Bits Bucket For January 21, 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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Name:Ben Jones
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Economists predict continuing economic gloom for U.S. during next 4 years
Government seemingly only hope to ignite pistons to drive growth
By Peter G. Gosselin | Tribune newspapers
January 20, 2009
WASHINGTON — Transfixed by the daily spectacle of dismal economic news and wild Wall Street swings, few Americans have looked up to see what a wide array of economists say lies beyond the immediate crisis. And with good reason: The picture isn’t pretty.
The sleek racing machine that was the U.S. economy is unlikely to return anytime soon despite the huge repair efforts under way. Instead, it probably will continue to sputter and threaten to stall for years to come. The prospects are so gloomy, according to a recent study, that Americans may be slightly worse off in four years than they are now.
The damage done by plunging house and stock prices, the failure of a global economy as an independent source of growth and hidden weaknesses in America’s past performance have crippled nearly every actor in the economic drama. None, save perhaps the government, retains the power to push the economy back to speeds it regularly achieved during much of the last generation, economists say.
The result: An economy that once averaged 3 percent or better in annual growth would be lucky to grow 2 percent a year during the entirety of the new president’s term.
“We’re in a post-bubble global recession, and post-bubble recessions are lethal for growth,” Stephen S. Roach, chairman of Morgan Stanley Asia, said from Beijing. “It will be a long time before the world experiences anything more than anemic recovery.”
President Barack Obama and his top economic aides seem to understand the painful prospects. Obama misses no chance to temper hopes for a quick and complete comeback.
A recently released study by Christina Romer, his nominee to chair the Council of Economic Advisers, and Vice President Joe Biden’s chief economist, Jared Bernstein, concluded that even with an $825 billion stimulus package the unemployment rate at the end of Obama’s term would be between one-half and 1 full point above where it was before the start of the recession. That would mean as many as 1.5 million extra jobless workers. And some independent economists say that number could be much higher.
What most worries analysts is not a cataclysm like the Great Depression, but the sort of morass into which Japan fell after its stock and real estate markets burst in the late 1980s and early ’90s.
Four factors power an economy: consumers, investors, the government and a favorable balance of trade with other countries. And for many years, the most important of these has been the American consumer. U.S. households long have accounted for the lion’s share of economic activity not only here but also in much of the rest of the world.
Although U.S. consumers constitute about 4.5 percent of global population, they bought more than $10 trillion worth of goods and services last year. Chinese and Indian consumers, who together account for 40 percent of global population, Roach said, bought $3 trillion.
U.S. consumer spending shot up from a little more than 73 percent of the economy to nearly 77 percent between 2001 and 2007, government statistics show. Initially, the expansion was heralded as evidence of economic vitality. But now it has become apparent the growth was largely a debt-driven bubble—a double bubble—in housing and in personal consumption.
Notice that the word “customer” is no longer used. “Customers” used to be “always right” and were to be treated with respect and care. “Consumers” are entities to be treated with contempt and indeed they have been.
I am not a consumer. I am a potential customer, a citizen, a person. I’m capable of helping my neighbor if I so choose.
“Consumer” has the air of managed confinement to it, as in farm animals.
Yes, it does, and I believe it is meant to dehumanize. “Consumers” are not entitled to service, courtesy or a “thank-you for shopping here”. Consumers will “take what they get and like it.”
Makes you want to completely withdraw from the system.
Many of you may be aware that the income tax law, as written, does not apply to the vast majority of us. I will not make that case here (read the tax code, definitions, etc yourself), but wanted to air an idea.
Suppose a company existed that would insure you against IRS audit for 10% of what the IRS claims you owe. This company would handle all correspondence with the IRS and if it comes to court and they lose, then they simply pay the “tax” and “fines”. Each of us individually lacks the money, time, etc to put up a fight against the IRS (it is simpler just to pay them off); however, the IRS lacks the funds to audit EVERYONE and so the probability of an audit is small, and if the IRS is forced into a costly litigation against even the smallest of individuals then they will not be able to go after them because the cost is greater than the return.
The only way to beet this system is for the little people to organize against it. So long as we fight alone we will continue to die alone.
The entire system will probably collapse under its own weight during hyperinflation in the next few years, but the general idea of citizens organizing in self-defense against the government would likely still apply. If such a company existed would you join? What assurances would you need?
So, is the idea that you just stop paying taxes and rely on your “insurance” to cover you if you are caught (oops “audited”)? Aren’t there also criminal penalties for tax fraud?
No, I didn’t get that at all, qax. As usual, some will try to game the system, but I think you brought up a good point for Dan to consider. Just as there are agreements in purchasing any insurance, this sort of thing could be considered in writing the documents for people who apply to be in the program.
I like the idea, Dan. I realize it is not fully developed, but I like it.
Ha! Once you organize this you are an enemy of the state. The ATF will find you and put a stop to your subversive activities.
The ATF will find you and put a stop to your subversive activities.
ATF?
Does Dan’s scenario have anything to do with Alcohol, Tobacco, or Firearms?
The tax evaders who stand out get made an example of. You cannot beat the IRS. You only win by playing by the IRS rules.
Understood, there are hundreds of billions of dollars spent unconstitutionally, enough to make one justify invoking the advice in the first paragraph of the Declaration of Independence.
You are better off keeping your tax evasion individually and not organize. Myself - I’m under a microscope and I have to do everything by the book. I get background investigations regularly as part of my job. My pay is worth it.
If I was not in this career, I’d seriously look at moving some of my assets overseas in the few places where financial privacy is maintained.
The best I can do to change the tax law is donate to the Libertarian Party, Ron Paul’s campaign, vote, and hope.
I think the folks who believe they “know” that the IRS is illegal, etc, are kooks and wackjobs.
That being said, the best thing would be–for those who can afford it–is simply not to earn any money over the next 4 years.
I took a tax class this summer and the first topic was the statutory authority for the IRS and income tax.
I made an A in the class but I’m still not clear on how the Income tax is (technically) legal.
The only way to beet this system…
…is to throw vegetables at it?
I do not believe you can insure an illegal action. Tax evasion is illegal. You can argue that income taxes are unconstitutional but the Supreme Court has disagreed and no one arguing on those grounds has ever been successful. Lots of schemers have taken money from trusting people with all kinds of promises and expensive products but none have ever worked long-term.
This is simply setting up a Ponzi scheme. You open the “insurance company” and take in a couple years of premiums. Good money and the company owners take the lion’s share with a bit for “lawsuit reserves.” With the first couple lawsuits the fed figures out who you are and shuts you down as an illegal operation. You simply tell your customers - “Sorry dudes, we’re out. Thanks for the premiums but you are no longer insured.” The IRS audits all the now unprotected clients (because they have the company client list) and the penalties and interest cost more than the original tax would have. (And you pay the original tax.)
If you think you can open this business why don’t you also try opening your own casino? Would never succeed and run as fast as you can away from any snake oil salesman trying to sell you this Madoff scheme. (Ponzi is so 20th century.)
There is an organization of tax avoiders in Los Angeles going under the title “Freedom Law School”, which isn’t a law school at all and none of the “professors” are actual attorneys.
http://www.livefreenow.org
There’s a lot of buzz on these crooks on the web.
The XVI Amendment appears clear on the authority of Congress to levy income tax in the US.
if the IRS is forced into a costly litigation against even the smallest of individuals then they will not be able to go after them because the cost is greater than the return.
Don’t forget though, that judges almost always come down on the side of the IRS, even when it’s clearly not warranted.
The tax evaders who stand out get made an example of.
Unfortunately this is true. Look at Irwin Schiff. And as Ron Paul would say (about the IRS), they have the guns.
And as the sign on Congressman Ron Paul’s desk reads: Don’t Steal - The Government Hates Competition.
The XVI Amendment appears clear on the authority of Congress to levy income tax in the US.
Don’t bother with this BS around here. We’re well aware that the Supreme Court ruled that the 16th amendment gives no new taxing authority to the government.
Those who choose not to pay income tax are no more crooks in my eyes than those who threw tea into Boston harbor.
I had an audit by letter a number of years ago. Got the documentation to prove the income was not in the year they thought it was in (called bank for new copies of documents). Faxed it over with a letter saying the income was in year A, not year A+1, and I had paid the tax in year A and copies of the return from year A. They said I was right and ended the matter.
It took a little more time than proving a parking ticket didn’t apply to my car since with the ticket, I already had the proof of my vehicle make, model and plate number actually with me (instead of calling bank) and explained on the phone instead of with a letter, but not by much.
Or Mental patients….they are classified as “consumers” of our services. Pathetic
—————–
“Consumer” has the air of managed confinement to it, as in farm animals.
Witness the replacement of “Personnel” with “Human Resources.” I used to be a person, now I’m a resource, like a lump of coal.
“Personnel” always made me think of a lady-person, and angle person or a teeny person: person-el. =^_^=
You should be a geyser, not a lump of coal. Think big!
Consumer implies destruction, and is a weird term.
Consumption….the scourge of the 19th century. Victims of this malady, aka tuberculosis, waste away from within.
Consumers…the filthy things breath up your air and use up your resources.
“Consumer” has the air of managed confinement to it…
Makes me think of tuberculosis.
I get irritated when Physicians/Nurses/PAs are called “providers”.
Yep, that’s another one. Newspeak is a lousy language.
Also, “mechanic” is now politically incorrect. The proper term is “car repair provider”.
RE: Also, “mechanic” is now politically incorrect. The proper term is “car repair provider”.
Full time housewifes now referred in the B-Glob as “Home Engineers”!
“Full time housewifes now referred in the B-Glob as “Home Engineers”!”
Are you sure it isn’t “Home Technicians?” The Professional Engineering Associations have rules.
so I take it “grease monkey” is politically incorrect?
A local AppleBee’s changed the name of their happy hour to “gathering time”.
Give me a f-ing break.
Political correctness is a disease of the meek.
Mike
The proper term is “car repair provider”.
Automotive Technician
So we’re all just being reduced to a bunch of “providers” and “consumers”? Brrrr. The world is becoming a cold place.
Not if it applies to a Jiffy Lube Lackey
———————————————
so I take it “grease monkey” is politically incorrect?
At least ’someone’ is making an effort to teach young people How-To-Sell!
They’re nice young guys that pleasantly remind you that your air filter needs replacing ( so you can get better mileage ) Maybe if more businesses viewed their younger employees in a better light the world wouldn’t be so f’d up?
I don’t have any respect for people that at least don’t try to sell me. Period.
Comment by hd74man
2009-01-21 08:22:43
Re: Full time housewifes now referred in the B-Glob as “Home Engineers”!
Incorrect hd74man. They are called “Domestic engineers”
The proper name for a waiter/waitress is Realtor
Part of this has to do with the way the Department of Labor classifies jobs.
Example: The attempts to get FAA “A & P Mechanics” a separate job classification, to “Aviation/Aerospace Maintenance Technician”
Why? Currently, the Department of Labor lumps A & Ps in with Joe Bob down at Jiffy Lube. We are all “mechanics”, as far as the DOL is concerned.
Being classified as “unskilled” workers has a direct effect on payscales, especially when the HR types use DOL statistics to determine salaries.
“Sanitation expert and a maintenance engineer
Garbage man, a janitor and you my dear
A real union flight attendant, my oh my
You ain’t nothin’ but a waitress in the sky”
GSFixer,
And at what a terrible cost! Started with breaking the Eastern A/L Machinist Union strike ( under Frank Borman ) and has gone downhill ever since. There’s no way to explain to people w/ an automotive background that the pilot can’t just pull over to the side of the road if they have a problem.
If you are considering a move ( and I know you’re in the midwest ) but my reserve squadron has SEVERAL openings! Check out USAjobs.com. We are under Klamath Falls, OR.
Love to have you onboard. I’m one of those “Just a Reservist” guys but the F/T guys do rather well “I” think.
Thanks, I’ll look it up.
A relocation is apparantly in the cards, no matter what. It appears that a relocation to one of the coasts (or possibly overseas) is going to be mandatory. Not a big deal. I don’t have to worry about a wife whining about moving away from “family”
(You think Jerry Springer/Maury Povich is BS?……get married, or become a foreman/supervisor….)
I was planning on looking for a new job in two years anyway (after the youngest daughter got out of high school)…..just an unscheduled revision to the master plan.
RE: Incorrect hd74man. They are called “Domestic engineers”
Infinitely better!
Why does Joe Biden have his own chief economist?
Too many chiefs in the kitchen.
Actually I fully support this idea. It signals that he wants to learn more about the topic, so he has a resident expert to help him grasp more complex issues.
It tells me Joe is smart enough to realize that he doesn’t know everything.
Refreshing!
You give these con artists too much credit. Wake up for crying out loud.
“None, save perhaps the government, retains the power to push the economy back to speeds it regularly achieved during much of the last generation, economists say.”
If this is our best hope, then we clearly are in trouble.
We are in DEEP trouble
What is needed is a serious commitment to start Hiring Smart bright On-The_Ball people again in America
We have so severely Dumbed Down the workforce, employees have become useless in solving a crisis.
I wish i had a job….but its always the same answer we don’t need anyone smart here.
2009 Corporate Double speak: “overqualified” really measn: We want to hire a Moron!
It is sad to see how far we have fallen from just 9 years ago.. I just returned from a 30 day 3 country tour of south amercia.. I was visting friends in brazil to start off the trip.. I lived in a city 45 minutes outside of Sao Paulo.. so I was able to see all the major changes.. first off 85% off all cars are flex/hybrid.. and small very nice cars.. we could learn a lot from this..
Real estate wise-
my friend was in the middle of 18 condo new construction project at 250k us for everything.. he had them all pre rented as he is a build for cash and rent guy.. he now has 60 units and is in his early 50’s in age.. he recieves 40k cash per month in rent. He wants me to go in on the property next door.. i passed..
my other friend purchased a condo at the beach cash for 72K with a ocean view (playa grande brazil) $110 hoa fees with a roof top pool and community room.. 1 building off the beach.
Next was Uruguray Punta del este.. the worlds best beach according to E entertainment and myself.. but what a big big real estate bubble they have brewing down there.. a lot of construction of new condos.. prices are still fair as you can get a ocean front condo for 250k but the area is only alive for 3 months dec, jan and feb.. but it is unreal at this time.. it’s a Newport beach meets a millian fashion show.
Next was BA argentina.. wow wow wow what a city.. but they did have a rush of investors come in and purchase a lot of old buildings.. I would stay clear of owning but plan to go back for 3-6 months to work on spanish, tango and see more of the country..
Lastly on the boat from Colonia uruguay (a must see as this is the most romatic old city i have seen in my life) I met a 19 year old kid who said his dad lost all his money with Madoff he was from argentina and he was going to meet his dad to go see an attorney and wanted to ask me for advice.. I told him to save the money and pass on the attorney.. more later if your interested
I was in Roatan Islands, Honduras in early Jan and also saw quite a bit of for sale signs on the islands and stick prices. Guess the ill economic winds blow a little slowly down there, i.e. island time mon. All these exotic beach-front locations are like Manhattan… last to implode but no escape.
“my friend was in the middle of 18 condo new construction project at 250k us for everything.. he had them all pre rented as he is a build for cash and rent guy.. he now has 60 units and is in his early 50’s in age.. he recieves 40k cash per month in rent.”
60 + 18 = 78 round off to 80 units
80 / $40,000 USD
$500.00 USD rental per unit?
It sounds like the 18 are under construction..they way I read it anyway. Which makes 40k/60=$666/mo. for the 60
*shrug*
Yes about $550 per month per 2/2 unit 1000 sq ft max.. nice but tight quarters is how they live in this area behind a large wall with spikes on it..
“What is needed is a serious commitment to start Hiring Smart bright On-The_Ball people again in America
We have so severely Dumbed Down the workforce, employees have become useless in solving a crisis.”
It’s called “Affirmative Action” and “diversity”.
You mean you might want to hire intelligent white men who get the job done? Forget that.
You want a “mosaic” of human debris to fill your company’s various job titles. That’s “FAIRNESS”.
Well, America got what it was sold as the NEW America. Welcome to it.
diogenes,
Right, and there’s ample evidence that all of us forced into self-employment left with a ton of connections and some really nice “parting gifts” on the way out too! Right?
forced into self-employment ??
And it is on the cusp of not being worth it assuming you are above board…Anyone who has been or is self employed knows EXACTLY what I am saying…The self employed for the most part that work off the books do the best…Bring on the value added tax….Revenue stream can be more accurately estimated… Everybody pays…
It’s called “Affirmative Action” and “diversity”.
You mean you might want to hire intelligent white men who get the job done? Forget that.
You want a “mosaic” of human debris to fill your company’s various job titles. That’s “FAIRNESS”.
Yes, blame the Ponzi economy on diversity programs…all the economic problems this country is facing are due to the mass hiring of poor uneducated affirmative action beneficiaries.
The “intelligent” white men who constitute 95% of Wall St. investment brokers, loan officers who made unworkable loans and CEOs who sold our jobs off to third world countries were clearly cheated of their birthright. Thankfully, the taxpayers will make them whole again. That’s ‘fairness’.
/sarcasm
Nepotism is still alive and well in the New America. Clearly, those who aren’t lucky enough to benefit from it are simply ‘human debris’.
Sure only white people are a gift to the world and all others are schmucks who need an education. People who blabber something stupid like you just did are what got us into this mess.
Well all except for the racial part, I think he pretty much has it right.
I’ve worked job after job where after q while it becomes apparent that the middle managers I report to really don’t want me to come up with intelligent, innovative, efficient solutions to things UNLESS I’m willing to let them completely take credit for it.
Basically, they want good lap dog employees that will lick their balls not only on command, but demonstrate that they are a team player by doing it without being asked.
I pray to almighty god that all these middle management a-holes lose their life savings when RE tanks(more) and have to live in a cardboard box the rest of their lives, while people who do things efficiently and thoughtfully get a promotion.
This country is doomed unless we start truly rewarding and elevating the smart people.
Alternatively, I’m looking forward to watching “Oww my Balls!” and shopping at FuddRuckers…..
/go away - ‘batin!
Hmp. Affirmative action complaints. Must work for the US Gov’t.
Affirmative action complaints = anyone who works for a company that sells goods or services to the U.S. government.
Just about every major manufacturer out there (OEM) has affirmative action quotas to meet each quarter. If you want to find out what’s wrong with the American auto industry, that’s as good a place as any to start.
oh, please. too many times I have seen very qualified black men underemployed.
at the same time, you see everywhere these obnoxious, incompetent affirmative action hires (often women with a major attitude problem who don’t give a fig if their employer goes down in flames as long as they still receive a paycheck) in low-level positions
when the prejudiced decide to make an affirmative action hire to make their numbers, believing ahead of time that all Blacks are stupid, greedy, time-wasting ingrates …
…well, they get exactly the kind of employees they deserve.
some of the best employees qua employees I ever worked with were Black. some of the best people I ever worked with were Black. don’t blame color on the fact that YOU make cruddy hiring choices.
My hubby has first-hand experience with that. He was deemed “too professional” at his call center job. Too many customers were calling the management to heap kudos on him for it. The managers were annoyed. They told him to be colder. He fought for his rights when they took away his commission because he missed his metrics by 10 seconds. The result was $400 less that month to feed his family. He was deemed a liability and disposed of. Truthfully, what they want these days are drones and slaves who don’t question anything and do as they are told. There really are too many overqualified people looking for jobs that want dumbed down drones. In his current job he is again being accused of too much professionalism, too much friendliness but at least this time he got employee of the month for it. Most places don’t seem to like that though.
You’re right about that. Ten or so years ago, when I worked for B of A, the call centers were loaded with bright, young people, many of them college students or recent grads. Fast forward to today and it has completely changed. In fact a few months ago, while on the phone with B of A, the uneducated customer service rep- a woman from a southern state, actually said “you’s doin’ ” instead of “you’re doing”. I was astounded.
smart = crazy
Smart people don’t know their place and tend to get uppity and demand things like raises and vacations longer than 4 days and don’t respect their “betters.”
Just a continuation of the drift towards a more powerful corporate state. As lamebrained as the war on terror is, at least its proponents could point to national defense being a mandate of the federal government. I doubt those arguing today for more government involvement in the economy could find any reference to supporting house prices in the Constitution.
Team Obama say they will order banks to lend. Now, can they order us to borrow?
Only the ones who can’t/won’t pay the money back.
More of the same; spending your future income and making banks profitable is your duty.
The economy needs loans given to sheeple who can’t afford to borrow and are at risk of bankruptcy. That is the state of the union. What I’m hearing, from the experts, is what I’ve suspected for the past 15 years or so. The war on savers will continue, our economic survival depends on it. How does the propping up of home prices sit with the Obama supporters? after all, this is a housing bubble blog.
Well just as good as it was with the McCain supporters, after all this is a housing bubble blog.
McCain is not the president. Again, all I’m hearing is that we have to prop up house prices. Well, can we assume that since tuesday RE always goes up?
Doesn’t sit well with me. Don’t forget both parties are strong believers in wanting to keep real estate prices up.
“..Now, can they order us to borrow”
Geez, have you no knowledge of evolutionary human behavior?
Team Obama say they will order banks to lend. Now, can they order us to borrow?
The difference between us and the banks is that the banks (supposedly) need the government (the Fed charters them, etc). We do not need the government in that way.
But can they force us to do something? Of course. They force us to do all kinds of stuff. Pay taxes on “our” property, taxes on “our” labor, require us to register for all kinds of BS, and plenty of other things that seem to be contrary to the idea of freedom.
“Four factors power an economy: consumers, investors, the government and a favorable balance of trade with other countries. And for many years, the most important of these has been the American consumer.”
For many years, the American balance of trade and consumer debt level have been moving unsustainably towards points of no return.
…towards “points of no return”
…isn’t that just a stones throw away from… “ground zero”?
RE: Economists predict continuing economic gloom for U.S. during next 4 years
Made the call 3 years ago, that this lender debacle was 10X worse than the $500bil govie clean-up for the ‘90/’91 bust.
Losses now @ $3.4 trillion.
Once all the lender’s hidden garbage floats to the surface the number should be just about $5T*.
*(excludes the potential $1.4 quadrillion derivative blow-ups
noted yesterday.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aS0yBnMR3USk&refer=home
“Four factors power an economy: consumers, investors, the government and a favorable balance of trade with other countries.”
Really? So, economies are really casinos. the government prints money, gives it to “investors” who buy stuff to sell to “consumers” and ship stuff around with other countries? Is that the model?
What about PRODUCTION? You can’t “consume” something that isn’t first produced. This type of upside-down thinking is what got us into this mess.
We NEED INCREASED productive work, leading to increased trade and sales, providing higher salaries and wages, HIGHER interest rates to promote savings and investment. The media-speak on the economy is totally insane, showing a complete lack of understanding of how things work, except a propensity to government socialism.
I am living in Wonderland….a victim of the Red Queen race………..you have to keep going faster to keep going backwards. Lord, help us!
Production, like consumers, is just a damn nuisance. Why, you have to HIRE people and PAY them for gods sake! How utterly “dirty.” *shudder*
Now take derivative market manipulation, er, analysis or stock gaming, er brokering! There’s a fine occupation for one with breeding!
I still think low interest rates are good as long as inflation and borrowing is low. Fundamentally, why does someone’s capital demand a higher return than say 5-6% for loaning it out? The ideal would be that 2-4% of loans that are highly qualified might go bad, so that needs to be considered, then 2-4% real return on investment seems acceptable. The only way people should be able to make above 4% on their capital should be by working with it in their own hands, building a business…
Screw all the other people trying to live off their hoarded wealth. IMHO everyone should be able to *save* for their own retirement as opposed to leeching off the backs of other people through lending at exorbitant rates. This whole leveraged economy is coming apart, and I for one am glad.
I agree with the production part of your statement. That is where the money should be made. And leave wall street out of it
The higher the cost of money, the more carefully it will be allocated, leading to LESS malinvestments.
Savings is the lifeblood of investments. It is “delayed gratification”. It is the willingness NOT to spend to put the money into a more productive allocation.
CHEAP Greenspan Money made this mess. It provided NO incentive to allocate resources. EVERY commodity became an “investment”. Higher prices are now proving to be an illusion of higher production and greater wealth.
Cheap money led to “houses for everyone” economic model that is now collapsing.
obviously that statement is false. The cost of the money for all these subprime loans was considerably higher than for prime loans, and MUCH less carefully allocated. Careful allocation of funds is independent of the interest rate. That is the definition of bubble behavior in fact.
Careful allocation of funds is independent of the interest rate.
————————
I’d have to disagree with you on that.
The reason Treasury rates are much lower than junk bond rates is precisely because of “careful allocation” of funds. If an investment is worthy, it will be less risky, and it will command a lower rate.
If someone wants to open the much-heralded candle shop in a tourist trap, then the lenders will want a higher rate because that is more risky.
I agree that we should not have leverage on top of leverage, but loaning funds to various borrowers requires interest rates that are commensurate with the risks.
One thing that has long disturbed me about economic news coverage is the statement that three quarters of the American economy is based on consumer spending. Never have I heard a discussion about how this figure compares with that in other major industrialized nations, or whether the current U.S. figure has always been forever thus.
In my opinion, having so much of the economy based on consumer spending spells trouble. As we all know, consumer spending is highly cyclical. And we’re currently seeing an economic downturn that corresponds closely with a downturn in consumer spending.
Essentially there are two ways of adding up annual economic activity. You can look at everything that’s produced or look at everything that’s purchased. It’s easier to segment into broad groups if you look at where income goes. Some of it is taxed, some is invested (in economy wide terms investment means buying goods used to make other goods or industrial equipment) the rest is consumed. Since the US has a huge existing industrial base there is very little new investment. That leaves taxation and consumption as the only remaining categories.
“You can look at everything that’s produced or look at everything that’s purchased.”
This is Keynesian Economic Fallacy model. You can produce money to purchase everything that’s produced, or you can do it from earnings. If your purchases are based on “borrowing” (credit), you have cannibalized FUTURE spending. You have promised to pay in the future for current comsumption.
The future of housing is now here, along with many other sectors.
There was never sufficient earnings to pay back the promises of future income. The scheme is unfolding for what it was, a fantasy.
You are forgetting that the CONSUMPTION was done based on CREDIT.
You don’t have sufficient income to pay the debt, therefore, the persons extending credit, by withholding their “consumption” are getting hosed.
Without TRUST and FAITH in the “system”, the whole credit system collapses, because no one trusts the system to return their investment/savings.
It’s just a model that adds up everything produced or consumed, the presence of credit or no credit is exogenous to what we’re calculating.
If credit is expanded, it can potentially cause demand to surge — see houses. If demand surges, production will likely surge, too.
Credit absolutely affects supply (production) and demand (consumption).
As diogenes said, if wages are not going up and consumers have little savings or disposable income, then expanding credit today will take away from future economic activity.
The purpose of factors of production is to answer the question, how much crap got made last year, not to ask, how sustainable is it that we can make the same amount next year. That’s outside what it can provide. There are other models that talk about credit expansion, but when you look in the wrong places to find information, it’s going to be hard to find the information. It’s like asking about at the thread strength at a discussion of weaving techniques, both are important to determining in how strong the resulting cloth will be, but the tools at hand are only used to compare one of the factors.
“Never have I heard a discussion about how this figure compares with that in other major industrialized nations, or whether the current U.S. figure has always been forever thus.”
I’d be really curious about that, too. I definitely feel like consumer spending has been on a massive increase in Vancouver, where I live, but I don’t know how it compares a similar-sized American city. It seems like consumption is up across the board, around the world. It isn’t something I associate with traditional American values, myself (I think of individualism, independence, stubbornness and wry humour as American character traits, though where I get that, I don’t know
). I only associate consumerism with America post-80’s. And, like I said, it seemed to be rising everywhere.
I was just in San Francisco and thought it was really interesting how shops would stay open until quite late at night. So you could go shopping after dinner, instead of some other entertainment. But many large international cities have that, too.
If I had to guess where consumer spending is highest, I might guess Hong Kong. I have never been anywhere where people spent so much time in malls, even on holidays. You can never tell how much people are spending though…some Asian cities have a mall culture that just develops around the air conditioning.
You can get some nations here:
http://w3.unece.org/pxweb/Dialog/varval.asp?ma=15_MENCGDPExpQ_r&ti=GDP%3A+Expenditure+Approach%2C+in+National+Currency+%2C+by+Expenditure%2C+Measurement%2C+Country+and+Quarter&path=../DATABASE/Stat/20-ME/2-MENA/&lang=1
You need the items, GDP, consumption by households and NPISHs, consumption by government, gross capital formation, and net balance of goods, for total output, consumption, government, investment, and net exports. Negative numbers represent net imports and positive numbers represent net exports.
That’s so cool, bluto!
So if I recall, the Council of Economic Advisers did not forecast the housing bubble or the collapse of our banking system.
What makes them so darn clairvoyant now?
What makes them so darn clairvoyant now? They’re the Best and the Brightest, don’t ya know?
Because the future is now the present.
The only thing the government can “ignite” is the fires of hyperinflation. Oh, but that WILL screw the savers and producers and reward the crooks, so it sounds like a path forward!
“Four factors power an economy: consumers, investors, the government and a favorable balance of trade with other countries.”
ROTFLMAO Gee, a four legged stool balanced on one leg.
Retailers cut inventory to address shift in consumer spending
Stores are reducing inventory and offering fewer pricey items as strapped customers slash their spending.
Associated Press
January 21, 2009
New York — For years, retailers could afford to be sloppy about running their businesses because customers kept buying.
No more.
Stung by the worry that shoppers — who cut spending by the most dramatic amount in at least 39 years this holiday season — may not start spending again for a long time, stores are making drastic changes. They are cutting out marginal suppliers, hiring outside experts to keep inventory lean, holding special events for those who are still buying and making extraordinary efforts to gauge customer satisfaction.
The new discipline will be mostly good news for shoppers, who will find stores less cluttered and see an array of products at lower prices, including groceries and jeans from brands they could once only aspire to.
Of course, the downside is that consumers who want something out of the ordinary — an olive green prom dress, for example — may have to look harder. Stores are rooting out offbeat, unpopular colors and styles, which will mean fewer choices.
Sales clerks are also checking back with customers to see whether they’re satisfied with their purchases.
“We are in a sea change,” said Millard “Mickey” Drexler, J. Crew Group Inc.’s chairman and chief executive.
“Of course, the downside is that consumers who want something out of the ordinary — an olive green prom dress, for example — may have to look harder. Stores are rooting out offbeat, unpopular colors and styles, which will mean fewer choices.”
Will such things truly be unavailable or instead now just available online instead of also available at “brick and mortar” retailers? One of the beauties of the internet the past decade has been access to items that might not have been available locally. That’s much easier than going from store to store in search of the odd or unusual item.
I think most will just do without. When you don’t have a job and are worried about putting food on the table, the want for an olive-green prom dress seems less important.
One can find anything on the net, there will be niche opportunities available to experienced and adroit net retailers.
Brick and mortar specialty stores, on the other hand, are probably doomed. To justify stocking such specialized items they need to locate in large population centers - and thus have very high overhead.
Of course an enterprising owner of such an urban store, through careful communication with their customers, could relocate to a small (cheap) town a few miles from a shipping hub (like Memphis for instance) and carry on at a fraction of the cost.
The net is there to serve the “long tail,” whether it be obscure books, olive green prom dresses, or whatever.
Thank God for the long tail.
In some ways it’s hurt the idiosyncratic stores out in the real world (those who haven’t exploited the web for their own purposes), but by and large, the interwebs have learned to serve those of us with more obscure tastes very well — especially people in out-of-the-way areas.
Nothing to stop the ‘consumer’ from going into the store, asking for that green prom dress and then being directed to the store’s own website. (Its actually in the back of the store in a box somewhere, but they can’t pull it out because its buried…………:-)
Tastes will change. Lavish is already falling out of favor, as people make do with less. I expect thrift store clothing and reupholstered/refinished furniture to make a comeback.
Already has.
It never went out of fashion with me. I have taken a lot of ribbing over the years from family members who could never understand my thrift store/garage sale/estate sale fetish.
“Already has.”
Confirmed. Two new thrift shops have opened within 20 miles of us and all 5 of them seem to be busier when we go in.
Well, it can be taken to extremes.
I’m frugal but I’ve seen my share of cheapskates (my dad, for example), and I am careful enough not to head down that path of madness.
Sometimes, it’s nice to just buy a book to read on impulse, or get a glass of wine for lunch on vacation and not care about the expense. (Yes, we’re probably getting ripped, and you know what? It’s OK.)
It never went out of fashion with me. I have taken a lot of ribbing over the years from family members who could never understand my thrift store/garage sale/estate sale fetish.
Me neither. I live in a microcosm of vintage dealers and thrift store trawlers, though, so in my world the ribbing is usually reserved for someone who bought new stuff at the mall.
it’s nice to just buy a book to read on impulse
I agree, and there’s no reason to sweat small stuff like this if you get the big stuff right, for example by NOT buying a house on impulse, as literally millions of self-styled “investors” did over the past decade.
Most of these people thought they were savvy investors when they borrowed to get title to these houses, but now they’re victims who were duped by unscrupulous brokers.
“I’m frugal but I’ve seen my share of cheapskates (my dad, for example), and I am careful enough not to head down that path of madness.
Sometimes, it’s nice to just buy a book to read on impulse, or get a glass of wine for lunch on vacation and not care about the expense. (Yes, we’re probably getting ripped, and you know what? It’s OK.)”
Yeah, absolutely. Life is short. It can become a madness. Like hoarding.
They were just talking about this on marketplace, and they gave the example: cooking your own dinner and taking leftovers to work for lunch is frugal. It would often be even less expensive to get a 99¢ fast food deal. But that would be cheap not frugal.
Buying high-quality that lasts and you enjoy it is a good way to consume. I like the way people consume in France and in Finland, where things are really well-made locally, and not cheap. And people there have real pride in the goods in their homes and their food. It’s nice. I wish to see that more in Canada, but we are quite short-sighted and tend to focus on exporting commodities rather than making them into something.
I was just thinking about William Morris and the Arts & Crafts movement, where they had a reaction again the Industrial Revolution and tried to re-instate a guild system and have high-quality goods, and “return pride to the common working man”, etc. (they were socialist hippie-types). It was problematic, though, because only the wealthy could afford the goods they produced, so it wasn’t ultimately sustainable or democratizing. On the other hand, when I think of cheaply made goods, even houses, I think there does need to be a return to quality and craftsmanship. How do you get that without the problems?
I mean, I would be happier with a teeny house that is well made, than an enormous mcmansion. But if I vote with my dollars, I think I still lose the election at this point, ’cause my city is covered in ugly, cheap structures. Maybe build my own house? It’s really on my mind these days!
“reupholstered/refinished furniture”
Already the one new store front in my burgh, and in the next one over.
Seems to me prices of new sofas are dropping quite drastically. Isn’t it expensive to have them refinished?
Wouldn’t be worth the difference to me.
If you could see the frame under the fabric, it might. Not sure about uptown, but here you can get a good piece refabed for about 1/4 the price of new crap.
“Wouldn’t be worth the difference to me.”
Before we had our littleman, my wife and I went on a road trip. We went to a thrift store to buy sheets to line the back seat for our dog. They were disgusting, and cost $4 for 1. We went to WalMart and bought 4 clean, new sheets for $4.
Just sayin’
Will such things truly be unavailable or instead now just available online instead of also available at “brick and mortar” retailers?
That’s already happening. I buy a lot of clothes online because I don’t like the styles in Macy’s or other stores. And witness Amazon.
As for “salespeople checking back with customers” blah blah, NO THANK YOU. They never check to see how I like something…they are just trying to sell you more.
“jeans from brands they could once only aspire to.”
Note to self: people who “aspire to brands”, lick donkey scrota.
MrBubble
“Sales clerks are also checking back with customers to see whether they’re satisfied with their purchases.”
I got such a call today as a matter of fact. Last time I shopped there was sometime last summer. They were calling to “invite” me “to come back”. I never even realized I was dis-invited!
The masses can hope for change and that ‘they’ will fix it. However at some point the situation will correct itself, despite all the meddling!
We have harped on this point for a long time. We picked it up from the late Ludwig von Mises in “Human Action.” “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved…….The credit expansion boom is built on the sands of banknotes and deposits. It must collapse.” (We’ve postponed the correction for a long time and it’s doubtful that even a changing of the guard in Washington can stop it.)
There is no means of avoiding the final collapse of a boom brought about by credit expansion
Yep. Unfortunately, most Americans either don’t realize or don’t agree with this. From an article written last week:
“Contrary to the belief of many, the goal of the economy is not job creation. Jobs can be a sign of a healthy economy, as a high energy level can be a sign of a healthy body. But just as unhealthy substances can artificially give the addict that burst of energy that has nothing to do with health, artificially created jobs just exacerbate our problems. The goal of a healthy economy is productivity. Jobs are a positive outcome of that. A ‘job’ could be to dig a hole one day, and fill it back up the next, or perhaps the equivalent at a desk. This does no one any good. But the value in that paycheck ultimately has to come from taxing someone productive“
patient renter,
Well put together, I think sadly though the current Admin. has figured out that productivity will only lead to more inventory ( and if you saw the ACRES of unsold cars from Mish’s web-site yesterday ) you’d realize ‘that’ is the LAST thing we need right now!
Is it just possible we could channel our energies towards something ‘other’ than stamping out disposable automobiles? I know, sounds crazy.
What are you? Some kinda damn socialeest/commie?!
Just kidding.
Actually, the advent of the disposable economy was lamented and and analyzed extensively starting in the 1960s. Many, MANY books and articles were written on the subject.
40 years later we’ve learned nothing. In fact, it got worse.
Sorry, but i must disagree. We can make as many cars as we want. The problem with the high inventory is too high a price for the current demand, which is now more based on income, than credit.
They could sell EVERY car on those lots TODAY, if they simply lowered the price to a point that people would buy them. The same applies to houses.
IF there was a quality 3/2 house here for $75,000, i would buy it TODAY for cash. The price is working its way there, but hasn’t happened.
The government is trying to prop up the price.
Why?
Lower prices are GOOD. It’s only if you thought of a house as an INVESTMENT, instead of a consumer good that a higher price is a good thing.
Under a capitalist system, ALL prices of products should be getting cheaper with improved methods of production, better methods of extraction of materials, etc.
FIAT money systems require the prices increase, or the system goes into a deflationary spiral.
Uncontrolled monetary inflation and credit creation has led to that cycle occuring now.
The FED is trying to stop it. I cheer it on.
Cheap cars and Cheap houses sound really good to me.
Poor old Ben, did anyone really listen to him anyway? I can’t imagine why.If he thinks government intervention has been a flop thus far. Hang on, the change that is coming may well stretch even the wildest imagination.
Ben Stein has be writing financial commentaries for a long time. Today he writes this:
“I wish I could say I knew what was going to happen in the future. I have learned that I do not. I was not given the gift or the burden of foresight. I thought that our government would not let the bottom fall out. I was wrong. I am sorry.”
Thank you for the quote. This guy has driven me crazy with his, unfailingly, wrong predictions. You made my day.
He should have listened to his daddy: “Anything that cannot go on forever will stop.”
LOL
He’s an @ss-pox that won’t go away.
I was wrong. I am sorry ??
I am Sorry….I am SORRY !!! Pitching Ryland homes as the best of the best for 1-2 years now…A$$ wipe…I just hope he followed his own advise…
His flaw was thinking they could stop the bottom from falling out.
Too-big-to-fail, meet too-big-to-save.
The thing is, why was he even thinking about the government in the first place. Doesn’t he roll with the “free market” gang?
Wow, the minute their precious service/consumer economy ran into some headwinds all the big capitalist commentators ran behind uncle sam’s leg.
Yeah, a bunch of fair weather capitalists! Now all the grily men are running crying for help from their favorite uncle.
Now all the grily men are running crying…
As a “grilly” man myself, I can assure you the only time I cry is when I’m cutting those damn onion wedges for shish-ke-bab.
“The thing is, why was he even thinking about the government in the first place”.
It is a mistake, but for millions that is all they know. If they fail they want someone else to pick them up, along with the price being paid out of someone else’s pocket. The it’s not ‘fair’ ‘victim’ pendulum has swung way to far and will correct.
I own my successes and my failures, and that’s how it really is intended to be. The debate will rage on as long as there is man.
“The thing is, why was he even thinking about the government in the first place. Doesn’t he roll with the “free market” gang?”
That’s the irony of those supposedly “free market capitalists”. They push risk taking, but in reality they only take those risks assuming the government will keep anything bad from happening. It’s rather entertaining when you put up one of these phony capitalists like Stein against someone like Peter Schiff.
You forgot the two best parts -
1. After telling ppl to invest in the market at the peak and that talk of a housing and stock bubble was crazy BS, now that we are are a temporary low, in an apparent tribute to Combo, he announces “Cash Really is King.”
2. He then goes on to state - “I say to myself, I am powerless over the stock market. It is all up to God. I do the very best I can, and after that, it’s up to God.”
His ignorance, blind faith, and refusal to reason with an open mind make him a danger. The saddest part is many of those that made lots of money in real estate or the stock market are given credit for brilliance when in fact most just lucked into having money to invest at the right time in history. If your predictions are inaccurate, you really have no business giving advice.
God doesn’t seem to hang around the alleys of financial speculation when Vinnie and the collection boyz CLOSE IN
Are there alleys behind Catholic churches?
Ben Stein obviously has a very high IQ but not when it comes to investing. I’m still waiting for Kiyosaki to taste the humble pie.
Mike
There are at least 4 keys to being correct.
1) being smart
2) being informed
3) not being locked into a dogma
4) not allowing yourself to be blinded by self-interest. Do not assume that the outcome most favorable to you, is the most likely outcome. The universe does not care what is favorable to you.
Stein had a dogma. It prevented him from seeing the truth.
For many, faith is seen as a virtue. It seems to be a main reason that many of Bush’s supporters, liked him so much.
I see faith as a MAJOR character flaw.
(Of course, this “yes we can” is also faith building. I hope Barack doesn’t try to lead from faith. He doesn’t seem like he is going to.)
“I see faith as a MAJOR character flaw.”
What does this say for a country which is collectively blinded by religious zealotry?
“What does this say for a country which is collectively blinded by religious zealotry?”
x10+economic terrorism advanced via ideology.
Mr. Bear,
Shrub would like to chat with you about becoming a “compassionate conservative”
It says I get repremanded by a lot of message board and blog owners for my failure to place religious beliefs upon a pedistal beyond reproach.
If everyone were a “zealot”, noone would be.
“…noone would be.”
OK, let me rephrase my point then:
What does this say for a country which is collectively blinded by religious
zealotryfervor?“What does this say for a country which is collectively blinded by religious zealotry?”
No - our country is blinded by media-fed stupidity, not by religious zealotry. Anyone with a basic knowledge of history knows that our country right now is far less religious than it ever was, especially compared to when it was founded.
Compare the common writings and speeches of key leaders in the 1700’s and 1800’s with now - there is a stark difference with regards to religious invocation.
“Compare the common writings and speeches of key leaders in the 1700’s and 1800’s with now - there is a stark difference with regards to religious invocation.”
“God save the Queen…so the Queen can save Barclays…so Barclays can save the wee little people.”
“God must love poor people..she made so many of them” Leona Helmsley or Paris Hilton
Anyone with a basic knowledge of history knows that our country right now is far less religious than it ever was, especially compared to when it was founded.
Really? That oddly has a negative correlation with the percentage of Americans who had formal education in their lifetimes.
The founding fathers were NOT advocates of a strong role for religion in government, merely religious tolerance. The last administration believed the opposite.
I think you are confusing America with the House of Tudor. We must have read different history books.
“The founding fathers were NOT advocates of a strong role for religion in government, merely religious tolerance. The last administration believed the opposite.”
Care to provide a link to specific legislation promoting a strong role of religion in government?
Besides, I wasn’t referring to “the administration”, which is a minute portion of our leadership - I was referring to leadership as a whole, and not just political leadership.
packman,
You are wrong on this one.
3 examples.
There were prayer meetings (unannounced / unscheduled) by senior attorneys working for DOJ terrorism cases. (no link but two prosecuting attorneys working right after 9 11 with FISA told me this.)
The Pentagon had to write a memo about prayers to commanders. It became common practice to have prayers before meetings by the brass, and lead by the brass. And, no this was not in the trenches prayers. This became SOP before meetings, here and abroad by certain very Christian commanders.
The young folks put in charge of the reconstruction of Iraq at the very beginning were vetted on religious grounds.
packman,
You are wrong on this one.
3 examples.
There were prayer meetings (unannounced / unscheduled) by senior attorneys working for DOJ terrorism cases. (no link but two prosecuting attorneys working right after 9 11 with FISA told me this.)
The Pentagon had to write a memo about prayers to commanders. It became common practice to have prayers before meetings by the brass, and lead by the brass. And, no this was not in the trenches prayers. This became SOP before meetings, here and abroad by certain very religious Christia commanders.
The young folks put in charge of the reconstruction of Iraq at the very beginning were vetted on religious grounds.
2nd attempt at post sorry if double
For the most part, the Founding Fathers were Deists. If they were around today, you’d put the word “Unitarian” in place of the word “Deist.”
Care to provide a link to specific legislation promoting a strong role of religion in government?
Ummm, the Executive Branch does not pass legislation, that is the job of Congress, so I can’t offer that as proof…but they certainly promoted their own religious beliefs as public policy. Google has many examples of this both in news releases and through actual quotes from the former POTUS, but I don’t know which source you will find definitive.
Wiki has it listed as 8% of American being self-described as “no religion/atheist/agnostic” in 1990, and 15% in 2001. That’s quite an increase. Don’t know how reliable that is, though. Also, I believe there are many people who identify culturally with a religion, though they may not practice or be very spiritual. In times of hardship, people do find more religion, so maybe that number will go back down, though.
Unfortunately, when many people think of religious people these days, they think of specific groups with specific agendas, because they shout the loudest (and often have political funding as well). But I think they are really the minority. Most people are not zealots and many religious people really do retain the ability to think critically.many consider a willingness to think critically about faith a sign of true faith.
Although I am not religious myself, I have family who are very committed (missionaries, even), and they have humbled me with their open minds, humility and desire to develop a vibrant interfaith community. They are the types to offer aid without requiring that the recipient adopt Christianity as a condition. There are lots of good eggs out there. So don’t watch “Religulous” and have a panic attack! If people didn’t blindly follow religion, they would just blindly follow something else, like communism. Or a housing bubble
.
Now I want to read the Father Brown stories again!
Yes many people are vicariously religious. They want others to keep the faith even if they don’t personally want to go through the hassle or take on the obligations.
They are the types to offer aid without requiring that the recipient adopt Christianity as a condition.
Maybe, but many others are not.
http://yaleglobal.yale.edu/display.article?id=5190
“Maybe, but many others are not.”
Yes, that’s true, and in my opinion it is wicked. “Major Barabara” by George Bernard Shaw is a wonderful morality tale about just that sort of thing.
The missionaries in my family spend a lot of time helping refugees who are fleeing from dangerous situations (providing shelter and legal aid), many of whom are from other religions. They are very respectful and lovely people.
Although I am not religious myself, I have family who are very committed (missionaries, even), and they have humbled me with their open minds, humility and desire to develop a vibrant interfaith community.
I suspect that they still believe you are going to hell if you are not religious.
“I suspect that they still believe you are going to hell if you are not religious.”
I guess that’s possible. But they have never tried to coax me or convert me, and they never talk about hell, they talk about love and trying to remain kind and open-hearted, but that’s it. They’re quite private about their faith. So if they secretly believe that I am going to hell, that wouldn’t make me mad at them. I don’t believe they’re going to heaven, because I don’t believe in heaven, even though I love them and I wish an afterlife could be for them. We just don’t talk about it, and I think that people have a right to believe whatever they like, as long as they don’t impose their will upon others.
#5 Good timing
“I see faith as a MAJOR character flaw.”
That depends on where you put your faith (ingots, tasty mustard, tiaras, heritage seeds, etc.).
I put my faith entirely in Joe Pesci.
“That depends on where you put your faith (ingots, tasty mustard, tiaras, heritage seeds, etc.).”
oh, bingo. tasty mustard, tiaras and heritage seeds are all worth a few good hymns to me!
You just summed up why I voted for Obama! He has all 4 qualities.
“You just summed up why I voted for Obama! He has all 4 qualities.”
Ingots, tasty mustard, tiaras, and heritage seeds?!?
“Ingots, tasty mustard, tiaras, and heritage seeds?!?”
^_^
To his credit, he at least addressed the situation. By contrast, some of yesteryear’s most zealous predictors (Gary Watts comes to mind) had their fifteen minutes of fame during the housing bubble’s parabolic blowout phase, then were heard no more since the onset of crash without end.
I heard a radio commercial yesterday for a Kiyosaki seminar touting that he “predicted” what is happening now six years ago! Ha!
Me too — I can’t wait to see Kiyosaki grimace at the first taste of that Humble Pie. (I hear that it’s a rather tart pie.)
Kiyosaki joined you goldistas and hyper-inflation guys a while back. He thinks Zimbabwe might be in our future:
http://finance.yahoo.com/expert/article/richricher/124339
And he did warn in his first book to not depend on Social Security.
I was going to post something similar.
I read an article how Kiyosaki mostly got out of real estate a couple of years ago, and in fact was warning of the danger signs. I believe he wrote an article in fact - something to the effect of “how to benefit in hard times”. Need to find it…
Like him or not - his foresight has been good. I think he’s mainly a profiteer, but he’s been right on both sides of the bubble.
Here it is (from June 2006 - he knew it was coming):
How to Profit From a Cooling Real Estate Market
wait wait wait…what’s this then? Dated: Jan 11th 2009
by Robert Kiyosaki:
“1. I learned my investment philosophy at the age of nine by playing Monopoly. In the game, if I had one green house, I was paid $8. If I had two green houses, then I was paid $16.”
“I began playing Monopoly for real when I was 26 years old. Today my wife and I have approximately 1,400 little green houses — each paying us monthly. You do not have to be a rocket scientist or have a Harvard degree to play Monopoly for real. Today’s depressed real estate market is the best time to start buying little green houses, even if credit is tight.”
“So my advice is, be very careful whom you take financial advice from — and that includes me. My guidance, after all, does not work for 80 percent of the people. My suggestions are not right for those who work for a paycheck or for commissions, nor do they work for those who save money in the bank or a retirement account.”
Paying a High Price for Bad Advice:
Ben Stein also write about the coming housing bust in 2006, FWIW.
Ben Stein has at least two houses in Malibu.
But he did say that Malibu was different.
Wasn’t the peak in Oct 2006? Seems a little late to me.
“I read an article how Kiyosaki mostly got out of real estate a couple of years ago,”
Oh, that’s funny. I was randomly listening to the Dave Ramsey show (I don’t normally listen, and don’t quite get Dave’s deal). He said how he was good friends with Kiyosaki, but they had differences in approach to money and that he (Kiyosaki) had doubled down and gotten even more leveraged in real estate. This was sometime last year? Then Dave advised all of his listeners to buy real estate if they had followed his plan and had savings or something, because of the low interest rates and he said it was A Very Special Time Right Now to buy. Then I turned it off.
I generally don’t trust advice from anyone who makes a living selling products based on their advice, myself.
Ben Stein is a moron.
The guy was pumping financials last fall right before the crash.
After reading that article, it’s obvious he’s read “The Creature from Jekyll Island”. His article is basically a short paraphrase of that book, with some observations of Zimbabwe thrown in.
I thought this was interesting. Similar to what a few people here on HBB have said:
“The second couple that fled the country said they saved money and paid off their house and other debts even as the Zimbabwean dollar fell in value. Looking back, they say they would’ve saved nothing and gotten deeply in debt in Zimbabwe, allowing them to pay off their debt with the cheaper dollars. Instead, they fled after they lost their jobs, leaving behind their house and owning $200,000 in nearly worthless Zimbabwean dollars.”
I’m sure if we do indeed go to hyperinflation it won’t be as bad as Zimbabwe - nonetheless this indicates how savers can potentially get screwed in such a scenario.
They have a “Kiyosaki Watch” that should set the record straight. AFAIK he’s been solidly debunked at every turn. I just found it surprising that that Yahoo Finance was even bothering to feature him at all?
At least w/ Ben Stein you get the sense that he’s trying to be sincere about his positions. Oh by the way Robert Kiyosaki “works for commissions” too! ( He probably just calls them “membership fees” for his stupid seminars )
SV guy,
Kiyosaki has a new seminar. The commercials for this seminar is stating Kiyosaki predicted this would happen over 6 years ago so come to the free seminar and see what you need to do today and for the future to protect your money.
‘come to the free seminar and see what you need to do today and for the future to protect your money.’
Doesn’t it just seem so phony when Kiyosaki could just create a website with all the info you needed to prepare for the coming storm? Perhaps he has many employees to pay?
SV guy,
Kiyosaki has a new seminar. The commercials for this seminar is stating Kiyosaki predicted this would happen over 6 years ago so come to the free seminar and see what you need to do today and for the future to protect your money.
SFBayGal,
Sorry for the late response, been working on my jeep today. I have seen the advertisements for his new ‘free’ seminar in the Chronicle. You couldn’t pay me to go to it though. I have nothing against the man personally. I just believe he’s a charlatan.
Mike
“I wish I could say I knew what was going to happen in the future. ”
Nobody has a crystal ball, but read this article from Doug Casey (from 1997) and you will see the difference in analysis with the usual Wall Street chearleaders:
http://www.321gold.com/editorials/casey/casey012009a.html
I agree goal of the government shouldnt be keeping the bottom up but preventing things from going too high, thats why we had rules for reserves and accounting regulations
I just remember when ben was a dick to peter shif
I’d be an @sshole to him too. He has been consistently wrong in his predictions, and he has lost a ton of money for his clients.
He didn’t even get the problem right. It was global, and infected other countries as much or more than the US. His dogma on the euro and gold prevented him from doing the right thing for his clients.
As I said, I’d rip him a new one too.
But that’s not why Stein was making fun of him. Stein made fun of him for questioning bank solvency and a stock market turn-around.
I said this a couple of years back on this blog, but think it bears repeating: “Ben Stein is a big fat idiot.”
In the skeptic world, Ben Stein made a name for himself with some new movie called Expelled. If you download a pirated copy of the movie, you can get a subtitle track that titles the entire movie with the facts. It’s very amusing. They were deceptive in the creation of the movie, and for the interviews.
Bless his heart, I loved him as an entertainer but his polymath schtick has worn thin. Since he went Hollywood he’s just too out of touch to comment on the economy or make predictions.
FPSS,
In the end, I came to the same conclusion about Peter. I called his office in L.A and they ( when pressed ) admitted that he too, is under water.
What this debacle has taught me is that sometimes it’s just not enough to “be bearish”. You have to be the right -kind- of bear.
Same goes for Jim Rogers - who also for whatever reason follows the ridiculous view of financial decoupling, and thus was big on commodities and Asia.
He was right in his bearishness of the U.S. markets, wrong on the rest.
True -
I, like you guys saw this thing coming, but that did nothing to help me make the right moves.
Yeah, (thank god) I didn’t run out and buy a house, but on paper, I took a nice beating (in the 401k).
Yes, I was warned, but I failed to see the broader implications outside of the housing market.
I was a “bear”, but evidently a dumb one.
Live and learn, baby.
If you follow what he does not what he says, he’s rather clever actually.
He did ride the commodities bubble but I bet you like a good speculator, he sold.
And he will ride the re-inflation too. He’s right about UK pound too.
Oh hush.
You make it sound like he’s been wrong about everything. Obviously he’s been right about most things, but his dogma as you put it, has harmed his outlook in some ways.
I thought that our government would not let the bottom fall out. I was wrong. I am sorry.”
Hollywood economist
“I thought that our government would not let the bottom fall out. I was wrong. I am sorry.”
Imagine your S.O. saying. “I thought that you would turn the oven off and not burn the cookies. I was wrong. I am sorry”.
And that’s how the fight started…
MrBubble
Well, WHEN THE FIRE ALARM WENT OFF, I imagine the S.O. turned off the oven and tried to clean up the mess.
The worldwide government response seems to be to crank on the heat up hoping the cookie residue will somehow vaporize before they have to buy a new oven.
Nice one! Mmmm… vaporized cookie dough…
The nightmare will end? Once government stops intervening in a much needed correction. Will they? Why of course not, they will do what they do best, keep making matters worse.Just as our central planners will do.
When will the Gordon Brown nightmare end?
Gordon Brown brings Britain to the edge of bankruptcy
Iain Martin says the Prime Minister hasn’t ’saved the world’ and now faces disgrace in the history books…
By Iain Martin
Last Updated: 8:41AM GMT 21 Jan 2009
They don’t know what they’re doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious.
Yesterday marked a new low for all involved, even by the standards of this crisis. Britons woke to news of the enormity of the fresh horrors in store. Despite all the sophistry and outdated boom-era terminology from experts, I think a far greater number of people than is imagined grasp at root what is happening here.
The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic.
The political impact will be seismic; anger will rage. The haunted looks on the faces of those in supporting roles, such as the Chancellor, suggest they have worked out that a tragedy is unfolding here. Gordon Brown is engaged no longer in a standard battle for re-election; instead he is fighting to avoid going down in history disgraced completely.
This catastrophe happened on his watch, no matter how much he now opportunistically beats up on bankers. He turned on the fountain of cheap money and encouraged the country to swim in it. House prices rose, debt went through the roof and the illusion won elections. Throughout, Brown boasted of the beauty of his regulatory structure, when those in charge of it were failing to ask the most basic questions of financial institutions. The same bankers Brown now claims to be angry with, he once wooed, travelling to the City to give speeches praising their “financial innovation”
The same is happening in Ireland, Spain and Netherlands which is bound to put considerable stress on the Euro. Then you have a bunch of minor players that are about to go belly up, like Estonia, Lithuania, Hungry, etc. Another Big Kahuna is Switzerland. An economy built entirely on finance and arrogance. That model doesn’t seem to be viable going forward. With the Dollar, Euro, Pound and Swiss Franc all swirling in the bowl and the stock market in full retreat it is difficult to find a place to hide your money. Real Estate? Commodities? Guns & Ammo?
I think Ireland and UK are at least one year ahead of Spain and Netherlands. What the article (unfairly) does not mention is that it is not Browns fault, he just inherited the bubblemess from Tony Liar. Maybe Brown made some bad decisions, but the iron had already been cast when he took office.
The average Dutch citizien does not worry a bit yet: life is good, wages increased the most in 10 years and home prices are even rising again (as of december 2008). There is lots of bad news in the media (including surging job losses) but most people still think it will hit the neighbours only and they will do fine. And many will be fine for the next few years, thanks to mommy government that first will extract the remaining wealth from others to keep the system going.
Trichet says today that there is no risk for the EU currency union; guess he was pressed to say so, after what is happening in the euro area lately. I don’t think the euro will survive the next two years in its current state.
It’s a slow train wreck and yes, nowhere to hide as the market is oscillating between deflation and inflation fears
Brown was Chancellor of the Exchequer for a decade before he became PM. I think it would be safe to dump whatever blame you like on him.
I’m sure Bliar was in charge of the bubbleblowing policies, and not (just) Brown.
Brown sold off most of the UK’s Gold reserves at the bottom of the market. He is a dope. Plain and simple.
http://www.timesonline.co.uk/tol/news/politics/article1655001.ece
“Cool Britannia”. Yeah, right.
I thought this was an interesting paragraph -
“According to other sources, however, Bank of England officials told those present they had “little say” about what was going to happen and that they were “doing what they were told”. This was a decision made by Brown and his inner circle, who appeared uninterested in their expert advice. ”
Those dang inner circles. Something tells me this went beyond just Britain.
“Switzerland. An economy built entirely on finance and arrogance.”
You forgot chocolate. Yodelayeehoooo!
“In Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love - they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.”?
yes, crisis is opportunity - maybe the Swiss will get their fair share soon and produce something of real value
So, the U.S. should be more like Borgia Italy than Switzerland?
No, not at all, but the way I see it, Switzerland had a more or less protected status for centuries since other countries agreed it was some sort of banking center and therefore inviolate and off limits to turmoil that other countries suffered. This made Switzerland think it was special and allowed it to be neutrally “above it all”. There was, as we are finding out, nothing special about Switzerland other than the agreement among other nations that it was special and protected. With the agreement gone, Switzerland is now in the interesting position of having to produce something other than banking to stay alive as a nation.
Get those vats of chocolate going, start yodelling, crank up the music boxes and Cuck-oo, cuck-oo!
The Swiss were also guilty of many pogroms against Jews during the Middle Ages (Swiss Jews are virtually non-existent as a consequence) and was the birthplace of Calvinism and Protestant-style religious persecution and intolerance in Europe and America. Much of their post-WWII prosperity was built on Nazi gold and valuables stolen from war victims.
Not exactly ‘Sound of Music’ material.
Sorry to call the bluff, but cuckoo clocks originate in the Black Forest. (i.e. Germany. So did John Sutter). link:
http://en.wikipedia.org/wiki/Cuckoo_clock#The_first_cuckoo_clocks
Mark Twain was right about many things, but not this one.
“In Switzerland they had brotherly love - they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.”?”
How about Leonhard Euler, one of the 2 or 3 greatest mathematicians ever.
It’s easier to be neutral when you are a really good gunsmith.
Best movie line award of the day for you!
How about Leonhard Euler?
How about him? Possibly one of the most prolific mathematicians ever - fingers in every pie you can think of.
Inventor of graph theory; major contributions in analysis, optics, mechanics, number theory, you name it.
P.S.: come to think of it, my country is an excellent example of how people and their country can thrive in a period of crisis/chaos.
The start of our 80-year war with Spain (16/17th century) pushed the Dutch Republic onto the scene. At the same time there were other serious problems like religious turmoil. Within one generation the Dutch became one of the major powers worldwide. In that same period they dominated art, science/inventions, literature (and finance …), all despite the war.
Shortly after the war things started going downhill, the rich were happy living from the assets of previous generations and the country never fully recovered.
Machiavelli’s book must have been inspired by the Borgia family. Alot of creativity after the Black death killed off a third of europe and I think that is a better reason for the rennasance than bad leaders.
“You know, I never feel comfortable on these sort of things. Victims? Don’t be melodramatic. Look down there. Tell me. Would you really feel any pity if one of those dots stopped moving forever? If I offered you twenty thousand pounds for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare? Free of income tax, old man. Free of income tax - the only way you can save money nowadays.”
That wasn’t a quote from Mark Twain, but rather a speech that Orson Welles wrote for himself in The Third Man.
Actually the Swiss have been threatened with invasion on many occasions. The Germans seriously considered invading during WWII. There’s a great joke about this that highlights the Swiss passion for rifle marksmanship. A journalist asked a Swiss general how they would deal with a German invasion. The general said “we have 100,000 trained marksmen for defense”. The journalist pressed him - what if the Germans invaded with 200,000 troups? The reply was “then we all shoot twice and then go home”.
Oly??!!!!!
Where are you?
How’s your head?
Casualties?
Loved your post yesterday.
May I reprint it?
We could of course keep it special, you posted so late that only myself and a select lucky few read it.
Oly? WAKE UP!
(move slowly)
Switzerland neutal? Surely you jest.
Switzerland was far from being neutral in WWII. Study the history books and see how they treated the Jewish population.
SFBAG,
Exactly. I typed a long post about that several hours ago, but it evaporated into cyberspace. Switzerland has a lot of blood on its hands.
500 year democracy? Maybe for males. Women didn’t get the right to vote until 1971.
Isn’t the Linux guy Swiss?
The Linux guy is from Finland.
Switzerland is also the home of CERN. And what might that have to do with us? Well, have you ever used this thing called the World Wide Web? It was created (by a British expat) at CERN.
A lot of CERN is actually in France.
CERN by treaty does not fall under Swiss or French jurisdiction.
Gopher pre-dated http://WWW. So the idea wasn’t 100% original. Gopher had hyperlinks, www added images. USA started it all… although there were global networks before it (Telenet, Tymnet). Ahh the days of hacking random computers on telenet.
It was created (by a British expat) at CERN.
What? I thought Al Gore invented it!
‘You forgot chocolate. Yodelayeehoooo!’
LMAO
You forgot chocolate. Yodelayeehoooo!
They make some pretty cool knives and watches too, IIRC
stress on the Euro ??
I have mentioned this before…Meridith Whitney said her biggest single fear is the failure of the Euro…Not sure what that may mean but I don’t want to find out…
The Euro was essentially a step beyond the political realities of Europe. The structure normally required to have a single currency is a single political entity. There are huge benefits to having a single economy, but because of regional variation in results the politicians of a region would have very different ideas of the best actions to take for their local economy. In essence, it was something like promising a huge dessert first with a healthy dinner sitting next to it, with the idea that the tummy ache would force people to start eating the healthy dinner. Now the tummy ache is starting and the concern is that rather than eating the healthy dinner, they’ll just all walk away from the table.
And another one down, and another one bites the dust. 6000 jobs lost in the land down under:
SYDNEY (Reuters) – BHP Billiton Ltd/Plc (BLT.L) (BHP.AX) will cut 6,000 jobs and close its giant Ravensthorpe nickel mine in Australia, writing off $1.6 billion, as the global resources giant battles a collapse in commodity prices.
Until now BHP, the world’s largest miner, had set itself apart by maintaining production and just last month said sales volumes were holding up despite a global downturn.
But as it became increasingly apparent there would be no quick fix to the slump in commodity prices, BHP was forced to do what it long resisted — close mines and cut jobs.
“Clearly their balance sheet is in a respectable position. But they are not immune from the commodity price environment that we’re seeing, and earnings are going to suffer,” said Neil Boyd-Clark, managing partner at Fortis Investment Partners.
I just watched an interview with FDIC chick on CNBC….
If I understand what she said it boils down to,
“What made our country great is the ability to make 1-.63=1.”
She spent alot of time talking about how we can sweep the losses under the rug. She admits that IndyMac assets got a top bid of 37% of par, but then says that isn’t a “real” value. We need to take the bad assets off the banks to get them lending again. And we need to do it at a price that keeps them solvent while ensuring the tax payer is protected….
SO, we have to pay $1 for stuff worth $.37, and magically have that stuff worth $.37 be worth $1.
And, we need to get back to doing what made the country great, which I can only conclude she thinks is the ability to make 1-.63=1.
AND!!!!!
The whole point of all of this is to get banks lending again? WHAT!?!?!
20% increase in median income, 50% increase in CPI, a working class that used to spend 90% of its income has been spending 110%. 180% increase in per-household debt over the last 15 years…..
And the solution is MORE DEBT???????
WAGES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
(in case you can’t tell, I’m back to anger today.)
So the Chinese are putting poison in our food & toys…while Corporate America is making a profit $$$$$$ off the human food behavior of humans and their ancestral appetites…I can only wonder how much joy the Walton family has in counting their Billions $$$$$$$$$$$$$$$$$$$$$$$ while striving so hard to run a business that is the crown jewel of our America collective society.
(It’s my born without teeth & hair anniversary today, I’m a 1/3 way through the weekend comments on the Cheney-Shrub “Legacy List” reminisce, thanks you guys for the early present!)
I believe this story illustrates why we need to bring back our “Reserve National Guard” post haste from our “Sha-Zam-Islam-is-now-democracy” lets convert the world by force of weapons adventure.
“I questioned him, ‘Where is your mom?’” Saco said when the boy first came into the store by himself to buy milk, chips, candy and bread with cash. During the next two visits, he said the boy bought a number of items, including bread.
Mich. police: Boy, 8, spent 10 days with dead mom:
http://news.yahoo.com/s/ap/20090121/ap_on_re_us/boy_dead_mother
That is the most depressing story I’ve ever read here.
From the article:
The boy was home-schooled, has no siblings and his father died several years ago, authorities said. The child is in foster care while police try to locate his other relatives, Romulus police Lt. John Leacher said.
———————
Oh my goodness! His father AND mother died and the kid’s only 8? Truly a depressing story.
I find the thought of buying a foreclosure home highly distasteful. Where is the appeal of buying a domicile which was recently possessed by a home debtor who probably did not have the cash flow to properly maintain it, and who may have taken out his anger over his financial plight through negligence or outright property destruction? Foreclosures seem to increasingly dominate the San Diego market, so anyone who buys a home here will have to grapple with these issues.
As for this Goldman fellow’s statement, a chorus of bleeting sheep does not make a consensus.
December home-loan defaults soared
Notices in county jumped 121% over previous month
By Emmet Pierce (Contact) Union-Tribune Staff Writer
2:00 a.m. January 21, 2009
Damien and Candice Smith bought a foreclosed townhouse in Logan Heights last month. Countywide, foreclosures were up 20 percent in December. (John R. McCutchen / Union-Tribune) -
Setting a grim record for monthly gains, notices of home-loan default in San Diego County surged by 121 percent in December over November, dampening hopes that the housing market’s three-year slide will soon end.
There were 3,052 notices of default last month, ending a lull in foreclosure activity that began in September. The notices, which mark the start of the foreclosure process, totaled 31,099 for all of last year, a 54 percent jump over 2007, the MDA DataQuick research firm reported yesterday.
Home foreclosures totaled 1,253 in December, up 20 percent from the previous month. There were 17,712 foreclosures within the county in all of 2008, a 141 percent increase over 2007.
The annual totals were the highest since DataQuick began keeping track of county foreclosures in 1988 and defaults in 1992, outpacing the tallies of the mid-1990s, during Southern California’s last big housing slump.
Lenders are no longer making the risky adjustable-rate loans that triggered the mortgage market meltdown, but thousands of bad loans have yet to work their way through the system. Many analysts say they are not certain when the pace of foreclosures will slow or when home prices will stop falling.
“That is the big question for all real estate economists,” said Mark Goldman, a real estate finance instructor at San Diego State University. “There is a consensus that we will hit a bottom halfway through 2009, but I am not anticipating a rapid recovery.”
Why are the futures up????
Other than thousands of more layoffs, I don’t see much news. Is it just IBM?
You really need to read “The Money Game”.
Oh, yesterday there was a change in tenants at 1600 Pennsylvania Ave in DC. That’s just GOT to be it.
I’m guessing that today The Precious™ will get pounded down while the stock market will enjoy a debt cat bounce. Just a guess
My advice about reading that book above applies to you too.
Alright then, I will add it to my unread book list.
He wrote a second book too called “Supermoney” (also excellent.)
Both are under the pseudonym “Adam Smith” (I know, I know) because he was in the financial industry himself.
They describe the 60’s go-go years. All of the arguments about bubbles and valuation including the endless inflation/deflation debate should be really really familiar to the audience here. Of course, they were on a gold standard back then so the answer was all too clear.
As they say, it’s “like déjà-vu all over again.”
“Alright then, I will add it to my unread book list.”
I’m not the only one with one of these!
I have confessions of a stock operator on my list, too. Thanks, Pussycat. =^_^=
You mean “Reminiscences of a Stock Operator”?
That is one of the best book on the subject of speculation. Whatever your opinion about that “loaded word”, you must read Edwin Lefèvre (it’s clearly the biography of Jesse Livermore.)
For all my love of Graham and Dodd, I must say my heart belongs to Livermore.
“my heart belongs to Livermore”
If I was less lazy I would make this into a t-shirt for you.
Short covering?
And another 5000 find a pink slip on the smorgasbord today:
STOCKHOLM, Sweden (AP) — Wireless equipment maker LM Ericsson on Wednesday reported profits dropped 31 percent in the fourth quarter, citing restructuring charges and weaker handset sales, and said it would slash 5,000 jobs.
Day by day..it looks like… in some respects…the Amish got it right.
“We have industry-leading encryption, but the data has to be unencrypted to request the information,” Baldwin said. “The sniffer was able to grab that authorization data at that point.”
“The personal data of 600 million or more cardholders was left vulnerable…”
Payment Processor Heartland Reveals Massive Data Breach:
http://www.crn.com/security/212901576
Who *doesn’t* have access to thousands of credit card numbers?
A friend of mine only made a single purchase on his credit card, and the information was stolen. It was being used in Vegas, in person (not online). He still had the receipt from the restaurant in Vegas where he used it the one and only time, and it had the waiter’s name on it that processed it. He offered it to the credit card company, but they said it wasn’t worth their time.
This is what happens when you fire the experts and keep the lesser paid idiots so you can save money.
600 Million. Wow.
Ah, other news sources say 100 million. Still. Sheesh.
They`re gonna need a bailout.
Centex gives up on development in Indiantown, sells land to grower
By EVE SAMPLES
Palm Beach Post Staff Writer
Monday, January 19, 2009
Centex Homes has walked away from the last of its big projects in Indiantown, abandoning its grand visions for the single-stoplight community.
After years of legwork to develop houses on 281 acres in the heart of the community, the Dallas-based builder sold the parcels - known as the Owens Grove and the Gibb properties - to Fort Myers-based Consolidated Citrus for $3.25 million, according to property records filed early this month in Martin County.
That’s more than half off the $7.31 million Centex paid in 2005 and 2006.
“Like other major builders, Centex is focused on generating cash and minimizing land-related spending as we work through an extremely challenging housing correction,” spokesman Eric Bruner said in an e-mail. “We’re disappointed that we could not go forward, but this specific project simply does not make financial sense in today’s market realities.”
Awesome!
I used to live in Palm Beach County and drove through Indiantown a lot on the way to the west coast. It sucked to see development after development taking the place of orchards and farms.
Confession though - I once bought a house located on what was once and orchard (in BB). I actually walked through the orchard as they were planning the development. Mixed emotions - excited about my first house, but sad to see the orchard go.
Office, warehouse vacancies rise, rental rates fall in Palm Beach County
By JEFF OSTROWSKI
Palm Beach Post Staff Writer
Tuesday, January 20, 2009
The one-two punch of the recession and the housing meltdown continued to batter Palm Beach County commercial real estate during the fourth quarter, CB Richard Ellis says.
The county’s office vacancy rose to 22.8 percent, up from 19.6 percent in the third quarter and 15.3 percent in the fourth quarter of 2007. In 2005, the office vacancy rate was a mere 8 percent.
The county saw a number of large blocks of empty office space come on the market, either through new construction or departures. In Boca Raton alone, 303,770 square feet became vacant. In Lake Worth, a former Washington Mutual building added 83,750 square feet of empty space.
Average office lease rates fell slightly to $19.55 a square foot
Saudi Arabia has its oil. South Africa has its diamonds. And here in China’s temperate southwest, prosperity has come from the scrubby green tea trees that blanket the mountains of fabled Menghai County.
Over the past decade, as the nation went wild for the region’s brand of tea, known as Pu’er, farmers bought minivans, manufacturers became millionaires and Chinese citizens plowed their savings into black bricks of compacted Pu’er.
A pleasantly aromatic beverage that promoters claim reduces cholesterol and cures hangovers, Pu’er became the darling of the sipping classes in recent years as this nation’s nouveaux riches embraced a distinctly Chinese way to display their wealth, and invest their savings. From 1999 to 2007, the price of Pu’er, a fermented brew invented by Tang Dynasty traders, increased tenfold, to a high of $150 a pound for the finest aged Pu’er, before tumbling far below its preboom levels.
For tens of thousands of wholesalers, farmers and other Chinese citizens who poured their money into compressed disks of tea leaves, the crash of the Pu’er market has been nothing short of disastrous. Many investors were led to believe that Pu’er prices could only go up.
“The saying around here was ‘It’s better to save Pu’er than to save money,’ ” said Wang Ruoyu, a longtime dealer in Xishuangbanna, the lush, tea-growing region of Yunnan Province that abuts the Burmese border. “Everyone thought they were going to get rich.”
But that was before the collapse of the tea market turned thousands of farmers and dealers into paupers and provided the nation with a very pungent lesson about gullibility, greed and the perils of the speculative bubble. “Most of us are ruined,” said Fu Wei, 43, one of the few tea traders to survive the implosion of the Pu’er market. “A lot of people behaved like idiots.”
Questions for Geithner:
1. Ordinary taxpayers would like an answer to this question: Why have they been billed more than $45 billion to rescue Citigroup from failure when, as president of the Federal Reserve Bank of New York, you were its primary supervisor? Three major problems led to Citigroup’s downfall: bad investment policy; overexpansion, which overwhelmed Citigroup’s management; and an inadequate capital base. Why was Citigroup’s supervision inadequate to deal with these problems?
2. The Treasury and Federal Reserve have been selecting which companies in American industry and finance will get taxpayer money. What criteria do you use to decide?
3. During the banking crisis of the late 1980s, assets of failed savings and loans were acquired by the government’s Resolution Trust Corporation. The trust corporation then sold off the assets in an orderly fashion. Would you consider requesting Congress to revive the Resolution Trust Corporation, so you would not have to decide which companies to save and which not to save? Would you consider re-establishing the trust corporation now for commercial banks that are likely to fail?
— ANNA JACOBSON SCHWARTZ, an economist at the National Bureau of Economic Research and the author, with Milton Friedman, of “A Monetary History of the United States, 1867 to 1960”
“Why have they been billed more than $45 billion to rescue Citigroup from failure when, as president of the Federal Reserve Bank of New York, you were its primary supervisor?”
Technically I believe BofA would fall under the jurisdiction of the Richmond district, not Geithner’s NY district - would it not?
(though obviously the NY bank is the “king” bank of the districts)
Read again! She said “Citigroup” which would fall under Geithner.
Oops crap - never mind.
I saw the $45B number the other day referring to BofA in an article, and my mind made the bad connection.
I thought Citi had only gotten $25B so far?
TARP + bailout.
Yep - I see reference to it in a 1/15 article (see my post below). Thx.
As one of the architects of the mess, he is the only man qualified to fix it (or so seems to go the logic to justify his appointment).
That is why we should make illegal aliens armed border patrol guards.
I frankly don’t understand the urgency to begin the new administration with a top cabinet post tainted by a cloud of scandal. I thought we were supposed to get Change or something like that?
And you will get Change - i.e. a few pennies on each dollar.
I agree, but the prominent named agenda is to keep up the cash ejaculation, so momentum must be maintained.
You want change? So does Obama! And he’ll take your dollars, too.
Exactly. All this stuff about racial and class warfare cracks me up, because these are games to keep the masses fighting each other in groups.
I’ve said this before, the only color that matters to the so-called “elites” is the long green of money. And the red and purple of power. Black, white, yellow and brown mean nothing.
The long green is what matters to Obama and his ilk and politics was his route to achieving it. It was the avenue open to him in the US. He now wears the red and purple mantle of power (psychologically, these are the colors of royalty, religion, government down through the ages) and the long green follows. Not for nothing are Christmas colors red and green.
“All this stuff about racial and class warfare cracks me up, because these are games to keep the masses fighting each other in groups” - no kidding!
Such a simple strategy: Divide and Conquer
The money boyz have it down to a science. And we are the just the latest batch of guinea pigs being tested in the lab to increase their $$$.
‘I thought we were supposed to get Change or something like that?’
Don’t get on the ship! The book, To Serve Man, IT IS A COOKBOOK!
And debtors into credit counselors!
As one of the architects of the mess, he is the only man qualified to fix it
As I said yesterday, like placing a fox in charge of the henhouse.
There is also the “boss effect”. People under good leadership can improve.
“2. The Treasury and Federal Reserve have been selecting which companies in American industry and finance will get taxpayer money. What criteria do you use to decide? ”
They could tell you, but then they’d have to kill you.
Seriously - I’m quite sure the phrase “backroom deals” would be apropos.
Just follow the money. Those that make the right size campaign contributions are favored.
Yep. Though there is a lot more favor-mongering that goes on - above the table and below - than just campaign contributions. Campaign contributions can be misleading if you only use them to judge who has influence.
She’s one brilliant old lady.
San Diego and Local Area Folks:
There’s a FREE event starting tomorrow at the Scottish Rite Center. The Real Wealth Expo runs tomorrow through Sunday. I’ll be definitely going to the programs by Bruce Norris, Bill Tan and Robert Campbell and hopefully the foreclosure speakers, most of the others are either not my taste (motivational) or are more advanced than what I’m ready for. But I strongly recommend these three speakers and suspect the others will be very, very good if you like their subject matter. Here’s the schedule and from there you can link to the free registration (Warning - one page PDF):
http://tinyurl.com/RealWealth
If you have any other questions e-mail me at sd.re.b@hotmail.com
I feel awful today. An executive in my company announced yesterday that the results for the 4th fiscal quarter (jan-mar) do not look well. Unfortunately, they will have to reduce costs, which includes laying-off people. He does not know officially who, how many or when, but we should expect people go towards the end of february.
I really, really hate this situation. I am a recent college grad, and it’s so unfortunate that the new generations are going to face very tough conditions in the job market. My parents/grandparents’ generations really messed up the entire economy, and it will the young people like me that will end up suffering the most.
I still do not know if I will be laid off or not, but being one of the newest employees, chances are I am one of the possible candidates.
At the end of february, I was hoping to move into a larger apartment unit ’cause I currently live in just 650 sq ft. My rent would increase from $850 to $1311 not only because the new place is much larger, but the location is a lot better and it has newer appliances and covered parking (and does not have carpet in the restroom).
Now, I do not know if I should carry on with my decision about moving to a more expensive place or I should try to look for something cheaper.
LIFE SUCKS!
I still do not know if I will be laid off or not, but being one of the newest employees, chances are I am one of the possible candidates.
I’ve survived several layoffs. The second layoff I survived was while working as an intern after I had been offered a full-time position but before the “paperwork” was complete. Upon finding out we were going to be laying off, I just started collecting my things assuming I was a gonner. However, I was spared and as soon as the layoff were finished, my paperwork was done and I became a full time employee.
They really liked me there and I’m certain I beat out some people that had been laid off based on not only talent and work ethic but also price. So being the younger guy (lower salary) can have its advantages.
Now, I do not know if I should carry on with my decision about moving to a more expensive place or I should try to look for something cheaper.
Frugality is good right now.
Frugality is ALWAYS good (and just for the record, frugality does not equate to being a cheapskate.)
Yep - frugal is the new black (to be quite cliche). Seriously - especially in your situation, it’s worth saving as much as you can. From reading this blog hopefully you’re aware that the storm that we’re in is nowhere close to over, in fact will probably continue to get worse for a while.
I got laid off last year, and fortunately found a new job within about 3 months. Make yourself as marketable as possible - learn skills - use the internet to do searches (it’s how I found my job). Monster etc. are great.
Weren’t you the guy who posted here about moving to a place downtown with your dog, and I warned you not to do it?
Yes, those were my plans. What sucks is that I already signed the contract even though my move-in date is on the 21st of february. I am about to send an email to the apartment company to see what the options are for me not to move in. Hopefully, it won’t be too expensive, but I gotta find another place to live.
My current landlord already found someone to move-in into my current place after I move out.
Pay the price, consider it a lesson learnt, and move on.
At worst, you’ll lose your deposit or so.
I’d also prep my resumé and start networking even if you’re not laid off.
>LIFE SUCKS!
Just be glad you aren’t a 40-something with a wife and 3 kids to support and no job.
Not that saying it isn’t stressful to be fretting about losing your job, but to me you are not even close to being in the worst situation I seen lately with lots of other people.
Great point.
I enjoyed my twentysomething layoffs - but they were all during the summer months. I sympathize with being home all day in February.
Oh, I don’t know — staying home during a snowy sub-zero snap ain’t all bad.
“I enjoyed my twentysomething layoffs”
Right, that’s when we called it “Un-enjoyment”.
This year I become a 50-something and if/when I get laid off, I know that I can downsize my living arrangements radically and move to a very nice $500 / month (or less!) studio apartment in Tucson, spend mornings fitness swimming and afternoons mountain biking for many years until I find a job again! Living comfortably does not mean you have to have a lot of roof over your head and does not mean it costs a lot.
If you lived frugally for many years, you don’t really know what you are missing and you enjoy the simple things in life that are actually very cheap! Thank Buddha all my sisters are renters. One has been unemployed since October and she has the standing offer to live in my Phoenix apartment rent free if she needs to move there to work. Renters have a lot of good choices at hand even in the coming bad years. Shoot, I could probably live in Cedar Rapids, Iowa for 15 years without tapping my 401k or IRA and not have to work for a living. The coastal areas are another story on cost of living though.
“studio apartment in Tucson, spend mornings fitness swimming and afternoons mountain biking for many years until I find a job again”
Sounds good to me !! Tucson is 10F cooler than Phoenix and closer to the mountains. I think this year I hike to the top of 4 peaks , well drive up most of the way and hike the last part. 4 peaks is the mountain depicted on the AZ license plate and is north east of phoenix. 7600 feet.
Yes, Bill, but you’ll have your bevy of lucious foreign-born sex kittens to give you solace and oh so much more in your hour of need. And all those lovely gold coins to run lovingly through your hands, as you thank the appropriate non-deity for your good fortune. The rest of us, well, let’s just say we wouldn’t be as sanguine about lounging around the house all day.
re: Sammy Schadenfreude
Saw a bumper sticker today with your last name. Is it is a band or something?
This is true, at least you only have to take care of yourself and your dog. I have heard of many cases of adult children moving back in with their parents. Not a bad idea right now. We plan to do just that if we can sell our house. Then we may be able to really save for the first time in our lives.
NO Brett:
What is at the cause of this is your college degree is worthless, you are not as bright as someone who graduated in the 80’s or even the 60’s. Your age group do not have the abilty to think outside the box
Maybe you should find ways to make your company more money so you can keep your job.
———————————————————————-
I am a recent college grad, and it’s so unfortunate that the new generations are going to face very tough conditions in the job market. My parents/grandparents’ generations really messed up the entire economy,
Well, I think you are being a little bitter about all this. You know nothing or little about me, and it’s very easy for you to generalize talking about my entire generation. I do not have a degree in English, Ceramics, Marketing or Political Science. I have a degree in Engineering from a very tough school. I honeslty do not know why you sound so bitter, but good luck fella!
Ummm Brett, reread your original post in light of your criticisms of aNYCdy.
Yeah, he’s a whiny little bee-yatch, isn’t he?
First he ignored all the good advice that most people here gave him about not upgrading until there was clarity; now, he wants sympathy.
Twerps!
LOL
I do not have a degree in English, Ceramics, Marketing or Political Science.
What, precisely, is wrong with a degree in “English, Ceramics, Marketing or Political Science”?
Nausea-inducing: Imagining a world of engineers without any of those other people for color and variety.
Gah!
The marketing guys are in the USA… send the R&D and engineering work the Chindia.
The more I read message boards, the more I realize how common the belief that knowledge of the English language is “worthless” has become . . . sad . . .
Well, you guys should definitely go around universities and see how many US students are going into degrees that do not offer many opportunities. A TON of my friends have gone into those degrees that offer very little oportunities.
There’s nothing wrong with an English major, but there are so many we need. Not a lot of US kids go into science, engineering or a good business school that will help the country to be competitive.
I used to share a house with 3 other guys when I went to school; their majors were Russian, Philosophy and Marketing.
FYI. the guy with the marketing degree ended up working at the container store making 29k/year.
You don’t have to major in it to master it.
Yeah, that’s more to an English degree than just mastering the language. Lots of writing and literature courses. I have a BA in it so I know. It has proven somewhat worthless to me but I have held jobs that required a Bachelor’s in anything. Pay was very low though.
Oops, meant “there’s”, not “that”, and I was a proofreader not so long ago.
Brett, what if they offered you a pay cut or a reduced work week? I was your age in the 80’s and we all got room mates pronto. It was an ugly time, this is worse. You will succeed and keep us posted.
We asked about that yesterday. The executive said that the higher-up management was NOT a fan of pay-cuts, forced unpaid vacation OR stopping 401k matching.
The executive said that the higher-up management was NOT a fan of pay-cuts, forced unpaid vacation OR stopping 401k matching.
Sounds like management did say it was a possibility then. It definitely means they were discussing it.
You gotta listen very careful to what is said and not said and never assume anything.
Ask about getting rid of some of the management and keeping the people that actually make the money.
ROFLMAO (dang, I think I broke something)
“LIFE SUCKS!”
What a wonderful treat it must be for your parents, having raised you in comfort and safety and made even college possible for you, to hear that they ruined your world. If your grandparents are by chance still alive, it is possible that they might be able to advise on navigating tough times from their own experience. You may learn to live like they did, but not with the Generation ME mantra.
Well, good luck with the decision on which expensive appartment to rent. There is a guy up the road from me living in the back of an old pickup. He is pretty cheerful.
I did not mean to specifically point to my parents or grandparents because they were very responsible financially. What I meant is the fact that all this economic mess was created by the greed of a lot of their people of their generations: baby-boomers, their parents and some GenX.
Greed in the government, greed in the streets with people wanting to make quick money in every possible way. They really messed up the future for people like me that had no or very little impact. They inherented a corrupt, messed up economy.
Yes, but life will not stop on your first unemployment or your first recession, if the rest of us are any proof. You were smart enough to get through engineering, you are young and you have every chance of success. Being a victim is just one luxury that you cannot afford, JMO.
“Greed in the government, greed in the streets with people wanting to make quick money in every possible way. They really messed up the future for people like me that had no or very little impact. They inherented a corrupt, messed up economy”
Greed is not the problem. Human nature has not changed for 20 thousand years at least. The problem is that government regulation has skewed the system to be almost as rewarding to the unproductive as the productive. The only thing worse than capitalism is every other economic system. In the grand scheme of things facing a layoff is pretty small potatoes compared to what my fahter’s generation faced in the depression and WWII. I hope you never have to find out how much worse things can get. Isabel.
Blue,
I hope you see Sam and Melissa soon, in your home.
I do not believe in God. At least none from the religions quoted in the inaugural speech.
But, I prayed last night that you wish comes true.
Thank you Muir.
Blue,
I posted yesterday, late in the evening. Is Sam and Melissa in Iraq or Afghanistan? Are they your son and daughter? I hope they come home safely also.
Gal,
A son and a daughter. Iraq. Thank you for your well wishes.
The oil isn’t worth it.
Skye
Ease up guys. He got some bad news and came to what is often a safe place to vent. He’s not attacking anyone personally and why people are being so reactive is beyond me. Life does suck and if I earned a degree in engineering and the economy crashed due to factors I was not a part of I’d be venting too.
I would add however Brett that the elderly that are going to be homeless when all their “safe” bonds implode have it worse that you do. Take a deep breath. You are young, can adapt to change much easier than people two plus decades older than you, and simply by being here can learn to think outside the box. You also are going to be seeing opportunities in the next few years for cheap investing and entrepreneurship that we have not seen for a long time. So you can sit around and moan about your horrible life and how it’s the fault of all those people who can’t appreciate your greatness or you can become proactive and spot the coming opportunities and put yourself into position to profit from them. Where is Obama going to be spending money? Get there.
Good luck and keep posting. Sometimes people here are just PMSing. (Yes, the men too.
)
Nice post RE Bear!
My dad’s standard response when I was knee high…”quit your bellyachin, and gether done’”
Yes,
My simple reply was going to be - you’re young, ‘Buy Low’.
Don’t lament the disaster, welcome the opportunities.
Well said, San Diego RE Bear. It’s kind of sad when the reflexive reaction to someone else’s misfortune is to castigate them for being in that position in the first place, or not greeting their plight with the requisite grit and determination. Bad things happen to good people. Sometimes we need to buck each other up. And in the real world, I’m making contingency plans to lend a helping hand to family members first, and deserving others second. There’s going to be a lot of dispair about, and we need to do what we can to look out for others as well as ourselves.
DON’T take the new apartment and set aside the difference in $ between your current rent and what would have been your new rent. Start saving now - prepare for a lengthy layoff. Be pro-active - don’t sit and wait for the axe to fall. Budget out how much you need to live on per month and try and sock away as much as possible right now - then if the shit hits the fan, you’ll have (hopefully) several months of living expenses laid out.
Been there myself several times myself in several different countries and it’s a huge relief knowing you have a cushion to fall back on.
Can you do month to month at your current place until situation is clear. The $1311 price may drop in a few months.
I turned in my 60-day notice last month, and my landlord already found someone to move-in when I leave the place…
Brett,
Rant above aside, your landlord may prefer to keep you if you tell him your plans have changed. i wouldn’t mention the prospect of a layoff though.
laurel ,md
I lived there for 6 months
scary ass place
happy in N VA
Maybe you could move back in with mum and dad?
Mom and dad retired and moved overseas! It’d be cheaper, but it’d be my last resource!
Well then, how do you look in fishnet standing at the side of the road?
Did they teach you that in Engg. School?
I’m sure he looks just fine there in fishnet, but not as good as the english or ceramics majors…
He’ll have just to take their uglier leftovers then.
C’est la vie (maybe we should provide a translation for him?)
LOL
Now, I do not know if I should carry on with my decision about moving to a more expensive place or I should try to look for something cheaper.
My best advice for you - my biggest lesson from the dot-com bomb - is to be ready to move. Being geographically flexible is a most valuable ability right now.
I take exception to your blanket comment concerning “parents/grandparents’ generations” messing things up. I am most likely old enough to fit into one of those two groups and, I assure you, whatever I’ve screwed up personally, I’ve already paid for.
I don’t own a home, drive a 12-year-old car, don’t have kids, pay all my taxes, donate to charities and vote. I see profligate spending on the behalf of 20-somethings daily - expensive cars/trucks, electronics, boats, quads - quite a bit of which must be debt-financed, but do not blame them for our financial woes, either.
LIFE SUCKS ??
Common…Your life has just started and there will be better days in the future…You have already shown the discipline to get a degree…Sometimes we takes two steps back before we can move forward. Thats just the way it is for most of us…Think about preserving cash even if it means a lower living standard for now…Maybe you can find a couple of people to rent a three bedroom or last resort (eeek) move back with parents…
Been there done that (except the overspending on an apt). Stuff happens to good people, good things happen to bad people. The ME generation did screw us up, now get over it. Deal the world that is in front of you not what you wish it was. Since you are an engineer you probably didn’t study history very much. Go read a few books about the great depression then try feeling sorry for your self. You are single guy with no wife and kids and you have an engineering degree. The problem you have is that you overspent on an apartment and you MIGHT lose your job. Go solve the problem. Anything else you would do right now is a waste of your time. Besides it will toughen you up and you will better for it down the road if something really BAD ever happens to you. Good luck.
I was born abroad, and the eyes just kept falling out of my head how the ME generation in the US spoiled their kids rotten !!! Even now, I just cannot believe what their heirs took for granted when growing up.
All I can say - if you think you might be layed off, assume you will, and start planning accordingly.
I feel for you. It is tough realizing this life thing isn’t going to be as easy as you thought. Study hard, get good grades, get into the “right” school, study hard, get good grades, get a degree, get a great job…. Move up quickly, get a nice place, nice car, nice clothes… Sew some wild oats, eventually settle down with a trophy babe, raise a couple kids, retire early…
That first slap in the face that all is not going to go as you though, is tough, regardless of what the people here say about not being whiny and such.
But, you must realize, your comments about the elders f’n up… well, that is pointing an acusing finger at a lot of the people here.
Do I think the WWII and Baby Boom generations really messed up and will leave an enormous hole for me (born in ‘67, so leading edge of genX) and those that come after to clean up? Oh YEAH!!
I don’t think our economy has been sound for 30-40 years. To fix it back in the 70s, 80s, 90s, would have required pain. So, we’ve just decided to kick the problems further and further into the future.
Even now, every solution proposed by government and private sector is about getting debt flowing again so we can kick the problem a few more years into the future.
Dear Brett, I feel for you. Howsoever, when you read the article in the NYT about the goings on at WaMU loan department (published in December), I think you have a very good example how it was NOT only your parent’s generation who scr*wed up the economy. The same goes for a whole bunch of twenty somethings who became WS analysts, very well paid serfs indeed.
Not to mention the large number fo 20-something mortgage brokers, flippers, specuvestors, etc.
A whole lot of young people that had NO business buying houses, did!
Buy now or be priced out forever. Can you really blame them?
“I really, really hate this situation. I am a recent college grad, and it’s so unfortunate that the new generations are going to face very tough conditions in the job market. My parents/grandparents’ generations really messed up the entire economy, and it will the young people like me that will end up suffering the most.”
I am really sorry you lost your job, and hope you find a new one soon.
Your parents’ generation is currently having its collective nest egg smashed into dust, though. They won’t be unscathed either. You still have time to recover and build a life. Young people like us will be fine. ‘Cause ti-i-i-ime is on our side. Yes it is.
“My parents/grandparents’ generations really messed up the entire economy, and it will the young people like me that will end up suffering the most.”
Save us the self-pity for the pierced navel, tribal tattoo and cellphones-glued-to-ears generation. True, you’ll inherit a lifetime of taxes keeping the Boomers ensconced in entitlement programs, but if it wasn’t for the (hello Tom Brokaw) ‘greatest generation’ you’d probably be goose-stepping to Wagner and speaking Deutsch.
I remember (as a baby-boomer born to a set of “greatest generation” parents, who had put off the family until the baby boom had a healthy start): 1. elementary school classes of 35, 2. HUGE competition for jobs (some of us never DID find a niche, after disabilities like war injuries, drug usage or inability to get accepted for proper training hampered them - no one pumps gas as a job anymore) and 3. being supervised by those older than me, with only Associate degrees or on-the-job training after I earned my bachelor degree (with 2 minors) in science. I am the only grandchild on both sides of my family to have achieved a university education (biology - the most important science, isn’t it? Don’t the restrictive conditions for supporting life seemed to have some significance, even now?)
However, if it weren’t for Affirmative Action, my 99th percentile ratings would have been wasted on diaper duty or cashiering, if those heroes that were hosed down, blown up, and “disappeared” (Viola Liuzzo, et al), and LBJ hadn’t enabled the AAMovement to occur.
I am a blonde (!) Northern-European female who avoided child-bearing and sought a medical career, & eventually was hired by GM as an Apprentice engineer (hourly, after earning the mandatory GED needed)! My first computer class covered programming (basic), not some MS application already designed, and I took it because it was interesting (on Apples) not required.
Get into energy - its the one thing that others have-to-have! Drop your living requirements to the basics (think hard) and avoid those jobs where you are the predator - few are successful long-term. My 48 acre farm is paid off, as are 2 houses (one in Hawaii - rainy side of island = no lack of resources to live off the land). Strive for things that don’t need professional servicing or high cost inputs.
Don’t blame those who were born before you, just try to improve the outlook for those who come after (I served on several college apprentice committees, shaping curriculum to avoid the “Keyboarding” mentality - at least for our candidates! and stressing the building blocks for self-improvement and problem-solving.) At least, I won’t have to support the returning mouth-breathing children-with-dependents that I see my peers despairing over!
“Save us the self-pity”
(Sorry, I pity others quite easily! He’s young he’ll figure it out.)
I won’t be happy until I see the first WWII generation/Boomer eat “dog food” story.
At that point, I’ll probably throw the best party money can buy. I really wanna see some dogs and bee-yatches grovel on the free ride they’ve taken.
Yeah, I want some blood. I’m vindictive that way. I wanna see at least one grandma grovel.
you’re young and unattached. RENT A ROOM.
Jan. 21 (Bloomberg) — Dubai property prices dropped 23 percent last month from a record high in September after banks cut lending and sellers offered discounts as a result of the global economic slowdown, according to an HSBC Holdings Plc survey.
The average price of villas in Dubai fell 30 percent and for apartments 20 percent from September….
Gosh - didn’t see that one coming.
shocking, absolutely shocking.
I’ve been joking that Dubai will become the world’s biggest ghost town. Could you imagine?
All that opulence and decadence, surrounded by bitter teeming masses of poor and seething Islamists. God help anyone who can’t fly their property out of there in a hurry.
1:19:09 23:59 hrs DC… NSA Transmission Message Intercept from Bush to Wall Street…
‘PBR Street Gang this is Almighty, do you copy’?
“Mission Accomplished”… ” Say again” …’PBR Street Gang this is Almighty, do you copy’?…”Mission Accomplished”
…that Cheney stuntman with the wheelchair, brilliant! Still lurking in the hidden “Shadow Gov’t VP Office…over”
Shades of Dr. Strangelove.
totally. I would find it very funny, if it wasn’t quite scary.
Terminate with extreme prejudice. You understand Captain that this mission does not exist, nor will it ever exist.
Brett …Go for cheaper in this environment . I agree with you that the situation sucks and its cheating the new college grads as well as everyone else . It was a greed that knew no bounds that took hold and messed up the financial systems of the World . I have said many times that the people
in 1929 who didn’t even have anything to do with that run-a-way stock market suffered also when the Great Depression hit and the Banks failed .
It’s not fair at all ,but we can only hope that some kind of Justice prevails and the innocent are protected in the long run .
Reaganomics, Clintonomics, and Obamanomics only vary in detail. They all are birds of a feather. They all exercise government control over the U.S. economy. Professor Mike Rozeff explains why letting the economy re-set, instead of calling on the heavy hand of government to attempt to put things a-right, would lead to a quicker correction.
Obamanomics Will Fail the American People
by Michael S. Rozeff
Obamanomics, the economic program of the Obama administration, will fail to help the U.S. economy. Instead it will undermine the economy. It will fail to help the American people as a whole, although it will benefit some. It will succeed in augmenting the government.
The depression is causing and threatening to cause many failures of banks, companies, whole states like California, localities, pension funds, federal home loan banks, and so on. Unemployment is rising. The Obama administration, following the Bush administration and the roadmap laid down by the New Deal and the Employment Act of 1946, will try to stop these failures and the unemployment using government action. This will fail. The system is too large for the government to bail out without destroying any semblance of free markets. Even if the system were not so large, government action would still fail, as will be explained in some detail.
The largest banks in the banking system have failed or will soon fail. They are insolvent and the system as a whole is insolvent. It is a virtue of the American system that both the Fed and the government are trying to act like responsible lenders and not simply nationalizing the banks and failing companies outright. Although these loans have stiff terms, they are haphazard and far inferior to outright bankruptcy. These loans should never have been made. The government cannot maintain its purported stance of neutral financier under the influence of politics and expediency. More importantly, when government introduces itself into the capital markets as it has done, it changes them in irreversible ways. There will be no going back to what was. The capital markets have been greatly harmed already.
The only practicable remedy within the existing system is bankruptcy and re-organization. All the bailout programs are circumventing this remedy. They have made hash out of the bankruptcy laws. That is underscored when the Big 3 automakers seek aid from Washington. There are many other companies, states, investment funds, and localities also lining up.
The bankruptcy procedures balance the interests of various parties to contracts under court supervision. There are long-established priorities, plans, and valuation procedures that at least form a stable framework within which to proceed. All of this has been discarded in the last twelve months. The political enactments under the Bush administration, endorsed and to be expanded under the Obama administration, ignore and replace these procedures with political measures. This marks a major turn of events. The nation abandons an established and workable accounting-finance-legal framework. It replaces it in an ad hoc way with a misguided economics framework and with a thin patina of legality that actually is a large expansion of unconstitutional power. If kept in place, this replacement has extremely long-term serious effects on American capital markets.
There are a limited number of paths by which large aggregations of capital can be transferred to borrowers. One is via the banking system. The other is through the capital markets. The capital markets supply most capital to business borrowers. They would probably provide even more capital if banks were not being subsidized by central bank reserve creation.
Nationalize the banks and than sell shares after the crisis is over . In other words, the taxpayers buy certain banks after FDIC takes them over as to maintain a Banking system . It is silly to give 45 billion to a bank that is worth 16 billion for instance . FDIC needs to be honored and that portion will need to be shored up by taxpayer bail-outs .
I’m only saying that the taxpayers need to buy the banks at BK value right now because its not likely that any buyers exist for these entities ,or maybe I’m wrong on that . Many bailed out banks and investment firms are insolvent if you compute their bad assets .
The original Tarp program was sold on the premise that bad assets would be bought by the tax payers so the Banks could function and extend credit again . That goal was not achieved and now we are at square one where the powers are saying that bad assets need to be
taken off the books of struggling chosen Banks . I get sick of the short memory of the Public and the Politicians whereby they don’t remember what the purpose of the Bail-out funds were originally .
I get sick of BS .
I agree. They should just nationalize the banks, as they did with the Home Savings and Loan scandal, and be done with it.
Floyd Norris, Ny Times
“Any successful government bailout must lead eventually to the banks becoming attractive to private capital. The belief that banks are on the road to confiscation by the government will assure that no such capital will be forthcoming anytime soon, and it can create a vicious circle, in which that fear causes investors to dump bank shares, and thus makes them seem even more shaky and unworthy of investment.”
Bank shares can’t go much lower. The shareholders, in effect, have already been wiped out.
That’s what they did in Mexico. Its also how a few Oligarchs ended up owning the whole shebang. And it wasn’t just banks. Carlos Slim became a bazzilionaire by buying government owned enterprises (like Telefonos de Mexico) at fire sale prices.
I thought Carlos Slim became a bazzilionaire by selling millions of records I never heard of. No, wait, that was Slim Whitman.
“It is silly to give 45 billion to a bank that is worth 16 billion for instance . FDIC needs to be honored and that portion will need to be shored up by taxpayer bail-outs . ”
What it’s UNBELIEVABLY silly if the shareholders are not wiped out in such a transaction.
We should be doing this RTC-style, wherein the banks fail in an orderly fashion and are taken over by FDIC, shareholders are wiped out, bad assets are stripped off the books (and disposed of over time by RTC), and the now-de-zombied functioning bank is sold and back in business.
I want the shareholders wiped out and I’m saying the Government
buys the assets at BK value and FDIC is the only thing that is honored . I’m just suggesting that the taxpayers be the buyer of
the bank after the FDIC takeover because i was assuming that
buyers are not plentiful right now . After the crisis is over ,than the Banks are sold off to private industry at a profit .There are a number of ways in which this can be done and your suggestion has a lot of merits also . I was just suggesting these takeovers to keep a banking system in tact until this crisis is over .
Great article. This guy is spot on!
Reaganomics started this mess. Completely irresponsible fiscal policy. At least Clinton managed to balance the budget…and run a surplus. Obama is stuck cleaning up Bush’ mess.
At least place the blame where it should be placed.
Nevermind the fact that the Clinton surplus was largely due to Greenspan being looser than your aunt Tilley.
Gotta admire a professor of economics who can plot a trend nad make accurate prognostications based on a single (day in office) data point.
I’m impressed!
Oh wait… “professor of economics?” ROFLMAO!
Something’s going on with homebuilders. They were down much more than the broad market yesterday, and are down this morning a fair amount despite the market being up big. No specific news I’ve seen. Updated housing market index is out later today, and housing starts number is out tomorrow - maybe a whiff is out there that they’re worse than expected? Centex and KB in particular are down a lot.
Lennar’s having legal problems - that may be a contributor.
“Lennar’s having legal problems”
You just made my day. And I’m buying a bottle of champage the day Lennar is BK. I’m surprised they have lasted as long as they have. They have harmed a lot of decent people over the years.
I saw Lennar when it was a baby.
After Andrew in 1992, I expected Lennar to go under.
To me Lennar’s existence is proof that if it is true that markets correct, they sure take their sweet time doing so.
HB prices fall, Lennar legal flap.
“Miami-based Lennar last week said it was suing a corporate watchdog group that recently accused the homebuilder of fraud. Lennar claimed the allegations by the San Diego-based Fraud Discovery Institute Inc. were false, and were prompted by the group’s ties with a developer being sued by Lennar.
“The Fraud Discovery Institute’s top official, Barry Minkow, issued a report citing the top 10 flags for fraud at Lennar, including a claim that the builder’s joint ventures were operated as Ponzi schemes. The report sent Lennar’s stock price tumbling by 20 percent.”
Ha, …and I repeat…why aren’t builders @ < $1.00?
Tinfoil hat theory: W owed them favors, OBwan does not. They lost their protector yesterday.
OBwan…You crack me up Bear
I’d like to think that, but it doesn’t really matter… one favorite exchanged for another.
“Something’s going on with homebuilders”
U.S. Homebuilder Confidence Dropped to Record Low in January
Bloomberg.
This might have something to do with it?
That’s the data that came out at 1pm (long after I posted).
However it did help push them down even further! Doh :-).
Something’s going on with homebuilders ??
First foreclosures due to toxic loans and unqualified buyers and now to labor market deteriorating real fast…We are reverting back to the historical level of home ownership…roughly 62%..Maybe lower…Add to that the front loaded building and the retirement of the 75 million baby boomer’s and there you have it….Mid range builders Goneski…Cut in half the big builders going forward…IMO, Consolidation coming just like the banks…So, who are the survivors ??
It was noted here yesterday that thousands of builders are finally being foreclosed on.
Hoz, correct me if I’m wrong, but I thought I’ve seen you post that 88 USD/JPY is parity…? Can you elaborate on that? I’m thinking “parity means 1:1″, unless I’m misquoting you, what do you mean by “parity”?
I’ve been meaning to ask you about this and the Yen is at 88 now, so that made me think about it…
He meant “purchasing power parity” (PPP, as it’s called.)
thx
This morning there was a guy on Bloomberg (forget his name) that was proposing to temporarily lift the reserve requirements on the banks, so they could use them to help meet capital needs - i.e. do more lending to stimulate the economy. I wanted to choke the guy. Anyone else see that? Who was that guy? A real squirrely-looking dude with glasses.
Along those lines - here’s an article U.S. Government Needs a Map for Lost Citi that discusses various banks’ “tangible leverage”. Note Citi’s huge leverage ratio of 46.7 - wow. For this layman - obviously that includes more than the accounts used for reserve requirements (”exchange accounts” I believe) - right?
(p.s. FPSS I see the mention here getting $45B, so nevermind my comment/question above)
It seems back in the early 80’s some actually understood the economic and cultural malaise:
Written by Dennis DeYoung
Lead Vocals by Dennis DeYoung
The Grand Illusion
Welcome to the Grand illusion
Come on in and see what’s happening
Pay the price, get your tickets for the show
The stage is set, the band starts playing
Suddenly your heart is pounding
Wishing secretly you were a star.
But don’t be fooled by the radio
The TV or the magazines
They show you photographs of how your life should be
But they’re just someone else’s fantasy
So if you think your life is complete confusion
Because you never win the game
Just remember that it’s a Grand illusion
And deep inside we’re all the same.
We’re all the same…
So if you think your life is complete confusion
Because your neighbors got it made
Just remember that it’s a Grand illusion
And deep inside we’re all the same.
We’re all the same…
America spells competition, join us in our blind ambition
Get yourself a brand new motor car
Someday soon we’ll stop to ponder what on Earth’s this spell we’re under
We made the grade and still we wonder who the hell we are
and: Rocking the Paradise:
So whatcha doin’ tonight?
Have you heard that the world’s gone crazy?
Young Americans listen when I say there’s people puttin’ us down
I know they’re sayin’ that we’ve gone lazy
To tell you the truth we’ve all seen better days
Don’t need no fast buck lame duck profits for fun
Quick trick plans, take the money and run
We need long term, slow burn, getting it done
And some straight talking, hard working son of a gun.
Whatcha doin’ tonight, I got faith in our generation
Let’s stick together and futurize our attitudes
I ain’t lookin’ to fight, but I know with determination
We can challenge the schemers who cheat all the rules
Come on take pride, be wise, spottin’ the fools
No more big shots, crackpots bending the rules
A fair shot here for me and for you
Knowing that we can’t lose
And we’ll be rockin’ in Paradise
Rockin’ the Paradise tonight
Rockin’ in Paradise
Rockin’ the Paradise tonight
Tonight, tonight…
Wow - memories. And yes apropos even moreso now. Had the right idea though they were kind of cheesy.
Maybe our next prez will use one of those as his theme song.
That whole rocking in paradise is what I remember in the 80’s. I rocked and even though I thought I should grow up this disaster is making me ultra manic. More cookies and more hobbies!
Please …….for the sake of the children that haven’t been scarred by hearing it yet……
DO NOT print a word of any of the lyrics from “Dr. Roboto”. You will force me to drive ice picks in both ears.
Signed,
Tommy Shaw
Artist: Elvis Costello
Album: This Year’s Model
“Radio Radio”
I was tuning in the shine on the light night dial
Doing anything my radio advised
With every one of those late night stations
Playing songs bringing tears to my eyes
I was seriously thinking about hiding the receiver
When the switch broke ’cause it’s old
They’re saying things that I can hardly believe
They really think we’re getting out of control
(CHORUS) Radio is a sound salvation
Radio is cleaning up the nation
They say you better listen to the voice of reason
But they don’t give you any choice ’cause they think that it’s treason
So you had better do as you are told
You better listen to the radio
I wanna bite the hand that feeds me
I wanna bite that hand so badly
I want to make them wish they’d never seen me
Some of my friends sit around every evening
And they worry about the times ahead
But everybody else is overwhelmed by indifference
And the promise of an early bed
You either shut up or get cut up, they don’t wanna hear about it
It’s only inches on the reel-to-reel
And the radio is in the hands of such a lot of fools
Tryin’ to anaesthetise the way that you feel
(REPEAT CHORUS)
Wonderful radio
Marvelous radio
Wonderful radio
Radio, radio
(FADE)
Damn. Memories indeed.
But if you want real politicized and true messages of dysfunctional societies at the time, punk rock was the real heavy hitter.
My favorite at the time was Fear’s song “There’s Too Many of Us (so let’s have war!)”
Sex Pistol’s “Anarchist” (”…no future, no future, no future, for you”)
And the often remade and relevant before the 80’s and still to this day “Ball of Confusion”
Dang, just how old ARE you HBB posters?
Oh, Sarah, don’t you remember swaying to the Glenn Miller Band and getting a kick out of those wild Andrews Sisters. Crazy times.
(^_^ hee)
WASHINGTON (AP) — Treasury Secretary-designate Tim Geithner (GYT’-nur) says he was careless in failing to pay $34,000 in Social Security and Medicare taxes earlier this decade and has apologized to Congress.
At his confirmation hearing, Geithner called the transgressions “careless mistakes” and unavoidable ones.
He told the Senate Finance Committee the failure to pay was “unintentional.” But he also said, “I should have been more careful.”
Earlier, committee Chairman Max Baucus said he thought that Geithner had made “disappointing mistakes” but also said he needed to be confirmed so he could get to work on solving the country’s financial crisis.
That’s odd. I thought Geithner was part of the problem, not part of the solution.
But Chairman Max knows that it is politically incorrect to deny a tax dodger his rightful place leading Treasury simply because he got caught.
Bah - what’s a few careless mistakes among treasurers?
I called one of my Senators today (the other one is a waste of time) and told him not to confirm. The main reason of course is how Geithner is part of the original team that got us where we are today financially. However, since the Senate wants to talk about his tax “mistakes”, fair enough. If he can’t keep his own finances straight, how can he be expected to deal with Treasury?.
I hate to bring old assclowns up, but shrubby sank two companies before becoming prez. And it was a sure bet he’d do to the US what he did to his companies.
Now, if Geithner gets confirmed and it looks like he will, you can count on the fact that the economy will get worse. Use that knowledge to your advantage. You cannot and will not go wrong by betting against the economy of the US.
palmetto ……While it is clear Geithner is a smart fast talker ,I can’t forgive the tax evasion ,and I view him as part of the team that
is in favor of saving the to big to fall Institutions . Geithner is part of the group that didn’t see the crash coming and no doubt his State benefited by the Wall Street Ponzi-schemes . The Powers that be seem to only want people that are part of the group that was part of the problem .
It seem like no matter what these clowns do ,they get off the hook
because they claim mistake or lack of knowledge ,such as Senator Dodds claiming he didn’t know he got a sweetheart loan deal from Countrywide .
Corruption is still rampant and exposure of the crimes of Wall Street players is still pending . If you bail out the criminals ,how do you discover all the crimes they committed ?
Housing Wizard, I’ve been enjoying your posts greatly in recent days. Keep up the good work! I’m honored to have made your acquaintance on this blog.
No, no, you have it all wrong. Geithner has brilliant ideas which will fix the economy in weeks. He’s just been keeping them a SECRET all these years, until he became treasury secretary. No, wait, his brilliant ideas just came to him in the past few weeks. No, left me try again, the brilliant ideas have always been there, but refuse to come out unless they are moved to DC.
Do not believe for one SECOND they didn’t see this coming.
+1
“Careless”, huh?
I think I’ll forget to pay my taxes this year (a lot less than $34K).
Check with me later, and I’ll let you know how well that excuse works for us working stiffs.
The worst part to me is that his employer paid for these taxes, so all he had to do was send the money his employer gave him to the IRS, but he kept it. There’s no way he could have done this by mistake.
He told the Senate Finance Committee the failure to pay was “unintentional.” But he also said, “I should have been more careful.”
Oh this douche bag will get the job and replace the Paulson douche bag, it’s a given. His buds are lined up waiting for their handouts/bailouts.
As a frequent reader, business owner, and lay economist, I must admit that the entire spectacle of economic collapse, and the varying opinions surrounding it, do not surprise me.
We have very intelligent readers on this blog, but I must make a few recommendations to a few of you-
1. Get off the Bush Bash Bandwagon- the election is over. Bush is no longer president, and he is not the lone, or even the biggest culprit in the current economic crisis. He was just the most recent figurehead. We are witnessing the climax of an era (spanning 40 years) of bad government policies meddling in the economy. The “Big Brother can fix all” era of government is quickly coming to an end.
2. Do not expect grand government policies to fix the economy. The government IS NOT the economy, and even the collective efforts of all our politicians will not obviate the consequences of the current cycle. Many “New Dealers” will be greatly dissappointed by the ineffectiveness of the many programs now being rolled out.
3. Economic down-cycles are much like earthquakes, in the sense that there are forces at work, much like the pressures of tectonic plates pushing against each other, that cannot be avoided. The best we can do is hunker down and do the best job we can at preserving and picking up the pieces. The current deflationary cycle is much like a black hole, with one exception; there will eventually be an end to the extraordinary deflationary gravitational pull that we currently see. Just when will that happen? Who knows!
4. Be careful of how much you attack “faith oriented” members of the community. Having been “faith oriented” all of my life (and also a student of science), I must point out to you, that when all else fails, including government, the “faith based” members of society are often the ones providing you with soup and shelter. If it comes down to choosing between those who rest their hopes in “faith” versus those who have “superior secular progressive” educations or perspectives, I will take my chances with the “faithfull” (as opposed to those who use faith to further their political ambitions).
5. Finally, keep your eyes, mind, and heart open. Do not think that (like many “Global Warmists” today) that all the data is in, and that all conclusions have been drawn. In fifty years of living, my perspectives continue to be reshaped by the information coming to me today. And I expect that tomorrow will cause me to re-think my current dogma. After all, the world is now 1 degree cooler than it was in 2004, and my Alaska relatives, where I spent 28 years, tell me that the past three winters have been the coldest since 1969-70-71.
Keep up the great posts and insights.
P.S. My intuition tells me that housing prices will continue to adjust downward until rents and monthly housing prices are comparable, and to where incomes support housing as a function of the costs of living (in each market area).
[ Be careful of how much you attack “faith oriented” members ]
[Finally, keep your eyes, mind, and heart open. Do not think that (like many “Global Warmists” today) that all the data is in,]
Self-contridectory statements. Faith-oriented members of society are those that think the data is in and they close their eyes and mind.
You attack those you say not to attack.
Darrell, you’ve repeated this half truth twice today.
Having faith in a higher power does not mean that a person becomes an automaton. In fact, a belief that a perfect personage exists serves to reinforce the imperfection of mankind. If one can operate from the assumption that man (and woman) is imperfect then all decisions about a path to take can be made with a very open mind indeed.
Shane - thank you for expressing in eloquent fashion what I usually sputter and stammer about. All your points were articulate and resonate of truthfulness and direct experience.
I think I’ll cut and paste and mail to excreter
You mention me in many of your posts. What is it with your obsession?
He called and you came.
Obsession…. it’s no longer a cologne.
“We are witnessing the climax of an era (spanning 40 years) of bad government policies meddling in the economy.”
Correction: 27 years.
Yes of course……the country went to hell AFTER Jimmy Carter left office.
Sheesh.
Exeter:
With all due respect, your response appears Partisan. A Democrat, no doubt! Problem is, the real Government involvement began with Medicare and Medicaid, in 1965. Follow the inflation associated with medical care and you will find that it tracked with the CPI up until the entrance of the Federal Government into financing medicine. Ever since that time (about 1965) medical related items have inflated at 2-3 times the core rate of inflation. In other words, as Government became a guarantor of payment, the costs have gone up at a faster rate than any other segment of the economy. Translated: we now have a medical system that we cannot afford, and the primary cause is because Government restricts who can provide, and guarantees payments. And many think that the solution is to have the Government take it over. Heck, they already did!
So my comment stands as stated “40 years of bad government policy” (Republicrat and Demlican)! Sure, it worked in the short run, as more people received medical care. But in the long run, it is bankrupting the economy, in conjunction with Social Security and runaway defense spending.
Shane, Irrespective of political affiliation, as evidence by the Clinton administrations adherence to the supply side mantra, the path to the long held but failed borrow and spend prosperity policy in fact began in 1981 when Art Laffer proposed the Laffer theory to Reagans economic advisors and was ultimately sold on the idea. At the time, the Laffer Theory was academically unsubstantiated then and completely rejected now by economic academia everywhere. Dave Stockman, Reagans budget director has subsequently rejected the theory categorically and refers to the Laffer mantra as “a fraud”.
When fair tax policy is reestablished is when we return to sanity. Not until.
Great Post! Right on.
Thanks for the post: two disagreements though.
RE: global warming. Think of the temperature cycle being like the stock market…there may be brief periods of down or up cycles, but the clear trend is unmistakable. You can’t generalize any more than anyone else off of only 3 years of data. The scientists who proposed the climate change model base it on data that goes back thousands or even millions of years.
RE: faith based “giving”. I’ll take my chances with the secularists any day. The faithful crowd always has strings attached to their giving (proselytizing, social coercion, etc). I’d rather have an imperfect government of elected representatives who are ultimately accountable to voters take care of my needs than an invisible, arbitrary and possibly non-existent force that “acts in mysterious ways” that is only seen by self-appointed prophets.
RE: faith based “giving”. I’ll take my chances with the secularists any day. The faithful crowd always has strings attached to their giving (proselytizing, social coercion, etc).
Do you know this from experience?
Catholic Charities dispenses aid without regard to what religion - if any - the applicant observes. There is generally no means testing, the office I’m acquainted with usually just offers assistance to whoever shows up. And they don’t have to sit through a sermonette or promise to read the Bible.
I was the beneficiary of grief counseling from three different faith based entities: one Catholic, one Episcopalian, one Lutheran. Nobody asked for a membership card, no money was exchanged, and there was no “social coercion” required.
What exactly is social coercion?
On a local basis, I’ve volunteered at a local Catholic-sponsored homeless shelter, and they go out of their way to avoid proselytizing. Personally I think they should, but Catholic charities don’t roll that way anymore & haven’t in decades.
Darn, my posts aren’t showing up. Google “proselytize” and “Tsunami” to find plenty of examples where you are wrong.
” Catholic charities don’t roll that way anymore & haven’t in decades.”
Yeah, my family is Catholic and some of them are very conservative, but the active ones are very progressive and don’t proselytize, either. Thanks for chiming in!
I used to think it was without strings, then read about how after the 2004 Tsunami when resources were stretched thin, the predominantly Muslim victims in Aceh were often turned away by Christian charities unless they agreed to listen to propaganda, or in some cases actively convert. To be fair, other religious charities did the same thing when encountering different factions of their respective religions. While the charities denied this was official policy, it was clear their field operatives imposed this ‘means testing’ on their own, for their own benefit in scoring points with their God.
http://yaleglobal.yale.edu/display.article?id=5190
An example of social coercion is when you move to Texas and all the new neighbors show up and ask what church you attend…when you tell them that you don’t, then you are ’shunned’, excluded from parties, influence in homeowner associations, and possibly job advancement because you are an evil secularist. Having that happen as a beneficiary of religious good works is not a large step to make.
Do you know this from experience?
Not sure if my previous post will show up, but here is a link backing up my assertion:
http://yaleglobal.yale.edu/display.article?id=5190
I posted this above, but George Bernard Shaw’s “Major Barabara” is an excellent critique of this type of charitable giving (withholding bread until the hungry man agrees to accept faith). It made a strong impression on me in school. I don’t contribute on to international faith-based charities for this reason. But there are positive faith-based initiatives and interfaith initiatives.
from my experience, catholics in general, are not into this proselytizing in exchange for something. my take is that because there is just too many of them to be worried about hooking the next member. ever wondered why it is one of the christian group who does not *require* 10 pct of your income for donation? they would love to get that 10 pct, though but there is no penalty for being stingy.
One need only look at the models to see the falacies involved in the assumptions (climate models). Many of the climate models have been picked apart. Read the late Michael Crighton’s critique of the entire Global Warming argument, and you will see a well thought-out, qualitative and quantitative rebuttal to the current Global Warming mindset. It is not that Global Warming is absolutely false; it is that Global Warming is not, scientifically, proven!
Here is my problem with the global warming alarmists: they pass the argument off as “concluded”, when the data, much of it conflicting, is still is coming in. The very people who should have an open mind have already drawn their conclusions.
Again, your perceptions about “faith-based” giving is based on an article written about a particular person’s experience, rather than your own. Draw your own conclusions. I am basing my conclusions on my own varied experience.
your perceptions about “faith-based” giving is based on an article written about a particular person’s experience, rather than your own.
Fine, but your implied assumptions about “superior secular progressives” and their good works in your original post begs for an explanation, as it sounds sarcastic. What are your assumptions about us? I have never required any charity, so I can’t comment on what religious charities do. My only experiences with any religious generosity (free meals, free movies, and gifts) towards me personally is that it is ALWAYS ultimately for the purpose of proselytizing.
I’ve only been on one international trip with a secular organization to Mexico, where we provided no-strings medical care to a presumably Catholic populace without any intent to question or change their religion. We truly view helping as its own reward. Does that surprise you?
Well, I’m secular, but I attended a religious school. We used to do all sorts of charity and community work, like making care packages for veterans or soup kitchening. We never mentioned religion or scripture or anything like that as part of what we did, it was just assumed that charity ought to be a part of daily life. I did not find an equivalent attitude when I switched to public school. Some people really are driven to do kind and generous things through their faith. Others, like you and I, don’t require it, but not all faith-based charity is bad (though you are right to be skeptical). I have noticed within my family that all the religious people do charity work, but not all the secular do, and, as I’m secular, I’ve been trying to make sure that I keep it as part of my life, too.
There are many progressive and non-zealeoty religious types out there. I could not convince my husband of this until he met some of my relatives, but they do exist.
As for global warming, the VAST majority of academic climate scientists world agree on the data, but intrusions from partisan political and business groups who hire mercenary scientists to generate their own conclusions does not constitute legitimate disagreement.
It reminds me of the tobacco companies hiring their own “scientists” to claim that tobacco smoke was harmless, until they were ultimately exposed as frauds.
Google “George C. Deutsch” and then tell me why I should believe you?
As to your global warming arguments, google “George Deutsch” to learn how serious climate scientists have been censured by politicians who found their views inconvenient.
To my knowledge, Michael Crichton had no credentials whatsoever in climate science, and used his fame as a fiction writer as a bully pulpit. On a related topic, his arguments that second hand smoke is safe are not taken seriously by anyone with an academic pedigree outside of the tobacco industry.
NoSingleOne:
I appreciate your thoughtful comments. However, serious Scientists (the Head Climatogist at Oregon State University, the founder of the Weather Channel, to name a couple) do disagree with the movement.
The Russian National Science Foundation just issued a statement that we are possibly moving into another glaciation phase.
My point is this: there is a strong opinion amongst some scientists that the earth is warming. But not all………
And the data is not irrefutable. It is quite contradictory.
As I said, my family in Alaska, has experienced three successive cold winters (coldest in three decades), as have those of us living in Southern Oregon.
yawnnnnnnnnnnnn!
Bush still sucks!!!
What a commentary on Democracy.
Shane…Your “Forced Dogma” has failed…The attacks on the centrists for the last eight years trying to “Shame” them to the right with fear and the flag did not work…The angry white men in the south are now irrelevant…
The “Big Brother can fix all” era of government is quickly coming to an end.
I think its ramping up
Shane re #1,2,3,4,5
Well, to begin with….
Ahhhh, wahtever, never mind.
fascinating….its rare that I re-read a thread.
Well, here I am, waiting for the guy from the window company to show up. (I’m having a couple of windows replaced here at the Arizona Slim Ranch.)
Set the appointment for 9 a.m. It’s now 9:35 a.m.
If this guy ever shows up — and if he even hints at how down the home improvement business has been lately, I’m going to give him my little punctuality lecture. In times like these, little things like showing up on time, or even a few minutes early, count for a lot.
“We’ll have someone there tomorrow promptly sometime between nine and five.”
Slim,
Yesterday, you mentioned about Cheney being pushed out to the “Shadow Gov’t limo” The first thing that came to my mind was how much he looked just like the “slumlord” Mr. Potter in “It’s a wonderful life”
ps, I heard that he hurt his back lifting boxes…must have been those Halliburton records & No-Bid contracts that belong to him personally…since the VP isn’t part of the Federal Gov’t and if you don’t believe him, just walk over to the Shrub Supreme Court and they’ll confirm that legal point.
The first thing that came to my mind was how much he looked just like the “slumlord” Mr. Potter in “It’s a wonderful life”
Ah, I didn’t think of that one.
Dr. Strangelove came to mind right away (for more than a few people, I’ll bet).
But Dick certainly looked more like Mr. Potter yesterday.
If you think Dick Cheney really had to move his own stuff I have some TARP bailout money for you.
I found that a little strange myself. Dick Cheney is not only the gosh-darn outgoing VP of the U.S., he is a very wealthy man in his own right–he has to pack up and move his own boxes like some random guy getting a middle-management transfer from Indianapolis to Charlotte?
On the other, he’s had like what–4 heart bypasses? It’s pretty impressive that he was mobile up until now–he was just pheasant hunting with Scalia not that long ago.
“I heard that he hurt his back lifting boxes”
Per Jon Stewart he was trying to steal a safe.
Jon Stewart must be devastated to have seen the last of Cheney and the tragicomedy that was the Bush Administration.
Me again.
Just a minute past 10 a.m. and still no window guy. And I’ve had my e-mail and phone on since 8 a.m., so he can’t say that he tried to reach me by either of those means.
I also checked my printout of the e-mail he sent me to confirm our appointment. Says Wednesday 1/21 at 9 a.m.
Yeesh.
While we’re on the topic of communication, here’s another one for y’all: I had a sore throat and laryngitis last week. I had a dental appointment last Thursday, and, trust me, I wasn’t in any condition for such a thing.
So, I started e-mailing the office on Tuesday. I was trying to postpone the appointment.
My first two e-mails went unanswered. The third one I sent in response to the office’s appointment reminder e-mail. It said that I was overdue for my appointment. Well, not for lack of trying on my part.
Since the reminder e-mail was sent by a third party service, I couldn’t respond directly to it. So, I sent that aforementioned third e-mail to the dentist’s office. It bounced.
So, I printed out the bounced e-mail and snail-mailed it to the dentist’s office. I got a reply earlier this week — from yet another e-mail address. Seems that the practice administrator who handled the office e-mail had left the building. And it seemed that the office e-mail communications have been thrown into chaos.
Sotto voce: I’ve been ISO another dentist anyway. This dentist was very enthusiastically recommended by my boss when I was working at the bike shop. And I thought she was quite good.
Then she got the idea that it was time to go upscale. To focus on cosmetic dentistry. And she had the office remodeled, complete with custom artwork, but not a clue as to who the artists were.
I mean, there were these striking pieces on the wall, but where were the artist credits? I even asked about that once. It didn’t seem as if providing that sort of info was a priority. (Hey, I’m an artist. And when my work is displayed at your business, I want an artist credit next to it.)
After the remodel, her rates really went up. And I can’t help thinking that I’m paying a lot more money for interior decorating. Not that her office was a dump before — it looked just fine to me.
Last year, she sent out a special mid-year letter to her patients. Didn’t have to read between the lines to figure out that her business was down. (Could it be that people are deciding that their teeth don’t need to be any whiter than they already are? Or that capping the ole choppers isn’t as important as say, keeping the car tuned up?)
The letter mentioned that bugaboo, The Economy, but I don’t think that’s the root problem. I think that the root problem is that there are too many cosmetic dentists chasing too few affluent people. Same thing’s happening in plastic surgery and dermatology.
Slim –
Can’t believe you’re still waiting! I would think that you’d be able to name your price AND get people there on time. I’d recommend being explicit about punctuality with the next window crew (as though you hadn’t already figured that out!)
I started e-mailing the office on Tuesday Why didn’t you telephone the office? My gut instinct is that email is not as reliable as a phoned message (even if left on an answering machine) in dealing with professional offices.
I couldn’t telephone the office because I had laryngitis. Couldn’t talk.
This is one of the main reasons (along with all the more obvious ones listed on this site) that I’m uncomfortable with buying a house. Inevitably, there’s SOMETHING you can’t do yourself–and it seems like contractors and home construction people just don’t have the same sense of responsibility about showing up on time, completing things in a timely manner and with the leve of quality promised, etc., of even your average employee. If you can’t install your own furance or windows, what do you do? I think we’ll keep renting . . .
Nonsense!! There is nothing about a house that you can’t learn to do with a little research, either at the home store, library of the internet. Just look at the people doing the work- do you think they are Mensa members? I was able to do all my own work and save enough doing it to pay for the tools that I have to this day, and did a much better job because I didn’t cut corners on supplies and I cared about the outcome. Now, if like most people out there you just don’t want to do the work, then you probably are better off staying renting, or buy a condo and let the homeowners assn overcharge you for the repairs. I can’t wait to get another house and make it how I want it, but I won’t buy until I get what I want for a price I can truly afford.
Did they ever show up? Have you insisted on a ‘tardiness discount’ if they did?
Well let’s see..
Not a single bite on my resell. Maybe it’s time to speed things up:
http://prescott.craigslist.org/reo/1001281111.html
..and I’ll toss in my 60 inch flat screen as well.
Duh!
Ria, that would be a total bargain if it were over in california on a lake or lagoon. I’d bite!
Jan. 21 (Bloomberg) — Hedge-fund investors withdrew a record $152 billion in the fourth quarter as the industry posted its worst returns in almost two decades, according to Hedge Fund Research Inc.
Global assets dropped to $1.4 trillion at the end of the year, the same level as 2006 and $525 billion less than a peak of $1.93 trillion in June, the Chicago-based firm said in a statement today.
How many more in requests were denied as funds locked the doors?
Still have a looooong ways to go to get to the mid-90’s $200B level, or even to the 2000 $500B level.
O.K., biscuit & milk gravy breakfast is finished, first sip of Fonseca Vintage Porto ‘70 is being consumed:
“To Cheney-Shrub, thanks for helping to elect Obama” x3 cheers!
second sip…
To Rash Limpbaughs, …that idea to get republicans to vote for Hillary, genius! (it also planted the minds seeds in GOP choir members, “hey, you mean we can actually vote for someone other than what is written in New Twit’s contract with America?”) x3 cheers!
third sip…
To Sarah “The Barracuda”, …you gave new meaning to…Blingada, Bangada…Boom! x3 cheers!
Best “born without teeth & hair” anniversary start in 8 years!
Enough with the partisanship. It gets old.
Skip over the posts if you don’t like it.
It not partisan if its the fricken truth…
Godd One Hwy…:)
Apparently you missed my last memo to you.
This is the HBB. The DailyKOS is
<=====
that way.
Old Puerto Rican proverb: “talk to the hand, because the ear isn’t listening.”
Cowtown,
Skip over the posts if you don’t like it.
Hwy, we’re giving your guy a “honeymoon” period here. You need to save the anti-Bush vitriol for at least six to nine months, when nothing has improved and people begin questioning whether The One knows what he’s doing. THEN you can bring it out as a means of diverting everyone’s attention.
Hey Bill,
I was out in the great wilderness on Sunday and would have liked to have let the steam whistle blow then with that kind & thoughtful thread that Ben had provided, but since the “Official” end of the line for Cheney-Shrub RR Platform was on Tuesday and my “born without teeth & hairless” anniversary was today, I delayed trying to have “A Fourth Day”…two days in a row, …the drinks I’ve selected are some of my best, and I might have diluted the careful arrangement of things via numbed taste buds.
My #1 reason for voting for Obama was to find a quicker way to end the US Gov’t “Sha-Zam-Islam-is-now-Democracy” Doctrine going on in the Iraq war. The Republican Party is currently on a path of genetics distribution common in family propagation via incest…They have no connection anymore to A. Lincoln…IMHO
(Hwy now quietly sits back down on a tree stump… drink in hand, watching a Red Tail Hawk soar above, thinking of his spring garden & looking forward to this years Great Pumpkin patch gathering with Linus & Snoopy & the Woodstock family…wondering what if… Sir Greenisspent had only made interest rates go to 14+ % but remembering… it’s one thing to take away the punch bowl and quite another to get someone to clean up the festival grounds afterwards…)
No..This is the Bits….
Sounds like a fine start to your hairless anniversary …
Happy Birthday!
Best,
Leigh
P.S. Hwy,
Me hairless toothless day is in August baybee!
Meeeeeeeeeeeeeow.
Leigh
Happy birthday, Hwy!
Dumb predictions for 2009-2012:
1) “The stock market” will bottom out long before “the housing market.”
2) Real estate investors over this period will get to learn why “real estate is the worst possible investment,” as they get stucco catching falling knives.
I predict that Cheney will win the Nobel Peace Prize, W will be indoctrinated into MENSA, and Hank Paulson will join the Peace Corps after making a fortune cashing in his shares of ‘Hairclub for Men’.
I’m willing to bet my firstborn child, of course…
Dumb predictions for 2009-2012:
Major league sports stadiums will offer discounts for Premiere Party rooms to anyone who receives TRAP monies $$$$$$$$$$$$$$.
Ooooooh - I wanna play!
Holywawd will cut hundred of thousands of jobs.
Ooooooooh - big box little box.
Ooooooooooh - I like this the best; We will have a home.
Yaaaaaaaaaaaaay!
Silly Leigh
I don’t know Bear…The stock market collapse has scared the crap out of the twenty and thirty somethings not the mention the baby boomer’s 401k’s…
Dumb predictions for 2009-2012:
Gasoline tax will increase but disguised as a Carbon Tax
The builder shill people over at Ameridream are trying to resurrect DPA - down-payment “assistance”, as in buyers paying more and taxpayers risking more in order to assist over-leveraged builders.
Conveniently, their web site has a very easy form (click on “Call on Congress Today” button/graphic) that automates the process of sending your note to all your reps. Feel free to use it in order to send on your opinion.
I know that for the most part reps/senators are bought-and-paid-for, but since they’ve made it so easy to contact them it’s worth taking up their offer.
I’ve been yelled at a few times by Realtors recently on various sites about saying DPA needs to die and stay dead. They seem REALLY upset abotu this one. They simply can’t sell houses if the buyers actaully have to bring ANY money to the table, even a tiny 3.5%.
Stagnate or falling wages for J6P. Job insecurity through your entire life. Layoffs every decade. No more pensions. Savings account interests a joke.
Why are they upset about getting rid of DPA?
Well there goes the price-to-rent ratio:
By DANA MATTIOLI, WSJ
Now it’s a renter’s market, too.
As the housing downturn deepens, rental rates are falling in many major U.S. cities, including New York and Los Angeles, and tenants are finding they have greater leeway to renegotiate their leases.
Early in the housing crisis, former homeowners were starting to rent again, supporting demand for rentals. Now, with more newly constructed condos being converted into rental units, landlords are struggling to keep buildings occupied. Apartment rents nationwide fell 0.4% in the fourth quarter from the third quarter — the first drop since 2003, according to Reis Inc., a New York City-based real-estate research company. Apartment vacancies rose to 6.6% in the quarter from 5.7% a year earlier.
In some major cities, the declines have been far steeper. In Manhattan, rents fell on almost all kinds of apartments in 2008. Rents of studio apartments fell 7.4%, and rents of one-bedrooms and two-bedrooms in buildings without a doorman fell 5.5% and 5.6%, respectively, according to a report released Tuesday by the Real Estate Group of New York, a Manhattan-based brokerage firm. In Miami, 60% of rents decreased in the fourth quarter, and 45% of rents in Los Angeles declined. Rents did buck the trend in a few cities. During 2008, rents increased 2.3% in Pittsburgh and 4.2% in Houston.
That’s it, I am going to call Verizon and DishTV this week to get my discounts. I urge everyone to do the same and report back on success/no success stories.
By VISHESH KUMAR, WSJ
Frustrated with his hefty and mounting monthly bill for TV, Internet and phone service, Alan Weinkrantz of San Antonio decided to call his provider, AT&T, shortly before Christmas to ask for a discount.
“Times are tough, and I don’t think I can keep paying these rates,” Mr. Weinkrantz says he told an AT&T representative. A communications-industry consultant who keeps a close eye on the space, Mr. Weinkrantz says he hoped for a reduction of about 10% to his $159 monthly bill.
To his surprise, AT&T reduced his bill to $94 a month, a drop of almost 50%, for a one-year period. “I was very surprised,” Mr. Weinkrantz says. An AT&T spokesman declined to comment on the specific bill but said that “we work hard to give our customers the services they need at the best price.”
Mr. Weinkrantz is among a number of savvy customers who realize that while times are tough for consumers, they are also tough for cable and phone companies. Under intense pressure from Wall Street to keep subscribers as the economy sags and competition intensifies, many carriers are bent on retaining customers even if it means offering big price breaks.
“The key is to hang on to every possible customer right now,” says Alex Dudley, a spokesman for Time Warner Cable, the country’s second-largest cable operator by subscribers, after Comcast Corp. “They are our lifeblood.” Mr. Dudley says that Time Warner Cable is also more receptive to giving stretched customers a discount during these tough times.
Definately inflationary.
Not that I disagree, but it’s been pretty common practice for the cable, phone, and satellite companies for years now. If you call up and say you’re switching due to price they’ll move you into their best 1-year trial subscription price.
Oh Yeah, I worked for MCI ‘93-’98. We made 75% of the profit off the 25% of the customers that didn’t know what other plans were available.
Then there were the sercial switchers that would flip between us and AT&T about once a month, getting 50% off, 60% off, 70% off. Pretty soon, it is costing us money to carry their calls. Oh, but that plan is only for 6 months or 12 months… then they go full price and we make it back….
Oh, really? How will the plan EVER expire if they are signing up for a new one every month?
I was one of those customers.
I think I basically had free long distance exactly those years that you’re talking about.
They mailed out a $100, and you’d call their competitor and tell them you used 200 minutes a month, and soon they were courting you, and then you called their competitor.
Every three months. There were three of them.
Those were some good times.
Last summer, I caught Cox charging me for cable television. And why would that be a problem? Well, it would be because I don’t own a TV. Only need Cox for the high-speed Internet connection.
Slam.
We discontinued ALL of our services.
Good lawd, who needs 500 channels?
Offers for DSL unlimited for $20 - then the taxes. Fools.
Wait for it - those $100 packages, no customer service, no job to pay the bill - Another shoe dropping.
Andonandonandon.
She is ugly!
Leigh
Jan. 21 (Bloomberg) — Singapore said its economy may shrink an unprecedented 5 percent this year….
The economy declined an annualized 16.9 percent last quarter from the previous three months, after shrinking a revised 5.1 percent between July and September, the trade ministry said today. The contraction in the fourth quarter was worse than a Jan. 2 estimate of 12.5 percent.
The Southeast Asian economy has contracted for three straight quarters, sliding into recession along with Japan, Hong Kong and New Zealand….
They are doing the right thing for them. Letting things deflate.
They’re a tiny city-state barely the size of 1.5 New York’s. They know that there’s an Iceland in their future otherwise.
It seems to me that identifying these countries now (who are actually letting the deflation occur) could provide useful information on good places/currencies to store wealth in the not-to-distant future. Is that a fair statement?
Along similar lines, these could be good places to work (not considering tax rate issues) in the near-medium term.
Both are very fair statements.
Someone in SG government said about the slowdown recently, “There’s absolutely government can do or should do about it.”
I like them already.
I’ve actually visited there, and I think American oversensitivity about their “rigidity” is overstated. Awesome food too particularly the Nyonya stuff! Which reminds me that I should post more of that on my food blog. LOL
Oddly, their government revenues far exceed spending, and they have saved reserves many time GDP. Damnded capitalists.
I have some Singapore dollars, and probably will expand with more soon. I think it’s a good play.
These countries need better mathmaticians to “fuzzy logic” the data more-better. Perhaps with a few hedonic adjustments, substitutions, and what-not, they can slow their rate of decline to 1% or 2% a year as we have done.
Hedonic adjustments:
Fish heads = Blue Fin Tuna
Eat them up, yum……..
Mr. Mom.
Thanks for the chuckles,
Leigh
Cox Quits at SEC, Leaves Schapiro to Restore Clout After Madoff
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=axZVSX.3GB5o
This may have been posted already, sorry if its a double post. What a shocker, I thought he would stay to defend his actions. Lol!!!!!
Jan. 21 (Bloomberg) — American Airlines parent AMR Corp. and United Airlines parent UAL Corp. reported wider fourth- quarter losses and said they will cut more flights because of slowing demand for air travel. Both carriers’ shares plunged.
…
AMR’s net loss was $340 million, or $1.22 a share. The deficit was wider than analysts expected, and the shares tumbled the most in almost six years. UAL’s net loss was $1.3 billion, or $9.91 a share, after incorrectly betting that jet-fuel prices would rise. The company’s stock fell the most since Dec. 1.
Excess supply and falling demand….. Sounds inflationary to me.
LOL
Will the airlines go BK? Man, this is like déjà-vu all over again!
No. We’ll just print a few billion $, hand it over, then reregulate to ensure we get our money back….
One thing is becoming self-evident. Old companies with old workers, and higher employee wage, health-care and legacy costs, simply can not compete with a young company that has lower costs.
“One thing is becoming self-evident. Old companies with old workers, and higher employee wage, health-care and legacy costs, simply can not compete with a young company that has lower costs.”
yep
Will the airlines go bankrupt… again?
The airlines can’t make a profit when demand surges, they can’t make a profit when demand falls, they can’t make a profit when oil prices rise, and they can’t make a profit when oil prices fall.
I’ve come to the conclusion that someone, somewhere has decided that the public good is better served by having cheap airfares and the airline business in constant turmoil, instead of letting a couple of major players go down the crap tube, and giving the survivors some ability to make a profit off their service.
Add to that, the low barriers for someone getting into the airline business, and the race to the bottom is off!!
Hire a consultant to write an operating manual, sign a few leases on some airplane, hire some pilots on furlough from the majors, outsource your maintenance to Central America, and poof! You are the latest Freddie Laker/Fred Lorenzo.
Actually, if you study them, they dug their own hole.
They all concluded that ripping off commercial flyers and using that to subsidize the casual flyer was a great business model. And it was until it wasn’t.
Then along came the information equalizers (travelocity, orbitz, what-have-you) and all that went down the p00p-chute.
What is up with a 1-way ticket. Had an oppertunity to take a 16-day cruise for $400 a person. Problem was, it left South America and went to Italy. The one way tickets were about 2x the cost of a round-trip from those places. $500 round trip and $1000 one-way.
If it were $250 each way, MAYBE. But $1000 each way, no way!!!
Use the multi city option on sidestep. It prices much closer and in some cases better than the RT.
Ever since 1903, aviation in the USA has on balance been a money loser. Southwest Airlines has made money, there may be some others, but generally they mostly wind up going broke.
There’s a formal reason for this:
In capital-intensive industries with very high fixed-costs, competition ensures that you only get marginal cost of production rather than total cost of production.
Think railways or airlines or power.
You actually need some form of national collusion for the fixed cost (think: railway lines or power grids.)
If I can make a recommendation: This American Life’s “The Fix is In” is an awesome 1-hour audio documentary on price fixing:
“168: The Fix Is In
Yes, airline prices are always the same no matter which airline you call; in Presidential elections you always feel like you’re choosing between the lesser of two evils; and it doesn’t really make your hair any cleaner if do the “repeat” part of the instructions “shampoo, rinse, repeat.” …today’s show…is devoted to one story, in which we go inside the back rooms of one multinational corporation and hear the intricate workings—recorded on tape—of how they put the fix in.”
Don’t know how long it will take for the link to show up but here goes:
http://www.thislife.org/Radio_Episode.aspx?episode=168
Crude oil is now close to $42 barrel after trading near $32 yesterday. Speculation City.
February contract expired, and this is the March. Contagion… Further out months are trading much higher than current month in anticipation that future production cuts will move up spot market prices.
Also have heard that with all the tankage full, the future price reflects very expensive storage premiums. They will certainly cut production when there isn’t a thimble left to put the goo in.
I’ll bet there are some jobs for welders out there right now.
“Also have heard that with all the tankage full, the future price reflects very expensive storage premiums.”
Is this a joke? Seriously. That’s the weakest argument I’ve ever heard. Crude up 37% from it’s lows of yesterdays trading session. I smell serious spec.
March delivey is NOT up 37% from yesterday. Yesterday they were trading the February deliveries as “current month”. Those are now done open market trading, so were taken off the board.
Today is the first day that March deliveries are “current month”. Yesterday, March deliveries were trading at $41, so we were oly up 8%.
Comparing yesterday’s “current month” to today’s “current month” is comparing apples to oranges.
I used to joke that this should be easy to fix. Since median income has not kept up with inflation, and the lower 80% of wage earners have been living on debt, all they need to do is:
Make it possible for people to spend 110% of their income, forever, without actually paying on or for any of the debt.
Joke or not, listening to the PTB… Bair, Geithner, Paulson when he was still in charge, Bernanke, etc… All we have to do is get debt flowing again.
Do these people not understand that there is too much debt and too little income to support that debt?
Do they not understand that people actually need real jobs with real wages, not just a leaky sieve (SIV?) of an economy where we do nothing but sell each other cheap Asian good that we don’t need, for money we don’t have, adding debt we can’t pay on or for?
The debt to income ratio of the medain American household is WHACKED!!!! And all they can think to do is add more?
In case you can’t tell, I’m moving from anger to dispair… I’ll be back to depression within an hour or so.
To present a real solution is to acknowledge that American style capitalism is a failure and that the citizens have rights independent of what the oligarchy deems appropriate.
That just will not do!
I will agree with you, on that count Darrell. We need actual productive wages to prop up the economy. The problem is that Government has never been a source for what you describe. Those jobs come from a well-functioning market economy, with Government simply acting as a referee.
Look at the 30s, and you will see that Government was able to create jobs, but they never succeeded in ‘reinflating the economy’. That reinflation came only after WWII forced production to shift from infrastructure to real value-added production (albeit for war-related industries).
I honestly think their intention is not to “inflate the economy” but to provide a buffer on the way down.
Having millions of people suddenly unemployed…foreclosed on, deep in debt and with no savings…it’s ugly.
They are trying to minimize the social chaos that can result from a deflationary debt implosion, IMHO.
Oh dahling,
It IS frustrating.
(I wish Oly would post).
See, you’re angry with the leaders, Ahem, thiefs.
Now whatcha going to to with that anger?
Oly would say, “Kill em”, and now there’s a thought.
Me? I’d say write them, and that’s what I do.
So there ya have it.
Vent!
But Leigh says (I love ya Oly) just don’t kill anyone!
Although, er - No kharma chips for killin.
Rats butt.
Leigh
Actually, good point. For the next few years, just make the income tax percentages negative.
Imagine the “entrepreneurship” miracle that would spark.
Sure it would cost the government a lot of newly printed dollars. (I suspect less than the other plans, though!)
Sure, the rich would get even richer (let’s just move on - this is a plan for the real world: where the rich always get richer.)
The only people who don’t win are those that refuse to work. Who knows, they might even give it a try and might even get used to it.
Of course, like all negative feedback schemes, some would game the system. Free raises for all, and deflation for none!
It’s all good, baby!
http://finance.yahoo.com/news/Nations-Banks-Are-cnbc-14116000.html
I watched the interview, and right after she talked about how they have all these distressed assets, how IndyMac assets went for $.37 on the $ par, how they need to unload all this stuff… Then she says they are will capitalized.
I’d love to ask, if they are so well capitalized, then why do they need to offload the bad debt? Why not just mark it down to current market and be done?
Oh, you mean they aren’t THAT well capitalized. Well, then they are not capitalized AT ALL!
My translation: “Well-capitalized enough that everyone should definitely NOT panic; under-capitalized enough that we should be afraid of the consequences of withholding a continuing stream of bailouts.”
My take: Short the cr@p out of the mo-fo’s after Obamatopia™ takes place.
I can hardly wait … drool … drool
NEW YORK (AP) — A key gauge of homebuilders’ confidence sank to a new low this month, as the deepening U.S. recession and rising unemployment erode chances for a housing turnaround.
The National Association of Home Builders/Wells Fargo housing market index released Wednesday dropped one point to a record 8 in January. The index was at 9 for the previous two months.
Index readings higher than 50 indicate positive sentiment about the market. But the index has drifted below 50 since May 2006 and has been below 20 since April. The slide in builders’ confidence accelerated in the wake of the U.S. financial crisis, slipping three points in October and then five points in November.
“Clearly, conditions in the nation’s housing market aren’t getting any better,” NAHB Chairman Sandy Dunn said in a statement, “and they aren’t going to get any better until the federal government takes substantial action to encourage qualified buyers to get back in the market.”
Homebuilders are pushing Congress for a 10 percent tax credit of up to $22,000 for homebuyers that purchase a home over the next year. They are also asking for a temporary interest-rate reduction on 30-year mortgages.
I predict the HMI will bottom out this year. Home builders are an inherently optimistic group, and there is not much space between 8 and 0.
Ha! The space between 8 and 0 is currently 100%.
Wouldn’t you think the bottom for these guys would be some time after we start the next building surge?
It will never get to 0. Builders are too optimistic for that, at least the ones willing to stay in business during the present episode, which would appear to be a necessary condition for inclusion in the survey sample.
Something tells me tomorrow’s 8:30am housing starts data will explain today’s homebuilder’s sentiment data.
shorts are lining up in GE…earnings Friday. Mr Market says another big miss coming.
I leave for a few hours, come back and Sheila Bair says banks are well capitalized……did I miss something?? (besides a 200 point rally of course)
Did anybody else hit double digits in December???
http://www.freep.com/article/20090121/NEWS06/90121089/Michigan+s+unemployment+rate+hits+double+digits
Nope, but we are at 9% with a forecast of 14% next year here in S.Carolina. So it will most likely be north of 15% by years end here.
I’ve seen that SC hasn’t been that far behind and frankly found it quite surprising. Maybe because it’s a destination, or something else???
Wmbz:
I lived in Charleston and Columbia….so whats with the high unemployment?
I had a much easier time getting jobs there then in NYC……but that was before Hugo.
We’re still lying and saying like 6%. I think the illegals totally trash our data.
Just like they’ve trashed the wilderness areas on our side of the border.
Jan. 21 (Bloomberg) — San Francisco Bay Area home prices fell 44 percent last month from a year earlier as foreclosures accounted for a record half of all deals on existing properties, MDA DataQuick said.
The median price declined to $330,000 from $587,500, the San Diego-based real estate research company said today in a statement. Sales jumped 36 percent from a year earlier.
“Half of the resales were foreclosures,” MDA DataQuick analyst Andrew LePage said in an interview. “That says nothing about the number of sales sold under the threat of foreclosure, or some sort of distressed situation.”
The median price dropped in all nine Bay Area counties, with the biggest decline in Contra Costa County. The median there declined by half, to $252,500. The median in Solano fell 42 percent to $213,500, MDA DataQuick said.
So Ya say the those mideast oil guys got all your money, Bunky, is that what’s troubling Ya?:
Arabs investors lost $2.5 trillion from credit crunch
Kuwait FM: 60% of development projects postponed or cancelled by GCC states due to global meltdown.
KUWAIT CITY - Arab investors have lost 2.5 trillion dollars from the credit crunch, Kuwaiti Foreign Minister Sheikh Mohammad al-Sabah, whose country hosts an Arab economic summit next week, said on Friday.
“The Arab world has lost 2.5 trillion dollars in the past four months” as a result of the global financial crisis, Sheikh Mohammad told a press conference following a joint meeting of Arab foreign and finance ministers in Kuwait.
He also said that about 60 percent of development projects “have either been postponed or cancelled” by the six-nation Gulf Cooperation Council (GCC) states because of the global meltdown.
Arab leaders who hold their first ever economic summit on January 19-20 will discuss the impact of the worldwide economic meltdown on the 22 Arab countries.
The biggest loss was an estimated 40 percent drop in the value of Arab investments abroad, which previously totalled around 2.5 trillion dollars.
Falls on stock markets contributed more than 600 billion dollars to the losses, while Arab investors were further affected by a sharp decline in oil revenues, the declining value of property investments and other repercussions of the global downturn.
Next week’s summit will also discuss the Gaza war but leaders are still intent on agreeing a joint response to the financial crisis.
We all know what happened the last time a bunch of sheikhs and princes were swindled by our good ol’ boyz.
And the hits just keep on a coming:
SANTA CLARA, Calif. (AP) — Intel says it is consolidating its global manufacturing operations as a part of a restructuring bid which will affect up to 6,000 jobs.
The world’s largest chip maker said Wednesday it is closing two assembly test facilities in Penang, Malaysia and one in Cavite, Philippines and will halt production at a plant in Hillsboro, Ore. It will also end wafer production at a facility in Santa Clara, Calif.
Intel currently employs 84,000. The company says not all employees will leave Intel, as some may be offered posts at other facilities.
A rough estimate of layoffs announced this month (though not executed) is around 100k.
It’s almost 20k just in my city alone.
The most ludicrous response to my CL post, “Housing Wanted”. Since he yells, “DON’T WORRY” I had better not…
*****************************************
“Hello, I saw your posting on Craigslist. I have purchase loans
right now that will get you a house in your payment range and location
with no money down! We will structure your purchase with no out of pocket closing costs at all… Credit scores can be very low as long as your credit reflects the ability to pay your bills on time. If you are at all interested in buying a home, now is the time as prices are lower than they were over 6 years ago.
Don’t rent anymore, give me a call or email me soon before these programs are gone for good and we can discuss some of your financing options. Here are some basic guidelines of these amazing loans to answer some of your questions:
* Down payments can be gifted
* Cosigners can be used
* Verified income with at least 24 months in current line of work
* No bankruptcies within the last 24 months
* No foreclosures within the last 36 months
* Very minimal or no lates within the last 12 months on any credit
reported item (medical collections are okay)
* Must live in the home being purchased
P.S. We also specialize in loan modification so if you own a home already but are in trouble on the payment or loan balance !!!DON’T WORRY!!! We guarantee successful modification or you get your money back minus a very small admin fee of $199! Here are some of the things our Real Estate attorneys can help you do no matter how bad your credit is:
* Stop foreclosure
* Delete second mortgages with same lender
* Change adjustable loan to a fixed rate loan
* Lower overall payoff amount
* Lower monthly payment
* Differ any late payments”
And the beat goes on…
Here you go, Palmy, another Tampa gem:
Self-employed construction worker arrested for operating a grow house in an abandoned military bunker.
tampabay.com/video/?v=8710162001&p=1886195484&n=1
So Californicators (including PB), I am planning to come to CA (Bay Area + SF + SD) on vacation for 3 weeks in March-ish.
And I’m planning to come to San Diego (which I have never been to.)
All of this is fluid and subject to change but still …
FXE Jan ‘10 105 puts 1.20
Am I early to the euro trashing party?
Rubios fish tacos in Pacific Beach…..mmmm 1990 was sooo long ago for…
After a few years of the fish taco, I went for the fish burrito and was never the same.
I’m in LA and would be down for a local hbb get-together. Up to you guys.
I don’t think that I could do San Diego, though.
OK, keep us posted and maybe we can organize a gathering of San Diego HBBs when you are in town.
Jan. 22 (Bloomberg) — Japan’s exports plunged by a record in December … driving the economy deeper into recession.
Exports plummeted 35 percent from a year earlier, the sharpest decline since 1980…. The December drop eclipsed a record 26.7 percent decline set the previous month….
Shipments to the U.S., China and Europe plunged the most ever, as the global recession dried up demand for Japanese cars and electronics. Toyota Motor Corp., Sony Corp. and Honda Motor Co. are shedding thousands of workers and closing production lines as profits and sales dwindle.
LOL @ hozzie.
I like JPY but I wouldn’t put a penny in their stock market.
They are gonna get pounded in GD2. Mercantilist-scum always get pounded - we have data from forever for this.
Back from a day of fun and leisure.
Got TIPs?
Come on Faster the markets never reflects reality, the market dropped 50% because orders were canceled. The market goes up in anticipation of the multiple stimulus packages being thrown at Japan by the US and China.
All markets will do what they can do to hurt the greatest amount of players.
GD2 nope, Inflation, fer sure, hyper inflation 32% chance.
“…Treasuries fell for a third day as traders added to bets inflation will quicken after President Barack Obama called on Americans to rebuild the economy.
The difference between rates on 10-year notes and Treasury Inflation Protected Securities, which reflects traders’ expectations for the rate of consumer price increases, widened to 65 basis points, near a two-month high. Graham Fisher & Co., a research company, recommended TIPS and said efforts to spur growth will focus traders’ attention on the risk that prices for goods and services will quicken….”
Bloomberg
I would rather have my positions than be on the other side. In a month even my positions will be obvious to you.
I remember when you laughed about my short Euro/long Yen position. I am still laughing about it.
Interestingly the US futures are slightly up. Nikkei is flat - which would make sense since otherwise they would be way up after today’s big up day in the U.S. (normally Japan’s market follows ours). However logically U.S. futures would be way down then for tomorrow, but aren’t.
Those are stunning numbers. Just a year or two ago, would anyone even have believed declines of such magnitude could occur so abruptly?
The commodities spike, together with sea-sawing currencies, worsened the fallout.
Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.
The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery programme to help close the deal.
FT
got a link perhaps?
Hope it doesn’t get filtered out.
http://www.ft.com/cms/s/0/378a38d4-e814-11dd-b2a5-0000779fd2ac.html
Trouble in paradise?
3 news agencies refuse to distribute Obama photoJanuary 21, 2009 10:17 PM ET
All Associated Press newsNEW YORK (AP) - Three news agencies refused to distribute White House-provided photos of President Barack Obama in the Oval Office on Wednesday, arguing that access should have been provided to news photographers.
The Associated Press, Reuters and Agence France Presse said the White House was breaking with longstanding tradition in not allowing news photographers to capture the president at work in the Oval Office on his first day.
“We are not distributing what are, in effect, visual press releases,” said Michael Oreskes, managing editor for U.S. news at the AP
Nah, just whiners. There will always be others that would me more than happy to take their place.
“Take the money and run” bonus compensation plan:
Merrill delivered bonuses before BofA deal
By Greg Farrell and Julie MacIntosh in New York
Published: January 21 2009 23:52 | Last updated: January 21 2009 23:52
Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.
The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery programme to help close the deal.