The Housing Bubble

There may not be an actual bailout coming, and I don’t think there is, but to me the use of ANY taxpayer dollars in this matter is wrong.

McCain’s campaign manager last night on Kudlow flat out said taxpayer dollars will be “involved.” I think we all know what that means. I have a problem with that, because IMHO the govmint, thru FHA, will cast their net a lot wider than originally planned and turn it into another boondoggle.

You’re gonna have to leave the country then. It’s not a question of “if” but “how much”. There’s where you make your decision.

I agree Ms. Chick. It isn’t their money so they will spend it. But the question is how much is available to be spent. Remember that The Treasury at one point told LBJ, “we’re broke”. The next Chimp in Chief may get the same message.

… but when leaving the country be sure to check twice, because most of the developed world still has most of these problems in front of them and many of them face even bigger bubbles. Maybe Argentina and similar countries are an option though …

Nah, it would take a lot worse than that to get me to that point. If it’s inevitable, the only thing to do (for me, methinks) is ignore it, or figure out how to profit from it.

From Today’s NY Times:

“McCain Reverses Himself on Mortgage Position ”

\http://www.nytimes.com/2008/04/11/us/politics/11mccain.html

article, not op-ed

“Remember that The Treasury at one point told LBJ, “we’re broke”.”

We shall overcome!

I had my McCain bobble-head doll up on a shelf, but it fell down and broke.

Politically, this is an excellent calculation. The FB’s are going to be a very politically active group. They are in active distress, so they are going to vote for the politician who promises them the most dramatic relief from their distress.

This is going to be a monolithic bloc of voters. They must be pandered to. And they number in a few million.

This explains a lot of politics.

I’m hoping most of these people are renters (like me) by the time a new president is in position to do anything (almost a year from now).

“The FB’s are going to be a very politically active group.”

I don’t mean this personally in any way - but that’s B.S. FBs were too lazy to read their loan docs for crying out loud. Sure they make a lot a noise, but come voting day they’ll be too tired, or too cold, or too busy to vote.

Who will vote are those that always vote - and the pols better start waking up to that fact. Your argument is giving FBs way too much credit.

I agree that some are too lazy to vote, but alot were amatuer speculators. Good jobs, good income and savings that they didn’t know what to do with. Why not try RE investing. Now they’re losing money every month, not desperate, but will vote for the BO candidate that promises the most. Boomers with no savings other than RE equity also have an interest in propping up values. Thats why, I believe Mc Cain changed his stance. Keep the hope alive.

‘can’t be attributed to me’

Oh, its yours alright. So who is supposed to be on the lookout for bubbles, an ex baseball player congressman or the organization charged with oversight of the entire financial system? And isn’t reforming the system what matters to the average person, and not finger pointing and name calling? The biggest impediment to real change in this country is the 2 party system, IMO. And party hacks just perpetuate that problem. So again, are you a party HACK?

I agree Ben and I’ve tried to say it here. Partisans are killing this country and the country is loaded with partisans. They keep real discussions from happening with their political zeal that borders on religious fanaticism.

Ben - To be honest I can never figure you out.

You agree with the idea of abolishing the Federal Reserve, in principle at least (and this is 100% the right thing to do) - so you must know or at least suspect the massive damage they do to our economy.

But then, whenever anyone on this blog calls lower than natural interest rates and other Federal Reserve policies that go against the market even partial bailouts (and banks have already gotten hundreds of billions of dollars in savings from lower interest rates loans than would have taken place w/o a central bank - and would have already gone bankrupt as well), you say there is no such bailout.

Can you clarify your position on the Federal Reserve, and let me know whether you view the lower interest rates as ‘wasted’ money, and what you think about banks having the ability to create money that did not exist before thanks to fractional reserve banking and the implicit support of the federal reserve. Thanks

I agree 100%. Partisan politics is antithetical to Liberty and our Constitution. It keeps us divided in so many little and some not so little factions that our eyes are never really on the ball. Not to get up on a soap box but our founders warned us of this very thing.

our founders warned us of this very thing This is true, but everyone please note that parties formed shortly after the ink on the US Constitution dried, regardless of the founders’ concerns, and have continued to this day. What is anyone’s alternative to partisan politics, and how could this “reform” be enforced? Dictatorships & monarchies don’t seem to be much affected by partisan politics, are these forms of governance a solution? The constitutional setup of the USA almost dictates a two-party system.
I see two bigger issues: the electorate’s ignorance/complacency, and over-the-top partisan rhetoric in place of “civil, well reasoned discourse”. Vested interests shoveling money into political campaigns is also a major problem, but seems to be dependent on the first two issues.

It is interesting to watch the John Adams series on HBO. It’s not a great series and Paul Giamatti is pretty awful in the role but it does bring up these issues. It is interesting to see Hamilton and Jefferson fiercely disagree on a central bank. Statements by Adams and Jefferson were made that the creation of political parties would be disastrous to the country. It was no secret then. It’s no secret now. The system is broken.

The system is broken. It’s been broken ever since 1789, then.

In my opinion political parties are not a problem until the official law starts to “account” for them. Political parties are no different than a RELIGION and should be treated as such from a legal perspective. Congress shall make NO law regarding parties.

Today we have congress organized by “majority/minority” parties etc. We have primaries supported by the government and ballot access made very difficult for non-major parties.

The only other way to resolve this party issue is to increase the size of the house of representatives so that districts are the same population size they were in 1913 when they stopped expanding congress to account for population increases like the founders intended.

Then we need to adopt range/approval voting where you rate each candidate on a scale of 1-5 and the candidate with the highest average rating wins. This has been shown to result in the LEAST “voting strategy” gaming where people vote for someone they hate in order to vote against someone they hate even more. This way, honest individuals can more fully express their opinion.

I’m glad you posted that VTD, and I want to add some things.

There’s nothing wrong with political affiliations. What’s illegal and extra constitutional is the two party SYSTEM. This isn’t some intangible party circuit, it is a rigid set of rules that dominate the so-called ‘democratic process’ to the extent that very little progress is made, reforms are almost non-existent and reelection is practically assured.

Now, if posters want to defend that, be my guest.

In addition to the thing above, let me add that the committee system is entirely unconstitutional and concocted to divvy up party power. How many times have you heard ‘locked up in commitee’ or that some com. chairman was blocking this or that?

And what about the seniority process within that com. process? Completely unconstitutional and arbitrary. I volunteered for a candidate that won re-election to congress after taking 12 years off. Yet despite having served 6 terms (IIRC) prior, was given freshman com. seats.

The inevitable response to these questions is, ‘well, nothing would get done otherwise.’ This just isn’t true.

There’s nothing wrong with political affiliations. What’s illegal and extra constitutional is the two party SYSTEM.

Absolutely.

I for one am in favor of partisanship; I want passionate, well-informed people in my government. But a two party system doesn’t even begin to express the totality of American opinion. There’s too much money, too many special interests, too much investment in the status quo.

A healthy multi-party system is what this country needs, one where the two currently entrenched parties have viable competitors to the left, right and center.

Jeremy,

This is way down from your post, but here goes.

You are mixing in a lot of different questions. In 2005 and 06, people would say to me, the Fed/PTB/govt won’t let the housing market crash because they can’t. I replied, there is nothing they can do to stop it from crashing.

In 2007 it went to , ‘well, they’ll prop it up or save it.’ Again I said they can’t and anything they do will only make the bust worse; even lower prices, due to more FBs and continued overbuilding.

Now, people say this is a bailout and that is a bailout. Guess what? The housing bubble has already popped. Past tense, game over. Now I am chronicling that process. But people get all excited that somehow the clock can be turned back, and it just can’t be done.

If there is some assistance to the housing market, why have we been at record levels of foreclosure for over a year? Record new and existing inventory for 2 years? Record prices declines across the entire country for who knows how long? Good grief, all I am saying is forget what’s on TV, believe your eyes! There is no bailout of the housing bubble because it’s impossible and always was. Wages have to support prices and there is only one way to reconcile that.

What I notice about the interest rate thing is it tries to ignore all the facts I’ve just spelled out. For the 1,000th time; is government wasting money? Hello! Is the FRS ripping us off? Why yes, for almost a century now. But this really has nothing to do with the housing bubble event itself and that’s why I consider it a side-show.

The media and certain others use terms like bailout because it gets people excited, distracted and tuned in. IMO, the real, huge financial event of our lifetimes is what is happening in housing markets all across this continent and the globe, not Washington DC.

I liken what’s going on in a financial vein, to being stateside during WW2, and trying to piece together censored news, as to what’s really going on…

It all becomes clear what happened, only after the war is over.

‘The media and certain others use terms like bailout because it gets people excited, distracted and tuned in.’

It’s true. Bail-out chatter certainly got ME excited, grouchy, distracted, and tuned in, until I realized, and that realization came from this blog, that there’s just not going to be a ‘bail-out’. Sure, dramatic posturing and flailing for a time…but this thing is too big, waaaaaay too big to fix.

Ben, with all due respect, the Bubble hasn’t “burst” yet. It is slowly deflating. Most people still cannot afford a house anywhere near where they work, their families, etc. We can only say the Bubble has “burst” when prudent savers with normal salaries can actually BUY a decent house near their jobs, family, and so on. We are a long way from that.

You keep saying that the Fed and the government “can’t bail this out.” Perhaps, but they can REALLY screw things up trying. We don’t even have to hit the extreme cases (true hyperinflation, etc.) for this to be the case. A lot of people here are rightly furious that now we’re all suffering higher living costs when we didn’t spend beyond our means as a way to bail out the crooks and idiots and to try to keep housing prices unaffordable.

It doesn’t really matter if “in the end” the Fed can’t keep the Bubble propped up if that “end” is 5 to 10 years from now before we hit affordable housing prices AND we all end up a lot poorer and/or less free in the meantime.

” agree 100%. Partisan politics is antithetical to Liberty and our Constitution. It keeps us divided in so many little and some not so little factions that our eyes are never really on the ball. Not to get up on a soap box but our founders warned us of this very thing.”

There was no provision in our constitution for political parties or our present 2 party system. It just grew & coalesced around differences between Washingtons two cabinet ministers , Jefferson and Hamiliton , over policy issues during Washingtons second term.
The two party system has provided some of the most raucious & rancorous events in American History, and is quite entertaining to read about as some of the greatest American statesmen & politicians of the early heroic period in American history and some of our greatest oratory were products of the two party system.

Admittedly the two party system and the constitutional system of checks and balances results in America getting bogged down in slow policy formulations and adjustments to rapidly changing events. Only in event of some shattering national crisis such as WWII and 911 do the american people instinctively rally around the flag, their commander in chief, and all parties unite, at least very briefly.

The alternative is a one-party system and the complete abolishment of politics, the system used by the communists and fascists in the 20th century, by no other than Hitler , Lenin, Stalin, Mao, franco, Mussolini and Hirohito.

Re: bailouts.

I agree that bailouts won’t do anything on the macro scale. House prices are/will go down. But there is still the micro, where someone who made a stupid decision gets help at the expense of others. Still frustrating for sure.

I also wanted to comment on the US political system (in follow up to Ben’s comment at 2008-04-11 07:46:18.) I’ve always thought the two party SYSTEM was an oddity. I’m not an expert on worldwide govts, but it does seem like most nations have more than two parties to chose from. Here in Canada, we have 5 (Liberal, Conservative, NDP, Block Quebecois and Green). Liberal and conservative are from the birth of the nation, but the others are relatively new. Is there no room for a new political party to grow from the grassroots in the US? Can a third party legally exist? I’ve heard of independents (like Ross Perot) running and not having any hope, but that’s not the same.

OK, 30-50 cents on the dollar in many markets isn’t a burst? Sacramento lots going back to farm prices? More foreclosures than sales in entire states?

You can get poorer if you want. In the Texas bust many, many people did well. I think I’ll not go your route.

The two party system is the least of our national problems.

The problem is that we are military and economic superpower with a highly uneducated electorate and a history of gross imperialism. We’re rich kids with guns. The current downturn, like the Great Depression, will probably hasten the maturation process…

In Humboldt county it is still 90 cents on the dollar…this in a state, like you noted with Sac, which is seeing the worst (along with Florida) of the housing crisis. I’m hopeful though, just annoyed at the relative slow pace of the crash here.

The one item we have plenty of, but have to be careful of whom we sell it to, and make sure we get paid, is…

Weaponry.

“For the 1,000th time; is government wasting money?”
Ok, here goes. The so-called gov’t waste is a drop in the bucket when compared to overall expenditures. Sure, we need to have the gov’t supervised, but the actual waste is not that big a deal. Now, if you want to discuss the gov’ts deficit spending and the interest rates that go with it, the liabilities that are looming and the inability of the govt to address these problems when they are solvable, the cost of the war paid by credit card, I’m game.

I just don’t believe that the Fed Gov’t wastes as much as people think. What they do is run the entire mess on credit. We need a balanced budget. Budget deficits and Iraq are my main complaints about the gov’t these days. I have other, secondary complaints, also.
Roidy

I wonder why the prices of real estate stay so High, there?

1. Bail-out won’t save housing bubble, but might save some players who deserve to fail.
2. 2 party system has some advantages, both parties have to play to the middle. If you throw out a far right candidate the Republican will have to veer right as will the democrat and the democrat may win even if the majority lean right. If you throw out a far left candidate the oposite happens. The two biggest problems with our political system are campaign contributions and gerrymandering. When political districts are drawn up to guarantee one party wins then that candidate is not beholden to the people. Very few people vote in primaries and most incumbents often run unopposed. Thus when the general election starts the candidate has been selected by a small # of people.

http://www.pbs.org/pov/pov2004/lastmanstanding/special_toobin.html

Another reason watching politics is like watching a fat man pop pimples on his ass. It’s an ugly process and largely a waste of time.

“You keep saying that the Fed and the government “can’t bail this out.” Perhaps, but they can REALLY screw things up trying.”

I think this is what most here are frustrated about. Not that a bailout will succeed but that even more taxpayer dollars will be spent in a failed attempt.

The funny (like a heart attack funny) thing is that poll after poll shows vast majority of taxpayers against providing help for FBs and yet all the politicos are proceeding as if they should be providing exactly that.

Hey Ben,

“There is no bailout of the housing bubble because it’s impossible and always was. Wages have to support prices and there is only one way to reconcile that.”

Not to nit pick, but strictly speaking there are two ways - I just don’t see the average clerk at Wal-e-World making 100k anytime soon, so from a practical standpoint, your statement certainly stands.

That leaves property prices tanking as our only resolution.

I just thought it was worth mentioning because there is a slim chance the PTB may try to inflate wages slightly - this would win someone political brownie points and placate the populace somewhat.

It just infuriates me that the rising cost of necessities like food and gas don’t count as inflation, but BY GOD if you manage to squeeze a few extra pennies from your slavedriver employer, then that’s evil inflation and BY GOD IT MUST BE STOPPED.

/rant

“Yesterday he promised to help “every deserving American family or homeowner.””

I would have no problem with that since the “deserving” only number about six.

I’ve been extremely busy and on Spring Break so I haven’t been keeping close track. But, really, that seems like a total reversal from what McCain was saying before we went on our camping trip. I mean, Holy Cats!

You don’t need a weatherman to know that politicians blow.

It would be naive to think that he can take an ivory tower approach to this issue while the other circus promises everything but a free McMansion and all the Cheetos they (voting sheeple) can eat. Get real.

Yes, the real question is “who is deserving?”. I find it disturbing that these idiot politicians want us to pay to have mortgage balances written down. It would probably be cheaper for the banks to do this on their own, rather than to go thru foreclosure. But it’s a decision the banks should make. Don’t make us pay for it.

Republican Sen. John McCain has erased Sen. Barack Obama’s 10-point advantage in a head-to-head matchup, leaving him essentially tied with both Democratic candidates in an Associated Press-Ipsos national poll released Thursday.

http://www.redstate.com/stories/elections/2008/the_mccain_poll_surge

Meh. When the circus finally annoints its clown, said clown will get a huge bump for awhile and will take the lead again.

Origin of Meh for anyone interested.

“Hungry Hungry Homer” (Season 12, Episode 15)

Homer: Kids… how would you… like to go to… Blocko Land??
Lisa/Bart: Meh.
Homer: But … the TV gave me the impression that …
Bart: We said “meh”.
Lisa: M-e-h. Meh.

“It would be naive to think that he can take an ivory tower approach to this issue while the other circus promises everything but a free McMansion and all the Cheetos they (voting sheeple) can eat. Get real.”

Bingo chick! I totally expected McFunkyFace to soften his tough love speak to woo the masses. I mean c’mon, it’s politics afterall.

Never thought I’d see the origin of “meh” on this blog. I use it at work, often to blank stares…

I was under the impression it was a Yiddish phrase, used along much the same lines as ‘whatever’…

Also sure I was hearing/using it a long time before Lisa Simpson.

The Republicans have been giving into the Dems on housing routinely…every time a bailout is proposed, they are initially against it but always seem to go along with it in the end. Doesn’t make any difference who ultimately gets elected–the bailout attempts will continue.

MEH

Etymology - Popularized by the television show “The Simpsons”.

Seems it was used in an earlier Simpson’s episode called “Homer’s Triple Bypass” which was the eleventh episode of The Simpsons’ fourth season and originally aired on December 17, 1992.

http://en.wiktionary.org/wiki/Meh

Stop over. I’m off today. We will start doing shots of my good buddy, Mr. Daniels. By noon we won’t care about any bailouts except the bailout of our livers.

I’d rather read about how every state sucks except NWPA Nah, the Amish have got it made. Sometimes they accept converts!

http://www.moneyfactory.gov/
No problem, tilt forward!

People keep saying “Who has 6 to 9 trillion bucks” but can’t they just “print” more money? Sure, it leads to hyperinflation, but unless that really affects the rich, who cares? Can they keep the masses zombified on cheap food, lousy TV and assorted drugs long enough to hyperinflate? I don’t know, but it makes you wonder…

Still, it seems to dangerous to think “that can’t happen here.” 10 years ago I would have said the same thing about much of the stupidity and scam-games that went on during the Housing Bubble, but that happened.

A friend e-mailed me a photo of a current Zimbabwe $10,000,000.00 banknote, that has an expiration date of June 30, 2008.

It’d buy you a chicken, little.

It would have bought you about one pound of chicken.

Still waiting

The only detractors i’ve ever noted, would be our home grown goebbels types, like hannity, et al…

Soros gives a lot of money to the Democrats. He’s evil I tell you evil.
Why he’s in favor of decriminalizing drug use. Satan!

Soro the boogeyman! The Great Oz behind the curtain leading to universal communism!! I’m skeeeerd!!!

Or you can just take 199 $50 1 oz Gold Eagles on the plane with you…

Or you can just take 199 $50 1 oz Gold Eagles on the plane with you…

If you get caught at security in the US they will likely be confiscated and you will be arrested.

One must only report having $10,000 or more, as per U.S. Customs…

Okay you go first…

I wouldn’t take 499 old $20 Gold Libs or Saints though…

Past the 20 pound limit you can take on board.

There is a law that makes it illegal to try and get around the currency reporting laws. Trying to skirt the reporting laws by carrying an amount specially so as to avoid being forced to report, say like $9,950, is actually breaking that law.

So take 193 coins instead, genius.

There are no $ limits in the law. Read the details Elliot Spitzer case. He moved much smaller amounts of money.

And I never said you would go to jail, just that you would be arrested and your money confiscated. I am sure that the first time you would be found innocent by a jury and your money returned to you. There would be no second time as you would never be allowed to fly again. You would probably also come out fine in your IRS audit.

If I were a publicly elected official, I guess i’d be more circumspect about taking a prostitute in my carry-on luggage.

Seems that I have heard more than one story along the lines of an immigrant returning home with $100K in a brief case and having it confiscated, never to be seen again for many years. So much for the presumption of innocence.

Yes.

Any thoughts on Visa? I have been eyeballing it to perhaps to buy for the long haul. I have been very cautious so far.

I’m amazed. How do you justify that - market psychology? IMO the fundamentals are all pointing way down. EPS on the S&P 500 will be negative soon, will they not?

Short to intermediate term. I use charts, cycles, some sentiment.

I use darts, dartboard, and a smoke and mirror detector.

$4 shorting the gap up on SKF. 113 is where it stopped last time too, might be a short term double top.

Only caught $3 due to an itchy trigger finger.

Missed the ride back up - I’m slacking today.

I’ve visited with two seperate Chrysler dealership owners in the past 30 days. Both indicate communication and decision making are much better now than under Daimler. That doesn’t mean they won’t fold or be sold, just means that dealers like the situation better now. If trucks and SUVs continue to struggle - which I think they will BTW, I don’t see how the domestics will turn a profit in the foreseeable future.

RE: Cerberus closes Chrysler down

Chrysler can’t even make a decent transmission or front end.

Maine Dept. of Fisheries and Wildlife made them buy back a fleet of 60 4×4 trucks because the POS were falling apart after 6 months of ownership.

GM, Toyota, and Honda will be the Big 3.

From CNBC: In Thursday’s Web Extra the traders reveal how to play alternative energy on extended tax credits. Also Tim Seymour reveals why you might want to borrow in Japan and put the money to work in Iceland!
pril 11 (Bloomberg) — Egill Johannsson sits in his Reykjavik office, glances at the snow-capped Esja Mountain across the bay and checks the value of the Icelandic krona every 15 minutes. He isn’t a currency trader; he’s a car dealer.

The krona has lost a fifth of its value against the euro this year, forcing Johannsson to raise his prices by as much as 12 percent
The currency’s plunge, which forced the central bank to raise its key interest rate to a record 15.5 percent yesterday.

I know we have some currency traders out here
Does the Krona have more to fall relative to the Yen and if so will it fall more than the interest rate being given?

sorry, meant to post at bottom

The carry trade is on the verge of being carried out by 6.

Just before Argentina’s currency collapsed in 2001-2002, they had very attractive interest rates, around 30%…

Danger Will Robinson!

This is the current ‘Carry Trade’

NZD/USD
AUD/USD
GBP/USD

Sharpe’s Ratio of 1.27

Basically sell the friggin dollar and buy pacific and England.

Lately, Australia looks more than a little shaky financially…

Oops? Prime & Lifted Capitol

New Zealand is joined at it’s hip, as Aussie banks own the lion’s share of it’s banking institutions…

I have some FXA and FXB. The pound have declined a little bit, I wonder will the Brits chase the US down or will they hold steady, to make London the next New York in terms of finance.

That’s just it, the Great Depression would have been over with in a MUCH shorter period of time had it not been for long arm of the great Nanny the Federal Government. Cycles occurred, plain and simple.

We have a government composed of people who have very short and selective memories and you know the old saw about forgetting history… Wonder what they’re going to call the new Smoot-Hawley Act?

“Only a virtuous people are capable of freedom. As nations become corrupt and vicious they have more need of masters.” ~B. Franklin

“The apocalyptic doomsday crowd has no idea of what they’re wishing for.”

Predicting != wishing

I am of the resolute opinion that the adiction to consumerism that is riding this country like an 800 pound gorilla with a VERY bad attitude is whats REALLY killing this country. Everything else is just a symptom. People need to realize this and I think the ONLY thing strong enough to do this is a total system crash. Hard reboot. Yes, another Great Depression is probably what its going to take. Yes, it’s going to be extremely painfull. Yes, people will die, families will be uprooted and destroyed, the center WILL NOT hold but this is absolutely necessary or EVERYTHING will be destroyed.

But then again, in the long run, we all die anyway right?

I recall flying over canyon country in SE Utah a few years ago with one of the early-day canyon pilots (kind of like bush pilots in Alaska). We flew over a little canyon dropping into the Green River and you could barely make out a little abandoned dirt road going down in there. This was out in the middle of the desert, probably 30 miles from the nearest town. He told me this is where his family had weathered out the GD, in a little rock house by the river with a garden. Eking out a subsistence living, hunting rabbits and eating vegetables they’d grown and drinking river water. It gave me a glimpse into what the GD was all about.

People are starting to realize that the thing that is killing this country is our addiction to consumerism that is riding us like an 800 pound gorilla having a VERY bad day. Everything else is just a symptom of this. We need to break the addiction. The only thing powerfull enough to do this is a complete crash. Another Great Depression. Hard reboot, don’t pass go, don’t collect 100K.

Dicking around with policies that put out brush fires only address the symptoms and delays the inevitable. Will it be painful? You bet. Its going to challenge us to the core. People are going to suffer, families will be uprooted and destroyed, many will likely die a premature and painful death but we have been living in a roman orgy of excess for so long now that we have to pass through this or EVERYTHING will be lost.

Like a clockwork orange, eh?

no, not for people in Netherlands but certainly for people from Poland: they can now legally work in Netherlands, undercut Dutch wages by a long shot (because they don’t pay the Dutch taxes and all the other stuff needed to support the Dutch topheavy wellfare state) and profit by using their money in Poland. Many of these people are buying homes in Poland with their first 1-2 years Dutch income, and of course this drives Polish home prices up.

In Netherlands the social security regulations are a bit tighter than in the eighties; people with higher education on unemployment benefits now have to accept any job in the country or loose their benefits. But people with lower education still have no incentive to move in order to protect their ‘income’. On the other side, many people who get some kind of benefits without working can legally move to cheaper countries like Spain or the Balkan, and enjoy the good life their with their income that is pretty high for local standards. Officially they still have to live in Netherlands, but are allowed to be on vacation for many months a year, so government cannot really check what they are doing.

I kind of wonder what the effects would be if the money spent in Iraq was used to buy solar panels instead.

SF Mech,
I know. People poo-poo alternative energy b/c it’s not as cost effective as nuclear and coal, but if we’re going to be spending billions on something with a bad return, I say make it alt-energy.

I agree.

For $20B, you could do a lot.

I would support a massive prize ($1B) for the first private group to create a (home solar system to take a home 100% off the grid–panels combined with hydrogen fuel cell for night use at less than $35k, OR ultra efficient engine, OR cheap fully electric car, etc.), or whatever difficult technical problem. In addition, I would add massive tax breaks to encourage people to buy the product. Call it a “pre-paid IPO with built in market”. In exchange for accepting the gift, the company needs to be required to manufacture the product only in the US.

Today, companies are incented to solve these kinds of products, but the exit is the same as other companies–raise money publicly by selling part of the company, and then try to build your market by convincing people that the technology works.

Might as well do a software startup…

There is already a green movement among investors. This prize would put massive dollars toward solving a tough and solvable problem that would serve as a catalyst to real economic growth.

Why the hell not? Sometimes the free market can use a little push in a socially beneficial direction…

Totally agree with your very good ideas, RW.

Also, agree with nhz, as the problem isn’t the permanent bailout of housing prices, but the destruction of our economy/country if the govt continues to throw good money after bad. That is my primary concern regarding the bailouts.

Good idea, now please get off the internet because it is the bastard child of the government and its agencies.

VTD: I don’t think government investment is a solution for everything, but I strongly disagree with you here. The ‘free market’ works well to find good solutions for many problems, but sometimes it does not work at all, e.g. because environmental damage or (future) depletion is not priced in. Give the free market all the power they want and they will quickly destroy the planet (and ask government from another one to profit from). Same story in healthcare, there is no commercial advantage in investigating cheap, non-patentable medical solutions so all we get is more of these extremely expensive me-too medicines (maybe we could agree there if you would throw out patent protection together with government regulation). I mention these issues because I have a lot of experience with them (both as a scientist and a business person), but there are many others. Also, the free market is sometimes extremely good at keeping a monopoly and shutting out viable alternatives for much longer than is ‘economically’ feasible.

I believe in free markets but with some industries (especially utilities) there is a need for gov’t intervention. Perfect example is Internet. It’s 10-30x faster in Japan and Korea than in the US because the baby bells didn’t want to invest in the infrastructure needed. Only Verizon had fiber to the house - AT&T uses the last loop of copper which can never support the multimedia internet we’ll see in 5-10 years.

“The government should not be investing in anything”

Ok. Please do refrain from using our airports, highways, etc. Also, don’t flush and you get no water either.

You mean the same free market that provided us with the current housing Bubble and all the assorted “affodability products” that went along with it.

Perfectly free markets are no more a “solution” than government meddling. The ONLY solution is to keep an eye on the crooks running the show - whomever they may be - and understand that if given enough power and time, they will become crooks.

Think of the poor shareholders of his liver.

Buy puts now, I say!!!

Food (grocery) typically isn’t taxed in many places, including King county. Fuel is taxed but I think the money is earmarked for roads/highway stuff (right?). That leaves out property and sales taxes as the only means of revenue.

For those that don’t know, the state of WA has no state income tax. I think that will change soon.

right about the time Oregon institutes a sales tax?

yeah, right.

HOW ABOUT THE 8,000 CITY OF SAN FRANCISCO EMPLOYEES MAKING MORE THAN $100,000 PER YEAR?

“Let’s soak the city’s residents!”

That’s one city staffperson making $100,000 a year for every 99 residents.

It’s ASININE.

ASININE.

Where has the leadership and moral compass gone in this country!

Where the hell is it?!?

That isn’t dirt son, that’s the smell of money!

Not when the price of feed is going through the roof for Cal dairy farmers. BK in the dairy industry in California this year. (Unless milk goes up another $10/hundo).

Or is you’re a terrorist?

My woods are bigger than your words…

RE: I can’t really think of anything else we can do…

Got a set of good bicycles and walking shoes?

2 summers ago while travelling in England, the MidLands had a gas scare with subsequent hoarding. The BBC was running ads negating rumors and asking for calm, because things were getting so out of had.

However, it was rather disconcerting to drive thru these small towns and see “NO GASOLINE” signs posted at every service station.

Fortunately for me I had a diesel powered rental car which got 50+ mpk and simply eventually drove out of the effected areas.

Jim Knustler, of Clusterfook Nation fame, a peak oil advocate, repeatedly asks, what will happens when the commuting hordes of the US are subject to the same circumstance?

The exact same thing they did in the last gas shock. Horde.
Dirty secret was that gas production and stocks never fell during the crunch it just got transfered to every 20 gallon tank in the country.

do not hoard.

it is unbecoming of those without spring gardens.

Are you flat for the weekend otherwise?

“A new way to invest in Kazakhstan? Claymore—the same firm that recently dropped the ax on 11 of its exchange-traded funds—has filed plans with the SEC to create a frontier-market ETF.

Could one say they Claymore mine’d 11 of their etf’s?

Toy alert

ETF Map - interactive

http://finviz.com/map.ashx?t=etf

Updates every few minutes and a lot of red (-3%)

you and that damn barclay “hard to get” currency peg ETF…

Currency pegs, hard to get currency…. that all goes back to Securitization of Capital outflows. With chick posting the street article ’bout rumors and commodity fund liquidations….where does the money go?

This is the second time I made a long side bid, and the number hit…..but I bot nothing…..Voz is the struggling little guy who is seeing the big picture….but locked out do to big money playas…If I only had some other peoples moneys…..

due’d, wheres my random grammaticalization ETF?

It gives you an idea of just how much a Million Dollars was, just 40 years ago…

It gives you an idea of just how much a Million Dollars was, just 40 years ago…

the moneys are coming home, its inflation…..its starting, BK Airlines, flights canceled.. big slowdown.

Homegrown American Earnings is the recovery story.