The Housing Bubble

http://www.foxnews.com/story/0,2933,343338,00.html

“LOS ANGELES — Rescue crews responding to a wreck on a San Fernando freeway found a driver fatally shot in the head, while another driver was shot and wounded in a separate attack about 30 miles (48 kilometers) away in Long Beach, authorities said…
The incidents were the latest in a string of Southern California freeway shootings stretching back several weeks.”

Actually all these shootings are occuring in the greater LA/IE metro region exclusively. Make a note of this:

If you drive at night or early morning along a freeway in the inner LA/IE third world slum belt areas chances are quite a few drivers on the road are ‘Packing’. Who are these ?
90% of time they are recent criminal unlicensed, uninsured/ often undocumented gang bangin illegals or their gang-bangin hostile criminal offspring. But there are also many legit citizens who are also ‘packin’. These normally law abiding commuters may get ticked off for some reason or another, get road rage and decide to blaze away road warrier style.

Isn’t life beautiful in sunny blissful SCal

It’s a city of angles and gunsights.

I remember in the early 90’s when there were plenty of freeway shootings in SoCal. This time around I wonder how long until there is a shooting in a supposed “safe” place, like Disneyland?

Magic Mountain has had enough violent incidents (mostly stabbings) that the owners considered shuttering it and selling the land for, what else, a housing tract. The plans are presumably on ice until the bubble burst has passed.

Also notice how many wrong way drivers death there are on the freeway? At least two on the 118 in San Fernando.

Magic Mountain has had enough violent incidents (mostly stabbings) that the owners considered shuttering it and selling the land for, what else, a housing tract.

I recall reading about that when Six Flags anounced that it was selling off some properties to raise cash.

“I remember in the early 90’s when there were plenty of freeway shootings in SoCal. This time around I wonder how long until there is a shooting in a supposed “safe” place, like Disneyland”

Most of these shootings take place in certain areas of inner LA city and /or the IE which are ghetto or semi-ghetto districts . Such as the stretches of the 110/710/5 fwy going from dwtn la to the 91. Or the 10 fwy going from east LA out to past San Berdoo. Or the 101 going from hollywood to dwtn . These areas of La/ IE which may comprise as much as 50% of the total geographic regions of LA and San Berdoo are basically DMV laws- of- the- jungle minimally policed marginalized zones. Practically all Scal commuters stick to the freeways like glue and wisely never get off the freeways and get stuck in a marginalized ghetto districit but occassionally the ghetto hops the freeway barrier and some unfortunate innocent commuter from a safe burg gets killed by bullet from some lowlife criminal scumbag from the ghettos of SCentral or inner San berdoo.

Better not tick off anyone on the freeways or u might get a bullet. Especially late at night or early in morning when most of these shootings occur. Criminals like to commit robberies, assaults and murder under cover of darkness and without witnesses.

The local L.A. radio station that I listen to is giving away tickets to an event they are hosting at Magic Mountain on Friday. Ever heard the saying, “they can’t give them away”? The callers that were up for this prize could not get off the line fast enough. Seriously. The D.J. finally started saying, “hang on the line for your tickets to the Magic Mountain party if you even wanna go.” I have not gone to Magic Mountain in close to 30 years. It’s always been nasty and scary.

I remember going in the 70’s, and liking the ride where you are in a cylindrical thing and they start spinning it, and the bottom drops and you are artificially pinned up high against the wall.

Or wait, was I thinking of the housing bubble?

This morning’s SoCal commentary makes me feel pleased with my late-April itinerary from Morro Bay to the NE US: planning to get to Santa Fe via Bakersfield-Barstow-Vegas, thus avoiding the IE.

RE: Practically all Scal commuters stick to the freeways like glue and wisely never get off the freeways and get stuck in a marginalized ghetto districit but occassionally the ghetto hops the freeway barrier and some unfortunate innocent commuter from a safe burg gets killed by bullet from some lowlife criminal scumbag from the ghettos of SCentral or inner San berdoo.

Sure wouldn’t be any loss to the world for a few scumbag mortgage broker’s to take a wrong turn aka Tom Wolf’s “Master of the Universe” guy from “Bonfire of the Vanities”.

IF anyone was wondering why Magic Mountain is the way it is, let me explain to you.

Troubles started when all the amusement parks started the buy one day get a year free deals. Six Flags is near one of the biggest juvies in the county. When you go visit your hommie, you have a lot of time on your hands. Visiting hours are short, traffic back to the hood takes forever. What the heck lets go kill some time at six flags and make a day out of it.

Doesn’t it also go back to the days when KISS used to play there on a fairly regular basis, IIRC?

From what I remember of it, they used to promote the “night club” aspect, and got the stoned concert-goers and sometimes, things would get a bit heated.

Then, in the 80s, when rap and gang-bangers started being an “in” thing, they would come to Magic Mountain and mix it up with the long-hairs.

IIRC, all this was before Six Flags bought the place, and it was for these reasons that the original owners sold it to Six Flags — who actually cleaned it up rather well, IMHO.

http://www.latimes.com/news/local/la-me-compton31mar31,1,2485831.story

This article is a joke. Says high end retailers give Compton CA a boost . I know Compton like the back of my hand and it ain’t goin nowhere. It is in fact a city packed with immigrants, bith illegals and near min- wage sweatshop factory slave laborers, and 90% of the population are on the gov’t dole . Plus it is an ugly nasty hi-crime ghetto with all of it shops/businesses barred with iron grating. The biggest revenue getter in Compton is stealing and fencing of stolen goods.
Notice all the PC correct feel- good flatulent BS fluff about Compton lately? 100% pure PR bullcrap from the fresh-out-of-college naive wet-behind-the-ears newbe staff writers of the LA times who would not know a ghetto if one sat on their face

Just NJ?

Add IL, CA, FL, MA, CT and NY to your list (in order of f*cked-up-ness.)

These kind of obligations are really the elephant in the room. No one will take the necessary steps to deal with them because of the political difficulties. I think eventually we will see an Orange county style bankruptcy, except on a state level. My guess is NJ will be the first, but the states you’ve listed could be candidates for that honor as well. The interesting thing to see will be what kind of risk premium investors start asking for on the debt that states and municipalities issue once a bankruptcy at the state level occurs.

“come ye masters of war, you who build the big guns…
you who never did nothing, but build to destroy
you play with my world like its your little toy”

the real cause of bankruptcy in this country is the war machine and it’s makers not the medicare recipients and the public schools and the welfare moms

Think of all the brilliant minds we had sucking @ the teat of the military industrial complex, and what they could have achieved if their abilities had been used in some other fashion?

The military budget is obviously a concern at the federal level. However, entitlement spending makes up a larger portion of the federal budget. The most recent numbers I’ve seen put defense spending at around 20% of the federal budget and social security and medicare spending at about 35%.

Means testing, benefit cuts, and a realistic reappraisal of America’s role in the world will all be needed to get our spending under control.

Whether the military is bankrupting the nation or the pensions is irrelevant.

The point is who promised what to whom.

The states made the promises. The states cannot possibly meet them. The states are functionally bankrupt. Those be the facts.

On a federal level, Medicare is a bigger problem than SS, and the war is just moronic beyond words. But we were not talking about that. We were talking about the states going bankrupt.

Yeah, but most of the debt service was military spending. SS payouts came out of SS receipts (maybe still do?).

I agree about these state pensions. At least in MA I think everyone knows that the pension system is f***ed. Too many friends of politicians with no-show jobs got huge payouts. Then they lost money in risky investments trying to make up for their losses. Probably they have done this again.

I was briefly on the state payroll. Boy did they sack my paycheck for pension monies.

Everyone in MA knows that ship is sinking. I feel bad for the retired social workers who spent years toiling away at quite literally poverty wages who will wake up one day and find their pension gone. Heaven knows when you make $13-15k a year (in 1988 in MA!!!) you aren’t going to get a lot in social security.

Of course, those who raided the system will never have to pay it back. Weep not for Billy Bulger.

Iraq war aside though - which could the U.S. actually do without - military or social programs?

In the case of loss of social programs - we would survive, and some would say even thrive.

In the case of loss of military - the U.S. would not survive.

So it’s not a case of whether we do or don’t need a “war machine” - it’s a case of how big it needs to be. Certainly it can be smaller (e.g. if we weren’t in Iraq) and we would most likely survive OK. The same could definitely be said about social programs also though - IMO even moreso.

Agreed in general principle.

People who don’t appreciate the raw mechanics of power just fail to understand what is responsible for their economic well-being.

One of the biggest reasons for us being in Afghanistan and Iraq is the idea that you really can’t justify building more weapons, until you use up the ones you have.

Both locales are perfectly suited to be a virtual meatgrinder, as far as precise machinery is concerned.

“The military budget is obviously a concern at the federal level. However, entitlement spending makes up a larger portion of the federal budget.”

are you sure about that? don’t forget that the military budget as published does not include the war in Iraq and the various ‘Security Agencies’

numbers here show 54% military/ 30% social spending

http://www.warresisters.org/pages/piechart.htm

As for ‘product’ I would argue that social spending saves lives where military spending kills, maims and destroys, fattens the ‘masters of war’ - Haliburton, Lockheed Martin, Boeing, GE , Blackwater and their kind. The legacy of their ‘product’ is failed high priced technology dreamworks like star wars and machines that are built to destroy, no other purpose. War and its aftermath like Uranium depleted weapons littering Iraq and Lebanon are our export. If social spending included investment in technology for a sustainable planet providing real jobs we would be talking about something with staying power.A real investment for our future.

“People who don’t appreciate the raw mechanics of power just fail to understand what is responsible for their economic well-being.”

I don’t appreciate it at all. I hate it. You call what we have as economic well being? Have you been reading this blog for long or living in the world? all its given us is lifelong insecurity, war, killing and the threat of nuclear annhialition. Our sons and our daughters lives. Take a look at the front page of todays NY times and you’ll see the face of our ‘export’ on the look in an American mothers eyes who’s son is lost from the ravages of Iraq. We are hated around the globe for our exercise of raw power I see no positives just waste and death. Personally I’d rather have a LOT less,than have the sort of ‘mechanism’ currently in operation which I liken to the Mob.

In the case of loss of military - the U.S. would not survive.

Nobody is claiming that the US shouldn’t have a military at all.

The historical fact is that for almost two centuries - from its founding to WWII - the US did not have a large standing military, because it was considered a threat to liberty. Only during declared wars was the military increased to deal with the imminent threat.

After WWII the US retained a large permanent military to counteract the USSR. President Eisenhower warned that such a military would likely lead to war for the sake of private profit - the military-industrial complex - rather than for national security. And he was right.

I’ve seen that chart. Budget numbers are notoriously difficult to interpret. However, from other sources I’ve seen those numbers overstate the military budget. I would grant you this, military spending has to be controlled. This country is getting to the point where the federal government is becoming a massive military complex that administers retirement benefits. Both entitlement reform and reducing America’s military footprint around the world are mandatory for any significant reductions in federal spending.

Um, there was a slight shift after WW2. Seems there were these guys called “communists”.

They wanted to take over the world.

So, the millitary threat didn’t disapear like in the past.

Secondly, in the 1700-1930 time frame; the amount of time it took to launch an assault around the world dropped down by orders of magnitude.

Aircraft carriers, airplanes, battle ships ring any bells?

So a larger standing millitary became a need. Also note the Japanese and Germans were discussing how to divde up the US. The Germans negotiated with Mexico about retaking Florida in WW1.

Last couple of weeks… the Russian’s (our buddies) buzzed Alaskan airspace with a bomber. A few weeks before that; they flew a bomber group over one of our carrier groups.

I don’t know if you think the world has suddenly gotten safer but you would be wrong.

“I don’t know if you think the world has suddenly gotten safer but you would be wrong.”
Well, if I DID think that, it would be because the warmongers told me to. Their argument is that the world is safer, now, since we busted off and blew up Iraq and Afghanistan. That argument is demented, acourse, but whatevs, we need something to do with our disaffected yoots and somewhere for KB&R to launder money. Yes, the communists wanted to knock down a bunch of dominos, and supposedly we prevented that from happening by defoliating Viet Nam and destroying villages by saving them or whatever was the line. That we fled that war ignominiously doesn’t apparently matter: it was still a grand success because the loss of it did not initiate the takeover of the world by commies. Rooskies buzzed Alaskan airspace? Shiver me timbers! Everbody knows since the great unmasking that the big scary bear was just a hollow thing made out of willowsticks and five-year plans. This country is another hollow thing. It’s made out of missiles and big fancy boats and flying machines and outerspace missile nets but it’s still hollow. There’s nobody but incompetent, amoral mercenaries and an increasingly exhausted and dispirited crowd of maimed, abandoned kids to run the war machine and there’s nobody with a legitimate, non-criminal vested interest in the war effort. The war effort can’t even be defined anymore, even to the extent that they tried to define it back in the day with that implausible domino theory crap they came up with to say on TV because they knew “Making southeast Asia safe for the United Fruit Company” might not win the stateside hearts and minds. Now it’s “We’re gonna kill the evildoers! We don’t know where they are so we’ll bomb every country in the hemisphere ’til we git ‘er done! Pay no attention to Dick Cheney’s company logo on every stick and stone of the jerryrigged, dysfunctional crap we ‘rebuilt’ in Iraq after we destroyed the evil Saddambuilt infrastructure! Don’t worry that we send ‘em out in open-sided Humvees and forget to issue body armor, don’t bug out just because every third helicopter that takes off crashes; the war effort proceeds apace. So we borrowed the entire cost of the war from China, so China made most of the war machinery and the steel for the things we say we made at the gigantically overmonied defense corps here, so what–you go to war with the global production hegemony you have. Why should we worry about a little thing like who makes the steel when we’re makin’ the world safe by bombing the penniless A-rabs?”

Castro’s Cuba has been sitting there under our defenseless soft underbelly yaddayaddaya for decades and decades and absolutely nothing has happened. Nine guys manage to sneak over here and knock over two buildings using nothing but credit cards and suddenly we need to crank up the whole insane circus and drag it over there to the desert so we can “fight them there, we don’t want them over here!” But bombing cities and killing everybody’s grandmother and cutting off everybody’s electricity for years at a time just makes us feel great about getting up in the morning. It doesn’t do one thing to stop enraged guys from sneaking in here and knocking down more buildings. Meanwhile China goes on quietly building more factories and training more people and taking on more of the building and making chores we used to concern ourselves with before we got so obsessed with “safety.”

I see you’ve been brushing up on your DailyKook reading assignment.

We’re there because right or wrong, the administration believes that Saudi Arabia is running out of oil (Matt Simmons was Bush Sr’s energy adviser) and Afghanistan and Iraq were sitting on two of the largest pools of untapped and unexplored oil that will be left.

Where does the money go? People write as if the money disappears. It goes to American personnel & mostly American companies, no? Cut their water off and you can add a 1991-style “peace dividend” recession to everything else going on. I have a step who’s probably couldn’t even make his lowly E3 wages as a civilian.

I am amazed at how wrong many of you are on military history, its size, its purpose. This just goes to show that due to the SHRINKING military very few American’s understand it any more.
I would speak in more detail but I am not allowed to speak for the military since I am a part of it and this topic is “outside my lane” I ask people check you baseless opinions at the door and check your facts. Many would be surprised what they find!!

Nuh-uh, Manny. I can’t even stand to look at that blog ’cause it’s orange or something and burns the eyeballs. I read that about Vitnam and the Domino Theory and the United Fruit Company in 10 or 11th grade American history class in 1984 or whenever it was. I read about China making all the good war stuff nowadays in _The Atlantic Monthly_ (also an eye-burning layout nightmare, but I guess I didn’t have anything else to read) in about 1996 or ‘8. _The Atlantic Monthly_ is a conservative publication that appears to be almost entirely funded by money they get selling adspace to Exxon, but even they could not supress a shiver of fear about China and the steel. And everybody sentient knows about Castro being in charge of Cuba for a long time, right? And most people who are alive have heard the endless rant about our soft underbelly? And everybody can look around and see how Cuba hasn’t done jack diddly to us despite the fact that it was so so so so dangerous we wanted to blow it off the globe? And nobody including rocks and dirt actually believes the implication that W has been pushing for nigh on 8 yrs with that “fight ‘em over there” crap that a hoard of Islamic terrorists is going to come over here and start a ground war on American soil. One does not have to read a ravey orange hippyblog to know some simple basics. You just observe observable reality.

“I have a step who probably couldn’t even make his lowly E3 wages as a civilian.” Well, exactly my point: we need something to do with these yoots since we outsourced all the jobs they used to do to China. True, “something for formerly proud and productive skilled mechanics and steelworker types to do” is like reason number 898843897204578098w475n09 on the priority list for the war, waaaay under “American defense contractors have a scheme to make money for American personnel (2 in number),” but it’s still a reason.

Well, exactly my point: we need something to do with these yoots since we outsourced all the jobs they used to do to China.

You say yoots; I prefer yoofs.

All these yoofs with no real skills to speak of. Sounds good, dunnit?

“Yoots” is from _My Cousin Vinny_. Joe Pesci has a line in that movie where he says something about “da two yoots.” I guess “yoofs” is probably a lot better than “yoots,” especially seeing as how “yoots” is kinda… stoled.

My elementary school had custodians. We didn’t need name tags because they knew the face of every person who worked and went to school in that building.

Same here. His name was “Joe”. I remember one day after school we were playing tetherball and this boy was hit by the ball in the head, lost his balance, fell and banged his head hard on the ground. He didn’t get up, and I saw Joe in the distance. I ran and got him. He called the ambulance and everything was taken care of. I can only imagine if he had been an outsourced illegal.

Of course, I imagine that today that every elementary school in OC is a closed campus after hours.

Jose can you see if you can get us help?

Not sure about NY, but in LA, that’s exactly what they do.

Overtime usually occurs because someone is covering an absent employee’s shift. How do you eliminate that?

Hoz, I’m assuming 1983 as well. However, the reality will be somewhere in the middle.

Why?

Some downside shooting, and some of the effects of “labor arbitrage”. Throw in bad policies (virtually certain) and you will end up somewhere in there.

If my ex-CA Townhome was to fall to 1994 prices that would be a 70% reduction in price from what I sold it for in 2006. It was worth about 125K in 1994. I don’t think the economy can take that kind of hit

Nobody cares what kind of hit the economy can or can’t take, sparky!

That’s the hard-edge of economics. You can’t build an economy around FIRE alone. You need some meat to roast too.

All the same to me, living as I do in the inner MD suburbs of DC. Here are the sales prices for my house, a modest 3/2 in College Park. 1989: 115k, 1995: 125k, 1999: 120k. Of course my assesment as of 1/1/2007 is ~318k.

I am looking for an 80% reduction in prices in much of California. Since 1969 the standard of living in the US has been dropping. Just playing catch-up with reality.

Wow 1989 to 1999 is pratically the same price! But this bubble is bigger and somehow, I do not expect to see 2005 prices in 2015, maybe 2030.

Thanks for the other replies. I am hoping for 1998 prices. Any less is icing on the cake.

Jim A, I feel for yah. It’s been nuts watching little, Post-War shoeboxes and such double or more in “value” in under 10 years. Salaries have not kept up, and the madness has to end at some point. Then, we’ll come crashing back down to reality, which works for me.

Who knows - at some point, maybe Americans will have real jobs and be able to buy houses and actually pay for them. A novel concept, I know…

Salaries not keeping up was part of the cause! People who couldn’t make a decent living any other way went to get-rich-quick seminars and “invested” by assuming huge debt.

Even better, there are now cultured diamonds that are lab grown diamonds which are identical chemically/physically to the dug up variety. The technology is still quite new, and prices are only a little cheaper than those mined in Africa… but I expect in a few years that this industry will take off like cultured pearls once did. I would have felt very guilty buying DeBeers “blood diamonds” mined from slave labor, so this alternative fit both mine and the girlfriend/fiance’s tastes.

Hear hear!

Yeah, DJ, it just doesn’t work! Could rent that house that would cost about 4K a month to “own” for maybe 2500. Broker said nearby 3-family went for “well over” asking of 880-something. Nuts … they’re, um, “accepting offers after 6 p.m.” today! Don’t miss yer big chance.

Yes rent are higher on that side of queens blvd. Sunnyside gardens is historical, nice area street patrols and a heck of nice park..but Just try and get $2500 rent here……..tops maybe $1800 much longer walk to the 7train shopping and bars…

Did they compare that with the last downturn? I have no idea what percentage of jobs were lost on Wall Street in 2002-2003, but I bet it wasn’t as high as 20%. Even that one was pretty brutal.

Manhattan Home Market Slows as Wall Street Cuts Jobs
http://www.bloomberg.com/apps/news?pid=email_en&refer=&sid=ablSPpNgcHsY

Lurker, MSM noted a few months back that countries where home”owner”ship rate is low are better off economically, precisely because the workforce can respond to changing opportunities.

Mexico is on the verge of becoming a failed state. I lived 12 years in Mexico City, in the tony west side (Lomas) part of town. The street where I used to live now has manned checkpoints at both ends of the block. That is how bad it has become.

I’ve been in Mexico well over 100 times in the last 25 years. Things ebb and flow, but in general things there are not in such a bad way currently. I would say the quality of life is improving. As for manned checkpoints, it used to be that you would be stopped and searched by the federales going from Morelos into Guerrero state; that is no longer the case. Mexico City is a hassle at times, but I’ve never felt threatened there. The topic was investing, and currently Mexico is not high on people’s places to invest, which is a positive. I’m not sure why I need to be comfortable with narcotrafficking to decide whether or not a country is a good place to invest. Seems pretty immaterial.

If there is no rule of law (failed state), then how will your investment be safe?

As far as for it being OK, my contacts tell me that its pretty bad now. Carjackings have become so common that people often run red lights to avoid becoming a target. I also read the other day about a bomb exploding in La Zona Rosa (narc related). The last time I was there we noticed that we were being followed by a group of unsavory types. We saw a couple of cops and told them. They said that they couldn’t arrest the guys, but they offered to distract them while we dissapeared, which we did.

April kicks off the marijuana planting season, here in the lower High Sierra…

The Michoacan narcos are no doubt all ready to go, as they are responsible for the lion’s share of gardening duties.

They are pretty good at what they do, as they think big and 20,000 plant gardens are about their speed.

The narcos have been busy all winter growing seedlings in dixie cups, which will be transfered to their new home, somewhere around 2,500 to 4,000 feet, probably on Federal Land.

If all goes well, they gross $40 Million for their efforts.

Their total investment might be around $250,000.

They are very worried about the remittances drying up.

You forgot about Panama. The use the dollar they don’t even print there own money (Balboa) just coins with the same melt value as US coins.
Those guys are going to go down in flames. 10-1 they go EURO.

Ecuador switched over to the Greenback Dollar about 10 years ago…

They had suffered through bouts of hyper-inflation and were looking for a “safe” currency, so they got rid of the Sucre.

Whoops~

I could tell you when to buy the dip, but you are only baiting of course. The day you buy the dip I will sell out. Lots of USD dips ahead to buy though, if you are inclined. As for the beautiful mind that figured an 18% decline in the gold price, he should get back in math class.

“The day you buy the dip I will sell out.”

I am not buying any gold, so you will get to ride the bubble back to the bottom if you follow this plan.

Buffalo’s more your speed, sport.

If you think an unbiased independent auditor could not find incompetency AND greedy intentions at any time under any administration, you are naive.

I don’t think edhopper was making the claim that the Clinton administration was perfect, or even close to it — that’s obviously naive.

I think he was just pointing out that under a competentadministration (of either party), some government agencies can be run properly and do some good. The current denizens of 1600 Penn. Ave clearly do not fall into the “competent” category — to think otherwise is, well, naive and/or delusional.

Jim there is no slant. It happened. It’s part of the record. The Bush administration ignored the pleas of state banking commissioners.

I suppose you have a crystal ball and can tell which banks and agents are dishonest. The current housing bubble proves we need effective regulation with big penalties. Same way you prevent any crime.

Instead of Regulation we continue to get power grabs with consolidation into inept organization in order to ’steal’ from the people - the patriot act was and is being used to take down people who do not agree with current admin - new financial institution will be able to go into anyone’s financials under the guise of protection and mess with people more - this is not good and if congress critters are stupid enough to give more power to these power grabbers they will do us all in - the congress critters buy into to the fear mongers and fear about regulation and instead just give all the power away - huge mistake and it shows with what we have now in this economy with money wasted on bombs, torture, and bullets instead of using that money here for the people - you could have paid for health care for all many times over with the money going to contractors, paid mercenaries from many countries, etc being wasted overseas and at military bases world wide - they have successfully used fear to control and it shows in many postings

Regulations weaken the immune system of the free market. - Regulations are the immune system of freemarkets.

Regulations create false security. No regulation creates no security. In third world countries with high corruption people put their $$ under the mattress or buy goats because they can’t trust the system.

Regulations create monopolies and prevent new companies from starting. Is that how standard oil formed and then was disolved? How about Ma Bell. As I recall the gov had to break up these monopolies. I agree that corporate $$ can be used to drive up hurdles for small business, but this is periodically undone when new gov elected. Monopolies are hard to bust.

Calling for regulations is asking for altruism on the part of the government and altruism quickly gives way to greed. Regulating power that “in theory” could be used for good becomes a great power of evil. Again gov is still elected, and competing parties occasionally out corruption in gov. This does not happen in corporate America.

If you want a system that works then you have to make sure that the motivating factor for keeping things honest is greed and FREE WILL! You really think greed will motivate companies from forming monopolies or creating fake bottle necks to drive up prices, or prevent them from putting toxins in your food ect. I don’t think so. Look at china, little regulation, a toxic swamp of an environoment, and poisonous products.

Make rating agencies compete for the business of the BUYERS of securities. The problem is rating agencies competed for the sellers of securities which means they had every incentive to blow sunshine. A simple regulation that requires companies that want bonds rated to throw $$ in a pool that randomly allocates cash to approved rating agencies makes more sense. I’d make rating agencies put a little skin in the game as well.

Make banks compete for customers based upon the soundness of their organization instead of neutering that bank selection criteria by government backed insurance. How have people done evaluating the soundness of banks, especially given the fact that they have been able to hide risk with SIV’s. Seems like some good regulation might force them to open their books to the public.

Bottom line is this: if you regulate something then you are responsible for the outcome. If you don’t regulate it the gov is still responsible for the outcome in my opinion. Then you vote that party/ gov out of office.

If the government is going to take the awesome responsibility of regulating the financial industry then the government is responsible when its regulations fail and must provide a “bail out”. What, then why are they bailing out Bear Sterns which has less regulation than banks.

I much prefer that people take responsibility for their investments and avoid relationships with dishonest banks or those that do business that depends upon those dishonest banks. Again, if CEO’s lie, and commit fraud how is the average investor/customer supposed to find out.

“Again, if CEO’s lie, and commit fraud how is the average investor/customer supposed to find out.”

In normal times, they’ll face criminal charges. Not now. Who needs regulations and oversight? /sarcasm off

The current housing bubble proves we need effective regulation with big penalties.

There’s a pretty good argument that the current bubble was a predictable result of the current goverment-created monetary system. Without that we likely (I believe) would not have had such a bubble. Instead of expecting gov’t to regulate a bad system it created why not just get rid of the problematic thing all together? You are asking for goverment interference when what we have currently is a result of the very thing you are asking for. What makes you so confident that what we need is “just a bit more” involvment?

It seems to me that the current bubble is not an indication that we need gov’t involvment but rather indication that gov’t involvment is problematic and that more of the same will lead to more of the same.

Incidentally, all the anti-corporation people who blame the “free-market” and “privatization” for the evils of corporations and who expect the gov’t to save them from the evil corps of the world, should remember it is your gov’t hero which created the corp and delivered you into it’s hands.

Do you really want to do away with all gov regulation on business? The result will be an exponential rise in bribery, pollution, monopoly/oligopoly, fraud, and an eventual collapse of capitalism. I suspect at some point we would also get back to slavery. Take a look at countries with weak central governments. People hoard cash and goods because they don’t trust banks, companies and politicians. Gov creates the playing board for capitalism, if there are no rules there is no game and a bunch of angry players.

Well said MEaston. It’s well established that privatization and the free market mantra has failed miserably. And underneath it all was class warfare and the wealthiest of wealthies won the battle….. This time.

MEaston I’m not sure of which countries you speak. I find in many cases when people talk about that type of issue it’s some malfunction of government that created the problem. But I would be interested to know in which countries free-markets led to the ills you refer to. I genuinely look for cases where that might be the case I just haven’t found anything clear yet. Every time I think I might be on the trail of some case where free-markets have led to some major travesty, it turns out to be some result of bad policy instituted by govt. That’s just my experience so far anyway…

I’m not sure how you can claim that slavery is a free-market ideal (in the libertarian sense of the concept anyway). This sounds like another case of someone laying the faults of bad policy at the feet of free markets.

Try Zimbabwe.

“Every time I think I might be on the trail of some case where free-markets have led to some major travesty, it turns out to be some result of bad policy instituted by govt.”

In 2003 State Banking Comissioners held their annual conference in DC and petitioned the Bush Administration to step in and stop the reckless lending practices that were ocurring as early as 2001. Result? Silence. Nothing. No response. So the fraud was allowed to continue to ramp up another 3 years.

We finally agree on something BP

Remember people operate under the rule of “INCENTIVES”. In a non regulated industry where is the incentive to be honest? It lies in losing credibility and thus clients-long term. In a regulated industry it lies in not wanting to pay fine, lose their ability/license to practice etc. A non regulated industry can and will get further away from norms and thus allow for boom/bust cycles. A regulated industry is more stable. Is the juice worth the squeeze? IMHO Yes we should minimally regulate those industries / sectors where a boom bust cycle can wipe out an entire countries confidence and global financial standing and thus future business.
Instead of having an unregulated industry that is too big to fail, we put regulations in place that prevents most companies from making decisions that can undermine the whole industry/sector. The regulations serve as an insurance policy to mitigate long term risk. If we do not regulate the industry then we should not bail it out!! If the industry is too big/important to allow to fail then we must regulate it. Can’t have both!!!

Exeter I think my last post got eaten. Anyway the short answer is that while regulation might have helped to stem some of the symptons, the underlying problem was (and still is) the monetary policy of the Federal reserve (an instituted created by the govt and allowed to continue as long as it makes it’s masters happy) in support of the irresponsible fiscal policy of the U.S. govt.

So while you see regulation in this case being good, I see it at best (to use an analogy I’ve used before) as putting out fires started by the govt in the first place.

It wasn’t the Fed that lent money to Bear. It wasn’t the Fed that lent to Lehman. Bear and Lehman took advantage of the carry trade and lent with no regard to credit quality. Now…. State Banking Comissioners held their annual conference in DC and petitioned the Bush Administration to step in and stop the reckless lending practices that were ocurring as early as 2001. The administration did NOTHING to preclude this mess.

The Fed doesn’t have to lend directly to each individual or company to have an effect of promoting bad stewardship of money. By inflating the money supply they create excess money. That money disperses into the economy in general via all manner of financial institutions. The excess money creates a disincentive for people (individuals and institutions) to handle the money responsibly and leads to what Rothbard (accurately I think) termed malinvestments. We saw that instantiated in this case in terms of lower lending criteria, whether in the form of lower interest rates, lower lending standards, etc. Any regulations provided by govt to quell that malinvestment is in this situation a case of the government fixing problems which stem from it’s own behavior/policy.

There is no such thing as a completely free market on a macro scale. The US certainly is not a free market. The reason for this is that a completely free market with no rules can never gain the capital and trust to grow. I think the closest thing to a free market is a market where there is no government right. How many of those countries have become dominant economic players. You are correct that too much regulation or cronysm regulation is bad for the system. The extreme of the latter is the totalitarian state Russia, Iraq ect. There is no economic growth the elite just strip resources. Fortunately I think there is still a semblence of democracy in this country and when a government does not exercise its responsibility to regulate they are removed and some one can come in and clean up the mess. In an unregulated system once a company becomes dominant there are no rules to keep them from crushing competition. Do you really think the US would be where it is now if the Standard Oil monopoly had been allowed to grab more power. No because any wealth created in other areas would immediately become hostage to the need for oil and the fact that only one player provided it.

Reading your posts, Bye, one would think that NW PA is Heaven on Earth. No crime, low taxes. Cool summers and warm winters. And pretty dancing fairies to pick up dog poop and wash cars.

Peak Oil City

Molly, You`re a scream !!

THREE WORDS: lake effect snows.

And I just want to add, the insane reporting requirements of the PA Dept of Revenue. You don’t start with Federal tax amounts and make adjustments. You start from scratch with the Penna Schedules A, B, C, D, GAG, PUKE, and VOMIT.

ya know, ya gotta love Bye.
He is steadfast.
!!

I remember a thread from a few months ago in which we were all laughing at an idiot from NJ or wherever who,while being arrested for some infraction was screaming “But I own three condos in Miami!”

For some reason, that came back to me after reading about all the twentysomething financial geniuses who are buying up abandoned houses in Motown. I can see it now as soon as one of them gets arrested, “Do you know who I am? I own ten houses in Detroit!”

If you want to see some truly depressing stuff, check out detroitblog some time. The guy who runs it has some amazing pictures of warehouses full of unused textbooks that the school district never got around to distributing, and office buildings that were abandoned years ago, but with all the files and desks sitting there just as they were 30 or 40 years ago.

They were having a problem supplying toilet paper to schools for a while too.

I came across those pictures through a different path somehow.

The pictures of the textbooks were bone-chilling (and I’m not easily scared!)

To be fair the text book picture isn’t the school’s fault entirely. They had a fire, the schools got theinsurance payout and sold the building to a private individual who has left it to rot (he bought to protect his monopoly on the bridge to Windsor, Ontario).

Check out http://detroityes.com/home.htm

Beautiful, in a desolate kind of way.

“he bought to protect his monopoly on the bridge to Windsor, Ontario”.

Is that the same guy who owns the Michigan Central terminal building that has also gone to rot?

Same dude. Can’t let anyone else muscle in on his ownership of one of the more valuable pieces of infastructure in the nation.

That detroitblog is great, thanks. I loved the photo of the ring-necked pheasants in the vacant lot. And the piece about the old Vanity Ballroom. I remember going there when it was briefly open when I was in graduate school in Ann Arbor in the 70s.

Although I do not agree with this gentleman’s conclusions, this gives the partial breakdown in ownership in 1992. There are lists that show Goldman Sachs as an owner of the Federal Reserve-that is not accurate.
http://www.federal-reserve.net/isaprivatelyownedcorporation.htm
or tinyurled
http://tinyurl.com/2rp3y5

“…THE FEDERAL RESERVE BANK IS A PRIVATE COMPANY.

Article 1, Section 8 of the Constitution states that Congress shall have the power to coin (create) money and regulate the value thereof. Today however, the FED, which is a privately owned company, controls and profits by printing money through the Treasury, and regulating its value.

The FED began with approximately 300 people or banks that became owners (stockholders purchasing stock at $100 per share - the stock is not publicly traded) in the Federal Reserve Banking System. They make up an international banking cartel of wealth beyond comparison (Reference 1, 14). The FED banking system collects billions of dollars (Reference 8, 17) in interest annually and distributes the profits to its shareholders. The Congress illegally gave the FED the right to print money (through the Treasury) at no interest to the FED. The FED creates money from nothing, and loans it back to us through banks, and charges interest on our currency. The FED also buys Government debt with money printed on a printing press and charges U.S. taxpayers interest. Many Congressmen and Presidents say this is fraud (Reference 1,2,3,5,17). …”

If the Fed is truly private why can’t the owners sell their ownership? Right to transfer ownership is certainly one of the prime litmus tests as to the question of whether you own a thing or not.

Profits are shared some via dividends to it’s member banks but there is a legal limit of 6%. All remaining profits for a period are turned over to the Treasury Dept, something your quote conveniently neglects to mention. That’s some strange behavior for a private firm don’t you think?

Incidentally, the Fed doesn’t print physical money, a point that is also incorrect in your quotation. They control the money supply and create money but do not “coin” (or print) it. That doesn’t matter as far as the Fed’s implication for a stable money supply but it does add to bring into question the validity of your source.

I am not in favor of the Federal Reserve system but it is important to understand a thing before you can attempt to explain how to fix it. The Fed is weird sort of government-created entity that was intended to give an appearance of being a “private” bank. However, close inspection shows that it is unlike any private, profit-seeking entity ever imagined.

By the way Hoz, I have spent a considerable amount of time trying to understand our monetary system, I know more about it than most people who boldly just claim that the Fed is a private company, as if it is something that could naturally come to be in a free-market (Michael Moore is a good example of this). I also have spent considerable time studying (privately) the Austrian theory of economics and read authors such as Rothbard, Mises, Walter Block (a former professor and senior fellow of the Mises Institute) and others. I am fairly well versed in the problems stemming from the Fed but I object to it’s characterization of a private company because that directs the rightful blame of the failures of the Fed from it’s creator (govt at the behest and to the benefit of rich banker types).

I wrote I do not agree with him, but he is a lot closer to the truth than you.

“…The Fed is weird sort of government-created entity that was intended to give an appearance of being a “private” bank….”

“Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purpose of the FTCA, but are independent, privately owned and locally controlled corporations.”
Lewis v. United States, 680 F.2d 1239 (9th Cir. 1982)

Hoz, you are quoting the government in defending it’s own creation. They want the Fed to be private when it’s convenient and public (it’s heavily controlled by legislation, how do you reconcile the two aspects?) when convenient.

I’m suggesting you accept a neutral position, consider the facts of the institution and then establish a conclusion as to whether it fits the mold for a private entity by some reasonable traditional standard.

At the very least, I have pointed out some facts that bring into question the issue of it’s privacy as well as the validity of the source you were quoting. I don’t mean to be too abrasive, but can you reconcile those facts instead of just repeating what you have already said?

Blu, I would love to have this discussion with you over a pint or 2 or 6 . Yes, you have pointed out some excellent facts. And you are as well aware if not more than I of the Federal Reserve. I do have a neutral position, but I have a long history with the NYFRB. I just wish the Federal Reserve was set up more akin to the Riksbank.

I am almost through translating Mr. Paulson’s speech.

Next time you are in central Arkansas I’ll buy the first round.

If you would divulge, what is your history with the NY fed?

And the IRS is it’s debt collector.

It’s just an example of how race is a factor in an election when a lot of people like to pretend it isn’t.

Well, if white Philadelphians vote against Barack Obama because of some random black criminal, rather than because of his own insufficiencies as a candidate, then I guess they deserve HRC and a McCain presidency, just as the deserve the last eight years. I just wish the people who think like this would stop complaining about administrations like GWB’s as if they were just foisted on them by “the liberal media,” or some other such nonsense, instead of being freely chosen.

what liberal media?

You know–that liberal media that hates America and wants the terrorists to win–them.

AFAIK Slate is considered a left-leaning publication, as is New Republic, The Nation, etc. Just like National Review (among others) publishes a conservative view. What is the issue here exactly?

Sheesh you can’t say jacksh1t around here anymore.

The majority of joeamerican doesn’t not read those periodicals. The majority read the WSJ,Local papers, local and MSM and USAToday etc which tv,radio,print are in the majority of rightwing owners/conglomerates with their slant.
The median reader/watcher/listener are People magazine readers ie: short attention span. Not something that is either left which might make them Think?

“You know–that liberal media that hates America and wants the terrorists to win–them.”

Interesting . . . my unicorn told me the same thing this morning.

The majority of joeamerican doesn’t not read those periodicals.

The link came from Slate.

My post was in response to the Slate link.

So she’s stiffing the little guy and saving cash for media buys in the forthcoming primaries. The main reason I think the nomination is hers is ’cause of the Clinton determination to win at any cost. If a few event coordinators in Ohio or Iowa get steamrolled so what.

OTOH, I think she’s done for this cycle and she knows she’s done. As of now her campaigning is about 2012. Damage Barack so dems come crying back to Clinton fold post november and then mount a bid for 2012. Whoever becomes Pres is probably a one termer anyhow.

Repub starts war so we have to elect repub who promises 100 year war which means we have to elect repubs for 100 years. Makes perfect sense…

“When I was a young man, they told me that if I voted for Goldwater, I’d get sent to Vietnam. I voted for Goldwater anyway and sure enough, I got sent to Vietnam!”

Just a cautionary statement about Democrats, Republicans, and war. Democrats have been in charge during several of the wars in the past century.

its obvious to me, that since the elimination of the draft, and the volunteer army, our presidents have enjoined in more conflicts and even started a war in Iraq. Any country in history,that hired its guns, easily chose war, rather than diplomacy. Bush, again a volunteer army, doesn’t have to answer to the total public. After all, they are volunteers. Bring back the draft, see how quickly we pull out of Iraq.

Tell that to the people that got killed/maimed.
Tell that to the civilians who had nothing to do with this, and have died by the 100000s

“not a war”.

Nation to nation? power to power in whatever form is war.
okeydokey

I’m working on the campaign of and will vote for McCain.

We’re doomed.

We disagree on this point, but hey, it’ll be an interesting election.

We have nowhere to go but up after the current office holders, no matter who wins.

Sure, but paying for fibreglass or blown insulation doesn’t pull in the wows like granite countertops and bamboo floors (They’re green!).

ditto

lol.. classic..

Why does it matter? Is she going to send you money if her IPO succeeds? Did she send you money when her “export-import” business was rolling in the dough? To whom will you “look bad,” and why do you care one way or the other?

jbunniii -
Good points - I’m supposed to be next in line to be the family ‘broad shoulders’, although my (rich) dad, now the surviving eldest, crossed his arms and said ‘no’, in no uncertain terms.

Now Im a little pissed. I was open to buy this stock, and it hit my price. Sale did not execute.

Guess the little guy retail investors is about to get shut out of any gains.

Thanks for the GM, Hoz. Im long.