Bits Bucket And Craigslist Finds For October 28, 2007
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The Housing Bubble
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Looking for a Great investment, a product with constant demand?
Rather silently, the foods we grow and the livestock we tend are in peril of being woefully inadequate, to supply the needs of 300 Million mouths.
The drought is taking it’s toll, all across our country and food will be getting progressively scarcer, as we all gotta eat.
We now have about a year’s food on hand, and are learning to grow our own and be self-sufficient to some extent.
If you don’t eat food, just disregard this posting…
“The drought has left cattlemen with significant shortages of hay. “It’s a very precarious situation right now,” said Curt Lacy, a livestock economist at the University of Georgia. “I don’t see how we will not have to liquidate cows due to the lack of hay supplies we have in the state this year.”
“In mid-Atlantic Maryland, “just about every crop was affected,” said Buddy Hance, deputy secretary of the state’s Agriculture Department. A farmer himself, Hance says his crop of soybean and corn this year was 70 percent below average.”
“Many livestock producers have found it difficult to maintain feed supplies. Hay is in short supply and grass is almost non-existent on some farms,” the South Carolina Farm Bureau Federation said.”
http://www.breitbart.com/article.php?id=071027181751.qkj6fowa&show_article=1
Don’t take this the wrong way, but SE USA is not in a real drought.
What do you mean by that? What scientific data do you have?
You have an Aussiesum drought…
Care to share your experiences?
My earlier post was partly in jest. I am fully aware that the Western USA has some very dry areas, and also that the greater intensity of agriculture further East means that what we would consider mild dry spells can have very severe effects.
Heck, my UK relatives live in an area where they consider themselves in drought if they go 6 weeks without rain.
Anyway, where I live myself it’s OK for the moment, and we have had some showers over the last few days which won’t hurt with summer approaching.
My sister-in-law has relatives near a city (by Australian standards; it would only be a town in the US) 60 miles away where they have been at level 5 water restrictions for most of the last 2 years.
Level 5 is very simple: No external use of water is permitted, period. The only thing you can put on your garden is used bathwater. After 2 years most gardens are dead, and even the Eucalypts are dying.
More to the point, my s-i-l’s folks are woolgrowing graziers (what you would call sheep ranchers?). They have reduced down to their absolute core flock, and can only do this because they have outside income so they can buy feed. Some of their neighbours have destocked completely and are just sitting it out, or trying to.
Another heavy shower started up just after I finished the previous post.
Rain drumming on the roof; a sound you never get tired of.
Glad to hear it. Thanks for sharing your perspective. It’s very interesting to hear tidbits about what’s going on in the rest of the world and how that might play into the final unwinding of this bubble.
Two problems. First, America has too many calories (and you can see lots of them parked inside American waistlines). Second, with a little substitution, the grain problem goes away. If a crisis were to hit, eliminating the middle-man (cow) by eating grains directly would allow everyone to live (with less heart disease, but that is another topic).
recently i read in a uk paper (sorry, no link) that this strict vegetarianism as better to feed the world is a myth, because much land that is unfit for agriculture is perfectly fit for grazing of ruminants. (disclosure: i like steak!)
yep. The optimal point seems about 3 ounces of meat per person per day. I.e. think a classic Chinese or Indian diet: lots of grains/rice, plus a tasty veggie dish with shredded meat or a veggie+meat stew.
Aladin Sane,
There is plenty of food, foreign governments are willing to pay more for it than Americans. Fortunately for the US, China has banned the import of US pork and most of Asia has banned the import of US beef. A drought affecting cows in the southeast makes my Wisconsin herd’s milk more valuable. Wisconsin’s export of milk/milk products has gone up 150% this year.
Fonterra in New Zealand, the world’s largest dairy exporter (note I said exporter, not producer), has also had a very good year.
150% for diary? Well, at least its worth it…everything goes better with cheese. What’s not worth it is gasoline. Talk about a waste of money, its better to live close to work and lavish oneself with good food and drink than burn it away in traffic for nothing.
wow, it’s like you’re eating my brain!
The link below is to an excellent lecture by Robert Glennon, author of Water Follies. I encourage everyone to give it a listen. Water is life and we are being very careless with it.
Robert Glennon Water Follies Lecture
Good stuff!
I talked to a farmer in Salinas, Ca. that told me their deep water wells have been breached by salt water, from overpumping.
Salt is good on food, bad for growing food.
That reminds me… a friend of my parents worked oil fields in Coalinga in the 60s. He said that they pumped salt water in the ground as they pumped the oil out to keep the ground from sinking. I wonder if the deep water wells are hitting the salt water from the oil wells?
“At the democratic end of the spectrum, the political zealot offered New Deals, Great Societies and Welfare States; at the totalitarian end, cultural revolutions; always and everywhere, Plans.”
- Paul Johnson writing in Modern Times
Waman is so proud of these New Deals and Great Societies. George Bewsh came up with his own plan, “The Ownership Society”. That is why we are on this blog in the first place. We are trying to protest the stupidity of government and the disastrous results it creates. We are trying to keep them from being ambitious. I don’t want a government that is ambitious. I want one that knows its place and keeps its goals small. When government gets big ideas, bad things happen.
I find it amazing that anybody, in this day and age, can be proud of the creation of Medicare and the Social Security Ponzi Scheme. Government should butt the f-ck out of the social engineering game. Build the roads, pay the cops and create a military when it is needed. Outside of that, mind your own f—ing business.
No kidding! if people are sixty and haven’t had the foresight to save, then screw ‘em! Let them go without food and doctors, they’ll teach others a lesson with their hunger and failing bodies.
“Let them go without food and doctors, they’ll teach others a lesson with their hunger and failing bodies”.
Once Hillary gets in and socialized heath care happens the old folks will start dropping like flies. We patterned many of our Gubmit systems after the Germans and having dealt with their form of health care I can tell you the old ones gurneys get pushed to the side.
That’s right, cuz she’ll be a old-person’s nightmare! Who does she think she is trying to address the issue of medical care… The market will sort it out if people would just give the market a chance.
Why do we always talk about her?
We’ve got 15 months of hell to get through, first.
Let’s concentrate on the disaster ongoing, not the potential for one.
We’ve got 15 months of hell to get through, first.
Hell? We must not live the same country! Try elsewhere.
“The market will sort it out if people would just give the market a chance.”
Comment by JP, 2007-10-28 05:17:22
___________________
I hope this is sarcasm. If you really believe this, let me know, and I’ll disabuse you of such a silly and dangerous denial of reality (I also have a house for sale I think you’d be interested in).
JP
“The market will sort it out” means the market would bring more pain in the short term, but it would bring thing in its proper balance for the longer term. Managing the collapse of the housing market will create problems in areas that are not as visibly painful. (Inflation, Depreciation of Dollar, Higher Taxes by next administration, more government bureacracies etc). The market is ultimately the best allocator of resources. The bubble was not entirely a creation of the free market, it was a phenomenon brought about by other factors that have been discussed before.
Funny, I would have guessed that “Let them go without food” would have elicited a greater response than “The market will sort it out”.
I promise to brush up on my sarcasm skills in the future.
And to Ben, I promise on topic posts.
>>The market will sort it out if people would just give the market a chance.
And I don’t want to step over 5,000 homeless people on the way to work. There is a lot to complain about with respect to government policy, but pure libertarianism is not the answer. With public goods, the market doesn’t just work. To get the most efficient allocation, there has to be some intervention. The things you mentioned (roads, defense) are public goods, but so are some less obvious things, like living in an educated society.
Where we would agree is that 90% of government regulations are completely useless. And special interests attack the 10% that actually have teeth so that they can profit. Banks have been especially bad about this, and their propagandists have most of our society singing the deregulation song. It’s in no one’s best interests but the banks. We’re starting to see that with remarkable clarity. So after the regulations that are actually useful are done away with, we’re left with nothing but government bloat. It makes it easy to attack regulation and government per se, but that’s far off the mark.
“Collectivism is the doctrine that the social collective — called society, the people, the state, etc. — has rights, needs, or moral authority above and apart from the individuals who comprise it. We hear this idea continually championed in such familiar platitudes as ‘the needs of the people take precedence over the rights of the individual,’ ‘production for people, not profits,’ and ‘the common good.’
“Collectivism often sounds humane because it stresses the importance of human needs. In reality, it is little more than a rationalization for sacrificing you and me to the desires of others.” — Jarret B. Wollstein in The Causes of Aggression,
Individualism regards man — every man — as an independent, sovereign entity who possesses an inalienable right to his own life, a right derived from his nature as a rational being. Individualism holds that a civilized society, or any form of association, cooperation or peaceful co-existence among men, can be achieved only on the basis of the recognition of individual rights — and that a group, as such, has no rights other than the individual rights of its members.” — Ayn Rand
God forbid we go back to families taking care of their own. It is much better to have the nanny state. They will get you a house now, too. That is working out well. The Nanny State is what is killing the sense of family that used to exist in this country. It was not a good tradeoff.
NYCityBoy - boy - have you drunk the kool aid
I don’t think so. I just want people to take some responsibility for their own lives. I don’t want to blamed for other’s failings and I don’t want to work to support everybody else. I don’t trust the government to have my interest at heart. That’s it. Is that so horrible?
I’m done with this topic. I sure didn’t mean for it to get this heated.
Here comes the liberal - From my perspective the biggest problem we have is that as a society, we’ve lost any sense of caring about the greater good. It’s filtered down to every level of society - it’s now every man for himself and screw ‘em if they’re sick or poor. It’s much more important for people to show how much money they have then care about those less fortunate. Everything is about profit and greed. That’s exactly how we got this housing mess we’re mired in right now. I just don’t see where a sick and uneducated society is going to make anything better. I know - I’m in trouble now.
When people are in debt–spending beyond their means, desperately trying to feed the alligator–they can’t afford to be generous.
We don’t care about others (as a society) because we are broke spendthrifts who owe more than we can hope to–or at least want to face the pain to–pay back.
It’s very simple… check out The Millionaire Woman Next Door (based on further research from The Millionaire Next Door–a lot of insights here on charitable giving) or check out the “Baby Steps” that Dave Ramsey talks about. Now, I don’t care to give 10% of my income to ANY church or religious organization, but shooting at 10% in giving to friends, family, and causes I care about sounds like a very good goal to me. And I can do it because I save, build wealth, and stay out of debt.
Debtors are not givers!
“From my perspective the biggest problem we have is that as a society, we’ve lost any sense of caring about the greater good. It’s filtered down to every level of society - it’s now every man for himself and screw ‘em if they’re sick or poor.”
I agree wholeheartedly. As an extension of this thought, we’ve lost caring about the good of the community and the value of a “commons” that belongs to all of us to enjoy (walkable streets, a landscape that includes trees and nature, neighborhoods w/aesthetically pleasing architecture). This ties into the housing madness IMO with the emergence of endless McMansion tract homes that have replaced many acres of forests and prairies that made up the landscape. This loss can NOT be understated, as the “sense of place” that is the very soul of our country is being destroyed for greed, profit. Why would anyone choose to buy a McMansion, to be part of the “demand” for this type of world I don’t know. I live in a traditional neighborhood where all of my immediate neighbors help each other out, divide up our perennials and share extra produce from our gardens in the fall, care for each other’s pets when we’re on vacation, and ask if we can “pick up” anything from Costco for our each other while we are there . The church down the street donates their parking lot for a farmer’s market in the summer. It is wonderful the sense of community and I would not have it any other way. Yet many people do not see the value in these things anymore because there is not a price tag on them, their value is not dollar-denominated like the lure of “instant equity”. Maybe when the equity goes away, value in these things will make a comeback. Just my two cents.
“From my perspective the biggest problem we have is that as a society, we’ve lost any sense of caring about the greater good. It’s filtered down to every level of society - it’s now every man for himself and screw ‘em if they’re sick or poor.”
I think the reason is that we are no longer a melting pot. Most cultures stay with their own and do not become “Americans” these days. There is a lot of queasiness about the idea of giving to someone in a different subculture (you name it) in the next little town rather than your own subculture (family). Added to that, the American family has become so broken down that it’s not even worth giving to them. I have a nephew turning 32 in April. He worked one year in his life. His late grandfather (my father) tried many times to coax my sister into getting him some counseling, but that was taken as an insult. My nephew is a frog on a log waiting for a fly to come by.
Actually Americans are still too trusting these days. But that’s another story. I’ve been a crime victim twice - once from someone I trusted.
I only give charity to the American Cancer Society and the like. I don’t give to “the homeless” and many of them out there put themselves in that situation. When my sister dies, my nephew will be homeless. He does not know my net worth. No need to.
“God forbid we go back to families taking care of their own. It is much better to have the nanny state. They will get you a house now, too. That is working out well. The Nanny State is what is killing the sense of family that used to exist in this country. It was not a good tradeoff. ”
Can’t entirely agree with this.
Time has dimmed the problems we had in the past, making it seem like “the good old days”. They were never that good. We enacted programs like social security for a reason. We would all have to travel back in time to really understand those reasons. “Family” seems good to some, unending bondage to others. Government programs were enacted for a reason. In principle, they are more fair, for one. Why should one family member bear a life time burden of care for another, when most do not? And please, no sappy stories of how it it not really a burden! Family can be a prison cell.
There are other negative aspects to too strong a sense of family…reduced mobility of talent and the workforce, for one. Asian countrys are held back by family customs, not letting outsiders into the family business, for example. It’s an impediment to growth of large business, familys only got so much talent, so the companies stagnate.
“We enacted programs like social security for a reason.”
To help widows, is my understanding.
“The Nanny State is what is killing the sense of family that used to exist in this country.”
I guess 1929 and the Great Depression was utopia in your mind, NYCityBoy. My father stood in a bread line, and had to try and support 2 kids and a wife with 25% unemployment.
Can’t wait for the return of the “good old days”.
So the answer is a massive bureaucratic machine to redistribute wealth? I would much rather see these things handled on a local level than the system we now have where it is estimated that we have $52 trillion in unfunded liabilities. Good solution.
I’m with you, NYCB. Our government racks up debt to pay for social programs (as well as disastrous wars). This is grossly irresponsible, since we’re not even paying for our own misplaced largesse.
I would much rather see these things handled on a local level
and you think that would be /more/ efficient? LOL.
it is estimated that we have $52 trillion in unfunded liabilities
Which is true, but cut DoD expenditure by 2/3rds over this infinite horizon and the funding problem is largely solved.
Healtcare works better in other countries. We can learn from their experiences, but instead we are afraid of them and their foreign ways, because we are morons.
NYCBoy,
I don’t think it’s an all-or-nothing thing. I live in NYC, and pay a ton of taxes. I don’t begrudge them that much: I get to live in a nice 1800sq ft apt and leave the doors unlocked. I, my wife, my maid, and nanny all use public transport. The stores within walking distance are all well-staffed. My kids talk to the young and the old, rich and poor, black, brown, and white on a daily basis.
I’ve lived in effctively gated and insular communities, and I found them kind of paranoid and sad.
I’ll take a place where my 2 year old can wander over to an immigrant family’s picnic, be invited to sit down, and fed dinner. That just isn’t isn’t going to happen in NYC without a lot of infrastructure paid for by tax dollars.
But I’ve seen often here complaints about extended families moving into the neighborhoods. You can’t have it both ways - you want families to take care of each other, then don’t bitch when the group moves into your neighborhood. Although most of the whining seems to be about extended families of assumed illegals.
You’ve obviously never had a severely ill child. Or a burn reconstruction.
No matter how much you’ve saved, or how hard you’ve worked, when you’re sixty and need a heart transplant, you won’t be able to afford one unless you rely on social conventions (IE: socialization– this time in the form of private health insurance…which may or may not cover your needs. In which case, you too will be “screwed.”) As for families going without food,
http://en.wikipedia.org/wiki/October_Revolution
My mother’s neighbors had done it all by the book: paid for their home, had sufficient retirement savings, insurance they payed for themselves, worked to keep themselves healthy, did volunteer work in the community.
Then the wife had a massive heart attack, from which she recovered, only to be felled by a stroke. She had to be in a nursing home for a bit over a year. She fought her way back. Happens.
What’s the problem? Their insurance ran out, her medical care ate thru their retirement savings, and they had to sell their house. They ended up in a small apartment, close to the catfood scenario, as their only remaining income was his social security, which was in the neighborhood of $700 a month.
Life happens, and I cannot be one who shrugs and says “bummer”, while finding delight in my low taxation rate.
The military industrial complex offers the last corporate upper middle class jobs, in quantity, in our country…
We really can’t make more weapons until we use the ones we have, thus perhaps the reason for constantly having to find a suitable enemy to use them on.
And the David’s we’ve decided to take on lately, are unshocked & unawed by our complex expensive state of the art Goliathness…
‘Why do we always talk about her?’
Because some people have an axe to grind and will push it even onto a housing forum. I do my best to discourage unrelated politics on this blog, but a few people are just relentless with this stuff.
Would you not admit that politics and the housing mess are completely intertwined? As long as we continue to blindly follow one party or another they are going to continue to create these messes. We need to be skeptical of ALL politicians.
‘Would you not admit that politics and the housing mess are completely intertwined?’
No, in my economics classes we rarely brought politics into it. Plus, once it does happen, nothing gets resolved. The political system is broken in this country, IMO. I have been doing this for a while, BTW. I know what is constructive and what isn’t.
Ben, I have great respect for what you do here. Yesterday you stated that you want to keep this from ever happening again. How do you do that without trying to unwind the political problems that are at the heart of so much of this? I just don’t see how politics and economics can be considered separately.
By staying relentlessly on the topic, and only going into the political area when it is absolutely neccesary. Notice how quickly any political point devolves into name-calling and historic recall. Who cares? What matters is how we address the situation at hand and how do we keep this forum moving forward constructively, IMO.
Point taken. It’s a gorgeous day in the City and football starts in 3 hours. We need to remember that even with all of these messes, life is still good. Thanks for the blog Ben.
Ben, I think you’re correct on the issue of laying blame on political parties and the ensuing degeneration of the discussion. However, to DENY that the bubble is a direct result of unregulated finance is a fools game. And who or what organization is consistently and historically harping for “deregulation”? What outfit harps on the Darwinian but misguided idea of “every man for himself”? We know we’re in the first inning of the long unwinding of a huge credit induced misallocation of capital. Who now is sitting on the money? Don’t tell me an equity bandit until one of them can SHOW ME an actual dollar this bubble put in their pocket. What we’re witnessing will likely be the greatest transfer of wealth from a large group to a small group of strong hands in the history of the world. So that redistribution of wealth is acceptable but it’s unfair in the other direction? The moral hazard of the thinking of some people is scary, uneducated and dangerous. If you want to conduct business with consumers, then our govt. is OBLIGATED to provide a framework that protects those consumers from their own stupidity AND from the dishonesty inherent in separating people from their money, i.e. BUSINESS.
Politics is the business of getting power and privilege without possessing merit. A politician is anyone who asks individuals to surrender part of their liberty — their power and privilege — to State, Masses, Mankind, Planet Earth, or whatever. This state, those masses, that mankind, and the planet will then be run by … politicians.” — P. J. O’Rourke
I took one of those best-candidate-for-you issue-matching tests and Dodd came out on top by a long ways.
DAMMIT! I CAN’T VOTE FOR HIM!
kckid right on topic as usual. /sarcasm off
Troy: Why can’t you vote for Dodd if he is the candidate that most fits your beliefs? I think that test is great and most of my circle of friends did the same test. Many were shocked at the outcome and found that their preconceived notions of what the parties/candidates stood for was warped by the media.
Yep. Feel free to delete this part of the thread. Certainly, my posts above have zero signal to noise.
I was disagreeing with Waman’s assertion that we need gigantic government programs. Family and local charities would be a much better solution to the Nanny State. I favor no political side. They both stink. The tendencies for believing the government can solve problems is what got us in this Housing Mania. Therefore, I see it as a very valid discussion.
So much for “groupthink” on this board.
Ben: When we bash politicians, aren’t we bashing ourselves. These folks get elected by the public. More than half the public don’t even bother to vote and probably a quarter don’t research or go beyond puppeting whatever the MSM says. No matter what group we want to blame for whatever happens, I think we have to accept some personal responsibility for the government we elect. IMHO local politics is more important than any other level because they are the folks that decide land use, school curriculum, property taxes, etc.
War as the only way out. Not a good situation.
The “nanny state” referred to by NYCityBoy, above, is the result of the last great social upheaval in the US - the Depression/Dustbowl. There are those who would argue that FDR was an incompetent Socialist who prolonged the recovery, and that a Right wing leadership would have done a better job. But that isn’t what happened, so such statements are and can only be conjecture. There’s no telling what might have happened under a different regime. On the other hand, a quick look at the 20th century shows that somebody did something right during those years. The success is obvious as the 20th century was “The American Century”.
American “conservatves”, as they call themselves, should research their own family histories to determine exactly when they were lifted from peasantry into the middle class. Probably during the FDR administation. Now they want to dis that system in favor of the false and hubristic claim of being naturally superior to the other weak and poor, and having pulled themselves up by their own bootstraps.
Your comment on the Military/Industrial complex is a clearer indication of what is wrong with America. Eisenhower warned us.We ignore the warning at our own peril.
Nope. Many of the conservatives I know grew up in households where FDR was equated with Stalin. These are people whose families came to America quite early and got their privilege by just being here first, starting businesses, grabbing land, fighting the British, whatever. My cousin is a judge in a county where “we” have been on the bench since the 1600’s. Well, of course we’re conservative: the USA belongs to us, right? (A hint of irony here.) Typically “we” accept immigrants as Good Americans if they share the traditional work ethic — Chinese people, for example.
I can’t evaluate whether FDR’s policies were necessary to the superior production and distribution systems that characterized America at mid-century. I can see that the sense of opportunity, connected with the relatively libertarian economic system here, continued to bring Europeans and others to our shores through much of the century. In some ways, the housing bubble is an unintended consequence of screwy income-tax policy. But others have pointed out that the housing bubble was already in full swing in some other countries (Holland e.g.) when it got going here. I think NYCB has a point when he ascribes the bubble partly to govt actions. WHICH govt actions, that is the question? Do we all agree that the “bailout” proposals are ill conceived? As arroyogrande said a few days ago, there will always be fads/bubbles in SOMEthing, but I think it is unfortunate that this latest one was in housing, and I do think that detail is unlikely to be repeated before 2060.
Exactly. Take away those jobs, and we’re all Wal-Mart greeters (at best).
“I don’t want a government that is ambitious. I want one that knows its place and keeps its goals small.”
“Government should butt the f-ck out of the social engineering game. Build the roads, pay the cops and create a military when it is needed. Outside of that, mind your own f—ing business.”
Unfortunately those horses have long since been thrown out of the political barn by both parties, to be left to starve on their own and never seen again, if they have their way.
I find it amazing that anybody, in this day and age, can be proud of the creation of Medicare and the Social Security Ponzi Scheme. Government should butt the f-ck out of the social engineering game. Build the roads, pay the cops and create a military when it is needed. Outside of that, mind your own f—ing business.
Agreed. The liberals like to claim they have the high IQs. But they do not know the difference between the words “promote” and “provide.”
For Provide, they think it means give everyone a white flag and a shovel to hide their heads in the ground - “Provide” for the common defense.
For “Promote,” they think it means stealing from the most productive and giving to the laziest - “Promote” the general welfare.
Economic modern day liberals are STUPID.
LaRouche Proposes Homeowners and Bank Protection Act in Foreclosure Crisis
Aug. 22, 2007 (EIRNS)—The following release was issued by the Lyndon LaRouche Political Action Committee (LPAC).
The Lyndon LaRouche Political Action Committee is mobilizing to get Congress, on return from recess after Labor Day, to enact the Homeowners and Bank Protection Act of 2007. This is legislation that Lyndon LaRouche proposes as the only means, at this late date, for stopping millions of home foreclosures and evictions this year and next, and for launching a larger process of bankruptcy restructuring of the U.S. and global dollar-based financial system, which is now already doomed. Governors and state legislators all across the United States will enthusiastically join in this effort, which some leading bankers and Democratic Party figures, briefed on LaRouche’s proposal, have already declared is “doable” and the “only salvation” for the American people.
Here are the essential features of the Homeowners and Bank Protection Act of 2007:
1. Congress must establish a Federal agency to place the Federal and state chartered banks under protection, freezing all existing home mortgages for a period of how ever many months or years are required to adjust the values to fair prices, restructure existing mortgages at appropriate interest rates, and write off all of the cancerous speculative debt obligations of mortgage-backed securities, derivatives and other forms of Ponzi Schemes that have brought the banking system to the point of bankruptcy.
2. During this transitional period, all foreclosures shall be frozen, allowing American families to retain their homes. Monthly payments, the effective equivalent of rental payments, shall be made to designated banks, which can then use the funds as collateral for normal lending practices, thus recapitalizing the banking system. Ultimately, these affordable monthly payments will be factored into new mortgages, reflecting the deflating of the housing bubble, and the establishment of appropriate property valuations, and reduced fixed mortgage interest rates. It is to be expected that this process of shakeout of the housing market will take several years to achieve. In this interim period, no homeowner shall be evicted from his or her property, and the Federal and state chartered banks shall be protected, so they can resume the traditional functions, serving local communities, and facilitating credit for investment in productive industries, agriculture, infrastructure, etc.
3. State governors shall assume the administrative responsibilities for implementing the program, including the “rental” assessments to designated banks, with the Federal government providing the necessary credits and guarantees to assure the successful transition.
By September-October, unless this legislation is enacted as a first order of business of the 110th Congress in September, many millions of Americans will be evicted from their homes, setting off a process of social chaos that must be avoided. The freezing of foreclosures is the vital first step in a thorough reorganization.
Under this plan, the Federal Reserve System will be, itself, put through bankruptcy reorganization, and transformed into a Third National Bank of the United States. As developed in Lyndon LaRouche’s just-released draft platform for the Democratic Party, these actions shall be complemented by the creation, by treaty agreement among leading nation-states, of a new Bretton Woods System, based on fixed exchange rates, and long-term treaty agreements for large-scale development projects on a global scale.
LaRouche said the foreclosure tsunami is occurring, not in a mere housing crisis or mortgage crisis, but a disintegration of the entire global financial system. There is no bottom to this collapse—unless a legislative fire-wall is created now, and a halt to the income drain on the population, brought on by the hyperinflationary debt bubbles created by Alan Greenspan and his ilk.
apparently LaRouche does not understand the true nature of a Ponzi scheme; he seems to think that all homeowners with a mortgage are victims instead of accomplices.
This sure sounds like a great plan to make sure the next housing bubble is even bigger, because the FB’s with the most over-the-top mortgage will get the biggest rewards. He doesn’t say where all the required credit comes from - I don’t think foreigners are willing to pay the bill, to it must be the few remaining savers? Is this LaRouche guy counting on huge campaign contributions from the RE mob ?
Terminating the FED sounds great, but I doubt making it a national bank would not make much of a difference.
Lunatic Fringers with the right message are the wrong messenger, methinks…
I can never work out whether LaRouche is an extreme right-winger or a Socialist.
No mystery there - the fringes are always closer to each other than either is to the center. Ex: Il Duce was an active socialist before embarking on his theatrically entertaining career in facism.
A few words from the Duce…
“Fascism should rightly be called Corporatism, as it is the merger of corporate and government power.”
It’s always “banks” - I may be unusual in originating AND holding notes privately, but I do know there are plenty of private individuals holding mortgage or trust deeds executed by other individuals. What these “solutions” always boil down to is: “Void all contracts and all contract law.” Oh sure, that will be a great way to restore an orderly system of doing business.
If private lenders want to do a 125% loan ,I really don’t care .Once a Company gets together a big bundle of money and markets it to the public thru a corporation ,than protections for the public need to be in place IMHO. The difference with big bundles of easy money , verses smaller scale private lender TD making ,is that those big Corp. funds have the power to make or break a market .
You have a very good point here. Congress is not supposed to have the authority to write ex post facto laws. They are only supposed to apply to new contracts going forward.
They have broken this rule a lot lately “for a good cause.” Dangerous game.
Does anyone have any figures or thoughts on raw land? I know of whole subdivisions in Arizona where speculators paid $100,000+/acre in recent years. Some of these were immigrants who put their wealth into land as a safe investment. Surely it will take years or decades for the value to appreciate back up to the price they paid. Is there a lot of raw land now on the tax roles that is unlikely to be developed anytime soon? How big is this problem compared to the “housing” problem?
Raw land is essentially useless, unless you build something on it, or use it for farming/grazing.
And this country has no shortage of raw land…
So many smart people on this blog, great resource. Does anyone know if silver coins distributed by the US mint as pictured in the link below, are legal tender at face value for real estate transactions?
https://www.bulliondirect.com/catalog/showProductDetail.do?id=40572465
If they are denominated (these have a nominal face value of One Dollar) they are indeed legal tender.
If they didn’t have a face value, they would just be 1 Troy Ounce Silver Rounds…
thanks
Sure they are legal tender it has $1 stamped on it. However what fool would use one as a dollar when it could easily be sold on ebay for $12 or more.
A coin w/o a denomination is a medal…
There are custom duties on medals, but not denominated coins, when exporting to other countries.
p.s.:
Are you still giving your stuff away on eBay?
Close to it - check out cbroncos on ebay - and I have more to give away starting Monday
You seem to lose money consistently selling on eBay, and do it in volume.
What’s your secret?
It is called get out of debt before the shf.
I think it’s a great idea to pay someone far below market wage using silver or gold coins with a small denomination so that they and I don’t have to pay much social security / medicare tax. But then they could convert to cash at a higher rate, maybe after 2 years with the lower long-term capital gains rate.
The US mint calls them “legal tender”:
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?flash=yes&Action=american_eagle_silver
“Raw land is essentially useless, unless you build something on it, or use it for farming/grazing.”
That’s the point. Literally billions/trillions? of dollars are tied up in raw land, and it’s being taxed as if it has huge value because some sucker paid way too much. How many billions or trillions are in raw land as opposed to housing, and is that going to be an issue in the economy going forward?
I suspect it depends on the state agricultural land tax laws. In some states, until the land is developed, it is taxed as agricultural land. In Illinois, this has created a significant problem for homeowners that purchased houses and were told taxes were $200/yr (based on agriculture). The areas then were reassessed after purchase and tax bills became $4,000/yr. Escrow for taxes was short and homeowners have had to come up with the shortfall with significantly higher monthly payments. Surprise.
Back in 1992 I bought 10 acres of So Cal junk desert at an auction for $4000. Ergo, property tax of $40/year. When I wised up a little bit, I saw the property would not be worth anything, anytime soon. I successfully took a $4000 income tax deduction by donating the property to Calif Assn for the Blind, and Xeroxing my property tax bill to submit with my 1040. Who knows what the Blind got for it - I hope more than $0.00, but at least they could avoid the property tax as they are a charitable organization.
So they got it, sight unseen?
~GROANS~
There’s a revolt brewing at Merrill over the losses triggered by mortgage-backed securities. Former Chairman Tully is leading the charge, with disgruntled employees, and O’Neal’s unauthorized talks with Wachovia over a merger may give the board an excuse to dump him. This is amazingly similar to the revolt at Morgan Stanley a few years ago, where Phil Purcell, even with a hand-picked board of directors, was driven out after a hard fight.
“The third-quarter net loss of $2.24 billion, or $2.82 a share, was six times bigger than the firm forecast just three weeks earlier. Merrill’s shares have fallen the most of the five biggest U.S. securities firms.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeJyIsHimO5k&refer=home
I heard they are trying to trade O’Neal, to other MBA teams…
They may put him into an SIV, that way he won’t affect their balance sheet.
The problem with replacing O’Neal is that the first order of business for any new CEO will be a CYA exercise making sure there’s nothing from the old administration that’s going to turn around later and bite him/her in the rear end.
So one would expect a rigorous mark-to-market at Merrill, which might have interesting (in the Chinese sense) repercussions for the financial sector as a whole.
I wonder if bonuses will be paid to people who produced profits (equity traders and MBS short sellers) or if there’s a bonus or no bonus policy across the board.
Just think what happens to this market if the Grinch Steals Christmas from Wall Street. Those bonuses are like a mystical source of hope and optimism in New York. Everybody, except NYCityBoy, thinks they are richer because of those stupid, oversized bonuses. How will little Cindy Lou Hoo feel if those bonuses don’t show up under the tree?
I think ozajh’s point is interesting. I find it difficult to believe that more losses in structured debt products aren’t waiting in the wings for the fourth quarter, and with speculation that ejecting O’Neal would require a 160million parachute for him, the costs for Merrill are mounting. Ben’s Florida thread this a.m. had both HSBC and Deutsche Bank both with potential short sales of 50 cents on the dollar, instead of 80 or 90, so things continue to deteriorate. And O’Neal’s backdoor chat with Wachovia suggests much worse is in the pipeline.
Guesstimates Won’t Cut It Anymore
By Gretchen Morgenson — NY Times
Oct. 28, 2007
http://www.nytimes.com/2007/10/28/business/28gret.html
The props holding up the values of risky mortgage securities finally started to give way last week. And that means the $30 billion in losses and write-downs taken by big brokerage firms in the third quarter are not likely to be the last.
Even as developments in the credit markets went from bad to worse this year, investors for the most part have remained upbeat about the values of the mortgage securities they held. One reason that they could keep their heads in the sand was that these complex securities are hard to value in good times, impossible during periods of stress.
Executives of companies with big stakes in mortgages also accentuated the power of positive investor thinking. Emerging periodically from their corner offices, these executives opined that in spite of rocketing delinquencies, most loans continued to perform well. Rating agencies, fending off complaints that they had been slow to downgrade, maintained that they would adjust their ratings only after they saw actual loan failures. Government officials trotted out regularly to contend that upheaval in the mortgage market was a minor scrape.
After last week, however, it was no longer plausible to deny that mortgage loans, and the complex securities derived from them, had crashed — and caused a lot of damage in the process.
First to face the music was Merrill Lynch, which stunned investors Wednesday with an $8.4 billion write-down, $7.9 billion of which was for mortgage-related assets. The write-down was $3.4 billion more than it had warned investors about just three weeks before.
Excellent Article - maybe one day soon, we will finally see the end of Mark to Market accounting. Companies will just value assets on present day worth instead of fantasy numbers!
I could deal with “Mark to Markey”, problem is curently we have “Mark to Model”.
The fancy CDO creating machine was designed with a major flaw, and the user’s don’t(aren’t) being held liable.
Mark to Malarkey
Malarkey: Exaggerated or foolish talk, usually intended to deceive.
Wouldn’t it be safe to say that the SIV’s/MBS’s are worth 60% less per loan (never mind any interest earned ),which would mean that some of the trenches are worth zero ? I think its safe to say that a toxic loan given to a borrower who can’t afford the increase payment will default ,unless they get a new job paying more money or get a raise .Who ever dreamed that lenders would give loans based on qualifying on low teaser rates for a short time ? The rating agencies can not justify these faulty ratings for this junk paper .
CNN has an article on the circling predators above the beleaguered holders of these things.
“The uncertainty leaves distressed debt investors with the tricky task of “catching a falling knife,” said Daniel Alpert, a partner at New York-based boutique investment bank Westwood Capital, which specializes in mortgage and related securities.
“You could argue this is a good time to go in,” Alpert said. “But my view is that a good portion of the market thinks the knife hasn’t even started to plummet yet.”
http://tinyurl.com/2ngxu2
Will there be some mutual funds that have to sell these securities now that the rating has been cut?
Yep. At least they will get an idea what the securities are worth. Interesting week ahead.
I’ve found that I enjoy the company of the housing bubble bloggers, but outside of the blogs everyone seems to still be naive about the huge issues looming with the housing and credit bubble. Someone hit on something on another thread, and I was wondering, are most of you the type of people that would consider themselves unaffected by corporate advertising? Independent thinkers? I know I’ve always felt pretty unaffected by huge trends and marketing, and have felt I am a solo thinker. Wondering if this is a trait shared by others on here, which may separate us from “the sheep.”
Good questions, all I know for certain is that it is fun to go against the grain. Questioning one’s own beliefs and constantly re-evaluating them leads to personal growth. At the same time, watching others see their beliefs put into question is downright hilarious - gnashing of teeth, angry scowls, mumbled obsenities, etc.
Housing is such a touchstone issue on our culture. Marketers have made owning houses an integral part of what it means to be a “successful” person. So, to see the mythology of the “home” finally come into question is about the most single enthralling story I’ve ever followed.
As we put in our 4 hours of television a week, (Daily Show/Colbert Report) my wife and I like to play a game…
We turn down the sound during the commercials and try and figure out what they are “selling”.
There’s something called axe body spray, that would have you believe that 14 year old boys will be inundated by 1/2 a dozen incredibly beautiful 17 year old girls, all so very hot for their scented bodies…
Give it a try, turn down the noise and watch what happens
Ha! I played this game once with my (then) 14 year old daughter who grew up without a TV. We were on vacation and watching TV in our hotel room without the sound. When a Macy’s commercial came on, I asked her “what are they advertising?” She looked at the bright red star on the screen and immediately said, “communism.” I’ll never forget it…
I can honestly say, even as a young lady, I went against every trend. When teen girls started to wear heels, I wore flats. Pants=skirts; jeans=dresses. It’s a fond memory, because I didn’t belong to any one group, and was accepted by all.
Even in the military I started a fad of sorts. I would wear my ribbons everyday, non-issued black flats, and non-issued leather purse! And for pomp, I would wear my formal hat!
This is all kind of crazy, because I began my career as a graphics illustrator (set a few trends there too, but that’s another story!)
Smiles,
Leigh
I haven’t watched tv in 12 years. I get my info from the web and books. This blog is very informative. I definately found that my desire for ’stuff’ abated when i threw the television out the 2nd story window to the street below. it is a known fact that people who watch television are more apt to have the desire to buy things. that’s not too hard to figure out as the hidden objective of advertising is to ‘create need’.Perhaps the housing fetish has been fed and fueled by television?(i didn’t really throw the tv out that way)
got dAdA?
phew, I was worried about the lead poisoning.
Haven’t had a TV in two years. It’s okay, my compy plays DVDs from Netflix.
I agree. Way less desire for “stuff”. Not reading Slashdot (which is full of bleeding-edge tech drooling) has helped as well.
Also, cars seem way less essential when you aren’t watching hours and hours of automobile ads.
Some tricks of the trade I have learned because of revolting against advertising. I record some tv and speed thru the commercials.
Owning less stuff means a smaller house to pay for and clean. Raw honey for wound care works better than anything else I ever bought. Learning to use a Jali Netti Pot has kept me away from meds and the Doctor for any sinus/cold issue, so far. My vehicle has been paid off for 8 years and gets me everywhere. My old furniture that still looks great- gets steam cleaned.
I use a pea size of Tom’s toothpaste dipped into baking soda and not that big glob shown on the tv. I tear dryer sheets in half. Olive oil soap lasts forever, no fillers. My computer, cell phone and digital camera do everything I need it to do—so no point in replacing them. Good quality stainless steel cookware without Teflon should never need replacing. Pinwheels in the yard gets rid out gophers instead of using gadgets and chemicals. Use a vacuum outside for the best spider control. Pour boiling water on fire-ant homes you want to get rid of, again no chemicals.
A soapy scrubber sponge negates the need for “special cleaners” for smooth cooktop stoves. I have refilled printer ink cartridges forever at a fraction of the cost. I don’t want a kitchen gadget that gets used twice a year—I don’t care how neat it is. Lysol, window cleaner, peroxide and CLR used sparingly does it for me without the clutter. Read the hazard panel on cleaners—why would anyone knowingly use a product for general cleaning that could blind them, damage lungs permanently or cause death?
One more thing, about food—I make my own frozen burritos and dinners for something quick. The commercial foods are loaded with what I believe are cast off chemicals left over from other manufacturing processes, that companies would have to pay big bucks to get rid of as the HAZMAT materials they are. There are giant parent corporations that own chemical companies and food companies—I don’t trust them.
I revolt every way I can, and started years ago against the propaganda that those hazardous chemicals should smell like green apple or yummy vanilla so people would not give it a second thought and willingly pay for dangerous chemicals. Don’t even get me started on the water supply. Those same chemicals as well as cancer drugs etc. test positive in some locations in the municipal water. Have you had your daily dose yet—it is disgusting. I am hoping with the looming water shortages getting attention this issue garners attention. Thanks for the soapbox.
How low will it go?
http://www.sanluisobispo.com/business/story/178024.html
Marketing and advertising are my bread and butter. I’m here to tell you that it’s all BS. The trends, as well as the underlying “needs” and “solutions” that feed them, are manufactured from thin air, those marketed to successfully are willing participants in their own fleecing.
For example: How many brands of toothpaste are there? Need something to whiten? Brighten? Bleach? Make your halotosis go away? Well, you’re in luck! We have a product for you! And it costs less than $5 for a week’s supply! Then there’s baking soda. Less than a dollar for a six-month supply - but you don’t get the cachet (you do, however, get clean teeth and $4 per week to put to good use).
Same goes for the vast majority of products (including housing) in our consumer driven society. Caveat Emptor.
Never believe they hype.
The new cheap mouth care is called “oil pulling “.Look it up .
Weird concept. I’m thinking of putting leaches on my gums.
They claim that it cures all sickness . Oil pulling has been practiced in India for a long time and it’s just starting to become popular in America . I can’t see that anyone can make money off it because it just involves cheap oil .
my dentist tells me that swishing your mouth with salt water daily is the cheapest, most effective and least publicised way of maintaining gum health…..
But he didn’t tell you about hydrogen peroxide.
salt water is probably less expensive than hydrogen peroxide.
Hydrogen peroxide is another good one to swish your mouth with, and it’s very cheap .
I just got done watching a Frontline episode I had never seen before, a 2nd one featuring Douglass Rushkoff, who wrote a book I randomly picked up some time ago called “Coercion.” Much of it I already knew was going on, but it was still entertaining to see it. The scary part is that the same marketing firms hired to sell toothpaste and perhaps push the American dream image for Century 21 or Remax, is also hired to handle political ad campaigns and what not. I wonder which one invented Suzanne, while eerie, you know it was accurate.
The best part was some crazy high paid marketing type who came up with some bizarre commercial set for a airline called Song. The commercials had a bunch of artsy fartsy stuff, but never said what the product was or did or featured. Even I could see that it didn’t seem like a good idea, which was confirmed later.
If the housing bubble and credit bubble and blog had me questioning anything, it was my desire to actually buy a house, and more so, why would I do so in Norfolk, Virginia region versus say… Raleigh, NC. “Do I really want to buy here.”
The scary part is that the same marketing firms hired to sell toothpaste and perhaps push the American dream image for Century 21 or Remax, is also hired to handle political ad campaigns and what not.
Yeah, I recently saw a documentary called “Our Brand is Crisis”, about how American political consultants contributed in their own particular (mostly well-intentioned) way to mess up things in Bolivian politics. Here in LA, it was on movie theaters only for a week or so, but it’s really good. See if you can get it with Netflix.
OK guys
Why was Charmin so squeezably soft????????
think you know?
get ready….
Remember what the don’t tell you is 10 times more important then what the do…..
here is comes
The inner roll it was on was paper thin compared to the cheap house brands!
“Then there’s baking soda.”
100% agreed. baking soda is one of the greatest discoveries of all time: replaces toothpaste, deodorant and half of the cleaning agents on your shelf. vinegar is the other great household deodorizer/cleaner. if people really knew the value of these 2 cheap alternatives to all the crap madison avenue pushes, the whole country would be in a consumer depression. oh, wait….
I use baking soda and salt water on my teeth/mouth and it makes your teeth feel alot cleaner than any toothpaste .
People that I know that are over the age of 75 are very aware of baking soda and salt water because that is what people used before modern day toothpaste.
Another one is 2 tablespoons of apple cider vinegar with 1/4 teaspoon of baking soda in a 6oz. glass of water daily (right before a meal ) to cure what ails you . The Romans use to feed the troops apple cider vinegar to make them strong .
our form of market-oriented capitalism is excellent WRT providing for our wants (eg. toothpaste, TVs), but not so good with our needs (housing, medical care, education, transportation, justice, news media). The reasons would make a good political economics paper and/or book.
The 70’s from Hawaii 5-0 “cuff him Danno.”
The 20th Century ” SIV him, Rocco.”
It was “book him, Danno.” But your 20th century version of it is great.
Housing humor from the Onion…
Doll-Housing Crisis Set To Worsen, Mean Older Brother Says
DAYTON, OH - According to 5-year-old Janie Wright’s mean older brother, Dave, 8, if unsuitable borrowers Ken and Barbie continue to default on their high-risk subprime mortgages, it could spell the worst doll-housing crisis to hit the plastic couple since someone threw their dream home’s roof out the window. “[Ken and Barbie] were dumb and ugly so now they’re going to lose their home and it’s going to wind up in the garbage,” said the big jerk, who predicted that since the dolls have not made a single payment, he might just have to cut off all of Barbie’s hair to sell it for extra money. “Maybe they can move into a shoe box that they barely fit into. But it won’t have any windows so they’ll suffocate and die.” The nasty older sibling added that since Ken and Barbie never insured the dollhouse, they would have no recourse in the event of fire, flood, or stomping.
RE has become a joke!
You have to admit, it’s hilarious. It sounds like it might have been inspired by the craigslist housing forum battleground.
“RE has become a joke!”
Once people begin to see the REIC for the farce it is, then we might get back to having a normal market. Every day we get a little closer. The glacier is on the move.
I’m waiting for the final RE crash in Second Life; some months ago my newspaper reported about serious problems from there that sounded like close to real life bubble experience. The newspaper even had a lengthy article from a Dutch banker (from Rabobank, probably the bank with most money in Dutch RE) warning against the risks of unbacked fiat money, rampant speculation and high values put on all kinds of useless activities in Second Life; very funny
i thought ben’s blog was second life!
Job losses hit an all-time high
“…Already this year, 140,000 financial services jobs have been cut in the US, according to Challenger, Gray & Christmas. This exceeds the record 116,647 set in 2001, when financial firms cut back following the dotcom-led stock market crash and the business slow-down following the September 11 attacks.
Across all industries, 71,739 jobs were lost in September in America. One in three (27,169) cuts were due to the housing slump, said Challenger. In August, 35,752 jobs were cut from the financial sector.
“The last two months’ cuts have been dominated by the mortgage, credit and lending areas,” said Challenger’s James Pedderson. “The biggest fear now is that with all the foreclosures and lack of confidence, consumers will stop spending. Then these problems could spread into other areas. But we haven’t seen that yet.”
Pedderson said the cuts were likely to have a profound impact on local economies in New York, Chicago and other cities dominated by financial services jobs. “You are talking about people who were making $300,000 (€200,000) a year suddenly being out of a job,” he said.
The Manhattan Institute recently put out a report that claimed New York City could lose two jobs for every one cut on Wall Street…..”
Times on Line
http://tinyurl.com/3y7chy
some minor adjustments to the Birth Death Model will take care of the problem …
“Pedderson said the cuts were likely to have a profound impact on local economies in New York, Chicago and other cities dominated by financial services jobs.”
Thank you for this post, Hoz.
Now, I wonder what Chi-Town’s cheerleaders will have to say when the F.I.R.E. jobs start faltering here too? I guess we’re going to see how much we’ll miss that long lost manufacturing base. The only thing that will be “different” here is the timing.
Hoz,
have lost the link, but NYTimes posted that Wall St. employment is near pre 9/11 levels, at close to 190,000 jobs. Bloomberg, who is very savvy, has structured the budget to account for a tumble in Wall Street tax revenues. I don’t see how we get to Christmas without layoffs starting on the Street.
Go for throttle up, Challenger…
Yikes..now there’s a chilling analogy.
Notice how quickly any political point devolves into name-calling and historic recall. Who cares? What matters is how we address the situation at hand and how do we keep this forum moving forward constructively, IMO.
That is oh so true that the partisan political debate seen here and everywhere is part of the problem not the solution. However, the housing debacle unavoidably gets its greasy paws into so many schools of thought. One person remarked about the collegiality of this blog, and I believe that’s quite true. If there is a solution to the housing/financial/greed bubble, it will happen on a grassroots level in a forum like this one. Lets face it. This disaster touches on greater issues such as: the environment, human greed, government oversight, education, abuse of power on ALL sides of the political sprectrum, and religion.
The global system presently in place (of which the housing bubble is a major component) will lead to the inevitable collapse of that same system if drastic, grassroots, radical change does not happen immediately. IMAO
Ben, you are the best moderator. May your tribe increase.
–
“That is oh so true that the partisan political debate seen here and everywhere is part of the problem not the solution.”
It is inherent in democracy. The Founding Fathers were very concerned about “factionalism.”
“If there is a solution to the housing/financial/greed bubble, it will happen on a grassroots level in a forum like this one.
Sorry, not a chance. Grassroots of one million, two million? Propaganda Machine is so powerful that only a revolution, or a civil war, would be able to overthrow it. The system is very corrupt and all-powerful at the present to see any threat.
Jas
The PTB are taking care of the grassroots thingy with this little gem:
http://www.govtrack.us/congress/billtext.xpd?bill=h110-1955
`”(3) HOMEGROWN TERRORISM- The term `homegrown terrorism’ means the use, planned use, or threatened use, of force or violence by a group or individual born, raised, or based and operating primarily within the United States or any possession of the United States to intimidate or coerce the United States government, the civilian population of the United States, or any segment thereof, in furtherance of political or social objectives.”
I’ve got no problem with eschewing violence but this
seems broad enough to pretty much shut down any chatter about trying to stop the dismantling of the constitution or any other legitimate beef with the asshats driving our bus off the cliff.
no fvcking joke
“That is oh so true that the partisan political debate seen here and everywhere is part of the problem not the solution. However, the housing debacle unavoidably gets its greasy paws into so many schools of thought. One person remarked about the collegiality of this blog, and I believe that’s quite true. If there is a solution to the housing/financial/greed bubble, it will happen on a grassroots level in a forum like this one. Lets face it. This disaster touches on greater issues such as: the environment, human greed, government oversight, education, abuse of power on ALL sides of the political sprectrum, and religion.”
While reading the newspaper articles about today’s major problems note the names of the people at the center of the various government agencies and the Wall street firms. Do a search on each of these names on Google; correlation?
I don’t see what everyone is so upset about. Democracy’s have a 200 year period of prosperity, then bend towards Socialism or Fascism. That’s why our founding fathers intended us to be a Republic. We are getting towards the end of the cycle now and as always the masses atempt to vote themselves the money.
Just wondering if we are going to get a conservative sort of “Financial Fascism”, or a liberal type of “Socialism bordering on Communism”. Either way the drive to succeed, which is one of the biggest factors in our countries prosperity is about to be poisoned.
Taking away a people’s hope is a dangerous game.
OK now I’m pissed too.
Vote Ron Paul!!!!!
I too would like to chime in here in the ‘rat race choir’ about the polarization that occurs when politics devolves into anger and namecalling. both sides have the same angry faces and same awful cursing. I know, I’ve been one of them. there is another way, I am finding out and I applaud the efforts here for reasoned and calm sharing of information and debate. We are headed for some tough economic times, we need to practice ‘keeping a cool head whilst others are losing theirs’. We need in our communities and families the abilities to have cooler heads prevailing. I am generally in awe of the wisdom and knowledge on this board. I find that I usually get a real good chuckle every once in a while too. I read it daily. Thankyou.
Just in case no one has posted this devastating update on California foreclosures,
http://www.itulip.com/forums/showthread.php?p=18508#post18508
Arrgh. Look at the suggestions to resolve the crisis. They make some sense. But, they are solving the wrong problem. Foreclosure has been shown to lower house prices. Lower house prices means more affordable housing. Why are people against affordable housing?
I have a job that pays just barely 6 figures. If there were no assembly workers at my company, I would have _NO_ job. The economy cannot run if nobody can survive by making 50k/year. These people need housing. So, lots of foreclosures help me keep my job by helping lower level employees stay nearby.
Why is everybody against affordable housing?
Because declines in property values translate into “losses” to those holding the property, less commission dollars for those handling the sale and financing of the sale, huge value mark downs for those holding the paper on the property, less revenue for those taxing the property and a reduction in equity withdrawals that leads to a general decline in consumer spending. But all of the above has been reliant upon false valuations. The sad thing is that now all of those with an interest in propping up prices really believe that this is where prices should be not because of any economic fundamentals, but merely because they need prices to be this high and would love to see more appreciation. From each according to their ability (that’s us folks) to each according to their need (that’s them folks). Had enough yet? Got Pitchfork?
I am happy to report the D-ratic proposal to replace the failed private subprime lending sector with a taxpayer-guaranteed subprime FHA substitute is indefinitely hung up in Congress. Midwestern taxpayers should breath a collective sigh of relief that they will not be forced to help prop up the property values of wealthy coastal homeowners.
NATION’S HOUSING
KENNETH HARNEY
New relief bills address borrowers, appraisals
October 28, 2007
WASHINGTON – Distress in the mortgage market is stirring up a wave of new relief bills on Capitol Hill, including one that would allow homeowners to tap into their retirement accounts – penalty-free – to bring their loans current or to refinance.
One major reform bill appears stuck in neutral, however: The Federal Housing Administration Modernization Act, which would raise loan limits in high-cost areas of California and the East Coast, and cut down payments. It is considered a crucial relief measure for consumers who need to refinance out of adjustable-rate loans into lower-cost, fixed-rate mortgages. It was approved by the Senate Banking Committee on Sept. 19, and was the subject of bold promises for quick passage, but hasn’t been heard of since.
http://www.signonsandiego.com/uniontrib/20071028/news_1h28harney.html
Retirement accounts are safe from bankruptcy creditors, so who would want to drain their retirement account to prop-up an asset with a falling value?
The same class of fools who happily overpaid for property and hung themselves out to dry on toxic 100% LTV loans. And they do so with the expectation that if they are wrong you and I will bail them out if not now, then later when they “discover” that they have nothing to live on in retirement.
haven’t been here in a while. All you cali people (and anyone else, of course)-
has anyone talked about the upcoming writer’s strike in la and the damage that could do? could it be bigger than what was it, boeing, in the early 90’s ? esp. if it goes for months- (and around the holidays, too…) i’d like some links to previous posts, if they exist. thanks!
That foreclosed house was sold to someone else… who are they? In some cases, nobody knows.
http://dispatch.com/live/content/local_news/stories/2007/10/27/EMPTYHOUSE.ART_ART_10-27-07_A1_5E8A0KC.html?sid=101
Markets seem to have already stolen the Fed’s rate cut thunder.
Fed concern at expectation of rate cut
By Krishna Guha in Washington
Published: October 28 2007 20:42 | Last updated: October 28 2007 20:42
The Federal Reserve is likely to cut interest rates by a quarter-point to 4.5 per cent when its two-day policy meeting concludes on Wednesday. But the debate among Fed policymakers will be more finely balanced than is suggested by the odds in the futures market – in which a rate cut is seen as a virtual certainty.
According to anecdotal reports, there is some resistance among Fed insiders to the notion of a guaranteed rate cut. Many would have preferred to go into the meeting with market odds more evenly balanced, which would give the central bank greater latitude to make its determination without risking market turmoil.
http://www.ft.com/cms/s/91c38df2-858a-11dc-8170-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F91c38df2-858a-11dc-8170-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
If the Fed’s policy is to cut rates whenever the futures market predicts a rate cut, then all the futures market has to do is go ahead and predict one every time they want one. If that’s the case, they will always predict one.