I totally agree that labeling things (socialist, capitalist, communist, Republican, Democrat, etc.) is a way to steer the herd and cause enough division among the masses to distract them from what really matters. Not to mention wedge issues (religion, abortion, gay marriage, etc.) which are personal issues and not the domain of the govt, IMHO.
All that disdain and pseudo-intellectual raving, and you have no solutions to offer? Feh. Even a 6th grader can be a critic, but it’s producing viable solutions that are hard work, and those who can’t put a viable solution forward, are not serious.
But you no doubt have a solution in mind, most likely in the flavor of Karl Marx…
There are steps involved in problem sloving.
Simply put, they would be:
1) Define the problem
2) Brainstorm the best solution
3) Implement that solution
You need to be a critical thinker. You yourself are criticizing, thereby not adding value to the discussion/solution process.
Why do you suppose that a good critic is also a good solutions generator?
Then where are your solutions? All I hear from you is the criticism…
“Then where are your solutions? All I hear from you is the criticism…”
Solutions require brains and leadership. The mindless drones are trained well at responding with simple 2 or 3 word sentences such as “tax cuts”, “you socialist” and “get out of my country if you don’t like it here”. But these minions never offer a solution. Just ignorant rhetoric.
When I was very young my grandfather told me to watch out for the “money manipulators.” I never realised at the time what he was trying to convey, but I never discounted the serious nature of his tone. Fortunately, I have acquired the skills to earn a living without screwing anyone, and I have always been distrustful of solicitors in all their forms.
Jas does a whole lot more writing and reaearch than I do. Just one example:
http://www.kwaves.com/debt_art.htm
What I’ve picked up in his writings is a consistent dislike and distrust of the hidden hands of Wall Street. Not sure if this is the right analogy (not his, to my knowledge), but the Goldman Sachs re-jigging of their fund weighting that, according to the NYT, likely had the biggest effect of all on the recent pre-election gas price drop. Stuff like that.
Jas has really valid points. He just waste them with his vitriol and broadly sweeping statements. It makes them seem like rants.
I am an American, I vote (carefully), pay taxes (reluctantly) and consume (reasonably). However, I am not a serf. I am not in debt. I save. I was raised, just like RMS, to be very wary of anyone who wanted to sell me something. I see the hand of manipulation all over the landscape: finance, politics, business, church, sports. It has ever been so.
I am not a dupe, I am not a farm animal, I do not hate myself. And I am not the only one like me. Therefore Jas’ statements are overly broad, and therefore meaningless in the specifics.
I am not as smart or as rich as many others on this board but I want to share my thoughts on this current issue of Jas’s rants. They just rant and rant without doing much to resolve the problems that they are talking about. They were lucky that they were born with silver spoon and also when they grew, their connections and wealth along with good luck helped them to become more wealthy. I do not doubt his intelligence (PhD in EE says that person is smart) but not all smart people are also good people. Also I do agree with what he says but the way he tells it is worthless. The financial trade that he says in which his family is engaged in India for centuries is not the trade of saints, it is trade of blood suckers and scammers who have been sucking people’s blood for centuries and he feels proud of having this history and justifies his knowledge of finance!!
Coming to the point of his rants, this is a typical Indian behavior of a person who has succeeded in life by hook or by crook. The moment they achieve something, all their fellow beings are worthless. When I compare Indians and American people, I would say that smartness and intelligence is similar in both the groups and in fact my theory is that 99% of people have same level of intelligence. But the difference comes from how they apply their intelligence in real world. In American people although everyone is trying to make as many bucks as possible but there is sense of collective feeling, respect for each other and a desire to work together despite any differences of opinion. I see this all the time on this board. There are many many smart people on this board and they discuss even though they do not agree with each other they disagree respectfully and that is what makes the people great. Whereas as Jas does, the typical Indian achiever is arrogant and behaves like he knows it all and others are worthless. Another problem in Indians is that of lack of willingness to work together and lack of collective feeling and trying to fight each other and one example of this you just saw is that I spilled the beans on Jas.
I kind of like when this blog digs at the bigger picture, Jas’s picture is a little foggy to say the least.
Communist, capitalist, autocratic systems degrade because they are corruptible. Theories of how to operate these systems don’t account for the corrosive effects of human vice. American-style democracy is one of the few that does - through its system of checks and balances - it announces the fallibility of its leaders — its most important pillar is its recognition that unchecked power really makes people screw things up.
That’s why it’s lasted so long. I’m not ready to give up on it yet, but there is hard work to do here to figure out why our elected officials think it’s a good idea to let “BFNYC” or any corporate interest, put its drunken hands all over our body politic. Checks and balances are good for our politcal system, and they would be a salvation for our economic system, if we’d only place some effort into trying to craft such safeguards.
We haven’t learned the lessons of human nature or history well in this regard. And we’re not going to learn them if we elevate corporate behavior into “evildoing” status - this to me implies the corporate brain has a conscious, directed mind. It doesn’t.
If we ever hope to reform corporate influence/behavior, we have to understand one thing: Corporations are motivated by short-term gain only - as such, they are idiots. They will cheat, steal, lie, conceal to every extent they can if permitted to enhance next quarter’s bottom line - damn their own future and everyone else’s. It’s evil like a junkie is evil. They’re so focused on their high they’ll do anything foolish for another fix.
The debt mess we’re in is exhibit A of this kind of behavioral problem. Capitalism amok is going to create an idiocracy in which corporations kill themselves and us while pursuing short term gains. The only hope for a free market is to make it a fair market - by not allowing corporations to do whatever the hell they want and screw whoever the hell the want to meet their narrow, dumb goals.
If the Republicans and Democrats and Independents among us can learn that lesson in time, there’s hope for us all. Regulation, when it creates fair competition, is the only means we can use to ensure the survival of our republic — we have political checks, now it’s time to think of economic ones.
“American-style democracy is one of the few that does - through its system of checks and balances - it announces the fallibility of its leaders”
…..really?
“If the Republicans and Democrats and Independents among us can learn that lesson in time, there’s hope for us all. Regulation, when it creates fair competition, is the only means we can use to ensure the survival of our republic — we have political checks, now it’s time to think of economic ones.”
I’m afraid this goose is cooked. It’s had a good run, but now the Anglo-American world power is about to take it’s place in the long line of has-beens.
nnv -
You can’t look at today’s snapshot. That gives a skewed picture. There are too many ifs and plausible scenarios where the US remains dominant for the remainder of our lifetimes. The simple fact that we recognize China and India as potential usurpers of our role gives us hope. We do better when we have a struggle.
There have been many times when it looked like the US was on the ropes or overly corrupt. They always resolved themselves.
Soon, Asia will take it’s place as the the economic leader. When is questionable. IMO, my father will not live to see it. I will not be working when it happens, and my children will adapt quickly, because this culture allows it self to do just that.
The lack of permanence in our culture is responsible for a lot of what Jas complains about. It’s also what has given us the flexibility to deal with changes the workd throws at us.
I think we are in for a hard times ahead because of our debt driven society and the bubbles created out of economic and political expediency. And it won’t make us stronger. It will get rid of the debts and the bubbles and put us on a better track.
Jas has no better idea than I (or you) about the path this thing will follow. We can predict a trajectory, but do not have enough knowledge to see how it ends.
–
“American-style democracy is one of the few that does - through its system of checks and balances - it announces the fallibility of its leaders — its most important pillar is its recognition that unchecked power really makes people screw things up. ”
My apologies, but you are one of those born-and-bred dupes of the system. No system is beyond human vices.
American system was good as long as we were fortunate to have relatively moral leaders (left over from the Puritan and Christian past). Now we have immoral Crooks who have total control of the economy and politics.
HOW MANY AMERICAN PRESIDENTS WANRNED AGAINST AND KEPT BANKERS IN CHECK AND FROM HARMING THE POPULATION????????????? That is why Americans were never financially raped as they so easily can be today. Bankers own the Presidents now. No, it was not always so. The power that the bankers and financiers have today is far greater than at any time in American history. And even bankers, like Gianini of Bank Of Italy (later renamed Bank Of America), were not so bad as today’s bankers who are evil. Gianini had to fight the evil bankers of New York City.
Jas Jain
Every political system is corrupt and becomes more corrupt because people are corrupt. Being a Christian, I attribute that to what I would call our sinful nature, which may or may not offend others on this blog. However, I am grateful to be born in the USA and not in many other countries of the world that do not have the same freedoms which I believe are a result of our Christian heritage, as you mention, Jas. It is useless to expect any political system to be free of defect, we should simply try to do what we can to make it as good as we can.
One aspect that you haven’t touched on that I believe has been instrumental in the formation of this credit bubble is mass social psycology, which influences both the “dupes” and the “leaders.” Alan Greenspan would never have held his position for as long as he did if he had stuck to his original principles, as I understand them to have been (and I would have had a lot more respect for him if he had). He was popular because he gave the masses what they wanted, if he had tried to do anything different he would have been removed and replaced with someone who would give the masses what they wanted. I believe that the mass psychology is changing; the change in the housing bubble is evidence of this, and when the change gets underway, it will be self reinforcing, and the “leaders” will not have the power to change it.
“same freedoms which I believe are a result of our Christian heritage”
…and soon to be destroyed due to a lack of Christian principles.
Kim you are on the money. I too am a bible believing Christian. There is enragement seething under the surface of the masses and it may or may not reflect itself in the upcoming elections. In may be too early yet. Irrespective of that, within the Church, we’re finally coming to the realization that we’ve been getting played by Dobson, Perkins and Falwell as they’ve been doing nothing more than pimping the corporate Church to one party. It’s long since been clear to most of us that the Church values (scriptural) DO NOT at all align with the values of the party currently in power.
There is a sea change coming. And all the pandering minions aren’t gonna like it…… at all.
Honest question here. I don’t attend church and often question the teachings of the church, but consider myself a Christian.
Why is it that Christians feel the govt needs to force the church’s will on all Americans? Is that any different than the corporations expecting the govt to do their bidding?
I think if we could come to an agreement about what the govt’s job should be, we would have a better chance of finding a better fit. Personally, I think the govt should provide for our defense, should regulate business and commerce (within reason), enact and enforce laws which prevent people from causing harm to other people or property.
As far as personal issues go, I believe the govt has no business telling people what to do, as long as their behavior & actions don’t negatively affect people outside their families.
“Why is it that Christians feel the govt needs to force the church’s will on all Americans?”
I don’t have much time to clarify this statement but here’s a few facts. Somehow, at some point, Falwell, Dobson, Robertson, Tony Perkins and the charlatan Ralph Reid appointed themselves at “Church leadership”. These aren’t elected reps, they’ve merely appointed themselves as the official voice of the corporate Church. What the’s “representatives” have done, as you know, is pimped the Church to a pandering political party with the promise of delivering votes in return for legislative action on what these representatives believe is important.
To be continued tomorrow.
Bankers were always evil in recent times. From the Fabian socialist Rothschild’s to Loeb and Morgan and Rockefeller. Bankers had complete control of presidents before. Hell they actually got Woodrow Wilson elected, and placed Colonel House in his bed to keep an eye on their interests.
It will not change without a cataclysmic event. But even the aftermath could be more frightening than the present. Keynes’ “bancor” replaces the dollar, and the Fed is rolled into the World Bank, under guidance from the UN. If the pain is great enough , the masses will accept it, gladly even. New world order.
Don’t forget the Harriman’s (with W’s grandfather) that helped fund the Nazi’s.
You are beginning to sound like Hitler!
you honestly think bankers own bush? ever taken a look at his family’s holdings? i dont like bush, but bought? please.
He might have meant that because they control the economy, they control the power the politician craves.
““same freedoms which I believe are a result of our Christian heritage”
“…and soon to be destroyed due to a lack of Christian principles.”
I agree. And I am NOT a Christian. Also, the politically active Christians today are a shame to one of the best “man” and religion. It is not the religion but the application of a corrupt political practice that makes them disgusting dupes.
Americans’ behavior will destroy everything that was good about this country. It is only a matter of time. Americans are on an accelerated a path to destruction. And, sadly, they will succeed. The Housing Bubble was just the latest on that path!
Jas Jain
Well spoken.
“if we elevate corporate behavior into “evildoing” status - this to me implies the corporate brain has a conscious, directed mind. It doesn’t.”
But they do have an agenda!
A little wordy but I agree with you.
The sheepels won’t wake up until something affects them like a job layoff and sustained unemployment, can’t get gasoline or intermitent electricity and gas. But of course, by then it’s too late.
Dems vs Rep’s and Conservatives vs Liberals is a smoke screen to keep you going to work, paying taxes, and mass consuming. It’s all about the wealthy class vs the working class! And guess who’s winning?
Our economic system is based on mass consuming limited rescources. And every year, more profit, more credit, and more rescources are needed to keep the system going. Sooner or later something has to give.
I’m afraid it’s going to be sooner than later. There’s a perfect storm brewing. Once you’ve been awakened, a blind man could see it. All you have to do is look (want to know).
This housing bust will most likely start the storm. It will effect all of us.
Jas is a fool. Remember Murphy’s Law: “If you argue with a fool, people might not know the difference.”
As for you Jas, “Patterns are not always artificial.”
Let me summarize Jas’s comments for those who didn’t take the time to read it:
“The world isn’t perfect and most people are to stupid to realize it.” There is also some sort of backroom control-the-world conspiracy nonsense as well.
My response, thanks for the revelation. People always take the action they perceive as being best for them. Rarely will these actions make sense as “best for them” is subjective and based on the data that they have on hand. No mater how much education these people have, no matter how critically they think, there will always be someone who will be able to dupe them either due to lack of intelligence or missing data. And that grand conspiracy you see is merely a coincidental pattern in random data points of people making the “best for them” decision.
That is the way the world works. Railing against it won’t do you any good.
And that grand conspiracy you see is merely a coincidental pattern in random data points of people…
What makes you think that? Do you have any more proof than the conspiracy theorists?
“That is the way the world works. Railing against it won’t do you any good.”
That’s right, just keep watching “American Idol”, drink your beer, go to your 8-5 job and STFU. Can’t take advantage of the sheeple if they actually challenge you?
What makes you think that? Do you have any more proof than the conspiracy theorists?
You want me to prove a negative?
That’s right, just keep watching “American Idol”, drink your beer, go to your 8-5 job and STFU. Can’t take advantage of the sheeple if they actually challenge you?
How are they sheeple if they challenge the system? And are you the self proclaimed liberator of the sheeple? And if you are, how are they any less sheeple for following your grand vision for the world rather than living life comfortably as they are now? The problem that you and Jas et al seem to have is not that they are sheeple, but that they are currently following someone else’s idea of what they should be doing rather than your own.
p.s. I would never wish American Idol on anyone. I would prefer if more people watched Drawn Together or Family Guy and actually got the jokes.
p.p.s. How dare you disparage beer drinking.
PBRenter,
Sorry, let me clarify. While I know some conspiracy theories sound extreme (and truly are), there have certainly been occasions in history where the “conspiracy theorists” were right. By the time everyone else figured it out, it was too late. If you have proof that these conspiracies are totally not possible, I’d like to see it. Conversely, if you can prove that what we are told to believe (by the govt, the media, and those who try to discredit consp. theorists) is true, I’d like to see that.
Point is, people in the majority could not be taken advantage of as long as they were vigilant and willing to challenge the system. Additionally, they must be willing to fight for the right to challenge those in power, with force, if necessary. IMHO, a government should be by the people and for the people — not for the priviledged few.
“And that grand conspiracy you see is merely a coincidental pattern in random data points …”
I think I see: Your not a conspiarcy theroist…you’re a coincindence thoerist!
I persanally quite believing in Santa Clause, the Easter Bunny, and coincidences a log time ago.
backroom control-the-world conspiracy nonsense as well.”
“You wouldn’t know proof of a conspiracy if it was biting you in your a**. Because it is.
Look in your wallet. Take out a bill and read what it says. “Federal Reserve Note.”
The FED is not part of the GOV nor is it a reserve bank. Yet the constituion clealy states the GOV shall print and set the value of the currency!
The FED controlls the banking system in this country (and other central banks control the rest of the world). Look to my other posts to see who controls the FED.
You do understand if you can control the money you can control the GOV/people?
Do your homework man. Time is growing short!
2nd.try
mdc earning down 60%/ canrate 48 %
looks like more and more builders highlight their cash and borrowingcapacity to stand this downturn. what a difference 6 month make…….
Diluted earnings per share of $1.06 vs. $2.62 in 2005 (minus 60%)
* Net income of $48.7 million, compared with $121.0 million in 2005
* Pre-tax inventory impairments and project cost write-offs of $29.4 million
* Total revenues of $1.08 billion; $1.17 billion in 2005
* Closed 2,955 homes at an average selling price of $358,200
* Financial services and other profits of $13.0 million vs. $9.6 million in 2005
* Net orders for 2,120 homes valued at $678.1 million vs 3.551 and valued $1.22b (-40% / value -44%)
* Quarter-end backlog of 5,661 homes valued at $2.10 billion vs 9.057 $3.29b (-37% $ -36% )
* Unrestricted cash and available borrowing capacity of $1.36 billion
* Cash flow from operations of $70.9 million in 2006 third quarter
enabled us to reduce our lots under control by more than 25% since the beginning of the year, with less than 3% of our stockholders’ equity at risk for our 11,000 optioned lots. In addition, our investment in land declined by almost $100 million in the third quarter alone, which contributed to our generating more than $70 million in cash flow from operations during this period. As a result, we ended the quarter with $1.36 billion in available cash and borrowing capacity, up 25% from last September.”
The Company closed 2,955 homes and produced home gross margins of 22.7% in the 2006 third quarter, compared with 3,686 home closings and home gross margins of 28.8% for the comparable period in 2005
The SG&A expenses for the three and nine months ended September 30, 2006 included project cost write-offs of $9.5 million and $23.0 million, respectively, compared with $2.5 million and $5.2 million of such costs for the same periods in 2005.
We experienced reduced home gross margins in each of our markets except Utah and Delaware Valley, with the most significant decreases occurring in Nevada and California, as has been the case in the previous 2006 quarters, as well as in Virginia, due to increased competition and extreme inventory pressures in that market. The $19.9 million in inventory impairment charges we recognized during the third quarter, which are not included in our home gross margins, primarily relate to five projects in California where we experienced a much slower than anticipated home order pace and significantly increased sales incentive requirements.”
Similar to our 2006 second quarter, we deferred $18.5 million in profits related to certain homes closed in the third quarter for which the Company’s mortgage subsidiary originated high loan-to-value loans for our homebuyers and still held the loans in inventory at the end of the quarter. However, we more than offset this deferral by recognizing $30.7 million in profits that had been deferred in the second quarter, resulting in a net increase to homebuilding profits for the 2006 third quarter of $12.2 million. This net increase in profits raised third quarter home gross margins by 90 basis points and average selling prices by $4,100.”(?)
canrate 48,5%!!!!!
plus a very good piece on
dow 36,000 wasn’t wrong, just early.
this shows me that the top is near. you really should read this stuff.
feels like fools day…..
http://immobilienblasen.blogspot.com/
sorry for the multiple posting.
A few folks at SDCIA are taking rather soberly the news that Australia’s Treasurer has recommended Australia and other Asian nations begin a move out of the US Dollar. Hopefully this article has not already been discussed here – if it was, I missed it.
SDCIA thread:
http://tinyurl.com/yez6cd
Sydney Morning Herald article (Oct. 18):
http://tinyurl.com/y4bpxn
“Orderly adjustment” sounds a lot like a “soft landing”
From Chip’s link to the Sydney Morning Herald:
“Ahead of next month’s G20 meeting in Melbourne, Mr Costello called on regional leaders to reform their anachronistic financial systems.
He said underdeveloped financial markets were to blame for the emerging economies of East Asia sending 94 per cent of outward portfolio investment to “ageing” countries outside the region.”
So ya think he was referring to us?
Did you notice that the SDCIA is forcing people from “Ben’s Mushroom Farm” into a little corner of their blog and out of the main threads? He he he. Smells like teen spirit to me. I guess their motto is, “if you can’t beat ‘em, delete ‘em.”
Again, I would like to stress to the San Diegians in the group - yes, the discussion boards are full of bulls who are clueless and about to lose everything. But the monthly meetings are fantasic with topics from why the market is going to crash to teaming up with foreclosure relators to buy investments in the coming huge wave of foreclosures. The discussions are very bullish. The meetings are far more bearish!
Rough day. Please forgive the typos.
from this morning’s Boston Globe: “Home sales fall 24% in September . Prices drop 5.3% as buyers bargain hard with market in their favor, realtors say. Sales of single -family homes in Massachusetts slumped in September .In its monthly sales report , the Massachusetts Association of Realtors said yesterday ,the median price for a single -family home was $341,000 lasr month down from $359,000 a year earlier . Sales were the slowest in September in a decade , and house prices ,which have been flat or falling for eight months in a row, are now 9 percent below their summer 2005 peak of $375,000.” Somehow I don’t think we’ve reached the bottom of the market in Boston yet !!!
countrywide is out with earnings.
Delinquencies (90+ days) at September 30, 2006 were 44 basis points, an increase from 11 basis points at September 30, 2005. The increase in delinquencies is in line with management expectations and primarily reflects the seasoning of the Bank’s loan portfolio.
Ugh, what are they considering “seasoned”. Is that the new word for “when the IO/negative am period is over and we take the house because there is, and never was, a chance we were going to get paid on that loan”?
A seasoned loan to me would be 5+ years old, with an established (full price) payment history. However, I have a feeling that’s not what they are talking about.
A seasoned loan is one that is 12 months payment history. Prior to 12 months the loan can be returned by the MBS market.
Seasoning? Is that the name of the process which turned the tasty chicken lasagna over time into the unknown substance hidden under the aluminum foil covered bowl in the back corner of the refrigerator?
this is only for the bank.
i´ll make an update after the call.
looks ugly.
stock is up. as usual…..
Just heard on “Squawk box” on CNBC:
They were talking about the “wealth effect”, and the analyst said (paraphrased)
1) all wealth is NOT created equally when it comes to consumption
2) on average, for every $1 increase in wealth (not income, but wealth), people spend 6 cents
3) However, the actual spending depends on source of wealth
4) for every $1 increase in Real Estate Wealth, people spend 9 cents 5) but for every $1 increase in stock market wealth, people only spend 2 cents.
Thus, their point was that a RE surge can “save” a stock market crash as it did in 2001, but a stock market surge can NOT save a RE crash if one happens! (I was surprised as to the bearishness)
Their reasons for why RE wealth is spent more than Stock wealth
-Overall it’s due to PSYCHOLOGY they said!
-also, the total value of RE is 22 trillion, stocks only 14 trillion. So there’s more RE wealth overall
-also, more people have RE wealth. 68% of people own RE. Only 50% of people own stocks
-also, the demographics are different. Stock holders tend to have a much higher income and overall wealth, and thus they don’t consume as much percentage wise of their wealth compared to RE owners who tend to have less wealth
-also, they stated that RE wealth is more accessible due to HEL and HELOCs and refinancings etc, whereas to get the wealth from a stock you must sell it
-and also, they thought that tax considerations cause this (low to no tax on Home equity, higher cap gains taxes on equities)
Their last point:
for every $1 increase in wealth, people spend 9 cents
For every $1 increase in income, people spend near a dollar!
I’d be curious to know what percentage of the current run up in RE prices has been pulled out as cash and spent through refis… Maybe its just the people I know, but 9% seems low…
agreed, 9% seems low. But remember that this is 9% of ALL wealth created in the RE runup. There are many people who do own their homes outright, and many people who have some equity in their homes as well. And also many people built up equity over the years until 2000 when the bubble began…
To me, it was just interesting that people spend 4.5x as much of their RE derived “wealth” compared to their stock derived “wealth”. (9% vs 2%)
And it was extremely interesting noting that CNBC’s reporter felt that RE could save a stock crash, but that Stocks CANNOT save a RE crash! wow.
There is a higher level of participation of the “consumption class” in RE vs. the Stock Market in terms of both the number of participants or distribution and as a percentage of the value of the asset class.
Not sure what the “consumption class” is but I’ll make a point that may be closely related to what you are trying to say. People who bought RE as a way to make money were very often confusing consumption w/ investment. People who buy stocks/bonds/productivefacilities have clearly chosen to defer consumption.
“To me, it was just interesting that people spend 4.5x as much of their RE derived “wealth” compared to their stock derived “wealth”. (9% vs 2%)”
Maybe it is because people could pull money out of their house without selling (parting with) anything. So they felt that they had gotten free money. But with stocks, they would have to sell some shares to get at the cash. The remaining shares, too, represented an asset that had proven quite capable of going down in value, whereas most everyone bought into the “RE never goes down” mentality.
I think that’s most of it, but also that most people’s margin rates of interest are far higher than their mortgage interest rates. Plus there’s a whole lot less leverage (2:1) vs 5:1 traditionally or 20:1 currently.
“I’d be curious to know what percentage of the current run up in RE prices has been pulled out as cash and spent through refis…”
From Boomers Love Real Estate
Kenneth R. Harney
October 22, 2006
Syracuse Post Std.
Sorry couldn’t find a link but here are a few paragraphs I found might provide some info on equity:
“Home equity plays a huge role in boomers’ financial planning and well-being. Their median equity stake - the market value of their real property minus mortgage debt - is $100,000. The median household net worth of boomers - financial holdings plus real estate, minus all debt obligations - was $149,500 in early 2006. However, 23 percent of boomers age 50 to 60 control equity stakes of $250,000 to $1 million or more. Fifteen percent of boomers age 42 to 49 already have accumulated home equities of $250,000 to $1 million.
Home equity represents a significant percentage of total household net worth for most boomers. Thirty-six percent of 50-year-old to 60-year-old homeowners report that the equity in their primary residences totals from 51 to 100 percent of their household net worth. Thirty-eight percent of boomers 42 and 49 report the same.”
for every $1 increase in wealth, people spend 9 cents
For every $1 increase in income, people spend near a dollar!
Well, if when you increase your wealth by a buck, you invest it. Long term = approx 11% gains, so people are investing in shorter term.
If you increase income by a buck, then you’re living near the edge of your $$.
This is not surprising at all.
Did they say where they found this little gem of wisdom?
Whenever some “eggspurt” is on the boob tube hatching out his statistics to back up their opinions I always go into hyper-cynical mode. It would be one thing if economists start out researching their metrics to see where that may take them. However, economists are human and subject to the same biases of any other human being. These people start out with an opinion, and they search high and low to find a metric that will yield for them their “proof” of their bias, while they ignore anything else that may disprove their bias.
“-also, more people have RE wealth. 68% of people own RE. Only 50% of people own stocks”
Wrong, there are far more people with stock ownership. They are not including the stocks that people own in their pension plans.
“-also, they stated that RE wealth is more accessible due to HEL and HELOCs and refinancings etc, whereas to get the wealth from a stock you must sell it”
Nothing could be further from the truth! It is much easier to extract equity from a brokerage account by simply using margin. This can be done by initializing online either a Fed wire transfer of funds or an ATH wire transfer of funds from the comfort of your own home. No need to dicker with bankers or mortgage brokers, and none of their fees or penalties.
“-also, the total value of RE is 22 trillion, stocks only 14 trillion. So there’s more RE wealth overall”
Again, nothing could be further from the truth! From the very top of the NYSE web home page:
The New York Stock Exchange (NYSE) is the largest equities marketplace in the world. Our listed companies represented a total global market value of approximately $21 trillion, as of December 31, 2005. These companies include a cross-section of large, midsize and small capitalization companies. Non-U.S. issuers play an increasingly important role on the Exchange. Our approximately 453 non-U.S. companies are valued at $7.1 trillion.”
So there you have it, $21 trillion. $13.9 trillion if somehow these people want to make a most stupid argument that somehow the $7.1 trillion of foreign companies does not count, but this is not even including the nasdaq! So they very conveniently understate total stock value, what makes me think these jokers are not overstating total RE value?
“4) for every $1 increase in Real Estate Wealth, people spend 9 cents 5) but for every $1 increase in stock market wealth, people only spend 2 cents.”
The “smoking gun” statistic. A very authoritatively and conveniently high 4.5:1 ratio. It would not be difficult to pay other economists to find equally authoritative ratios of other metrics to prove the reverse.
We need to have a better understanding and recognition of “junk science.” Remember, the tobaco companies have scientifically proven over and over again that smoking is not detrimental to anybody’s health.
Now I will introduce my own bias to this argument. Asset class has nothing to do with willingness to go into debt. There are many, many RE owners who would never do anything stupid with their equity, whereas there are plenty of people with very large stock brokerage account balances that do not have any net worth because of their debt load. (His and hers Lexus and BMW, etc…). There are always “very smart and sophisticated investors” who know how to work around the 50% margin limit. This is why stock markets can correct very viciously with a vengeance; the margin calls mask the actual extent of the use of margin.
Yeah, and some of them are “institutional” investors; i.e., hedge funds.
Your source is complete fabrication - the NYSE is counting the number of ETFs that also own stocks that are listed on the exchange. I always like double counting.
For the value of ALL US STOCKS see The Wilshire 5000 which has total valuation for all US stocks on all exchanges.
Today the market value of all the stocks is (no surprises)- drum roll
tada
~13,780,000,000.
I think the NYSE page has ego problems
Also HIC the RE figures that you are showing are for single family residences and do not include any commercial property.
All good criticisms of the “data” provided.
For me, though, I look at the source. This was a stock market bull (or so it seemed) whose eventual thesis was that stock market gains cannot compensate for RE losses!!!!
It’s one thing if I saw those statistics here on a bubble blog (no offense to anyone here), but I was totally expecting them to talk about why surging stocks would take care of any potential housing bubble!
Instead they say “stocks cannot overcome the housing decline”. Odd for CNBC in my opinion.
TCM guy wrote: “Wrong, there are far more people with stock ownership. They are not including the stocks that people own in their pension plans.”
**Actually, I think they DID include people who have stock in their Pension plans, 401k, Roth and traditional IRA’s etc. This was part of their point. Because so much of the stocks held is in the above plans, the wealth is hard to extricate.
TCM guy wrote: “It is much easier to extract equity from a brokerage account by simply using margin”
Most stock owners don’t have a brokerage acct. Most stocks held by Americans are in the above retirement plans (which makes them less accessible)
“The New York Stock Exchange (NYSE) is the largest equities marketplace in the world. Our listed companies represented a total global market value of approximately $21 trillion, as of December 31, 2005″
- a lot of stocks owned on the NYSE are owned by foreigners as well though… I’d guess (yes, a guess) that a higher percentage of equities are owned by non-Americans, than American Real Estate owned by non-Americans
That said, I agree with you that economics is a soft “science” at best, and I hold very little of it in esteem. It is able to partially explain past events, but is poor as a forecasting method, and hence I don’t rely on it overly much.
According to the US Census Bureau, a 2003 report shows 47.9% of US households own mutual funds either independently or in a retirement plan. 32% of households have mutual funds only in employee-sponsored retirement plans. 34.5% of US households own mutual funds outside of employer sponsored retirement plans. Another report from 2005 shows 56.9% of US households own equities, and 90% of those households own them in mutual funds, while another half of those households own individual stocks.
http://www.sia.com/research/pdf/EquityOwnership05.pdf#search=‘ownership%20stocks%20census’
IMO, the disparity between what people spend of their “wealth” vs income is easy to understand. Most people who are “wealthy” have ample income and/or savings (that’s why they have wealth). They do not need to spend it, as it’s used for investment. An increase in wealth simply means there’s more to invest, not spend.
OTOH, the great number of peole who work for wages (income) basically live paycheck to paycheck. Therefore, they would likely spend an extra dollar of their income.
3rd.try
mdc earning down 60%/ canrate 48 %
looks like more and more builders highlight their cash and borrowingcapacity to stand this downturn. what a difference 6 month make…….
Diluted earnings per share of $1.06 vs. $2.62 in 2005 (minus 60%)
* Net income of $48.7 million, compared with $121.0 million in 2005
* Pre-tax inventory impairments and project cost write-offs of $29.4 million
* Total revenues of $1.08 billion; $1.17 billion in 2005
* Closed 2,955 homes at an average selling price of $358,200
* Financial services and other profits of $13.0 million vs. $9.6 million in 2005
* Net orders for 2,120 homes valued at $678.1 million vs 3.551 and valued $1.22b (-40% / value -44%)
* Quarter-end backlog of 5,661 homes valued at $2.10 billion vs 9.057 $3.29b (-37% $ -36% )
* Unrestricted cash and available borrowing capacity of $1.36 billion
* Cash flow from operations of $70.9 million in 2006 third quarter
enabled us to reduce our lots under control by more than 25% since the beginning of the year, with less than 3% of our stockholders’ equity at risk for our 11,000 optioned lots. In addition, our investment in land declined by almost $100 million in the third quarter alone, which contributed to our generating more than $70 million in cash flow from operations during this period. As a result, we ended the quarter with $1.36 billion in available cash and borrowing capacity, up 25% from last September.”
The Company closed 2,955 homes and produced home gross margins of 22.7% in the 2006 third quarter, compared with 3,686 home closings and home gross margins of 28.8% for the comparable period in 2005
The SG&A expenses for the three and nine months ended September 30, 2006 included project cost write-offs of $9.5 million and $23.0 million, respectively, compared with $2.5 million and $5.2 million of such costs for the same periods in 2005.
We experienced reduced home gross margins in each of our markets except Utah and Delaware Valley, with the most significant decreases occurring in Nevada and California, as has been the case in the previous 2006 quarters, as well as in Virginia, due to increased competition and extreme inventory pressures in that market. The $19.9 million in inventory impairment charges we recognized during the third quarter, which are not included in our home gross margins, primarily relate to five projects in California where we experienced a much slower than anticipated home order pace and significantly increased sales incentive requirements.”
Similar to our 2006 second quarter, we deferred $18.5 million in profits related to certain homes closed in the third quarter for which the Company’s mortgage subsidiary originated high loan-to-value loans for our homebuyers and still held the loans in inventory at the end of the quarter. However, we more than offset this deferral by recognizing $30.7 million in profits that had been deferred in the second quarter, resulting in a net increase to homebuilding profits for the 2006 third quarter of $12.2 million. This net increase in profits raised third quarter home gross margins by 90 basis points and average selling prices by $4,100.”(?)
canrate 48,5%!!!!!
plus a piece that could mark the top in the market
dow 36,000 wasn’t wrong, just early.
http://immobilienblasen.blogspot.com/
sorry for the multiple posting. they didn´t show up.
Didn’t the yield curve invert for the first time last December or January? I recall the news at the time was that it was a spotty predictor of a general recession, but it was a 100% predictor of a corporate earnings recession 12 months out. DOW 12k and rising. What am I missing?
I’ve been seeing this cookbook advertised in a lot of catalogs recently. Hmmmm….
http://www.amazon.com/Depression-Era-Recipes-P-Wagner/dp/0934860556
$9.95 !! I can cook rice and potatoes for a month with that kinda money. I think this will be a tough sell. Try “Pidgeon Catching for Dummies”, now that will sell big.
Most investment managers have to have a minimum position in stocks. If you thought the market was going to tank, where would you allocate your assets if you HAD to put x percentage in stock? Wouldn’t it be in the biggest, safest names?
Notice the relative lack of participation by small caps. Small caps usually LEAD a bull market. This, in my opinion, is simply defensive posturing.
–
Q: What Does the Housing Bubble Say About “American People” and Our Economic Leaders, Led By Bankers and Financiers?
Note: If the crime rate is 5%, you can’t lay the primary blame on the common criminals. It lays on the shoulders of the government that makes it so easy and permissible. BTW, Scam Options Fraud was squarely responsible for the stock market bubble of 1990s. And Who Do You Suppose Were Responsible For That Bubble?
TIA,
Jas Jain
Hey we’re two weeks before an election, let’s let loose with politics. It’s the most important election the universe has ever known!!!! sarcasm /off I’m not a Bill Clinton basher, and I don’t give him credit for the 90’s prosperity. I think he was a good President in that he didn’t f up things beyond belief, which is better than you can say for anyone since Ike. But IMO Clinton does bear some responsibility for the stock market bubble insofar as he pushed nondeductibility of salaries in excess of $1 million. How to compensate? Options! Presto. Now as far as the people posting that Little Boots and the NAMBLA party on Capitol Hill have nothing to do with this housing bubble, I think that douchebag from Ameriquest might have a different opinion. What is he now, ambassador to Holland?
“If the crime rate is 5%, you can’t lay the primary blame on the common criminals. “
So I guess the marker didn’t show up. Meant to post:
“If the crime rate is 5%, you can’t lay the primary blame on the common criminals. ”
(scratches head)
I’m begging the people of this blog to please ignore Jas. Let’s not waste another fifty posts on his rants. Please just move along. There’s nothing to see here.
There is no RE bubble in California. Move along.
http://tinyurl.com/y3jkot
Just to put it in perspective — “bubble” Idaho:
http://tinyurl.com/y8mdaa
That Idaho house is down right ugly inside. It is like they think luxury equals cramming as much travertine and marble into the place as possible. I also love how close to the back wall those other houses were in the “play ground” picture. And the picture of the bathroom with the blinds closed makes me wonder just how close to the property line they are. Usually you want the windows open to let light in. My guess is that they couldn’t get an angle with the blinds open that eliminated one of the surrounding houses from the shot.
Some open house notes from Sunday.
The first place I went was an older 3BR for $150,000. Not in good shape at all. “Don’t let the condition scare you,” the agent said. “Feel free to get an estimate on what it would take to get it up to speed, then submit an offer.” I asked how the market was doing. “Oh, don’t worry,” he said. “All the stuff you hear about, that’s just in California and Florida. We’ll be fine. What you saw in the last few years here was very unusual. And we’ve come off that. Now we’re back to a normal market.” As I was leaving, he said that there would probably be a price reduction in the next week.
Next, on to some of the “urban condo” projects (the ones I reported on that aren’t selling). 2BR, buy for $150,000 plus $75 condo assn. Now they’re also up for rent, $800/mo. I told the agent that I share a house with a roommate for under $500/mo and that’s hard to beat. But then she started talking about “building equity”, etc., etc.
I also told her that I was saving up a 20% down payment, and did anyone actually do that anymore? “Oh, you only need a 3% down payment, or we can get you in for nothing down. The problem is that, while you’re saving all the money up, the market is on fire and your money won’t be worth much by the time you get it saved.”
The market’s on fire? Where?
Actually, three answers come to mind:
1) I can’t tell you, otherwise the specuvestors will ruin everything
2) If a certain poster is correct, many markets will be “on fire” in seven days or so
3) The real answer is that things are going south quick. So either the Realtor did not get the memo, or she believes that everything will be OK in spring, or she just chose not to tell me that things are looking bad.
“I can’t tell you, otherwise the specuvestors will ruin everything”
I won’t worry too much about that here. I doubt many bulls study this blog too much - human nature is to avoid the voices which disagree with yours. (Which is why I am not hanging around the pro-real estate blogs. I disagree with them and the “facts” sicken me. Much as I am sure, our “facts” sicken them.
Plus, I don’t think 98% of the people on this blog are in any hurry to buy real estate right now. If the area has been bubbly - it will come down. if it is one of the few that hasn’t - it will stay where it is.
Anyone giving examples like this should give an idea of their general location please.
You’re right, sorry. Montana.
–
I AM DYING TO KNOW
There is no dispute about the following:
1. Americans Are Financially Illiterate (Greenspan himself admitted)
2. Americans Are History Ignoramuses
Q1: Who Are These Americans?
Q2: And How Did They Get To Be Financially Illiterate and History Ignoramuses?
BTW, I met a brain surgeon in Long Island in July 2000, at a wedding, who bought CSCO at $78. I am quite sure that he had money to invest when CSCO was $4. His financial advisor taunted me by saying that if I knew so much about CSCO (I gave him lot of data on Cisco) how come I was not working on Wall Street. At the time I was loaded with short on JDSU and CSCO (I got lucky).
TIA,
Jas Jain
What is this, now, the brag blog? Dude, while a LOT of people on this blog ARE financially astute, that doesn’t mean they are in the majority. I, personally, am not. I don’t play the market, I don’t understand most of what txchick says when she talks about stocks (though I’m usually impressed with what she says). So what?! Does that mean I shouldn’t be allowed to buy a house? I have no debt, have a 401k and some IRAs, have money in the bank. Do I have to buy the proper stocks in order to be a participant in the game? Am I just a moron if I don’t spend all my free time reading up on how best to invest? There’s more to life than just money (perish the thought!).
And, BTW, I think a brain surgeon is making a bigger contribution on this planet than a day trader.
–
I am simply pointing out that there IS a deeper problem and most Americans are in denial of a systemic problem — they LOVE the American System just as it is failing them. LOVE is blind, you know.
Okay, what should be the future of a population that is admittedly Financially Illiterate and History Ignoramuses?
Honestly, I am looking for a good argument.
TIA,
Jas Jain
Well, I don’t necessarily consider myself financially illiterate nor a history ignoramus so I guess I don’t have an argument. But I think is simply boils down to laziness. I think a lot of people are just lazy nowadays. If 100% of the country were like that, we’d sink for sure. But, while it seems to be quite prevalent everywhere you look, it’s not 100% of the country. Don’t know what percentage it is, but - rest assured - the ones who are NOT lazy are (or will soon be) done with carrying the lazy asses around. Therefore, the future should be about tightening the reins and forcing people to be accountable for their decisions. This means tightening credit, lending, and even tightening up the legal system. Stop letting every Tom, Dick, and Harry sue for every single little thing. It’s a mess. I blame a lot our messes on a legal system rum amok as well as the dumbing down of our society via Hollywood, the media, advertising and such.
However, all that said, I don’t envision anything changing. And it scares the crap out of me because I cannot and do not want to live like the masses are living.
“Don’t know what percentage it is”
80/20
I wrote a lengthy reply, but I used the word a$@ so it may not show up. Briefly, what it said was that I agree we have a problem with our country. I think it boils down to laziness. I think that laziness is fed by a legal system run amok (anyone can sue for anything) and by Hollywood, advertising, and the media. I think those who are NOT lazy are going to get real tired real soon of carrying those who are. What will the future be? Well it should be about enforcing accountability and the only way to do that is to take the “easy streets” away (fast credit, loose lending, frivlous lawsuits). Will that happen? Probably not. I honestly believe nothing short of a huge catastrophe - be it a depression, a war on our soil, etc. - will rope things in. I’m not a fatalistic thinker, but things are so spun out of control now that I don’t see a fix.
Jas:
Just reviewing my own personal interactions and observations but could you please provide an example where there is not a preponderance of financially illiterate people or history ignoramuses? UK? Nope. Australia? Nope. Japan? Nope. China? Nope. Russia? Nope. Mind you, there are plenty of areas where the infrastructure does not permit a free personal finance system and such an area may indeed harbor such a group, but unfortunately that would be poor speculation. There’s certainly areas where I would say people in the majority are more aware of of global history (I think the US public education system is indeed poor) but nowhere can I find a majority that is both both history and finance astute - hence the global bubble. Do I think there is a chance of a 2nd great depression? Yes, actually. Have discussed this with my grandmother just to make sure her portfolio was more aligned for someone her age and in her situation as it was entirely too aggressive. I wouldn’t necessarily rank a 2nd great depression at 50 percent just yet because there are things to do which can cause it to be avoided - the only trouble is I doubt the people on top will implement them. And as for those espousing the racist asian immigrant vs naturalized us etc bit - I’ll point you to a somewhat racist book, the millionaire next door - its generally a by-product of immigration into the US that immigrant families have a level of drive and one of the things they most seek is a higher level of education in certain fields for their children so that they can obtain what they see as a secure and status-fulfilling position. Having met a fair number of people in my lifetime, I have no qualms saying no race is any more intelligent or capable than another - its culture that tends to impair us. When jobs become scarce, when incomes fall even more - you will get a return to these jobs and degrees. If I had a child of college age - I’d direct them into these degrees as this is where the scarcity and need is. And from this, we can see what the cure for most of these problems are - awareness, knowledge and education. And TxChick’s 20lb trout upside some heads.
“Jas: Just reviewing my own personal interactions and observations but could you please provide an example where there is not a preponderance of financially illiterate people or history ignoramuses? ”
A country and people that I know better than the ones you mention – Switzerland. What saves the Swiss from stupidity of the Anglo-SEXons is their conservative nature.
Unfortunately, Americans and their CROOKED bankers are badly influencing most of the world. The finest example is the country of my birth — India. Indian economy will suffer badly during the Greater Depression. No, I don’t blame Americans for stupidity of Indians. India has been becoming a bad copy of America.
Jas Jain
Q: How Did They Get To Be Financially Illiterate and History Ignoramuses
It’s called schooling. People no longer get educated: they learn how to please their masters [teachers and standardized test makers -- with "supportive" parents] and that’s it. No desire or incentive for anything else.
Why do you think people are surprised to get their first pay check and find that their net is not the promised gross?
About Jas Jain’s posting and bluto’s “American optimism and ingenuity” remark. Americans really are brainwashed I’m afraid. It’s not a “Manchurian Candidate” kind of brainwashing. Far more subtle and, frankly, far more insidious, aided and abetted by the numerous media outlets like Fox News. I’m not sure if this has always been the case but it certainly is now.
Americans think they have far more ingenuity than others outside their borders and are more optimistic than non-Americans. Not true.
For starters, Americans are very, very naive about the rest of the world. Iraq proves the point yet again. The word “optimistic” could well be replaced by “arrogance”. Quick example: The French got their butts kicked in Vietnam but the Americans thought they could do better. They couldn’t and they had far more resources than the French. The Americans rushed into Afghanistan (probably rightly so instead of Iraq) and are now stuck….just like the Russian experience. A massive attack on Afghanistan, concentrating on the area bin Laden was supposed to be in and killing him and his cohorts, followed by a quick withdrawl of ALL troops would have been better. Instead, America got suckered into the “Freedom and Democracy” for Iraq b.s when it was simply an attempt by Bush and his band of corporate crooks to control (steal) Iraqi oil. The rest of the world knows it but to this day many Americans still fall for the “Freedom and Democracy” crap. Sadly, America went (optimistically) into Iraq and we are now seeing the end result of that folly. What amazes me, as a Brit, is how Moron #2 in the world, (Tony Blair) followed the world’s #1 Moron (George W. Bush) into a place that the Brits know cannot be tamed. The Brits have a long history of getting into trouble in both Afghanistan and Iraq and many, many other places. I think Blair must have been asleep during his British history lessons when he was a kid.
The Brits led the world for years with British “ingenuity” but now they are just the 51st State, keeping their, what has now become but never used to be, a consumer economy going in exactly the same way the Americans are keeping their economy going. By using the “house” ATM machine and printing money.
A big problem with Americans (and a couple of posts attacking Jas Jain’s post proves the point) is they wrap themselves in the stars and stripes the moment anyone dares say that America is not the greatest county in the world. It is a great country - but it ain’t that great and with the way things are going, in a few years it will be even less great.
The political system is incredibly corrupt ON BOTH sides of the political spectrum. A good start to solving that problem would be to take money out of politics.
We can wrap ourselves in the Stars and Stripes or the Union Jack but it makes no difference. The British had their time in the sun, the French had their time in the sun, the Spanish had their time in the sun. If you go back far enough, you can apply that to almost every nation. It appears the US has now had it’s time in the sun and it’s Asia’s time. If you want to see “ingenuity” at work, FAR MORE than it is here, and you want to see an “optimistic” nation - go to China or even India. Again, we can wrap ourselves in the national flag and shout, “If you don’t like it, dude - go to China.” That attitude solves nothing. What solves problems is trying to figure out what’s going wrong. Unfortunately, America has lost it’s way and is allowing things to happen which should NOT be allowed to happen. Money flooding into politics is one and special interests and the power they have over the political system is another. What’s being done about it? Nothing. Thousands of good paying manufacturing jobs moved to China and India because corporate America could make bigger profits. What did flag waving Americans do? Nothing. Now they bitch and moan.
The truth is, any free and democratic country that elects a spoilt little arrogant rich boy who was a drunk to the elevated position of President of the United States, who has no experience of the world or world politics and who’s only success was being involved in the running and sale of a baseball team which was handed to him on a plate by his daddie’s rich pals, needs to sit down and look long and hard into the mirror. Something has gone wrong and anyone screaming, “This is the greatest country in the world, dude,” when another person objects to the way things are going - needs to start thinking.
Thanks, Mike. You stole my words — “far more insidious.”
Jas Jain
It’s sad when calling-it-like-it-is gets you labeled an extremist.
Well I guess I’m one that refuses to accept the kind of doom and gloom you’re bemoaning, and if that makes me spoiled and naive in your mind, so be it. Our country was always under threat, from day one and throught it’s history, under threats of one form or another.
I really don’t think you realize how good you have it here. You want to compare this to China? Or India? As someone that has lived around the world (not just visited), you don’t understand what a silver spoon you have in your mouth just for being born here. China? Please. If the people could get out and come here, they would. They can’t even control the number of children they’re “allowed” to have, for God’s sake. How can you even compare their debased society to ours.
And I’m not just looking at mere economics, as some do. There’s a quality of life, they don’t have, compared to us.
Do we have problems? Yes. We always did, even in the days of yore, 1750-1800 (that was for Jas Jain). If we wanted to play tin foil hat time, then I could say they were troubled by the Masons and one-worlders. But then I’d be accused of weirdity (is that a word?)
So are you saying that America is different than every great empire that preceeded it? Is America going to somehow avoid the inevitable decay and demise that every other world power has experienced? I’m sure every superpower that has ever been spawned has made a claim of immortality, the Empire to end all Empires, the one that will reign in perpetuity. But that hasn’t been the case. Will we be different? I think we need to take a hard look and sober up, because this great nation is already showing many of the classic signs of a great empire in its death throws.
What I’m saying is that, there isn’t another country in the world that I would rather live in. For all our problems, we’re light years ahead of China, for example, in quality of life. Anyone that would presume to tell me who many children I’m “allowed” to have, is on the sh*t list forever in my book. It’s inhumane, and there’s no comparison in terms of quality of life.
And I’m not going to get political in saying that the current administration (Bush) is an angel or something, but there was plenty in the administration before this one (Clinton), that caused an equal amount of decay. In my mind both sides are severely lacking in selfless desire to help the common man, and therefore you have to take any leader with a grain of salt. They get paid to “take care” of us, and the job they typically do it pretty crappy. BUT it’s still light years ahead of any other country in the world, and so the system, while faulty, is better. I do believe that, for if I didn’t, I’d move tomorrow.
And if and when the USA is gone, I’ll find the next best thing, until that’s gone, then I’ll find the next, and so on…
“What I’m saying is that, there isn’t another country in the world that I would rather live in.”
Have you lived in every country? How would you know? You see, this to me sounds like the classic American arrogance that many outside the West have came to dislike us for. I think it’s a pretty decent place to live, for the most part, but I don’t assume that it’s the best because how would I know? I haven’t lived everywhere. And no, I’m not going to take someone elses word for it. Many assume truth because of what they’ve heard or read from those they think they should trust. For once, we need to start challenging those beliefs.
I’ll never forget watching a video in 11th grade of a captured Chinese runaway wife, 7 months’ pregnant, crying on the abortion table. That was shown to me in my public school. I almost wish it hadn’t been.
And as for India - I’m not sure an Indian can get a caste system out of his head. I remember arguing with an Indian co-worker of mine over the Clinton intern fiasco. His take was that those in power can do absolutely what they want, and I tried to tell him that as an American I believed the law ought to be applied equally. I know it often isn’t, but I expect it to be attempted.
Just last week I watched a PBS show with a young girl in India struggling to take night classes and working all day to serve the menfolk, who were sitting around in their turbans watching the boys climb the trees while the girls and women did all the work. Foolishness.
nnvmtgbrkr — I wouldn’t take that kind of advice. I’ve always had a home, food, and extra money to throw around, I have a wonderful family, and a stable society. I don’t feel guilty to those around the world who don’t have it, and I don’t feel any need to. And I’m not curious about where it “might be better”. I already have everything here.
If that’s American arrogance, then I’m arrogant. And I also know, this lifestyle is copied, envied, and desired the world around, as everyone wants to do things the way we do. Even as they hate us…
When something is clearly superior, I’m not going to apologize for saying it is, even when that is not “politically correct”. I’m not PC
And that’s the end of that.
Arwen U –
Yes, that Chinese example is so tragically sad, and has been repeated in the lives of thousands to millions over there.
Jason-
You’ve been fortunate to live in a window of privilege and opportunity - that window is closing.
Jason,
I’m with you pal, good ideas beat horrible politics / religion every time.
Here’s an idea:
Google has “produced” / “provided” more help to individuals than any politician or political entity. Oh, and it’s free…
Something from H.G. Wells:
History is a race between education and catastrophe.
While there is a chance of the world getting through its troubles, I hold that a reasonable man has to behave as though he were sure of it. If at the end your cheerfulness in not justified, at any rate you will have been cheerful.
Non-violence is the policy of the vegetable kingdom
That’s a great quote, thanks.
Just because “we have it good” doesn’t mean stop trying to make it better!
Freedom means more than free to go shopping whenever we want. Free to go into debt whenever we want. Free to work all our lives and not have a pension and health care!
We’ve never been a perfect country but the one thing that has separated us from the rest of the world was that we rarely said die and have historically been proven right most of the time. We’ve been through corruption, lost foreign wars before, and faced economic challenges as great as any nation, and the only things that have worked here were meritocracy and optimistic ingenuity. Call it confidence or arrogance or what you wish, but it’s pretty obvious who the Americans are most of the time. Without those assets we may as well be Brazil (great resources but very little real wealth). And plenty of prior administrations make the present day look like kids trading baseball cards in compared their corruption. That doesn’t excuse anyone. All systems are corruptible, and ours has been corrupted for better than a century.
On that I’m not sure how you interpret my post as wrapping in the flag. My statement was simply that if we’ve lost that inginuity that we had (we may have lost it after many rumored deaths) there’s no way this nation will pull out of the increasingly likely depression.
However, my unanswered complaint was that Jas Jain’s posturing now about how we have overloaded on debt is of very little use because it’s been widely publicised that we’ve had too much debt for more than 10 years (when perhaps we could have changed course) and his tone strikes of massive disengenousness:
*His refering to Americans as if he’s not one–regardless of his origins he lives in California now and he’s been in the US long enough to have made a fortune provided by the American system. I tire of the hypocracy of someone who directly benefitted from the economic system of the US, only to lobby for removal once they’ve gotten theirs.
*The utter lack of any sort of reccomendation or suggested action. So your prediction is that a great depression is coming, a useful reccomendation is investment infriends and family, farmland, and physical protection. At least then you are staking something (your reputation on a prediction that can have action taken or ignored). This isn’t a hard conclusion to draw, but we see none of it from him.
*Generally factless posturing here (as opposed to reasonable discussion on the linked page). Whining about Greenspan and bankers doesn’t alter the past which has already been written.
All of sure looks to me like someone who is deeply unfulfilled by the substantial resources they’ve accumulated and expected to find fulfilling. Now that money isn’t filling needs, he appears to be hoping that power will. That’s my take and propted my original questions.
Ironically, I’ve been watching the economy and came to a similar conclusion about 15 years ago. I’m young enough that I only had a summer of savings in the stock bubble (sold in June 2000). So my resources aren’t great, but they are certainly comfortable. I’ve been building up for a farm not far (but not near where I live) and I’ve learned enough of several trades of semi-skilled manual work. Between now and then, I’ve taken advantage of as many cultural opportunities as I could so that should they become unavailable I’ll have memories of them. I’m not afraid of the future and plan to “meet it with the same weapons of reason which arm me against the present,” to share in the wise sentiments of Aurelius.
If anything I find it a bit saddening that someone who has the wisdom to expect something, and the resources to make substantial improvements to his and many other’s situation seems to be flitting it away assigning blame. I hope I’m wrong on this count.
Great stuff, Mike.
My blogname is “tj & the bear” because I am an optimist that recently discovered his inner bear.
As “tj” the optimist, I do believe the USofA is one of the greatest experiments in government the world has ever seen. I also believe that the American people are special, given the synergy inherent in bringing ambitious people together from all over the world in pursuit of a common dream. Dare I not mention this great land? We have everything.
As “the bear” I now know that the founding fathers would not recognize their country. Our Constitution & Bill of Rights are held together by mere threads, the Republic is now the Empire, and TPTB are beyond corrupt. Most of our fellow Americans are fat, happy and blissfully ignorant. Our great land? Still there, albeit taken for granted when not outright abused.
Where does all this lead? A Greater Depression where (hopefully) Americans are reacquainted with the values that made this country great — independence (i.e., self-sufficiency), hard-work, mutual respect, and limited government — and the country will rise again… better and stronger.
First prize here. I was wondering when someone would mention the U.S. Constitution and the Bill of Rights. Anyone thinking about leaving the country needs to remember what they relinquish when doing so.
In spite of all the critics of this country, our people and our government, I know there are many more honest, informed, and well-intentioned people here than the ignorant drones, thieves and crooks Jas and Captain Credit would have you believe are behind every bush (pun intented).
Here’s one for ya, Jas
Free Money
The Financial Times’ John Dizard takes a close look at “free money” being generated these days by so-called “negative basis trades.”
“Free money? Sounds too good to be true,” you say. Man, you people are so cynical!
Here’s how it works, according to Dizard. “Over the past few months professional managers of US dollar bond portfolios have been buying corporate bonds, then buying the credit default swaps (CDSs) that allow them to cover the default risk on the bonds.”
Now that should not be profitable, you are wisely saying to yourself, because the cost of full credit default swap protection should be greater than the cost of the bonds.
Yes. And the difference between the two is called the “basis.”
And yet, Dizard points out, “thanks to a bizarre anomaly in the financial markets, the cost of protection using the CDS market is less than the interest yield on the bonds. So we have “negative basis.””
In other words, because of the negative basis you are being paid for taking the risk of owning corporate credit, but you don’t have to actually take the risk! It’s like magic.
Of the 150 most frequently traded corporate names in the US bond world, about a third have negative basis spreads available that are more than 10 basis points, Dizard notes.
That means a bond manager can buy, say, 10 bond positions of $10,000,000 each, then buy the corresponding credit default swap protection and collect (given the negative basis spread of 10 basis points, $100,000 a year. Risk free.
According to Dizard, this is all the result of our old familiar friend… excess liquidity.
Chris Whalen, of Institutional Risk Analytics, tells the FT: “It’s kind of sad. People are running out of ways to deploy their capital intelligently, so they turn to this kind of financial masturbation, trying to get their performance far enough inside the herd so they don’t have to deal with redemptions.”
Thanks, chick.
Jas Jain
The belief that this is risk free money is false. What’s not being considered is counter-party risk. That is, what if the deal goes bad AND the party provinding the insurance against default (the credit deafult swaps) goes bad. Then you are still stuck on your half of the trade and the cds are not there to protect you. Can it happen? Maybe.
Good point. This is why I think there’s a 50/50 chance we have a massive financial gridlock within 10 years. EVERY risk these days is being converted into counterparty risk, and it’s becoming more concentrated among the counterparties as well (US taxpayers being one enormous risk-taking group). The wonderful financial “flexibility” that Greenspan always praised has spread the risk so well that now there’s essentially only one risk: a major meltdown. You can see this everywhere you look — low volatility, low credit spreads, high complacency. Everything will be peachy until the day it isn’t. And when meltdown finally occurs, the complexity introduced by all that “flexibility” (as derivatives, e.g.) may well clog the courts and the economy for years, as we are left wondering who owes what to whom.
–
The Housing Bubble Is But the Latest Proof Of My Earlier Conclusion
That most Americans are born-and-bred dupes, thanks to the massive propaganda organ, led by Crooks (who own and control the propaganda organ).
I am open to good arguments that prove that most Americans are not dupes and our leaders are not Crooks. I am only comparing with the American past. Americans were NEVER this stupid and our leaders were NEVER this Crooked.
I am in awe of the Americans of 1750-1800.
Jas Jain
“I am in awe of the Americans of 1750-1800.” G. Washington wasn’t so thrilled with the non-support of these awesome Americans. Better dig out some good Bio’s of GW right around
the winter 1774-1775. His army at Valley Forge was small and desperate, and the most AMERICANS were not ready to support this break with England. It was leadership from a very few dedicated, intelligent men who got us over the hump.
“It was leadership from a very few dedicated, intelligent men who got us over the hump”
And the blood of some of the first american dupes.
It was leadership from a very few dedicated, intelligent men who got us over the hump.
Specifically,it was the rank and file New Englander’s who stuck around for a 100 acre land grant if they re-enlisted to engage in the Battle of Trenton where the mercenary Prussian Hessians were routed.
You want to talk about duped, I spent eight in the military as an officer and watched our troops go over to Iraq under the guise of “keeping America free.” What does Iraq have to do with keeping America free? Does anyone see any logic in this?
Sure, as a military man myself I might be able to help. Of course if your mind is set that this was a bad idea, I am unlikely to help your understanding much.
On September 11th 2001 some of the rules for world peace changed. They had actually been changing for some time, but as an earthquake is really the realization of geological tensions that have been building over time, the attacks then were the Islamic Fascists making us aware of what they thought the future should be.
So we went and spanked the Taliban some, and drained the swamp that Al Queda had used as a base for some time. Did that stop or neutralize the threat? No.
A stateless thug army is not able to be defeated by removing a single base. In fact because the entire thing is built on a radical brand of Islam that seeks to convert infidels by the sword, the fight was only begun at that time. What to do next was the big question. The remnants of Al Queda had fled to the tribal regions of Pakistan. We could have gone there to continue to beat on them, but not without harming a dictator that was in fact helping us at the time. What was likely to replace him was a very radical government who would have access to nuclear weapons. The Intelligence community claimed that they had “pinned down” Usama & Co using technical means, and they could not do very much.
The fascists were not done. We had a choice, either wait for the next attack and then respond again, or go proactive and attack a state sponsor of terror. The up side of the offensive approach was that it would draw out all the idiots and sh*theads to come attack American Forces (rather than American Civilians and cities). The down side is that we got all of the baggage that comes with knocking over someone else’s government (which we are enduring now).
The choice was Iraq, Iran or Syria. Iraq was the easy choice at the time because the consensus in the intelligence community was that he either had WMDs or was about to get them soon. In addition there was a suite of UN resolutions stating that he was a bad actor, and we could use that to help justify the regime change.
So far the enemy is very willing to save the long schlep of going to CONUS to attack the “great Satan” and is instead sending their martyrs to Iraq to do it. This strategy relies on 2 factors. 1) That US troops can take the punishment, 2) there is a finite supply of idiots who want to die attacking Marines. So far #1 is true, though it is a sad cost of precious human life. #2 is not necessarily true. To make matters worse, the administration is trying to fight a “clean” or “polite” war at this point. Or rather they are trying to not be at a war footing at all. This leaves our forces in an inappropriate posture for the situation they are in.
Sorry for the military lesson on a housing blog, I just wanted ACCROYER to have a decent answer.
The fascists were not done.
You got that part right, anyway.
I would be interested to read what you think (in my write up) did not happen.
I am unlikely to help your understanding much.
I enjoy watching both sides of thugs kill and maim each other.
No decent person supports any government or Islam.
don’t apologize for the military lesson on a housing blog… it looks like the housing bubble blog has already morphed into a Hate America First blog anyway
To quote (as best I remember the phrase) the libertarian columnist, Charley Reese, “How can you fight a ‘war’ if there is no entity that can surrender?” In other words, how can you possibly know when the war is over? I say that you cannot — that “war” is the wrong word for what we are engaged in, in the Middle East.
don’t know if this one’s been posted here. sorry if it’s a repeat.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-10-23T213145Z_01_N23363760_RTRIDST_0_FINANCIAL-GSE-FANNIE.XML
Jas,
“Okay, what should be the future of a population that is admittedly Financially Illiterate and History Ignoramuses?”
You know, there’s 6 Billion plus in the human genetic world today, and with nothing more than a little free radical aging on the cells of these folks, in around a 100 years or less, there will be 6 Billion people dead.
Imagine that this will happen regardless of where they live, what they believe, or what they accomplish. 6 Billion people will die even in the most perfect of worlds. And to think I consider myself an optimist!
“An institution,” Emerson proclaimed in “Self-Reliance,” “is the lengthened shadow of one man.”
Jas, your beginning to sound like an institution, if your healthy, enjoy the historical collection of your genetic karma.
Timothy
PS, I like your posts and share some of you thoughts, but I tend to get dizzy when things start spiraling….
O.K., now on to my real estate / economics / finance education
–
“O.K., now on to my real estate / economics / finance education”
Believe you me, that is precisely what I am doing.
Economics, investments and politics are all about people’s behavior — that of the leaders and the led.
If we are dealing with the born-and-bred dupes led by Crooks it affects investments and would affect the future of the economy and the political system.
Jas Jain
Can anyone go over to the Business Weekly Hot Properties Blog/Is florida Housing a Bubble?and help me out? They won’t post my reply to an idiot name Lee. Not sure why, but it could be due to the fact that I posted at least a dozen links to other periodicals pointing to mortgage fraud, declining housing market, Florida foreclosures lead the nation…….. Thanks! Here’s the link:
http://www.businessweek.com/the_thread/hotproperty/archives/2005/09/is_florida_hous.html#comments
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Only Born-and-Bred Dupes Don’t Understand DEBT
IMO, Debt and Speculation are older institutions than the supposed oldest profession — Prostitution.
Amazingly, the organizational model – Pimps, Whores and Johns – has been applied brilliantly by our Bankrupters and Fraudsters to Debt & Speculation.
Debt Pusher = Evildoer.
What a system have we created! Enjoy while it lasts!!
Jas Jain
Maybe it’s just too much dilution of the gene pool ;0
Bah! The thing is not a nose at all, but a bit of primordial chaos clapped on to my face.
H. G. Wells
Now here’s where the mortgage biz is at today…LMFAO…
http://boston.craigslist.org/gbs/w4m/225017468.html
I wonder if she swallows.
Wow, you busted her. She was in the Austin Craigslist last week.
Soooo proud of my profession.
lol
When I first saw the Austin version posted here, my first thought was “wow, hooker with a creative RE-related story to avoid prosecution by the local vice squad.”
But who knew she would commute for work as well?
Jason
For starters, I’m not a visitor. I’ve lived here for 30 years and have American born children. Secondly, I’ve lived in the UK, France, Spain and Australia. I had a business in Spain for several years. My grandfather was Australian.
The future cannot be looked at in today’s mirror. As for “how good we have it”……we are living in a bankrupt society and China holds our I.O.U’s. We simply disguise our bankrupt status by living in big, well furnished houses and driving shiney new SUV’s and giving our kids too much money so they can buy the latest clothing. Most of it made in China because we do not have a clothing industry anymore.
We have a negative savings rate. That means NO MONEY in an emergency or put away for retirement. That USED to be okay because most big companies had a pension plan. Not anymore. To maintain our current life-style, we are allowing the Greenspan’s of the world to print money “as needed”. We are allowing $65 an hour jobs with benefits to leave, which were the basis of the great American middle class, and replacing them with $10 an hour jobs with no benefits. We have a health care system which spends over $6,000 per. head per year on medical care while in europe they spend $2,000. Is that because we have the best medical care? No, We are about #30 + on quality of care in the world.
We let a poster boy for greed (the CEO of EXXON) walk off with $400 million in bonus payments and simply murmur, “That isn’t right,” while pumping gas that has gone up 100% in a year. We allow a bald headed little tour guide, by the name of Grasso, at the US stock exchange to walk off with $150 million and we don’t even object when he screams because some want him investigated. We allow WCOM and Enron and countless others to ream the people who worked for them their whole life, a new a **hole and leave them destitute and without any healthcare coverage. How did this happen when we are supposed to have a SEC to stop this stuff? It’s because the stink of corruption is everywhere in the US finacial system.
We are told that the economy is terrific and people are doing really well. They are not. Many are working 2 or 3 jobs. 40 years ago, the average American male was bringing home enough in his paycheck to keep the family going WITHOUT his wife working. Not anymore.
China? You’re looking in the rear view mirror and todays mirror where both America and China are concerned. As the Chinese middle class emerge (with the odd two steps back now and then) they will gain more power and things will change. The children of todays growing capitalist minded Chinese will be the politicians of tomorrow and they like a capitalist system. The China of today is nothing like the China of just 20 years ago and one cannot even recognize the China of today to Mao’s China.
Also, concerning the best place to live. I happen to live in California. I tried Mexico. No thank you. California is a great place to live (but it’s getting more crowded and more expensive). For me a few of the main attractions in life are the weather, the quality of the food and being around people who speak english (most of them anyway) and a resonably non-corrupt police force. Most of my friends are American. My wife is American. I was born (almost 70 years ago) in a country which is very pro-american. I can think of no Brit who dislikes America. Except the new Brits from Muslim countries. Yes, many Brits shake their head in despair when they see Americans elect a moron like Bush but that’s America’s business. Not theirs. The US has to move with the times and adapt and get out of this, “We’re the greatest, most powerful nation in world and nobody can be better than us,” attitude.
Only if the US stops waving the flag and starts to understand what is happening NOW around the world, can it (at least) stem it’s slide down the ratings as a country of influence which others admire. At the moment, around the world because of Bush, admiration and respect for America is in very short supply.
CEO of Exxon has nothing on your average private equity or hedge fund manager. There is not a word available for the kind of greed in those businesses.
I have no problem with any CEO receiving 400 million nor with money managers in Hedge Funds receiving inappropriate compensation. If I were in their positions I also would take the money. The problem I have is the lack of compensation going to middle income (less than $250,000/year). I do not believe the ratio between corporate executive compensation and middle income wage earners has ever been this great. I have not researched this, just MHO.
Do you have a problem with the PE firms immediately plundering the companies they take private for their own personal gain and then adding a bunch of debt before trying to spin them off to the sheeple again?
Nope only time most folks learn is after they’ve been the beneficiary of one (hopefully not more than that for their sake) of those fine deals. Besides, how else is their pension going to be funded?
This has got to be the most boring “Bits Buckets” I have seen. Usually my favorite topic, but damn, way too much hot air and endless rants about bullshit. Okay, we get it. “Americans” are stupid, now on with the bits…..
I’m in agreement. I’d much rather read the craigslist and news posts in regards to RE than the chicken little posts. I know it can be said that I don’t have to read them, but they’re so big
Anyway I know everyone has the right to post what they want, Ben willing
### IMPORTANT ###
Here is an important site with information for all who participate in any way in the U.S. stock market. Ever wonder what “naked shorts” are? What is the SEC doing about it? This is an explanation that raises critical questions that we all should be thinking about. Find a quiet hour, pour yourself a cup of coffee and dig in. You won’t regret doing so.
http://www.businessjive.com/nss/darkside.html
Jason I admire your love for this country, but don’t be blinded by a false sense of prosperity you see. Haven’t you ever wondered how so many peopl can afford to own 100K worth of automobiles? How in the world are all the neighbors going on these luxurious vacations when the husband works at no more than $25/hr and the wife is a school teacher (nothing against those professions, just pointing out the does not compute part of it)? Have you looked at some of the run down areas of NYC, LA, Chicago? Have you even seen the depair of those affected by Katrin in New Orleans and Mississippi? Life may be dandy for you, and for many in this country, it it may still be better than living in say, Afghanistan, but don’t fool yourself. Many in this country are suffering. While five people in the top 10 on the Forbes’ list are Sam’s Club family members, their employees can’t even get affordable health coverage. Also, my drumbeat is debt, as many know. Jason, have you ever considered all the debt in this country? On top of that, look at all the entitlements. From the feds to the lowly ant, this country has a lot of outlays and payments in the future. What are going to do? Oh wipe out social security? Fine, but there will be a lot of pissed off people. Not pay back debt to China and India? Nice, see if they ever invest in us again (best case scenario). See, the bottom line people like Jas and TXChick are making is that things can’t go on forever in this country as they have. While the US is a capitalist society, you can’t continue to allow a sliver of people to get the lion’s share at the expense of everyone else without destroying or severly damaging the country. And, you esp. can’t allow when they are doing it illegally or unethically. I also think that a big part of the problem is that many in this country want all the riches for the least amount of effort. At what other time in this country have soooo many embraced the “debt=wealth” mantra. Unfortunately for these dunderheads, having a 900K mortgage outstanding plus 50K in the bank does not almost make you a millionaire. It means that you have a 900K debt and 50K in the bank, that’s all. However, many sheeple have been duped into believing that they are really millionaires. Not singling you Jason, but sense you took up the casue, I thought I would respond. Lastly, as was pointed out, many nations have had their time in the sun, if you don’t the US will go down the same road, well, I have a nice 900K fixer upper for you.
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It IS NOT Your Grandfathers’ America!
Bad, Or stupid, People = Bad System
Is that so hard to grasp? Yes, American system WAS good when Americans were fairly smart (even ready to revolt!) and their leaders were better, relatively. Please compare the Founding Fathers with the current generation of Un-founding Crooks! Precipitous decline must be obvious to all but the brain-dead.
Democracy = Domination Of Money (Spengler)
Only the agents of Moneyed Crooks can get elected and appointed to the very top positions, especially, to the Federal Reserve. More so today than ever before.
Elected officials are not only the agents of the Moneyed Crooks but also subservient to one of the two parties in America (please don’t bother to point out exceptions to the two parties). So, the person that an American dupe has the pleasure of voting is not only likely to be controlled by the Moneyed Crooks, but also by the party. Now, if there is such a person who believes that a party mostly represents his, or her, values, may God help him, or her. The two party system is very oppressive to free ideas and free thinkers.
American econo-political system is as bad as American leaders; no worse and no better. I love this: “I love democracy but I hate politicians”!
BLIND FAITH WILL NOT SAVE AMERICANS FROM THE MISERY THAT THEIR LEADERS ARE GOING TO VISIT ON THEM. It will be too late to throw those rascals out, after the Greater Depression has begun, wouldn’t it? Blame the past rascals!
I am very confident, based on historical parallels, that American system will collapse in less than 30 years (most likely 15-20).
Be Safe!
Jas Jain
Jas, I am with you. I don’t give us much more than another 20 years. I would be shocked if we make it any longer than that!
The amount of space taken up by these idiots wollowing in Jas-eology is killing my desire to return to this blog.
oops! “wallowing”
That’s the spirit. Keep up the good work! Everything is fine and dandy in this country. No worries here. Let everyone do what they want, when they, to whoever they want. No care for anyone but me and mine. That’s the attitude many of the banksters have and look what it ihas gotten us.
Thanks, Bruce. Let Us Behave Irresponsibly and Become Stupid, Because Our Voting System Will Save Us? LMAO. — Jas
-x-x-x-x-x-x-x-x-x-
http://www.lewrockwell.com/shaffer/shaffer147.html
The Voting Ritual by Butler Shaffer
What is the ballot? It is neither more nor less than a paper representative of the bayonet, the billy, and the bullet. It is a labor-saving device for ascertaining on which side force lies and bowing to the inevitable. The voice of the majority saves bloodshed, but it is no less the arbitrament of force than is the decree of the most absolute of despots backed by the most powerful of armies.
~ Benjamin R. Tucker
November 7th – like any other date in history – has born witness to birth dates and events with both positive and negative connotations. On the affirmative side, it is the birthday of Albert Camus and Konrad Lorenz. On the other side of the ledger, it is also the birthday of Heinrich Himmler, the date of FDR’s election to a fourth term as president, and the date on which Anne Hutchinson was banished from the Massachusetts Bay Colony as a “heretic.”
This November 7th will also be the date of the forty-second anniversary of my non-participation in the voting process. I can assert that I have been “clean” from the politicoholic addiction for over four decades. I have no intentions of ever again sneaking into an enclosed booth – that serves the same purpose of hiding one’s embarrassing habits as those found in an adult bookstore – to conspire with a multitude of others to despoil you of your liberties or property.
I shall, of course, continue to be asked by some of my colleagues and students why I am not wearing one of those little stickers – reminiscent of bird-droppings – that reads “I voted.” Mark Foley will have to endure far less opprobrium for his actions than do those of us for whom it has become known that we are, as a matter of principle, opposed to the practice of voting. “Are you apathetic?”, or “did you just forget to register?”, or “are you making a protest against the quality of candidates?”, is the usual litany of responses I get to my non-voting stance. “Apathy is not something I care about one way or the other,” I reply, as my inquisitor heads off fearful of contemplating the unthinkable: that someone may be philosophically opposed to the democratic process!
As others go forth to participate in this silliest of all rituals – designed to convince members of the boobeoisie that they are really running the political zoo – I shall be engaged in more productive pursuits, such as picking the lint out of my navel.
…
Sigh
–
Yes, a typical response of a “know it all” lazy and uninformed — an intellectual couch potato.
Jas Jain
I didn’t want to participate in this debate as I see it as a waste of time. However, I did and those two posts have not shown up. I will not spend another two hours writing posts that will be deleted.
However, Jas, you are the know it all on this blog. You actually believe that you’ve figured out the economic and political machinations and come here to enlighten us about how the world works. If you actually believe that you have figured out how it all works, then I have no basis from which to debate you since I’m not a humorist. If you actually believe the stupidity you spew, then I find you nothing more than funny.
Then again, maybe the little green men are using you as their mouthpiece. Jas, are you in cahoots with them? Have you betrayed the stupid human race? Why, oh why? You’ve gone to the other side… what are we to do?
Another boring moronic “This November 7th will also be the date of the forty-second anniversary of my non-participation in the voting process” and this friggin’ moron thinks (maybe ?) that by not participating in this or any other election he has any form of superior moral comment that should be read! Not! Get better sources and stop cluttering up the blog with your drivel
What Makes Some Americans So Disgusting?
If someone with a different way of looking at things, with different background and experiences (a plus, one would suppose), comes to very different conclusions about some deeply held beliefs, then he, or she, must have psychological problems. Bunch of psychobabblers who can’t refute the specifics. Can’t even answer very clear and concise questions because the answers will incriminate their belief system. It is not hard to see stupid behavior of masses, but trying to psychoanalyze someone you barely know and dwell into their motives? Get a life, you psychobabblers. I am doing it because I care for America and Americans (both have been good to me). I warned my friends of Scam Options in 1998 and pleaded with them to avoid stocks, especially, tech Scams (later, I also warned in a forum). Yes, my advice has been very conservative. The same is true today.
Majority of Americans are beyond redemption because they are as ignorant as they are arrogant (know it all). Only MISERY will bring some sense and much needed humility into these born-and-bred dupes.
For me, nothing is beyond question, least of all an econo-political system. All human institutions are infinitely corruptible. Most of all a democracy! Democratic Dupes are worse than most religious groups. It is faith and NOT reason that appeals to masses! I was a Democratic Dupe at the ripe old age of ten.
Nothing personal ever intended.
Jas Jain
Jas,
Another view.
http://www.philosophynow.org/archive/articles/34madigan1.htm
Don’t respond here, email me: consensusscientific@gmail.com
Timothy
PS,
Jas, I respect you, but your a black hole to this thread.
Jas, take your crap elsewhere. I don’t mind reading you from time to time but youre dragging down this blog with your pointless drivel. STFU and get your own blog. You aren’t contributing anything to this blog and your signal to noise ratio is approaching zero.
I love this story! What is happening in Sydney is sure to happen here in 2007 and 08.
http://www.news.com.au/dailytelegraph/story/0,,20581474-5001021,00.html
“Sydney’s Pay Later Poor”
“DEBT-stricken families with new homes, cars and plasma televisions in Sydney’s sprawling housing estates are relying on charity handouts to buy food.
Welfare agencies report a worrying increase in the number of middle-income families with big mortgages seeking help to pay grocery, electricity and gas bills.
Dubbed the “pay-later poor” by St Vincent de Paul, they live in homes boasting cable television and the latest electrical goods and use credit cards to meet basic living costs.
Many of the families live in so-called McMansions.
Rising interest rates and petrol prices have hit them hard, with the latest figures showing soaring personal debt levels and bankruptcies.
With rates tipped to rise again next month, the blame game has begun, with the State Government accusing Federal Treasurer Peter Costello of economic mismanagement.
St Vincent de Paul Society chief executive officer John Picot said families were seeking cash and vouchers to buy food and clothing, and pay electricity and water bills and other debts.
He blamed a “want-it-all” attitude for the trend.
Those who took up “buy now, pay later” offers and store credit cards often found themselves in difficulty when the interest-free periods ran out, a member of the family fell ill or one of the family’s breadwinners lost a job.
“I call them the pay-nothing-now poor - couples who have wanted everything now,” he said.
“Retailers have created this new breed of poor - people who have over-extended themselves to buy a new home and then signed up to all these contracts to get the furniture, the television and cable.
“Suddenly there is a quarter per cent rise in interest rates and or a hike in petrol prices and of course, it’s a disaster.
“We never heard of borrowing money from the bank to pay for wine or to get our hair done in the 1970s - that would have been an absolute nonsense - but that’s what we are doing now through all these credit cards.
“I’m not just blaming the banks or retailers - there has to be some personal responsibility taken.”
Mission Australia and the Salvation Army have also reported an increase in the number of homeowners seeking charity handouts.
Mr Picot said while the charity refused to cover mortgage repayments, it had helped out with food and electricity vouchers.
Families in financial difficulties were also referred to a budget counsellor on how to manage their debt.
“We say, you have to make some decisions or choices, such as maybe looking at winding up the cable TV contract,” Mr Picot said.
“Our focus is always on the society’s most disadvantaged but we will always help in a crisis. We will always make sure there is food on the table.”
Figures compiled by St Vincent de Paul for The Sunday Telegraph show the number of welfare recipients has soared in the past five years.
Case-workers visited 235,718 homes last year - an increase of over 29,000 compared with five years ago.
In the year to June, more than $11.5 million worth of assistance was given - up from $8 million five years ago.
While singles and sole parents were the major recipients, couples with a child were also high on the list.
More than $2.3 million was handed out so families could buy food.
Almost $2.5 million worth of vouchers were issued to pay electricity bills. Another $150,000 worth of vouchers paid for water.
An Illawarra case-worker said some families appeared on the surface to be well-off with “a large house and plasma TV” but had sought help because they could not pay the bills.
Mission Australia reported an estimated 25 per cent increase in cases of homeowners asking for assistance for the first time.
The charity’s State manager of financial counselling services, Barbara Jones, said the rise indicated an alarming trend and was likely due to the increased cost of living.
“My financial counsellors have reported a significant increase in cases where both partners are working but are still struggling to make ends meet, without enough money for food and electricity,” she said.
“The rise in petrol prices and interest rates make it incredibly difficult to afford things like food.
“Five years ago, you would be lucky to see 10 per cent of these cases - now it’s up to 35 per cent.”
New figures from the Insolvency and Trustee Service Australia showed bankruptcies in NSW increased 18 per cent in the past year.
Personal debt accounted for 88 per cent of the bankruptcies.
The ING Direct-Melbourne Institute Household Saving & Investment Report showed the latest interest rate rise had had the greatest impact on NSW households.
Over one-third of NSW residents were worried about the effects of the rise, it said.
Six per cent of NSW households were running into debt to meet daily expenses - up from four per cent in the previous quarter.
NSW Treasurer Michael Costa blamed rate rises for people falling harder into debt.
“Interest rate rises are hurting NSW families,” he said.
“As I said at the time, the Federal Budget added to the inflationary pressures that saw the Reserve Bank raising interest rates for the seventh successive time in August.
“Prior to the May interest rate rise, the property sector was showing signs of improving demand, with increased housing finance approvals, low vacancy rates, and rising rents all pointing towards a recovery.”
Jas,
Sound familar?
http://en.wikipedia.org/wiki/The_True_Believer
Don’t respond here, email me: consensusscientific@gmail.com
Timothy
–
Democracy Is the Largest Mass Movement In Human History
I believe that there are more adherents to the ideology of democracy than the religion with the largest following – Christianity. No?
And it appeals to the most naïve, the thoughtless, and the most stupid. At the age of ten I was pretty stupid, when it comes to politics. (Although, I was a wiz kid in math and very knowledgeable on the subject of Debt and its consequences at the age of eight; my late father was a moneylender and an all-purpose businessman). Elections were like a pageant in the village and I was a rabid democrat (I was born after India got its independence). Hell, the candidate I shouted for, whom I had never met!, even won for parliament. What an accomplishment! Nothing requires less meaningful effort!!
Americans, led by Corporate Crooks, will take the lead in discrediting democracy within the next few decades. Corruption, which is less overt and of very insidious nature, will claim it. Enjoy while it lasts!
I bet that less than 1% of Americans know who were behind the Anglo-American democracy that began in the 17th century England. Someone, or some group, had to finance it!
Jas Jain
Another ignorant Jaseological comment. The largest religion is Buddhism…. you friggin moron. STOP CLUTTERING THIS BLOG WITH YOUR STUPIDITY!!!!! AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!
Moron IS what moron says! There are 2B Christians (Catholics are Christians, you know!). There are less than 1B Buddhists according to a Chinese scholar and historian that I respect, but no more than 1.5B.
Go to some source and verify for yourself, “’ you friggin moron.” Don’t spew false stats.
And don’t ever expect another reply. This is for the sake of others.
Jas Jain
“And it appeals to the most naïve, the thoughtless, and the most stupid.”
In the above connection I forgot to add that a democratic mind is a dream of a propagandist! Why do you suppose that Americans are the easiest to brainwash? Long march of democracy had nothing to do with it? Please read Tocqueville as to how American democracy prepares the minds.
Honest to goodness, an illiterate (couldn’t sign his name) person in my village of birth, born way before democracy, was very hard to lead into anything. He would politely listen to an “‘educated” (sahib, or sir) but wouldn’t buy any ideas. I CAN GUARANTEE YOU THAT NO ONE COULD HAVE SOLD A $670K CONDO WITH 100% FINANCING TO SUCH A GUY. HE KNEW THAT IT MUST BE A CON GAME. BUT AN ACCOUNTESS IN MY SON’S OFFICE COULDN’T FIGURE THAT OUT. NOW, SHE WORKS LIKE A DOG, 70-80 HOURS A WEEK.
Jas Jain
You seem to be angry. Did I hit a nerve, sweetheart? You are correct. I was mistaken about the number of buddhists. This of course, must validate the rest of your rant. It is decidedly so (smiles).
I did notice that you failed to address my irony regarding your superior understanding of world economics. Hmmm, very interesting. If you know it all, then why don’t you say that you do. Or was that part of my post too inconvenient for you? Go ahead you arrogant ass, claim it. The bombastic nature of your supposed understanding of the world is impossible to defend, but it would be very entertaining to see you try.
Furthermore, the fact that you consider Americans the easiest to brainwash does not speak too well of your intellectual powers. You actually think that Americans are easier to brainwash than the people of your admirable India? If so, then you are a bigger moron than your rants indicate. Goodness grascious, you people worship cows! Of all the people in the world to criticise others about brainwashing. Honestly.
Do you not think that someone who worships rats is not brainwashed? Do you not think that someone who believes it’s peachy to torch his wife is not brainwashed? Do you think that someone who thinks bollywood is just a bit of alright is not brainwashed? Honestly (number 2).
Why don’t you go back to your rat worshipping, cow adoring, wife burning, Bollywood heaving backwater and get the hell out of America?… What? What are you are chanting, Jas? “Death to America! How do I get there? Death to America! How do I get there? Death to America! How do I get there?”
If Indians are so hard to brainwash, then why are so many of you so desperate to participate in the great American brainwashing? Hmmm? Pray tell. You are so brainwashed that you want to participate in a brainwashing that you have even been exposed to. (Death to America! How do I get there?) The reality is that you America haters can’t stand the fact that you want to be like us. If you didn’t, then why would you be here? Your anti-Americanism smells like teen spirit.
Then again, I may be wrong once more. I must acknowledge that I don’t have contact with your little green men. I would like to have contact with them, but I’m not up for an anal probe (oh, did I just say “up”?). Oh, by the way, Jas, how are they? Do the overlords lube ya?
Ben,
Please give Jas a category link on your site.
Thanks,
Timothy
Wow all I can say is the political environment in this country is getting VERY WEIRD. I’ve never seen this country in such a mess and even on this site I’ve seen where the tone has changed from sort of neutral to bottom of the barrel pessimistic. I’d give the US maybe 2-3 years tops for political sustainablity. After that, who knows…….
Oh, and housing will drop by 40% - 95%. It’s my first post here so I had to say that
.
“I’d give the US maybe 2-3 years tops for political sustainability. After that, who knows…….”
Give it a little more time, but you are right on. Americans show their true colors only when democracy and American political system are criticized. And people thought that Muslims were intolerant and extremists! We ARE #1 in both, it would seem.
Jas Jain
“I’d give the US maybe 2-3 years tops for political sustainability. After that, who knows…….”
Jas, you actually agree with this person. You see, this is the reason I wish you’d stick to real estate. You bring out the loons. You’re sort of like that guy in Monty Python’s Holy Grail that says, “bring out your dead.” Only you bring out the tinfoil hats.
Stick to RE or you just look ridiculous.
I hope no-one beat me to it.
Scientists find evidence of housing bubble reaching as far back as Stonhenge,” experts said.
http://dsc.discovery.com/news/2006/10/13/stonehenge_arc.html?category=archaeology&%5C1guid=20061013183030
Amazing that in this market sellers are still saying, ‘will entertain offers between .. blah blah blah ‘… you will get what the buyer will offer.. take it or leave it.. grrr
Beds 3
Baths 2
Sq. Ft. 1514
Lot Size 6430
Type Single Family Home
Year Built 1971
MLS # R2047587
Seller will entertain offers between 535,000 - 550,000. AMAZING SINGLE STORY HOME IN THE HEART OF VALENCIA. GORGEOUS HARDWOOD FLOORS, GRANITE COUNTERS IN KITCHEN, REFINISHED CHERRY CABINETS, NEW DUAL-PANE WINDOWS, & COPPER PLUMBING. FORMAL DINING ROOM, FORMAL LIVING W/ FIREPLACE. FRESH INTERIOR & EXTERIOR PAINT, ALL ON A WONDERFUL CUL-DE-SAC.
Low credit? No cash? Bankrupt? No Problem! You probably won’t qualify to lease this for $1700 per month, but you can buy it for nothing down, interest only 40 or 50 year loan!!!!
http://losangeles.craigslist.org/sfv/rfs/225339428.html