Bits Bucket For January 2, 2009
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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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What is so difficult for so many to understand about supply and demand? I’m sure they’ll want a bailout soon.
Funny thing about milk, man is the only animal on this planet that continues to drink milk after it has been weened. As far as I know.
As Recession Deepens, So Does Milk Surplus…
As a breakneck expansion in the global dairy industry turns to bust, Roger Van Groningen must deal with the consequences. In a warehouse that his company runs here, 8 to 20 trucks pull up every day to unload milk powder. Bags of the stuff — surplus that nobody will buy, at least not at a price the dairy industry regards as acceptable — are unloaded and stacked into towering rows that nearly fill the warehouse.
Mr. Van Groningen’s company does not own the surplus milk powder, but merely stores it for the new owners: the taxpayers of the United States. To date, the government has agreed to buy about $91 million worth of milk powder.
“The thing is, they are going to produce it because they have to milk the cows,” Mr. Van Groningen said. “It’s like a river. It keeps coming.” In addition, dairy farmers are all too aware that, unlike industrial machinery, cows cannot be turned off and stored until economic conditions improve; they must be fed and cared for, at continuing expense.
The bags of milk powder represent a startling reversal of fortune for the dairy industry, which flourished in recent years in part because of a growing appetite for milk, cheese, ice cream and pizza in places like Mexico, Egypt and Indonesia. Many of those countries were benefiting from a global economic boom led by free-spending consumers in the United States.
As American dairy farmers increased their shipments of powdered milk, cheese and other dairy ingredients to foreign markets, their incomes rose. And the demand surge helped drive up the price of milk for American families. The national average for whole milk peaked at $3.89 a gallon in July, up from an average of $3.20 a gallon in 2006.
But now, demand for dairy products is stalling amid a global economic slowdown and credit crisis, even as supplies have increased. The result is a glut of milk — and its assorted byproducts, like milk powder, butter and whey proteins — that has led to a precipitous drop in prices.
DOH!!!
I posted the same thing.
This is such a hallmark of deflationary times with the same dumbass thinking as last time. They want to cull the herd instead of just dropping the price, cutting production to current demand, and moving the product.
no cull herd = feed the herd, house the herd, doctor the herd, manage the herd, insure the herd, all with declining income…..oh my.
Yeah, yeah, I know that.
My point (badly made) was more related to the grace-hopers who are hoping that the boom comes back “next year”, and then the “herd will have to be rebuilt”.
There’s a similar article on steel in that paper too.
There is overcapacity in virtually every industry I can think of (= deflation.)
Right, like when FDR had every third piglet killed in an effort to maintain prices. This maintained the production possibility for the next year but “reduced supply” for the current food supply.
And he did similar things with other food. Which is ironic considering people were starving.
This is just “broken window” in disguise.
What’s done is done. The cattle are there. Killing them cannot bring back the boom so you might as well use them.
When will they learn that you can’t fix prices. It cannot work because it contradicts Econ 101.
Since the Feds are stepping in a purchasing milk, we are in effect fixing the price. Purchase enough milk and we can all get welfare cheese again!
It didn’t work then. Why do you think it will work now?
Even on a gold standard, everyone knows you are borrowing money.
It can’t work for fairly obvious reasons.
“The result is a glut of milk — and its assorted byproducts, like milk powder, butter and whey proteins — that has led to a precipitous drop in prices.”
Maybe things have changed, but I think I remember learning long ago that the dairy industry had a sweetheart deal that artificially propped up the price of butter - way (whey?) beyond its cost of production. Foggy memory is that it started during or just after WWII. The govt bought enough butter to keep the prices up and as I recall much of it just rotted away or presumably was put into landfill. Is this still the practice? If it is, why not save the electricity and just dump the raw material?, assuming the interest of the taxpayers is not much of a consideration.
ISTR that 7-11 and Highs were created as a way around milk price supports. At least the way that it used to work was that milk that was used to make cheese WASN’T subject to price supports. So dairys had a percentage of their production that was sold at a market (not subsidized) price. But by selling ALL their milk directly to consumers through convenience stores, dairy’s could get the subsidized price for ALL of their production.
Wow do you think they will Lower the price of Ice cream, or bring back the half gallon container? NO way….then they will beitch about the glut of ice cream in stores and lay off workers.
————————————————-
The result is a glut of milk
I drink a gallon of milk - easily - by myself each week. Can’t blame me for the surplus!
But now that prices are collapsing, will you drink two?
No?
Well, that pretty much sums up how inelastic demand works.
I will help by eating more steak.
MMMMMMM, T-bone steak.
The problem is that diary cows have crummy meat, fit only for taco hamburger. Steak comes from steers, who are bulls who have been….altered. This causes them to get fat in all the right places for marbled steaks.
bulls who have been….altered. This causes them to get fat ??
Dang..I knew there was a explanation for all this gravity towards my midsection.Well, now that I know the cause, I will just can the New Years resolution for the Gym membership….Thanks for the info DennisN
Now, where is my Coors Light…:)
Dave, I sure hope you didn’t have THAT operation.
It’s really not that bad, Dennis.
Dry Aged Black Angus Rib eye and Tenderloin!!!!! MMMMMMM.
Meat is murder.. MMMM Murder!!
No, but I didn’t cut back to 1/2 gallon when prices went up either.
That would be the “inelastic” part now, wouldn’t it, Captain Obvious?
Just further proving the point, crabby.
‘Funny thing about milk, man is the only animal on this planet that continues to drink milk after it has been weened..’
So maybe that makes us freakish in the animal kingdom.
We’re also almost the only ones who wear tiaras to climb trees and consistently po0p into little porcelain receptacles, which is also pretty unnatural when you think about it, but that don’t mean IIIIIII’m a’gonna quit doing those activities, just so I can be ‘natural’.
What are you, a Bigfoot?
Glad to see you made it back to Olympia, Olympiagal.
Thank you, sanfranny! I beat the storm, heading back from Utarr, mostly beat it, and I feel grand. What a super year this shall be! I can just feel it.
In fact, hello to all of you hungover or not HBBers.
Man, it’s good to be home and not driving along in rain and whirling snow and falling frogs and blazing meteorites and other assorted excitements. I woke up on Monday, read the weather reports for northern Utarr, Idaho and the Columbia gorge, bellowed in alarm and leaped up and jammed everything in the truck and squealed the tires out of there.
It was quite an exciting journey, but anyway I got in late last night and beheld my bed with joy and reverent pleasure. And now here I am, ready to start with my 2009 resolutions list.
Man, it’s good to be home and not driving along in rain and whirling snow and falling frogs and blazing meteorites and other assorted excitements.
If you ever decide to start writing a blog (or blag or bleg or whatever) please let me know.
I will be a faithful reader.
“And now here I am, ready to start with my 2009 resolutions list.”
Pray tell.
“Man, it’s good to be home and not driving along in rain and whirling snow and falling frogs and blazing meteorites and other assorted excitements.”
You didn’t run into Moses on the way did you?
If I put a bowl of milk in front of my cat he sure has no problem drinking it. The only reason other animals don’t continue to drink milk is they don’t have opposable thumbs to milk the cows.
Beware though….cats generally are lactose intolerant.
Mine bug me for the milk in my cereal every morning; the most vocal one gets first dibs.
Welcome home, Olygal…
Funny thing about milk, man is the only animal on this planet that continues to drink milk after it has been weened..’
Not too many animals capable of convincing one of their fellow 4 legs to part with milk. I suspect many would if they could.
Can’t they get some relief by making lots of cheese? Cheese lasts a lot longer than liquid milk and has a higher value than powdered milk. I got some swiss cheese from Costco a while back that had a “sell by” date 10 months in the future.
Hey everybody Happy New Year!
I posted yesterday, but it got caught in the Great Gravity Hole of the Interwebs and never appeared.
Anyway, I wished you Happy New Year, and have done so again. Been a way for a while doin’ bidness…
As for the milk - call me a Bleeding Heart - but it kinda churns my stomach to think of almost $100 million of it, sitting rotting in a warehouse here in the US.
Especially when there’s so many people (kids in particular, who on the whole aren’t Lactose Intolerant like their parents) who desperately need food in other less productive countries..
Use it to make Plumpy Nut - do a deal with Oxfam or UNICEF.
They may not get a ‘fair price’ for it, but at least its making a difference to someone, somewhere.
Agree with using that “excess” milk to feed those less fortunate.
Happy New Year to you, speeding!
Can’t they get some relief by making lots of cheese?
Isn’t there some way to make an alcoholic beverage from milk? I remember reading that beer was invented (partially) as a way to store grain…
There you go! There must be a way. I think that Mongolians make their hooch by fermenting yak milk, or something like that. Help the dairy industry - buy bovine booze.
buy bovine booze.
The only thing I can think of is White Russians
You’re thinking of kefir or kumis. Either one is only mildly alcoholic like 1-2%.
Time for you to don your culinary hat and concoct a more suitable 5-6% elixir for us on the HBB, Faster.
Where does one get yak milk in the States?
“Where does one get yak milk in the States?”
From none other than the Yak Daddy Ranch! Who’s yer yak?
http://www.yakdaddyranch.com/about-yaks.html
There’s a guy with a herd of yaks only about 4 miles south of my place here in Boise. Boy are they funny looking - they look like shaggey red-haired horned cows.
It all sounds like Boca Raton to me….or maybe L.A.
send it to the chinese as a good will gift in exchange for some of the GSE debt their holding.
The national average for whole milk peaked at $3.89 a gallon in July, up from an average of $3.20 a gallon in 2006.
I remember being able to buy milk a Sam’s Club for about $1.80 a gallon a few years ago. At the peak it was about $3.30, now its about $2.60.
‘Funny thing about milk, man is the only animal on this planet that continues to drink milk after it has been weened..’
I’m not so sure about this. On a trip past Hibiscus Farm I swear I saw a great big bull enjoying a cows utters.
Another aspect of this is the total destruction of the small, family farm. I grew up on a small dairy farm, the kind that pretty much doesn’t exist anymore. I remember the family’s fortunes rising and falling with the milk price.
Out in CA, many dairy operations sold their land for subdivisions and made a cool (multiple) million. Then they used that windfall to invest in GIANT dairy operations in the desert in the southwest. These dairies can milk more cows at one time than made up my folks’ whole freakin’ herd. It’s amazing. However, with that increased capacity comes massive overhead, and the associated costs. These places are too big to be profitable if they aren’t milking thousands of cows. Profits are enormous, but now they are loosing thousands and just waiting for the price to go back up.
It used to be that there were small, family operations spread out all across the nation. Now these huge southwest dairy farm make much of the milk for the whole country. The destruction of the family dairy farm reminds me quite a bit of the destruction of the American manufacturing base. Most children of dairy farmers did not take over the family business, because it was no longer profitable. This “brain drain” has been going on for decades. Remember Farm Aid?
Gas prices have fallen now, but no doubt they will rise again. I can’t help but think that at some point it will no longer be cost-effective to make all the milk in one corner of the country and then ship it everywhere else. When fuel prices get so high that returning to locally-based production, on a smaller scale, becomes more appealing, the knowledge base to make this happen will have long since disappeared.
Like many other industries, the dairy industry is but a microcosm of the problems in this country in the last few decades.
The sky high land prices make absolutely no sense for business, just as they are cost prohibitive for housing. Land valuations need to reflect what can be reasonably paid for a profitable venture, no matter what it may be. When farms, nurseries, and the like are selling off their land and moving to cheaper locations, many times across country, it’s a sign that something’s terribly wrong.
We need to get back to producing food near where it’s consumed, instead of trucking things cross country. It’s a hideous waste of energy and resources. Most of the community development officials need to be fired, or if I had my way, imprisoned. They’ve set us back decades due to their incompetence in permitting sprawl, and changing zoning laws to benefit developers.
When some big shot buys 200 acres in a rural area zoned for one home per 40 acres, then buys off a zoning change for 6 units per acre, he’s just made a killing. What he’s also done, is set the stage for all the small farms to disappear. This is a simplistic view, but there’s been no protections in place to prevent this sort of thing. Gone are the days when you bought a hamburger at the corner stand, made from 100% beef from Henry the local farmer. Now, Henry is gone, and the burger is made from some mystery meat product of unknown origin. Progress? I don’t f***ing think so.
Your corporate masters will not be pleased to hear this.
Ditto all that, BB. I would add that the Interstate Highway System, built at tremendous cost and with constant resort to eminent domain, has had a great hand in the demise of local businesses. As always, the economists and public planners who tell us of all of the benefits of these public projects completely miss the flip side. It’s a classic fallacy of Bastiat.
The Eisenhower IHS is the Autobahn done wrong. I’ve driven both now and yeah, just–yeah.
Put another way, Germany didn’t bulldoze their cities for the sake of an intercity road system. What were they (the US “brain trust”) thinking?
The Autobahn was designed for one purpose: to move heavy artillery to and from the Western front to the Eastern front. We don’t have that simple a goal.
Happy “Hangover Recovery Day”
Take it easy on the hair-of-the-dog hangover recovery plans!
Too late for that.
Chong: Take these, man. This will
mellow you out, man.
Cheech: What is this, man?
Chong: Just take them.
(pause)
Chong: Hey, don’t take
those, man.
Cheech: What?
Chong: I almost gave you
the wrong $h.it, man.
Cheech: I already took them,
man.
Chong: Ho ho ho ho!
Cheech: What do you mean
ho ho ho ho?
Chong: Wow, man!
Cheech: What was that $h.it,
man?
Chong: You just ate
the most acid I’ve ever seen
anybody eat in my life.
Cheech: I never had
no acid before, man.
Chong: I hope you’re not busy
for about a month.
There is also a proposal to increase the federal gasoline tax by 50% to help rebuild our failing highway system. So what have they been doing with all of the gas tax revenue up to this date?
WASHINGTON (Reuters) - The ailing U.S. steel industry is pressing President-elect Barack Obama for a public works plan that could be worth $1 trillion over two years to boost flagging demand for U.S.-made steel, the New York Times reported in Friday’s editions.
Daniel DiMicco, chairman and chief executive of Nucor Corp, a giant steel maker, told the paper the industry was asking the incoming administration to “deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a ‘buy America’ clause.”
The industry supports building mass transit systems, bridges, electric power grids, schools, hospitals and water treatment plants — all of which would require large amounts of steel.
“We are sharing with the president-elect’s transition team our thoughts in terms of the industry’s policy priorities,” Nancy Gravatt, a spokeswoman for the American Iron and Steel Institute, was quoted as saying.
Obama, who is to be sworn in as president on January 20, has not revealed details of his soon-to-be-announced plan for spurring the weakest economy since the Great Depression more than 70 years ago. Aides have indicated most of the package will probably go into infrastructure spending rather than tax breaks.
“If the president-elect really follows through, he’ll fund a lot of mass transit projects,” said Wilbur Ross, a Wall Street dealmaker who put together a steel conglomerate known as Arcelor Mittal USA.
“All the big cities have these projects ready to go.”
Since September, U.S. steel output has plunged about 50 percent to its lowest point since the 1980s, largely because construction and auto production have fallen sharply.
The fall-off in production of appliances, machinery and other electrical equipment has also reduced steel orders, sending the price of a ton of steel down by half since late summer.
Industry executives are “adding their voices to pleas for a huge public investment program of up to $1 trillion over two years,” the Times reported.
Imports, which account for about 30 percent of all steel sales in the United States, are also hurting as customers disappear, the paper said.
(Reporting by Jim Wolf; editing by Todd Eastham)
then maybe we can get the 2nd ave subway finished in 2 years not 10
surprise surprise@!
————————————-
“If the president-elect really follows through, he’ll fund a lot of mass transit projects,”
Here’s a little snippet about the issue from greenvilleonline in South Carolina:
“Dr. Doug Woodward, an economics professor who has studied the immigration issue at the University of South Carolina.
Meanwhile, the prospect of federal economic stimulus funding for ready-to-go state infrastructure work could soon create a pocket of job growth in the road-and-bridge industry — and a dilemma for employers, Woodward said.
“It’ll be interesting to see who among our native workers here can pick up the shovel,” he said. “These are supposed to be shovel-ready projects, but the people with the shovels in their hands seem to have been Latinos. So I’m not sure if we have a shovel-ready labor force.”
I’ve posted this, not so much about the illegal immigration issue, but an issue that seems to escape just about everyone, and that is the constant hammer and pound in the media about how American citizens are crap. Like Hitler’s propaganda degradation of the Jews prior to WW2, much the same operation is at work here in the US, from the media, the politicians and business. All of which are entities that we’ve supported with our tax dollars, legal and physical infrastructure. And I’ve heard at least a blogger or two agree with this. We’re fat. We’re lazy. We’re stupid. We’re illiterate. The Chinese, Mexicans, Indians, Russians, Arabs, etc. are all better than us. Blah, blah, blah. It is to soften us up to accept contemptuous, crappy treatment. I, for one, am sick of it. To be sure, there are plenty of American citizens who are wastes of flesh. But they are in the minority. Even the number of homeowners who default on their loans are in the minority and that number includes a healthy amount of non-citizens.
Americans have, in general, been worn down to accept wages and conditions they never would have accepted in the past. And you can get people to agree to such a thing by telling them over and over in many different ways that they’re worthless, etc. If I had Mr. Woodward (I refuse to call him a Doctor, he’s a pretentious ivory tower ahole) in front of me, I’d give HIM a shovel, tell him to dig and get in.
But Palmy, these projects won’t need masses of people armed with shovels. Construction and engineering have fundamentally changed since the G.D. and it is embarassing that so many pols omit that in their thinking.
These projects will benefit a few well placed companies and individuals and connected unions. The masses are SOL so its pathetic to see them rally around this idea without questioning it more.
As others have posted, the last thing anyone needs at a modern day construction site is a que of unemployed UHS.
edgewaterjohn ,
Exactly, nobody and I mean nobody brings this up in the media. They are all sold on the romantic idea of a new new deal to save us all. Obama is their Roosevelt.
palmetto,
I saw a report on the news this am about California and the tens of billions they spend on supporting illegals, it is amazing. They are short tens of billions of dollars in their state budget. Do the math. Due to their threats of issuing IOUs and basic disaster of a budget I am pulling business from the state and canceling all travel there until they straighten things up. My business can’t afford to take IOUs.
Even the cemetaries around here are equipped with bobcats for digging graves.
But somebody is operating that bobcat. And somebody is manufacturing that bobcat. And somebody is repairing it. And somebody is delivering it to the jobsite. And somebody is coordinating getting the bobcat to the right sites at the right times…
While I absolutely abhor the financial bailouts, we will definitely need a buffer as we transition from net debtors to net savers (I hope we do this).
A public works project at least gives us something in return for our money, keeps people busy and fulfilled, trains people in **productive** work, and softens the blow as we work through the mess. It’s not a panacea, but it’s the best we can do.
As others have posted, the last thing anyone needs at a modern day construction site is a que of unemployed UHS.
UHS?
Uneducated Hick Slicksters?
Unionized High Schoolers?
Urban Hoe Slingers?
Ultra Heavy She-males?
Used house salespeople.
Used house salespeople
Ah. Thanks.
Really good point, edgewaterjohn… I hadn’t thought about this either, but it makes perfect sense…
These kind of shovel-based infrastructure projects will not spread the money nearly as broadly as they did during the GD. Instead of 50 guys with shovels & crowbars, it will instead be two guys operating bulldozer & backhoe.
I believe a ton of folks are expecting make work projects over night. There are so many governmental agencies the process will drag out a long time. Not to mention the list of private contractors that will be ten miles long, waiting to get a piece of the money flood. As always the big dogs who donated the most $$ to the PTB will get the lions share.
Thank you palmy for saying that about American workers.
‘…in front of me, I’d give HIM a shovel, tell him to dig and get in.’
Why you being so mild and generous-spirited there, palmy? In this particular situation I should think you’d do better to simply beat ‘Mr’ Woodward with the shovel, like a pinata, all enthusiastic, and see if any candy comes out. THEN you can proceed with the moral instruction lesson, if you still want to.
Olygal, I just got back from some errands and OHMIGOSH…can’t breathe…pounds chest…laughing so hard…need new keyboard…coffee up the nose…need new underwear…ROTFLMAO!!!!!!!!!!!
Toooooooooooooooooooooo funny!
Leigh
I’ll bet if you hit him hard enough some fudge will come out…..
Why do I think of Blazing Saddles whenever someone talks about whacking someone over the head with a shovel?
DANG, Dennis, he’s already got the fudge coming out…of his mouth.
LOVE Blazing Saddles.
Say, Olygal, I like your style!
Most of this attitude comes from colleges and universities. They teach that America is imperialist; that our society is patriarcial, bigoted, arrogant and stupid. They’ve undermined most people to be sheep; because how can we know what’s right or wrong, if we’re so evil? Universities are a breeding ground for this kind of shit.
Right on, Ed. Like Barry Soetero criticizing folks for clinging to their guns and religion. Where do ya think he learned that?
BS Ed
TV, gov policies that decrease the rewards for work, and free money via the housing bubble are the problem.
Colleges provide plenty of debate and present many points of view. They are smeared by the right for that very reason. I’ll admit there are many soft degrees that are a waste of time and money but that goes to my first point above.
PS As far as imperialism goes, I’d say Iraq makes a pretty good case that we have elements in our gov/society that are imperialist. Unless you contend that we went there to get Osama and not because Iraq has oil.
I know quite a few people who work at universities (in mean old Canada and the US) and I’ve never heard them say anything a millionth as awful about American culture as I hear on regular TV. (That’s the weirdest thing on American TV, everyone says it’s the best country and then talks about how godless/lazy/greedy/(insert horrible thing) ‘Americans’ are.) It was on TV I heard that America “deserved” 9/11 - something I still find shocking
It’s not true that academics all pretentious and look down on everyone else and so on. They can be. There is a lame contingent, but just the same as anywhere. You find blowhards and losers in most organizations.
Many intellectuals - those in -
Ahem…er…
Well, some of the ones that count themselves smart, don’t have…er…
Any common sense.
Or so I’ve heard.
Grrr.
Leigh
“It’ll be interesting to see who among our native workers here can pick up the shovel,” he said. “These are supposed to be shovel-ready projects, but the people with the shovels in their hands seem to have been Latinos. So I’m not sure if we have a shovel-ready labor force.”
This guy’s about as dumb as they come. We have a shovel-ready workforce, aright, but just not at the paltry wages the illegal aliens are willing to work for, and that the low life’s who hire them pay. Let’s get this guy to dig ditches all day for 8 bucks an hour, and see how well he feeds his family.
Great post, Palmy!
And this has what to do with housing? NOTHING. The nuts at the heritage foundation blog might be interested.
About as much relevance as anything you chirp about.
He whines about the Heritage Foundation the same way that the tin-foil hat repubs whine about the CFR. Some people have to have their bogeymen.
“About as much relevance as anything you chirp about.”
Well now, maybe excreter does not feel compelled to connect employment trends with housing trends. After all, the New York Times has not yet pronounced it politically correct/expedient to do so.
Aw, DANG, cobalt, first I read Olygal’s post, calmed down a little, and then here you come, giving the palmster fits of laughter all over again.
Shucks. I love you guys.
Aren’t some of the dumbest of dumb bred in Texas?
If you’re referring to me, I was born in NYC and bred in Manhattan, Westchester County, NY, and then New England (Connecticut, Mass and VT).
BTW, Bush was bred in the Northeast and carpetbagged it to Texas.
Some of the finest people I’ve ever done business with are from Texas. Polite, hardworking and decent. Oh, also, they have a tendency to keep their commitments. Make fun of them all you want, but they have to contend with BS that people in the Northeast can’t even imagine, but it’s headed up your way, amigo!
Not you Palmy.
The gas tax needs to be increased, PROVIDED it is used for roads (i.e., not funding the homeless). The gas tax is way too low to fund the required improvements/maintenance and a 10 cent increase is not a budget-buster, particularly because demand (and thus oil prices) will stay very low for years, given our morbid economy.
The idea of tracking and then tolling everyone the minute they leave their driveway (if not earlier), via some satellite system (as the report also recommends), is SICK. The system they want will vary the tolls so that J6P drives the “right” roads at the “right” times. My only question is: Why not mandatory implants and get it over with? The idea that the gas tax is obsolete because a handful of people will drive plug-in hybrids is laughable (but that is the rationale used by these clowns and others)…we will ALWAYS use a lot of gas and diesel and, even after doubling the gas tax, it can be increased much more (if necessary, to compensate for those phantom non-gas users), with only minor effects on household budgets (i.e., a total increase of 40 cents per gallon, which will EASILY cover the loss from the hybrids forever, if adjusted for inflation is relatively small, after what we’ve just dealt with).
However, you know that the PTBs are licking their chops to know where we go, when we go, and how we get there. It’s the dream of fascist dictators (and pot-smoking libertarians).
Now back to housing.
Taxing gas would cause the cost of homes that are far away from work centers to go down and homes in the crowded cities to go up. This would reduce the quality of our lives.
Also, the price of oil would go down for the Chinese and all the other peoples of the world who in turn will use more gas. So by taxing our own gas we are subsidizing the rest of the world’s quality of life (and not helping the environment).
The Gas tax is also regressive and will hurt the poor much more than the rich. With all of these unemployed people, I think the cost of building roads will go down anyways and there is not much need to raise the tax.
1. Taxing gas would cause the cost of homes that are far away from work centers to go down and homes in the crowded cities to go up.
GOOD
2. This would reduce the quality of our lives.
????? Yep can’t be happy without a mcmansion in the country.
3. So by taxing our own gas we are subsidizing the rest of the world’s quality of life
and by not taxing gas to reflect all of the economic costs that our oil addiction inflicts on us you are making the United states poorer and more dependent on Iran, Saudi Arabia, Russia, Venezuela ect ect. These good friends become richer in the process.
4. The Gas tax is also regressive and will hurt the poor much more than the rich.
Unless the arleady take mass transit and we use the procedes to make it more efficient. There are plenty of ways the money could be returned to the poor and middle class like say a cut in the payroll tax.
I say use half the gas tax increase for roads (bridges,etc) and half for rail infrastructure (not CSX, but commuter rail and Amtrak). It will benefit the working poor who use Greyhound and Amtrak to travel and bus and rail to get to work…
A car is the surest route to poverty. We tax cigarettes to discourage their use–why not gasoline?
I don’t see poor people in Europe crying about the price of gas/diesel… The standard of living on a low income in Eurozone and UK is generally higher than here, although I think we are accustomed to larger, newer dwellings, and that includes apartments.
We need a viable Amtrak for the future. Airlines as public transportation is and was madness. Even a small investment in rail would reap rich rewards.
“However, you know that the PTBs are licking their chops to know where we go, when we go, and how we get there. It’s the dream of fascist dictators (and pot-smoking libertarians).”
Whoa - can’t let that one go by, unaddressed. “…to know where we go, when we go, and how we get there” is the exact OPPOSITE of the libertarian dream.
“Whoa - can’t let that one go by, unaddressed. “…to know where we go, when we go, and how we get there” is the exact OPPOSITE of the libertarian dream.”
I would agree with you, except that these “road pricing” proposals are being led by Cato and Reason, two libertarian think tanks. They see road pricing as the most efficient way to use concrete (i.e., charge tolls in such a way that traffic always flows smooth, so you charge the heck out of people [like 50 cents per mile, or even a $1.00, as they do in California] during some of the rush hours…then let them go cheap during off-hours)].
…and I agree, if the only concern is to use concrete as efficiently as possible, then toll-away. However, these systems ALWAYS involve tracking of drivers. Great Britain is gearing up for this system and now records EVERY vehicle trip and keeps this info for 7 years (in case of terrorism, they say). Apparently these “Libertarian” think tanks think that approach is acceptable…or they would not keep pushing the idea.
Hopefully others don’t mind a bit of privacy when they drive, and the freedom to pick their own hours without getting slammed in the wallet.
Here in central Florida, you can buy pre-paid toll gizmos that transmit the signal to the toll-gate receivers exactly the same as “trackable” ones. So I don’t see the problem - privacy is assured. In theory, anyone could possess several of these and keep all but one in a lead-lined pouch and change them out every trip, though I can’t see the value in doing so.
Maybe it is just “up North” where folks don’t have the liberty to purchase anonymous toll-paying devices.
Yes, libertarians believe that roads should be toll roads, so that their use is paid for by the users, but that is possible to do anonymously, notwithstanding that cameras can photograph your tags wherever you drive, toll-road or not.
A mere drop in the ocean…
Fannie says IndyMac has $1 bln in mortgage obligations:
(Reuters) - Fannie Mae, the largest U.S. home funding company, believes that failed mortgage lender IndyMac has obligations to repurchase around $1 billion of home mortgages that failed to meet Fannie’s standards, the Wall Street Journal said, citing people familiar with the situation.
Banks that sell loans to Fannie or its smaller rival, Freddie Mac, must make “representations and warranties” that those loans meet certain quality standards, the paper said. If not, the lenders can be forced to buy the loans back, the paper reported on its website late on Thursday.
A spokesman for Fannie told the paper the company is working with the Federal Deposit Insurance Corp (FDIC) to resolve the issue.
Fannie could not be immediately reached for comment by Reuters.
A consortium of private equity and hedge fund firms, including J.C. Flowers & Co, is close to a deal to buy the assets of IndyMac, a source familiar with the matter told Reuters earlier this week.
The FDIC, which took control of IndyMac in July 2008, is seeking a buyer.
(Reporting by Ajay Kamalakaran in Bangalore; Editing by Anshuman Daga)
No kidding. I see that our fearless leaders in Congress want a vote within two weeks on bailout spending that will get us to $1T. I wish the media would refer to is as a thousand billion dollars. That sounds more sobering, doesn’t it? Or how about a million million.
How high would a stack of one trillion $1 bills reach, anyway?
I still like 1 trillion seconds = 32,000 years
This one, and the below are great. Going onto the little piece of “Oh, yeah?” paper in my wallet.
Seems certain that the stack is at least 60,000 miles high.
Then we consider that the total amount of money creation connected to all bailouts is projected to be north of $8 Trillion. It’s why I don’t sleep well anymore.
Best Answer - Chosen by Voters
One thousand times one million = one billion.
One thousand times one billion = one trillion
In other words. One million times one million = one trillion.
The trillion dollar stack would be one million times higher than the million dollar stack -or- picture it this way. It would take one million stacks of one million dollar bills to equal one trillion dollars.
If the million dollar stack is indeed .067 miles high, Then the trillion dollar stack would be 67,000 miles high. (fairly near to one third the distance from the Earth to the moon).
“How high would a stack of one trillion $1 bills reach, anyway?”
61,500 miles, or enough to reach the Space Station (and back) 162 times!
1,000,000,000,000*.0039/12/5280/190/2
Assuming a dollar bill is .006″ thick, a stack of one trillion Georges is
94,697 miles high.
(( 0.006″ x 1,000,000,000,000) / 12″ )) / 5280′ = 94,697 miles
I printed that, I don`t have a calculator that has that many digits.
How about a $2000 tax credit if you get married and have a reception?
The credit must be spent on an approved low cost Wedding package consisting of a DJ , a Video, and Photography
Do you have to pay it back if your marriage defaults in five years?
Listen AM, I’m not sure those from elsewhere comprehend the NY wedding thing. We didn’t do it ourselves, as we held our reception in an American Legion hall, had it catered from elsewhere, and drove ourselves to the church and reception in a rental car, only because we didn’t own a car.
But we did have a DJ.
The NY-area wedding might be another bubble, although it goes back a long way.
WT:
Wedding receptions are a Luxury item. Some people do like you do low cost. But from a DJ’s point of view my speakers amp cd’s lights cost the same in Omaha as in NYC but if i can only charge 1/2 or less what i can charge in NYC it’s hard to make it any kind of living or a decent p/t job in Omaha.
That’s why there are very few Full time dj companies in most cities in America, Unless you book125-150 jobs averaging $4-500 is only $50-75K gross. That’s 3 a week….weddings schools corporate picnics etc…renting the equipment for meetings…
Think how the economics change if you can average $1000 per gig, and with weddings and bar mitzvahs you can easily do even more that that.
But how any mitzvahs can you do in Idaho?
You’re displacing us musicians, ya know..
Yeah, I know. But without you guys making new music we cant exist. How many disco weddings have i done 2 in 15 years.
Unfortunately wedding bands are really no different then dj’s we play other peoples music and add our own “spin” to it.
So much new music being made and not being promoted short clip:
http://www.youtube.com/watch?v=HbuY_8q5gA4
—————————————-
You’re displacing us musicians, ya know..
You might do more mitzvahs in Idaho than you think. Boise’s Ahavath Beth Israel http://www.ahavathbethisrael.org
is the oldest congregation west of the Mississippi.
Better have technobeams or cyberlights and a YAG laser for $1000
The last wedding I went to did not have a DJ. Instead, it had a laptop with a net-connection & Rhapsody subscription. Everyone typed in their own requests throughout the evening, and we had a great mix of music and lots of fun dancing.
Keep trying! I admire your efforts.
You, my friend, certainly have found the audacity to hope!
How about something new; receptions for the divorce. Plenty of appropriate music available!
You’d need a country DJ for that one, know? Rock & Roll gets you in, but doesn’t get you out!
Prof Bear posted a link to various mortgage modification programs yesterday. All of them but one only talk about who will pay for the loan modifications or refinances. I have to ask, again, refinance into WHAT?
The only program that would work would be a cram-down to reduce principal. But that will save only a few FB’s. Loan approvals were fast; cram downs are much slower. And a judge won’t look kindly on a liar loan, or on a plea to cram a specu-second home.
Or for that matter, the case of a homeowner who used HELOC to extract all of the equity just to buy lots of consumer crap.
“And a judge won’t look kindly on a liar loan…”
Wanna bet? After all, it was the wascally mortgage broker who filled in the false info according to most FBs.
I personally agree. I expect the cramdown policy to overlook the sins of the buyers and assume the lenders were at fault unless they can somehow prove themselves innocent.
“The only program that would work would be a cram-down to reduce principal. But that will save only a few FB’s”.
That plus they are running into road block after road block, with 2nd & 3rd mortgage attachments. Can’t untangle the web, who the heck owns them, is a big question.
It’s hardly a question to those in the law industry.
They LOVE all the obfuscation. Keeps their fees up and enables them to endlessly solve nothing for no one.
We have a glut of lawyers in the USA. We can throw them in a glass-encased pit of butter, let them grease each other up, then lick each other clean.
They’d be right at home.
We have a glut of lawyers in the USA. We can throw them in a glass-encased pit of butter, let them grease each other up, then lick each other clean.
I really am not enjoying the mental image you’ve just drawn for us.
Not to mention the waste of perfectly good butter.
But it’ll save all the milk farmers (read thread above!!!)
I bet you wouldn’t mind so much if they were women lawyers.
But you’re missingmy main point, and that is that a cram down is SLOW. Even if a judge crammed down every NINJA, it would take 12 years to cram down 3 years worth of ninjas. The clock will run out on too many FB’s.
Give this man/woman a prize!
Here’s the link:
http://online.wsj.com/public/resources/documents/st_MortgageModificationPrograms_20081231.html
Local market observation. A SF house is for sale four houses down from us. Nice neighborhood, 35yr old house, upgraded and very well taken care of. Present owners had been in it for 15+ years. Selling because of divorce (she found a friend). Been on the market for 4 mn. Two+ years ago it would have sold for $385k. It was first listed for 319k. It has just been lowered to 299k.
How many sq ft?
Laurel is not McMansionville; it’s a burb of middle-class housing from the 70’s. 3/2 homes on 0.2 - 0.25 acre, maybe with a basement makover. Unless it was very nicely updated or is one of the bigger homes, it still needs another 30% off at least.
I’d argue that Laurel is harder to pigenhole. Big victorians near Main street, old row houses on 9th st, lots of crappy garden apartments, new developments north of the Patuxent. (not tecnically Laurel, but certainly CALLED Laurel)
Article: As Recession Deepens, So Does Milk Surplus.
This is such a hallmark of deflationary times.
They want to cull the herd instead of the obvious solution. Drop the price and move the product.
If the price of milk goes lower are mothers going to force feed more of it to their babies? Am I going to substitute milk for beer?
What aspect of milk demand is so elastic?
Wait a minute, I forgot milk is used to make cheese! Yesss!! Pizza prices will come down so we’ll have it TWICE a week! Woohoo!
Maybe you could let milk ferment and substitute it for beer…
Milk (correctly spoilt) = yogurt.
You can make other stuff though.
All pretty inelastic. There’s only so much demand.
Not to get all technical…but cheese/yogurt/etc are made from milk as a result of increased ph, not “spoilage”. There are several ways to cause milk to curdle, adding lemon juice is one method. A substance called rennet (an enzyme extracted from a calves stomach) can also make milk curdle.
When bacteria (either intentionally or unintentionally added) feeds it causes the ph to raise and milk to curdle, and obviously bacteria is sometimes used intentionally in this manner to make various milk-based goodies. Unwanted bacteria we commonly refer to as “spoilage” as it can make you sick and often leaves an unpleasant, bitter taste in the product. However, a friend of mine’s grandmother will put curdled milk into a bowl, sprinkle with sugar and eat. (yuck!)
I started making cheese a little a few years ago. I’ve never made any hard cheese due to lack of proper equipment/environment but I occasionally make a soft cream-cheese like cheese that is a most excellent substitute (especially in ice box pie) to store-bought cream cheese.
Yogurt is most definitely “correctly spoilt” milk.
I should know; I make my own (in warmer weather.)
You heat the milk to kill all the ambient bacteria, and then add the good stuff (a spoonful of yesterday’s yogurt) once the milk cools down to the right temperature.
So there Mr. Smarty Pants, you’re wrong!
Sure, but the thing that makes the milk coagulate is the increased ph which is a result of the activity of the culture you added.
Good stuff.
Faster, since you seem to be eminently familiar with the financial industry, would you be willing to provide some information concerning career options in that area? I’m finishing a degree at the end of the year and changing careers and I have a lot of things to consider and want to make a thoroughly informed decision with regard to which path I travel down.
If so, you can email me at bluprint55 at gmail dot com.
Thanks.
Milk is the new oil!
I’ve been paying $1.99/gal. for months. Over the summer it was between $3-$4.
Perhaps Central Planning will appoint a “Cow Csar” to over see this pressing crisis!
Brisbane CA already has a “Cow Palace” ready for him.
DennisN,
Cow Place is in Daly City.
I guess I get confused because the exit sign on Bayshore says “Brisbane/Cow Palace”.
No kidding. The only Cow Palace I know of is in Arivaca, AZ.
Well, 2009 will bring the Year of the Brown Cow, according to the Chinese calendar:
http://www.chinesefortunecalendar.com/2009.htm
^_^
I’ve been drinking soy milk for about two years now.
Rich and cholesterol-free.
One of these days, I’ve got to get out to a soy dairy and see how they milk those things.
“I’ve been drinking soy milk for about two years now.”
I also switched to soy milk almost eight years ago. The more accurate description would be soy juice, but that sounds so unappetizing I don’t think it will ever catch on.
…but that sounds so unappetizing I don’t think it will ever catch on.
Ha! I remember thinking how clever it was the first time I heard “cow juice”.
There’s no such thing as soy milk.. It’s soy _juice_…
Anybody here know anything about Vanuatu, as a banking venue? A fella I met at a holiday party asked me if I knew anything about the place, compared to the Caymans. Didn’t know it was important for anything but maybe coconuts and scuba diving. Wikipedia says it is an offshore tax haven. All I could offer was the rhetorical question, what would he do if the other party to whatever the transaction is, screws him? To whom does he turn? What if the “bank” vanishes? I suppose you could get to the Caymans tout suite if you needed to, to verify or whatever, but getting to Vanuatu looks like it could take days.
A decade or two ago there was an attempt by American libertarians to get involved in some skirmish there and establish a tax haven. I heard it backfired.
I hear the Caymans is no longer keeping things secret from U.S. government investigators either.
Nowhere to run, nowhere to hide. May as well not plant roots anywhere and be a milk cow property tax payer / loser - just for revenge against world socialism.
Keep up the fight against statism. Be a thorn in its side.
It is almost always better to pay your taxes.
The taxes in the US have never been lower in my lifetime. I started out when the Federal tax rate was 90%.
I agree hoz but they come at you from so many angles now particularly called “Fees”……I read a little paperback book a few years ago called the “Greedy Hand”…It gives a historical look at taxes and fees…
Wish I could buy a SFH in Queens for $299K instead of $599K. :-{
Don’t worry Ed:
It will be lower then that, my 2 family house i live in was about $350K when we moved in in 2000…i was shocked when a neighbor bought his 2 fam in 2002 for $415K…it went up to $749K i heard one sold last year
But then Archie Bunker got a credit line! Now if SFHs in Sunnyside or Forest Hills fell into the 300s … well, I might be able to think of going back to Brooklyn! To other Kings County refugees, not me, those 600-700K boxes look like a steal, unfortunately.
Joe;
The question really is how many have to move and sell, vs how many bought 15 years ago and didn’t refi so they can sit on their homes for another 15 years and see if they can win the housing lottery ticket again
Right now the biggest foreclosures are in the minority section of queens st albans etc but its spreading
“Archie Bunker got a credit line!”
I love this!
Have you seen that show recently? Nothing’s changed, except for credit. But Archie and Meathead could be having the same arguments now, only Archie would be misquoting Fox and Meathead would be pulling out a laptop at the dinner table to show him video clips on Daily Kos.
If Archie misquotes FOX, then he would be agreeing with Daily Kos. Just sayin…
Who would have thought 30 year ago houses in Brooklyn would sell for more than than comparable properties in Queens, or even Nassau? The absolute price is going down everywhere, but I’m not sure the relative price will go back to what it was unless the state really screws the city.
Yes, this can only be the result of middle class boho fantasies. Recently saw a listing for a house on Tennis Place, a few doors down from the famed old West Side Tennis Club, for a mere $1.3 million. What could you get in Brooklyn for that? Uh, something that needs a lotta TLC just up the street, but not upwind, from the stinking Gowanus Canal, most likely!
How much would Dr. Huxtable’s (Cosby show) brownstone in Brooklyn have fetched at the peak of the bubble?
Hah, you mean last summer? A couple of friends of ours plunked down over 2 mil for lovely old, crazy-priced townhouse in a bad school district just north of Flatbush Ave. back in July. They’d had a bit of a windfall, but they could’ve rented a purty nice penthouse on Prospect Park West if they were afraid of losing caste.
Easy Come Easy Go…they will be bumming stuff from you very soon joe
—————————————
They’d had a bit of a windfall,
“Government to get 5 million preferred GMAC shares in exchange for $5 billion in bailout cash ”
-Isn’t $1000/share a little bit high for a worthess POS?
If you had guaranteed health benefits and pensions for life, you’d make crappy investment decisions too.
So we are getting 250 Malibus for 5 billion dollars, I bet they are laughing down at the job bank.
I for one will never never ever buy another automobile made by any of the 3 American automakers. EVER!
Right on!
Vote with your dollars, events are just beginning to prove that you will be heard.
You might want to cut Ford some slack.
They also arguably make the better cars of the three.
^^LOL misses the point^^
How is saving the “homeowner” working so far?
What will it look like when the guvs save all the CC defaulters?
It’s a blurr.
Maybe in 2009 we will get to witness a collective realization that the gov’t cannot solve every problem?
Too soon? Maybe they can keep the illusion going until 2010, 2011…
Edgewater, where’s your audacity of hope?
Clearly unfettered capitalism is not the prescription, either.
ET, the clueless creepy crawly libertarian CONservatives have no interest in capitalism. They prefer corporatism and call it capitalism.
Nope - libertarians overwhelmingly prefer small business. They might be defined politically as paleoconservatives, but in economics they are Classical Liberals.
For those who don’t understand libertarianism and would be interested in doing so, especially before opining on same, lewrockwell.com is a great site. It connects, and is related, to the Ludwig Von Mises Institute, the formal libertarian economic think tank that tries to educate the educable in the theories and practicality of Austrian Economics.
Here is a quiz, “Are you an Austrian?”, from the site:
http://mises.org/quiz.aspx
It is difficult for those who do not have a good understanding of economics terminology. But the scoring results tell you what camp you’re in relative each question, so try it and see how you fare.
http://mises.org/quiz.aspx
I agree libertarians are not in favor of corporatism, although I believe their hatred of all regulation would lead to it . The true corporatists are the neocons (Who I believe would be in favor of communism or corporatism as long as their was some degree of dictatorial power) and the American Enterprise Institute Types.
lol, nice try Chip, but ex isn’t interested in such things. “libertarian” is a derogatory term among statists. The one thing statists hate more than (classical) liberals/libertarians is other statists which direct the funny money in ways they don’t like.
Among our modern lefty statist parties “libertarian” is a derogatory term they throw at the other statist party who prefer to misallocate resources in different ways.
although I believe their hatred of all regulation would lead to it .
The existance of “regulation” implies an amount of central authority. Central authority is what created corps and has given them the various benefits they receive.
It’s the centralization of power that gives corps their power. Without that (which includes “regulation”) corps wouldn’t even exist.
It may be that we need lots of central authority and regulation and such but its intellectually unfair to conclude that corporatism is the logical ending place of libertarianism when the corporate form itself (and all problems that derive from that frankenstein) is the clear and direct result of statism.
I think it is funny that libertarians tar socialists with the “utopian” label, when most have a similarly utopian idea of what a “free and unregulated” market would look like.
“Libertarian utopianism” is just as far-fetched as extreme socialist, neo-conservative, or other ideologies.
straw man - A straw man argument is an informal fallacy based on misrepresentation of an opponent’s position. To “set up a straw man,” one describes a position that superficially resembles an opponent’s actual view, yet is easier to refute. Then, one attributes that position to the opponent.
Pointing out statist failures is not the logical equivalent of describing or claiming utopia.
Bub - I dunno - I’m a registered, card-carryin’ Libertarian and actively campaigned for Ron. Can’t remember hearing or reading another real libertarian ever using the term “utopia” or “utopian” in a positive sense. Just the opposite - we view “utopian” as a code word for state control and redistribution. Anathema to our goals of freedom, non-intervention and minimal taxes.
70/100
But ET, we have had the regulations - they just weren’t enforced.
What Washington will never admit is that all the tools/legislation to avoid this mess were already in place.
I will bet a case of decent beer that ultimately history will prove that this is all just another power/money grab.
What Washington will never admit is that all the tools/legislation to avoid this mess were already in place.
While I don’t dispute that there are many areas where existing laws simply needed to be enforced properly (something the current executive branch actively chose not to do), there are also plenty of holes in existing legislation — in accounting rules, in corporate taxation, in corporate transparency, in corporate governance, in regulating leveraged investments, in regulating derivatives and other increasingly abstract financial instruments … the list is monumental in its scope, really.
Worst of all, we continue to let corporations f*ck up on a global scale and then we reactively attempt to fix their blunders, at our expense.
” I will bet a case of decent beer that ultimately history will prove that this is all just another power/money grab.”
I’ll take that bet because those that control the money control the recording of history. When I see riots in the streets then that will signal that the history books are about to change.
The rantings of an overweight ideological blowhard demanding perfection should not stand in the way of something good. In the sick, twisted utopian pipe dream of a libertarian conservative, anything that does precisely fit into their mad ideology is imperfect, thus no good.
Now back to building your house.
Chip,
I got 70/100 on the Mises test. How far gone am I?
Dennis - probably not bad at all. I suppose it depends on how you were pegged in the other 30%. For example, were all the rest “Chicago” answers (Friedman)? Were any collectivist (the answer choices for many of those are dead giveaways)?
I was browsing the thread from yesterday (predictions on when the bottom will happen). I was struck by a comment made by Blue Skye. “…Three times income is a stretch for anyone raising a family. That is over half your takehome pay. Plus utilities and maintenance and you and are living like a slave and your kids like paupers…”
When we talk 2.5x income or 3x income, what - exactly - are we talking about? Overall price of home? Or mortgage amount? Say the house is 3x income, but - after a 20% downpayment (IMO the only way to proceed) - the mortgage amount is 2.5x income. That to me seems reasonable (at least my math seems to be when I run the numbers for my own scenario).
Just curious what everyone else thinks.
“When we talk 2.5x income or 3x income, what - exactly - are we talking about? ”
I always figured it as the price of the home. I used to tell people that 10x price of a home in Ventura County CA was too high. It was it turned out just like before in 1990.
I think mortgages are calaculated or used to be calculated on as a percentage of pay, around 35% of income going to pay the mortgage . A down payment lets you buy a more expensive house.
I don’t know where the 3X income should equal house price comes from ? Some math finance person can post it maybe ?
35%? Try 28% for PITI, with 36% total debt payments (car, student loans, etc).
I’ve run the numbers before on several different scenarios, and 1.5 times gross income is really as far as we’d want to go right now (we’re a family of four in Texas currently paying about 16% of take-home on rent). 2X income produces numbers that I’m really not comfortable with. We’re going to have taxes, maintenance, a second child starting private school, out-of-pocket medical expenses, retirement, college to save for, etc.
… and that 1.5x house in CA is….
BONG!
5x income?
Whatever the “fundamental” price should have been (based on pre-bubble standards), I think it ultimately needs to be a bit lower now. This shift in the fundamentals of calculating what a house really “should” cost is due to the changing employment patterns in this country. Most people can no longer count on long-term employment with any particular company. As a result, the ability to pick up and move elsewhere for work is more valuable than it once was; conversely, the reduced flexibility of owning a home is more costly than it once was.
I agree, and the comments made yesterday (by Chip, I believe) are well founded. 2-2.5x income seem a better figure for the future.
What most people are forgetting is that the tab for our greatly expanding social welfare obligations are coming due. With massive amount of dollars being directly toward IOUs in the near future, where will Joe and Jill 6-pack get the money to justify a 3x income residence?
When tax rolls increase by 20% for everyone in the country, does a 3x mortgage seem like a good idea?
The short of it is - no one knows how we’ll pay for the aged come 2015-2025. No one knows the extent to which international competition will pare U.S. wages.
It amazes me the extent to which people believe that yesterday’s traditional 3x income/20% down scenario is going to be workable for most people. It won’t be. Social welfare obligations guarantee it.
When you allow your country to consume not only today’s money but that belonging to future generations as well, all traditional, wishful Goldilocks scenarios can be thrown out the window.
Rule of thumb in the 1950s (according to my mother) was 1.5 X income.
My dad bought a $10,000 house in 1954 on a $6,000 salary. Government was a lot smaller then and the tax burdens were too.
My dad bought a $15,000 house on a salary of probably around $8000 in 1955. In 1966 he bought one of the nicest houses in town - $35,000.
Government was a lot smaller then and the tax burdens were too ??
Exactly !!!
I am afraid that your comments are going to be coming to fruition sooner than we think.
I know people that are not prepared for their retirement years.
I also know that the upcoming generation is not paying attention at all in how much in taxes they are paying presently. This is something that I am trying to teach them, but it keeps falling on deaf ears!
Talk to them about new cell phones or where the next party is going to be at, then they pay attention.
Sad, very sad indeed.
IMO, a great many more individuals need to spend a great deal more time considering the macro-economic, long-term ramifications of the demographic group they were born into.
Comparing, of course, their demographic cohort to other cohorts.
Many of today’s retired or near-retired generations seemingly have been caught with their pants down because they are oblivious to what other demographic groups are facing - and how what they are facing will affect THEM.
The lack of foresight, or attempt to gain foresight, used to startle me a decade or two ago. No longer. Most people across all generations rarely consider the ramifications of anything.
They don’t have the intellectual capacity to exercise their minds thusly. I mean that quite literally.
Did you know that 80% of all adults have stunted brains structurally speaking? Their brains do not have the functional capacity to reason beyond what is ordinarily achieved by a high school senior.
“Did you know that 80% of all adults have stunted brains structurally speaking?”
And 80% of those retards live in my community, making my trips to Wal-Mart SO annoying.
“And 80% of those retards live in my community, making my trips to Wal-Mart SO annoying.”
I rarely go to WalMart, but when I do I am nothing short of shocked by many of the people shopping there. It’s like little West Virginia every time. I’m worried there’s some serious inbreeding going on in this country. Cue the banjo.
The other 20% evidently, are able to make up statistics.
A shame that you can’t make them up, too, skroodle.
When we talk 2.5x income or 3x income, what - exactly - are we talking about?
2.5 - 3 x income as compared to the mortgage balance. This is just a rule of thumb, to guage if you’re in the ballpark of long-term affordability. Much depends on your income and expenses, kids, etc. High-income DINKS can stretch this higher than a mid-income family of four…
With “median” wages at +/-$40k, then the avg house should be +/-$80K?
Oh my.
That’s correct. Tho average household income is closer to $50K, so the average home should be $100K.
Considering that the median priced home now sells for about $180K, we’ve a long way to go.
Correct - it’s mortgage. Otherwise the size of the downpayment would have to be taken into account. Lots of people do make very large downpayments - from previous equity, inheritence, etc. - e.g. I paid 60% down on my house; mortgage is about 2x income. I can definitely afford the mortgage though the house itself is (or was at the time I bought it) about 5x income.
My BIL works for Delphi.
It’s a good thing they could be part of the bailout, otherwise he wouldn’t be able to afford his vinyl mcmansion in the far-flung exurbs.
“…but eventually there will be too much month left at the end of the money.”
Just added that one, from a 12/31 Casey Research piece in FSU, to my long-running list of housing bubble favorites. Would make a good T-shirt (There’s too much…).
They are still trying to sell nondescript condos, townhouses, and other assorted claptrap in the East San Gabriel Valley (L.A. adjacent) for over $300,000. There is no house in San Marino for under 1 M. I don’t think we are even at the point where we can call this a buyer’s market. Late 2010 is my prediction for true buyers market.
I am a bit surprised that nothing currently listed is under $1M. Amazing. The cheapest house in San Marino is a 3bd, 2ba, 1480 sq. ft. for $1,050,876! That doesn’t seem too far below the peak pricing.
I have grown impatient, but I agree that 2010 is the earliest date to consider buying. That is, if we can keep our jobs. Layoffs are clearly inevitable at my law firm, and hiring at other firms has slowed to a standstill. Luckily, my area is still fairly busy these days, so I hope not to have to look for a new job in the near term.
Best wishes to you all in 2009!
Another Cleveland would be a real change, this fellow used his veto power more than any other President that I know of…
Stephen Grover Cleveland (March 18, 1837 – June 24, 1908) was both the twenty-second and twenty-fourth President of the United States. Cleveland is the only President to serve two non-consecutive terms (1885–1889 and 1893–1897) and therefore is the only individual to be counted twice in the numbering of the presidents. He was the winner of the popular vote for President three times—in 1884, 1888, and 1892—and was the only Democrat elected to the Presidency in the era of Republican political domination that lasted from 1860 to 1912. Cleveland’s admirers praise him for his honesty, independence, integrity, and commitment to the principles of classical liberalism.[1] As a leader of the Bourbon Democrats, he opposed imperialism, taxes, subsidies and inflationary policies, but as a reformer he also worked against corruption, patronage, and bossism.
Some of Cleveland’s actions caused controversy even within his own party. His intervention in the Pullman Strike of 1894 in order to keep the railroads moving angered labor unions, and his support of the gold standard and opposition to free silver alienated the agrarian wing of the Democrats.[2] Furthermore, critics complained that he had little imagination and seemed overwhelmed by the nation’s economic disasters—depressions and strikes—in his second term.[2] Even so, his reputation for honesty and good character survived the troubles of his second term.
Cleveland was the type of liberal that I am.
Yep, I would have been behind old Grover. Call me a classic liberal, and I think I will. Sure to piss off the modern bed wetting, thumb sucking variety of lib running around today.
There used to be classical liberals and socialists. Nowadays classical liberals are Republicans.
“Nowadays classical liberals are Republicans”.
Don’t think so, I don’t know of perhaps one or two that would like like to see less government. The Repubs threw in the towel long ago with their across the isle crap. Both parties deserve one another. Unfortunately we are caught in the crossfire.
Didn’t Grover marry is step-daughter 28 years his junior?
He was accused of fathering an illegitimate child.
His opponents would shout
“Ma, Ma, where’s my Pa?”
and the rejoinder was:
“Gone to the White House. Ha! Ha! Ha!”
Nice to know political discourse has always been pretty childish
.
ROTFLMAO
Industrial production falls off a cliff….just like during the GD1
http://en.wikipedia.org/wiki/File:1930Industry.svg
U.S. Economy: Manufacturing Shrinks as Orders Hit 60-Year Low
http://www.bloomberg.com/apps/news?pid=20601087&sid=ar33MwWqPjdQ&refer=home
Jan. 2 (Bloomberg) — The decline in U.S. manufacturing deepened in December as demand for such products as cars, appliances and furniture reached the lowest level since at least 1948, signaling further cutbacks in factory jobs and production this year.
The Institute for Supply Management’s factory index fell to 32.4, below economists’ forecasts and the lowest level since 1980, from 36.2 the prior month. Readings less than 50 signal contraction. The group’s new-orders measure reached the lowest level on record and prices slid the most since 1949…
Factories Slash Output Around the World
——————————————————————————-
BEIJING (Reuters) – Factories in China and India joined much of Europe in slashing output and jobs at a record pace in December, another sign the biggest emerging markets were wilting under the recession gripping industrialized nations.
Factory activity surveys in the United States were also expected to show a steeper contraction in December, as demand collapses in the Western countries that developing nations rely on as export markets.
Economists and policymakers had seen China, Russia, India and Brazil, with their vast markets and rising wealth, as the engines of growth that could save the world from recession. Those hopes are fading fast and forecasts are getting gloomier.
From job losses at Chinese factories to the biggest drop in South Korean house prices in five years, there were signs the export slowdown was rippling through domestic economies in emerging markets.
“What is worrying is that the weakness has spread rapidly from the externally-oriented sectors to domestically oriented sectors too,” analysts at OCBC Bank in Singapore said in a note after the country announced gross domestic product data.
In contrast to the rapidly darkening economic outlook, the mood in markets
In the GD1 industrial production contracted from about mid-1929 with a bottoming in about mid-1932, and it didn’t reach pre-crash highs again until 1937 and then crashed again.
The $64,000 question is how long the contraction will continue. A quarter or two more of slight contractions? Or two or three more years of large declines?
Your guess is as good as mine. I hope it doesn’t continue for three more years. If there is one thing I can say for certain, it’s that there is some pain ahead.
legal eagle,
This means more general stock market declines are ahead of us. And “they” think they can tax their way out of recession? Ha!
I’m in all cash equivs. I’m not trying to make money investing, I’m just trying to preserve it. I’m filing about 10 Chap. 7’s and three Chap. 13’s a month right now so I’m busy as all hell. I’m trying make money the old fashioned way: earning it in the trenches like everybody else.
“I’m in all cash equivs. I’m not trying to make money investing, I’m just trying to preserve it.”
Legal Eagle Inflation would not be kind to your cash. Question is how long until the FED blows another bubble ?
Anyway I sold a GMNA fund and switched it back to S&P 500. Companies can’t be made out of thin air like cash.
I think the stock market will do OK 2009 because the FED is inflating like crazy and its at a low level. And most important it seems everyone is selling and getting in cash.
my 2cents and thats maybe all its worth ?
Again, the deflation/inflation argument. The large contraction in industrial production due to lack of orders i.e. demand - leads to me to believe deflation is ahead of us. Our country as a whole consumes so much crap it’s not hard to envision a day when people scale back. If the contraction was not demand based but instead for other reasons (bankruptcy, system breakdown, regulation, etc) then I would think inflation would rear it’s ugly head - too much money chasing too few goods. This time there is more goods than there is money leading to deflation. As result, the stock market will trend downward.
Not hard to “envision” a day when people scale back? Good grief. What do you call the -5 to -7% GDP number that we just did for Q4 2008? Randomly lower spending?
Cactus,
Stocks are certainly less expensive. And I agree. You are getting something real by increasing your ownership of various companies through stocks and mutual funds, which is why I keep buying them. In fact, I just got back into NYB around $11.96. I sold all I had in that at $18 a few months ago and got some good out of it.
We’re in cash, and our brokerage has an insurance policy with a “London Insurer” for up to $900,000 that covers cash. The only concern I have is the SPIC (solvent?), and if the insurance co has taken a major Derivatives hit. Then we’re screwed, either way.
And “they” think they can tax their way out of recession? Ha!
Only if they can combine the taxes with increased spending.
forecasts and the lowest level since 1980 ??
If you are old enough to have been a working Adult during this period you know how bad it was…And remember, Paul Volker is on Obama’s economic advisory council…I think he is the chair…
Oh, I remember alright. The 80s sucked. But then, so did the 70s.
In fact, the only decade that didn’t suck for me was the 90s. And that’s only in a relative way.
Local observation,
I have sometimes looked aghast at the amount of garbage my neighbors put to the curb each week. Most using 2 large automated cans brimming full. It shocks me because with a family of 6, we routinely put far less trash out than most all of our neighbors. We are by no means tree huggers or climate change fanatics, as we are already happy in our chosen religion, we just don’t buy disposable everything.
Usually the first collection day after Christmas brings bags stacked atop cans full of cardboard and wrapping papers; not this year, it looked like any average day with 2 exceptions: The policeman’s house and the city worker’s house, looks as if the recession has passed them by.
Holy moly! I didn’t see your post when I wrote my post further below.
Okay, that’s eeeeerrrrrrieeeee! We might actually be on to something here!
Usually the first collection day after Christmas brings bags stacked atop cans full of cardboard and wrapping papers; not this year, it looked like any average day with 2 exceptions: The policeman’s house and the city worker’s house, looks as if the recession has passed them by.
Out here the city provides 30, 60 and 90 gallon containers on wheels (not free). You also have the choice of buying special city trash bags at the super markets, or tags for regular trash bags (you can also sign up with private haulers who also offer the wheeled trash cans). Cardboard is recycled by the city and is picked up for free.
In years past most neighbors would resort to the trash bags for their overflow. I saw fewer this year as well.
I have noticed that cops and firefighters live in nice houses out here. Sargeants are paid about 110K.
cops and firefighters live in nice houses out here. Sargeants are paid about 110K ??
Safety in Unions…IMO, we will see a significant push towards unionization moving forward.This recession has shown every private sector non-union employee how vulnerable they are…A private sector union may not be as “Golden” as a muni union but its better than no union at all…
Garbage not in, garbage not out?
A curious anecdote of declining consumption:
Ran into my building super this morning. He’s been here some twenty years. Every Christmas Eve and Day he said they have to empty the garbage dumpsters beneath the chutes every 90 minutes to two hours as residents toss their holiday garbage.
This year, they didn’t have to empty those dumpsters at all during the 48 hour Christmas period. And yes, they checked for clogged chutes!
First time this has ever happened.
No dumpster stories, but another anecdote:
The little lady makes candy for holiday gifts and hands it out in tins. She tries to buy up vintage tins throughout the year, but invariably needs a few more. She had a heckuva time finding new tins of a proper size this year. When she was talking about it with a clerk at JoAnn Fabrics on Elston, the lady said their business was through the roof, since more people were making all their gifts this year.
Is the news that manufacturing in every industry reported no December growth what is driving the New Year’s stock market rally? I guess from here on out it’s up, up and away in my beautiful balloon …
[$INDU] Dow Jones Industrial Average rises 37.92 points to 8,814.31
ECONOMIC REPORT
U.S. manufacturing drops to 28-year low
No manufacturing industries report growth in December
By Robert Schroeder, MarketWatch
Last update: 12:10 p.m. EST Jan. 2, 2009
WASHINGTON (MarketWatch) — U.S. manufacturing activity dropped to a 28-year low in December, the Institute for Supply Management reported Friday, as manufacturing contracted for the fifth straight month.
The overall ISM index fell to 32.4% in December, the weakest reading since 1980, according to the institute. It’s down from 36.2% in November.
Opportunity is knocking. Hint, hint, wink, wink, nudge, nudge.
Time coming up to reload those shorts.
Expecting 2009 to be vaguely 2002-ish (or 1932-ish) with the market taking a steady regular cr@ppin’ as opposed to the 2007 which was vaguely 1929-ish.
Slow and steady into the vale of despair that is the marker of a real bear market.
Vix is running lower very quickly….thin volume, Hope and Change are in the air…..can ya smell it?
wait for it…..wait…
Got in a couple of trades to be unwound Monday at the close tonight.
But the serious short trades will have to wait until I see the gleam of Obamatopia™ shining bright from every orifice in the land.
went back into the UYG, TIP news is just to scary for the shorts…..that and I cant seem to leave it alone. The defense of 100 on SKF has me astounded.
The whole “ban the shorts” thing got a nasty case drippy dick stuck on Cox, but I digress.
Thinkin over Hozzies call on oil, but I was already select long energy sector when he made the call….Im expecting another leg down on the whale blubber to put in a double bottom. Wait, there’s no such thing as a double bottom unless Im hammered and staring at Mrs Voz’s fannie
You thinkin’ 1100-ish for S&P before the big cr@ptacular?
I bought SDS at the close so only one of us can be right first thing on Monday morning. LOL
I’m surprised you don’t take exception to the math Professor!
The index measures the rate of change, not the absolute level of manufacturing. Given that the rate of decline is the greatest in 26 years says nothing about the level of manufacturing being at a 26 year low.
Reporters are smart.
‘Overall this report was a bad end to a bad quarter, and it gave no real sign of momentum going into early 2009.’
— Abiel Reinhart, J.P. Morgan
‘Economists surveyed by MarketWatch were expecting the December ISM index to rise slightly from November’s reading, to 36.3%.’
Dumb New Year’s prediction: No recovery will occur until economists stop missing almost all of their forecasts to the optimistic side of reality.
PB,
Head over to the HBB forum and post your 2009 predictions. I created a folder called “What are your Predictions for 2009?” in the General Housing Topics section.
A quick glance at this analysis suggests that Florida is in the worst suffering category for all four criteria under consideration (employment, foreclosures, growth and personal income). I did not notice any other states similarly cursed, though CA was in the worst category for the first three criteria on the list.
Financial Times
The state of the US economy
Published: October 9 2008 20:08 | Last updated: October 9 2008 20:08
Find out which US states are suffering the most in the current economic and financial crisis.
Some of these variables are collinear with clear lead-lag relationships.
I bet you places like CO are suffering even though it doesn’t show up. They are headed to becoming a MI. Other places have been so beaten down that the suffering isn’t obvious (OH, for example.)
They’re saying that Colorado had a 4.9% income growth rate? Whose rectum did they pull that out of? I don’t know anyone who got a 4.9% raise. I know plenty who got nothing, and more than a few who are getting less. Plus it was in the news the other day that Larimer County, home of
“best place to live” Fort Collins, has seen a 10% decline in wages since 2000. I would say that Colorado has been a salary and wages wasteland this entire decade.
With all those people buying $500k condos in downtown Denver, I figured everyone had found 2lbs gold nuggets out on the Arkansas.
How do you figure that CO will becoming another MI? Please share?
I do see that the state government is held bent on increasing taxes (all for the children, don’t you know /s).
I also know that they are already counting the “bailout” monies from the federal gov’t, talk about getting their hopes up.
Well, they put all their chips on tech/telecom. They have really never recovered from the last bust.
If you look at some of the exotic loans, CO buyers were among the most aggressive ones out of the gate. That means they really needed the loaned money, and they started defaulting in droves first too.
Ultimately, you have to produce something of value. They were trying to be a SV (who wasn’t?) and I don’t think they quite pulled it off.
High prices, high taxation, a dying business model. What does that resemble to you?
Sounds like the Silicon Valley to me.
I do see that the state government is held bent on increasing taxes (all for the children, don’t you know /s).
Thank goodness for TABOR.
Well, they put all their chips on tech/telecom. They have really never recovered from the last bust.
Bingo! Sun’s Broomfield campus is already a ghost town. I keep hearing rumors of HP buying out select pieces of Sun (like the Storage group),
Nice post Pbear…
Anyone else hearing the ’save housing first’ commercials on the radio? Poorly written and the male and female voices talk as if they are talking to kindergartners.
One pathetic line in it is, “Our family can’t plan for our future, because we don’t know what our house value will be.”
“We must save housing first, that’s the only way to get our economy going again.”
F-ing sad the level of ignorance out there.
“Our family can’t plan for our future, because we don’t know what our
house valuerent will be.”How about having affordable home prices, so people can buy a house AND have money to save or spend. That should get the economy going.
If you bought a 500k house and can’t afford the payments, how will the value going up help you afford payments? If you could pulled out more money, it will just make your payment even higher, making you have less money to spend on other things. It would have the same affect as cutting you income.
so people can buy a house AND have money to save or spend ??
I grew up next door to my grandparents in what was then the small town of Santa Clara Ca.(95050)…My granfather worked in a manufacturing plant making gavanized pipe…Hardly a high paying job…Probably toxic as hell…My grandmother worked during the summers only in the fruit packing plant…Again, hardly a high paying job and only three or four months a year…
They purchase there first home, then over the years the house next door, then the duplex next door to that, then the house next door to that and finally the duplex next door to that..Owned them all free and clear by 50…No help, no Inheritance, all on their own with basic jobs..
They were VERY frugal…Only three cars in their lifetime..My grandmother never drove…They lived to 87 & 92…Grew most of what they ate…Never traveled…My grandmother never flew in a plane…They did go on a camping trip occasionally with my Aunt…
So, whats changed ??
Gavanized = Galvanized
So, whats changed ??
Copper and plastic piping now
Wages.
I want to hurt people real bad who say things like “…adjusted for inflation, ‘X’ is still a bargain!” because the average person’s wage did NOT adjust for inflation. REAL inflation that is. In fact, J6P’s wages went DOWN, let alone adjust for inflation.
Bingo, ecofeco!
Very good point.
Oh, except one counter point is the cost of many goods & services (electronics, clothing and restaurant-dining all included, I believe) have also dropped, adjusted for inflation (actually countering inflation to a degree).
Housing is the big, big exception to that rule.
, “Our family can’t plan for our future, because we don’t know what our house value will be.”
Implicit in this is, of course, the assumption that being able to borrow against your home’s values is a valid component of planning a financial future.
Grrr.
I’m hearing them on the radio here in DC. Unapologetic pleas to prop up housing prices for the good of the children and all that jazz. They list a website at the end of the ad but I couldn’t remember it. I really wanted to stop by and ask them what other asset prices should be manipulated as well. Maybe we can make me some money on my old baseball card collection.
My response was the same. It was so head shakingly sad that I couldn’t even keep a righteous level of indignation. Turning the corner into the takeout place made me forget about it
This is going to hurt - many.
Migrant workers who moved to coastal provinces in China to find jobs are now returning home in large numbers as factories close. (Sean Yong/Reuters )
Rising desperation as China’s exports drop
HONG KONG: At the docks here, the stacks of shipping containers that used to loom above the highway overpass are gone. Logistics managers say they negotiate deeper discounts every week on ships that are leaving half empty.
In nearby Guangdong Province, so many factories are closing without paying employees that some workers are resigning pre-emptively and demanding immediate pay before their employers go bankrupt.
In Sichuan and other interior provinces, municipal officials are desperately searching for ways to provide jobs for millions of out-of-work migrant laborers whose families no longer need them for farming. (Cont’d)
http://www.iht.com/articles/2009/01/01/business/exports.php
Trade finance is collapsing - tarrifs are a buzz in the article.
Sigh,
Leigh
If China imposes broad tarriffs, it’s all over for them.
Jim Rogers or no Jim Rogers, I am going to short the cr@p out of them at that point. They will lose that mercantilist game like every other nation before them.
They don’t have to use overt tarriffs. Tarriffs are so….democratic. If you were a businessman in China and were told quietly to buy Chinese, what would you do?
They are functionally equivalent, and if so, I will do as I suggest above.
I don’t care if it’s literally equivalent or functionally equivalent as long as it has the same end consequences for my trading and investment purposes.
“Trade finance is collapsing - tariffs are a buzz in the article”.
LMFAO! Tariffs! Oh yea that will do it,bound to go over like a loud fart on a wooden pew in church.
(Reply has not shown up in over an hour).
You guys are killing me with laughter today - keep typing!
I do not tip liquid or solids to my face when reading this blog!
Leigh
A friend of mine doing business there says there are closed factories everywhere and they are all toxic waste dumps…
Just as it was in the USSR.
Saturday Night Live says….
Don’t make Stuff You Can’t Sell!
How do banks lose money on foreclosures, if they never had the money to lend? Say a bank did a 100% finance loan for 500k. They loaned 500k with 100k of depositors money as reserve. If the house sells in foreclosure for 200k aren’t they getting 100k of real money for nothing? Just keeping this simple and assuming they didn’t sell the loan, where is the loss?
Doesn’t work like that, kimosabe.
If you are 5x leveraged as per your example, you just blew a 300K hole so you need to raise 60K of capital to get back into your required capital ratios.
It’s not a one-way free-street no matter what the goldbugs think.
The bank get 200k after the foreclosure, when they only had 100k in reserve for the 500k loan. Why doesn’t the extra 100k get used for the 60k reserve for the 300k lost? They do get to keep the 200k from the foreclosure right?
I forgot that the original 100k reserve would make a lot more than a 500k loan from some of the 500k being deposited by the seller and the bank using that to make more loans.
Because it doesn’t work like that from an accounting point of view.
Somebody else reason with this man. I give up.
it’s not like you explained how it really works
Lawd, there’s only one thing worse than ignorance; it’s the ignorant who expect everything to be served up on a platter as a free service.
Losses are a reduction in reserves.
Think of reserves as dollar bills. When a bank lends money, it creates money in the form of a checking account balance. This is how reserves become M1.
From an accounting perspective the banks has a new asset of 500K (loan) and a new liability of 500K (checking account balance or “demand deposit”).
If the borrower gives the money to his lawyer’s trust account and it gets deposited in a different bank, the new bank has a claim against the reserves of the first bank. (This is not an issue so long as the first bank can continue to attract deposits - if necessary it can borrow reserves, probably at a lower rate than what it is making on the loan.)
The bank hopes to earn money on the loan, thereby increasing reserves and increasing its ability to lend and make more money.
When the bank loses money, its reserves are decreased. It makes not a whit of difference how much reserves it has backing whatever loan it makes.
Losses are always losses in reserves.
Wow…you are such a b****. No one made you reply to my question.
somebody got scratched by the mean kitty kat….
I was thinking to myself, why has he purred twice?
You must be new here.
He must be…Don’t rile the pussy tiger.:)
lol
tiger,
bank financial statements are available everywhere - get one . . . read it . . . then ask an intelligent question if you don’t understand. Also, as with any other industry, they do have to balance . . . you won’t find a “Poof” entry in there. Good luck!
FPSS, I have to laugh because I almost responded to tiger the first time, then I re-read the original question and thought I’d keep my pie hole shut . . . temporarily.
Paul,
Thank you for the explanation.
A+
SanFranciscoBayAreaGal.
You’re welcome.
its more like a 300k smoking crater, and a 60k hole.
Thanks to TIP, those smoking craters are gonna get backfilled on a “need to know” basis only. Dont like it?
Sorry bout that. The lonely holes are getting the margin call though.
The bank PAID the seller and is on the hook for the 500 large. The DUH factor on this one is huge!!!!
Gas prices have spiked up 25 cents here today…..anybody else seeing anything like that???
I haven’t been out today, but according to gasbuddy.com we are still in the low 1.30’s in my neck of the woods.
Noticed when I got back to Florida that prices were up 15 cents here (bought it as cheap as $1.369 on the road), and I would expect another 10-15 cents by Monday and an additional 10-15 cents by the end of next week. Probably north of $2 here by the time of the OIE (Obama Inauguration Extravaganza).
In related news, the long bond is getting crushed (I mean, 10% change in yield and 5% in price in two days is a pretty good whacking).
Also have noticed along with others that cheese and milk and even bread are getting cheaper.
Blano,
Middle East, specifically Israel and Palestine.
That’s been going on for a week now, and I gassed up a few days ago at a recent low. But maybe ’cause that problem doesn’t appear to be going away soon.
Just got out, prices are fine. Same as yesterday and day before.
Went back out for dinner, one place had gone up 10 cents. The other place went up 6 cents while at dinner.
Interesting interview today on State of Nevada (a program on Las Vegas’ public radio station)
http://knpr.org/son/archive/detail.cfm?ProgramID=1499
“Prof Richard Florida, Author, Who’s Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life
… on why he thinks the world is spiky instead of flat and how you’d better think carefully about where you live if you want to succeed.”
If there is one expense I regret, it’s buying Florida’s “Rise of the Creative Class”. Of course I donated the book asap, to the library.
The hypothesis is “Boston, New York, Seattle, SF and Austin are more liberal/ idea driven”, author provides 300 pages of hand selected evidence to back this up, and voila: The research shows that Bos, NY, Sea, SF have more creative yeast. Does academics need to be a refuge for self absorbed narcissists - yes I am judgemental, I say that he delivers only empty talk. Everyone else, we already know that there is a rust belt.
It seems that the stock market has shrugged off all bad news, and it’s party time.
I bought SKF right before the close yesterday, so that must be why we’re rallying today.
Is that another bazooka in your pocket or are you just happy to see me?
Has anybody bought any CD’s from moneyaisle dot com. It was recommended by the wall street journal.
I did the test drive but would have to evaluate the bank
I don’t think the test drive tells you who the bank is ?
Is there hope for California?
January 3, 2008
Great Lakes Region Sees More People Leaving; West, Southeast Welcome Residents According to 2007 United Van Lines Migration Study
Some other noteworthy outbound states in this year’s study were:
California (50.8%) saw its lowest outbound percentage in five years.
Missouri (51.4%) continued its 13-year outbound trend.
Maine (50.1%) witnessed its lowest outbound influx since 2001.
Maryland (54.1%) retained its 16-year outbound tradition.
Oklahoma (53.9%), outbound since 1998, continued to see more people leave than move into the state.
Walter said the United Van Lines study, through the years, has been shown to accurately reflect the general migration patterns in various regions of the country. He also noted that real estate firms, financial institutions, and other observers of relocation trends regularly use the United data in their business planning and analysis activities.
http://www.unitedvanlines.com/mover/united-newsroom/press-releases/2008/2007-united-van-lines-migration-study.htm
Michigan 67.8% outbound…..amazing.
Oregon (58.4%) sustained its 20-year, high-inbound trend.
Just keep out the Cheeseheads….hippies dont like cheese unless its Velveeeta….and thats a cheese product, not actual cheese food.
Huh?!?
Have you never heard of the Berkeley Cheese Board Collective?
must be all staunch Republican bitches…never heard of em.
Yeah, I always love them lesbian Republican movers an’ shakers. LOL
Coupling can some times feel like getting screwed (and I don’t mean that in a good sense).
But luckily, Wall Street rallied today, signaling that the worst is behind us now.
Manufacturers suffer record declines in activity
By Krishna Guha in Washington, Michael Mackenzie in New York and Chris Bryant in Berlin
Published: January 2 2009 19:23 | Last updated: January 2 2009 19:23
US manufacturing activity contracted at its sharpest pace for nearly 30 years in December, a closely watched survey suggested on Friday, underscoring the downward momentum in the economy at the turn of the year.
The Institute for Supply Managers survey index declined in November from 36.2 to 32.4, much worse than expected, while new orders and production measures hit their lowest level since the survey began in 1948.
It coincided with manufacturing data that highlighted the sharp synchronised decline in economic activity around the world, with manufacturing suffering severe pain.
JPMorgan’s global purchasing managers index (PMI) on Friday showed manufacturing activity falling to its lowest level since the survey began 11 years ago.
A PMI survey compiled by broker CLSA showed China’s manufacturing activity contracting for a fifth successive month while the South Korean government said exports slid 17.4 per cent in December after a revised fall of 19 per cent in November.
I think the PPT is working overtime. My theory is if Dow falls below 7500 we have a depression. If Dow stays above 8200 we have bad recession. PPT understands it clearly.
The ptb will try their best not to let it fall. Imho
Obama ascending to the presidency rally. PPT need do nothing until the inauguration.
Then fourth quarter results will bring this puppy down and down and down…
Then we’ll see how much power the PPT really has.
I guess you buy into Jas’s “Americans are born and bred dopes” theory? Either that, or you think like I do — enough stimulus and money printing will make stocks go up despite terrible fundamentals, and may create inflation as a side effect — and hence go long stocks as a hedge against getting shafted with inflated currency. It seems like all investing strategies are mopes games, but this might just be a non-trader’s New Year’s kvetch.
I buy into Jas’ theory, and I don’t even like his style.
Which doesn’t make him wrong just uncouth.
“I think the PPT is working overtime.”
And the FED is loaning out dollars overtime as well.
In a free market money goes to the best business thats the strenght of capitalism.
in this market money goes to the companies the government likes.
thats ineffcient and will cause shortages and crappy products. Start limiting imports to protect these government favorites and get inflation. Thats the future I see a few years down the road.
Brad Setser has some good charts up relating the now recession to past recessions.
lets take a look while Im still sober.
1. US GDP Growth has not bottomed out.
2. US Federal budget has collapsed faster than any previous recession.
3. World Trade Growth has almost found the bottom.
4. Unemployment is reaching the highs of previous recessions.
5. Non-Farm payrolls have already collapsed.
6. Oil prices have collapsed.
7. Indistrial production is bottoming.
8. ISM manufacturing has collapsed.
9. Vehicle sales have collapsed.
10. Real Personal Consumption has collasped (ala Housing bubble).
11. Investment grade debt spreads are still blown out.
12. Equity Market performance has been, lets say…. very, very poor.
—
Strong evidence of fear, panic, shock-and-awe rate cutting, global bailouts stimulating personal consumption, geopolitical tensions, riots in China and Greece, IB implosions, Sovereign Nations (Iceland) economy destroyed, and finally EXPECTATIONS in the toilet……what can it all mean?
Personally, I see not a recovery in the equity markets anytime soon, and that ususally means a strong rally and S&P 500 to 1000+ should manifest over the next few weeks. In sum, I would expect a bounce in the Housing market in the Spring to be the trigger for the next leg down. Why? Bear markets rally into the bad news, and may begin a new leg down on real good news, like a false housing recovery start….
stay long, get longer, may wanna short some Yen here. Obamanation Hope and Change coming to town.
http://www.cfr.org/content/publications/attachments/2009OutlookFinal_Long.pdf
theres the linky if it posts.
Look at the second to the last chart and read the blurb: “The recent rise in the BAA spread is unprecdented and, if not a product of an unprecdented ‘deleveraging’ in the market, implies record future defaults.”
The term “implies record future defaults” implies billions - trillions, perhaps - of dollars going “poof”. This poofiness of dollars will make remaining dollars just that much more scarce, that much more valuable.
Go to cash, if you’re not already there, and wait out the storm. Come out of cash in a year or so and reap the harvest.
ben, I hate to bitch, but I put two decent posts in here….
Dunno if you saw this but I just got back from DC.
Went to a few parties. Demos and Repubs both.
These are the most vile humans I have met on the planet. All of them. They make the Wall St. crowd look like decent upright altar boys.
Great food though (DUH!!! It’s OPM.)
are comuocado-ing?
I posted one for you above….has to do with short banning, drippy dick, and something stuck on Cox at the SEC.
I laughed (internally.)
Wow..I’m really jealous. I wish I could do stuff like that. I love being around fake or crappy people who think they are a lot smarter than they really are. Isn’t it great folks like that run this country?
are you gonna sit there and say you would not go to a catered party, great food, open bar, and a bunch of kool-aid drinkers in DC?
I would love to get hammered and mouth off at that kinda party, spilling drinks on people, bitch slaping some foolish mortal…..
I wasnt being sarcastic at all, I love situations like that. I like to turn on the redneck and wait for a prime opportunity to demonstrate to some pretentious a-hole how much of a retard he really is. They really hate that especially when it comes from some dumb-arse southerner. lol
Wow? You like that?!?!?
If it weren’t for the booze, I’d be sooooooo not there. But, damn, those fancy beers were good.
Oh, and the answer to your (unasked) question is that you wouldn’t get invited back if you were an a-hole. So you need to just kinda eat/drink, make some aggressive remarks, and take a ritualistic shower when you come home.
Well, I do like to try to be a little subtle about it…its a game. Kinda like “Does he know I’m actually making fun of him?” Although it CAN turn into outright making fun depending on how hammered I get.
But anyway I’ve never been to anything just like you’re describing. Sounds like a lot of “important” people…the closest thing in my experience is either a party with people attending a pretentious liberal arts school or the faky-faky I-wanna-be-rich jerkoff crowd some of whom my wifes parents hang out with. Maybe in a situation like you were in its more important to consider other benefits to being on the inside which would outwiegh the short-term gratification of making fun.
(modifed for filter)
Well, I do like to try to be a little subtle about it…its a game. Kinda like “Does he know I’m actually making fun of him?” Although it CAN turn into outright making fun depending on how hammered I get.
But anyway I’ve never been to anything just like you’re describing. Sounds like a lot of “important” people…the closest thing in my experience is either a party with people attending a pretentious liberal arts school or the faky-fakE I-wanna-be-rich je.rk0ff crowd some of whom my wifes parents hang out with. Maybe in a situation like you were in its more important to consider other benefits to being on the inside which would outwiegh the short-term gratification of making fun.
Bah humbug.
It was nothing of the sort. DC is filled with so-called “important” people who will not be so important with the next change in phase.
Not one of that crowd could actually earn a living. They know the drill.
Pork out with your cork out while the getting is good, and then either move back to some podunk state where you will be king of the pork or stick it out in some self-important half-pork state with memories of the past glory.
Oh, and you gotta marry a lawyer or else how would the bills get paid?
How about a few details or examples as to why???
Aaah, I have finished the 2nd to last chapter in the “Ascent of Money” by Niall Ferguson (otherwise referred to as ella’s boyfriend in our house. Poor Robert Shiller, I haven’t returned his calls in ages
).
So, while reading Chapter 5 “Safe as Houses”, I got to review some greatest hits housing statistics. Just for old times’ sakes:
-Since 1959 the total mortgage debt in the United States has risen 75-fold.
-American owner-occupiers owed a sum equivalent to 99% of US gross domestic product by the end of 2006, compared with 38% fifty years earlier.
-About half of all growth in the US for 2005 was housing related
-Between 1980 and 2007 the volume of GSE (Government Sponsored-Enterprises) - backed mortgage-backed securities grew from $200-million to $4 trillion.
-In 1980 only 10% of the home mortgage market had been securitized, by 2007 it was 56%.
- Between 1997 and 2006, US consumers withdrew estimated $ 9 trillion in cash from equity. By the first quarter of 2006 home equity extraction accounted for nearly 10% of disposable income.
-Home ownership in the US as of 2000 was at 65%, lower than the other English-speaking countries: Canada 67%, UK & Australia 69%, Ireland 83% (!!). (Those are high percentages, no? Germany is 43%, France 54% and Japan 60%.)
-In 2008 US grew to 68% owner-occupiers, as opposed to less than 2/5 prior to 1930. It was 60% by 1960. (Considering all the money sloshing around the last 10 years, if there are only 8% more homeowners, then it all seems even more pointless, no?).
Special bonus fact:
-The final cost of the Savings & Loan crisis between 1986 and 1995 was $153 billion, of which taxpaers paid $124 billion, making it the most expensive financial crisis since the Depression.
HBB Ciffnotes.
Nice summary Ella thanks!
Cliffnotes, hee!
How about a little analysis on the subject of why we are so prone to falling for financial scams, from a fellow named Greenspan? Hardy har har!!!!
Wall Street Journal
* JANUARY 3, 2009
Essay
Why We Keep Falling for Financial Scams
Intelligent people have long been ruined by frauds. Psychologist Stephen Greenspan, who specializes in gullibility, explores why investors continue to be swindled — and how he came to lose part of his savings to Bernard Madoff.
Decent MSM article on loss of principle vs. paper wealth, in regards to Madoff scheme.
http://money.cnn.com/2009/01/02/news/companies/madoff/index.htm?postversion=2009010218
Easily translates to housing bubble paper losses.