Bits Bucket For October 31, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Tin-foil hat time!!
Posted this over at Piggington’s and will repeat here a couple of times. We are in San Diego. The reference to the “coffin” post was to a post on Piggington. Seems they might be stockpiling relatively cheap, hermetically-sealed coffins in Georgia, IIRC.
We know a number of people in “emergency services” in California. Over the years, I’ve asked that they report any unusual trends, espeically as it might relate to war or some type of civil “event” in the U.S. In particular, would like to know about hazardous material drills, changes in crowd control, big shifts in standard operating procedures as it relates to how emergency service workers handle certain types of situations, etc. Recently, there are some interesting developments that might be worth sharing here:
1. They have been ramping up the “mass casualty incident” drills; having them maybe 3-5 times more often than usual this past year. These are the drills where they enact a scene from various accidents, often dealing with hazardous materials, containment, crowd control, patient triage, etc. In addition to having more of these, they seem to be focusing on contamination issues.
2. The “triage tags” have been changed, and now there is a default for “contaminated” that needs to be ripped off the tag if someone is NOT contaminated. IOW, the tags assume all patients are “contaminated” until they are cleared.
wiki on triage tags:
http://en.wikipedia.org/wiki/Triage_tag
3. They are having the largest-ever, statewide “earthquake” drill in November. This may be totally benign and truly related to earthquakes; then again, it may not. They emphasize what things will be like **after** the quake, and how emergency service workers will be stretched thin, and people will be “on their own”. They are stressing earthquake preparedness, including adequate supply of water, food, medical supplies, etc.
http://www.shakeout.org/
Just throwing this out there. Along with those coffins (previous thread with youtube in Georgia?) and all, it’s just “interesting”.
The story of the stockpiled coffins has been making the rounds of the intenet for months now. Actually the manufacturer of the FEMA ordered cheapo coffins is located in Georgia and the photos show his backlot.
FEMA has been piloried for years now about not being ready to deal with emergencies. What’s so wrong with them making a good effort now?
FEMA’s roots go back to the Cold War when the feds were concerned with a national nuke-out emergency. Prior to that time emergencies like earthquake, floods, and hurricanes were expected to be dealt with by the state governments, with Congress maybe appropriating some money for the affected states later on. Somehow after the Cold War was over FEMA morphed into a catch-all federal emergency agency.
Knock Knock
Who’s there?
Duck
Duck who?
Duck and Cover, a financial nuclear bomb is falling our way.
There is no such thing as a “cheap hermetically sealed coffin” when buying from a government contractor.
I thought they used body bags now a days any how.
Make sure those FEMA coffins have enough formaldehyde in em to aid the ‘hermetically sealable’.. and well as I write, aren’t the FEMA trailers actually coffins? You just live in them for a bit while you die.
‘You just live in them for a bit while you die.’
HAhahahahaah! Funny!
They wanted to make sure that people had an incentive to move into permanent housing, instead of squatting for years in a FEMA trailer.
MAJOR late-night overflight activity in this restricted airspace over the last four days. Moderate daytime fighter presence as well.
How ’bout you down there, Ouro?
Something’s afoot fer shure….
Saw a small Cessna fly over this morning.
Just randomness but the gf is on a business trip down in Virginia Beach and she said I would have loved it, there were so many fighter jets flying overhead. Have noticed nothing whatsoever up here in NYC though.
Indeed plenty of jets here in the right areas! Housing contracts generally have a page about crash zone AFAIK.
We had a lot of fighter jets overhead last weekend here in SE Houston. Maybe they were chasing the formerly enemy bombers also overhead. (”Wings over Houston” airshow with the Thunderbirds.)
was it a black cessna?
Maybe these triage tags are for the coming mortgage modicication meetings. The government has accepted an existing commercial off the shelf standard in a spirit of cost savings!
Monthly Suffolk county (Long Island) price from the NY State Association of Realtors.
September 2008: 376,000
September 2004: 375,000
Peak price in June, 2007: 430,000
And I don’t think the Wall Street job losses have made an impact yet.
I’m daring to hope for a return to 2001 nominal prices. 2001 is when we sold our last house.
Oct. 30 (Bloomberg) — Home prices in the Hamptons, the summer resort of Wall Street bankers and Hollywood celebrities, plunged a record 19 percent in the third quarter from a year earlier as stocks tumbled and the financial industry shed jobs. http://tinyurl.com/5c6×6x
What was the price back then?
Why settle for 2001? Have you seen the destruction to the New York economy? NPR just said that Bloomberg is going to end the 7% property tax decrease early. He will ask for 5% decreases for 2009 from all agencies. I’m already noticing more homeless and more beggars in the street. The rise the past month or two has been huge. Just think when services get cut. Nothing will get fixed when it’s broken.
Local governments are going to kill people with property taxes. They know the “it’s different here” crowd won’t sell because of those tax increases. The lemmings around here will take property tax increases to mean that their house is “special” and “different” and that the price is holding up. They will gladly buy the cement block that is being attached to their feet. People really are different here.
Virutally the same observations from Chicago. My personal gauge is a ped tunnel on my route to work. Over the years one or two sleepers was common and three showed up once and a while. On Tuesday morning’s ride I counted seven and it’s been around five each morning since Labor Day.
The mayor wants to cut services here too, and now the Aldermen are starting to grumble. But get this, yesterday it was reported that on any given day 1/3 of the laborers who load trash onto the garbage trucks calls in sick.
The big cities are in for big problems, and all things considered, it is valid to question if ever buying RE in one again is a good idea. Renters are in the catbird seat - all the advantages but they can leave at will.
I know the advantages of big city living, I’ve lived in one all my life - but when condos started costing more than SFH the hype far outshadowed the practicalities.
There is a huge gap in Chicago between the classes, but it is one that interestingly enough will probably allow Chicago to grow again in the future. Class type is definitely NOT a racial issue in Chitown; you have a reasonable balance across all income levels.
Property values make no sense to me. I’ve made offers, tons of offers, on 4-flats and 6-flats, only to be rebuffed and then have the same owners call 6 months later accepting my old price, with me now offering 30-40% less than before. One unit, a beautiful 4-flat in Ukrainian Village, has 4 tenants (all over 3 years, the same) who pay between $910 and $1080 a month. Gross income is around $3900. The asking price for the unit was over $800,000. I offered $440,000 cash. No go. They called back a month ago and said they’d accept $550k, but I told them $350k is my only offer. No go. They called this week and said they’d accept $480k, which is close to my acceptable point, but no thanks.
I’ve pitched about a dozen deals in the last month, all rebuffed as “too low” even though rents are nowhere near cash positive. Most of these landlords have owned the buildings for decades, or their parents did for longer than that. I’m amazed at the inane asking prices that people think are reasonable.
Commercial property asking prices are even more ridiculous. On a street with 3 out of 7 vacancies on the first floor, they are asking $40 triple net. Unbelievable. For a 1400 sq.ft. “retail” store, you’re talking about an overhead of close to $6000 per month including taxes, insurance, maintenance and upkeep. That means you need to cover a daily net expense, including payroll, of about $750. If you’re earning 40% margins, your daily sales have to exceed $2000 just to break even! And many stores I’ve talked to are barely breaking $1000 during the week and triple on the weekends, which means they’re going to fail. Throwing good money after bad is a bad, bad idea.
Right - O, besides - let the winter work its magic on the sellers.
YOU get yur azz 2 wurk dumbo or U will bee da nixt1 fired!….
There wont be a choice in the matter very soon….if they strike in NYC i will apply for the jobs..and so will thousands more!
————
But get this, yesterday it was reported that on any given day 1/3 of the laborers who load trash onto the garbage trucks calls in sick.
if they strike in NYC i will apply for the jobs..and so will thousands more!
I hope and pray it happens in Cali…It may be our first chance to move those services to the private sector…
“YOU get yur azz 2 wurk dumbo or U will bee da nixt1 fired!….”
Ahh, but you underestimate the chokehold the unions have here in Chicagoland.
Edge…
I caught some fellow on the radio yesterday, credentials unknown. He was saying that under Clinton, there was a proposal to tax people who had paid off their homes. It would have worked thusly: Say a man or gal paid off a home. It could be rented for $1,000 a month. Under the plan, the owner would be assessed $12,000 in “income,” which, assuming a 33 percent tax bracket, would create an extra $4,000 FIT obligation.
The point of the wag was that such a concept/scheme would be resurrected under O’Bama’s term.
I confess I never heard of such a plan.
I hope I don’t again!
Quite honestly, I cannot say that anything is unthinkable anymore. That said, were a such a thing to ever happen I would dump and run so fast it wouldn’t be funny.
Hearing things like that makes me so glad that everything I own - even the stuff I just kind of hang on to but don’t really need - would easily fit into a standard size van or pickup.
During my last crosstown move everything was moved from point A to point B - even dropping off the rental van - within 3 and half hours.
You shouldn’t trust things like that when you hear them on the radio. That’s especially true when it comes to anti-Obama statements. There are a tremendous number of lies about him circualting on the Internet. It’s no surprise that some of these would appear on talk radio.
Yuo should be very wary when you hear such stories on the radio, especially those regarding Obama. The internet is teeming with lies about him and it’s no surprise that some if these would surface on talk radio.
I would defeat such a tax by keeping a permanent $100 interest-only mortgage on my house.
I never heard of that either, unlike the plan to confiscate 10% from all 401(k)s and IRAs, which died a violent death.
Have you ever noticed that the Republicans are really adept at floating unsubstantiated rumors about Democrats like right before an election? And people continue to fall for it?
When your party is as big a disaster as the Republicans have been, you can expect them to say anything to hold onto power.
Not buying this bullshit.
The rise in homeless people has been steep in the last few months.
Last time was in late 2002-early 2003 but it was nowhere near as rapid as this time.
Every business and its sister is sending out coupons at a non-stop rate. There is much pain in the Emerald City.
Apparently not everyone is equally sharing the pain.
The number of people not sharing the pain is so small as to be insignificant.
Unless you buy the “trickle-down” theory which I don’t.
“Trickle Down economics” = “Tinkle On economics”
Trickle down economics is one of the biggest pieces of crock ever.
Just think about it. True economic value is composed of labor. But not just any labor, but specifically:
A. Labor that’s geared towards producing something that’s of value to all people - i.e. staples of basic food, housing, clothing, energy, etc.
B. Labor that’s most efficient - e.g. via mass production techniques. For example 10 persons producing 1,000 bushels of wheat is way better than 10 persons producing 500 bushels of wheat.
Trickle down theory assumes that all the money spent by executives and such will go towards A and B. While it may be true somewhat for B, it certainly isn’t for A. When an executive buys a $10 million yacht - there’s $10 million dollars that is mostly wasted. Yes it is $10 million that was spent paying the salaries of many laborers - however that work was wasted for the most part - save for a few good times by the executive and his friends.
Those laborers could instead have made the same $10 million producing food, energy, etc. that would have been a lot more useful to society as a whole. If the executives had not received an extra $10 million bonus - this is exactly what would have happened, because their company would have spent $10 million through other means - e.g. increasing the workers’ salaries, etc. Those workers salaries would have gone towards buying more staple-ish items rather than wasteful yachts.
Don’t get me wrong - I’m not proposing that it’s actually wrong for executives to have yachts and other luxuries etc. - certainly many executives deserve them (obviously not many as well), and IMO the incentive to acquire such luxuries (be it yachts for executives, or big-screen TVs for workers) does indeed benefit the economy by encouraging more production. However don’t pretend that the use of the money for yachts has the same direct benefit to the economy as would using the money for other non-luxury things, via trickle-down theory. It doesn’t. Luxury items, pretty much by definition, are wasteful use of labor resources.
Your point is only relevant if you totally ignore the fact that our basic needs are being met with very low (and increasingly lower) labor requirements. With the advent of the combine tractor, society needed (and will increasingly need) luxury goods. Or the economy will basically halt. Pretty much why everyone is freaking about consumer confidence at the moment. That reduces spending on “luxury goods”
Totally disagree with us “needing” luxury goods. By definition a luxury good is something you don’t need.
Automation, such as combine tractors etc., have indeed reduced the need for a true labor force, and allowed us to have more luxury items than we otherwise would have - but there’s a gray line that defines what “luxury” item is. In reality a TV is mostly a luxury item, and most cars are, etc.
The need for jobs is still out there - it’s just transitioning from a pure-labor workforce to skilled labor - e.g. engineering, construction, management, factory, etc. These allow us to have things that are borderline necessity/luxury like TVs, iPods, nice cars, etc.
I’m not proposing any change to capitalistic methods or anything like that (at least not making that point right now), just pointing out why trickle down theory is flawed. It proposes that increased salaries/bonuses/etc. to executives does not negatively impact the lower classes, however I’m saying that that is wrong - it does negatively impact the lower classes - at least in a direct sense.
Trickle down theory also makes the false assumption that the rich will pass along enough money through salaries, etc. to keep the common-folk gainfully employed. This only works when the people calling the shots are not soulless sociopaths who can never have enough money, power, etc. Once one factors that in, handing out extra money to the people who create the economic problems in their quest for “more, More, MORE!!!” clearly makes no sense at all.
Many people don’t remember that when Reagan’s folks were originally talking about cutting taxes, they were talking about cutting marginal tax rates on the related to the purchase of business equipment. The idea being that lower taxes on business equipment = more equipment = business expansion = greater employment.
That was quickly morphed into general tax reductions, primarily at the highest earnings. Now the concept is that if the “rich” have more money to invest, there will be more business/employment etc…
The real problem in that is you can invest for gain in ways that have zero impact on employment or improved wages. You can simply build factories in China. You can just drive up asset prices. Buy houses for far more than they are worth. In fact, cutting taxes on the rich can easily lead to reductions in employment and wages for American workers, if done incorrectly.
Well since people are looking for a hand up, not a hand out, they should demand some standardized golden showers. Those bonuses are paid for by newly counterfeited money.
Economic production and supply is way the hell up. All those necessities should be cheaper than ever. Houses, cars, education, health care. Yet the exact opposite phenomenon has occurred.
There is zero scarcity in paper fiat money. It’s only artificially limited by not pressing control + c. If you xerox ten million dollars you can buy all kinds of luxury goods shit. Higher prices will and do trickle down piss on everybody else who gets the newly circulating money at a later discrete time. But no. We might as well all just litter dollar confetti out the windows as we drive down the highways. When my half full Wendy’s biggie sized coke lands on your windshield, remember, I’m doing you a favor. Enjoy your wind fall.
But should people just stop working, stop producing, after they’ve got all the basic necessities covered? Is there a finite amount of work to be done such that every yacht produced is some poor saps zero sum loss of basics? Division of labor free trade is always win-win. That’s the only reason it occurs. You can deal with a rich guy who wants a yacht and a poor guy who wants food. Both sides will go get what the other side want and trade.
Which is more obscene? A CEO earning a ten million dollar bonus? Or the entire existence and all forms of the entertainment industry? Comedians spitting on free market capitalism is some funny shit! Not to mention, “athletes” now earning hundreds of millions of dollars. Yet people can comprehend sitting in a stadium of 60,000 people why athletes make a lot of money. What do CEOs do? Except sit behind a desk and get blown by their secretaries.
Maybe we should ban all health care services for people over age 60. Just let ‘em die. And execute them if they are caught trying to buy some health care services on the black market. Because those purchases could never be win-win division of labor free trade, and are just wasting society’s scarce resources on old people that are going to be dead soon anyway. Talk about pissing money down a drain! It’s the only sensible Keynesian Solution.
Note: This post has been rated ‘S’ for Sarcastic content.
Strangely enough, Art laffer, the senior voodoo priest of the fundamentally flawed concept of supply side was on Bill Maher last friday. He was backpedalling furiously from his 27 year long mantra that supply side somehow works. I won’t be happy until economic terrorists like Laffer, Kudlow, Fund, Moore, Kneale and Rutledge are doing prison time. These thieves are our modern day Geobbels.
“These allow us to have things that are borderline necessity/luxury like TVs, iPods, nice cars, etc.”
Funny! I think the way you phrased that is re-enforcing my point.
(Yachts are hardly the keystone of our economy.)
The wealth gap is a separate issue whose cause can be debated. My crazy layman theory is that it’s a result of mutual funds. I think that the massive amount of capital in the system from 401k’s, Roths, etc. made stock value more important than company value. This lead to short term myopia in my opinion, including boards OK’ing huge pay-outs so long as quarterly reports drive stock prices up. Mutual-type funds also seem to reduce accountability of board members to stock holders.
Do you know which companies you own pieces of from your 401k?
‘Higher prices will and do trickle down piss on everybody else who gets the newly circulating money at a later discrete time. But no. We might as well all just litter dollar confetti out the windows as we drive down the highways. When my half full Wendy’s biggie sized coke lands on your windshield, remember, I’m doing you a favor.’
I don’t think I’ve seen your name here until recently, Crook County, but I hope you keep sharing your thoughts. I do admire a firmly and colorfully articulated position.
“The wealth gap is a separate issue whose cause can be debated. My crazy layman theory is that it’s a result of mutual funds. I think that the massive amount of capital in the system from 401k’s, Roths, etc. made stock value more important than company value. This lead to short term myopia in my opinion, including boards OK’ing huge pay-outs so long as quarterly reports drive stock prices up. Mutual-type funds also seem to reduce accountability of board members to stock holders.
Do you know which companies you own pieces of from your 401k?”
Actually I do (and it’s very few - most is in MM).
You raise a good question about the effects of stock price visibility affecting long-term vs. short-term investment. I *think* your point is that investment in various companies through 401k’s and such are contributing to short-term investment strategies. I wouldn’t agree with that though - because our retirement savings have always been invested in such companies. What has changed in recent years has been the visibility and control of such investments via 401k and IRAs. In years past there was very little visibility and control, because the bulk of retirement savings was in pension plans. Now we have 401k and IRAs that give more control to the end user - and they like to see more immediate gains, without so much of a long-term strategy.
Just a theory anyhow. Normally I’m very much a free-market person, but I think that only really works when we have people who are committed to long-term investments, and not so much driven by short-term greed, as we have in the last few years.
Pussy,
There’s been a distinctly AnnScottian bent to your posts of late. You might want to tone it down a bit so you don’t come off sounding like a spiteful old queen. (Pun intended. God spare us the service dog visuals….)
Thanks,
a
Hey, the service dog visual was most colorful even if I say so myself.
“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
Lincoln’s First Annual Message to Congress, December 3, 1861.
ummm.. Is this Lincoln the same guy the supply side economic terrorists on Wall/K street hold in such high regard?
No offense Mr. Icon, but labor and capital have less than a 1 week float, or I quit
Hello sweetie.
Emerald City = Seattle, correct?
I live in the midwest, so I am trying to follow the thread…
You’ve never read the Wizard of Oz?
It was a metaphor for the bankers in New York and their “green money”.
Jeebus. Talk about uneducated.
There is some huge church along the DC beltway. You come around the corner and go under an overpass and there is what looks like Oz. A while ago Graffiti artists painted “There’s no place like home” along the overpass. Pretty humorous. The homeless should all be in churches, that’s what the faith based initiative welfare is for.
Actually, the people who live there (which included me about 18 years ago) commonly refer to Seattle as the Emerald City. I am also familiar with the metaphorical reference from Mr. Baum’s classic, but I don’t think it is fair to suggest one is uneducated to ask for clarification.
I’m just sayin’.
FPSS,
Sorry if my education doesn’t include a PhD in popular culture. Apparently pop culture (along with arrogance) is a leading indicator for wisdom in the emerald city.
No wonder we’re all fooked…
BINDY-
I only vaguely remember that reference about the emerald city in the wizard of oz. That it refers to NYC is one of many pop culture facts that sort of goes in one ear and out the other. So I’m with you.
Schmendrick,
Thanks for the clarification. Apparently FPSS is not very well-traveled. He probably considers a trip to Hackensack as a “road trip”…
‘Actually, the people who live there (which included me about 18 years ago) commonly refer to Seattle as the Emerald City.’
Yep. Most ever’body here calls Seattle the ‘Emerald City’. Or else a few more colorful terms, unfit to print in a blog read by gently reared ladies.
The world revolves around NYC, or so it’s citizenry thinks…
I have always known Seattle as the Emerald City
Thanks,
The one time I was in Seattle, I flipped on the evening news and there were immediate references to the “Emerald City”. The reference is quite obvious — I never saw a city that was so vibrantly green due to the rainfall and temperate weather.
I’ve been to NYC several times, and lived within broadcast range of NYC radio and TV stations for a couple of years. I never heard anyone refer to it as the “Emerald City.” Big Apple, yes. Emerald City, no.
One last comment on New York City:
Instead of calling it “Emerald City,” we should rename it “Cubic Zirconium City.” For obvious reasons.
It looks great from a distance. But take out the magnifying glass and peer inside, and you see it’s not real…
I always thought Boston was the Hub of the Universe…
You’re not uneducated, BINDY. In fact, I would guess that most people think of Seattle before a child’s movie when they hear The Emerald City. The world doesn’t revolve around NYC and it’s arrogant citizens as much as some posters would like to believe it does.
Wow,
WIth no trolls, we really do eat our own
I couldn’t agree more with your bantering.
In the Emerald City they call the “Inland Empire” by the term “Eastern Washington”. Having grown up in the Eastern part of Washington state, when I got to Seattle I thought they were talking about Washington D.C. all the time.
The natives made slightly more sense after I figured out their lingo.
The funny thing was that those Seattleites didn’t even know they were collectively “The Coast”. They thought that was someplace West of them. 
Also,
I saw a piece on CBS Evening News a week or two ago, about Tent Cities being erected in some cities in the west. They had some film footage from Reno, NV I think it was. The city had set up a large plot of land, put up port-a-potties, and added night-time security detail for safety. Looked like there were HUNDREDS of tents. They interviewed a couple that were sharing a tent. They’d been there 14 months. Both had lost jobs, and were evicted/foreclosed out of their house. The guy was getting dressed up to go for a job interview at a warehouse, and hoping like hell he got it.
It was pretty sad.
Are there any other areas where they’ve implemented these “tent cities”? I guess I’m just curious about how bad this has gotten…
Let’s see… CBS, story about tent cities, election less than a week away.
Nah, just coincidence.
PoTENTkin Village?
Sheila Bair wants to guarantee HELOCs. The insanity gets more insane. These tent dwellers should have held on a little longer.
http://tinyurl.com/68y85y
Now they are talking about the possibility that people will stop paying en masse to qualify for bailouts. Do you think? Bair is a retard.
BIG tent city in /near Ontario CA.
HUGE.
Media probably just re-exposed it because it keeps growing…
“Now they are talking about the possibility that people will stop paying en masse to qualify for bailouts. Do you think? Bair is a retard.”
yep retarded
Even on line businesses are sending out offers all the time now.
I need a new guitar case. Last night I put one in an on-line cart system because it said there was a 10% discount, but I wasn’t sure it applied to this case. I switched windows and in coming back I must have hit enter and it confirmed the order. Oops, I think.
I call the place immediately, get a live person and explain that I’m an idiot (I find being honest helps in these situations). I explain I’m not comitted to the case yet and I accidentally hit confirm. When asked why not, I explain I’m still price checking and wanted to see if the discount applied.
Operator turns around, offers 15% off and offers to take off the shipping charge. Nothing great, so I still decline, but wow.
They are sending out coupons non-stop. Marginal businesses whom I might’ve given $10 of business five years ago are sending out letters and coupons.
The whole thing is demented.
Incidentally, to whover is keeping score, this is powerfully deflationary. Stuff like this simply doesn’t happen in inflationary times when people are desperately scrambling to spend their money before it gets devalued. You don’t send out coupons then.
We still have tons of retail inventory sitting all over the country gathering dust, so it looks like plenty, but those cargo-cult shipping container ships just might not be coming anymore like they used to…
We are in the ‘phony war’ part of this economic standoff.
I like to buy stuff at sierra trading post dot com as they have some great deals on high end clothing/outerware and lots of hiking/camping stuff. Its stuff I love, but would never pay full, or even half price for. Lately, I have been getting 20-30% off plus free shipping on $100.00 orders. I have been getting some ridiculously great deals lately. Last week I picked up a $275 Marmot gore-tex shell for $80.00. I don’t know if they are hurting or not, but I like deflation right now.
Right.
Everything’s a pat explanation for your pet thesis. You’re the cargo-cultist. Waiting for the “collapse of society” and the “second coming of the gold standard”.
Any day now. As long as “they” don’t manipulate it. OK, we’ll hold our breath over there with the Realtors waiting for the Second Housing Bubble.
FPSS, you’re falling into the static analysis trap. Govt is moving, and will continue to move, heaven and earth to prevent a deflationary trend from taking hold. Reducing the fed funds rate to 1% is an example. Remember the last time it stayed at that rate?
realestateskeptic,
When you own around 6 backpacks & 5 sleeping bags, 4 hammocks, and assorted tents and bivy sacks like I do, you realize you don’t need anymore gear…
But yes, the discounts are rather amazing on outdoor stuff on the internet nowadays.
I like R.E.I. (return every item) for their liberal return policy, but when you can buy the same item on the internet for 40% off, with no sales tax and no shipping fees, it’s a no-brainer.
Really?!? In that case, they are failing spectacularly.
See the steep home price declines? Is that imaginary?
Dude, they didn’t even get the freakin’ Nasdaq back to 5000. What makes you think they can stop this deflation?
Gimme a break.
Finance is like sex. Timing is everything.
Lad,
I am really cheap so I check out REI and then scour Campmor or Sierra Trading at the end of the season to see what I can get. I spend a lot of time outdoors at sport events, at my “cabin in the tundra” and hunting, and good boots and a gore-tex rain coat are a few areas where I will splurge a bit. I am getting too old to have wet/cold feet and to get soaked in a downpour. You can always use more gear
FPSS, you’re falling into the static analysis trap. Govt is moving, and will continue to move, heaven and earth to prevent a deflationary trend from taking hold. Reducing the fed funds rate to 1% is an example. Remember the last time it stayed at that rate?
can anyone enlighten me about why deflation is bad for government?
Deflation is bad for anyone who has debt. You are paying back in currency that is “worth” more.
Governments are always indebted. Ever seen a government surplus? I didn’t think so.
Hence governments like to inflate to basically renege on their debts.
But sometimes the “shadow banking” system become so large that they can’t control it any more.
BWAHAHHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHHHHHHHHH!!!
max4me,
deflation is bad for the government in the same way it is “bad” for everyone who has debt (or is “naked” short dollars like the banks ). More importantly the banks will fail if we get deflation that isn’t countered by government inflation.
Lets say all of the debt is allowed to collapse, the potential tax revenue for the government collapses with it, yet the government debt does not collapse. Deficits will rise until the interest due on the national debt is beyond the ability to tax and you enter geometric growth of the debt.
Further more, you see the governments contention that the solution is to “spend, spend, spend” so you know what will happen.
No matter what way you slice it, a huge amount of real capital has been squandered on consumption and every move the government makes squanders even more. The resulting poverty will be the same regardless of inflation/deflation.
VT FPSS
thx, I liked both your posts. I learned something.
“Lets say all of the debt is allowed to collapse, the potential tax revenue for the government collapses with it, yet the government debt does not collapse. Deficits will rise until the interest due on the national debt is beyond the ability to tax and you enter geometric growth of the debt.”
IMO if we haven’t already gotten to that point - we will soon.
I look for the national debt to become a huge issue right about the middle of next year - perhaps beyond “the economy” even - the same way “the economy” has become a bigger issue than “the subprime/housing problem” these last few months.
Mid-2009 is when:
- 2008 tax revenues from April will come in very low, due to the very low amount of 2008 capital gains taxes, and huge amount of tax writeoffs.
- 2009 revenue expectations will be lowered due to high unemployment, and continued cap gains writedowns.
- Expenditures due to bailout bills continue to mount way beyond what most people expected.
Last time we had a government surplus…?
I think it was Cheese, wasn’t it?
Warehouses full of cheese.
Now I recall, when people said, “he must have a lot of cheese?” Or did that mean something else?
Finance is like sex. Timing is everything.
What a shock. Pussycat is an expert at sex, too.
Excuse me while I genuflect.
See the steep home price declines? Is that imaginary?
Dude, they didn’t even get the freakin’ Nasdaq back to 5000. What makes you think they can stop this deflation?
Asset price deflation (a.k.a. bear markets) and consumer price deflation are two different things. So just because houses and stocks are getting cheaper it doesn’t mean your cost of living is getting cheaper. People throw the term ‘deflation” around as though everything gets cheaper at the same time. It doesn’t.
The inflationary 70’s saw one of the worst bear markets in stocks ever. The US has also seen numerous housing busts - and of course the current national bust - during times of continuing consumer price inflation.
The news media only discuss the national debt when a republican president is in command. They would never discuss it should democrats hold uncontested control of both the budget passing congress and the budget asking and signing president.
Let’s look at local governments revenue options:
-Sales tax increase: Too easy to avoid by shopping elsewhere/online.
-Income tax increase: Possible, but a political price will be paid at the next election.
-User fees (rental car and hotel fees, etc): Some of these are ridiculous already. They will lean on these until users scream for mercy, or they take their business /convention business elsewhere.
-Property Taxes: The big, fat, dumb target. The only way to avoid it is to sell your property.
I’m also convinced that local governments will be increasing property taxes. It’s easier to send a bill to some faceless property owner, than it is to tell the civil servants face to face that there is going to be some pain.
Here’s a novel idea-
Considering 50% of all business incorporated in the US pay ZERO tax, it’s about time they pay back what they’ve absconded with.
A lot of businesses exist only as liability buffers and the income passes through to the individual(s). Those businesses wouldn’t pay taxes, but that doesn’t mean no taxes are paid on that income.
I’m more of the opinion that it is WAY too easy to sell stuff here, but use profits from those sales to invest in Chinese/overseas factories “because it is more profitable”. A big reason why they are more profitable is because they don’t have to deal with the environmental/safety/regulatory envorinment imposed on US manufacturers since approx. 1970.
I’m all for “free markets”. But the reality is that governments of all stripes are using monetary and fiscal policy to push their economic agendas.
Florida has a funky property tax system. By law, property tax rates automatically adjust to collect the exact same amount as was collected the previous year.
This was put into the constitution to slow the growth of local governments when tax revenues jumped every year because of increasing property values. Millage rates would automatically “roll back”. This would force local governments to vote to increase the millage rate to get the higher revenue.
But now we have the opposite problem with falling property taxes. Millage rates automatically “roll forward” (increase) to collect the same property tax revenues from the previous year. Now, commissioners don’t have to vote for an increase, it just happens by law. Something nobody thought would ever happen.
“I’m also convinced that local governments will be increasing property taxes. ”
Will be? Already are, in many places. Where I live our rates just went from .095% to .115%, supposedly to offset increasing property values. Funny though the rates didn’t go down so much when property values were increasing.
I think it is odd that peak price on LI hit in 6/2007 but it does account for the level of denial this late in the game here in the northeast. I didn’t believe there would be this level of asynchronicity during the bust phase.
Arkansas is still increasing in price according to my numbers (through either august or september, i don’t recall exactly and its in a spreadsheet). The increases are getting smaller but they are there in any case.
Hamptonites may soon be trading in their Hummers for Hyundai’s. From Crain’s NY:
The average price of a house (in the Hamptons) plunged 23% to $1.5 million and the number of sales dropped 29% to 257 in the third quarter from the year-ago period, a report says.
Home prices in the tony beach enclave of the Hamptons have been hit even harder by the sinking economy and credit crisis than their counterparts in New York City.
That’s because the credit crisis socked a double-whammy on the Hamptons, Mr. Miller said. First, the crisis means it is much harder for potential buyers to get mortgages. And second, many of the homes in the largely weekend resort were bought by Wall Street executives, who are now losing their jobs because of the crunch. The properties that were once bragging rights have become unnecessary luxuries.
http://tinyurl.com/5g3ty7
While I don’t agree with some of what is in the article, and I am a Baby Boomer, I found it an interesting summation.
http://seekingalpha.com/article/103202-the-shallowest-generation
What “essentials” do the Boomers invest all this borrowed money in every year? The U.S. Census bureau provides the answers:
$200 billion on furniture, appliances ($1,900 per household annually)
$400 billion on vehicle purchases ($3,800 per household annually)
$425 billion at restaurants ($4,000 per household annually)
$9 billion at Starbucks (SBUX) ($85 per household annually)
$250 billion on clothing ($2,400 per household annually)
$100 billion on electronics ($950 per household annually)
$60 billion on lottery tickets ($600 per household annually)
$100 billion at gambling casinos ($950 per household annually)
$60 billion on alcohol ($600 per household annually)
$40 billion on smoking ($400 per household annually)
$32 billion on spectator sports ($300 per household annually)
$150 billion on entertainment ($1,400 per household annually)
$100 billion on education ($950 per household annually)
$300 billion to charity ($2,900 per household annually)
http://seekingalpha.com/article/103202-the-shallowest-generation
Likewise I don’t agree with the article in and of itself, the data is interesting, but some of it is misleading. Eating out as a percentage of income, for example, should be way up for the most part. Looking at Japan, what’s their percentage? While not the entirely same reasoning, I can tell you a two income family, when both get home at 7 pm or so, aren’t really in the mood to wait an hour for the food to cook, eat for half an hour, then spend a half hour cleaning up so they can both goto bed and get up 5 hours later to head back to work. Two full-time employed people will cause this. Commutes will cause this. Smaller homes cause this… and that is not an issue, unlike the Japanese, as many of the newer homes are freaking monstrous. The vehicle cost? $3.8k annually per household? Even at only 1 car per household (i presume the number is above 1.5) and say a 7 year lifespan per auto, this doesn’t strike me as an excessive number overall…. though I bet if you broke that # apart by decile you’d see bloating in the middle while the tails are more balanced. Or heck, do a distribution of the middle deciles themselves and THOSE would have REALLY fat tails I bet….
the lottery tickets and gambling are downright disturbing but the alcohol and smoking I bet are actually somewhat low compared to the rest of the world. With an average household income of what is it, 48K in this country? 2.9k to charity I don’t have a problem with. I bet if the involuntary charity our government runs were curtailed, you might even get that number up a tad (more money in our own hands to distribute).
When I was a kid, my family never went out to eat in a restaurant. Why would we? We had a kitchen.
We didn’t have a cell phone bill and certainly not several of these.
We didn’t have an Internet bill.
We didn’t have a cable TV bill.
We only had one TV. We all gathered around that TV.
We actually knew each other.
Luxury!
When I was a boy, we didn’t even have TV. We had a flat rock that we would draw pictures on with burnt sticks.
we had rocks when I was a kid, but no fires to burn sticks. The winters were very very long. language also hadn’t developed yet, so we just sort of grunted at each other most of the time.
Yay!
Chalk - we loved chalk!
Jumpropes - hours of fun!
Hullahoops contests - I win!
Jacks, now there’s real entertainment!
Kickball.
Treeclimbing.
Snow sledding, on a trashcan lid.
The susy bake oven we never had a chance to experience - thanks little bro for inserting a deck of cards to bake - one day I’ll get ya for that!
And, wait for it
A. Rented. House.
Yay!
Leigh
LOL!
Leigh,
Check and double check on everything on your list…
I was just a little too young for marbles, which went away in the early 60’s.
‘Luxury!
When I was a boy, we didn’t even have TV. We had a flat rock that we would draw pictures on with burnt sticks.’
No way! We had the same set, laughing boy! Awesome! I wonder if we got the same channels? We may have had the upscale version, however, because WE had a remote.
It was a piece of gravel.
When I was young, we had to walk uphill to the school both ways. And cross a valley full of snow. And wrestle eight bears.
These youngsters, they have it so easy. We should make them wrestle lions and jump over hoops each way to the school.
Oh, and there are declining standards for everything including mortgage loans. Oh wait, that was the problem!
“Chalk - we loved chalk!
Jumpropes - hours of fun!
Hullahoops contests - I win!
Jacks, now there’s real entertainment!
Kickball.
Treeclimbing.
Snow sledding, on a trashcan lid.”
Leigh, I can proudly say I’ve got every single one of those games for my X-Box.
Leigh, I can proudly say I’ve got every single one of those games for my X-Box.
Big belly laugh, (little belly)
Leigh
“When I was a kid, my family never went out to eat in a restaurant. Why would we? We had a kitchen.”
Not only that, I’ll bet your kitchen - like ours - was outfitted with a modest yet ample array of basic tableware, pots and pans.
Now, the urban elites outfit their kitchens with everything from esspresso makers to bread machines - and yet the wankers still packed into SBUX and the restaurants.
I say “packed” because here in Chicago our full service restuarants had their worst year since 1980. We’ve done our part - our dining out boycott is a year and half old this fall.
We still do carry out from time to time because there’s no tipping involved. I have a h*rd on against tipping and the lame azz excuses used to rationalize that bogus practice.
I need to employ a drinking out boycott–then I will really save some money.
We didn’t have several desktop PC’s and laptops. Nor did we have subscriptions to Norton or McAfee.
We didn’t have health clubs.
We didn’t spend hundreds of dollars on XBox 360. We had Etch a Sketch.
And many families’ kids didn’t go to college. another not so insignificant expense.
Today’s world seems to be far more outfitted with things designed to separate you from your money.
A year ago a friend told me of his 13 year old granddaughter’s first monthly cell phone bill coming in @ $261…
That was the monthly payment on a nice new car, when I was a newly licensed unleashed hellion on wheels, way back when.
These kids have it so easy nowadays…..
Us Okies didn’t have fancy stuff like toilet paper, we used corn cobs. Baloney sandwiches on white bread for lunch and dinner. Maple syrup and peanut butter on white bread for breakfast. Walked ten miles to school, uphill, going and coming. When we weren’t being scalped by Native American war parties. Seven days a week…..
All this carping about “wasteful spending” is getting a little old…….especially bitching about PC and internet access on an online blog.
I wouldn’t spend ten cents on what some folks consider neccesities. But that’s okay, because the last time I checked, we were allowed to do that in this country.
The problems with this only started when people started doing too much of this with borrowed money
My first car was a 1960 Chevy. It was worth $100.
Color TV hadn’t been invented. Only some had B/W. We watched the radio.
Phones weighed more than a baseball bat.
When my grandmother was born, there were no cars. She never figured she needed one her whole life.
Simple is quite doable, it’s the transition that hurts.
My great-grandmother died at the age of 103 in 1989. She told me how she could still remember how much fun they had when they moved from Kentucky to Illinois in the 1890’s, in a covered wagon.
I bought my first car in 1992 with just under $10k in cash. It was a new honda civic and got 45 miles to the gallon. I saw an ad today touting the Honda Fit w/ 33 mpg.
‘Now, the urban elites outfit their kitchens with everything from esspresso makers to bread machines - and yet the wankers still packed into SBUX and the restaurants.’
That makes me SO annoyed. I must modestly mention that
I am a great cook, and my favorite pan is a 10 inch cast iron skillet I got from an estate sale out of the free box. It was the (quite old) lady’s grandma’s skillet and obviously was used for a lonnnng time. So clearly it is a super well-trained pan. I mean, this thing’ll cook anything perfectly. I bet I could chuck a fresh dog poop, a handful of leaves and a couple marbles in there and it’d come out tasting like chicken kiev, is how experienced and skilled this pan is. One of these days it’s gonna start going to the fridge, selecting the ingredients, cooking them, tying a bib around my neck and handing me a fork, is how great a pan this is. I won’t even have to get off the chair, I can just sit there drooling! Man, I can’t wait.
I’d marry this skillet, is how much I love it. If it would have me, that is.
Chocolate-covered dog turds. You can make just about anything taste decent, if you cover it in chocolate.
Ok, half of the answers were sarcastic but unless I’m a Luddite or something, I see no reason NOT to embrace technology or consumption, presuming it is done responsibility.
Each of us can give our little report of “Oh my goodness, I lived so long ago before we had this stuff and we lived just fine without it!” Yes, but why would I choose to live without say an Xbox 360 if I enjoy it? I think they’re only $200 now. Presuming you’re not SHOWERING crap and being wasteful, having that and having it provide say 1/5th of total entertainment per year is a bargain. (Addendum: presume also it doesn’t cause harm such as turn you into a couch potato, etc)
Presume you rent movies and bought a DVD player, etc, same thing? Yes, I can play outside for free, presuming the weather is cooperative. Yes, I could sit around and talk to my friends and family, which I do and will do. Heck, I’ll kick it up a notch and watch movies WITH my friends and family, holy crap! But seriously?
And many of you are responding as if the nuclear family as then still existed in earnest today. It exists, but its not universal.
Many of these answers just seem way too serious and curmudgeonly for my tastes.
Ok, well, rant off, I’m going out to the barn to churn butter and then will retire to my shack to create artwork with my piece of slate and burnt stick…
“…..new Honda Civic got 45 miles per gallon…..”
Lots of government mandates since 1992, like:
-OBD II in 1996
-NHTSA mandates for airbags, front/rear crush zones and side impact protection……added between 500/1000 pound of weight, depending on the vehicle.
-EPA changed their testing method for calculating city/highway mileage this year. More reflective of actual mileage that people will see.
EPA doesn’t actually test for “mileage”. The number appeared because some brainiac at the EPA figured out that they could use the numbers generated by their emissions testing to give an apples to apples lab based number for “Estimated Fuel Mileage”
“My great-grandmother died at the age of 103 in 1989. She told me how she could still remember how much fun they had when they moved from Kentucky to Illinois in the 1890’s, in a covered wagon.”
Jon, did your grandmother write down any of her experiences? Did you or any of your family write down what she said or record what she told you? I love hearing or reading personal history. My grandfather had some great stories about his life, unfortunately none of us had the foresight to write or record his life story.
‘My grandfather had some great stories about his life, unfortunately none of us had the foresight to write or record his life story.’
Too bad you all wasn’t Mormons. They love geneology. Heckfire! I could tell you the color of the first store-boughten dress my great-great-great grandma got. Well, I couldn’t personally tell you right this minute, but I could call up my mom and ask her, and she could tell me, and then I’d know, and I’d tell you.
Oh, and while we’re on the subject, do you; SandFranGal, do YOU keep a journal? So your posterity will know you?
Just curious. Hahahaha.
One of my great aunts got a store bought dress as a teenager in Idaho around the turn of the century. She went up like a torch due to some misthrown fireworks.
AP
Nevada, Michigan, Florida lead ‘underwater’ list…
6 states account for almost 60 percent of homeowners with mortgages higher than homes’ value.
Another pessimistic analyst, Desmond Lachman of the American Enterprise Institute, said that “unless there’s government intervention on a big scale…we’re really not going to bottom.”
http://biz.yahoo.com/ap/081031/meltdown_underwater_borrowers.html
Sounds like the same list of swing states in the presidential election…the only ones that aren’t swing states with an especially high number of foreclosures are CA, AZ, and MI.
“6 states account for almost 60 percent of homeowners with mortgages higher than homes’ value.”
I have a feeling its a little less than 60%. Its just that the other 44 states are in deeper denial about the true declines in property values.
My thoughts as well Kim… The other states/cities are on the same track, just timing is different. That’s why I feel the bottoms is still so far away. Govt is doing “everything” to keep the bubble inflated by helping those that need it most now. What happens when ALL the money is spent and the small fry states show up to the bailout window later in the game?
Yes, yes, because government intervention always works out well!
We “need” unaffordable housing, forever! ARGH!!
I continue to watch the listings in my hometown. It is great that Zip Realty now labels the “Foreclosures” as “Foreclosures”. The amount of said foreclosures is skyrocketing. It used to be 2 or 3 here and there. Last night I counted at least 37 listings out of less than 200.
The other trend that is really great is that the foreclosure prices are coming down. I’m as bearish as any of you hairy bears, and pussy-cats but I wouldn’t object if I had a friend that was thinking of buying some of these places. Some of them look to be in great shape. Here are examples of the price drops I’ve seen. One house that I think looks very appealing started at $230,000 and is now down to $149,900 (2,400 square feet). There is another from $330,000 to $249,900 (3,500 square feet and well kept). I saw yet another that I liked and it has dropped from $175,000 to $135,000 (1,700 square feet).
These prices indicate a reversion to 1998 or 1999 pricing. I know it could go further but the movement has been very rapid the past 2 months. Reality is setting in for the holders of these houses. Fortunately for the natives those are “distressed” sales and won’t have any impact on their own homes.
Are you having a “senior” moment?
You smoked my @ss the other day for suggesting the same. We are far from done here. The prices are gonna drop far further than anyone expects.
There are no J-O-B’s in MN that justify those high prices.
Have you ever been to MN?
I will never buy but if somebody were intent on doing it then I wouldn’t bash them at some of the prices. They aren’t going to listen anyway.
I have been to MN many a time.
Thankfully, never in winter though.
“Thankfully, never in winter though.”
Then you really are a pussy cat. Grow a set and head to Duluth in January.
Why? So he’d have something to freeze off?
“One house that I think looks very appealing started at $230,000 and is now down to $149,900.”
“There are no J-O-B’s in MN that justify those high prices.”
I’m calling BS on FPSS. Minneapolis has jobs to support $149k homes.
I looked at a piece of land this week and had a nice chat with my charming realamatrix about the state of the local market. She says Lake property and top end houses aren’t selling but the prices aren’t dropping (nice denial logic there). She says we never went up, like everybody else, so we won’t fall.
My response was: “Wow, think what the prices would be here if we hadn’t had the biggest realestate boom in history!”
She didn’t get it.
Wait.
VALLEJO, Calif. — When the economic crisis deepened this fall, this city already was losing scores of police and firefighters because it could no longer afford the rich salaries and benefits it offered after the Sept. 11, 2001, attacks. Now, with crime on the rise and tax revenue sinking, this San Francisco Bay area city faces more cuts in police and fire department budgets.
Like other California cities, Vallejo is targeting police and fire budgets, and has cut law-enforcement community services and youth-service programs.
It is a scenario being closely watched by the many other California municipalities that offered the same lucrative pay packages — and that now face the same fiscal pressures.
With a slowing economy and housing prices in decline — cutting into tax revenue — Vallejo, a bedroom community of about 120,000 without a big sales-tax base, is running out of options and has targeted public-safety budgets that in the past were off-limits to the budget ax.
The main factor driving away police officers in Vallejo is the same one that helped drive the city to file for Chapter 9 bankruptcy in May: a costly campaign to improve security in a post-9/11 world that backfired. Since the filing, nearly 40% of its police force has either quit or notified the city of plans to quit.
“Everyone is watching to see how this shakes out,” said Marc Levinson, Vallejo’s bankruptcy attorney and a partner at the Sacramento office of Orrick, Herrington & Sutcliffe law firm.
After Sept. 11, California municipalities moved to increase wages and benefits to attract police officers and firefighters. Vallejo joined a consortium of cities in the region, including Oakland and San Francisco, that used each city’s salary and benefit increases as a guide for labor contracts.
Before that, in 1999, state lawmakers had adopted a measure called “3% at 50″ that allowed local and state police officers and firefighters to retire at 50 years of age with 3% of their highest annual salary — multiplied by the number of years served. The legislation granted thousands of public-safety workers a retirement payout of 90% of their former salaries for life. The benefit, bolstered by post-9/11 recruiting, swiftly became a major staple for most California cities.
Those full-natured benefits created a bidding war among Northern California cities, and Vallejo negotiated lucrative wage increases with police and firefighter unions to stay competitive. Three years ago, the city agreed to a 20% pay increase between 2007 and 2009; an average police officer now makes $121,000. When benefits are included, the number rises to more than $190,000. By 2007, 80% of Vallejo’s budget was dedicated to police and firefighters.
As tax revenue plummeted, Vallejo’s finances buckled under the pressure of the labor contracts. Retired Vallejo employees are owed almost $220 million in unfunded pension and retirement-health benefits.
“We did a bad job of long-term forecasting,” said Craig Whittom, Vallejo’s assistant city manager. “We made agreements that were beyond our means.”
Recently, Vallejo’s city council preliminarily approved a package of cuts to close its budget shortfall, including a 10% salary cut for the city manager, and city employees will take two unpaid days off before June 30.
With budget cutbacks and salary concessions staring at them, many of Vallejo’s officers have turned to retirement or are seeking employment with surrounding municipalities.
Jason Wentz is typical. A Vallejo native and a 12-year veteran of the city’s force, Mr. Wentz, plans to join another police force in Northern California.
“People on the street know we are scaling down,” said Mr. Wentz. “The high-crime neighborhoods are used to seeing more patrol cars, and they notice the ramp-down.”
Vallejo’s Police Department is down to about 120 from 150 police officers in January, and it expects an additional 30 or more to exit by year end. The city has cut law-enforcement community services and youth-service programs.
According to the FBI, the national average for sworn law-enforcement officers is 2.4 officers per 1,000 residents. In Vallejo’s case, there is one officer for every 1,000 residents. Vallejo reported nearly 500 assaults in 2008 through April, according to the latest numbers available, already approaching last year’s total of 687 assaults.
The ranks of the city’s firefighters have also taken a hit. Jon Riley, vice president of International Association of Fire Fighters union local 1186, said that after the city filed for bankruptcy the department lost 15 firefighters in one day. “I don’t think morale can go any further south,” said Mr. Riley.
Stockton, Calif., rocked by housing foreclosures, also is scrutinizing budgets for police and fire. Mark Moses, the city’s chief financial officer, said “we will not be able to manage with just cuts to libraries and parks.” In Santa Rosa, assistant city manager Michael Frank said the city is cutting about 20 police officers and will also cut some firefighting services.
In Sacramento, Police Chief Rick Braziel is grappling with how to cut 8% from the city’s $130 million police budget.”Vallejo is not unique,” said Mr. Levinson.
Vallejo also finds itself in competition with Bay Area cities that can still afford to attract officers. Joe McCarthy, a Vallejo detective, says 10 surrounding cities have contacted him with job offers. He plans to leave soon.
These examples show how house ownership has been grossly subsidized in the same manner as auto ownership (highway constr & maint). Local taxes will have to go up and those increases will offset any rinky dink Fed “tax credits” designed to promote wage slav…er….house ownership.
Maybe turning the country into an ad hoc police state wasn’t such a good idea, now that we can’t afford it?
You mean having 8 police officers stand around a small folding table in the subway, waiting to check backpacks, wasn’t a great use of taxpayer dollars? I’m shocked.
And those are the ones you see. Think about the 10 others snooping behind the scenes. Police State is an understatement.
..
Err….umm…In the case of California, you left out the ” $121,000 average salary ”
Here in Polk County, Central FL, local law enforcement patrol duty starts at around 30K or so. Shift Supervisors, Detectives and such range from 40K to 60K…..Only Police Chiefs get six-figure salaries.
California is about to learn a hard lesson; and will fall all the way back down to equilibrate wages / housing / cost of living with the rest of the country.
People in California are in for a big hurtin’…….and when law enforcement gets cut we will see a huge surge in street crime. I’ll bet the “anti gun” yuppie types will get themselves armed to the teeth once their wives and daughters get beaten, robbed and raped in broad daylight in their own homes.
Every man for himself, California.
..
I think most California cities will do whatever it takes to keep cops & firefighters’ salaries high. It is an entitlement here, and poll after poll supports giving these people ever higher salaries. I’ve worked alongside many a batallion chief and incident commander in this state, and they EXPECT $200K+/year. Fact is, if they went to almost any other state, they’d be making 1/3 this. Sales taxes and income taxes will be raised to pay for these outlandish salaries and benefits packages (not to mention retirement). Of course, property taxes won’t be raised since the REIC in this state is so powerful.
By the way, I was thinking about this and wanted to see if any of my fellow HBB bloggers had any insight into this: In California, prices are/were high far away from any metropolitan area–whether it be Eureka, Redding, etc. It is very common for people to move from the cities to the rural areas hundreds of miles away to buy and flip property. Why don’t we see similar behavior in Albany, NY or other places that are “relatively” close to NYC (that is, why aren’t median home prices in Albany or Buffalo $400K due to speculators like they are in Eureka)? Why is it that Californians are so real-estate obsessed compared to the rest of the country?
property taxes won’t be raised since the REIC in this state is so powerful ??
Nope…See Cali. Prop #13…
Why is it that Californians are so real-estate obsessed compared to the rest of the country ??
I will just guess at this one;
5th biggest economy in the world
A plethora of things to do within a reasonable distance
Weather
???
Texas pays about the same at Florida.
Dallas Police Chiefs salary band starts at $86,459 and tops out at $185,769. For reference, Dallas is the 9th biggest city in the US.
A $121,000 average salary is just amazing.
And that $121,000 is for just a beat cop. No management. And, don’f forget the $365,000 salary for the San Francisco city nurse that was revealed in the SF Chronicle a few months back.
I’ve never been to New York….do they really do that??
HAHAHAHAHAAHA
Every weekday I ride the PATH in and out of WTC.
Every day, there are:
approximately 5 to 8 officers at a folding table next to some machine that sucks in air. They do random searches.
3 US Military stand approximately 80 feet behind them against the wall.
3 more US Military stand at the top of the stairs out of the PATH… unsure what their purpose is.
US Military = Presumably Army, in Khaki fatigues, body armor, 9 mm Beretta side arm in hip holster, occassional AR15 or M16 on some days.
You also see teams like that in the street in certain areas, but generally only during “alert” times.
C’mon, man, don’t be all heartless and stuff.
Those pimply teenage maggots need some self-esteem too and you can just make them feel all important by givin’ them a gun and stuff and making them stand in the subway.
You know? Everyone’s a winner and all that?
There is nothing more frightening that a 20 something kid with a sidearm, badge and a cruiser.
I was in NYC…I think it was Feb of last year, and I don’t remember seeing that. We rode the subway from near Times Square, up to washington heights and back and from that same starting point down to the world trade center site (or within walking distance anyway). We were on it several times coming/going from several locations.
I didn’t carry any bags to be searched, so maybe I just didn’t notice.
Those pimply teenage maggots need some self-esteem too That statement won’t seem so clever after the first NYC subway bombing or gas attack. insert a riposte from exeter or the like here
Were you travelling during rush hour?
I can’t vouch for outside of rush hour but I can vouch pretty much that they have been present for the past 6 years or so now.
I was on the first PATH train that pulled into the reopened WTC PATH station and they were present then.
Sometimes you don’t see them because they’re off to a side and the crowd is huge.
I could have easily missed them, or maybe even forgot about them by now. I’m sure there were cops wandering around, I just don’t remember any being in a place to stop you for searches, like I don’t remember passing any that seemed “stationed” between the street level and the time I stepped onto a car.
Gotta include those firefighters who slave away 11 days a month….
10+ 24-hour shifts, to be precise.
That’s 240 hours/month, compared to a 40-hour worker who puts in 173 hours per month.
And cops/firefighters put in a lot more overtime, which is why many of these incomes seem unusually high, IMHO.
Today I went in to the Social Security office. No one in there. Just me. But there was an armed security dude that questioned me about weapons and the like. You could have dropped a grenade in there and hurt no one but the security dude.
What a total waste.
turning the country into an ad hoc police state ??
Exactly !!!!
Until I go into the bank and the guy with the shotgun standing beside the guy with the battle rifle tells me not to use the cell phone inside… I won’t worry much.
Until the malls stores start hiring their own shotgun door guards… I’ll snicker at police state comments.
The Philippines has all that and isn’t a police state either. They just have a significant amount of armed crime, and a sizeable ethnic minority that goes to heaven if they blow up their fellow believers, or infidels. Since it is harder to blow up infidels, they mostly just blow up believers.
Do you own a home in San Diego-O.C.-L.A.-San Francisco?
I’d put it on the market and sell it for whatever the market will bear, and make sure it went away, comps be damned.
I’ve been babbling on about the seriousness of the drought in California for some time now, and if this doesn’t scare some of you, than nothing will.
Imagine the ramifications of a 85% decrease in imported water to 25 million Californians?
=========================================================
The Department of Water Resources announced it will deliver just 15 percent of the amount that local water agencies throughout California request every year. That marks the second lowest projection since the first State Water Project deliveries were made in 1962.
The State Water Project delivers water to more than 25 million residents and 750,000 acres of farmland.
http://www.signonsandiego.com/news/state/20081030-1120-ca-californiawater.html
The new oil.
Water features seem to be the new fad in the home makeover shows my wife watches. I’m constantly amazed at what a waste of water and energy those things are.
But at the beginning of the year we had that storm from alaska didnt it give us a huge amount of water in about week?
The bottom line from last winter’s snowpack was 65% of normal.
Alad, here in northern Cali (Placer and Nevada Couties) it’s pretty bad. It’s normal for the watershed lakes to drain down this time of year. But this year they didn’t need much draining if any at all. Shaver and Orville are at all time lows. Most people where I live use wells, havn’t heard much about complaint about them, I think that’s next though. Cali is in for rough times, I agree.
Mobin,
The worst thing is, the DWR has been sitting on this information for @ least 6 months.
California could have been better prepared by instituting rationing way back when, and to drop the bomb that imported water deliveries (i.e. all big cities in Ca.) will fall by 85%-all of the sudden, shows that accounting foibles aren’t just limited to Wall Street.
It is the mindset of today - “Think good thoughts!” and all will be well.
I’d bet money that there were some people in DWR who know about these problems and who wanted to warn people so that they could prepare, but these people were labeled as “being negative” and “not team players.”
It’s the same everywhere - anyone who dares bring up reality to the clueless, especially when the clueless is a management-type, is branded as a “black sheep” and ignored. Then, when the Fit Hits the Shan, suddenly it’s “who could have know’d” and the Black Sheep gets stuck cleaning up the mess while everyone else runs around screaming or CYA.
…and throw in the specter of the legal ruling regarding the Delta Smelt, a nothingburger of a fish, which has caused water deliveries to So Cal via the Delta to be reduced by 30%.
In essence it was a Red Herring move by the No Cals, to take the lion’s share of Delta Water for themselves.
There’s a water war of words going on right now, but no fisticuffs yet…
The delta smelt is criticle to the health of the delta particularly the stripper…
The timing of the judge’s decision in conjunction with the drought coming, makes me think it was motivated more by greed.
We have back to back storms right now. Even San Jose which tyically avoids most of the worst.
Greed doesn’t make any sense as a motivator for the judge since they would get nothing out of this. Strict rulings are the usual result of indicator species becoming endangered and in this as with so much else no area or ecology is special or exempt.
It’s raining like a mofo here right now, Lad. This is year 14 of the 13 year drought cycle. Very early acorn drop. (mid-August.)
Got aqualungs?
ahansen,
We only need 1 more year of drought to blow up the system, as you are well aware.
Another crummy winter and 25 million people will have to find a plan B, as in another place to live outside of the state.
p.s. added drought bonus:
Last year Southern California Edison relied upon large hydroelectric for 24% of it’s power making capacity, it’s down to 5% now.
Aladinsane -
Relax. Plenty of water here. You can come to Buffalo and snap up a $10k house with billions of gallons within walking distance. (Just be sure to arm yourself..)
What flavor would you like, Erie or Ontario?
25 million people will have to find another place
Ah, Lad…
We can only dream.
(Still betting on a wet one.)
Emperor Norton —
How do we know you don’t just want to scare people away from Cali so you can reduce the gold price of housing?
“Dead subdivisions line the highway, their pompous names half-obliterated on crumbling stucco gates… Whole sections of outlying subdivisions are composed of unoccupied houses, past which one speeds on broad thoroughfares as if traversing a city in the grip of death.”
Description of Miami in 1928, from “Only Yesterday” by Frederick Lewis Allen
Back to the Future.
In South Beach in 1979 you could buy one of those abandoned high rises for 250K. It looked like bombed out dresden but what a difference a bad recession makes. History repeats…
Sounds like the central valley of Cali…
Does anyone know what happened to those old subdivisions from the late 20’s? Most housing near the coast seems to be from the 50’s. Did they get bulldozed or just rotted away over the next 20 years?
I’ve been noticing fairly substantial (25-30%) increases in inventories in some areas that I track. These increases are a bit outside of the noise that I’ve seen over the last six months or so. Has anyone else noticed this lately in other markets?
Here’ an anecdote.
I live (rent a townhome on the cheap:)) in an area of St. Petersburg Fl called Carillon park. Adjacent to where I live was built a townhome development supposedly styled after some place called Backbay in Boston (( think). Anyway, these places are ridiculously large. The smallest model is ~3000 square feet while the largest is 3 stories and is over 4000 sqft. I went to look at a couple of the models and they are poorly designed with at least a few obvious construction flaws. They are crammed close together (back to back that is) and here’s the best part. They were empty for a long time, but recently a few have been occupied. The thing is, they started LEASING these things a couple of months ago, so I have no idea if any have sold (maybe I look them up on the county appraiser’s website). By the looks of some of the people living there, I wouldn’t think they were “owners”.
“By the looks of some of the people living there, I wouldn’t think they were “owners”.”
Maybe they’re squatters. Squatting is an up and coming trend right now.
They don’t look that bad. Just too young to be able to afford a place that they are trying to sell for 500K. Of course, I’m assuming lending standards really have tightened.
I had a buddy that couldn’t sell his house. Instead he decided to “lease” it out. I asked him if leasing it out was anything like renting it out? I hate all of these euphemisms for stupidity. Since when did a 2nd mortgage become a “home equity loan”? It all wreaks of one of the world’s great evils, political correctness. PC is just a massive effort to deny reality. But what do I know? I’m just a bitter leasee?
My favorite euphemism from this mess is “creative financing”!
Well, it’s “creative bankruptcy” in disguise.
And not a very good disguise at that.
It’s what they call spreading the wealth.
Mine is “sophisticated investor” for FB.
My favorite is “affordability products.”
Um, no… if you can’t actually pay off the house at the REAL price, then it is NOT affordable! Delaying that reality until one can flip the house doesn’t change the unaffordable nature of the house’s price.
Finance has proved you wrong. Sub prime financing worked as long as the usual formula for banking was followed. When people have steady employment and good payment histories then it makes sense to offer them a deal that includes a reduced down payment and higher interest rates. The default rate on those loans was and still is extremely low. It is only when income, payment history, and loan size are ignored that this trouble emerges. People always had the ability to buy more with affordability products. Indirectly you are proposing to run a capitalist economy without lending which doesn’t make any sense. Attempting to rewrite history with what you would have preferred to see doesn’t help anyone.
PC oxymoron.
“foreclosed home owners.”
When I was a teenager, a neighbor had to get a second mortgage to send a daughter to college. Friends whispered “second mortgage” as if the neighbor was wearing a scarlet “m” on his jacket. “Second Mortgage — *gasp* wow, he’s BROKE,” they said. “Poor guy, but at least he’s doing for his daughter…” It really made an impression on me.
Nowadays, a second mortgage is code for “granite countertops.” It’s disgusting. Am I going to have to bail out the refi HELOC’s too? If these people were dumb and greedy enough to refi for a cruise on the QE2, then they don’t deserve to “stay in their homes.”
My favorite is “Bank Rescue Plan” instead of “Stupid Lender and Crook Bailout Charity Plan”.
My other favorite is “Economic Stimulus Plan” instead of “Welfare” or “Vote Buying” Plan.
“
EconomicSocialistic Stimulus Plan”Keynsian, actually. The stimulus plan has pretty much nothing to do with banks and has been making the rounds ever since economic projects started pointing down. Failing to understand the investment part of capitalism does not make you look like an expert.
“Failing to understand the investment part of capitalism does not make you look like an expert.”
Failing to understand the plausible deniability of a scam makes you look like a dumbsh!t.
NYCB,
x2
PC = BS
Mike
Florida Association of Realtors September stats came out the other day. Wow - prices are really plummeting at the fastest rate ever, and we haven’t even hit the normal late-fall drop period yet.
Statewide since June:
Jun 205k
Jul 194k
Aug 187k
Sep 175k
Past years’ Septembers:
Sep ‘05 248k
Sep ‘06 244k
Sep ‘07 221k
Florida is so toast. It’s 1926 all over again down there.
The price drops in some parts of Florida are breathtaking. Absolutely astounding. We’re talking 75% declines from peak prices Q3 2005. I’m having all I can do to keep my focus while this plays out down there. I’m very tempted to strike in Florida.
I would say that it only demonstrates how ridiculously inflated the prices got. Think prices are tempting now? Just wait a year or two.
Great Idea, you can help pay (taxes) for all the deadbeats that are in defalt on their taxes and HOA dues.
I will laugh my a$$ off when you reap the $ benefits of your smart play in housing only to have it taken away by our soon to be over taxed ever more socialist govt.
The local DA recently arrested our asst property appraiser for lowering property assessment values. yes, arrested– Charged him with fraud.
“POWER TO THE PEOPLE—uhh wait, no, not my power, go get that other guys power……not mine, I earned mine, stop it. HELP”
Govt is like tylenol, a little eases the pain, a lot kills you.
I love govt. And I love socialism even more. And you will too.
‘I’m very tempted to strike in Florida.’
Don’t do it, man! STOP! Quick! Go find someone to slap you briskly upside the face! Breathe through your nose and tell yourself ‘Waiiiiiit….wAAAAit…!’
Because wouldn’t 90% off peak be even funner? I mean, jeeze, it could maybe get there.
Ex,
Don’t do it unless you’re going to live there full time (6 months + 1 day). I looked HARD at some gulf access property many months ago. I did not want to live there more than 4 months a year though. Their property taxes are two tiered now. You will get banged hard as a part timer.
Mike
Aren’t the taxes based on the price of the property?
If so, and you buy cheap enough, how hard do they really whack you property taxes in FLA, even if you are a snowbird?
..
Here in FL:
Property taxes for full time residents qualify for a $25,000 Homestead Exemption. You take 25K off the assessed value and then apply the tax.
Also, people who bought before the boom and live here full-time are protected from the full burden of taxes on the sudden spike in “property values” by the Save Our Homes amendment which caps annual tax increases at ~1.6%; regardless of the current tax assessment.
However, if you come down here TODAY and buy a house for a vacation home you will:
1) NOT receive the $25,000 Homestead Exemption ( unless you commit Fraud )
-and-
2) WILL PAY the FULL TAXES based upon the current assessment with no limit on further increases.
You can bet that many, many flippers and “investors” showed up at the County Courthouse and lied about their residency in order to get their Homestead Exemption.
I have looked up several properties down here at the Tax Assessors website that were for rent, only to find that a Homestead Exemption was being applied and the tax bill was being mailed to Tennessee or South Caroilna, etc. Fraud plain and simple. Faraway Landlords aren’t supposed to get Homestead Exemptions.
Lots of tax fraud here in Florida, and I’ll bet as we weather the storm they will start looking for these violations.
IIRC, falsely obtaining Homestead Exemption status is a 3rd degree Felony here in FL……….
Anyhow, don’t buy JUST YET. There are over 5,000 foreclosures in Polk County alone and lots more in the pipeline for 2009.
Keep your powder dry, mate.:)
Oly… I agree 90% would be even better and yes…. one never knows what is in the future given the current deflationary environment.
Mike, If I did strike in FL I would move the family there permanently and I would continue traveling for work.
Using the numbers above, I get a 30% drop from Q3/2005 to Sep 2008
I called this on mid year predictions.
-
I still say to all those in California we shall overtake you.
You will remember why Ponzi started business in Fl.
We know about busts! (1927-28 South Fl Real Estate)
We know about graft and grifters, remember the same stock operators that worked Wall Street in 1929 worked Miami Beach in 1927.
-
FL will not be deterred, we will be number 1!
-
I honestly think this number is so much lower. Take out Donald Trumps 100 million dollar sale,and those top skewing numbers, and I think you will be closer to the real decline. Also 2005-06 was the top…go back to 2001 to see what a more realistic price should be. Talk about an overbuilt house of cards collapsing below the mean. Buy now,and assume the lashing when two years from now it is half of what the current ‘asking’ price is…Wait till all those geniuses have to dump their 2nd or 3rd home…
Revolutionary: Anybody else notice that the word “affordable” is replacing the word “luxury” in more and more property descriptions? I don’t always agree with their idea of affordable, just as I didn’t agree with their idea of luxury, but the seas are changing.
Yes our Luxury $3100 a Month 1 bedroom suite is now an “affordable” $2900 a month
I cant wat till all those luxury buildings in Long Island City go bust.
Its amazing how many older cheap SFH and row houses which were really affordable were torn down for these soulless “homes”
LIC kind of amazes me. Seems it wanted to be DUMBO, or by extension, W’burg, SoHo, etc., without ever having had artists. Nope, they weren’t going to just give their houses away! Kind of a planned (to make a quick killing) community.
Well, it’s filled with DUMBO’s alright!
BWAHAHAHHAHAHHAHAHHAHAHHAHHHHHHHHHHHHHHH!!!
So TRUE…had they left it alone LIC had “character” aka poor people They even have a harley shop and a new age shop aroma therepy well before the boom, nice artist stores on vernon,
but then they wanted to be upscale…
At current prices. most of the property in NYC (all boroughs) is affordable to only the top 5%-10%. A large part of which are from Wall Street, which is being hit worse than any other sector in the local economy.
Where will this lead?
Falling rents and collapsing prices.
From yesterday’s posts:
“The “Debt” conversation has been going on now, more or less, for 30 years, as the US Government continues to spend more, each year, than it takes in. PHD’d Economists have dismissed the damaging effects of deficits, in the short run, but as someone trained in traditional Econ theory, I know that everything matters in the “long run”.
The question I have for you, Blue Skye, and the rest of our bloggers is this: when will the “long run” truly come into play?”
Shane,
That is the big question. I was a young man when I thought reckoning day was due, now I’m old.
I got into debt one time, years ago. I reached my credit limit. That was based on debt service, not the size of the debt. No more credit Mr. Skye, the bank said, when 40% of my pay was going to debt service. At that point, I was borrowing to make payments. The final kick wasn’t even more debt, it was an increase in interest rates. So, I had to change some things rather drastically.
My thought, based on my personal journey of stupidity, is that if the pain doesn’t wake us up first, the lenders will. Right now, low interest rates postpone the tipping point. Reduced income, from a recession, pulls it in. Also, I can tell you that sudden loss of credit makes one quite vulnerable.
That’s why I have a Paypal card….as soon as someone pays you its fully usable.
——————————
Also, I can tell you that sudden loss of credit makes one quite vulnerable.
It’s why I have cash. Probably too much.
Let to its own devices (ignoring creditors), I fully expect our national debt to be near $20T within the next two years. $62,000 for every man woman and child, $250K per family of four. Put in perspective, this is like every family having the burden of 100% financing on the average house with 0 equity and no way to mail in the keys.
Factor in the average household debt they must pay either to the banks or in taxes (because the government is buying / covering losses on defaulting mortgages) combined with their own credit card, college, and car debt plus the debt of their local governments and you realize that the debt-per-person cannot be repaid and, therefore, will not be repaid. Ultimately there is no government, corporations, only individuals and all debt is ultimately paid by the productivity of individuals.
So the question everyone must ask is what happens when everyone is forced to default or there is hyperinflation (really the same as mutual default).
VT,
“So the question everyone must ask is what happens when everyone is forced to default or there is hyperinflation (really the same as mutual default).”
If the outcome is the same, aren’t the paths different?
Would not individual choices be different if one is attempting to survive?
“I fully expect our national debt to be near $20T within the next two years. $62,000 for every man woman and child”
And they will force you to pay your share before you try to leave the country.
Have you tried to renounce your US citizenship since July 1, 2008? Not only is the US one of a few countries that taxes individuals based on nationality and not residence; the country now requires former citizens to file tax returns (and of course, pay taxes) for ten years following ones renouncing of American citizenship.
what?!
Only if they determine that you renounced your citizenship to avoid taxes.
Skye,
“Life is like a shat sandwich, the more bread you’ve got, the less shat you’ve got to eat”.
This advise was given to me and taken to heart many years ago.
Truer words have never been spoken.
Mike
Never heard that one before SV…
“Nationwide, almost one out of every five homeowners with a mortgage owes more to their lender than their properties are worth.”
Five to one baby, 1 in 5… no one here gets out alive now
http://www.youtube.com/watch?v=9DfG1SNydnc
But Sheila Barr, and the FDIC, will bail it all out. The new plan will even encompass HELOCs. I can only shake my head and the seemingly endless stupidity. Did any of these morons ever stay awake during Econ 101?
What role will President Obama play once elected?
Does he wait in the wings until January 20 and let Paulson-the Usurper do his thing, or what?
I don’t vote, but I would probably vote for McCain. The assured warmonger will definitely cause commodities to rise in value, which is the only thing I generally care about over any 4 year stint.
Being the anti-war advocate that I am (anarcho-capitalist variety), I abhor both. But yet I’ve told all my goldbug and entrepreneur friends that if you’re going to vote, might as well support the monarch who will destroy the dollar the fastest.
Wonder how many of them will listen. Never vote for who you like the most, but for the man or woman who will destroy your enemies the fastest. In my case, tyranny and the dollar are my enemies, and nothing destroys either faster than the expansion of what you hate.
I’d rather have the precious be worth triple what’s worth right now with Obama as President, vs. having it be worth 30x what it’s worth right now, if McCain is President.
C’mon both you guys…they have the same handlers. You honestly think there is a difference?
“You honestly think there is a difference?”
Yes.
Talk radio versus Internet.
Please consider voting 3rd party. I know it seems meaningless, but we’ve got to start somewhere. It’s a better protest against the system then not voting at all.
I don’t know about that.
If, say, 55% of current voters voted for a third-party, it would certainly be interesting. But if the number of voters just dropped this go-round by 55% that might actually be a more substantial event in some regards.
Leave it to the Brits to tell us the truth:
http://www.timesonline.co.uk/tol/news/world/us_and_americas/us_elections/article5051118.ece
Barack Obama lays plans to deaden expectation after election victory
BTW: This is not a partisan post. I am merely pointing out that neither candidates promises can be paid for - and they know it.
Just my opinion but I think Barrack will move to the center rather quickly…I think jobs will be the issiue for some time…Tax increase/cuts will move to the back burner…I don’t think he wants to be a one trick pony…
hopefully he pulls out of Iraq, as that is the only thing I agree with him on.
Peggy Joseph Thinks Obama Is Going To Pay For Her Gas And Mortgage.
http://www.youtube.com/watch?v=L6ikOxi9yYk
Peggy Joseph Thinks She Won’t Need To Pay For Her Gas And Mortgage Under Barack Obama.
http://www.youtube.com/watch?v=L6ikOxi9yYk
SOCIALISM! (Sorry if this post is too long…)
Wall Street Journal
* MANAGEMENT
* OCTOBER 31, 2008
Banks Owe Billions to Executives
By ELLEN E. SCHULTZ
Financial giants getting injections of federal cash owed their executives more than $40 billion for past years’ pay and pensions as of the end of 2007, a Wall Street Journal analysis shows.
The government is seeking to rein in executive pay at banks getting federal money, and a leading congressman and a state official have demanded that some of them make clear how much they intend to pay in bonuses this year.
But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces.
The sums are mostly for special executive pensions and deferred compensation, including bonuses, for prior years. Because the liabilities include stock, they are subject to market fluctuation. Given the stock-market decline of this year, some may have fallen substantially.
Some examples: $11.8 billion at Goldman Sachs Group Inc., $8.5 billion at J.P. Morgan Chase & Co., and $10 billion to $12 billion at Morgan Stanley.
Wouldn’t it have been cheaper to let terrorists destroy Wall Street than to pay bankers to gitter done?
It was tried. 9/11 anyone?
Judging from the vigorous policy response over the ensuing seven years culminating in the October 2008 collapse on Wall Street, historians may be able to make the case that Bin Laden won.
And yet, some here harken back to a yesterday when there was trust and honesty.
When, I ask?
Others deride a class of individuals as having a sense of entitlement.
And I have to ask, which class is the most entitled?
GOP screams at Dems about class warfare.
The reality is class warfare has been going on for the last couple of decades and the middle and uppermiddle class have had the snot kicked out of them.
CEO’s and Hedgefund managers pay 15% tax
we pay 25-35+%
AMT continues to claw at the middle class
The majority of the gains in productivity have benefitted the elite, with the middle class getting a box of glass beads
Still they can get the JOe the Plumbers of the world to support trickle down economics.
MEaston,
I’m fascinated by the fact that 40k/yr wage slaves vote against their own economic interests and always in lieu of some low cost/no cost BS issue like flags and the like.
What’s truly upsetting is the rather large crowds standing on multiple corners of busy intersections, passionately waving banners in support of a ban on…gay marriage.
As if that has anything to do with real life.
Meanwhile, during the panic-rushed bailout discussions, it was only those of us on blogs who were trying to get anything done. No big crowds on our local streets, no TV ads from opponents to the bailouts.
The American sheeple never cease to amaze me.
The plumber is just a mutt head and using him is just a circus…Gee’s, it’s kind of embarrassing really….
Didn’t they find that the plumber had a lien against his house for about $1,000 because he didn’t pay his property taxes or something? He opposed to Obama’s plane to raise taxes a little on income over $250,000 becuase he thinks that someday he might be pulling down that kind of money. These people are amazing. He’s a 34-year old plumber who can’t pay his taxes. It’s highly unlikely that he’ll ever make the bug bucks, but somehow he thinks that it’s a possibility.
My belief is that the vast majority of AMT slaves are coastal democrats. Maybe Obama will rescue them too.
How much hush money will the pols (wall street b*tches) get to keep their mouth’s shut?
Most ‘underwater’ homes in few states
Here’s a shocker: almost half of Nevada homeowners with a mortgage owe more to the bank than their homes are worth.
http://www.msnbc.msn.com/id/27463646/
Don’t think that’s a shocker to this blog.
Happy Halloween all! And Happy Phillies World Series Champs parade day, too!
Couple of homes in my area I’m considering looking at. If I like them, I’ll offer 80% of their listing price (which are finally dropping around here). I was recently told by someone who works in the new construction industry that offering 80% is by no means insulting sellers at this point. If anyone’s hungry enough, I may just buy a house soon!
Only eighty-percent?
That’s not insulting enough, IMO.
Agreed. Start at 40 or 50%.
With the “homeowner” bailout plan that’s due to come out in the next few days to weeks, the government hopes to put in a bottom by modifying mortgage contracts.
They’ll probably make lowballing illegal as well. If you’re not with us, you’re with the terrorists.
Buying a house is not really supposed to be a matter of taking away a hungry person’s perceived wealth. Was this a suitable metaphor for home buyers in previous downturns, or is it different this time?
Perhaps hungry enough was a bad choice of words. I just mean if anyone really wants to sell in a down market, and can afford to take 80%, then that would bode well for someone like me at this point. I’m not trying to take anything away from anyone, nor am I trying to insult - I just want to buy something I can afford and it finally looks like the tide is turning that way in the Philly burbs area.
I use this terminology too EC.
Prof, maybe it’s a regional thing or something. Anytime someone has something to sell (asset or service or whatever) I might say something simiilar, “if he gets hungry enough he’ll sell it for $X.”
I guessed you meant “hungry” in a figurative rather than literal sense. Unfortunately, I believe the literal sense may be more appropriate in many situations households will face over the next few years.
DON’T. DO. IT.
Wait untill 2011 (at least)
’nuff said
Good luck eastcoaster gal. Even if you get one of these 20% off bargains, it may never be worth more for the rest of your life. This thing is just getting started. Choose your prison wisely.
Question for those inclined to discuss:
Why do we have “homeless people” when we live in a country with 3 million + vacant houses? At what point does the gov’t have an obligation to put people who have no ability to pay rent or a mortgage payment, into homes?
I posted yesterday about my sister’s B-I-L whose house has been foreclosed, and he was just evicted by the sheriff’s department. That house (a small dump, according to my sis) will likely sit vacant. He will likely end up moving in with family, or at a homeless shelter. At what point does the local or state gov’t step in and say “we’re going to put THESE homeless people into THOSE vacant houses.”
“At what point does the gov’t have an obligation to put people who have no ability to pay rent or a mortgage payment, into homes?”
Never?
Correct.
Ding ding ding! Correct!
The answer is complex:
- If the government put people with nothing into homes, then the next scam would be for people to act like they have nothing to get a free house. This is a variation of the current BS about “reworking mortgages to make them affordable” where the person who works hard, saves, and pays a down payment ends up paying MORE than the arsehat who bought a stupid-big house on a toxic liar loan.
- On the other hand, one could argue that we need to do something about the homeless… but since there’s no way Wall Street can make money off of this idea, it’ll never happen anyway. The only people who get bailouts are those who can become life-time debt-serfs: the truly pennyless and the productive savers are both thrown under the bus to keep the Ponzi scam going.
first part of the answer is how it works in the Netherlands; sure way to get more market distortion (and keep the Ponzi scam going). Free homes for those who have never worked, extra expensive homes for those who are working and have to pay everything out of their own pockets.
we have almost no homeless people here; those that are really homeless are so by choice, or sometimes because they are unwilling to deal with the administrative issues related to getting free housing.
“Why do we have “homeless people” when we live in a country with 3 million + vacant houses?”
God, how I hate this line of reasoning. Many of the homeless I see in this fair city are not mentally stable. I doubt they would know how to live in a house. The options, as ugly as it may seem, are homelssness or a mental institution. Well, the institutions were closed in the 60s because they were “inhuman”. That left the streets as the nation’s mental institution.
Why do people try to act like complex problems have simple solutions? Just put them in the empty houses. Problem solved. Geez.
because the problem has been framed as “homelessness”? just a guess
At my last gold/silver meetup in Chicago, I had 15 people agree to dress as homeless people for one day and sit on the curb at a random intersection. We’ll probably do it on the first snow. If you’re interested in making some fast and easy cash, and you live in Chicago, stop shaving and join us.
It will change your mind on the topic of homelessness. As someone who volunteered for 5 years up in Zion, Illinois (’the homeless capital of lake county’), I can tell you that MOST homeless people are neither mentally challenged nor unhireable. They just make a very, very good living doing nothing.
Chicago has at least 10 churches that have excellent shelter-to-work programs that work. Get a few business cards, and if a homeless person asks for money, send them that way. If they don’t go, let them freeze. If they’re mentally disabled, thank your government for putting them there (shell shock, PSTD, etc).
I could not agree more.
Since when has every little thing become collective problem; a government problem.. a public burden?
Call sis and tell her he can stay with you.
We spent too much borrowed money building homes and not enough of it building companies and jobs and incomes to pay back the borrowed money.
Oh, all this borrowed money created lots of companies and millions of jobs.
They just weren’t in the U.S.
We’re about to see tectonic shifts in trading behavior.
Companies that give their employees a higher standard of living and toss them and their families aside like banana peels once a better deal comes along? Yeah that’s what we need.
/grew up near detroit.
1 out of 10 Americans gets food stamps (nicely disguised nowadays-in lieu of vouchers, a credit card-like system is in place) and that means probably 40 to 50 million people only eat because of government give-outs.
10 out of 10 concerns that grow food are only able to do it because of government give-outs.
Something’s gotta give…
…and in Humboldt county, California, about 7 in 10 grow dope for commercial purposes and 3 in 10 are on SSI. So, can anyone explain to me why it costs as much to live here now as Monterey????
Because you have a Indian Casino in Trinidad
It boggles the mind, Anthony. I never could stand Eureka. Perhaps it’s “different” there now?
I doubt it is much different, although long-timers say there is more homeless and poverty and drug use. Also, the Evergreen pulp mill just closed. I believe the official unemployment rate here is close to 9% but when you count in all the people who aren’t really looking for work (SSI recipients, retirees), it is probably more like 30%.
Food stamps is another name for Farm subsidies(especially the corn farmers).
Food stamps use a credit-card like system because that is how the vast majority of people pay and it didn’t make any sense to use an extremely different system, with physical stamps no less, to handle the “food stamp” program. Developed nations organize farming in a wide range of different ways, but not remain agrarian. The majority of the US population lives in suburban circumstances that are fine for growing food. Great companies like Niman Ranch grow excellent food in sustainable ways and are already leading food sector growth, so you would be well served (pun alert) by spending less time and energy kvetching and putting more into getting onto the new food sector bandwagon.
Homelessness, drug addiction, mental illness - they’re big business nowadays. We must remember, the gov’t is the largest single employer and it didn’t get that status by accident.
Government contractors now outnumber government employees.
I cannot remember the name of the politician that once said the poverty for NYCity is what oil is for Texas. If anyone knows who he is, please post it. Definitely it sound like there is a LOT of money in these government programs for support of poor people.
At what point does the local and state gov’t step in and say “we’re going to put THESE homeless people into THOSE vacant houses”
I believe that these gov’t entities and the money Gods already DID that with a little help from the banks and we shall call the soon to be homeless again… HomeDebtors.
Amen
that’s what got us into this mess in the first place
Hmmmm. That’s just who I want living next door to me. People who cant afford to live in a small dump.
Sounds like a SOL day may end a SOL month on Wall Street. Enjoy them billions of dollars in bonuses, boyz!!!
* TODAY’S MARKETS
* OCTOBER 31, 2008, 9:04 A.M. ET
Stock Futures Fall Ahead of Data
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
U.S. index futures were weaker on Friday morning, suggesting that markets would close one of the most brutal months for stocks on record with another decline.
More than one hour before the start of trading, Dow Jones Industrial Average futures dipped about 110 points. S&P 500 and Nasdaq 100 futures were also weaker but off their earlier lows. Changes in futures do not always accurately predict early market moves after the opening bell.
…
October has been a horrible month for the stock market. Heading into Friday’s trading the Dow industrials have fallen 15.4% for the month. If those declines stand, it would make October the 11th worst month in history and the worst in 21 years. Stocks have also been volatile. The average daily range for the Dow from low to high has been 605.51 points. The index hasn’t had two consecutive daily gains all month, and it has had sixteen down days, the most since August 1973, during a grinding bear market.
With this market’s volatility we could see a 600 point up day, by the close. Nothing is as it seems.
Well, at least they managed to get the bailout as a consolation prize. Which will go down in history as the single biggest swindle con-job of all time. Banks should always be in a postition to bail out people, not the other way around. What a joke.
As the price range increased the last 3 days volume/demand decreased each successive day. We’re at the top of the price range, 9,400 DJIA. Demand increases as we near the bottom of the price range, 8,000 which coincides with 2001, 2002, and 2003 lows.
Everything being equal, price should stay below the top range or demand decreases further. If demand increases as price breaks through the top range, a major shift in sentiment is underway.
Q: What’s a good site to reliably track and compare overall volume?
Try bigcharts. It’s free. The interactive charts work better with IE than Mozilla, however.
Thanks!
hehe, took a quick jump to 9,454 and back down.
Two questions:
1. What happened to Real Estate in Argentina during their hyper-inflationary periods?
2. Historically, what has happened to the price of gold during a depression?
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For Argentina, substitute any Modern, post WW2 Industrialized economy, if you care.
For gold in a depression, I am specially interested in here in the U.S. as it seems that it offers nothing special during a depression.
Muir,
Of course the world isn’t on the Gold Standard anymore, but i’ll try to paint a picture of what it was like back in the 1930’s…
One by one, countries went off the Gold Standard, and as they did, their banknotes were backed by nothing, and the USA was the last man standing, still adhering to a system of financial checks and balances set in motion 2,500 years earlier.
The Europeans then proceeded to make a run on our Gold Supply, as the value per troy ounce in their fiat money was closer to $30, than $20.
As a result of the difference in face value (a $20 Gold coin contains just under 1 troy oz of pure Gold) and the Gold value, a tremendous amount of metal was transferred to Europe, our bankers only to happy to play along and share in the profits.
As a result, we too went off the Gold Standard in 1933, because of these fiat raids on good money. (Gresham’s Law)
FDR set the price of Gold @ $35, which took into account the value in Europe in fiat terms, and padded it a bit.
If you had your money in Gold coin of the realm in lieu of having it in cash in say 1930, you were rewarded with a 75% return in less than 5 years time. Not too shabby.
During the last depression in the U.S., the dollar was still pegged to gold at $35/oz, so that won’t be a very good measure of how it’s price will change.
Not sure what you are looking for exactly, but I’m thinking the price of gold in terms of the local currency would be less interesting than the value of gold in terms of other things, either consumables or probably large assets.
Real estate comes to mind, maybe even other assets like big trucks, heavy equipment, farm equipment, stuff like that. It’s conceivable that someone who was duely prepared, could buy those types of assets during a depression and hold on to them for a few years and then start a business with those assets or sell them when the next expansion cycle starts.
1. Price of real estate collapsed; it is almost impossible to borrow money in hyperinflation, so real estate deals became all cash, usually tied to something else (like gold or foreign currency).
2. Gold rises in a Weimar-style hyperinflation. It also rose during the deflationary Great depression. I can’t think of a historical depression where value of gold fell but it might be possible under some scenario. Generally, any large economic dislocation is good for gold.
Going back to Argentina; they had a GDP larger than France before the economic collapse and are now an economic basket case. Yes, it can happen here.
It might be more accurate to say that the purchasing power of gold rises in a depression, than to say the price rises. The purchasing power of cash rises more than gold in a deflation.
Thanks blue.
The wording of my question was horrendous , my bad.
That was the question.
(Thx all)
as for real estate, I was told that shortly before the crash real estate in the big Argentina cities was extremely overvalued; prices went down by 75-90% in a few years, but I don’t know how those prices relate to pre-bubble pricing. Probably homes were a store of value somehow for those without a mortgage.
Normally home prices should track incomes (as long as there are no big changes in mortgage lending, speculation etc.) and have a sensible relation to rents for similar properties.
The real problem in Argentina was with the mortgages (which were adjusted for currency depreciation to the benefit of foreign lenders, while incomes and savings where not adjusted). And the other problem was that there were little buyers left after the crash.
MARK HULBERT
Deflation vs. inflation
Commentary: Deflation is more likely than many assume
By Mark Hulbert, MarketWatch
Last update: 11:59 p.m. EDT Oct. 30, 2008
ANNANDALE, Va. (MarketWatch) — Is the gold market sensing deflation?
“Deflation is more likely than many assume”
This deflation that nobody can see wouldn’t have anything to do with trillions of dollars vanishing into thin air, would it?”
It couldn’t possibly have to do with home prices falling at annual rates of 25 pct or so in wealthy coastal communities, could it?
Or stock prices declining all around the world?
Naah, naah, none of this is deflationary.
Buy gold before you are priced out forever™.
Ber-spanky call “always inflate” in a paper regime was the pet thesis of just about everyone based on that one stupid paper that he wrote.
But nobody told him about the shadow banking system which was in plain sight to everyone but the academics. (how do you think all the hedge funds were getting “financing”?)
Not to mention that there are political hurdles to jump over.
BWAHAHAHHAHAHAHHAHHHHHHHHHHHHHHHHHHHHHHH!!!
The house of cards is still fully levered. Everything is intact.
Really?!?
So I must have imagined Lehman going to banking heaven. And all the hedge funds blowing up. And all the banks scrambling for capital.
Everything’s intact. Well, golly gee gosh. Don’t I just feel stupid now!
Stock prices falling are no more deflationary than stock prices rising are inflationary.
Inflation can cause stock prices to rise, but so can increased productivity and consumer demand for a product.
Likewise, falling stock prices can because by decreased consumer demand for products or increased inefficiency.
Now, an increase in the demand for investments means there must be a decrease in demand for other goods; likewise, a decrease in demand for investments must mean an increase in demand for other goods. It follows, that without any inflation a fall in the stock market and an increase in consumer prices can occur with a fixed money supply and levels of production (no inflation or deflation).
An increase in the hoarding of dollars (demand for dollars relative to other goods, aka demand for savings) can give the appearance of “deflation” even if the money supply is growing *or* fixed. This savings becomes the fuel for massive inflation down the road.
I believe we are seeing dollar hoarding more than we are seeing a decrease in the money supply.
“I believe we are seeing dollar hoarding more than we are seeing a decrease in the money supply.”
I agree, VT
“Stock prices falling are no more deflationary than stock prices rising are inflationary.”
That is correct, but I lost you after that statement.
Try a couple of thought experiments to test the consensus view that stock prices live independently of consumer price inflation:
1) Suppose the value of stocks went up by 500% over a twenty year period, and they were widely distributed over households through 401(K) plans. Do you think aggregate consumer demand would go up or down? If demand went up, do you think aggregate consumer prices would stay the same, or go up to reflect the wealth effect?
2) Suppose that in a bad year, the value of stocks went down by over 40%. Do you think aggregate consumer demand would go up or down? If demand went down, do you think consumer prices would stay the same as before, or decrease in the aggregate to reflect a negative wealth effect?
Needless to add, I don’t mean to suggest the above examples are anything but hypothetical…
“Now, an increase in the demand for investments means there must be a decrease in demand for other goods; likewise, a decrease in demand for investments must mean an increase in demand for other goods.”
The money supply is fixed in VT-Dan’s parallel universe.
“I believe we are seeing dollar hoarding more than we are seeing a decrease in the money supply.”
Ditto for the Precious(TM).
Bear:
“Needless to add, I don’t mean to suggest the above examples are anything but hypothetical…”
-
“I believe we are seeing dollar hoarding more than we are seeing a decrease in the money supply.”
“Ditto for the Precious(TM).”
-
I don’t think anyone really understands deflation. The only good modern example was Japan, and we are repeating the same mistakes they did.
Moral Hazard is a bigger long term risk than deflation, IMO.
Right. Nobody understand anything. Except those that do.
We need a bumper sticker here.
Well, if our policymakers understood deflation when it was peaking in Japan, they aren’t following their own advice now.
Supposedly, inflating M3 is good for the economy right now, which is what got us into this mess in the first place (thanks Greenie!).
Maybe all those real smart economic types know what they are talking about, both in US gov’t and on the HBB. Could have fooled me, though.
They forgot about the Shadow Banking System™.
More money is going to money-heaven outside their control than all the printing they are doing.
Moral Hazard in Japan? Naaaah:
Just some Free Money
“This puts into perspective the federal government’s efforts in recent months to pour huge amounts of money into the financial arena. That would otherwise be quite inflationary.”
-
Otherwise?
Don’t worry, they are just talking about the paper price, not the physical metal price. Of course, the latter always goes up, in the long run (just like stocks and houses!).
METALS STOCKS
Gold futures lose ground as dollar strengthens
Metal poised for biggest monthly loss since 1983
By Moming Zhou, MarketWatch
Last update: 12:19 p.m. EDT Oct. 31, 2008
NEW YORK (MarketWatch) — Gold futures fell Friday, set for their biggest monthly loss since early 1983, as a strengthening U.S. dollar and fund liquidations pounded the precious metal and other commodities.
Maybe the FED and Sheila Blair will bail out all the speculators who lost money in Gold recently ?
Yet there is next to no gold (physical) for sale. Hmmmmmmm.
Or silver. Hmmmm.
Things that make you go, hmmmmmm….
fear…
gold…
cash…
hmmmmmmmmmmm…
By George, I’ve got it: I will stuff all my cash and/or gold under my mattress for safekeeping.
outside the dollar universe, gold prices have held up quite well or even gone up over the last months. What you perceive as a goldprice plunge is in reality nothing more than a US dollar shortsqueeze.
Be that as it may, gold and other commodities prices have plunged, and unlike short squeezes in stocks, which come and go in a day or so, this short squeeze has long legs.
An apartment on the floor below us has an eviction notice hanging on the door. The reason is “failure of payment”. Why aren’t we bailing them out?
Deflation, or the decline in amount of money active in an economy, will never happen in the States due to the decreasing of the Federal Reserve’s “mandated” reserve ratio. Just because banks are failing to lend to some people doesn’t mean that the banks won’t lend in the future.
In reality, price deflation or inflation is a myth, too. For every individual there is a different barrel of goods and services that matter to them. To think that anyone should be concerned with what “everyone” is experiencing is a myth. If you MUST pay attention to the overall picture, do so only so that you can adjust your own financial situation.
If the overall national AND local economy sees general price increases, it means it is time to save, and preferably outside of the cartels. “But my dollars will be worth less!” Yes, for the short run. You’ll lose value. But when the business cycle turns the other way, your money, overall, will likely be worth more, as is the case currently.
The dollars I hoarded for 4 years (to the shock of friends and family) are now worth 200%-800% more than when I first earned them, based on what I set them aside to buy. In one (rare) case, my dollars are worth over 1100% more for the same product. Yes, they did lose some imagined value for 4 years, but now they’ve reclaimed their status.
To me, I don’t care about inflation or deflation of others, I care about it for my own financial well being, in my life, for my products and services I need. I can weather the short bubbles and busts, and do so in a contrarian manner.
I get a lot of requests on how to make money fast: simple, save during booms, spend during busts. How hard is it?
Really?!?
So money printing and money going to money heaven are myths. We must be imagining it all. It’s all in our heads, is it?
WHEEEEEEEEEEEEEEEEEEEE!!! If I step out of my window I can fly. Gravity is a myth too.
“For every individual there is a different barrel of goods and services that matter to them.”
The vast majority of the goods that interest me actually start their life in a barrel.
Roll out the barrel, roll out the barrel tonight…
monkey’s?
You set aside dollars to buy a computer, the computer falls loses 50% of its value in 1 year, so your dollars have gained relative to the computer and you consider yourself to have “made money”.
Your position is short sighted because you ignore the opportunity cost. Just because what you want to buy is falling faster than dollars does not mean that you should be saving in dollars.
For example, 4 years ago you set aside $100,000 to buy a house and since that time housing has fallen by 50% you have realized a 100% gain on your dollars relative to housing; however, if you had put your money in, for example, gold, you would have made a return of 400% because you would have twice the dollars to buy half the house.
In this sense, you must be concerned about inflation others experience. There are only two reasons to own something, because you want or because you think someone else wants it. There is only one reason to hold dollars, because you think someone else will want them. At all times we should attempt to save in what we believe others will want the most in the future (when we need to make an exchange).
What the Gold haters simply fail to realize, is that we are no different than those of you that have put all your faith in paper & computer bits…
We are all savers, but only a precious few figured out the endgame.
Nobody “hates” gold.
At best, we’re neutral on the subject; at our worst, we love making fun of the tinfoil hats.
We know the endgame as well as you do. But we don’t spend our lives waiting for the endgame when we could be, oh the shocker, playing the game.
PS :- I know someone who waited for the endgame for 50 years. Then he died. The game is still on. That pretty much sums up the problem.
Once a pawn of time, always upon a time.
This doesn’t even make sense. Even after I put my tinfoil hat on.
A watch is a prison
you wear it, it shines
but if enjoying life is your mission,
then your enemy is time.
A stopped clock is right twice a day. Eventually your predictions will be right, too. But will you still be alive?
Lad–Reminds me of a great short story by Ballard, “Chronopolis”. If you haven’t read, it’s worth at least a library check-out.
“We know the endgame as well as you do. But we don’t spend our lives waiting for the endgame when we could be, oh the shocker, playing the game.”
Well said!
I also say no one “hates” gold. We don’t even abhor fantasy. We abhor conversation with one of a closed mind.
“We are all savers” You keep saying that. Give us a break. You HELOC’d your house to buy the latest in idiot trap consumer electronics for your roof. That is not saving.
It is no wonder that you hate deflation.
“We are all savers” You keep saying that. Give us a break. You HELOC’d your house to buy the latest in idiot trap consumer electronics for your roof. That is not saving.”
I disagree with that statement. Alad has said that he is at least breaking even on the monthly nut. Once the bill is paid off, he has for free(electricity) what others are paying monthly for. Throw in a Volt type plug-in car and he eliminates his monthly gas bill. At that point it will not matter if KWH are $1.50 or .04 he is not paying either.
Smart move if the numbers work in your location and you plan to stay long enough for it to pay off.
The numbers for my moms house are close, but not quite their yet. When they equal out, I will pay for the setup myself to save her money rather than give her money. My payback is the house is going to me in the end anyway.
Short term thinking is what got us into this mess with both finances and energy.
Who put faith in paper and computer bits? You have put your faith in a hoarding strategy. My strategy is to put my money into networking and productivity. As a result I have good working relationships with a range of farmers just outside my urban area and also local wealthy gold hoarders who will need help and connections to those farms in a crisis. With are both balancing risks, and both positions have lots of downside. My guess is that the first person you try to pay with gold in a post crash environment is going to follow you home with their buddies and prey on you, and that is just one of the big risks with your strategy. Faith in paper and computer bits, indeed!
Following people home to prey on them when gold is the only currency of the realm will be a one way trip. There will be no justice delayed for crime as there is now in these times
VT
Nice, thank you.
‘Deflation, or the decline in amount of money active in an economy, will never happen in the States due to the decreasing of the Federal Reserve’s “mandated” reserve ratio.’
You said you are an economist, right?
bond market rally time.
hats backwards inside out with a bubblicious candy right in the sweet spot.
3 month- 0.30, helluva buy. better get em now lest you be priced out forever.
“…This week, Kuwait’s commerce minister, Ahmad Baqer, was quoted as saying that the global crisis will prompt more countries to use Islamic principles in running their economies. U.S. Deputy Treasury Secretary Robert M. Kimmet, visiting Jiddah, said experts at his agency have been learning the features of Islamic banking.
Though the trillion-dollar Islamic banking industry faces challenges with the slump in real estate and stock prices, advocates say the system has built-in protection from the kind of runaway collapse that has afflicted so many institutions. For one thing, the use of financial instruments such as derivatives, blamed for the downfall of banking, insurance and investment giants, is banned. So is excessive risk-taking. …”
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/30/AR2008103004434.html
If I recall, Muslims are not allowed to charge or pay interest.
And Wells Fargo is now charging 10% APR for a 30 year jumbo loan *while offering savers 1%* Banks will be making money hand over fist. Good investment?
treasuries are a joke
http://www.bauerfinancial.com/btc_cdratewatch.asp
My friend’s kids are dressing up like Bernanke & Paulson tonight for Halloween…
I’ll be hanging out with Count Floyd~
http://www.youtube.com/watch?v=0Q6nDqlaqeU&feature=related
“My friend’s kids are dressing up like Bernanke & Paulson tonight for Halloween…”
Were all the Hitler and Pol Pot costumes sold out?
Comedy!
Happy Halloween to you.
I’m thinking of pasting a bunch of fake dollar bills to a sheet, covering myself with it, wearing a bucket with suspenders, and calling myself a Monster Bailout.
LOL
Quick question. Any pointers to where one can learn how to identify construction quality? Of course I know the obvious things, crooked outlets, poorly mounted outlets, corners, etc. But I didn’t come up with much with google searches as to all the things to really look for.
Look for some books by “Holmes on Homes”. DH and I started watching his show after DH heard him speak. While I haven’t read the books, he has high standards, so they could be a good a place as any to start.
I think he is very entertaining, but more like the Jim Cramer of home inspectors.
can learn how to identify construction quality ??
Not sure you can get there by reading a book…Probably kinda tough to do without a trained eye…I suggest a good building contractor or a property inspector even though the property inspector won’t really address the “Quality” of the construction…
NEVER buy anything without a home inspection done a by an ASHI certified home inspector NOT recommended by the Broker. They will do a very thorough job. It shouldn’t cost much more than $500 and well worth it.
I understand this. But if I’m just going to look-y-loo, I want to be able to own whomever I’m talking to. Pointing out tons of flaws is a great way to help beat down the price when making a 50% offer in 2010.
If you need to hire a home inspector, to evaluate the property your going to buy, you shouldn’t be in the market. Home inspections were invented by realtors, to protect themselves against lawsuits. Any knob, with half a brain can do a home inspection. I hate to tell ya, a house is just a box, or a combination of boxes.
As a buyer, you should know.
1. The difference between a 100 amp service, a 200 amp service and an old pull breaker 60 amp service.
2, If the foundation has a crack, its cracked!
3. If the chimney has a crack, its cracked!
4. If theres a water line on the basement wall, or theres a painted floor, the basement leaks.
5. If theres a lead pipe servicing your water supply, don’t buy the house.
6. If you see mold on the attic wood or water stains, the roof leaks.
7. If you just see edges of shingles and no more, or the shingles are curled, it needs a new roof.
8. In a house with real plaster, cracks are common and thats the way it is.
9. In a house with drywall cracks indicate house settling or poor construction.
10. Flush all the toilets, run all the faucets…look under the sinks for leaks, water stains or fresh paint.
11. Make sure you get a survey of lot lines with the house and check the lines.
12. If the driveway is concrete, it will be cracked, its the natur of concrete.
13. If the driveway is blacktop, it will also be cracked. Thats what it does.
14 Garage doors normaly don’t work, get over it!
15. If you can’t open the dorrs ingress and egress, their crooked, dont buy the house.
16. If you cant open and close the interior doors, don’t buy the house.
17. Same with the windows.
18. Turn the firnace to 00 degrees and run it. if it don’t heat, don’t buy.
19. Turn the ac to 60, if it don’t cool, don’t buy.
20. Do all of the above and you just became a home inspector.
AND, if you can’t do all of the above, go ahead anf hire a home inspector, then plan on spending big bucks on paying somone else to do what any idiot can do!
Awesome post!
“learn how to identify construction quality?”
Buy a level.
Excellent advice Frank. The high dollar cost deficiencies are almost always structural and much of the time are revealed in architectural detail. Step back to maintain objectivity and sight down long walls, inside, outside and all elevations including the basement. Water penetrating basement walls is quickly covered up with white paint so it should be a flag. Look for effluorescence(a white, powdering calcium like scale) on cast in place and block walls. Check foundation walls (best hidden behind ‘landscaping’) for spalling/deteriorating concrete. Be on the look out for fresh paint on gyp board walls and closely look at inside corners on gyp board walls for differential settlement. If possible, visit structure while raining to check out basement and attic for leaks. Differential settlement and subgrade subsidence supporting foundation walls and basements are the source of most structural failures. These failures will cost you ALOT of $$$.
Much less costly is mechanical and is best checked out by a boiler or furnace tech unless you’re confortable opening up a boiler. If a well, run the water full bore for 15 min. and take a sample in glass and check for sediment and of course take a bac-t sample for coliform. If septic tank, find location of field and check for spongey soil, obvious odors and determine last time tank was pumped.
Here in Norfolk, VA everyone in my apartment building got a letter from the management company that they are offering $250 referral fees. Of course, they are trying to increase the rent $200+ a month on people. People are bailing. At this point, some of the asking rents are $1450, and that is in a building that tends to have lots of mechanical issues and coin operated laundry. Around the corner one can rent newer condos with in-unit washer/dryer and all the bubble lipstick for around $1300/month. Right on top of this they send out letters saying that tennants can no longer park in a large portion of the parking lot next to our building during the day because it’s now rented to the neighboring architectural firm. They claim they will check and be towing all violators 3 days from now (ignore that people may be out of town for 5 days and miss this notice.) A great way to win over customers.
Similar story here in Sunnyvale, CA. Mgmt just put flyers on all the front doors saying they’re offering $300 referral fees. Tracking the prices on our complex on Craigslist over just the last month has seen a $200-400 decrease on asking prices. This contrasts against a $400-600 increase over the last 2.5yrs we’ve been here. Seems we’re falling off the edge now. My wife says she was told by a friend that the last time this happened in our complex was ~6yrs ago. Funny how that coincides with the last recessionary spell. Can’t wait to see the bigger price drops — if we can keep our jobs, that is.
Rob
Rob…That is quite surprising…I did not know that rents were dropping in Sunnyvale…Are there a lot of vacancies ??..Do you think its due to job losses ??…I am in Santa Clara
scdave,
I’m in San Mateo County and I’ve noticed rents are dropping, some are willing to pay all your utilities, and some are willing to accept section 8s. I look at Craigslist and some other rental lists. You can tell by the rental price which ones are looking for someone to pay their mortgage.
Kinda surprised that you’re paying $1450 to rent an apartment in Norfolk, as I’m paying $2000 to rent a 3br 3.5 bath townhouse in Fairfax. I got a letter from the landlord the other day and the annual rent increase is [drumroll, please] $0. Yes, zero. I’m even seeing vacancies in the complex, something I didn’t see last year.
Oh, and my landlord is a property management company that owns a block of townhomes (among other properties through the DC region), not an accidental landlord.
Oh, the schadenfreude. Everyone, even the oil dudes got pumped.
Oct. 31 (Bloomberg) — Abdullah Hajeri led a march on the Emir’s palace in Kuwait this week, demanding the oil-rich nation’s ruler stop stocks from plunging…. “Every day the market is crashing,” said Saleh, a 42-year- old trader, staring dumbfounded last Tuesday as company names scrolled across the Dubai Stock Exchange’s outdoor ticker in red.
Its is written: Stocks will stop plunging!
Boy, that was easy!
Damn…….we should have thought of that.
“We have no idea of the details of our derivatives exposure and neither do you.”
Senior Lehman official to US government officials the weekend before the BK filing.
“…The ongoing efforts to bail out the financial system, even if they work, won’t do more than slightly mitigate the problem. Maybe some consumers will be able to keep their credit cards, but as we’ve seen, Americans were overextended even before banks started cutting them off.
No, what the economy needs now is something to take the place of retrenching consumers. That means a major fiscal stimulus. And this time the stimulus should take the form of actual government spending rather than rebate checks that consumers probably wouldn’t spend….”
Paul Krugman
http://www.nytimes.com/2008/10/31/opinion/31krugman.html
He’s a macro-economist. There are no budget constraints in his parallel universe.
Certainly a Nobel Prize winning economist gets the concept of dilution?
Japan built plenty of bridges to nowhere. They went from being the largest creditor to the second largest-debtor nation.
And still no reflation.
Not while Mrs. Watanabe could play the carry trade. Looks like Mrs. Smith is gonna get in on that one too.
but,but…
Weren’t the Japanese making all kinds of stuff, and investing in the infrastructure of China & assorted tigers, a must-have set of circumstances ideally suited to make the Carry-Trade work?
Mrs. Smith is a little late to the game…
Mrs. Watanabe was late to the game too so I guess the parallels are even more exact.
A local sportswriter wrote a column once, saying that there was no such thing as a “salary cap” in the NFL, because it didn’t seem to stop Dan Snyder and Jerry Jones from spending crazy millions on football players.
For the same reasons, I’ve decided that the Federal Deficit doesn’t matter anymore either.
My “Daylight Savings Time” solution to the problem: At 2:00 am on November 1st, move all decimal points three spaces to the left.
Juan Cole: “It is dawning on the Bush administration that it will not likely get a security agreement with the Iraqi government by January 1. In the absence of such an agreement or an extension of the UN Security Council mandate, US troop actions in Iraq could be considered war crimes in international law.”
Kidder Reports
why the worry? As far as I know there is an official agreement that war crimes committed in Iraq by the US will not be prosecuted by the international justice court in the Hague.
And even if there is a theoretical possibility, I’m sure Shrubs fans in the Netherlands like De Hoop Scheffer (NATO Secretary General) will make sure nothing happens. For those people, only acts against US or Israeli forces count as war crimes.
Seriously, compared to the hundreds killed by street bombs in Iraq every week during some months a couple years ago, you are worried about American war criminals? Shakes head in amazement at European math.
wmbz posted this story above, but this one has the actual list. Dayam. What’s the historical foreclosure rate, 1 or 2%?
So, for the state currently with the fewest underwater mortgage (NY), if half of those mortgages go bust, that’s a 2.2% foreclosure rate, already above the historical rate. (And I suspect those with the fewest will join the party with more later.
The average appears to be about 13% underwater for all states, or 6.5-13x the historical rate!
I’m surprised there aren’t more comments about this above!
money_cnn_com/2008/10/30/real_estate/underwater_borrowers/index.htm?postversion=2008103108
Real estate investor is a casualty of dire times
“By the late 1990s, he had acquired enough assets to work full time as a property-flipper, buying fixer-uppers, remodeling them and selling them at a substantial profit. He eventually sold his properties to buy a 34-unit apartment complex in Portland. At that point, he was making about $265,000 a year in rent, and the property values were rising.
But after trading the complex for several units in Southeast and Northeast Portland, he hit a snag.
Several homes turned out to need more repairs than Halase had expected, and he took out a $400,000 loan against his home.
When the homes were finally ready to sell, the market softened, and nobody would buy them. Now, all 19 of his properties are either in default or headed that way. ”
I don’t know what “making” $265K in rent means. I suspect its before PITI. If not, if that was his actual income, what a maroon! I’d could be VERY happy with half that salary.
Ah sheesh, I thought all of the stupidity had settled right here in California. Don’t tell me some were able to overcome state lines. Next time we’ll keep them under better control.
10:27 am Pacific. The DOW just shot straight up, and I mean vertical, to a gain of 198 points in just a moments time. Juiced.
Perhaps, as a country, we’re headed for an all time high in the stock market (padding the pockets of the wealthy) and, subsequently, and an all time low in standard of living and employment for the masses. The great divide?
Boy that turned out ugly. It should have read “subsequently, an all time”. How do I cross out a word like so many posters do, anyone? PB?
“
andsubsequently, an all time”there, taught myself. Please ignore all of this. Sorry, Ben.
BB is creating a new economy, a Jenga economy. Steady.
Nice analogy. I like it (and intend to plagiarize it)…
“People are seeking refuge in dollars,” said Mariano Tavelli, who manages $300 million of assets at Buenos Aires- based brokerage Tavelli y Cia. People lined up for dollars at exchange houses today in downtown Buenos Aires, where retailers sold them for as much as 3.42 pesos per dollar.”
Bloomberg: Argentine Debt Rating Cut by S&P Amid Default Concern
really sad; at least I hope the people of Argentina are a bit prepared now for what is coming, after their first crash course (although switching to dollars does not sound very clever to me, but maybe it’s the only easy option).
Halloween with foreclosed houses:
http://jonnyob.blogspot.com/2008/10/halloween-is-going-to-suck-this-year.html?ref=patrick.net
This list about covers it, except for houses, derivatives contracts and employment. What went up when everything went down?
markets
Spooked in October
Ten highlights in a month that marked one of the worst in history for stocks, emerging markets, bonds, currencies and commodities.
Short bets.
Even the ones that were banned?
Maybe they were made “pre-ban”.
Forgot to mention hedge funds, pension funds, commercial real estate, free market capitalism, etc etc etc
Gold, you forgot, gold.
That veritable fount of religion, the one and only, the only thing worth talking about, etc.
I guess I thought it was covered under “commodities.” But what the heck…
METALS STOCKS
Gold futures lose ground as dollar strengthens
Metal posts biggest monthly loss since 1983, down 18% in October
By Moming Zhou, MarketWatch
Last update: 4:02 p.m. EDT Oct. 31, 2008
NEW YORK (MarketWatch) — Gold futures fell 2.7% Friday, ending October’s trading with their worst monthly record since early 1983, as a strengthening U.S. dollar and fund liquidations pounded the precious metal and other commodities.
Also forgotten…
Treasuries Fall for Week as Credit Thaw Trims Demand for Debt
By Cordell Eddings and Dakin Campbell
Oct. 31 (Bloomberg) — Treasuries fell this week, with 10-year notes posting their worst five days since June, as government efforts to unfreeze credit markets reduced the haven appeal of U.S. debt.
Yields on longer-maturity debt increased the most as the London interbank offered rate, or Libor, that banks charge each other for three-month dollar loans dropped to the lowest since September. The Federal Reserve reduced the benchmark interest rate to 1 percent. Sales of short-term corporate debt climbed to a record as the Fed began buying the obligations.
“Some of the Fed programs are having a meaningful impact, reversing some of the flight to quality,” said Michael Cloherty, head of Treasury and agency strategy at Banc of America Securities LLC, one of 17 primary dealers that trade with the central bank. “The theme for the week has been, and will be for the next couple of weeks, the meaningful improvement in Libor.”
I see that Lawrence Roberts (Irvine Renter) has his book out, and is advertising on this site.
Ben, where is your book? Or did you decide not to write one?
Is the Dow gonna get back to 10-11k in the short run? I’m considering shorting it at this point (~9400).
Lots of bubble-era stocks that had remarkable runs during the trading day are tanking after hours…
BULLETIN
Major stock indexes close month down 14%-17%; Dow has worst October since 1987
What’s “short”? Look at the swings. Except for a few personal stocks I follow closely and over the years, I would stay as far away as possible for the time being.
2 days in a row up in the DJIA, first time in a month.
from Yahoo’s Business
“Even if alternative organizational structures are considered for the future, the U.S. government’s strong and effective guarantee of the obligations issued under the current GSE (government-sponsored enterprise) structure must be maintained,” he told a public policy symposium by videoconference.
The U.S. government took over Fannie Mae and Freddie Mac in September as the companies finances foundered.
Bernanke said that some form of government backing for bundling mortgages together as securities is probably still needed in times of financial strain.
“Experience suggests that, at least under the most stressed conditions, some form of government backstop may be necessary to ensure continued securitization of mortgages,” he said…”
Then give a guarantee. Right now the spread is as wide as ever and the market in MBS is dried up. Today was the lowest liquidity yet. Mortgages on Monday will be 7%.
why not 10%?
This is awesome! NY Times, you rock!!!
The Debt Trap
A series about the surge in consumer debt and the lenders who made it possible.
Ms. McLeod used debt to keep going until she was fired from her job in March for writing inappropriate e-mail messages. Since then, she has been selling her coveted handbags and other items on eBay to raise money while waiting to be evicted from her
home.
Credit card companies and banks that loan to idiots like McLeod do not deserve to get bailed out by taxpayers like us. Consumer loans the next finacial diaster ?
Oh, i feel sooooo much better. Richard Hoey from the Bank of NY Mellon just said on Bloomberg that the FED has our back and this whole housing problem will all go away next spring! Time to go out, celebrate and start looking for that new house to buy!!!!!
For those that are still undecided, I ask you to consider the failures of 9/11, Iraq, Katrina and Wall Street. The administration that McCain will set up will be loaded with ex-Bush staffers. Almost nothing will change.
Do these people deserve another 4 years? Another 4 minutes?
Do your civic duty then relax. Our long 27 year national nightmare is nearly over.
Let me see if I’ve got this straight: Mr. and Mrs. ‘gotta-live-large’ with their limited income jive their mortgage application and wiggle into a 3500 SF McMansion, where they traipse between the entertainment and exercise room (where they spend too little time judging by their large waistlines). Their kitchen drawers are full of takeout menus from rustic Italian Trattoria’s to the hotspot bistro. Now: Oops, they got in trouble and can’t pony-up the mortgage payment. Mr. and Mrs. ‘common sense’ got the 30 year fixed on a 2000 SF property within their means. Now: they are up to date with their mortgage notes, and have a nice emergency nest egg saved as well. They don’t eat out much.
How it plays: government assists Mr. and Mrs. ‘gotta-live-large’ in staying in their McMansion by rejigging the mortgage contract as long as they meet minimal prerequisites. The lesson for Mr. and Mrs. ‘common sense’ = being honest and sensible may not trump being dishonest and stupid.
Comment by Ria Rhodes
I don’t think it could be summed up any better than that. Run for President and I will vote for you.
Not hardly.
Many folks who tried to buy within their means were forced to take ARMs and/or were also forced to (through denial/approval) to buy larger homes.
Fact.
Many more folks took out that second mortgage to pay for medical bills… the LEADING cause of bankruptcy in this nation.
Then we have the flippers.
Then we have the poor planners/overly optimistic buyers.
Then we have deadbeats. Your true deadbeats make up a VERY small percentage of the problem.
I wouldn’t vote for you as dogcatcher, though no doubt you’ll make a great school district administrator one day. You have right attitude.
“forced to take arms”
line of the day, didja hear or even read what Greenspan just confessed….
a flaw…. minor, but a flaw…
the US treasury bond maket has a little “flaw” as well….
tiny bubbles…..
ecofeco
You don’t know what you are talking about on your first statement. We all have choices and we live with the choice we make. Your statement is really stupid.
No one, and I mean no one could force me to take an ARM loan if I did not want it at the time, not you or any F__kng mortgage broker.
But then, of course, if you did not have the income in the first place to pay a real mortgage with 20 percent down you felt like your back was up against the wall. In this case the banker and the borrower both got what they deserved.
“Many folks who tried to buy within their means were forced to take ARMs and/or were also forced to (through denial/approval) to buy larger homes.”
I didn’t know that the crooks put guns to their heads and made them sign for ARMS they couldn’t afford, thanks for the heads up.
“Many more folks took out that second mortgage to pay for medical bills… the LEADING cause of bankruptcy in this nation.”
That happens and is what bankruptcy is for. I am sorry you think that these few would cause a financial nightmare and trillions of dollars in bailout money.
“Then we have the flippers.
Then we have deadbeats. Your true deadbeats make up a VERY small percentage of the problem.”
All are deserving of sympathy and money because why?
If she was the school administrator when you went to school, maybe you would not have missed the critical thinking class.
Scariest data I have ever seen is in the NY Times interactive on hh debt I just posted (hopefully soon to show up w/ link):
“An average (American) household’s debt and annual savings in today’s dollars”
Year Debt Annual_Savings Debt-to-savings_Ratio
1982 $38,117 $7,304 5.2
2007 $121,650 $449 270.2
Does anyone else see a slight problem here???
Note: The NY Times misses an important piece of the story, by only looking at debt without considering the asset side of the household balance sheet. But adding in the asset column would not necessarily provide much comfort given the recently plummeting value of American stocks and homes.
Check-out the chart at the bottom of this article and tell me that shouldent scare the cr@p out of people.
http://finance.yahoo.com/tech-ticker/article/104704/What-Does-‘Deleveraging’-Really-Mean-Cutting-Our-Addiction-to-Debt?tickers=%5Edji,%5Egspc,tlt,PTTAX,SHY,IEI
yea, we were horrible savers in 1982, too
“Does anyone else see a slight problem here?”
I see opportunity. I see cash as king.
Shocking news from Dublin just in….
http://ap.google.com/article/ALeqM5hJWyVehzrfp39g66QaRY2cTBjNDQD945LLP82
Dublin shelves plans for U2 Tower
I have been waiting for this one. As soon as I read about the plan, I knew it would never come to fruition. Next to be abandoned: Chicago Spire.
Pakistan just got a $9 Billion bailout from the IMF…
So far, the countries bailed out have been pretty small potatoes, outliers.
What happens when we get to meat and potatoes countries?
The power brokers don’t want risk an unraveling of Pakistan’s puppet government since they are in the nuke fraternity. How this relates to Iran? Answer: join the nuclear weapon club come hell or high water.
ben jones’ nyc radio interview with brian lehrer on oct 24, 2008:
http://www.wnyc.org/shows/bl/episodes/2008/10/24/segments/113542
Another *barely* commutable to NYC county is Sullivan that saw an influx on NJ/NYC refugees pushed out during bubble years. Sales there are down exactly 50%, Sep06 to Sep08.
Note: Sullivan–>NYC is NOT a commute you want to make but they’re doing it.
Oops. The above post is meant for the metro NY thread.
somebody picked up 700k shares of TMM at the end of the day at 80 and 72 cents….
5 times volume, speaks volumes.
JPMorgan to cast cruciatus curse on pending foreclosures…
JPMorgan to freeze foreclosures
By Francesco Guerrera and Saskia Scholtes in New York
Published: October 31 2008 20:51 | Last updated: October 31 2008 20:51
JPMorgan Chase has moved to ease the burden of struggling US homeowners and avoid taking over thousands of houses, revealing plans on Friday to renegotiate $70bn of mortgages and freeze foreclosures for up to three months.
The measures are expected to stave off the threat of home repossessions for 400,000 families by cutting their mortgage bills through reductions in interest rates or principal repayments and other loan modifications.
When you step into the ballot box this week, remember that it was John McCain delaying the debate that paved the way for the $700 bn Republican
taxbailout that saved Wall Street from collapse.