Bits Bucket And Craigslist Finds For March 26, 2008
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Older people in debt… This has been a growing trend for years now.
http://us.ft.com/ftgateway/superpage.ft?news_id=fto032520082325335524
does this mean they all will not be going to fla/vegas, and arizona to purchase mcmansions and luxury condo’s?
They’re one medical procedure/illness away from bankruptcy.
Almost everyone is.
That’s why prior generations saved for old age.
Those in more recent generations have not.
They expected to live off the fat of the land in old age. But they will find that the public choices have been the same as their personal choices, and all their money will be gone.
Can we say that there may be a number of reasons we, as a nation have not saved for our retirement?
1. Marketing of goods and services that are not critical (These guys and gals are good at their jobs as sales persons).
2. Implicit guarantee by government that the USGov will provide health, SS and employers provide pensions.
3. Income for most of the population being static for 20+ years with rising inflation.
4. From pensions to IRAs and 401Ks, wherein the gang on Wall Street, chuns business for commission and misleads the public (a la J. Crammer) on time to buy good stocks.
5. General decline in regulation of financial institutions/industry in the last 20+ years.
While the public may be greedy, the business and social elites know where there hot buttons are and have intentional lead them over the cliff by driving them into the direction of greater risk so that they can be fleeced, imho.
Sorry about all the mixed metaphors.
Of course since prior generations didn’t live as long, they didn’t have to save as much. Look, the longer, healthier, lifespan that expensive medical technology enables us is a GOOD thing. We just have to figure out how to pay for it, especially since we’ve collectivly decided to have fewer children to pay for it. And make no mistake the children ALWAYS pay for their parents. No matter how much they’ve saved, or contributed into SS and Medicare, MOST of what the elderly consume is produced by those still working. Are we as a society buying pacemakers or ipods? Are workers entering the field of eldercare, or childcare? The existance of a bunch of electrons on a bank balance somewhere don’t affect the increasing percentage of consumption by those who are no longer producing.
Social Security was and is a way of forced saving. lets see, if I have paid in over 100k to ss taxes in the last 50 yrs, 50yrs, x a nominal return on savings…hey, I have every right to get my money back, plus interest. As a boomer, all I can say is “pay up sucker’.
The retirement age was set at 65 back when that was the average lifespan. It hasn’t yet sunk in that when the average lifespan approaches 80-85, most people are going to have to work a lot longer.
“It hasn’t yet sunk in that when the average lifespan approaches 80-85, most people are going to have to work a lot longer.”
Heh! Heh! Heh! Yeah, tell that to the employers that have been looking for ways to dump workers over 45 for over a decade. That’s going to go over like a lead balloon.
The real question is: is there even a job market for the people who will now need to work until they’re 85 (and I’m not talking executive level who have always had greater opportunities. Can there ever be a job market for the elder masses?)
Too bad the original Social Security enactment didn’t include an automatic tie between average life expectancy and the age at which one could collect. However, I noticed in watching some “focus group” of 20-somethings and 30-somethings discussing SS that they are outraged by the notion of having to wait till (let’s say) 75 to collect. I can’t blame them, since their grandparents all collected from 65. At 62, I am postponing my SS even though it’s actuarially stupid to do so. I just figure SS is my “insurance” in case I screw up my lending biz totally.
“Can there ever be a job market for the elder masses?)”
Yes. It’s called “grandparenting,” and up until the last century or so, it was the traditional work of societies’ oldsters. Perhaps with the coming return to multi-generational housing, the older members of our communities will once again be honored for their repository of experience and willingness to impart same to the up-and-coming- little worker bees. Storytelling is cultural history, and we’ve got one doozy of a cautionary tale to tell.
Granted, we’ve institutionalized childcare and schooling, but now that Mexico is returning to Mexico, perhaps these arenas will provide semi-gainful employment-of-a-sort to aging retirees?
Do any of you actually think The Boo-mers are going to allow themselves to be put out upon America’s ice-flows? Never underestimate the tenacity of little old ladies with investment portfolios and the collective gnarliness of the AARP.
I think there’s an age difference involved as well. From what I have seen the older someone is the more likely someone believes that SS/Medicare will take care of them. On the other hand people my age (under 30) are trying to save for retirement like you wouldn’t believe (at least those of us who can) since we know that SS/Medicare won’t be there for us.
The retirement age was set at 65 back when that was the average lifespan.
Kaiser Wilhelm set 65 as the retirement age back in the late 1800s. I think the average lifespan was much much less than 65 back then.
::sigh::
The life expectancy at age 18 hasn’t increased all that much since the 1930s. The main reason it was lower back then was due to childhood mortality.
Take out deaths due to difficult childbirths and the life expectancy of workers hasn’t changed much at all.
The bottom line is that today’s worker is immensely more productive than the worker of the 1930s so this entire argument thread is BS.
The retirement age of 65 is a good one even if the average life span were 200– it allow the infusion of new blood in to managerial and high ranking positions. Wanna work as a front desk peon forever while your dad holds the regional manager position until he is 180?
What’s hard to understand is, most Americans, when polled about various ways to make Social Security not pay out more than it collects, rank “raising the age of eligibility” lowest!
They’d rather cut benefits of those people who were smart enough to save money and have significant income after age 65, or tax people more!
To me, raising the age is the only fair and practical thing. If you knew that benefits wouldn’t start ’til age 72 or 73, you could start planning for that. (You’d raise it slowly, like 6 months every 3 years.)
There were loads of old people back then. The reason the median lifespan was less is that many, many people died young due to infectious diseases. Also many young women died in childbirth. Go look at the headstones in an old cemetery. You’ll see lots of old peoples’ graves, and lots of young peoples’ graves.
The idea that lots of people used to die in their early 60’s is probably the one of the biggest misunderstandings of statistics today.
A couple of points:
- Older people were not as uncommon as one might expect back then - a lot of my ancestors lived longer than one might think many years ago.
- Older people will be starving in the streets until age discrimination is eliminated and they are actually given a chance to get useful jobs that pay well enough. These days, everyone is disposable - the old replaced with the young, Americans replaced with illegals and slave labor. And heaven help you if you have a medical condition or something - some executive might not be able to afford a new paint job on his second weekend yacht just so you can live longer - the horror!
- People have not really chosen to have fewer children: that choice was made for them. Children used to be productive assets when they’d help around the farm and such. Now, they are complete liabilities for an ever increasing amount of time since the cost to raise them has gone up much faster than salaries and jobs are harder to find so they start supporting themselves much later in life. In short, it is no longer economical to procreate in America, which is a sure path to self-destruction, but nobody really cares so long as we can have our Hummers and McMansions today.
- Somebody said the retirement age of 65 is a good thing to get new blood into the system. I suspect you’ll be reconsidering that when at 65 you’re forced out the door, facing 20 years of no real income (or less if you starve to death), to be replaced with cheaper blood.
- Most people don’t save for many reasons. It has grown increasingly difficult to save: wages do not keep up with inflation, housing Bubble, children are now a huge economic drain on parents, etc. However, the people have also been conditioned not to save, but to instead spend, Spend, SPEND! Even if that conditioning could be broken, most people would still be nearly broke, though perhaps not deeply in debt. But Wall Street still gets its share of the cut, so all is well…
Just a comment on the ole So-soc debate.
What I expect to happen (and my teeth are grinding on this) is they will count more and more of your ability to pay against you. So, the savings we have in our 401K plans will be counted against us very heavily.
That will minimize the burden on the systems and reward the people that didn’t work or didn’t have a plan.
I’m just wondering how bad we get f*$%ed in all of this. The return on our 401K savings will go down dramatically if it just subtracts from your SS check.
It will also be another incentive to spend.
So… its a stupid and destructive thing but I expect it to happen.
Excellent Pondering.
Grandparents lived to 100, and they were the youngest of the bunch. So many can and do live longer.
I see seniors who look great long into their 80s and the wealthy ones are still playing tennis.
The seniors who weren’t blessed with good $ fortune, usually either A. can’t afford to go on vacations ,EVER. or
B. only go once a year to childrens houses. That isn’t to say that is a bad thing, it is just that we are so used to seeing people go on lavish vacations, several times yr.
But the ones we do not pay attention to are the ones who are buying dog food to supplement their meager income. Never vacationing, splitting Taco day 3 for $1.oo with 2 other retirees on meager incomes.
We never pay attention to the ones who seem to be okay.
They are not Borders bookstore visitors because they never buy books, they are avid library hounds for free reading, do not pay for cable, will be out of tv in 09 when the US has allowed the cable companies to make regular old tvs redundant and unable to get reception unless you BUY the box that will go with older tvs. There are limited coupons of $40. off but they are limited.
It is increasingly inflation expensive to live whether you are frugal or not. And seniors do live longer.
Yesterdays Greeter at Walmart was 85.
Did you know that the #1 seller in any pharmacy type of store is the PILL CUTTER. Seniors who get prescriptions cut their prescriptions and can’t afford them, will cut them in half.
#1 seller.
‘If you knew that benefits wouldn’t start ’til age 72 or 73, you could start planning for that. (You’d raise it slowly, like 6 months every 3 years.)’
I see a major tug of war to raising the retirement age. As others have noted above, older workers are expendable. This nation is greying. Tell future seniors they will not collect SS until age 72 and you will see workplaces crowded with older workers applying. I hope I will be able to get around w/o any physical troubles if I hit age 72. I also hope my Roth IRA does not get diddled with by the tax system. Possibly expect means testing if TSHTF.
Sigh, I’m with James on this one. “Means testing” is coming. It doesn’t keep me from maxing out my 401(k) and Roth IRAs, but what else can you really do?
“The idea that lots of people used to die in their early 60’s is probably the one of the biggest misunderstandings of statistics today.”
I didn’t mean to say that living longer was the only reason there are many more old people now. It’s one reason. reducing early deaths is another, and the country concentrating so many people into the baby boom period is a cause too.
But the simple fact is, no matter what the cause, the over 65 population has increased from about 4% in 1900 to 12% in 2000, and projections have it as 19% in 2020. What it means is that we have many more retirees to be supported by per remaining worker. We are not in a workable situation, and it doesn’t get any easier to solve the more we stick our heads in the sand.
To whoever thinks 65 is a good retirement age if lifespans went to 200, you need to think through that a bit more. It’s hard enough to work 40 years and save enough for your remaining 30. Just try saving for 150 years of living expenses in only 40-50 years time.
Did you know that the #1 seller in any pharmacy type of store is the PILL CUTTER. Seniors who get prescriptions cut their prescriptions and can’t afford them, will cut them in half.
#1 seller.
My understanding behind the popularity of the pill cutter is that higher dose pills often cost only minimally more. So if a months supply of 20 mg pills costs $30 and 40 mg pills cost $35, using a pill cutter you can convert those 40 mg pills in 20 mg pills and only spend $17.50 per month.
Polio, Scarlet Fever, Yellow Fever, Smallpox, Rheumatic Fever and a host of other life threatening diseases have been largely eradicated…
100 year old people will be much more commonplace, in the next 25-50 years.
Terry–
“Social Security was and is a way of forced saving. lets see, if I have paid in over 100k to ss taxes in the last 50 yrs, 50yrs, x a nominal return on savings…hey, I have every right to get my money back, plus interest. As a boomer, all I can say is “pay up sucker’.”
My response-
You’ve already been paid that money back, since the SS fund has been essentially raided for decades through the boomer’s government’s deficit spending, borrowing, lower taxes, etc.
You want to be paid again.
If SS was indeed forced savings, then we wouldn’t be having the problem in social security today, the money would be there.
2008-03-26 12:12:25
Did you know that the #1 seller in any pharmacy type of store is the PILL CUTTER. Seniors who get prescriptions cut their prescriptions and can’t afford them, will cut them in half.
#1 seller.
My understanding behind the popularity of the pill cutter is that higher dose pills often cost only minimally more. So if a months supply of 20 mg pills costs $30 and 40 mg pills cost $35, using a pill cutter you can convert those 40 mg pills in 20 mg pills and only spend $17.50 per month.
Therefore, the majority of seniors/retirees who buy this PILL Cutter do so because they have no extra money to go the full way. It is not because the dosage is stronger, it is because and shows up in senior centers all over the valley, that they do this because they are pinching whatever pennies they can find.
Good point ric.
I guess our solution to old people is “soluent green?
Sorry for the mis-spelling.
Soylent Green is people.
yep, solves the old age problem and food shortages! Two birds with one stone.
Yea well. That’s because back in the day you couldn’t do much and more people simply died. Everyone could afford medical care if, like when your grandfather’s grandfather retired, all the world of medicine fit into a little black bag. Back in the 50’s you died from just about all the cancers and acute MIs — today they can save your life it just costs as much as a house does.
I think most people could afford to retire too, if they lived the way they did 70 years go. No vacations to Europe you “vacationed” at the local lake, no new clothing, either you made it or you had a dress which you wore once, on Sunday. The standard of living has gone up — way up. Most of us today live richly compared to 50 years ago.
How many shoes do most of us own, how many pairs of pants?
Medicine too is a part of this, yes modern medicine is very expensive but that is partly because it can do so much. Just look at cancer: say your kid has ALL and you are told “well either you can use this drug that we’ve been using for the past 20 years to good result and it costs $2000″ (say it works 80% of the time)” or “there is this new treatment, it costs $200,000 and it works 90% of the time.”
We are all just a few heartbeats away from death in any case.
Article in WSJ today about primary physicians & nationalized health care: “Massachusetts, the state with mandated insurance coverage most like Sen. Hillary Clinton’s health plan, has suffered a painful shortage of family doctors the last two years. More people signed up than predicted and higher costs have led to premium increases. It’s apparent to me there is no increased access to care with this plan in many areas and no cost savings have materialized.”
No different than MD’s in NY closing shop due to HMO’s lowering their compensation for basic procedures. 4 MD’s within 5 miles of me have shutdown due to this.
The lack of doctors may be exacerbated by the high cost of living in MA. A GP has the choice of living well in Ohio or living (relatively) miserably in MA. It’s a no-brainer for many young doctors.
Thirty years ago I knew a young internist who had been practicing in southern CT. He was having trouble saving up enough money for a down payment on a house in the Greenwich area. Eventually he gave up on New England altogether & relocated his practice to NC. Within a few months he bought a house (for cash) with only a portion of the money he had been saving for a down payment in CT.
No-brainer, indeed.
IIRC - in the late 80’s/early 90’s, admissions to medical school were decreased in order to deal with the surplus of doctors and help prop up wages. The lack of doctors was planned.
If there is truly a shortage of doctors, why have 3 bills increasing the number of H1-B visas to help with the acute “shortage” of IT workers been submitted?
Why are there not any similar bills to bring in MDs to help alleviate the shortage of doctors?
(sorry if this is a double post)
Medical positions in desirable cities are plentiful and lucrative now with plenty of room for negotiation in contracts. Too bad I have to rent… well, too bad real estate is such a shitty investment right now.
During 70s the plan was to allow foreigners to take the few slots for medical school, thereby making the US citizen who didn’t get in to go to an offshore school and then finish and do residency here in the states. And then the foreigners left with knowledge and returned to their homeland. Nice, not investing in our own land. NOT.
And the gov/schools had a Plan to reduce amount of med students per yr during the 80s.
Along with the ridiculousness of plastic surgery specialties etc, we have a serious lack of mds in rural areas. Not enough, and mds in rural areas make the same as regular folk, just not enough to pay off medical school bills.
Eh, crips. This isn’t anything big - it’s just a “pay the doctors more” article. Note the attitude towards lower cost nurse practioners and PAs, which require far less time and money to train and I would argue to be a *far* more appropriate choice when someone comes in with a simple cold or sore throat.
There are many problems with our current health care system that make it so expensive, only one of which is health insurance. Adding more doctors to the system and paying them more isn’t the path to reduced costs or generally improved health either.
a simple cold or sore throat is only obvious in retrospect. Epiglottitis can kill an otherwise healthy adult stone cold dead in 4 minutes, if it has progressed to a certain point. It starts out as a sore throat.
a simple cold or sore throat is only obvious in retrospect. Epiglottitis can kill an otherwise healthy adult stone cold dead in 4 minutes, if it has progressed to a certain point. It starts out as a sore throat.
Yes, and? Can tell me how often do people get this disease?
How often would the average physician catch it anyway, if it’s rare (which I’m guessing it is)?
Most sore throats progress to nothing more. A PA or nurse practitioner is more than qualified to handle that. If it doesn’t respond to treatment, that’s when the specialized skills of a doctor should be called in.
In the end, life is a risky proposition. More doctors don’t make the world safer or more healthy.
My internist missed by strep last time - didn’t test me. It went on for another month and finally I got tested at a walkin clinic. That could have wrecked my kidneys.
You wanna know how America will switch to a universal health care system? People will slowly come to realize–when the idea gets around– that the care they get in public facilities is at least as good (or sometimes better) than what they are getting from $$$ in$urance-funded clinics. I’m seeing that now: people–including ordinary white Americans from middle class backgrounds– choosing the public clinics where I work despite having private insurance.
why is socialized medicine accepted for our president, vp, congressman (women), senators but frowned upon for the regular person? IMO, we have 2 sets of laws in our country. One set for the rich and one set for everybody else. If they can give a 93 yo man in florida a ticket for being set up by an undercover cop posing as a prostitute then I think that if old eliot spitzer can afford 4300-5500 an hour for a pro then he could at least afford to be ticketed for breaking the law. and the same goes for the crooks (errr, sharpies) on wall street.
When I was a high school student back in the 70s, my Harvard trained pediatrician told me my leg pain (along the tibia) was “fallen arches” [SHHUUHHH!!!] causing my credulous parents to buy me a pair of Florscheim wingtips for school [trust me, they never left my gym locker]. Anyway . . . our school’s athletic trainer, who probably made about 10% of what my doctor made, correctly diagnosed my leg pain as “shin splints”–common among indoor track runners. I’ve looked askance at MDs ever since. Gimme someone who works “hands-on” in the trenches–like a registered nurse or an EMT–anyday.
I say propaganda, too, on the WSJ oped.
Don’t want to ruin the grudge against the medical profession you’ve carried for so long, but…shin splints can be caused by fallen arches. Your doctor wasn’t wrong in his diagnosis. And treatment does often involve orthopedic shoes or arch supports.
It is not accurate to post an EDITORIAL from the WSJ, who’s editorial page is very pro-business and conservative. And say it’s an article, as if it were a news piece. This was written by an MD with an agenda. And while his has a right to voice his opinion, it is just an opinion.
If you looked forward at the report this author sited, you will see that the shortage of family care physicians is nationwide and not just in Mass.
NYTimes did a piece a few days ago that the best medical students are fighting for residencies in dermatology. Offers regular hours, no emergencies, and an aging population willing to spend discretionary dollars on cosmetic procedures, bypassing insurance claims altogether, and mow the highest earnings in medicine, far more than surgeons.
Good example of the market at work…family practitioners get plenty of emergencies, long hours, and are tied to insurance forms and gov’t claims forms.
edhopper — This is the Bits Bucket, after all.
Let me add an anecdotal here. When a relative was completing his ER residency he was offered a job there at $80/hr (he had 200K in Med school loans, or thereabouts, to say nothing of the 7 or so years of training after college). About the time he was being offered the job (this was a northeastern mid-sized city) I was visiting and took my jeep in for a repair. On the wall at the shop was a sign that reported the various charges. Mechanical labor was billed at $85/hr. I remember because I had great fun at his expense upon this revelation.
Now, I know that there is overhead, etc that goes into the equation here. BUT, there are also smaller shops, independently owned/operated, that are charging fairly close to this number as well.
Is there anyone here who can rationally explain why someone would spend 4 years in college, 4 years in Med school, 3 years in residency, rack up around a quarter million in debt, all to make approximately the same wage as someone who spent a couple of years at a votech college and spent 30K or so on equipment (just a guess here, I have no idea)? GP’s make even less and still have to go through the same schooling with the possible exception that years in residency may be shorter.
It’s all out of whack, imo.
You miss my point. I have no problem with you posting this subject. I am saying that the “article” you quoted is just an opinion piece from some one with an agenda, and the source he sites dosen’t back up his premiss about Mass.
Your anecdote is related to this old doctor’s legend.
“On the wall at the shop was a sign that reported the various charges. Mechanical labor was billed at $85/hr. I remember because I had great fun at his expense upon this revelation.”
The mechanic probably only makes $30-40 per hour from that rate. It’s a pretty good paying job if you’re good at it, but a pretty demanding one too. I don’t think too many people, if they had the ability to do either, would choose auto mechanic over doctor.
What really makes you wonder is among high paying, education-intensive fields, why anyone would choose to be a doctor instead of a lawyer.
A doctor works hard, saves lives, and makes good money. A lawyer waits for the doctor to make one mistake, and takes all his money.
And an “article” or “news story” written by someone at the NYT, LAT or Wash Post has no “agenda”. It is almost all agenda driven.
What you get paid, and what you bill at, are two seperate things.
The mechanic charging $85 an hour? That covers all his overhead - pay for tools, training, rent on his shop, social security and medicare taxes, health benefits plus his take home pay. Your brother bringing home $80 an hour? That is only his take home pay. The bigger question is what does the hospital bill him out at?
Everyone sees that mechanics charge $85 an hour and think that is what they take home. I know what my company charges me out at, and I know what I take home. If you think the mechanic is even taking home $40 an hour of that $85, you’re waaay off base. He might see $30 of that.
Is there anyone here who can rationally explain why someone would spend 4 years in college, 4 years in Med school, 3 years in residency, rack up around a quarter million in debt, all to make approximately the same wage as someone who spent a couple of years at a votech college
Yes. Medicine is a calling. Like the ministry. Like art or music. One doesn’t devote that many years of one’s youth and that standard of commitment to anything less. The money is secondary…and as you point out, not necessarily that spectacular given the investment of time and effort.
Give me a break! Yesterday you posted this -
http://thinkprogress.org/2008/03/25/mccain-housing-speech/ -
from ThinkProgress.org.
In doing so, you did not put in a caveat or a disclaimer that it is a purely opinion based forum. ThinkProgress is a blog from the Center for American Progress Action Fund. The CAPAF advocates ideas like raising the minimum wage; it critiques the conservative approach; it calls conservative health system proposals radical and dangerous; and other progressive causes. In short it is biased and advocating its own point of view. Shouldn’t you have noted this in your comment? No? Okay, then let other people be. I think we all here can read and interpret articles critically.
“And an “article” or “news story” written by someone at the NYT, LAT or Wash Post has no “agenda”. It is almost all agenda driven”
And you also miss the point. It’s not that this is a News story from the WSJ. It’s an Opinion piece from the WSJ that the poster touted as a legitimate article.
I would have the same response if it was also an editorial from the NYTimes or the Wash. Post.
There is a big difference between the two. In all those papers including the WSJ , the news and opinion dept, are kept seperate.
Is there anyone here who can rationally explain why someone would spend 4 years in college, 4 years in Med school, 3 years in residency, rack up around a quarter million in debt
If you want to do something highly specialized and don’t have the money, join the Army. The surgeons at Ramstein are creating the medical procedures today that will become standard practice in every trauma center across the country in 5 years.
I have a friend that wanted to go into pediatrics and was so broke after his first year that he was ready to drop out. So he joined the Army - they paid for all of his medical school, plus a stipend to live off of. Now he’s finishing his residency in Hawaii. When that’s done, he’ll owe the Army a few years at some base in the US with lots of Army brats. They don’t need pediatricians in Iraq.
A wonderful idea except that they can always change their minds about what you will be doing and where you will be going. Good luck trying to hold them to their promises.
“Shouldn’t you have noted this in your comment? ”
Yes I should have. But I did not say it was a news article. I simply posted the link. I do not think it is the same as here, posting an opinion piece and quoting it, and explicitly saying it’s an article.
And of course the quote was simply not true.
Shouldn’t be surprising. Any system that artifically lowers the cost (from the perspective of consumers) of a thing will cause a shortage.
I may be ignorant, however during WWII, didn’t the govt. break up the AMA monopoly by paying the tution and increase the training of doctors/medical personnel?
I suspect that the AMA restricts the number of doctors produced each year in order to maintain salaries/incomes of those in the trade.
Chris Rock had a humorist remark that I recall that doctors do not cure diseases otherwise they could not sell you the medicine that they had to offer at outrageous prices. Yes, I know it is simplistic, however there does sound like it has the ring of truth in his comment. imho.
Medical licensure is a government grant. If you think this grant is being abused, feel free to petition your state legislature to abolish or modify it. The AMA has no more power than the state legislatures allow it to have.
I may be ignorant, however during WWII, didn’t the govt. break up the AMA monopoly by paying the tution and increase the training of doctors/medical personnel?
Wouldn’t this increase the AMA monpoly? The doctor/nurse system is the only government sponsored health system. All other disiplines can use student loans, but are pretty much on their own to raise money, etc.
I suspect that the AMA restricts the number of doctors produced each year in order to maintain salaries/incomes of those in the trade.
I recall reading (sorry, no link) a couple of years ago that at one point the state of new york was paying medical schools a subsidy to not train so many doctors. (Bascially, to keep the schools afloat but train less doctors to “reduce costs” in the health care system.)
Interesting point if true..
Chris Rock had a humorist remark that I recall that doctors do not cure diseases otherwise they could not sell you the medicine that they had to offer at outrageous prices. Yes, I know it is simplistic, however there does sound like it has the ring of truth in his comment. imho.
While that may be so, who sets the standards and controls who and how many can enter med school/official training programs?
I suspect that the AMA restricts the number of doctors produced each year in order to maintain salaries/incomes of those in the trade.
The AMA exists to benefit it’s members, just like any other trade union. Of course they support policies which will do just that.
The AMA has no more power than the state legislatures allow it to have.
(I assume you also mean to include federal legislatures?)
Which is exactly why I personally harp on the gov’t so much. There are lots of organizations whose purpose is to benefit their members. On an individual basis most people seek to maximize their own benefit. This is a condition of human nature unlikely to change.
The real problem is the power bought and sold on a daily basis in Washington. Instead of trying to regulate every action of every special interest group it would be better to just remove the power from those who broker it to their own best interest.
Medical licensure at the state level is the ultimate source for all the standards, controls & entry into training programs. The state legislatures have simply delegated that to the medical school & medical residency training system (much more extensive than just the AMA, btw). Legislatures could draw up very different rules any time they wish to.
There was a time in some states when there was no such thing as a medical license. Anyone who wished could call himself a “physician.” It was up to the sick & injured to figure out who to see about their ailments.
There was a time in some states when there was no such thing as a medical license. Anyone who wished could call himself a “physician.” It was up to the sick & injured to figure out who to see about their ailments.
Tresho - my other posts may not come through. So I don’t repeat myself and don’t waste time, I’ll keep this short. (Or at least try)
It is not 100% good that doctors have government sponsorship. 8 years of formal education and liscensure do not guarantee that you are getting any better of a physician than before these requirements.
I think the current system of 12 year of educating a doctor is really much more of a hazing process that weeds out most of the best thinkers. Medical education focuses itself too little on actual patients (IMO, it’s a really bad idea to have a prospective doctor wait 6-8 years before coming close to sick people). The emphasis instead is on rote memorization and treating the body like a chemistry lab and/or tinker toy set.
IMO, given the way we train doctors, it’s a wonder there are so many good ones out there.
First off, would you want that type of doctor. Snake oil salesmen were selling medicine containing alcohol and opiates. It didn’t solve the illness, but you felt good.
With regards to the high cost of health insurance, In the late 60’s students that received teaching credentials and govt. student loans, could write off 10% of the loan for each year that she taught in designated blighted areas (read Watts, in my mother’s case.) For those without funds for their education, this is a great motivators. If the US wants to get health care under control, at least this approach, if serious, might help.
I guess, what I am saying, the people thru their govt. wants to deal with healthcare, they can do it.
One final point, its almost impossible to apply free market principles to medicine like the banks. In the first instance, the outcome is critical and you lack the knowledge to challenge the course perscribed and in the second case, the consequences of failure of banks can/could lead to our current situation-sociality meltdown.
Bysides, I suspect that the only free enterprise that still exists is in the restaurant business- low entry and high failure with transparency.
IMHO
I worked as an auto mechanic for 10+ years. All the guys who were over 50 wished they had gotten out and switched careers - bad backs, decades of being surrounded by extremely toxic fumes - the job really takes a toll on your body, and there just isn’t a lot of prestige in the position. The pay is decent, but auto mechanics don’t hang at country clubs playing golf like the doctors do.
for vermontgal…it is far from rote learning.
My daughter is just finishing her 4th yr of med school. She has been assisting/working on patients from the 3rd month of first year. Delivering babies, sick small children, patients chained to bed, open heart surgery, mental patients, rural clinic, substance abuse patients, Longest shift was 30hrs with a 4hr nap. 80 hours are not uncommon
Interesting thread. Last week I had to put my 84 year old mom into a skilled nursing facility. It’s going to cost $9,000 per month. She had a 4 year LTC plan, but she’s outlived the benefits. She was frugal and a successful conservative investor so she has the money to cover her care costs. I don’t see myself being in that financial situation if I reach her age.
YOu bring up a point that I am going to look into.
How long is the LTC “I” have or my co-workers?
“we ” are all paying for it, but it is long enough to care for “us”?
Thank you.
“Older people in debt…”
They are among the innocent victims of the War on Savers.
Not that it’s not the case in the US, but isn’t the article about those in England?
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Debt Pushers have been pushing reverse mortgages in TV commercials on business TV a lot lately. I find them disgusting, but what else is new. I hold the view that pushing debt is evil. Tens of millions of Americans will suffer the consequences of this evil that was taken to an extreme, by any measure, under Greenspan-Bernanke. I think that that game is mostly over.
Jas
Reverse mortgages are the next big scam. Watch that trend explode.
Yep.
They’re calling them Home Income Plans instead of reverse mortgages in Canada. They’re actually peddling debt as income and emphasizing that it’s tax free.
“The CHIP Home Income Plan allows you to unlock the value in your home. Learn how” I think the line they should be using is “you spent a life time paying us interest on your mortgage, don’t you want to start doing it again?”
http://www.chip.ca/index.cfm?id=100&language=english
The key wording in all the plans is “as long as you live in your home”. Those getting moved out and into some other form of living can kiss everything goodbye. Anyone choosing to go this way surly needs a shrewd lawyer.
Home Income Plan? H-I-P?
I can’t wait for the headline: Broken HIPs Hurt the Elderly
‘They’re calling them Home Income Plans instead of reverse mortgages in Canada.’
Tragically HIP
I prefer Blue Rodeo to the ‘Hip
The elderly would be better off just to heloc like hell wouldn’t they? Assuming they still can.
Debt Pushers have been pushing reverse mortgages in TV commercials on business TV a lot lately. I find them disgusting,
Heh. Don’t worry so much, Jas.
Reverse mortgages are where banks get bitten in the rear because they are *still* drinking the kool-aid that real estate always goes up.
Think about it: the essense of a reverse mortgage is that you sell your house back to the bank. You get to live there until you die (usually) and get the advantage of actually using the money in the interium.
What happens in 2 decades when the banks are stuck with a glut of houses they can’t sell and have pre-bought (with interest) at today’s prices?
I don’t think reverse mortgages are financially sound on a personal level but in they end they are as stupid for the banks as all these other crazy mortgages.
Vermontergal–I never thought of it that way. That’s a very interesting take on this topic. Come to think of it, most of the people I’ve heard arguing that reverse mortgages are bad are people who hope to inherit their aged parents houses…
Bi,inherit their parents home, at this rate of deflation of home costs, why would we want to ‘inherit’ their homes.
I am not in that position, but, I am concerned about the elderly who are not able to decipher those ads in lieu of their getting much money they need.
I am thinking with the homes decreasing in value,that those reverse mortgages will not be so available. Cause the banks won’t want to catch the falling knife.
Just a thought.
Good discussion today.
There are a lot of fees and a lot equity extracted by the reverse mortgage providers right at the beginning — much like with inappropriate annuity products aimed at seniors.
There may be some cases where the reverse mortgage could be a good deal for a senior, but my understanding is that they’ve set up the whole structure to be pretty lucrative to them regardless of price direction.
“There are a lot of fees and a lot equity extracted by the reverse mortgage providers right at the beginning — much like with inappropriate annuity products aimed at seniors.”
I can vouch for your statements. I have had to personally handle my aging mom’s financial affairs and despite all attempts to get her out of her annuities she will not listen. Annuities make commissions for those pedding them. Worst are the variable annuities which are indeed risky hi-fee products and totally inapproprate for seniors.
Reverse mortgages really need deep investigation and study before getting into one -too may scammers and cons in this area as are all products aimed at extracting fee’s & commissions from equity rich but financialy naive and desperately cash poor seniors.
There may be some cases where the reverse mortgage could be a good deal for a senior, but my understanding is that they’ve set up the whole structure to be pretty lucrative to them regardless of price direction.
I totally could be missing something but I just plain old don’t get how price direction is irrelevant. (And I do miss a lot…)
What I see is banks paying cash for houses and letting the people who live there continue to live in them.
How do you make a profit off of that? The house price has to go up (even if just through inflation) *and* the house has be relatively easy to get rid of it when it’s done. It seems like it requires the same lending environment as the 100%, interest only mortgages. Otherwise, (I’m guessing) that you’d have to offer 25 to 50 cents on the dollar to make the risks (low long are they going to live, actual value when we have to auction off the house) worth it.
I just don’t see banks tackling them with the same enthusiasm 6-8 years from now when we’ve several years of price declines and experiences with houses taking months or years to sell. Once factored in for inflation, that ROI seems like it would be very low, if anything.
They only lend 45% of the current appraised value for someone who is 80 years old or so. Less for lower ages, more for higher ages.
Fees fees fees hidden fees, not so hidden fees, fees with funny names, fees with no meaning to the layman.
I would say the reverse mortgage “vehicle” will only help those in the banking/credit industry and as soon as they fine print indicates ( and seniors do not have the best eyesight), the senior who “enjoyed” this small cashflow, will be booted as soon as possible by said banking institution.
I see Sharks and venomous snakes all over this “vehicle”.
Jas, I agree with you. Those Reverse mortgage commercials should be illegal. It is preying on those who may or may not have the ability to hire an attorney to review, or a CPA to review if this is good for them, those in need. And, just like some of the predatory lenders, it will sink those who do not have the ability to protect themselves.
So many folks can’t hire the attorney or know of where one can find a free one. It is all Buyers beware.
Crumpling… A line that stands out to me is… ‘This business cycle’. That’s the problem, the FED has been interrupting business cycles for years now. We should not have gotten in this predicament in the first place!
http://www.chicagotribune.com/business/chi-wed-econ-consumer-confidencemar26,0,385601.story
I hate the term “business cycle” because it attempts to shift the blame from the Fed for creating easy credit to some mysterious “unchangeable” natural phenomena. Remove the easy credit and companies will rise and fall and you may even have a few manias in some smaller markets, but you will never have system wide failure barring war, disease, weather, or corrupt governments.
Precisely.
There is no such thing as a “business cycle”. It’s just a lagged version of the “credit cycle” which is set in motion by the Fed, and destroyed by the Fed.
They’ve had “business cycles” long before the Fed. The 1800’s were loaded with Panics.
Hold The Hysteria
http://www.realclearpolitics.com/articles/2008/03/hold_the_hysteria.html
Er … those were credit cycles driven by the bankers too.
Maybe the Fed was created so the rest of us could have someone to blame for Panics.
Er … those were credit cycles driven by the bankers too Did you just move the goalpost? You blamed the credit cycle on the Fed earlier.
Seems to me it will be the hedge funds that bolt for the exits first. (bsc was first) Retail is always the last to catch a wiff of smoke.
that’s why they’re called sheeple
the fed is a group of banks.
the fed is a group of banks.
Verbal distinctions matter. The Fed is not a random grouping of banks, it is not banks in general, it is not “fractional reserve banking.” It is a weird creature of Congress, which has delegated some of its fiscal responsibility away. I am not an economist, but I strongly suspect as long as there are banks and lending at interest, there will be something like bank panics and runs on banks.
Did you just move the goalpost?
I think there may be two different issues here. One is about what causes business cycles. The other is who is responsible.
For the sake of this conversation, lets assume that too much cheap credit can or will cause the dramatic business cycles.
In modern times, the Fed is the head of the Amercian banking system. Before the Fed, it’s conceivable that the same type of problems were being created by cheap credit provided by either gov’t or banks in general. The issue of the Fed currently being responsible is just a modern instantiation of an old problem. In that case, its not a case of “moving the goal post” but rather just pointing out that a similar institution can have the same impact in the absence of the Fed.
I personally haven’t enough spent time understanding the banking/monetary system prior to the creation of the Fed or what caused the “panics” of the 1800’s. To the degree that information has been presented to me (through things I’ve read or whatever) I am under a similar impression that there were some similar issues with the monetary system even before the Fed. For example, Lincoln passed the legal tender laws, which had the effect of making the Treasury notes issued during the war between the states “money”. Even by that one data point, it’s clear that even with a gold standard the gov’t had the ability to interfere with the monetary system. And it’s not hard to imagine if a gov’t can interfere it will.
As to the issue of whether cheap credit causes (or at least exacerbates) business cycles, the Austrian theory is pretty solid so far IMHO. At least from my perspective it is much more satisfying an explanation than the Keynsian theories I learned in college. As one example, Keynes explains (I’m not joking here) changes in levels of investment (represented as I in the equation describing economic activity) as resulting from (I’m paraphrasing for not recalling the exact phrase used) changes in the “animal spirit” (in people). In contrast the Austrian theory explains the change in levels of investment as deriving from levels of credit which derives from either savings or the sort of “created” credit we get from the Fed now, a much more rational explanation I think.
But that’s just me and I don’t have the historical knowledge to reconcile the panics during the 1800’s with the fact that we were also under a supposedly “stable” gold standard. If I understand the Austrian model (and assuming its pretty much correct) then I would say the panics would likely have to be tied to some level of credit expansion which exceeded that of savings. So perhaps a fractional reserve banking system could be the explanation?
Bluprint, to some extant the idea that credit crunches are caused by banks is a tautology. The availability of credit is ALWAYS a function of credit granting institutions by definition. It’s as if you said “Fords cause auto accidents.” When tresho points out that “There were auto accidents before there were Fords.” You respond that, “Well, cars cause auto accidents,” which is true, but not what you said at first.
Jim my point was to try and distinguish the “what” argument from the “who” argument.
FP and Dan made the point that the Fed causes (present tense) the business cycle. It’s true that the real cause is cheap credit. Those guys were blaming the Fed as the current culprit and Dan’s main point was that there is a specific institution that can currently be blamed rather than some ephemeral thing that we can do nothing about. When it was pointed out the same circumstances existed before the Fed, the response (correctly) was that other institutions existed that could do the same thing.
Because the Fed didn’t exist in the 1800’s doesn’t lessen their current responsibility and is a redirection of the point Dan was making above (blaming “who” not “what”).
If we imagine a scenario when the Fed is dissolved and the Treasury takes over those activities, it would then become correct at that point to blame the Treasury with regard to “who” (even thogh the “what” is still the same).
Okay, I stand corrected. I was attributing to bluprint statements made by Faster Pussycat Sell Sell. mea culpa.
IMO, the Fed’s attempt to smooth business cycles dampens the short frequency movements and amplifies the long frequency waves. With enough smoothing, they get really big tsunamis at the end of a very long, smooth period (e.g. 1988-2005).
Well if the dampening was well designed, it would simply broaden out the cycle and decrease it’s amplitude. IMHO it’s the attempt to dampen only the troughs and not the peaks that causes large amplitude corrections like we’ll be going through in the next few years.
Exactly, jim.
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Business Cycles by Joseph Schumpeter is a must read if you want to understand the dynamics of our econo-political system. I re-read it frequently. Yes, credit plays a very big role in long cycles and “bankers’ mischief” leads to “catastrophe” (depressions). However, there are shorter cycles (inventory related, etc.) and cycles in-between. If we avoid depression I would be amazed.
It Is the Debt, Stupid!
Jas
Thank you for the reference, Jas.
Jas, does this book comes with pictures?
When I get this book, will I need toothpicks for eyes and someone prodding me with sharp stick?
Just kidding.
Basic ? Is this a dry read? Thanks.
You can read “The Case Against The Fed” and “Money, Economic Cycles, and Bank Cycles” for a lot more theory and information. Both can be had as free downloads at mises dot org
The Austrian theory of the business cycle holds that a 100% reserve backed system would eliminate the business cycle. It doesn’t hold that elimination of the Federal Reserve would eliminate business cycles, but it would be a step in the right direction, as the Federal Reserve is nothing more than an institution that helps ‘manage’ the expansion of the money supply and acts as the lender of last resort. Looking at interest rates while ignoring the money supply is the main issue of why people are so ignorant about the effects of the expansion of the money supply on the economy.
Those claiming that there were recessions and depressions before the fed was created are correct, as are those who say that it was ‘cheap credit’ (read: the expansion of the money supply) that drove previous business cycles. However, despite banking runs and failures (inevitable in a fractional reserve banking system w/o a lender of last resort) and hence loss of depositors money, recessions and depressions were much shorter in duration in the 1800s.
gambling bubble bursts:
LAS VEGAS — In a town enthralled with its own mythology, Las Vegas would like to hold on to one myth in particular these days: Gambling is recession-proof.
It’s conventional wisdom characteristic of a city and an industry far more accustomed to boom than bust, but it’s just not true, experts say. Gamblers, whether motivated by compulsion or hope, don’t necessarily double down when the economy spirals and belts tighten.
“It’s an old idea that has very little relevance and maybe no relevance to the United States today,” industry analyst Eugene Christiansen said.
http://tinyurl.com/333fdq
Gambling (I refuse to sugar coat it by calling it “gaming”) has been a direct beneficiary of the easy money people “made” off of housing. States have counted on tax revenues from these casinos to make up shortfalls. That leg has been kicked out from underneath them.
I have yet to see an article stating that the gambling boom and the cash-out refinancing boom are related. But they did occur at about the same time.
I’ll have to dig, but a while back there was an article noting how “gambling addicts” were HELOC’ing to support their ‘habit.’ Overall spending was driven by MEW (Greenspan-Kennedy), thus Las Vegas, which went more into the ‘luxury vacation’ side of the house now will see less business.
Las Vegas is now the fastest falling market in the nation.
Got Popcorn?
Neil
Gambling take for Las Vegas in Feb 2008 was down 5% to 1.06 Billion Dollars. One of the best known resturants in West Los Angeles said sales for Feb down 20%. Is Vegas is going down the tubes, what does it say for the restuant business right here in LA.
I spoke with a salesperson at a high end retail store in Santa Monica the other day. She told me that all of the stores on that street (Montana Ave.) are feeling the pinch. I’ve also noticed quite a few stores in west LA that became empty months ago and show no signs of being filled. Anyone know whether/how retail rents correlate to housing corrections?
Just moved here to the new “silly-con” valley of Oregon.
Upscale store parking lots were packed— entered a Banana Republic [need, and I really do mean need a pair of jeans]—lady with three small children talking to sales girl,”call me when the “new spring items” arrive. I need those for upcoming trip to Palm Springs and then Hawaii—we are sending our luggage ahead”.
Went next door to “the Loft”, found jeans for $15. At register I’m told the sale is final and I cannot bring them back. I said, “you can keep them, I’ll shop somewhere else, transaction complete”, and left.
You know, I think I might be able to sew the hole in my jeans.
I know of one individual here in Salinas that stole money from his company to buy two houses, expensive car, and made trips to Las Vegas to gamble. He couldn’t have done any of that without liar loans and the money he stole for a life style he felt entitled to.
Anybody who fails to see the connection between the rise of the gambling industry and monetary policy over the past couple of decades must have their eyes wide shut. What’s worse, the gambling mentality was pushed out to the level of household-level decision making by the Faustian mortgage loan products offered by the lending industry circa 2005.
were these brokers gambling that the irs would not catch them? this is something to smile about
http://www.nypost.com/seven/03262008/news/regionalnews/real_woe_for_1b__broker_103556.htm
Yeah ,how about all those agents that didn’t get a 1099 from Countrywide Funding for years .Wonder how many didn’t report that income . Just another incentive from good old Countrywide funding .
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“Gambling (I refuse to sugar coat it by calling it “gaming”) has been a direct beneficiary of the easy money people “made” off of housing.”
Gambling and debt have gone hand-in-hand. The source of debt could be mortgage or something else.
Jas
Everytime I see the words ‘Innovative Financial Instrument’ coming from the MSM/Street shills I can’t help put picture a large roulette table.
Gambling…investing…it’s all the same these days.
Another casualty of the credit bubble: Gambling used to be a vice, and now it is an American industry.
gambling is still a vice and can be more destructive than drugs
i hate gambling personally
The worst gambling addicts anymore happen to be state and local governments.
When I was about 10, I was on a ferry crossing the Channel when I asked my dad if I could try playing the slot machines on board. He said sure, handed me a bag of coins worth about 20 pounds, and told me I could use my winnings to buy toys. I gambled the entire bag away. I have not gambled since, nor have I been remotely tempted. He was, not incidentally, a child psych.
As a child, a friend of mine and his family stopped in Vegas on their way to SLC. They ate at a casino buffet because it was cheap. My friend asked his dad why he was against gambling or something to that effect. Dad started to explain that it was a waste of money and went on to demonstrate buy “wasting” 4 quarters in a progressive slot…last quarter won him $5K.
I’m with you. Went through Montana for the first time last summer and the entire state had a pallor on it from the gambling industry. Cheesy and sleezy.
I don’t hate gambling, but I sure don’t understand the attraction of it. You’re probably gonna lose your money. What’s hard to grasp about that?
If you simply must have a vice, there are so many funner ones out there. Is my view.
If you simply must have a vice, there are so many funner ones out there. Is my view.
I agree.
The allure of gambling has always escaped me. I suppose that’s good.
“Went through Montana for the first time last summer and the entire state had a pallor on it from the gambling industry. Cheesy and sleezy. ”
Yup, it has not been a turn for the good. We went from a genial go-out-dancing scene here to a braindead Keno player scene with penny ante casinos on every corner. I mean, at least Vegas had some pretty impressive stakes. So people in MT go into hock so they can tell everyone they won $800. Of course the title loan places took off too.
This was people’s idea of a new economy substituting for wood products, mining, railroads etc. It’ll never be the same. My first jobs were in Nevada, and I hated the dopes on the machines. I played a little craps to kill time on breaks but quit if I lost $20. I never really liked the place and thought those who did were suckers. But there were good union jobs for musicians back then.
I generally agree that gambling isn’t entertaining (slots, cards, roulette, etc. are boring as hell and expensive). That said, the best people watching, social entertainment I’ve ever seen has been at a craps table. I think I actually made money playing at that table, but I was thoroughly entertained for a several hours to a degree that to me was worth several multiples of the money that I had put at risk.
“I hate gambling personally”
Then you must not invest in the stock market, right?
Then again, if you’re TxChick, it ain’t gamblin’.
confidence crumples:
Consumer confidence plummeted to a five-year low in March, according to a report released Tuesday, as Americans gloomily surveyed an economic landscape blighted by soaring energy costs, rising inflation, sinking home values and a downturn in the job market.
http://tinyurl.com/3bwkbz
Happy euros:
March 26 (Bloomberg) — The euro rose against the dollar after an industry survey showed German business confidence unexpectedly increased in March, a sign the European economy is weathering a slowdown in the U.S.
http://tinyurl.com/2p6ou8
It’s different there.
socialize the losses:
March 26 (Bloomberg) — Even as the Bush administration insists it won’t risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis.
http://tinyurl.com/3y635d
You may be right, but those who don’t “trust” McCain to stick with his philosophy of avoiding a massive bailout have no reason to vote for those (Obama and Hillary) who are positively promising massive bailouts.
Yes - this is one thing I am wondering about.
As we all know, on March 27th, the FED will accept mortgage backed securities as collateral for 30 days. In exchange for the MBS notes, the banks get cash. I am wondering a couple of things:
1) Are the banks able to borrow at face value of the notes or are these notes already discounted to reflect current market worth?
2) If the market for these mortgage notes does not become more liquid again, what happens then? Do the banks have to take back their mortgage paper or can they simply roll the debt to the next month - like a payday loan?
3) Finally, since the Fed now holds these mortgage securities, can the banks pretend on their accounting statements that they are not liable for these problem notes? In other words – can they delay further write downs for a few months?
Supposedly they are discounted to the current market value.
Whatever that might be.
Yeah, and who priced them.
look to the east:
Politicians in Washington, D.C., seem stalled on how to tie up more strands of an unraveling economy. They should listen to advice from Japan, a land that knows how the bursting of a housing bubble can make a mess of an entire nation’s prospects.
http://seattlepi.nwsource.com/opinion/356405_housinged.html
only if you try to “save” jobs and bail the banks
leave it a lone and you have 1921
speak truth to power:
I was a real estate appraiser until very recently. The appraisals I did were for home equity lines.
What I saw, and passed on to the mortgage companies that I worked for, was that most home equity lines were not being used to upgrade their homes, pay for a child’s education or medical expenses. The loans were used for new cars, big screen TVs and to have money to pay their mortgage loans which they could not afford!
http://tinyurl.com/3523yh
That’s mostly the fault of the government. If borrowing via one instrument is tax deductible and borrowing through all others isn’t why wouldn’t people take advantage of the deduction?
Good article. Correct views in very simple words.
That plan leads to the Japan scenario and a multi-decadal decline in real estate. The result that I see from reducing the principal of the loan is a reluctance to lend and an accrued loss for the banks. If the banks don’t need to book these as losses (give the politicos time, somebody will propose it), then the banks end up with zombie accounts that look alive, but are in fact just going through the motions. Just like Japan.
Yet, somebody is going to propose this as a solution, and somebody is going to second that motion. Sad, really.
Japan had a surplus of savings supplied by their frugal citizens.
The US has a deficiet of savings and borrows from japans citizens and others. While hiding the bank loses is the same strategy Japan used the US dosen’t have the cash. Bernake is forced to print the cash out of thin air and then loan it. So I expect interest rates to rise in the US while they fell in Japans Deflation.
New York magazine’s reaction to Clinton suggesting Greenspan take on the housing mess….
“
Excellent teaser. What time do we tune in for the show?
One more try. Based on your comment below, I see it was at 4:53:03
when the Philadelphia Daily News asked Clinton yesterday why she would pick Greenspan to do this job, she said she didn’t know. It was like, she just knew his name and that he had something to do with the economy and thought that, you know, it sounded kind of presidential.
“He has a calming influence still to this day on Wall Street — don’t ask me why because I never understand what he’s saying — but nevertheless people respond to that Delphic oracle approach. I think it would be wise to include him. And recently he’s come out, and very smartly so, that we have to deal with housing and maybe we need to have some kind of buyout mechanism for mortgages. So he’s moved on his understanding and depth of the problem — but you know you could pick three others. You just have to have some demonstrable involvement of presidential leadership.”
Oh, cool, we can pick three others? How about Angelo Mozilo, Chuck Prince, and Stan O’Neal? They all know a little something about high-risk mortgages. Crikey, lady.
New York magazine, 3/19/08
McCain Suggests Limits on Govt Aid for Housing Crisis
http://online.wsj.com/article/SB120645482100762421.html?mod=special_page_campaign2008_leftbox
this is a nobrainer, folks
I think the bond market will put limits on any bailout. This is out of the federales hands.
http://www.torreon100.com/images/federales.jpg
I am not sure what kind of limits you are contemplating, but doesn’t the federal government have a big control lever on supply and demand for T-bonds at all durations along the yield spectrum?
They control the supply, not demand. Do foreigners have the appetite for low yields?
This to me sounds like Bush talking about a “strong dollar policy”. McCain’s not in favor of a bailout, but will weigh “all the options”. He wants a “hands off approach”. (which is how Bush has handled the whole sub-prime mess and to me means a failure to regulate.)
He’s really not saying anything at all. No specifics, nothing about what the Fed is doing now.
Look we know you like McCain, but there’s nothing here.
God I despise McCain (and I still vividly remember his idiotic bumbling when asked by Ron Paul in a debate about the Presidential Working Comittee on Financial Markets), but of course I despite bailouts as well.
Grrrrrrr.
This make me feel good!……..Maybe this will be the beginning of the end of the McRadio Stations in America…..I miss the days of owner operated WKRP type local radio stations…at least you knew real people were making crappy programming decisions and you could call them up and actually talk to a real program director or DJ.
————————————
Clear Channel Shares Sink on Reports That Buyout Deal Is on Brink of Collapse
SAN ANTONIO (AP) — The proposed $19.5 billion buyout of radio station operator Clear Channel Communications Inc. is reportedly near collapse because the private equity firms leading the deal are having trouble nailing down a financing agreement with banks.
Shares of Clear Channel, the largest radio station operator in the United States, fell 21 percent in after-hours trading on Tuesday to $25.82 after dropping $1.89, or 5.5 percent, to end regular trading at $32.56.
That is well below the $39.20 per share the buyout firms offered Clear Channel shareholders.
The Wall Street Journal reported on its Web site Tuesday that the private equity firms leading the buyout were having difficulty reaching terms with the banks committed to financing the deal. The report cited unidentified people familiar with the matter.
The buyout deal, which has been plagued by delays since it was announced in November 2006, was scheduled to close March 31.
A person familiar with the situation told The Associated Press that the equity partners, led by Thomas H. Lee and Bain Capital Partners LLC, are prepared to fulfill their obligation to fund and close the deal.
Some issues were still being worked out, said the person, who asked not to be named because of not being authorized to speak publicly about it.
Because the stock has been trading below the buyout value, the lenders face the prospect of lending far more than the current market value of the company at a time when banks are already nervous about making loans. Failure to make good on previous lending commitments, however, could subject the banks to lawsuits.
The New York Times, also citing unidentified people briefed on the negotiations, said in Wednesday’s editions that San Antonio-based Clear Channel and the private equity buyers may go to court to force the banks to complete the buyout.
Bain Capital said its executives were not commenting Tuesday. A call to a THL spokesman was not immediately returned, and Clear Channel referred calls to the equity partners.
The deal was struck during the years of easy credit that preceded the current crunch that is pressuring the U.S. market. The Clear Channel buyout remains the largest pending buyout in the U.S., according to Dealogic PLC.
That would be a good thing, these guys flip stations like rehabbers. It looks like it will be up to the courts to decide if the deal gets cancelled, unfortunately.
Mainstream media is dead. Only the zombies still watch/listen/read/believe information that comes from large corporate outfits.
Clear Channel is flabby, boring, sterile, anti-free speech, and not particularly interested in making sure that musicians get paid equitably.
I hope they sink like a stone.
I recall as a kid listening to the local radio station’s “Birthday Club” each morning, where people called in each other’s birthdays with humerous comments. Also really liked the call letters local stations had, like radio KOAL for Carbon County, Utah (big coal mining area) and Radio KURA (K-uranium) in Moab. A special touch of Americana. Homogeneity is boring.
Don’t even get me started…
Of course, who deregulated the airwaves - and ushered in this era of bland corporate radio that helped drive people to downloading and has largely tanked the music business?
Reagan.
Before deregulation, you HAD small mom and pop radio stations with eclectic playlists. Having a good dj surprise you with a great song you never heard before is a fun experience that most people have never even had thanks to the likes of Clear Channel. Ipod’s only play what you already know about, they’ll never surprise you.
Try Pandora online for surprises.
Amen Bud Diddley.
There isn’t a decent music station out there showcasing new upcoming artists etc. nydj usually links up with an interesting artist now and then, but those stations that play anything BUT britney etc are long gone.
There have to be so many interesting artists “out there” but we have no real avenue to hear them.
Thanks, check out the video….friends of mine The Catholic Girls they were way ahead of their time back in 82…its a shame i can’t find a angel investor who would fund them…and put them on tour. Let alone all my zydeco bands
Maybe i should ask sirus to have a up to date baby boomer channel…but i want to hear what Rod Stewart Tina Turner Koko Taylor, Blondie, Suzie Quatro are doing today not 25 years ago.
Thank goodness. Clear Channel isn’t.
The U.K.’s Financial Services Authority said it failed to properly supervise Northern Rock Plc before the lender’s collapse and promised to improve its oversight.
The longest funk — The S&P 500 finished yesterday below its level of April 1999. When dividends and inflation are factored into returns, the S&P 500 has risen an average of just 1.3% a year over the past 10 years, well below the historical norm. Big U.S. stocks were outrun even by Treasury bonds, which historically perform much less well than stocks. “We have to accept that this is no longer a nation of 4% real economic growth. This is a mature nation that no longer has a strong manufacturing base,” says Steve Leuthold, chairman of Leuthold Weeden Research in Minneapolis. One big question is how much worse investor confidence will get.
Factor in inflation and you have a negative return for 9 years. So much for dollar cost averaging.
The 1.3% net growth quoted in the original article did include a factor for inflation. Dollar cost averaging & index fund investing haven’t been looking good this past decade.
Ha! Beat me to it. Does BiM factor inflation into his DCA sales pitches?
Nor currency depreciation.
The dollar has lost 40% in the last 10 years.
Hoz — Is there (to your knowledge) a clear conceptual distinction between “currency depreciation” and inflation? This one has had me scratching my noggin for years now…
I think it’s like the distinction between “official” inflation numbers and the REAL inflation numbers that one sees when doing stuff like: buying food, energy, gas, and all those other things that the academic-types like to ignore while telling us “inflation is contained.”
A few months ago, I recall comparing the 10 year return of a mid-term Treasury Bond fund to the 10-year return of an S&P 500 index fund… the Treasury Bond fund beat the S&P 500 index fund by a full percentage point, and the gap has probably only grown since then.
Dollar cost averaging into the current market - one ruled by huge Bubbles and huge swings for the benefit of the insiders is becoming less and less of a good option, IMHO.
I know you didn’t ask me but -
“Hoz — Is there (to your knowledge) a clear conceptual distinction between “currency depreciation” and inflation? This one has had me scratching my noggin for years now…”
It seems like the distinction is whether or not the prices paid for goods/services is relative to just the local currency (in our case US$) vs. world currency.
Good example is what’s happening right now. If I buy gas at $3.15 today and last year it was $3.00, then I’ve experienced 5% inflation.
At the same time though - the US$ has experienced 10% devaluation relative to the rest of the currencies of the world.
So to that extent - they’re independent stats. At least when we refer to “inflation” in terms of US$, which is what’s traditionally done.
Of course even though the stats themselves are independent, they do have a cause and effect relationship - i.e. a weak dollar will cause import prices to go up. There’s a lag there though - e.g. auto invoice and MSRP prices are typically set on an annual basis - so if you buy a new foreign car whose price was set 11 months ago, you might get a really good deal now since next year’s price may jump a lot due to weak dollar.
Thats why in addition to dollar cost averaging you must also have a diversified portfolio. Anyone who had just domestic US groth stocks has gone no where this past decade. However if you were diversified in gov/corp/muni bonds + small caps & international stocks then you’d have a portolio that weathered this past decade of US stock anemia. Take heart, if you’re in US stocks now then you will be ready for the next bull run. Other’s who got out locked in their loss and will likely jump in when its too late, hence the wisdom of dollar cost averaging!!
If you’re a brain dead financial planner, who’s been telling clients to put 50% in the SP500 for the long run, you must be sweating right now.
Of course, if you’re a brain dead FP, your clients probably don’t read the WSJ.
Your clients probably don’t understand the distinction between nominal and real gains, either.
I am curious if any financial economist has researched the connection between bloated bonuses paid to Wall Street fat cats and dwindling returns on their “product?”
Haha thats right the worse it gets for investors the more money the managers keep knowing the “jig is up”
Mass market for stocks is the key to their being a poor investment in recent decades. When I was very young, there was a chance of making real money in stocks, but that was before “everybody” owned them (whether through pension plans or individually).
Wanted: A New Policy for Bubbles — Free-market proponents will argue it’s not the government’s job to discipline markets. Fair enough. But if the government is going to intervene aggressively when bubbles burst, as it’s doing now, then maybe policy makers should do some new thinking about how to prevent bubbles in the first place.
There is a policy in place, it’s called regulation and there are probably enough laws now to make it work. It’s just when the “Free Market above All” crowd controls things they don’t believe in regulation and this shit happens.
I am really naive about how economics and our economy, however I do know when my pocket has been picked. I guess that places me in with the general population.
The more I learn about economics, the more It looks like a shell game. Which shell has the pea?
how to prevent bubbles in the first place.
No doubt.
Some of us free-market folks however think we have a situation where we (we being the population in general not necessarily any particular political group) are expecting the gov’t to put out fires they started in the first place.
The one main problem I see is expecting the institution to be able to objectively evaluate itself. Lets assume that the Austrians are right and the gov’t (in our current case via the Fed) cause the big asset bubbles. That has to at least be considered as one possibility. In that case, do you trust the current gov’t to be integral enough to just step aside if indeed after careful consideration that is the conclusion reached? Do you consider them objective enough to be able to honestly come to that conclusion?
I also think that calling housing a “free market” is a misnomer. It’s a preferred asset class. The capital gains exemption, the Community Reinvestment Act, Fannie Mae, Freddie Mac, FHA etc. are not creations of the market place, they are creations of the United States Government. There were regulatory failures here as well, but let’s not put housing forward as a simple proposition of the free market gone wild.
Very good point. It seems most of the, shall I say, “anti-free marketers” for lack of a better term, tend to hold up heavily regulated/influenced markets as “free”. See: the “privatization” of electricity out west.
The biggest thing that most quasi free marketers miss is that we have the exact opposite of a free market in money.
Federal Reserve control of the money supply and government mandated legal specie hardly add up to a ‘free market’.
There are those that would argue that a free market in money would be enough (any bank can issue any money backed by any asset of their choosing, and choose reserves appropriate for them)… and there are those that believe any form of fractional reserve banking should be outlawed on a legal, pragmatic, and moral basis.
Anyway, regulation is necessary when the money supply is manipulated - it is not necessary in a truly free market.
We don’t live with a truly free market, however.
Wells Fargo CEO open to another Fed-backed deal:
http://www.marketwatch.com/news/story/wells-fargo-says-its-open/story.aspx?guid=%7BC56A2C85%2D301A%2D4903%2DA03C%2DD838DD80B548%7D&dist=TNMostRead
Pick Me! ME here in the back! Oh pick Meeeeeeeeeeeeeeee!
Well heck, IIRC if the Fed is going to guarantee you against losses like they did JPM, who wouldn’t??
Free money, sign me up!
Wells is AAA. The last one in the US. (Well, GE could be considered a bank…). They’ll survive and the Fed won’t have much choice.
Got Popcorn?
Neil
Sure, with the backing of the FED maybe Ben Jones should buy a bank.
I would be very careful believing any money center bank is AAA.
WFC has a lot of crap. Enough crap that its earnings will be impaired for years.
Not if they get a FED backed deal on another bank like WaMu. WF will just shift all of their crap assetts to the purchased entity and then claim they didn’t make a profit so the FED will bail them out.
First it was foreigners, now expecting the Federal Reserve to bail out the banks. lol
There is not enough moneys available to stave off the problem. This is not chump change. Mr. Paulson’s comments this morning should chill any investor in banks.
His comments concerning homeowners walking away when able to pay the mortgage should give any and all an idea of the severity of the problem. WFC could be the biggest loser. BAC and WFC have the most amount of 2nd mortgages outstanding.
Is leh the next candidate for a bank run?
I have no idea.
“…We head back to the chopping block, reducing our 1Q08 estimates for U.S. banks on average by 84% (led by C at -309%), and our FY2008 estimates on average by 30% (led by C at -120%),to reflect 1Q08 mortgage and CDO related write-downs. Since November, we have cut estimates for financials over 30 times, with no clear end in sight….
Upon this measure, the stocks look expensive based
upon historical standards. Due to the adoption of purchase accounting in 2001, goodwill has grown to unprecedented levels on bank balance sheets. As we believe we will begin to see goodwill writedowns during the first half of this year, we believe investors will focus more on tangible book value and stocks will quickly revalue to far lower levels….”
Meredith Whitney
March 26, 2008
I do not pick bottoms. Let the Billionaires like Buffett and Lewis buy financial stocks they can afford the losses.
Orders for Big-Ticket Manufactured Goods Drop for Second Consecutive Month
http://biz.yahoo.com/ap/080326/economy.html
The 1.7 percent drop in orders for durable goods, items expected to last at least three years, was worse than the 1 percent increase that many economists had expected.
Looks like the fed gets additional ammo for further rate cuts.
I was talking to some folks who run a local charity thrift store. They told me they’re not getting as many donations (of furniture, appliances, even clothing and knick knacks) like they used to. Apparently, they really need appliances like stoves, washing machines and dryers, since these are in demand by local poor who get vouchers from the churches to buy these items. There’s apparently a waiting list for these used appliances.
I suppose if consumers decide not to buy new, they will hold on to their old stuff longer rather than donate it to the thrift stores. I have never replaced an appliance that was still functional, I run all of ‘em until they won’t work.
We bought a plastic Japanese washing machine for around $200 for our house in the Philippines. It was pretty funny being able to pick it up and move it around.
In many parts of the world, having “poor” and “washing machine” in the same sentence doesn’t make much sense.
Yeah - virtually 0 dryers in China
http://money.aol.com/news/articles/_a/factory-orders-decline-for-second-month/n20080326085609990009
Factory Orders Decline for Second Month
By MARTIN CRUTSINGER,AP
Posted: 2008-03-26 08:56:22
WASHINGTON (AP) - Orders to factories for big-ticket manufactured goods fell for a second straight month in February, a worse-than-expected performance that provided more evidence of the economic troubles gripping the country.
The Commerce Department reported Wednesday that demand for durable goods dropped 1.7 percent last month, disappointing analysts who had been expecting a small rebound after a 4.7 percent decline in orders in January.
The declines showed up in a number of areas. Demand for manufacturing equipment plunged by 13.3 percent, the largest amount on record, while the category that is seen as a good proxy for business investment fell by 2.6 percent, the biggest decline in four months.
The problems in manufacturing are a reflection of weakness in the overall economy as the country struggles with a prolonged slump in housing, a severe credit crunch, soaring energy prices and higher unemployment.
Economic growth slowed to a barely discernible 0.6 percent in the final three months of last year, and many economists believe the gross domestic product will turn negative in the current quarter, signaling the start of a recession.
*********
Ya mean when people run out of money/credit they don’t buy things?
As I was posting this, CNBC reported the government had expected the durable goods numbers to go up.
–
“As I was posting this, CNBC reported the government had expected the durable goods numbers to go up.”
I thought that it was economists and not the govt that “had expected the durable goods numbers to go up.” Always the clueless economists at the turning points, especially, the down turns. We will see this repeated, off and on, for years.
Jas
http://money.aol.com/news/articles/_a/factory-orders-decline-for-second-month/n20080326085609990009
Factory Orders Decline for Second Month
By MARTIN CRUTSINGER,AP
Posted: 2008-03-26 08:56:22
WASHINGTON (AP) - Orders to factories for big-ticket manufactured goods fell for a second straight month in February, a worse-than-expected performance that provided more evidence of the economic troubles gripping the country.
The Commerce Department reported Wednesday that demand for durable goods dropped 1.7 percent last month, disappointing analysts who had been expecting a small rebound after a 4.7 percent decline in orders in January.
The declines showed up in a number of areas. Demand for manufacturing equipment plunged by 13.3 percent, the largest amount on record, while the category that is seen as a good proxy for business investment fell by 2.6 percent, the biggest decline in four months.
The problems in manufacturing are a reflection of weakness in the overall economy as the country struggles with a prolonged slump in housing, a severe credit crunch, soaring energy prices and higher unemployment.
Economic growth slowed to a barely discernible 0.6 percent in the final three months of last year, and many economists believe the gross domestic product will turn negative in the current quarter, signaling the start of a recession.
*********
Ya mean when people run out of money/credit they don’t buy things?
As I was posting this, CNBC reported the government had expected the durable goods numbers to go up.
Oh wait, all is good. Corps are just holding off to purchase gen machinery (down over 13%) until they receive their bush stimulus dollars. (heh heh)
(Apologies if this posts twice)
Perhaps The Climate Change Models Are Wrong
“These 3,000 yellow sentinels –about the size and shape of a large fence post — free-float the world’s oceans, season in and season out, surfacing between 30 and 40 times a year, disgorging their findings, then submerging again for another fact-finding voyage.”
“It’s fascinating to watch their progress online. (The URLs are too complex to reproduce here, but Google “Argo Buoy Movement” or “Argo Float Animation,” and you will be directed to the links.)”
So why are some scientists now beginning to question the buoys’ findings?
http://www.nationalpost.com/opinion/columnists/story.html?id=8926a1d3-f43f-4f8b-811d-0a0daa3e1012&k=39580
From NASA:
“Update as of 5/30/07: Recent analyses have revealed that results from some of the ocean float and shipboard sensor data used in this study were incorrect. As a result, the study’s conclusion that the oceans cooled between 2003 and 2005 can not be substantiated at this time. The study authors are currently working to correct these data errors and recompute ocean temperature changes. ”
Nevermind.
So why are some scientists now beginning to question the buoys’ findings?
It reminds me of medieval “doctors” who had no clue on how the human body really worked and instead clung to the dogmas of their day.
It was only a mere 10 years ago Doctors admitted ulcers might be treated with antibiotics rather than antacids…I’m expecting them to admit that milk is not very good for you soon.
Doctors did not admit anything. This was proposed by scientist in the 80s and then through testing using something called “science” it was proven to be true and adopted by the medical community.
This is a short period for the acceptance of a new idea.
I don’t ever see the same openness in the psuedosciences.
Things haven’t changed much, except that dogmas are now cloaked in science.
A theory proposed by some scientist in Australia is accepted by the medical community within 10 years and you consider that a dogma?
But i bet you know a lot of truths that are dot dogmas, they just can’t be challenge.
No, but the preceding idea *was* dogma, and there are plenty of similar beliefs in the medical field proposed without proof as scientific fact. Just saying, always be skeptical.
Dogmas cloaked in science? - You must be thinking about Exxon’s paying scientists to write antiglobal warming papers, or creationism, but these are not Dogmas cloaked in science, they are dogmas cloaked in BS that is called science. The uneducated are just too dumb to understand the difference.
yeah. Peace.
Who Gets Us Out of this Mess?
http://www.huffingtonpost.com/robert-l-borosage/who-gets-us-out-of-the-me_b_93401.html
This is encouraging (not)…these people who are clamoring to lead us have not a clue, and will easily be misled by the world’s leading strawmen puppeteers.
‘Greenspan and Rubin were once hailed as the Committee to Save the World. Are we now to engage them to save us from the world they helped create?
Hillary isn’t alone. John McCain admitted that “The issue of economics is not something I’ve understood as well as I should.” But he said, “I’ve got Greenspan’s book.”‘
“John McCain admitted that “The issue of economics is not something I’ve understood as well as I should.” But he said, “I’ve got Greenspan’s book.”‘
I think I’ll send him Michael Lewis’ “Liar’s Poker” when I’m finished.
McCain Wants Greenspan, Dead Or Alive
“If He’s Dead, Just Prop Him Up… Like ‘Weekend At Bernies’” To Help Fix Tax Code, Jokes Senator
PAWLEYS ISLAND, S.C. , Oct. 4, 2007
Well if they put Volcker on the committee foreclosures, he’ll say let them die and raise interest rates. Volcker is the only spine-bearing Fed chairman we’ve had.
Wrong.
Good reference. Also, after reading Liar’s Poker, I’m so enamored of Volcker. The myth might be a tad larger than the man.
Whoops. I meant “NOT so enamored”. Volcker handed out a gift or two to Wall Street back in the day.
Who instituted the policy of using asset price inflation to sterilize the natural consequences of loose U.S. fiscal policy?
(Cf. chart 2: “Up, up and away,” noting carefully the change of regime indicated circa 1980…)
Volcker is backing Obama.
I always amused at people who think that Carter was a bad President in Economic terms and that Reagan “saved us” with his tax cuts. It was Carter who put in Volker. And Volker saved our ass in the early 80s.
Carter only put in Volcker because his back was up against the wall. Read Secrets of the Temple to learn more of which you speak.
Carter make Bush look like Lincoln.
Carter make Bush look like Lincoln.
Forget Carter: Bush looks like Lincoln anyway. After all, both Bush and Lincoln got us into a long destructive war based on lies, depreciated the currency, and trashed the Constitution.
Bush makes Hoover look like Lincoln.
LBJ looked hot in those tight pants!
Wait, what?
Who really understands this mess. I think that in reality, its all based on models that are too simplistic, to idealistic and irrelevant when things that are viewed as minor are or become major as the cause of change.
Heck, humans created an artificial enviorment on top of that of nature, and it is so convoluted, that no one and I mean no one can figure out what levers to push and pull to get the desired outcome.
Just my humble opinion-we out smarted ourselves.
When you get down to it, I think the mess can be attributed to global warming, though I am not sure why…
I will drink to that! Somewhere in this world, its after 6pm.
PB silly.
You’re right, it’s pretty obvious nobody does. If they did, it would be written down, nicely formulated, and communicated clearly. Some bright spark might come along and say ‘oh, but Newton’s laws don’t apply at the solar system level’, and everybody would nod sagely, and continue using the formula where it clearly works. (And the new version for GPS.)
Instead we have the ever mysterious “market forces” - which are what, exactly? Endless political arguments, because nobody really knows what to do, and a lot of activity that would be criminal in any other context being passed off as ‘acceptable business practice’.
glorious.
Ron Paul would have. Which is why he was marginalized.
http://www.chicagotribune.com/business/chi-tue-trucks-repo-diesel-mar25,0,3589923.story
Driven to the end of the road
As opportunities to haul freight shrink with the declining U.S. economy, and diesel costs soar, independent truckers are fast becoming a vanishing breed
Since the first oil crisis of 1973, whenever fuel prices rise rapidly, there appears a spate of stories lamenting the “vanishing breed” of independent truckers. Trucking companies go in & out of business all the time, there is a heavy turnover of employed drivers in most trucking companies, and the independents make a living (or not). Trucking is essential to the functioning of the US economy & isn’t going away any time soon. Costs of shipping will vary as they always have.
” Trucking companies go in & out of business all the time, there is a heavy turnover of employed drivers in most trucking companies, and the independents make a living (or not). Trucking is essential to the functioning of the US economy & isn’t going away any time soon. Costs of shipping will vary as they always have.”
Very true what U say,
The I/C trucking business is just that: a small one person business operation, a business on wheels. I/C’ truckers go out of business like any other small mom and pop . M & P’s, whether truckers, sandwich shop, donuts, retail , auto repair,ect., will go belly up or not, and rates for BK really soar during recessions. It is the business cycle , the repeated closing up of millions of tiny- medium sized firms but there are always millions more springing up daily all over america. It is called entreprenourship. The desire to be your own boss, to run your own show. Just need a bit of capital or borrowing capacity. If u succeed u are a genius. If more than likely u fail U file Chapter 13 or simply close up the shop.
We will see uncounted small M & P’ s going out of business during this latest nasty downturn. BTW i went thru the early 80’s severe recession running a small business. Got out of that barely but later got out of the M & P restaurant business due to sheer exhaustion .
Diesel cost.
AAA tow truck driver discussion yesterday, the truck has 2 tanks, 30 gall and the cost to fill up is over $275 a couple of times per day on average.
That sure made me think the cost of hauling/freighting goods is going to create havoc? I see freight trains as answer, but not enough tracks etc.
“I see freight trains as answer, but not enough tracks”
What did Warren Buffett know and when didn’t he know it?
Adm has a short memory. Their point is valid, railroads got too greedy. If they poured the money into infrastructure instead of stock buybacks it wouldn’t be an issue.
http://www.reuters.com/article/marketsNews/idUKN2645449220080326?rpc=44
Comstock Considers Sale to Offset Losses
Remark by Builder’s CEO Follows Accountant’s Doubts About Firm’s Survival
“…”If the best option is to sell the company, we’ll sell the company,” Christopher Clemente said in response to a question from an analyst during a conference call with investors.
Comstock is one of the many publicly traded home building companies that have recorded big losses since the real estate market went bust. …”
Washington Post
http://tinyurl.com/3xzczc
Sell to whom?
Sounds like they are out of options. Paulson doesn’t want to put the bailout on the governments’ cc.
http://www.marketwatch.com/news/story/paulson-resists-congressional-effort-stem/story.aspx?guid=%7B4AE51827%2D5F12%2D474F%2DB86F%2D2282BFDD91F3%7D&dist=hplatest
I was watching PBS Frontline last night. It was about Bush’s War. This has made me realize that all of the analysts, pundits, and MOTU’s (Masters of the Universe) have forgotten about the Iraq War. It’s funny, but you just don’t hear about that. Ya know?
To wit, the dollar is not only declining because of the Fed’s activties, but also because of this war that we are fighting. Our military is in decline. The men and women who are in Iraq for the 2nd or 3rd time are absent from their regular jobs and are not contributing to the GNP. Their bodies are being mutilated, they are emotionally damaged, they are loosing their lives. I still do not believe that they are being adequately cared for in the VA system.
We have forgotten them in the public debate and on this blog. Hey gang, we aren’t perfect, but we are better than the pols, pundits, and MOTU’s. At least we should be.
Roidy
Re-institute the draft so all economic classes share the burden of war. Then guys like Goober will think twice before landing GI’s on someone elses turf.
John Conyers and Charles Rangel proposed re-instituting the draft in the House of Representatives a while back, for just the reasons you cite.
The Republican House leadership almost stroked out on the spot, even though the bill had no chance of passing.
It wasn’t just Republicans who were against this. The vote in the House was 402-2. Rangel voted against this as well, although his reason was that hearings had not been held.
http://tinyurl.com/2swwbm
exeter,
Yes, I hate that idea. It will have to happen and for the reasons you state. I just hate the idea that my boys, nephews, and nieces, will be going to a military boot camp and possibly from there to the meat grinder. I was in the USMC. I am for a strong military and the draft. I don’t have to like it, though.
Roidy
If I recall, Dick Cheney used a college exemption and then had kids in order to avoid going to Vietnam. Unless you get rid of those exemptions, the burden will fall on those at the bottom of the scale.
On the other hand, we could elect a president smart enough to avoid such situations. Reagan was far from perfect, but, he was man enough to leave Lebanon after the embassy bombing. Although GW Bush blamed Reagan’s cutting and running from Lebanon for giving inspiration to Bin Laden, I think Reagan was smart in avoiding a pointless situations.
I fear that non of the current presidential candidates are that capable.
What about Ron Paul?
Great letter from a soldier in Iraq
http://news.yahoo.com/s/time/20080326/wl_time/therealmeaningof4000dead
Um, how exactly will this help? Do you really think that the Leaders will let THEIR kids go to fight in THEIR wars? Of course not! There will always be an excuse. Bringing back the draft would just mean an endless supply of bodies to feed to the meatgrinder of somebody else’s ambitions.
“Do you really think that the Leaders will let THEIR kids go to fight in THEIR wars? Of course not!”
No, but a wider range of draftees would mean more of the public are affected by the war, and might lead to greater accountability. Sure, our evil overlords would make sure their children are exempt, but if more of the middle class had “skin in the game” (their own relatives skin) then war protesting wouldn’t just be the job of commie-loving pinkos who hate our freedom.
Lot’s of countries that haven’t had an armed conflict in ages also have mandatory military service.
Your sense of freedom is hollow. No one should have to go to war as a SLAVE! I suggest you read what Ron Paul has to say on he draft before you start suggesting it. The draft is nothing more than playing the lotto to see who has to pay income taxes and making the taxes on those who have to pay 3x what our current income tax is. The only difference is that the draft is a tax that can demand your life!
Well said, Roidy. I saw that program, too. Both nights. Where’s the outrage? I had to look away a few times because I was in a blind rage and feared for my blood pressure. Basically, we said to the troops “You fight, we’ll shop”. Bush’s War was and is a complete debacle. I wish the administration and CONgress could experience the pain of the troops and their families. I was seething with contempt after watching that program. I also recommend “Body of War”, another interesting documentary.
Actually, it seems like there has been quite a bit of chatter here regarding the short- and long-term costs of the war, and what we could be doing with that money instead of giving it to Dick Cheney’s buddies at KBR, Blackwater and Halliburton.
(The Powers-That-Be haven’t forgotten about the war, regardless. They just don’t want to talk about it. They’re hoping we forget, though.)
5 years down; 95 to go according to McCain. What comes after trillions of dollars; gazillions?
Wait, I thought war “helped” the economy? I thought WWII was the only thing that got us out of the GD. Where does the money go - to personnel and American companies or somewhere else?
“I thought WWII was the only thing that got us out of the GD.”
This is a misconception that I’m sure the powers that be like to perpetuate. A more accurate view would be that the US benefited immediately following the war in that every other economy in the developed world was completely destroyed. This gave America, who avoided the wholesale destruction of Europe and Japan, a head start economically as it’s industries shifted to non-military endeavors. The idea that WWII saved us from the GD is simplistic, and I think even dangerous.
Oh no, Paulson is about to speak. Prepare for gyrations.
Somebody is standing in the way of Dumb0crat mortgage crisis quick fix programs.
Obama has released his tax returns…Clinton and McCain still stalling. From Bloomberg,this a.m.
“The Clintons’ tax returns might shed light on Bill Clinton’s financial ties to Vinod Gupta, a longtime supporter, and California billionaire Ron Burkle.
While Hillary Clinton’s Senate disclosures report only that her husband has earned more than $1,000 from each relationship, the New York Times reported in May that Gupta’s data-mining company, infoUSA Inc., has paid Clinton more than $2 million in consulting fees and spent $900,000 to fly him around the world.
Meanwhile, the former president stands to make tens of millions of dollars with little risk if investments with Burkle’s Yucaipa Cos. profit beyond a certain level, the New York Times reported in 2006.
Minimizing Taxes
Bill Clinton has a financial stake in three investment entities registered in the Cayman Islands by Yucaipa. Investing in a Cayman Islands partnership is a legal strategy used to minimize taxes because the country has no taxes of its own. The Clintons would still owe U.S. taxes on any income earned there.
Gibbs said the couple should reveal how the former president is compensated by Yucaipa — whether at a salary taxable at rates as high as 35 percent, or with equity, which could be as low as 15 percent.”
I will confess to being a supporter of the Clintons who is finally having his eyes opened. The best thing BC can do for his legacy is make sure Hillary loses. If she wins, my guess is he steps in it another few times and his reputation as genius crumbles. Older I get, the more I suspect there are no geniuses, there are only smart people who can act, and smart people who can’t. BC is in the former category but he very much risks pulling a Greenspan.
Ouch, crude product inventory down across the board, oil inventory flat.
Oil up nicely; where are Exeter and the Seal Beach tanker guy to call a top?
Market Last Change %
Crude Oil 103.52 +2.3 +2.27
Three tankers are sitting empty and anchored off of Seal Beach, that’s because the domestic demand for oil has declined.
Also, domestic gasoline stocks in the U.S. are at record highs.
It is what it is.
This is starting to help people understand the global nature of this fine system, tankers parked in the US, and armed guards at China fueling stations…..hmmmm.
So which is it: Aggresive Emerging Market Growth flush with moneys, or Sad Consumer Economy cant drive to dunkin donuts cuz the credit card is maxed?
This is not a trick question.
When it gets to a new high I’ll rattle your chain. Enjoy the painful slide to the bottom in the meantime.
Paulson says U.S. housing prices need to fall more
Wed Mar 26, 2008 10:37am EDT
WASHINGTON, March 26 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Wednesday that housing prices need to be allowed to continue to drop while every effort is made to ensure the adjustment does not cause excessive harm to the economy.
“A correction was inevitable and the sooner we work through it, with a minimum of disorder, the sooner we will see home values stabilize, more buyers return to the housing market, and housing will again contribute to economic growth,” he said in a speech to the U.S. Chamber of Commerce.
The U.S. Treasury chief also said no one should conclude that broker-dealers and other big financial firms will get permanent access to new lending facilities made available by the Federal reserve to ease market stresses.
In wide-ranging comments on conditions in credit and housing markets, Paulson tried to sound a note of reassurance about the future. He said capital markets remain flexible and resilient, and regulators and policy makers were “vigilant” about the risks the economy faces.
He said the Fed’s recent moves to boost market liquidity and to offer broader access to its so-called discount window for loans were helpful but exceptional.
The trick is keeping people employed while prices correct. Will we see infrastructure projects get more attention?
How would we pay for infrastructure projects? Borrow more?
Infrastructure?
The only thing this administration wants to leave for future generations is crushing federal debt and a presence in Iraq.
Paulson spouts about regulation but if truly put in place the ’shadow’ banking system would be exposed for the true house of cards it is.
While researching this mess we are in I discovered to my shock that 16% of CDSs are held on companies heavily invested in CDOs and MBSs.
How many people on this board can get there brains around this mess? This is the kind of crap that keeps me up at night.
I should take a break from my attempt to understand high risk corporate finance. It’s the scariest sh!t out there……
Wow…. Okay, I dislike Hanky Panky Paulson as much as the next guy, but if even that dingleberry realizes that prices need to keep falling, well, maybe we’ll be getting somewhere. I suppose that we should take some comfort now that our brilliant leaders are starting to realize that people really can’t afford $500,000 houses on $50,000 a year with no money down. Durr… about 5 years too late… duh!
When will falling l-t T-bond yields translate into lower mortgage rates that benefit houesholds? I have a good friend facing an ARM reset who would like to know…
Whither Wall Street’s trading volume, and what does it portend for future share prices?
Judging by the action in the brokers, down.
Here is still more evidence that a housing market bottom must be nigh at hand…
BULLETIN
CRUDE-OIL FUTURES SURGE $3 A BARREL AFTER U.S. SUPPLY UPDATE
ECONOMIC REPORT
New-home sales fall to 13-year low
February’s supply of new homes on the market stuck at 27-year high
By Rex Nutting, MarketWatch
Last update: 10:53 a.m. EDT March 26, 2008
Hey Olygal, if you’re there - CNN Money has listed Olympia as #40 in the top 100 places to live/start a biz. Run for the hills!
Strangely enough, my little town in SE Utah didn’t make the list.
On another note, for those of you pro-nuclear types, plans are in the offing to build two uranium processing mills in my part of the country, one near Green RIver, Utah, and another near Naturita, Colorado (SW Colo.).
I did a 5 day raft trip on the Green River about 10 years ago, and every now and then, you’d see heavy metal equipment rusting away not far from the river, the vestiges of the 50’s uranium boom.
That heavy metal will be gone in 500 or 1,000 years, vs. spent uranium that might take 500,000 years to go away.
I’m not sure why the say it has a “half-life”?
I see old rusted-out car or pickup hulls every once in awhile in the desert, usually full of bullet holes. Each has a story of someone who probably tried for riches from the earth via uranium prospecting. Or ranching. Or some such enterprise. Sometimes I stand there and look at the old seats, springs sticking out, the old rusted-out radios, and I wonder why we think our times will be so much different than theirs in the grand scale of things. Dust to dust. Just not too crazy about atomic dust…
imho-
From a simplistic non financial/economic perspective, It seems to me that even without a decline in asset values (homes, PM, stocks, commodities), American public is tapped out. We are so indebted, that I suspect the only way we could acquire additional assets is if it was given to us for free. (tho their is still the costs incurred from maintenance).
Now, putting on my “tin-hat”, I suspect that WS supported NAFTA. The US would be shortly over burdened with debt. So lets send our manufacturing to Mexico (Business gets lower wages, etc.) and WS/financial institutions (read banks and credit card co.s) gets access to the Mexican citizen who were previously so poor, that if their income rose, they could assume debt. I think big business has given up on the US. Everyone here is tapped out. Time to move on to greener pastures.
That is the line I have been hearing from B school profs. Multinationals will make a killing overseas, even in poor countries. Selling single cigarettes and shampoo in single application containers (think fast food ketchup packets).
The IRS needs a form, similar to the 1099s I have to fill out for subcontractors I pay, so renters can report the amount of rent paid to their landlord.
This will catch folks renting out a home in hopes of making some “cash flow” and not reporting the income.
The last thing anyone needs is more forms to fill out and mail to the IRS.
scrw the irs
(a la flat)
You can do this with the current 1099’s misc.
Banks seem to be able to find the next FB pretty easily still: http://www.azcentral.com/realestate/homes.php?pgAction=homedetail&address=2661+E+BEECHNUT+PL&city=CHANDLER&zip=85249
Feb 2007 - $1,010,000 Feb2008 $775,000
Pretty good haircut in the beginning innings of this game.
From my zip in Glendale.
http://www.azcentral.com/realestate/homes.php?pgAction=homedetail&address=6602+W+PHELPS+RD&city=GLENDALE&zip=85306
6602 W PHELPS RD
GLENDALE, AZ 85306
Week Ending Buyer (Last, First) Price
03/03/2008 TEODORESCU, MIHAELA $133,000
05/01/2006 ABISHALOM, RAMZI $200,000
11/12/2002 ABISHALOM, ROMEL $109,000
Yes, 80/20s for the full $200K, and YES, it is a post foreclosure.
http://recorder.maricopa.gov/recdocdata/GetRecDataPgDn.aspx?&rec=0&suf=&nm=ABISHALOM+ramzi+&bdt=01/01/1947&edt=3/26/2008&cde=ALL+TYPES&set=250&res=True
http://www.azcentral.com/realestate/homes.php?pgAction=homedetail&address=4925+W+EVANS+DR&city=GLENDALE&zip=85306
4925 W EVANS DR
GLENDALE, AZ 85306
Week Ending Buyer (Last, First) Price
02/25/2008 SCHAUWECKER, ALEXIS $162,000
09/26/2006 OSORIO, ALBERTO O $232,000
Full $232K was owed, and yep, another post foreclosure.
http://recorder.maricopa.gov/recdocdata/GetRecDataPgDn.aspx?&rec=0&suf=&nm=OSORIO+ALBERTO+&bdt=01/01/1947&edt=3/26/2008&cde=ALL+TYPES&set=250&res=False
http://www.azcentral.com/realestate/homes.php?pgAction=homedetail&address=6027+W+KAREN+LEE+LN&city=GLENDALE&zip=85306
6027 W KAREN LEE LN
GLENDALE, AZ 85306
Week Ending Buyer (Last, First) Price
02/15/2008 CANIPE, JAMES H & TIFFANY B $207,000
06/20/2006 SHAKUR, KHALID M $290,000
06/03/2005 CANTARELA, PAUL & KIMBERLY C $225,500
You guessed it… another post foreclosure.
house of cards:
This credit expansion poured hundreds of billions of dollars into the purchase of homes largely by subprime borrowers who never had a realistic capability of repaying their mortgage debts in the first place. And, not surprisingly, large numbers of them in fact stopped making the payments required by their mortgages.
http://www.mises.org/story/2926
did anyone else buy the dip in commodities last week? prof bear?
Market Last Change %
Crude Oil 104.97 +3.75 +3.69
Natural Gas 9.66 +0.149 +1.57
Corn 555.00 +10.25 +1.88
Soybeans 1353.5 +46.5 +3.56
30yr Bond 118.71875 -0.34375 -0.29
10yr Note 118.5625 +0.03125 +0.03
NY Gold 954.1 +14.4 +1.53
NY Silver 18.3 +0.5 +2.78
I don’t gamble (that much…)
Prof:
What sort of flavor of investments do you have?
- Family
- Work
- Human capital
- Positive net worth
Beer , Chocolate and Malt Whiskey - Woulda, coulda, shoulda
I didnt want to do it, but I did. Yes, its true..I find very little joy in this current situation, but the overly soft American Consumer must feel the pain, and these are the vehicles that deliver that learning experience.
I dont celebrate higher oil and food prices, but I feel that they are necessary. The intolerance of oil and food prices are the only global answers to dollar destruction in a system that does not recognize inflation.
This aint pretty folks, but until some bright bulbs begin to shine among the Elected Elite in the US ; pain will continue. Does it not already feel like the consumer is getting waterboarded? The consumer is not dead, but they are hurt puppies.
I gotta lighten the tone a bit:
Horray, oil and food prices are crushing the lower and middle classes!
The dollar is toast! Whoopee!!
Ok, I feel much better now.
“buckle up the sheep, we are coming in for hard sheering.”
you heard it here first.
You and your sheep! Only in Oregon. Herding on the tors.
Voz
19/3 14:09 FX Crossroads: Dollar decline not over yet
In this edition of FX Crossroads we introduce revised forecasts. We also look at whether EUR/USD has peaked, and suggest three new G3 trade recommendations.
Danske Research caution 11 pg pdf.
http://tinyurl.com/2ehhve
hoz, I briefed the paper after my last post below.
more thoughts to follow.
initial thoughts:
Based on my previous posts regarding Japanese CB intervention. I am inclined to say they will not make a move, for sake of upsetting the apple cart. They have already said too much.
If Japan does not intervene, parity arrives at 86 yen to the dollar, and at that point….well it says it all, the long end of the curve of the USD would evaporate.
strength lies in numbers of population with strong growth, freedom, happiness, and Cultural Conservatism…. this is go Yuan go, but it lacks freedom, and liberty among the participants.
Globalization scares most people, me included. Simply because ts not working out right now,and it isnt working out because jobs with a future are not manifesting for the young generation in a way that contributes to the global society….we are about to become the old people.
I welcome all thoughts and anecdotes of grandparents memories of the depression.
the 10 CB’s, are really
Euroland (+UK, Switzerland, Sweden, Norway)
ok, thats 5
US (Canada)
Japan
Ozzie, NZ.
that about wrap up the new global currency?
the NewOzziCanEUYen dollar.
newozzicanyou dollar, cant we just call it the Yusonda.
$EY
the real answer is I am not gonna blink on my currency trades, Japan does not intervene, dollar is going 86 Yen.
only then will the world change.
No more carry trade? A global central bank to run things?
Think positive
Go Yuan go!
Chase to cut 300 jobs in Rochester
http://tinyurl.com/3a38ng
I am always amazed when I hear the local yokels say that the upstate NY area isn’t going to be affected by the housing bubble because there wasn’t a rapid appreciation in home prices like there was in CA, NV, AZ and FL. These rose colored glasses types are clueless to the fact that the financial problems associated with the housing bubble are far reaching.
Anecdotally, I have seen quite a few more empty older homes for sale locally. I recently spoke to a local RE agent and she said that many homes are being foreclosed, but that the banks are trying to sell them using RE agencies. I guess a house looks better to most if it’s on the MLS instead of a foreclosure list.
When will economists start getting their expectations right?
U.S. ECONOMY | Expanded coverage
Durable drop is unexpected
Durables orders take a hit in Feb., down 1.7%.
Housing crisis hits Ireland.
http://www.spiegel.de/international/business/0,1518,542364,00.html
what, no pot ‘ gold, and three wishes?
“”They still seem to be concerned about moral hazard, but we are long past that. It is not a question of bailing out the City. We’re faced with the threat of unnecessary damage to the real economy,” he said.”
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/26/cnciti126.xml
Maybe Citi should be promoted to central bank status.
Hurry — buy the dip! PPT is painting the lipstick on the tape as I type…
http://www.marketwatch.com/tools/marketsummary/
Sorry but the pig crashed. It might have something to do with the USD about to hit a new all-time low, or oil up $5. Maybe.
Orcl getting hammered, Q3 not quite good enough.
Tech is so 1999. Will Nasdaq ever recover? Doubt it.
http://www.safehaven.com/article-9789.htm
The potential adverse consequences of Greenspan’s legacy of debt are:
McMansions and SUVs will not make us more productive in the future.
Foreign creditors could start to question how we will be able to pay future interest and dividend payments without resorting to “printing” dollars.
If foreign creditors should question our ability and willingness to repay them without resorting to the currency printing press, there could be a run on the dollar.
A run on the dollar would lead to sharply higher U.S. interest rates.
Sharply higher interest rates would do great harm to household finances and the housing market.
A sharp decline in the housing market would result in a spike in mortgage defaults.
A rise in mortgage defaults would cripple the banking system.
A crippled banking system would render Fed interest rate cuts less potent in reviving the economy.
http://www.safehaven.com/article-9780.htm
heres one for Txchick
Did anyone see Neil Cavuto earlier on Fox News? He was interviewing this guy who was leading a protest of a couple hundred “homeowners” that were up in arms about the Bear Stearns bailout. They wanted the $$$$ to go to bailing them out instead. Neil argued with him that the taxpayers should not be responsible for bailing out either Bear Sterns or the irresponsible “homeowners” who took on ARMS without reading their loan documents. The guy kept trying to play the victim that “nobody” reads the loan documents, that they didn’t understand them, that the banks ensured them that they could refinance later if the rate went up, etc. Neil kept on the guy by saying that the terms were right there in writing and that they signed. No one forced them to sign. They made their own beds. He said the same thing about Bear Stearns and that they should be allowed to fail. After much badgering, he, finally, got the guy to admit that the taxpayers should not be responsible. Hooray! It was nice to actually hear someone standing up for responsible people!
I think Neil Cavuto is a closet “personal responsibility” capitalist, in the line of Peter Schiff. He seems to have Peter Schiff as guest quite often. Every time I see him interview Schiff, Cavuto makes the point that Schiff has been right on the money with his predictions over the last several years. Perhaps Cavuto even prefers Ron Paul over all the other candidates for Prez, but Faux news forbids him to make it clear. Read between the lines. Jonathan Hoenig, Liz Montgomery, are in the capitalist camp and not Pollyannas, like Tobin Smith. Tracy Byrnes is sympathetic to the personal responsibility / no bailouts side too.
I agree. The few times I’ve seen Cavuto interview Ron Paul, he’s been very fair and respectful.
Maybe Fox Business News is coming around on Ron Paul –
In this item (I don’t want to reignite the article debate), they call Dr. Paul “the lone voice of reason in Congress”:
Time to Listen to Ron Paul?
http://emac.blogs.foxbusiness.com/
This may have been posted elsewhere, but it’s too good, just in case:
“Help Main Street, not Wall Street!”
…
“Homeowners, that’s more than $1 trillion (in mortgage debt), you’re crazy,” another man in a suit screamed at a protester on the street.
http://www.msnbc.msn.com/id/23814034/
This is what my post right above your’s is about. Neil Cavuto interviewed the leader of this group.
I’ll do one more.
since the thread is dead meat.
1.75% on the two year note… a 30bps psread form the 30 day t-bill….keep dryin the short end up, GNMA is 5%, better money, safe as the 2; even safer.
ITs either all over in the treasury market or energy, gold, and food are gonna run wild.
Decoupling is depegging. thats the short answer, either that or global currency…..take your pick.
How will swaps perform given that scenario? Will we see what happened to the JGBs happen to treasuries?
I do not have a good answer for that, if you are bidding treasury notes at the shortest end of the curve, you turn around and sell em for more moneys in the secondary market.
ask tresho, he’s watching.
this is part of the problem. More panic is coming. More downside risk is manifasting. targets on S&P are in the 1100’s
bids are in.
Test
Well we just had a 3.1 magnitude earthquake here in Costa Mesa about an hour ago and it reminded me of a question I had last week. There is a large section of Huntington Beach that lies in a liquefaction zone. For those wondering what that is, it is an area of land that is susceptible to severe rolling motions, i.e. liquefying, during a high magnitude earthquake. Now why would house wishing prices in that area be equal or greater than others close by of the same type, but not in such a moderately risky location? Even though I do not consider myself a tin foil hat afficianado I would not even consider living there when I have other less risky choices. Would you?
75th Anniversary of the 1933 Long Beach Earthquake
They called it the Long Beach quake, but the epicenter appears to have been either in Huntington Beach or Newport Beach.
My dad was a little kid during the Long Beach quake, and it knocked him over in an open field.