Bits Bucket For February 3, 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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Nah, Those were just fantasy trillions anyway.
U.S. Property Owners Lost $3.3 Trillion in Home Value Last Year…
Feb. 3 (Bloomberg) — The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth as the economy went into recession, Zillow.com said.
The median estimated home price declined 11.6 percent in 2008 to $192,119 and homeowners lost $1.4 trillion in value in the fourth quarter alone, the Seattle-based real estate data service said in a report today.
“It’s like a runaway train gaining momentum,” Stan Humphries, Zillow’s vice president of data and analytics, said in an interview. “It’s difficult to say when we’ll see a bottom to the housing market.”
The U.S. economy shrank the most in the fourth quarter since 1982, contracting at a 3.8 percent annual pace, the Commerce Department said on Jan. 30. Record foreclosures have pushed down prices as unemployment rose. More than 2.3 million properties got a default or auction notice or were seized by lenders last year, according to RealtyTrac Inc., a seller of data on defaults.
About $6.1 trillion of value has been lost since the housing market peaked in the second quarter of 2006 and last year’s decline was almost triple the $1.3 trillion lost in 2007, Zillow said.
Values have dropped for eight straight quarters. They fell in Manhattan for the first time since Zillow began including the New York City borough in its records two years ago.
…Zillow’s vice president of data and analytics, said in an interview. “It’s difficult to say when we’ll see a bottom to the housing market.”
Yup.. difficult to say. But I can tell ya one thing.. whenever the bottom does hit, it’ll take at least 6 more months before “Zestimates” catch up.
Given that home equity increased about $17 Trillion during the bubble, a $3.3 Trillion decline isn’t hardly jack squat.
$17 Trillion = 136% increase in value (per Case/Shiller indices) from 1996 -> 2006, times 130M homes. Average home price in 1996 was roughly 100k, in 2006 about 236k.
We’ve got a ways to down still.
I almost worked that out earlier.. had the “130M” homes… but the calculator choked on the trillions.
Rather than grab a pencil i figured we’re talking phantom equity losses so why even bother.
“Given that home equity increased about $17 Trillion during the bubble, a $3.3 Trillion decline isn’t hardly jack squat.”
The entire housing market at its peak was about 20T, the current US housing market is around 16T. Home equity never increased by 17T.
110 million housesholds; assume 100K per house; doubled in the last five years = $22T.
We can quibble about the details but the order of magnitude is correct. There’s even a paper by Greenspan and somebody on the subject!
You OK there, ol’ man? Havin’ trouble like Geithy-boy with basic ‘rithmetic?
Faster check the math dude.
You trust Zillow’s figures? LOL - their figures are unreliable.
My figures are closer.
Don’t worry, you’ll have another “Bair moment” in a year’s time.
Total housing market gain 13T since bubble began. Only 3T losses so far.
Stock Market losses in 2003 were calculated at 17T from the 2000 dot come bubble. US Stock market losses from last year’s crash were 7T. Alot of that 7T were further beating down of the 2000 -2003 losses. Because of that, it’s hard to predict what the stock market will do going forward. Housing, though, a bit easier to predict. Lot’s more downside I think.
“They fell in Manhattan for the first time since Zillow began including the New York City borough in its records two years ago.”
Can you imagine all the Bodega talk these days?
Yeah, but dat zillow ain’t takin’ in da fact dat we gots our place right here, where they’ gowing to build da 2nd ave stop. Those numbizz are gahbige.
There HAVE to be some amazing explanations flying around for the decrease in property values.
Muggy–
About your application for “dialogue specialist” at our NYC NBC offices:
Keep your day job.
-Al Roker
People don’t *talk* to each other in bodegas. They stop off quickly to pick up something that they could have gotten for 3 times the price in Zabars, but forgot. If they see someone they know, they pretend to be lost.
Talking is for the Union Square farmer’s market or maybe Fairway.
True story. I stopped off at a bodega when I was at my first law firm job to pick up a plant for my secretary for our first admin assistant’s day. She was as dumb as a post and didn’t do much for me (especially since I had to walk past the office of one of my department’s most active partners to get to her desk - risk getting called in for another new assignment just to get some copying done? no, thanks), but I was new and thought I should do it. I got an exceptionally smelly fuschia hyacinth plant with gaudy foil paper wrapped around the pot. I hated it, but I thought she would like it, and, hey, I didn’t sit near her so I wouldn’t have to smell it. She was delighted when I gave it to her. Mission accomplished.
Early that afternoon, one of the more experienced associates who sat very close to my secretary and was not in my department but was definitely a friend asked to speak to me. He told me that I had really gone overboard with the gift and should be careful as “showing up” the other associates, especially those senior to me, could cause problems. I looked at him stunned and said how could I possibly be showing up anyone with a $10 plant from the bodega near the Clark Street subway station. He applologised profusely. Seems that all the other associates had assumed I’d plunked down upwards of $50 to $100 bucks on some fancy flower shop. Never occured to them to get flowers at a bodega - guess they had never shopped in one. More fool them. The fruit and veggies were usually much fresher than at D’ag’s and way cheaper, too. This was before high end groceries hit Brooklyn Heights, though I’m sure it is there now.
I still miss New York, but I don’t miss the money based posturing down on Wall Street, and it was a lot less intense back then than it is now, I’d bet.
Isn’t it obvious that you can only see the bottom from behind?
I would hope so, although I that we should all strive to tell others that once the bottom does hit, we’re not going to see values go up 30% the following year. They might go up 3%. They more likely will go up 0%.
There’s still a ton of people that believe if they can just hold on long enough, their house will return to its previous value and everything will be wine and roses again. I feel it’s my duty to tell these people that the bottom, when it comes, won’t mark the beginning of massive appreciation. It will just mark the end of the declines. We won’t be back to the prices of 06 for 20 years, it’s important that the bubble-heads realize that.
I rather think that most will continue with the naive extrapolation theme regardless. By the time we are done falling down the flight of stairs, the majority will be totally convinced that there never will be a bottom.
I had a great uncle Ed Fink up in Buffalo half a century ago. Any relation?
Perhaps, that was my grandfather’s name (Ed), although he spent most of his life in NYC and upstate NJ. Almost without question there’s some relation if you go back far enough!
And I totally agree, once the sheeple start telling ME that we’re nowhere near the bottom, that’s a good sign that the bottom has already hit.
We are all Buffaloans now.
Was he married for a time to one Peggy Macdonald?
Wasn’t everybody?
(sorry!)
LOL. Few survived.
HAhahahahaah! Hahahahaahaha! Funny!
“There’s still a ton of people that believe if they can just hold on long enough, their house will return to its previous value and everything will be wine and roses again.”
This belief should be reinforced. Homebuyers with this belief will struggle to keep up with the payments, which is a very good thing for the banks and thus for we the taxpayers.
YUP. Alot of what I call “magical thinking,” out there. People don’t realize that when the market “recovers” it will be because house prices have fallen enough to be affordable with a sane mortgage. After vacationing in crazytown, the remaining lenders won’t be returning anytime soon. The ONLY question is inflation. If we get a wage/price spiral, wages will rise. Of course interest rates on mortgages would skyrocket even higher. But this process would be likely to take much longer than these FBs are planning on.
“There’s still a ton of people that believe if they can just hold on long enough, their house will return to its previous value and everything will be wine and roses again.”
I know I have a friend, his parents were always fixing up the house. last year he told me that the “house” was his moms retirement. They think they can sell in five years.
I wonder when they will figure out…it aint coming back
They will be able to sell it in 5 years. As long as they set the price low enough. What they won’t be able to do is get a huge retirement nest egg out of it. At some point, people will start to distinguish between “not being able to sell” and “not being able to sell for the price I want to get.” That will be one of the mental turning points, though I’m not sure everyone will get there at all.
Fixing it up Now? to sell in 5 years?
Whaaaa?
I tried to tell my family and friends also, but got so sick of arguing with them that I decided to use their ignorance to my advantage. The longer they think their houses are worth more than they are, the cheaper for us at the bottom! Th kress cycle won’t bottom until 2014+/- and with the size of the credit bubble, you’ll be able to have your pick of houses. And with money problems in local governments, etc you will be able to own a house for free in some areas and not just in the slums. Just sign on the line and promise to pay your taxes!
Not if interest rates get ridiculous, mortgage bailouts are the norm, and the number of undamaged and cheaply rehab-able houses decreases. That could delay the needed housing correction even longer than 4-5 years.
In Japan, thanks to poor gov’t policy and the size of their bubble, it took 20 years. (shudder)
The fact that so many are STILL trying to time a housing bottom is all the proof anyone should need that the speculative fervor that fueled the boom has only retreated - and not been flushed out.
Yes, but I’ve argued that at least now the specuvestors REALIZE that they’re speculating. It is obvious even to the Casey Serin’s of the world that housing prices do NOT “always go up.” Right now we’re in the gap between how people feel about making money and losing money. Sellers (and banks) are more reluctant to sell and realize past losses than buyers are reluctant to risk future losses.
IMHO we haven’t hit bottom because there are too many knife catchers, but because not enough people are throwing knives.
Well… People are more reluctant to sell something if they’ve already lost money on it, when rationaly the decision to sell today should be based upon one’s estimate of future returns. You can’t change the past. IMHO THIS is why we’re not hitting bottom yet. Potential seller’s (including banks in the case of REOs and short sales) are more reluctant to realize losses even in the face of continued losses than buyers are willing to speculate.
At this point in the game, potential speculative purchasers should KNOW that they’re speculating. The “real estate only goes up” meme no longer gets much traction. At some level, all RE purchases are attempts to secure future housing at current prices. So the decision always depends upon one’s estimates of the future value of the housing (owner equivalent rent) and the future price of purchase (either because you want to sell in the future, or delay buying today).
The “real estate only goes up” meme no longer gets much traction.
I don’t agree, I think the agents have applied a thin veneer of token reality to their sales pitch - and many buyers have done likewise to their expectations.
They have just changed it to “in the long run, real estate always goes up.”
In the long run we are all dead, too, so I find this an odd strategy when you are trying to sell as asset as a good investment.
Oops, sorry for the double post. I thought that the first one was eaten by the blogweasels.
The three stages of an “infestment”:
[1] It’s a GREAT investment.
[2] It’s a GREAT investment in the long-term.
[3] Somebody, anybody, please give me a bid.
Isn’t it obvious that you can only see the bottom from behind?
That sounded … wrong.
pervert economics.
Good one, Blue Skye!
“…as the economy went into recession…”
This is the money statement, and it’s what makes this episode differ from other U.S. recessions and Japan. Household balance sheets were atrocious before the jobs started to disappear.
There is one more great advantage that Japan had. For the most part, companies there see themselves as part of the social safety net. So you had companies keeping people on the payroll when they really didn’t need them to do any work. I forgot the Japanese term, but something about the person being reassigned to a seat near a window as I recall.
Basically an understanding among the companies, the citizenry, and the government. Social contract. It’s basically a socialist country, but hey, what have we become, if not socialist?
I was in Tokyo from March 1990 to June 2000 and the recession was more long than it was bad.
At least as important as the Japanese savings accounts is the attitude of the companies there toward firing people.
I believe they’re called “Window Watchers”. They’ve already lived out their useful term at the company but are kept on anyway.
hmm, found out from a friend they have one at FDOT.
not sure why they don’t fire… maybe they will in two years when they’re really pinched. however, incompetants often sue in this state when fired. this guy did nothing criminal, he just sucks. he’s given assignments with no clear objective to keep him busy and out of everyone’s hair.
“Household balance sheets were atrocious before the jobs started to disappear.”
But household basements and garages and walk-in closets were just full of stuff!
ZIllow ignores post-foreclosure sales, and ones not on their “expected” slope.
It was tracking my house pretty well until last fall. Since then, there have been half-a-dozen sales it ignores and NONE it consideres real transactions.
They claim my house is still worth $180K, but house behind me went for $130K and one down the street went for $118K.
Prices have fallen much more than Zillow reports, and way more than 1/3rd are upside-down.
U.S. auto sales, which typically account for about 20 percent of all retail sales, dropped by 18 percent in 2008 to a 16-year low of 13.2 million units.
The median forecast of 36 economists surveyed for Reuters is for an annualized sales rate of 10.2 million cars and light trucks for the month.
Analysts and auto executives said sales of new cars and trucks to U.S. car rental agencies took a major hit in January, reflecting the growing pressure on those companies to cut costs by keeping vehicles in their fleets longer.
CHEAP DEALS, FEW TAKERS
Chrysler Financial, the financing arm of Chrysler, rolled out zero-percent loans on a wide range of vehicles in late January after receiving a $1.5-billion loan from the U.S. Treasury.
Those incentives, combined with cash rebates and employee-level pricing, were intended to help the struggling automaker clear inventory equal to 115-days worth of sales at the start of January.
http://www.reuters.com/article/topNews/idUSTRE5116BK20090203
Also check out the story on expected drop in retail sales–2.5% YoY Jan, 10.6% in Dept stores–they are toast!
How loudly does Mr. Market have to shout in Mr. Mopar’s ear?
Well, my back of the envelope estimate of diminished housing value required to restore affordability (ie. no overshoot) was $5 billion, with $2 billion in realized mortgage losses.
So we’re getting there. The problem is, some of that diminished real housing value might have been expected to be inflation, but apparently not this year. That will make it hurt more.
I think you mean t, not b.
I think your numbers are about half the reality. They ignore the feedback those drops will cause in job losses and incomes.
Right, t not b.
It’s true that I wasn’t looking at feedback loops when I thought this was just a housing bubble. I didn’t expect that the deflation of the housing bubble would cause the financial system to collapse.
The paper value of houses was about $15 trillion at the inflated peak. The question is, what is the low value?
“The paper value of houses was about $15 trillion at the inflated peak. The question is, what is the low value?”
Pre-bubble, total residnetial real estat value was $10 trillion. At the peak, it was $21T. I think we’re off like 20% nationally. So call it $17T.
Personally, I think we’re going sub-$10T. It seems to me that EVERY market in the country is overbuilt, while at the same time under-supplied with qualified buyers.
Add in the demographics of many WWII/Baby-Boomers being wiped out and forced to move in with their kids…
We are oooooohhhhhhh so overbuilt!
WT -
Do you really think it was the housing bubble that caused financial system to fall? Don’t you think the ponzi schemes would have eventually impolded regardless?
“Don’t you think the ponzi schemes would have eventually impolded regardless?”
Thats an excellent point. The housing bubble ‘pop’ was just the trigger. A pebble falling out of place that started the whole landslide. Read this if you want a big picture view of the whole awefullness of it read this.
http://www.truthout.org/013009T
Be prepared to get REALLY pissed off.
I wonder why we don’t see this in the MSM? (rhetorical question)
Besides, we all KNOW it was them damn po’ folks that caused this mess! Not the fraudulent loans, fraudulent appraisals, fraudulent CDOs, fraudulent ratings of those CDOs, over hyped mantra of house flipping and artificial inflation by the fraudulent appraisals, and unregulated and unenforced financial “investments.”
Naw, it was the damn po’ folks!
For the moment Wayne County foreclosures don’t stop, but foreclosure sales do:
http://www.detnews.com/apps/pbcs.dll/article?AID=/20090203/METRO01/902030351
“There’s no way that anybody can predict what’s going to happen with the TARP monies. It’s a noble act, but I think he’s overstepping his bounds,” said Tom Korte, a Dearborn Realtor. “It’s not his job to determine a course of action that’s yet to be determined.”
It’s not a noble act IMO, it’s a waste of time. I wonder when and if some reaturds are going to grasp the fact that these “moratoriums” are really nothing more than a temporary road block, and that it is in fact bad for their business.
There may be some folks in the RE game that get it, I just haven’t read about it.
It is amazing that he missed the whole Blagojevich story. Guess he was holding foreclosure sales.
Looks like that Detroit Sheriff wants to become the new mayor in town
If that guy wins the race for mayor, there will be no more lending in Detroit, at least not at reasonable rates.
People still live in Detroit?
Plummeting tax assessments, yes…..plummeting property taxes, maybe not so much.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20090203/METRO/902030355
Some good snippets in that article, Blano. So, the higher end really is taking the bigger hit? Hmmmm
Remember when the stories of lowered assessments started coming out of CA? The REIC and FBs spun in “silver lining” stories it as if lowered taxes would compensate for lowered prices.
Anyone who believed that fantasy then, or still believes it now, is cracked. Look at CA today. Even this article points out - tax revenues are down big time in MI - who the hell is going to cut the levy now?
Think of some of these states/cities/townships as big condo complexes - fewer paying owners will have to pay rising bills. Something’s gotta give.
Think of some of these states/cities/townships as big condo complexes - fewer paying owners will have to pay rising bills. Something’s gotta give.
Think of our own state or our own city as a grim model — tax revenues of all sorts have dropped precipitously (What’d we lose just in real estate transfer taxes last year in Cook County, $40 or $50 million, if I recall?), and local/regional governments are desperate to bring in revenue somehow.
Selling off money-making assets? Check.
Cutting back services left and right? Check.
Hiking sales, sin, and consumption taxes? Check.
Nickel-and-diming the citizenry on forms, fees, and violations? Check.
The scary part is that when justifying all those tear downs and new condos, they budgeted spending off of the projected revenues. Of course we all know that developers aren’t the sort of people to inflate such projections, are they?
One of the issues here is that a lot of folks’ taxes won’t go down even if the assessment does.
There’s an “assessed value” and a “taxable value.” Assessed is often much higher than taxable. If I read the law properly, as long as that gap is there, taxable value (and therefore taxes) can stay the same or worse yet, continue to go up until such time as assessed value drops enough to equal taxable value.
States as condo complexes….good analogy.
Housing Market: NUDE Awakening
Each year, millions of Americans bring the world of “Adult entertainment” into their homes. Now — a rapidly growing number are bringing their homes into the world of adult entertainment.
Here’s the gist: According to a January 16, 2009 Bloomberg story, California property holders hit hard by the real estate slump have found a new way to earn extra income and stave off foreclosure: Residential Filming, or leasing one’s house to production companies for the use of shooting commercials, big-budget pictures, and yes, low-budget porn.
Bloomberg observes: From Hollywood mansions to “small houses” in the valley, the (alleged) $5,000/day rent paid by the porn industry is too good for “recession-pinched” residents to refuse. As one participant reveals: “A few months ago, I probably would’ve said, ‘you want to do what in here? That’s reserved for me and the missus.’ ”
http://www.elliottwave.com/freeupdates/archives/2009/02/02/Housing-Market-NUDE-Awakening.aspx
“Wow.. we sure scored on this deal. One night away from home for $5,000. Nice hotel you picked, btw. I wouldn’t mind staying here for a few days.”
“Hey honey.. you did take all our family pix off the walls, mantle and the bedroom nightstands, right?”
“I thought you were going to do that.”
Desperate people do desperate things, and these are turning into very desperate times.
Folks who invite this element into their home have got to be desperate lunatics. Might as well put a big neon target on your front door, back door, and family. Welcome to Horrorshow 2009.
I saw one of the earliest instances of this trend in our immediate neighborhood circa 2006, when a real estate flipper changed careers to become a pornographer. His girlfriend was one of his leading actresses (cringe)…
We rented out our home to Papa john’s pizza!
Oh wait, in the 80’s my mom rented our house out to some producer who turned our place into the stomping ground for heidi fleiss and friends! That was messy. They put locks on all the bedroom doors from the inside.
“His girlfriend was one of his leading actresses (cringe)…”
Just a few more movies, Honey, and we’ll be back on top.
I’d love to have been a fly on the wall, when he started that conversation……..
“Honey, my flipper career is not turning out the way i expected…….but just wait until you hear about my new idea……”
Maybe it’s too early for me to have awoken from my desperate lunacy, but I’m not sure how bringing these folks to an empty home for use as a studio (something done since pr0n was invented) invites the decline of western civilization? They make and spend a lot of money.
Being told by financial advisers about how stupid it was not to buy houses and stocks or voting for politicians that told you that you should send your child to look for Iraqi WMDs was far more dangerous to society, IMO.
While there is a risk associated with any strangers coming to your home, is it more likely that a wealthy visiting pr0n actor or highly educated sound engineer would likely rip you off, but a hungry or drug addicted plumber or drywaller wouldn’t? I would love to see newspaper articles describing the crime spree of porn industry participants in private homes.
Jeeze, azure person, relax. It could potentially be very tastefully done, with a plot and dialogue and everything. And then you’d get the benefit of demanding a free copy. Just think how fun it would be to watch it, with your familiar coffee-maker and toothbrush and high-school yearbook and stuff in the background, behind the, um, the real action.
Olympiagal, I wouldn’t leave my toothbrush laying around if I were you!
I don’t think even the actors get paid much any more. $5k is probably the budget for the entire movie.
so what if your co workers see what are they gonna do start a conversation with “so me and the little latey were watching adult entertainment last night and we though the house look familiar
“Hey Sarge.. this is weird. Look at the latest GPS tracking readout. According to this, almost every registered sex offender in the city is standing near the corner of Elm and 35th St.”
Isn’t Elm and 35th St. the Holy Trinity Church of the Divine Blessednesses?
“Hey Sarge.. this is weird”
“A few months ago, I probably would’ve said, ‘you want to do what in here? That’s reserved for me and the missus.’ ”
For some reason I think next year the missus will be included
Lol.
That’s a slippery slope.
Sounds like these two will make great parents.
>That’s a slippery slope
Someone got KY?
Dry lease or wet lease?
Yawn. Old article. Already posted here.
Cool…”Debbie does West Nile” in FB slime green McMansion pool
All this time I could have been getting PAID?!
Flights down at Rochester airport:
http://democratandchronicle.com/article/20090203/BUSINESS/902030332&referrer=NEWSFRONTCAROUSEL
No problem, AirTran will survive by refinancing houses… so much for my direct flight home! In one year, I might be the only guy that wants to travel regularly between Tampa & Rochester. LMFAO.
Now departing Freezing-Abandoned-House-Crackville, next stop, Burning-Abandoned-House-Crackville.
Richard Fisher is 100% correct in regards to protectionism. If we go down this path, stick a bigger fork in the economy.We’ll be hearing the words ‘cap & trade’ along with ‘price fixing’ more and more I don’t doubt.
Fed’s Fisher says protectionism equals “economic death”
WASHINGTON (Reuters) - Dallas Federal Reserve President Richard Fisher warned on Monday against “Buy America” provisions in a proposed fiscal stimulus law and said it could lead to devastating trade protectionism.
“Let me just be blunt. Protectionism is the crack cocaine of economics. It may provide a high. It’s addictive and it leads to economic death,” Fisher told C-Span television in an interview for its “Washington Journal” program.
President Barack Obama seeks a $825 billion stimulus plan to end the country’s yearlong recession. U.S. lawmakers are debating rules that will insist that public money is spent on U.S-made products, although the White House has already said it will review any Buy America provisions.
“We just cannot afford to go down that path and I hope our senators, Democrats and Republicans, will be very sensible on that front,” said Fisher, who is not a voting member of the Fed’s policy-setting committee this year.
Fisher also urged Congress to balance the immediate need to stimulate growth with the long-term consequences of piling on debt that could be a drag for years to come.
“Our job is to maintain price stability while we engender the growth and employment of the United States … It is a very difficult balancing act, but it can only be done if it is buttressed by sensible fiscal policy,” Fisher said.
The Fed has used unorthodox steps to thaw credit markets and encourage borrowing and consumption. It has cut interest rates almost to zero and has pumped hundreds of billions of dollars into the financial system, more than doubling its balance sheet in the process, to almost $2 trillion.
Fisher said he supported the Fed’s aggressive action but stressed it was crucial that the U.S. central bank have an exit strategy to prevent this massive build-up in liquidity from fueling inflation once U.S. growth recovers.
“Right now the pressures are not on the inflationary side; they’re on the other side. Longer term, we have to be aware of the fact that we could have, as a result of all these initiatives we’ve taken … baked-in inflationary pressures.
“We’re very mindful of that and our exit strategy has to work with the fact that we cannot allow inflationary pressures to also take root. This is our job,” Fisher said.
Of course it is crack for an economy that runs on credit… If we stop importing cheap crap from Chindia, our own products would be more expensive, throwing a wrench in that whole inflation reading… Not only that, but wages would have to be readjusted in the face of less labor competition from third world peasants that do not need to pay almost 50% of their income in taxes, and the reamining 50% goes to housing…
I do not agree BTW with trade restrictions, just a leveling of the playing field… Have the outsource companies pay equivalent taxes on those that are outside the US, but do work here, have the same wage and environmental laws, and then we can talk about inflation and protectionism…
I think that they are terrified of the prospect of people actually making more money than what they need, and being able to save some for a rainy day. That would certainly throw a wrench into their neat little credit fueled binge….
Rant off…
I think he was warning against protectionism against China - if they stop buying our debt or sell the debt they already own we are in for a world of hurt.
I saw an article on yahoo about 1/7 migrant workers in China are out of work. Thats gotta be dangerous for the communist leaders.
The last number I saw for China holding of US debt was $686B. That is less than the amount of the first TARP and far less than the Stimulus Bill approaching. I like Buy American.
Oh, we’re sooooo going down this path.
I like it. When are we going to get back that cold roll steel mill we shipped to China about 10 years ago? We’ll need it now for all the new auto plants. Maybe I could get one of the 15 hundred jobs needed to run it. Oh, I forgot that Cleveland was going to be all modern and focus on healthcare and finance instead of mfg. Oh, forget finance, I just remembered that National City Bank was de-TARPed by the ingrates in DC. Nevermind.
” Dallas Federal Reserve President Richard Fisher warned on Monday against “Buy America” provisions in a proposed fiscal stimulus law and said it could lead to devastating trade protectionism.”
If a representative of the Federal reserve says it’s bad, it must be an excellent ideal.
How about “Buy American..or DON’T Buy” Mr. FED man ?
Don’t those provisions only apply to the spending financed by the stimulous? If we are trying to give a shove to the US economy, how does buying stuff made elsewhere do that? If you are going to buy all the supplies from overseas, you are vastly reducing the efficacy of the stimulous as only the direct labor expenditures actually get into our economy, not the labor on the inputs. Getting the steel on the cheap is not the first priority here. How hard is this to understand? If other countries need a financial stimulous, let their taxpayers pay for it.
It makes sense for the US government to use the stimulus money to only buy US products and services on the surface. But what will the rest of the world do in response? What protectionist policies will make sense for them? How will those policies hurt the US?
Oooh! Maybe they’ll retaliate and stop shipping us drywall and cutoff our source of cheap cat food additives. Im scared that our chatckey inventory will collapse; waves of strung out scrapbookers and shopping addicted will overrun our mental health clinics. This will just accelerate the need for federalized health care. Could we export houses intact? Containerized?
What exports to where will drop? Is there some secret mfg plant run by bonobos on the 3rd shift at some large metropolitan zoo? And what, pray tell, do they make that China so desperately imports; chopstick refurbishing machinery? shark’s fin dehydrator ovens? Oh, the humanity of our export loss!
Here’s a perfect example of the PTB telling us up front and in public and on record, that they don’t want jobs for Americans.
Why isn’t this guy’s head on a pike?
credit crunch fallout:
one week after the Dutch government took over the Us mortgage portfolio from ING (Direct), the stockmarket value of the bank is sliding again and a nationalisation of the company is no longer excluded.
It seems officials are mostly afraid that the savers at ING Direct, with a savings total of 200 billion, will start moving their money. Ultimately these savings are backed by the Dutch taxpayer, and 200 billion is probably too much for the Dutch government to guarantee. This could develop into a much bigger version of the Icesave drama …
Enough with the “bad bank.” Maybe now we need a “worse bank.”
We need a government-owned bad bank to relieve the privately-owned bad banks from reaping the consequences of their financial blunders.
maybe we just need a failed state like Zimbabwe (Iceland, Afghanistan, UK, pick your choice ) to register all the bad banks in, and then have the country default and be done with it
Maybe we could start a bad bank and put all those bad executives in charge of it. Throw them into their own hole and base their bonus on how well they dig out.
OK if the bonus means a slight reduction in punishment. But I’m afraid even if you let them run a bad bank they will find ways to enrich themselves and their friends at the cost of others.
Put ‘em on the ship with the phone sterilizers and nail technicians.
If that is an allusion to the Hitchhiker’s Guide, well played!
Worse Bank
Here it is
NEW YORK (AP) — JPMorgan Chase & Co. said Tuesday that it has been selected by the Federal Reserve to serve as custodian of the government’s program to buy mortgage-backed securities.
The program, which began on Jan. 5, will see the Federal Reserve buy up to $500 billion in mortgage-backed securities backed by Fannie Mae, Freddie Mac and Ginnie Mae in an effort to improve conditions in the financial markets and help boost the mortgage and housing markets.
The Federal Reserve also selected four investment managers, BlackRock Financial Management Inc., Goldman Sachs Asset Management LP, Pacific Investment Management Co. and Wellington Management Co. to assist with the program.
This just in
Gov hires Fox to rebuild Hen House and raise chicks. Story at 6.
Yes, and I wonder when the run from the bank starts in the US?
We are covered by FDIC, don’t need the money ‘now’ (we have a local bank), but getting held up does make me nervous, especially since inflation will hit sooner or later.
I hope when ING USA gets merged into another bank it’s, like, Everbank, and not, like, Bank of Cramerica.
(I was going to say “crapmerica” but then I realized that Cramer viewers are just the sort who would bank with those doggy diddlers…)
I don’t think ING Direct will merge with a US bank, as they are basically a Dutch company. I am told that the Dutch government guarantees ING Direct savings, so I doubt if FDIC applies as with other US banks (probably same story as with Iceland banks that were banking in other EU countries).
As ING Direct customer, you might be banking with the Dutch government in the near future. Before you think that sounds good, just look at what is happening in Iceland now. The IMF bailed out most Icesave savers with tax money from their member states, but they won’t be able to bailout countries like Netherlands, UK, Greece etc. if they go bankrupt.
nope, nope they had to incorporate in US (delaware) to get FDIC, which they have.
they are holding lots of ARMs and so on originated in US (dumbasses)
when another online bank failed, ING took over their customer accounts. I would assume if ING failed FDIC will send accounts to yet another bank. ING won’t be getting US bailout. I suppose we will rely on Dutch gubbermint goodwill or get used to another color than orange on our online banking site.
I have an ING account here in Canada that is covered by the CDIC. As I understand it, Dutch ING (parent company) started a bank here (incorporated a subsidiary under Canadian law) so that it can be part of the CDIC organization. May be true in other nations as well.
don’t know, but if it works the same as in Europe in case of a bank failure you would first have to try to get your money back from the Dutch government, and if that doesn’t work out CDIC may or may not cover.
In Europe most of the savers who had an account with Icesave in Iceland had the first 20K euro guaranteed by Iceland, and the rest (sometimes, up to 40K or 100K) by their own central bank. Problem is that for the first 20K you have to file with the foreign creditors of the bank (usually not much left). In this case most savers got lucky because the IMF bailed out Iceland, who are passing most of this money to foreign savers (no doubt that was part of the deal).
Hartford Courant
Dodd’s Saga Takes A Strange Turn
Rick Green
February 3, 2009
After all the talk, the bashing by the media and demands from his constituents, U.S. Sen. Christopher Dodd on Monday offered apologies and stacks of documents to explain his controversial loans from Countrywide Financial Corp.
Dodd’s regrets still don’t clarify why one of the most powerful, influential politicians in Washington didn’t run from a lender who promised “VIP” treatment. It doesn’t begin to explain why we had to wait half a year before learning information that Dodd has had for months.
I expect more from one of the guys trying to save us from economic collapse — …
“We did not seek or expect any special rates or terms on our loans,” said Dodd, who was joined by his wife, Jackie Clegg Dodd, at a tense press conference in his Hartford offices. For a story that Dodd last July said “there ain’t much to,” Monday marked another curious, bizarre chapter.
Dodd, Fwank and a whole host of their cohorts should be and should have been removed from their offices, fully investigated and prosecuted.
Won’t happen of course, but if these guys are as ignorant as they claim to be about their own personal business affairs, then they should resign simply for reasons of incompetence.
Ignorance about one’s personal financial lapses appears to be nearing the level of a qualification standard for high office.
RE: Ignorance about one’s personal financial lapses appears to be nearing the level of a qualification standard for high office.
Geithner, Daschle, and now Killefer!
“Only the little people pay taxes”
IT”S A CIRCUS!
Another subtle mention to a sci fi movie, Planet of the Apes. Well done hd74man
Whoops, maybe it wasn’t from Planet of the Apes. Have now go do some research.
Queen of mean…
AKA Leona Helmsley
“Only the little people pay taxes”
The audacity wasn’t expressed by us taxpaying turds. The outrage was expressed by the wealthy elite as they know Helmsley’s words are 100% true.
There also appears to be a tacit assumption that only those who put the global economy into the worst financial crisis since the Great Depression have the requisite understanding to fix the problems.
Won’t happen of course, but if these guys are as ignorant as they claim to be about their own personal business affairs, then they should resign simply for reasons of incompetence.
We could have gotten rid of a whole executive branch barrel full of rotten, incompetent apples eight years ago if it were that simple. And we’d have all been a lot better off.
Agree. He should be in jail. I called the senate finance committee offices repeatedly last year, but apparently there was an “outrage deficiency”.
C’mon, they’re Democrats. Democrats like Dodd, Frank, Daschle, etc. just don’t do bad things. And if they do they still get a pass.
Move along, nothing to see here.
Pot, meet kettle.
Bill,
I understand that Dodd allowed the press only a short time to view the documents and they weren’t allowed to make any copies. What kind of ‘disclosure’ is that?
DinOR, that’s exactly how McCain “released” his volumes of medical records. Limited time, no copies or photos.
I’m just hoping that the younger Congresspeople don’t get corrupted like a lot of the older career pols (both parties) did.
I don’t think I’d want the press or anyone else walking away with copies of my financial or medical records either.
http://www.theonion.com/content/amvo/daschle_paid_220_000_by_health
Frank Watson,
Loan Collector
“Daschle got screwed. Health insurance providers can afford a lot more than that.”
Did a lunatic write this? Some have called him that, not IMO though.
Ron Paul…
“If Congress really wanted to do something helpful, it would cut taxes. Ideally, we would repeal the income tax altogether and get the IRS off the economy’s back, which would be a huge boon. We should also cut spending. Cut every unconstitutional department and program, every wasteful governmental encroachment on the people’s liberty and money, starting with our massive overseas empire. The cost of our empire is bringing us to our knees, just as the Soviets’ empire did to them. Congress should also abolish the Federal Reserve and take back its responsibilities to ensure sound money, safe from the manipulations of powerful banking interests.”
This sounds absurd, of course, to most folks. We, the people, are not interested in smaller government and sound money. That’s why we elect politicians who strive to make government bigger. Besides - we are so advanced as a 21st century society we don’t care to be bound by old fashioned notions of thrift and individual responsibility.
“Congress should also abolish the Federal Reserve and take back its responsibilities to ensure sound money, safe from the manipulations of powerful banking interests”
Yes, because congress can’t be manipulated by powerful interests…. Rolls eyes.
Labeling someone a lunatic is a lazy man’s way to avoid addressing his arguments.
Amen, PB. And kudos to Ron Paul, who speaks the truth.
The longer you live in the USA, and the more you read and understand about the subjects and proposals Ron Paul speaks of, the closer you get to understanding the real nature of the economic problems were are going through.
Hey, I’m a libertarain at heart. I voted for Ron Paul.
However, that does not mean that he is right when we says that congress can’t be manipulated by powerful banking interests.
He doesn’t say that congress can’t be manipulated. He is against institutionalized arm’s length manipulation.
Yep. How do people think the Federal Reserve came to be in the first place? Duh.
Everybody’s against it. So what? It cannot be fixed. You have to find solutions understanding that it is a corrupt environment.
Can anyone answer why the GOP/RNC in conjunction with fox news and Rash Limbarge bushwacked Ron Pauls primary campaign?
Got any?
The only one I can think of starts with gui and ends with llotine.
Certainly the creation of the Federal Reserve was an ATTEMPT at putting the central banking function beyond the easy reach of politics and influence. But it’s simply very hard to keep any organization with that much power from being influcnced by those with that much money.
The Federal Reserve was not an attempt at putting central banking beyond the easy reach of politics and influence, it was the direct result of influence being used to give the bankers a monopoly and power to print money without government intervention.
It was only *sold* as an attempt to keep bankers in check… I suggest you read the history of the Creature from Jekylle Island.
History is always written from a point of view; not neccessarily the truth.
But before the federal reserve, bankers were ALREADY the one’s printing money without government intervention. I’d bet that private banknotes outnumbered greenbacks. Now an argument can be made that we’ve replaced frequent local bank collapses with the possibility of rare, but colassal national collapse. But to believe that the creation of the Fed moved currency creation INTO private hands is just silly.
Jim,
Who owns the fed? Can congress audit the fed? Ron Paul has tried for decades with no success and the Fed has doubled the monetary base without seeking approval of Congress!
Yes banks use to issue their own warehouse receipts and even issued fraudulent receipts and this practices was legalized by government. The only thing that changed with the Federal Reserve was that it “outlawed” competing 100% reserve banking and gave undue confidence that the central bank could never fail because they could always print more! This caused increasing levels of recklessness. It put all of the eggs in one basket and eliminated competition.
Government is a money and power black hole. What goes in never comes out, except perhaps in some other dimension in an alternate universe.. which also, i’m beginning to suspect, may be where RP hails from.
He’s a nice, sensible guy with good ideas and all that but seems a bit impractical at times..
We, the people, would be interested if the majority had not been brainwashed by government schools and government media. These people do not know what they do to themselves and worse yet… they think they DO understand what they want and why.
Brainwashed? Ha. I’ve been outside the country…
Believe you me, I’d rather live in the 1st world than the 3rd world. US used to be 3rd world (okay, 2nd world–”developing country”). Life was really hard.
I wouldn’t even want to be one of the kleptocratic elites in a 3rd world country (this is what you are hoping for, right, when you desire to eliminate taxes?) because it is spiritually so horrific. Is it any surprise that all but the dictator Himself spend as much time as possible outside of their countries? No, a large middle class for me. Maybe I can’t “get ahead” but right here is a fine place to be. Friends, family, a few fruit trees planted by the wayside on the road out of town…
I don’t get what you are trying to say? I too have been out of the country and much prefer to live the U.S. standard of living… but just because I prefer our standard of living doesn’t mean I think it is sustainable or that the corrupt system that has temporarily given it to us is “good”.
The vast majority attribute the historic “prosperity” of our country to our corrupt financial system and have adopted fallacies (promoted by the government) such as:
1) We dropped the gold standard because it was “out dated”.
- in reality we defaulted on a debt
2) The economy can be “stimulated” by spending
- no such thing as a free lunch
3) Government has the answers.
- that benefit the few at the expense of the many
This is what I mean by brainwashing. People systematically taught to substitute “authority” for “independent thought”. The result is a population that is easily “controlled” by “expert opinion” with very little accountability to the “experts”.
Anyone promoting keyesian economic solutions has been brainwashed and has failed to apply reason, logic, or to seriously study alternative theories. The austrian school has predicted almost every move of this crash and the ultimate consequences for past actions. The Keyesians were in denial about recession or even the possibility of recession.. who *really* understands economics? Who benefits from the Keyesian theory?
substituting authority for independent thought is brainwashing?
really?
I say it’s human nature. It’s in our genes, compadre.
Just because the desire and ability to be brainwashed is in our genes, doesn’t make it right, especially with respect to those doing the brainwashing.
Many people have murder in their genes too - that doesn’t make it right.
- in reality we defaulted on a debt
The problem was that just like many FBs out there, we had no ability to repay said debt. The obligation printed on our currency DID NOTHING to prevent the us from printing more money than we had gold and silver to redeem for it. The only question was would we declare our obligation to give currency holders the gold or silver that we owed them before the first ones backed tractor trailers up to Fort Knox or after. In the end, we kind of did both. FDR prohibited anyone other than foreign banks from demanding their gold, and finally, Nixon stopped others from doing so. So first we defaulted on our debts to each other, and only later did we default on our debts to others.
“We dropped the gold standard because it was “out dated”.”
Any idea what the world GDP would be limited to under a gold standard? Anyone? I’m looking for some of that independant thought here.
“The Keyesians were in denial about recession or even the possibility of recession.. who *really* understands economics?”
The deniers of the recession are NOT Keynesians. Keynesian’s accept that recessions will come about and will try to use countercyclical spending to minimize the fallout (as apposed to avoiding recession). They will also cut back on government spending to help contain booms and bubbles. Don’t take a politician’s word that they believe in Keynesian theory when their actions tell otherwise.
“Who benefits from the Keyesian theory?”
When applied properly, the general populace. When used as a justification for stupidity…..
Who said anything about right or wrong, packman?
If responding to authority instead of thinking is in our genes (and I daresay it is–Dawkins makes some compelling cases for this being the case at least in children), then that’s a fact, which can be proven true or false. It isn’t a moral judgment.
What I’m trying to say is that it’s human nature to respond to authority, rather than think for one’s self. “Brainwashing” of any sort, be it deprivation and torture in a Chinese prison, a 1970’s civics textbook, or those 15-20 minutes of advertising for every hour of cable, is not required.
I hope you realize that GDP is not measured by the total number of dollars in circulation, but by the estimated “value” of all goods and services produced. Under a gold standard there would have been far less mal-investment (which counts toward GDP) and real wealth would be much greater.
Clearly what has happened without a gold standard has failed because there is no amount of government “regulation” that can prevent the mal-investment of even one new dollar printed. This crisis was only made possible by “lending money from nowhere”.
Everyone who argues for an increase in the money supply is arguing that *someone* should get something (new money) for nothing (it costs next to nothing to print).
Money is not wealth and the supply of money is irrelevant to the prosperity of society so long as banks cannot naked short the currency without marking the notes differently from the 100% reserve notes.
No one complains about the price of computers falling… why *should* prices stay flat or grow by 1-3% if people are producing more and more with increasing efficiency?
No country is currently using a gold standard.
When everyone except me is insane, maybe it’s time for me, not them, to see a shrink.
Joey,
No country uses a gold standard because it limits government power, Alan Greenspan said so himself. If everyone is jumping off of a cliff then I guess you would too. Your argument is the logical fallacy of “appeal to majority”.
Another example is the FANS that attend
those football games and paint themselves
sit in cold/inclement weather, for what?
To root for others who are making tons of $
while “you” are jobless etc.
Mass sheeple.
VT… i don’t mean to pick on you alone because many peeps around here are guilty of it, but Greenspan is either an idiot not worth listening to or a savant who’s every word is gospel, but he can’t be both. Parsing some particualr comment he made to back up a point is kinda lame, imo.
The gold standard falls by the wayside when a country is so heavily in debt that it can’t escape without borrowing beyond it’s reserves.. which eventually happened to all of them at one time or another… usually after an expensive war.
What good is a gold standard if an economy limited by that standard will fail unless fiat is added to it?
Wall Street Journal
* REVIEW & OUTLOOK
* FEBRUARY 3, 2009
Dodd’s Peek-A-Boo Disclosure
The Senator’s modified, limited mortgage hangout.
Connecticut Senator Chris Dodd has finally, sort of, kind of, ended 193 days of stonewalling about his sweetheart loans from former Countrywide CEO Angelo Mozilo. At least he did if you were a fast reader and were one of the few reporters he invited to his Hartford office yesterday to review — but not copy or take — more than 100 pages of documents related to his 2003 mortgage financings through Countrywide’s “Friends of Angelo” program.
portfolio dot com
Feb 2 2009 3:34PM EST
Dodd to Refinance Without Angelo
It’s been more than seven months since Condé Nast Portfolio uncovered the “Friends of Angelo” program at Countrywide Financial and the details of favorable mortgage terms for certain VIP’s, including Senator Christopher Dodd. It’s been more than six months since Dodd, who denied any knowledge of the special program, promised to share his loan documents with the public.
But on Monday morning, Dodd did just that.
In what was described as “a sometimes tense meeting with reporters at his Hartford offices” this morning, Dodd and his wife shared the loan documentation and communication for his 2003 mortgages to refinance both his Washington town home and his vacation home in Connecticut.
“We were told that it was nothing more than enhanced customer service,” Dodd said. “I regret having ever done business with Countrywide.”
“Enhanced customer service,” Senator?
That euphemism sounds more than a little dirty, sir, like the fabled “happy ending” available at certain massage parlors …
“enhanced customer service”
Dodd probably thought that meant hookers. He must have been pissed to see that low mortgage rate!
“Someday - and that day may never come - I’ll call upon you to do a service for me.”
Who buys a vacation home in Connecticut?
Sen. Dodd, who chairs the Senate committee that oversees the mortgage industry, has collected $10,000 from the company this election cycle. He has collected $20,000 from Countrywide’s PAC during his career, putting him just after the Democrat’s presidential nominee-to-be, Sen. Barack Obama, for most contributions to a senator. Obama joined Dodd in co-sponsoring a housing relief bill that would encourage lenders to refinance and stabilize existing mortgages. Sen. Kent Conrad (D-N.D.), the other senator reported to have benefited from a lower mortgage rate from Countrywide, has received $9,000 in campaign contributions from the company during his congressional career.
Hedge fund managers. They don’t do any work, anyway.
“And hedge fund managers do… whatever it is that they do.”
“Cocaine.”
Only because he was caught does he regret it.
Just a Band-Aid on the Foreclosure Problem?
Loans Are Reworked, but Many Borrowers Fall Behind Again
By Renae Merle
Washington Post Staff Writer
Tuesday, February 3, 2009
Many homeowners who have been given a break on their troubled mortgages quickly end up in trouble again, a growing problem that is bedeviling efforts to stem rising foreclosure rates.
A recent study by the Office of the Comptroller of the Currency found that more than 50 percent of troubled homeowners had missed at least one payment six months after a lender modified their loan, and lenders and other researchers report similar default rates on modified mortgages …
Feel free to say “I told you so.”
I told you so.
Also known as “Refinance…into what?”
I don’t think we can conclude anything until we understand what the loan modifications were. $25 reduced from your monthly house payment is a modification. Judge ruling that your mortgage interest payment will only increase by 10% instead of 11% is a modification.
Exactly. “Modification” is not defined in this article and is therefore intentionally misleading.
If they missed one payment in six months then that means they made five other payments, which is more payments than they would have made if they decided to walk six months ago. So, by they measurement the program is a success.
Right - the goal, as with chickens, is to keep them producing as long as possible.
Never thought about it that way. Combotech has the same thinking. It really is all about not fixing anything, but rather doing the best to simply maintain, get through the next few months or current year, until whatever is going to happen, happens.
I agree with everything you say, combo. We do need people to continue paying what they owe, but darnit, I feel for those that don’t realize it’s bad family economic policy. Having the ethically bankrupt escape punishment will hurt us all.
maybe they are guessing that if they default again they will be offered an even better loan? Can’t fault the sheeple for thinking like that with all the noise coming from policy makers …
Workout is just a way to delay foreclosure a little longer.
People don’t want a workout that doesn’t involve principal reduction.
It’s called:
“I ain’t got no job”.
McClatchy Washington Bureau
Posted on Monday, February 2, 2009
By Jefferson George | The Charlotte Observer
Even MBAs are applying for theme park jobs
Each year, Carowinds must fill more than 2,100 seasonal jobs at the 112-acre amusement and water park off Interstate 77, near the S.C. line. The staff starts taking applications in January and after a week usually has about 1,000, said Sandy Cranford, director of human resources.
This year, Carowinds had about 3,400, she said, or more than triple the typical turnout.
“It has just been amazing,” Cranford said. “They’ve just been coming in by the droves.”
In a recession that has brought near-daily news of layoffs and rising unemployment overall, Carowinds is a haven for job seekers, even with the temporary nature of the positions available.
At the park’s employment office one morning last week, more than a dozen people – from their 20s to their 50s, in blue jeans and business suits – filled out paperwork on purple clipboards or waited to speak with Carowinds staff in one of three interview rooms.
Cranford, who has been at Carowinds for 23 years, said her six-person human resources staff has handled the crush. The park has 107 year-round employees, she said.
Always a big draw for high-school students, the seasonal jobs are attracting older and more experienced applicants in the recession, Cranford said.
“We’ve had several with MBAs,” she said, and not just for high-level jobs. “Some are looking for something to just fill their time, which is great.”
Wow.
Leigh
SC economy is doing really badly, and it all happened all at once. Quite a shock, b/c I thought Fla. was in trouble.
Fla is mostly RE down, then econ, SC seems to be other way around. Dunno what all the rich people were into that they all went broke at once.
I would like to know too…..I lived in SC and was thinking of going back….but not if its worse then here
Hm, well, it was always a sad sack dump, but a sad sack dump with 200% home price appreciation the last few years. Poor are still dirt poor, with less jobs and a hole in their credit from the summer gas runup, while the urban gentry got ass-pounded in the markets. Giving to charities took a nose dive while unemployment went up, and home prices have cratered.
I thought SC had some sort of ag-based economy. I guess lumber prices HAVE fallen off a cliff, but I really don’t know. Rural parts of SC seem stuck somewhere in the past still. Do they even notice the change?
But Charleston is crying.
But my former DJ partner sells Charleston touristy stuff is selling like mad..she is so busy…a real home business ….hubby does the photography work, used to work for CNN.
http://www.jettstarr.com/
—————————————————-
But Charleston is crying.
Good for her. People who hustled for a living were able to eat during the GD. Prices look quite reasonable.
You should see the newspaper headlines there.
Thanks to REIC lobbying efforts, momentum is gaining for taxpayer-funded anti-affordability provisions in the stimulus bill.
As for Vitner’s absurd statement, home prices obviously cannot keep falling forever, as sellers are not going to just give away their homes.
Housing aid gaining steam in stimulus bill
By ALAN ZIBEL – 14 hours ago
WASHINGTON (AP) — Homebuyers could see lower mortgage rates and get tax credits as part of a sweeping economic stimulus package being considered on Capitol Hill.
Lawmakers are heeding the pleas of two powerful and well-heeled interest groups: real estate agents and homebuilders. Those industries have lobbied hard in recent weeks for more expansive assistance for their flailing members.
The Senate took up an $884 billion version of the stimulus legislation on Monday after an $819 billion version passed the House last week without a single Republican vote.
Any government aid for the housing sector should be temporary and apply to all buyers to help boost sales of expensive homes as well as low-priced ones, said Wachovia Corp. economist Mark Vitner.
“Nobody wants to buy a home before prices have bottomed out,” Vitner said. “Unfortunately if everybody has the same idea, prices are going to keep falling.”
So basically they’re looking for suckers.
Yup. Perhaps they should call this part of the bailout effort the KEMLA (”Knifecatcher Encouragement Mortgage Lending Act.”).
One born every minute may not be enough to meet the demand.
P.S. For those of you who skipped college coursework in basic finance, with other things equal, lower mortgage rates (provided through government subsidy) have the effect of increasing the price of housing and reducing affordability, by artificially propping up the demand for housing. Those who are lured into buying in the near term may later on discover themselves to be part of the latest knifecatcher cohort to get stucco, as interest rates are presenty at a generational low. If interest rates later on adjust upwards, there will be no way to refinance out of an unrepayable debt burden.
presently
I was thinking the same thing, but there is something basic missing in order to reinflate the bubble… It is psychology. Market psychology has changed, and the sheeple are no longer convinced that RE always goes up… So, you might have very low interest rates, but if you fail to attract more buyers than houses, you would still get disinflation.
I think that what happened with the banks, would of course happen to the housing market, in that the too big to fail, become too screwed to save… The market is far too big for a small intervention like this to save it. It is like giving a drop of penicilin to a patient with septic shock…
Now, if they would just stand aside, and let the banks fail, let those who overextended, fail, then we can start seeing a real recovery.
Pinch-a-penny,
And if you have any doubts as to the validity of that scenario, look no further than what is going on in the Jumbo Loan market?
“Interest rates at a generational low”
I missed that basic finance course in college. If the ROI on an average house is -25% and you make that investment with a mortgage @5% interest, the cost of carrying a mortgage is 30%. That, my friend, is a multi generational high.
Add deflation and stir. Crushing debt burden.
The boneheads who say lower interest rates will make housing more affordable tend to neglect the cost of owning a falling knife if their calculations.
Microheads doing microeconomics.
I tell people this all the time. Interest rates have nowhere to go but up. Interest rates go up, home prices go down. So, buying at the bottom of an IR cycle almost assures losses on the asset when IR go back up.
The time to buy is when IR are high and credit is tight. That’s why prices will be low. Then refinance when IR are low. That way you have a low basis (home price) and a low interest rate. Buying at rock bottom IR does nothing but ensure that you pay too much for the house.
The fact that the sheeple keep falling for this “trick” is pretty amazing. A 15 minute course on bond pricing would be all they need to understand the relationships between price and interest rates (or yield, but it’s the same thing).
But this is a great opportunity for those who already own homes to re-fi. That I will not dispute.
Well….all things being equal, over the long term, mortgage rates do nothing for affordability either way. When howmuchamonth is the constraint, lower rates only pressure prices up to the point where the monthly cost is the same as it was before. But of course “all things being equal, over the long term.” are the great weaselwords of econ 101; just as “ignoring friction and air resistance” are the great weaselwords of physics 101.
Prices are somewhat sticky, and there are other constraints. The return of the downpayment dwarfs howmuchamonth as a factor for first time homebuyers.
Updated version of H.L. Mencken’s characterization of practical politics:
“The whole aim of practical politics… is to accept contributions from lobbyists in exchange for enacting special interest programs by misrepresenting them as for the public good.”
Exhibit A
Wall Street Journal
* FEBRUARY 3, 2009
Lobbyists Raise Stimulus Price Tag
By BRODY MULLINS and ELIZABETH WILLIAMSON
WASHINGTON — Lobbyists for industry and labor are gearing up to add costly proposals Tuesday to the Senate’s nearly $890 billion economic stimulus plan.
Opinion in the WaPo
Ward Three Morality
By DAVID BROOKS
“… The essence of the problem is this: Rich people used to set their own norms. For example, if one rich person wanted to use the company helicopter to aerate the ponds on his properties, and the other rich people on his board of directors thought this a sensible thing to do, then he could go ahead and do it without any serious repercussions.
But now, after the TARP, the auto bailout, the stimulus package, the Fed rescue packages and various other federal interventions, rich people no longer get to set their own rules. Now lifestyle standards for the privileged class are set by people who live in Ward Three….”
http://www.nytimes.com/2009/02/03/opinion/03brooks.html
Thanks, hoz. I enjoyed that.
A little Chicagoland corporate news — not good, I’m afraid …
Motorola loses $3.6B, suspends dividend, CFO exits
By PETER SVENSSON
The Associated Press
Tuesday, February 3, 2009
SCHAUMBURG, Ill. — Motorola Inc. posted a massive fourth-quarter loss Tuesday as it recorded charges to reflect the dwindling value of its cell phone business. The maker of telecommunications equipment also suspended its dividend announced the departure of its chief financial officer.
Hammered by a decline in sales, the also said it expects to undertake cost-cutting measures meant to save $1.5 billion in 2009.
I like that building they built in Harvard. I think it would make a nice place for an indoor skate and bike park.
The Paradox of Thrift supplants The Conundrum…
Financial fears freezing up spending
Consumers, businesses saving more money
By Jack Healy
NEW YORK TIMES NEWS SERVICE
2:00 a.m. February 3, 2009
American consumers and businesses are embarking on an era of thrift as the recession deepens, saving more money as they cut spending on purchases as varied as sweaters, new homes and office towers.
That was the picture painted by two government reports released yesterday. One showed that Americans cut their spending for a sixth month in December as they worried about losing their jobs and earning less in a deteriorating economy. The personal saving rate in the last three months of 2008 rose to its highest level in six years.
In another report, the Commerce Department said construction spending in December declined 1.4 percent from November as housing values continued to fall and credit markets remained tight. Spending on residential construction in December dropped 22 percent from the same month a year ago.
“If households are shying away from spending, what’s going to cause businesses to start spending again?” asked Aaron Smith, senior economist at Moody’s Economy.com.
“If households are shying away from spending, what’s going to cause businesses to start spending again?” asked Aaron Smith, senior economist at Moody’s Economy.com.
Business 101 says sell a product that people actually want and need. Can’t do it, too bad.
Real business is a b!tch, ain’t it?
PRESS RELEASE
Fitch Downgrades California’s $5B RANs to ‘F2′
Last update: 6:29 p.m. EST Feb. 2, 2009
NEW YORK, Feb 02, 2009 (BUSINESS WIRE) — Fitch Ratings has downgraded the short-term rating on the State of California’s $5 billion 2008-09 revenue anticipation notes (RANs, or the notes) to ‘F2′ from ‘F1′. The downgrade is based on the severe erosion of state revenues and cash resources since note issuance, prompting payment deferrals while the state develops solutions to its deficits. …”
MarketWatch
“…to ‘F2′ from ‘F1′.”
How low can an ‘F’ rating go?
The next lower rating is FU.
and after that is feh.
LOL!
More like SNFU.
SNFU=SNAFU
F’ed’??
It would be nice to own a lot of those dollar thingies right about now, wouldn’t it?
Wow, who would have thought state and municipal bonds would someday be so unsafe?
“Revenue Anticipation Notes”
Hahaha
What Other Financial Crises Tell Us
The lesson of history is grim: Expect a prolonged slump.
By CARMEN M. REINHART and KENNETH S. ROGOFF
“…Perhaps the most stunning message from crisis history is the simply staggering rise in government debt most countries experience. Central government debt tends to rise over 85% in real terms during the first three years after a banking crisis. This would mean another $8 trillion or $9 trillion in the case of the U.S…
Yes, there are important differences between the current U.S. crisis and past deep financial crises, but they are not all to the good. True, for the moment the U.S. government is in the very fortunate position of being able to borrow at lower interest rates than before the crisis, and the dollar has actually strengthened. Still, deep financial crises in the past have mostly been country-specific or regional, allowing countries to export their way out…”
http://online.wsj.com/article/SB123362438683541945.html
Japan Japan Japan
Still, deep financial crises in the past have mostly been country-specific or regional, allowing countries to export their way out…”
BINGO
Add to that the real strain on natural resources that will occur if other countries even approach consumption rates in the US and you see the problem. If consumption rates increase in China and India you will see massive inflation which will keep a lid on any growth.
Even more gloomy than the average HBB reader.
http://www.ft.com/cms/s/0/49ccaa62-ec8e-11dd-a534-0000779fd2ac.html
“Plenty of observers, including me, have criticised the media for being too gloomy. I am now beginning to believe that they have not been gloomy enough, if they want to reflect the true consequences of our profligacy and past conceit.”
welfare spending:
propping up state industries/nominally private but still state industries (GM)
social security for those with savings in hand
airports
unneeded highways/unneeded interchange projects (looking at you, Springfield, VA mixing bowl)
TV advertisers
mortgage interest deduction
FHA “help” to 1st time homebuyers (suckers), ie Realtwhore job security administration
Homeland Security
ADA giveaways such as Medicaid transport. Before era of big govt (ie FDR admin), state provided certain level of support to blind, disabled vets, deaf, amputees, according to what need was–blind typically got the most. (By support, I mean some public services and accommodations, waived fees or taxes, sometimes housing and other support.) Today, anyone with a doctor’s note is “disabled” (note: any of us can get this, I can get this for multiple “conditions”!! like, tomorrow!) and the tab just gets higher and higher.
Disability is the new welfare.
Great article.
It seems like the average person is in denial (Obama will fix it all, right?), and those that know that the sh*t is gonna hit the fan big time are acting like deer caught in the headlights.
I personally feel like the latter. I mean, ok, I could buy a boat or some land with a well and get ready for the meltdown. Nah, I’m not gonna do that. At least not in the next 6-12 months.
Save my money? Check
Buy gold? When AM radio and the super bowl are pushing gold as the answer I know we’re on our way to a bubble.
Get a gun? Check.
WTF? What else can one do?
It is like watching a slo-mo train wreck, can’t really do anything. Not much I can do about my (CA) pension. Looks like I won’t get the money I’m owed in CA taxes. My job is good - for now.
Very few will be untouched by this thing.
CARRY ON and REMAIN CALM….I guess.
Yeah.. remain calm.. but don’t snooze.
There’s not much more to do to prepare for the downside, but there may be lots to do in preparation for the recovery..
If unemployment reaches 20%, roughly speaking it means 20% of businesses, mostly small, died and were swallowed up. Recovery will uncork demand for those nonexistent products and services.
Pick an example you’ve already got an affinity for and some small knowledge about. Study and make a plan as to how you will provide it to the new world rising..
While the field might be wide open for a time, the majority of the spoils belong to the quick and best prepared.
Everything’s a buying opportunity, eh?
maybe not everything… on the scale of an opportunity’s quality, I’d cherry pick only the best ones that suit me.
During the Great depression recovery, the govt price fixed certain vital commodities. I dunno what they were.. i’ll guess some food and energy were included.
If that happens this time, growth in industries which are tied to those commodities would be stalled. Take crude oil, for example. It might not be a good idea to drill a well or open a gas station or invest in the energy sector.
But lets say you want to try a candle shop to replace the failed “Ye Ol’ Candle Shoppe” around the corner.
A candle can be made cheaply enough where anyone can afford to buy one, or they can be fancy, meaning large market base.
Startup cost and overhead is as low as any business. Candles smell nice and look pretty, the little flame has a primordial appeal and candles bring a bit of cheer to a depressed environment, like the average, recession-ravaged abode.
The base ingredient is wax.. paraffin.. a crude oil derivative. If crude is price-fixed it seems likely to also stabilize it’s basic derivatives.. those requiring little or no extraction effort, like tars and waxes.
If so, the candle maker’s fundamental raw material’s price is unnaturally stable and may stay that way for years, which should be an advantage.
I haven’t really thought much about what i will choose yet, because i’m lazy.. but i’m confident that (almost) any carefully chosen entrepreneurial effort will find very fertile ground in the recovery period.
Few weeks ago I boasted that AZ was not yet talking about tax increases, just 40% cut to education.
Well, it begins.
Discussions of tax reform… Oh, just revenue neutral changes.
Well, revenue neutral means tax increases since in the current system, the bottom is falling out from under collections.
Current system: 47% sales tax, 36% individual income tax, 9% corporate tax, 8% “other taxes and fees”.
Well, the problem with this is that sales tax are off more than 17% and still falling and individual income taxes are off 20% and still falling.
What kind of tax reform is going to fix that???
“Murphy, a Peoria Republican, said the state can’t rely as heavily as it does now on construction and retail jobs, which ebb and flow with growth cycles. ”
Again, how are changes to the tax system going to fix our total lack of real industry?
Az used to be known for cotton, cattle, copper, citrus and climate.
The cotton farms have been plowed under and turned into suburbs. The citrus trees have been cut down and turned into shopping centers and golf courses. The cattle feed lots have been closed because the smell brought down house values. The copper mines are closed because of high production costs and global glut. Climate is for travel, and the travel industry is rolling over and dieing.
Fix that with a revenue neutral tax reform???? I don’t think so.
When the necessities of life become luxuries, luxuries will no longer be seen as necessities.
…and there you’ve found the bottom.
what is it that I need that I do not already PO=ZEZ?
An alter-alter-ego?
sounds a bit like what is happening in my thinly populated part of the Netherlands.
Our economy was mostly based on agriculture and tourism, but our politicians have based the current economy on housing (local government gets more than 75% of its money from RE related things like land/home sales) and wrong bets on stuff like a huge container terminal (you know what happened to the Baltic index …), another coal+nuclear power plant and other proposals that offer high-paid board jobs for kleptocrats, but contribute little to the real economy and will scare away the tourists.
Difference with the US is, they don’t have a clue yet over here that their income stream is going to be crushed. Most of the towns are still banking on huge housing developments to generate income, many of them with homes costing upwards from 15-20x local income. Many towns are highly leveraged in land that was purchased at top prices from local farmers. Some politicians are still boasting about all the money they will make on this land (farm value per sqm2 EUR 4,-; city council pays about 50 EUR; homeowner has to pay 250-750 EUR). I guess most of it will go back to a few well-connected farmers, who will laugh all the way to the bank.
Cotton? In a desert? Where did they get the water?
Several rivers drain right through Phoenix, and unlike many places in the country, we have first use rights on most of the water.
It is called “the valley” because we have mountains to the north and to east. We actually have ski resorts and such. Even forests. And when the snow melts, it all runs down hit to Phoenix.
We also have rights to Colorado River water.
Too bad much of the water is being diverted to golf courses.
Undivert it and let the golf courses wither.
So, the democrats want to spend billion of dollars in building roads and infrastructure.
Will American people do those jobs? OR will the government get US contractors that will employ illegal immigrants?
Mayeb they are banking on the illegals going out and buying themselves a “troka” with their new found wages.
So, what would be the point of giving the stimulus money to illegal aliens if they will send a large part of their earnings back to their home countries?
How does stimulating Mexico, Costa Rica or any of those countries help the US?
Why should US tax payer money be used to help those countries?
Illegal aliens paid over$50.Billion in taxes between 1993-2006 in efforts to be considered for US citizenship if there was an amnesty program implemented.
I haven’t actually seen where much money at all will go to building roads and infrastructures.
Why employ Americans when you can get the work done cheaper by Mexicans? It saves me on my taxes so I can buy more stuff from China. Think me. Me, Me, Me, Me, ME! F everyone else and F America!
Sorry, I’m in a mood today.
Why aren’t the bedwetters squealin’ about the current illegals illegally employed by US business? Employing illegals is a crime.
Give it time.
Actually, not if you follow the rules and file the paper work.
Moody’s Economist Has Become a Go-To Guy on Stimulus Plan
By Shailagh Murray
Washington Post Staff Writer
Tuesday, February 3, 2009
…”I’m just saying what Mark Zandi from Moody’s, an adviser to John McCain, is saying: You have to have a package of this robustness if you’re going to make a difference,” House Speaker Nancy Pelosi (D-Calif.) said at a recent news conference.
What distinguishes Zandi from other economists are the statistics he churns out. His widely cited “bang for the buck” chart shows, for example, that every $1 spent on food stamps will generate $1.73 in economic activity. He has outlined by industry the number of jobs the stimulus bill is likely to create, its effect on state unemployment rates and the impact of its various provisions on quarterly gross domestic product. …”
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/02/AR2009020202971.html
the fact that this guy isn’t regarded as a total joke demonstrates the extent to which knowledge is not evenly distributed
Zandi can translate the technical terminology into layperson’s language. But it’s still the conventional wisdom. He offers no new insight. I get more insight from HBB.
While politicians yammer incessantly about how they plan to prop up home prices, the crash continues at an accelerating pace in San Diego.
Here are some recent price per square foot numbers for San Diego, based on Radar Logic’s 28-day moving average:
October 1: $216.97
December 2: $196.77
Elapsed days: 30+30+2 = 62
Annualized rate of decline in price per square foot over the October 1, 2008– December 2, 2008 period:
((196.77/216.97)^(365/62)-1)*100 = -43.7 percent annualized rate of decline
for the minds eye:
(Mr. Bear, interlacing fingers …extending arms outward…cracking knuckles sounds issue forth…and a slow sardonic smile emerges, quietly.)
Correlates very closely with what I reported yesterday for Palmdale. Until these rates of decline ease off there is no bottom, and we can’t even see it from here.
The only folks who claim to see a bottom are not bothering to look at the data.
For all you Doom & Gloomers…this was made in America!
Maybe it can “simulate the effects” of: 1% FED rates / 0% down x22 million loans?
Energy, IBM working on 20 petaflop computer:
“Fun specs: 1.6 million processing cores, 1.6 petabytes of memory, 96 racks, 98,304 computing nodes, footprint only 3,400 square feet. And energy-wise, it’s a dreamboat. It will draw six megawatts of power a year, equivalent to that consumed by just 500 homes.”
What’s even more amazing is that some children of unpatriotic democratic parents have been helping with its design…unthinkable!
forgot the link:
http://government.zdnet.com/?p=4314
If the statement “..will draw six megawatts of power a year..” is any indication of the correctness of this article, I would suspect much of the rest.
Disclaimer: I have a PE in electrical engineering.
maybe it draws six megawatts once a year because it flops? (maybe that is just a Dutch word though …)
Kinda like 55 miles an hour a year, eh?
I talked to a science writer from Salon dot com and gave her my answer to her question in grams. She thanked me, we chatted about the details and then she said, “I have to ask you one final question…What is a ‘gram’?”
Fuuuuuuuuuuudge… Only I didn’t say “fudge”.
MrBubble
While it will be a nifty super computer the fact remains that most HW that IBM sells is designed and manufactured in Asia. The same applies to most other tech HW giants.
And most of that is Hon Hai.
It feels good to go right through the bottom. Is it a false bottom? You tell me.
My work has recently taken me more and more into the world of fraud. Fraud is a funny thing in that the crooks took us to new highs and once the plug was pulled we are now seeing values lower than anytime since the 70’s.
I always thought that the bottom would be at or about the numbers before the bubble began to be blown up. Not so, as now I am appraising properties for numbers I began working on in the late 70’s. Darndest thing is I am not sure we have hit that bottom.
1100 sf condominiums are now at $40,000 in some areas of Orlando. These same units sold for $342,900 3-4 years ago. There are so many dynamics working in this market that I am unable to assess all of them. Each time I think I have a handle on the market something else pops up I had not thought about.
I am working in a dynamic mirco-market so how is Washington going to get a grip on the macro? I honestly believe this is like the China syndrome in that it is feeding on itself and is an ever evolving virus.
This market is fear frozen in place and well it should be. It reminds me of Khe Sanh in 1968 when we were taking 1200 rounds of artillery a day in a very small perimeter. A buddy of mine looked at me with his eyes wide and said, ” damnedest thing is we can’t do nuthin but take it.”
“I am working in a dynamic mirco-market so how is Washington going to get a grip on the macro?”
They don’t know, but they’re happy that plenty still think they can.
Those condos have negative worth. They are pure liabilities, plain and simple.
You could just rent for far less hassle.
wish I were a Lynx driver right now–rent, gas, food all cheaper than GNV, pay–higher!
of course, you would need a few years of seniority… layoffs are probably coming and there is no shortage of class B drivers in Orlando–noooo sirreeeee
“1100 sf condominiums are now at $40,000 in some areas of…”
The beginning creation of the…. “Great Landlord Society”
Here’s your 3 day…. “pay or move notice”…
One has to wonder what the fundamental “reason for being” of a place like Orlando is. What is so special about Mosquito County that it became Bubble Central? Disney (the cultural center of the universe)? If the Mickey Mouse economy falters, maybe you should look at 1965 prices? How far did prices drop in Orlando in the 20s bust?
I don’t understand the appeal of Central Florida (and I own some swampland there!). It has high crime, not a lot of good jobs, and you’re as far away from the ocean as you can be in a state known for its beaches.
There will be entire subdivisions of boarded-up houses within a few years. It’s starting already
the ‘appeal’ is that some people with dollar signs in their eyes thought they could ‘get rich quick’
with all the cultural abominations that go with that
My consulting company does a lot of work for the Theme Park industry. We used to meet 20-somethings who would tell us about how they owned 3 condos and were going to make a killing!
When I would tell them that that was extremely risky, the reactions were that I was either some out-of-touch old coot, or that I was somehow jealous of some kid making a buck.
At the peak, it seemed that nothing was selling for less than the “confirming maximum” (417K?). And these were typically I/O mortgages they had. I saw one unit that was a converted 20-year old rental building. Another was a codo / timeshare combo built in the parking lot of an outlet mall! (http://www.lbvresortvillage.com/ “close proximity to shopping!”)
When meeting with higher-ups, I like to tell them that the first folks they should let go are the people who used to go around bragging about their real-estate investment business. (Just check the on-line property records!)
“There will be entire subdivisions of boarded-up houses within a few years. It’s starting already”
Royal Trails off SR 44?
..I am working in a dynamic mirco-market so how is Washington going to get a grip on the macro?
They won’t. One size can’t fit all. But DC’s philosophy is that doing something is always better than doing nothing.
I was reading about calculating probabilities and an example used soccer goalies attempts to block those penalty kicks.
While about 85% of the time goalies lunge left or right to block, statistics show they would block far more shots if they just stood their ground near the middle of the goal. They know it, too.
But they catch a lot of flak if they just stand there and the ball goes right or left. The fans hate that.. even more than if they jump in the wrong direction.
Seems to me that Cali is just a few step back and to the right of Flo, so this same prospect may be coming soon to a neighborhood near you…
“I always thought that the bottom would be at or about the numbers before the bubble began to be blown up. Not so, as now I am appraising properties for numbers I began working on in the late 70’s. Darndest thing is I am not sure we have hit that bottom.”
Before the bubble inflated there was credit available to the average borrower whereas today even the best borrowers cannot obtain mortgage credit while asset declines are so steep. The widening TED Spread was the Canary in the Coal Mine, IMHO.
I was in Orlando last week (Thursday - Sunday) on business. Stayed at a big resort-type hotel near one of the big amusement parks. The place was DEAD. It was akin to a Florida-themed “The Shining”. The hotel (a four star) was so low on business, that they shut down 2 of the three restaurants and only served breakfast and lunch at the main restaurant. That slow during Super Bowl weekend!
Orlando is fooked and not only that, they’ve known it since at least 2005.
Disney, the big dog, has been facing declining admissions since before 9/11! (I’m sure there are some year to year fluctuations, like 2002 or 2003 might have been better than 2001, but it’s an overall secular decline, in part related to the decline of the Disney brand and experience–due, some say, to cruddy management.)
There were “Orlando is toast” stories in the local rags as early as 2006–talking about jobs, not real estate.
Of all the places to go 2 hours from GNV in FLA, Orlando is not on my list of “desireable”. Homosassa, Tarpon Springs, St. Auggie, Fernandina Beach, even Jax, yes. I will even brave the drive to Savannah (a lot more than 2 hrs). Closer to home: Deland, Cedar Key (lame), Micanopy, Poe Springs, those springs in evil Levy Cty, Starke (really), Palatka (no, srsly), Oh-c’lla (Silver Springs!), that town Rainbow Springs is in (has some nice craft stories + restaurants), the Levy County county seat (quilt store, some restaurants), or was that Putnam? whatever, oh gosh, I could go on and on.
Forgot to mention - I received a voicemail from the resort vacation club salesman. He was pitching a $299 family stay for FIVE NIGHTS. He even repeated that the $299 was not the per night price, but $299 for the full five nights. Wow. Motel-6 in many areas would be more than $299.
And yes, Orlando is not a great destination by any definition.
Disney was making up for the drooping attendance by pushing their own vacation club. Horribly expensive and from what I have heard the sales have fallen off a cliff.
Not surprising. Disneyworld vacations are horribly expensive, even with their current 7 days for the price of 4 promo (meals not included). It seems that every time I have priced a trip there for the family (say 7 days) when the dust has settled its about 5 grand.
My son and his family were at the Magic Kingdom on Saturday, the day before the Super Bowl. They are regular visitors (unlike me). He said it was packed! His comment was that it certainly did not look like a recession.
They are running some promos now, like free admission on your birthday. I know some of the smaller parks are cutting ticket prices for Fla residents, dunno about Disney. So they may boost attendance at the cost of revenues.
Disney sells discounted annual passes to Florida residents, which might explain why so busy on a Saturday.
The one time I’ve been there there was a definte bump in attendance on the weekend.
Same story in California. From what I have read they are getting more turnstile clicks from local annual passholders, but once inside they are spending less than they used to. If you go enough times a year, say 10 to 20, a SoCal pass can end up costing as little as $7 per visit. A lot of SoCal families buy APs for this very reason, and is a reason why there is no longer an “off season” at Disneyland. It has gotten to the point where its almost always wall to wall people.
I have also read that on any given day half of Disneyland’s visitors are annual passholders. I doubt that the percentage is as high in Orlando.
I doubt it too… weather during the summer is horrible… and the park isn’t all that busy. At least on a weekday.
Springs owned by the state are only $3 to visit, more fun than Disney.
Off topic I know, but how many of you HBBers are old enough to remember The Day the Music Died?
I already played my one and only Buddy Holly CD this morning. WSJ has an article today about two new CD collections of un-released works and practice/jam sessions. I think they’ll be worth buying.
Not old enough, but it’s a fascinating story. 50 years! - it snuck up on me (again) - tried to go in 1999 too. Did eventually make it to the Surf Ballroom, but not the crash site. Clear Lake seemed like a nice town.
R.I.P. guys.
Was born around time plane crashed.
Do recall seeing a fun musical in the West End about the story.
Extravagance
I am thinking about what I spend money on for lifestyle. Netflix is kind of overpriced, compared to $1 DVDs at the gas station. Also the library.
I have considered dropping it a number of times, but there are still a lot of iconic movies I have yet to see (my parents hardly let us see any movies growing up, making me culturally stunted), and it’s cheaper than movie tix (though I occasionally spring for these for the experience), and, most importantly, I have somewhat weird/obscure tastes, and Netflix often fulfills these. (Not always–thank you Sony for making it next to impossible to get German movies in the US. Unless you have hours to pirate movies and I don’t.)
If I really had to cut back, I think Netflix would go. I think some others may have already made this calculation. Too bad, they are a really cool service, let me ‘date movies, not marry them’ and see as much as I wanted w/out the bad karma from pirating.
I wonder how Hollywood video and Blockbuster stay in business? Even a decade ago I only went once a year–Xmas day, to rent some timewasters.
Red Box is an automated $1 rental firm in many of the grocery stores and Wal-Mart. No hassle rentals or waiting. You use your credit card, after setting it up online. You can have them email confirmation of the return. Joint venture of McDonalds and Coinstar, I believe I read. You can reserve a DVD at a specific location (12,000), too.
If I really had to cut back, I think Netflix would go. I think some others may have already made this calculation.
Some people have prob’ly made that calculation. In my household, it’s seen as a very reasonably priced service, though, as we tend to watch a lot of out-of-the-mainstream stuff. In short, we’d cut a whole lot of stuff before we gave up the Netflix queue.
The “watch now” feature on netflix (now works with Macs) is great.
I watched the first 4 seasons of the Office on my computer.
Always thought I would hate watching movies on my computer, but turns out, it suits my multi-tasking personality: half screen on the show, half the screen on the web.
Works with Macs now? Only Intel, or PPC too?
Hmm… veddy interrestink… *steeples fingers*
Only Intel Macs …
We’re fortunate to be in a town whose library has a media room the size of a small Blockbuster store. We usually have to wait about a month to get a new release, but its free.
We’re done with DirectTV . Our receive box died about 16 months into a 24 month contract. They won’t replace it unless we sign a new 24 month contract. It seems so unfair — design a box that dies after 16 months and keep people under contract forever.
So we’re dropping the whole thing, paying a cancellation fee of $100 and upgrading our netflix subscription to 3-at-a-time.
I thought Blockbuster bought out Hollywood video?
Blockbuster has seen the writing on the wall, witness last years aborted attempt to purchase Circuit City.
I doubt even Netflix will be around in 10 years as soon as movie companies realize they don’t really need a middle man.
I doubt even Netflix will be around in 10 years as soon as movie companies realize they don’t really need a middle man.
The problem there is content aggregation.
If one-star action movies and rote rom-coms are your thing, maybe a large studio’s site would be right for you. But one proven online tactic is targeting so-called “long tail” consumer choices — the niche markets, the cult favorites, the obscurities — and that’s something that Netflix does extraordinarily well. I doubt the major studios could pull anything like that off without partnering with an Amazon or Apple or other content aggregator (aka middleman, if you prefer).
Bingo. If all I wanted were new releases, there’s a dude down the block selling pirated movies for $3…
Or I could go to the Kangaroo and use Red Box. Whatever.
Agreed. It’s $18 a month, I have no TV (so no cable) and the video store is $4 a movie. I easily watch 10 movies a month, would watch at least 5 a month without NF and the films are usually weird or I get into some director and want to watch their entire oeuvre or some pedantic cr*p like that. So Netflix and the library down the block hook me up for pretty cheap. I don’t have the interweb at home either but…
sfrenter — I just get
“Our apologies — instant watching is not supported for your operating system.
Note that your current Internet browser is fully compatible with adding titles to the Instant Queue for later watching on compatible devices.”
on my PowerBook G4. I am running 10.4 Is that my issue? Thanks for the tech support!
MrBubble
1. What’s ‘NF’?
2.) Hahahaha! You said ‘ouvre’! What, are you French, or sumpin fancy like that?
3. I pestered Netflix every month for many months until they FINALLY got Andrei Tarkovsky’s stuff. Go put ‘Stalker’ in your queue, right now! I looove that one. Man, that one changed my whole life! ‘Course, I was in college when I first watched it. Oh, and really super drugged up. This was at BYU. (Brigham Young University, Provo, Utarr.)
Anyway, it’s a good one! For the ‘creepy-as*s, meditative, long-spun-out-ouvre’.
‘Course, I was in college when I first watched it. Oh, and really super drugged up. This was at BYU.
Hey, you ain’t supposed to be doin’ such things at BYU!
Or so I’ve heard.
Oly –
Way ahead of you (or at least keeping up). I LOVE Stalker! I love the scene with the tanks rusting in the meadow. Good stuff. I actually put it back in my queue for I watched it in a similar state to your first viewing. I enjoyed Mirror quite a bit, but The Sacrifice less so. His version of Lem’s Solaris definitely is my pick over Soderberg’s as well.
And NF is NetFlix.
MrBubble
Hollywood and Blockbuster aren’t surviving, They’ve had to close many stores over the last few years.
DirecTV (satellite) commercial:
scene: “Cable Corp” execs around the conference table wondering what to do about their crashing profits.
“Two words: Federal Bailout!
Check the newspaper. Everyone’s getting it!”
“Well, with our bottom line we certainly qualify.”
Ok, talk me down off the ledge, here. It’s my turn to type one of those “woe is me posts”…
I’ve been living in the same little apartment for nearly 5 years. I didn’t buy into accumulating a lot of shiny crap and thought the way everybody else around me was living was insane. I’ve been watching this housing fiasco grow and grow for awhile now, as have many of you. I’ve got no debt of any kind, no dependents, some money saved up, and my job seems relatively safe for now. But I’ve gotten a bit bummed out of late.
I’m sick of this apartment. As some other poster griped on here previously, I feel like I’m still living like a college student. Prices have yet to fall significantly in my area, and it looks like it’s going to be at least another couple of years before they do. What if in the meantime, we get a huge round of inflation and I end up using my down payment money on 10 dollar gallons of milk? If that happens, I really will be a “bitter renter”. If we go all Weimer/Zimbabwe here I would have been better off buying an overpriced crapshack - the mortgage debt would be inflated away as I wheelbarrowed piles of worthless currency to the bank, and at least I coulda painted the damn walls.
I beg your indulgence for the rant, but I had to spout off a bit.
Okay, so come on, sock it to me. Deflationists are welcome.
Oh, and might I add:
http://www.youtube.com/watch?v=6TDqvD34hEA
Some of us still live like college students although it’s been a long time since. What’s the big deal?
Why not try and find a nicer apartment? If not, ask the landlord if you can paint (”what is with people and this paint fetish anyway?”) Or buy some nicer furniture and assorted cr@p that the home-pawners do?
Oh, and totally agree with poster below on the plentiful “horizontal jogging”.
”what is with people and this paint fetish anyway?”
That was a joke! Maybe it would have been more obvious had I lamented my lack of granite countertops instead…
Yeah, probably. Sticking a borderline plausible thing in one of these rants didn’t quite cut it.
And chill out, we’re in effin’ free-fall. Ain’t gonna be no hyperinflation. I’ll put my money on most of us buying houses in cash in the 2013-2015 timeframe.
‘I’ll put my money on most of us buying houses in cash in the 2013-2015 timeframe.’
Goody! ‘Cause I want another one, for my books to live in. They ain’t no room left in the first house. I even found myself stacking a big pile of cookbooks on top of the fridge the other day. I told myself, ‘So they’ll be handy’, but that was an excuse. Really it was because the top of the washing machine was covered.
Why, just think, it could be I go get up at night one of these days and groggily stagger into the kitchen to make myself a little snack and if I was to carelessly yank the freezer door open too hard!? Why, I’d surely be kilt by a giant avalanche of cooking literature!
Man, the irony…
If the worst you can do is books over the fridge, you are but a child.
There are books piled on all horizontal surfaces in my house. And there are a lot of horizontal surfaces, I assure you. And there are boxes and boxes stacked everywhere including my closets and my attic-y closets.
‘If the worst you can do is books over the fridge, you are but a child.’
Don’t you patronize me, Mr. Man! I bet I got hugely heavy books delicately balanced in places you never even thought of!
you are Gabriel.
In my mind you are a man.
I used to have a computer on top of the refridgerator in the bachelor apartment. Clearly, this was before serious dating and marraige.
+10. I love living like a college student.
It brings me back to a time that was totally exciting, where all I had to do was read, study, go to class, and play squash. No worries about the basics. Boy did I wallow in that realization.
Like Oly, I loved it.
Seriously Bub, you need to get laid.
Actually, that’s not the problem…:)
Then what IS the problem?
Oh, you know what, maybe you’re getting spring fever. Tell you what, send me your address and I’ll mail you a few handfuls of thawing mud with some fresh and lively worms mixed in there. You can sniff it deeply and maybe eat a worm. That’ll fix ya up.*
*What do you mean, ‘What good will that do’? Well, it couldn’t hurt to try, now could it? At least, it couldn’t hurt ME.
Oh I love the smell of digging in the dirt and the feel of the dirt in my hands.
So, SanFrangal, you want some mud and fresh worms, too? Or are you already supplied?
Bought tomato plants today with soil. Going to
be a ‘farmer’ in my little condo patio…hoping the heat doesnt’ fry the little cherry toms again. Pray for my good luck in tomato harvesting.
Trying to gain a foothold on grocery prices, independence and finally something tasty.
Will keep an eye out for worms, but I don’t think they exist in the desert. For long at least.
If you are worried about hyperinflation (as you should be) then you can rest assured that real estate will crash in real terms. There are no 1, 5, 10, 15, or 30 year mortgages in the middle of hyperinflation so all housing must be bought with cash. While the cash price my be going through the roof, the price relative to your $100T gallon milk will fall through the floor. Imagine what home prices would be today if all mortgages were forbidden. I think they would fall to 5 or 10% of todays prices. This is what will happen during hyperinflation.
Furthermore, I would not want to buy any house in the city / suburbs until after I saw the aftermath of the civil unrest heading our way. Don’t be bitter because of hyperinflation, protect your wealth and you will be anything but a bitter renter.
So take your savings, buy gold, silver, guns, and food, and then you will be able to buy your house for a few gold coins while all lending is halted during hyperinflation. If you have more than what is necessary for cash flow in your bank account then get it out now because one day soon there will be daily withdraw limits.
It is not worth going into debt unless you have assets (gold/silver) that will keep up with hyperinflation and your debt has a fixed interest rate. Do not count on your wages going up!
hm, this makes me feel better (a bit)
I’m in similar predic. I guess the good thing is that rents can only go up once a year, take that, hyperinflation…
(Weimar inflation wiped out landlords.)
How does hyper-inflation wipe out landlords?
Back then, loans were variable-rate. Can’t raise rent. You get wiped.
Also, those who owned the prop. free and clear often had to sell just to buy bread (so to speak)… they typically did not have other jobs, and those renting and working certainly weren’t going to barter. “Oh, sure, it is the first, isn’t it? Sie haben recht, ja. Will a 1000dm note do? Don’t worry about the change. Ja, times are tough, nicht wahr?”
I am pretty sure that once hyperinflation starts there is also no such thing as a year-long lease. You will be paying your rent on a daily basis or will pre-pay your rent for an entire month and renegotiate every month.
Only those landlords who signed a rental agreement before hyperinflation started get screwed.
Land lords get screwed by property taxes if the rent cannot keep up. Moral of the story is to have 10 years of property taxes in gold / silver or work with your local government to pre-pay your property tax.
As far as I remember, during the Weimar hyperinflation people who already had a mortgage (probably fixed rate, don’t know if all the modern sneaky stuff already existed then) when it all started were among the winners. I agree that they needed at least some other inflation proof assets / income to get through daily life, but still …
The real winners of course where those who put their savings in gold or foreign banks, and bought up the country for pennies on the Mark a few years later. That also set the stage for what happened during WWII, because most of these winners had a certain Middle-Eastern background …
I think this hyperinflation scenario might happen again, although maybe not as dramatic. There are some serious articles about the subject in the EU press now. Those with real estate and a big mortgage have been the big winners up to now in Europe, and they will also win if we get hyperinflation - as long as they have a mortgage that is not too big for their income. Ordinary savers will loose everything they have (probably except for some minimal capital, World Government guaranteed). Still no sign of deflation in Europe
Seriously? Please give names and addresses of these “winners”.
My wife’s great grandfather lived in Fuerth, Germany (Bayern). He was the leader of the Jewish community there during the Nazizeit. No record of his family making big buck$$$ during Weimar period–in fact, on a tour of the city, it seemed that up to the Nazi period, little had changed in this suburb of Nuernberg since the 15th century. I viewed the ‘old’ and ‘new’ cemetaries and there was nothing odd about tombstones–no blinged out mausolea from the 1920’s. Actually, quite a few burials in 1910’s for war dead. One of her great uncles among them.
I also went to the Munich Holocaust Museum. There was an exhibit about an art collection belonging to a Jewish couple who had been great fans and boosters of Wagner. While the Nazis did seize their assets, they were already broke! You see, over a period of many decades, Herr Doktor So-and-So had bought so many antique Greek plates and other objets d’art that he had quite depleted the family assets.
In fact, the Weimar inflation did more to boost the Communist party–which many working class Jews flocked too, ruined just like the Gentiles–than the Nazis, at least at first. It was only into the stable period of Hindenburg’s rule than the Nazis took power. (”v.” Hindeburg, but of course there is a scandal behind that!)
As for my wife’s family, a few, including her grandfather, escaped. He was granted special permission to attend school in Switzerland. He graduated and finished the war in a refugee camp, then arrived in the US and got a job with a Swiss firm with his Swiss diploma–a lucky break, as he puts it. Nazis and Swiss bankers (okay, that was redundant) stole almost all the family’s financial assets, and several of the older family members were killed. There is a roster of their names in the “new” cemetary.
Grandmother’s family fled suddenly, taking almost nothing with them–as the 1936 laws forbid Jews from taking anything of value, especially money, out of the country.
Even Hitler never spoke of ‘weimar profiteers’–he spoke of ‘war profiteers’, implying these were Jews, but actually they were his backers, industrial firms like Krupps, who made machine guns and made bank on WWI and WWII. He did go on and on about Jewish Bolsheviks. Well, guess what, the Communist party was quite popular in Germany in the 1920’s and 1930’s until Kristallnacht.
I’m sorry you believe these kinds of myths. I must wonder, if so many Jews had their money out of the country in the 1920’s (before the Nuremburg laws) then why did they have so much trouble fleeing?
I have read many accounts by Holocaust survivors. Not one talks about having money stashed away outside the country, except maybe a little in Switzerland … which turned out not to be the failsafe they thought it was. Without fail, those who fled Germany had to survive by their wits.
Perhaps you mean the Rothschilds, they are part of Europe’s noble class and have nothing to do with this discussion.
sorry for late answer: you make the wrong conclusion from what I am saying.
Of course most of the Jews did NOT escape the hyperinflation or what followed. But of the people who did, Jews were a significant proportion. Not only the Rothschilds, there were many others who made lots of money in this period (maybe because many of them were in banking or business owners, I don’t know).
I think you know too that within the Jewish community there were/are different groups, some of them generally poor and disliked by other groups because of their heritage, and others (on average) very wealthy. It’s not myth at all, and that is why it was easy for Hitler to point to the Jews: most people knew examples that ‘proved’ that he was right.
Talking about the Holocaust: it is surprising to me how many people with Jewish heritage are now claiming huge damages from the Dutch state (and other countries like Switserland) because of art collections, homes, bank accounts etc. that have been confiscated during the war.
Definitely not just ‘a few’.
I have a bunch of 50 million Mark notes from 1923 in a shoebox with some baseball cards and coin proof sets from the U.S. Mint.
Is my 1989 Mark McGwire Topps card worth 50 million 1923 Deutschmarks?
Probably not. How about my ‘92 Cal Ripken Jr? Maybe.
But those 1953 silver quarters and dimes?
Somebody might bid on ‘em.
Some men learn from reading,
some men learn from the experience of others,
and some men just have to learn from peeing on THAT electric fence :).
actually…the mythbusters tried the fence thing and they busted the myth.
the stream just isn’t constant enough.
‘the stream just isn’t constant enough.’
Well, maybe the mythbusters ’stream’ just isn’t big enough to provide constant flow.
After all, that one of them wears that deeply annoying beret. Tell me that’s not compensation for something!
Hey,
I like those two men. I even like the beret.
yeah, if you’ve got a ropey frothy stream….it’ll not only get your attention…it’ll knock you on yer @ss…
I beg to differ. A very painful experience in a poor young Idaho boy’s life.
Wha…?! They got electricity in Idaho?!
They got nuke you lure power, don’t cha’ know!
Arco Idaho, first city to light up with nuke electric.
only for the fences
And some women don’t bother to learn anything at all, seeing no point to all this ‘knowledge’ stuff. Knowledge just gets in the way of their enjoying life, which to them is standing there consuming candy and gin and shouting encouragement as men of the third variety damage themselves in new and exciting and comical ways.
We’re all concerned with inflation eating into income and savings.
Take heart in the fact that the economy is huge.. bigger than big. It has tremendous inertia and changes direction slowly. For example, despite the powerful forces driving them down (skyrocketing inventory, stagnant sales, credit starvation, etc) witness how long it’s taking for property prices to fall back to affordable… several years.
Govt is throwing megabucks at deflation but it’s not stopping it.. yet. The money can’t get past clogs in the pipeline. It will eventually break free and inflation should be the result.
My guess is it’ll happen only after property prices hit bottom. No force in the economy is even remotely as powerful as the downward (deflationary) force brought on by plunging property prices. We’ve barely scratched the surface of commercial property moving downward.. might even be a deflationary wave or two after that one.
The RE price “bottom” is also when economic recovery can begin. Employment and wages should rise as the vacuum created by lost business is filled with investor and entrepreneurial money.
Property would then be a good place to park money as a hedge against inflation. Property will appreciate hand in hand with inflation, just like in normal times. And it’ll be a very safe investment since the bottom, by definition, is when values won’t fall further.
There is a lot you can do to make an apartment not feel like a college dorm room. Unfortunately, some of it will make you feel like an FB because you will have to think about decorating and it will make it harder to move the next time you do it, but it is worth it.
Suggestions:
Go ahead and get a few pieces of art and get them properly framed. I have some that are just posters (opening of a college art museum, original screened print from an early exhibit at that same museum, one that I just liked when I saw it during my first visit to Paris, etc.) and some that are real original art (mostly costume sketches I got at a theater festival I attend each year). It makes a huge difference. Nothing unframed on your walls and nothing just glued to foam board (it warps without the frame).
Frame some family and friend photos. Since this is to avoid a college atmosphere, avoid photos that include beer or frat basements, even if you still spend time with the people as adults. If anything on your walls includes the name of any school you attended, the letters should be no larger than one inch high and not easily readable across the room. Avoid college colors being too dominant in your color scheme, though one of two is OK (you don’t have to avoid navy if you went to Michigan, just avoid navy and yellow together).
Go ahead and get some nicer furniture. Do it on craigs list or go haggle at a real store. Yes, you’ll have to move it, and that is a pain, but you deserve to have a nice place to sit. If the furniture needs duct tape to keep it together, it is dorm room furniture. Move on.
If a few particular pieces of furniture just remind you too much of dorm life, replace them. I had a few. I finally got rid of them last year. The replacements aren’t perfect, but I didn’t have them in law school, so they don’t remind me of being a student. Much better.
By the way, all this transformation will have the additional advantage of impressing chicks. Saying that you did it because you just got sick of living like a college kid, will melt many hearts. Unfortunately, the ones it melts the most are the ones who want a house right away, so be careful out there. So look for someone who smiles a little, but not too much.
Commit to your apartment. Talk to your landlord about paying a contractor to come fix up the place just as you like it. Maybe you could go half and half or agree to a rent freeze for a while.
I spent a couple hundred dollars landscaping the front of our rental place. Haven’t done much to the inside but I probably will. Just because you don’t own it doesn’t mean you can’t make it yours.
Oly,
Check this out! New rain forest frogs discovered! Neat pics.
http://www.telegraph.co.uk/earth/wildlife/4445256/Ten-new-species-of-amphibian-discovered-in-Colombia.html
While you’re looking at the above Oly,
I didn’t get home from work until late late (PST) last night, but I wanted to give you kudos on “gormless”. You sent me right to the dictionary and made me feel, well, gormless.
MrBubble
“Me fail English? That’s unpossible!” — Ralphie Wiggum (AKA Shrub).
I happily accept your kudos, MrBubble, just as if they were tasty Cheetos. Thanks.
Since you like words, let me tell you ’bout this–I once won a Boggle game in absolutely mighty style, with the word ‘jurisprudence’. Huh huh huh?! Using 13 letters out of 16! Yeah!
This was several years ago. I haven’t played since then. Why bother? The savor has evaporated. I done went and jumped the shark on that glorious day.
I had a geophysics professor would wouldn’t let me use the word “yeti” in Boggle because it was a foreign word. I have not played since. This was in 1991.
Irish Alzheimer’s: When you forget everything but your grudges…
‘I have not played since. This was in 1991.’
And I approve of your stance! There’s things you should take a stand on, and by gum, that’s one of ‘em!
Also, I do hope you later introduced your iggerent professor to a real yeti. Oh, and then taped the results, because heads don’t grow back, and that’s always funny.
Irish Alzheimer’s: When you forget everything but your grudges….
Oh, dear, I’m showing symptoms. What’s the cure? Lots of Guiness? No, that don’t cure it, nowhow…
Ooops, sorry. I’ve got the italics ‘on’ part grasped, but not the ‘off’ part.
Thanks for the link! That’s a wonderful frog! Goodness, that’s pretty. Man, I love frogs. I’m going to make up a Frog Chant right this minute. Lessee, what rhymes with ‘amphibious’?
Succubus?
Oh, now THAT has promise!
Throw in some mythology and you’re home scot-free: Daedalus Maybe some Latin: Regulus.
OK, we’re ready to hear the chant now.
I’m having some difficulty and am considering just going with: ‘I love Frogs, I love Frogs, hooray, hooray…’ sort of thing, along with claps of the hands.
….Ohhhhh, very well, I’ll keep on trying…
There must be a dance that goes with that—-right Olygal??
‘There must be a dance that goes with that—-right Olygal??’
Well, of COURSE. I have a dance for everything, my good sir.
Or, if you prefer, a ‘Free-Floating Fidget’, in the case of the less organized ‘dances’.
Mysterious, delirious, bilious, egregious, bubblicious (this IS the HBB, after all!)…..
Sexy! Good job, Elanor! Sounds just like a fun party!
Until someone falls out of the tree into the bonfire.
Sigh.
I always hate that part.
A report from Advertising Age about layoffs at Disney:
http://adage.com/mediaworks/article?article_id=134215
article was a satire. though funny.
Fed extends life of programs to ease turmoil
The Fed says it will keep these programs, which had been slated to expire on April 30, running through the end of October.
The programs being extended include those that: provide emergency loans to investment firms; buy mounds of companies’ short-term debt, known as “commercial paper;” bolster the mutual fund industry; and allow investment firms to temporarily swap risky securities for super-safe Treasury securities.
http://biz.yahoo.com/ap/090203/na_us_fed_credit_crisis.html?.v=1
No suprise, I think everyone expected this to continue. Lather, rinse repeat.
Fed extends life of
programs to easeturmoil“Confidence grows at the rate a coconut tree grows. It falls at the rate a coconut falls.”
Montek Ahluwalia
Deputy Chairman of Planning Commission in India at Davos.
“Down at an English fair,
One evening I was there,
When I heard a showman shouting
Underneath the flare:
Hoi’ve got a lo-ve-ly bunch o’ coconuts.
There they are a-standin’ in a row.
Big ones, small ones, some as big as yer ‘ead!
Give ‘em a twist, a flick o’ the wrist,
That’s what the showman said.
Hoi’ve got a lo-ve-ly bunch o’ coconuts.
Hevery ball yer throw will make me rich.
There stands me wife, the idol of me life,
Singin’ “roll a-bowl a ball, a penny a pitch!…”
Lets throw coconuts!
I like Put the Lime in the Coconut much better.
There is a place and a time to throw coconuts… Krewe of Zulu, Mardi Gras Day, New Orleans.
Now yell loudly, “Throw me somethin’, Mister!”
Roidy
Emerging Art Markets
Roman Kraeussl
VU University Amsterdam; Center for Financial Studies
Robin Logher
Department of Finance
December 15, 2008
Abstract:
“This paper analyzes the performance and risk-return characteristics of three major emerging art markets: Russia, China, and India. According to three national art market indices, built by hedonic regressions based on auction sales prices, the geometric annual returns are 10.00%, 5.70%, and 42.20% for Russia (1985-2008), China (1990-2008), and India (2002-2008), respectively. The Russian art market exhibits positive correlations with most common financial assets and a positive market beta, whereas the Chinese art market demonstrates a negative correlation overall and a negative market beta, and the Indian art index reveals a negative market beta and varying correlation results. Portfolio optimization under a power utility framework suggests limited diversification potential, but with a downside beta of 0.43, investing in Chinese art offers hedging potential during financial market downswings. Investigating the linkages between art and the economy through co-integration and causality analyses proves that emerging art markets share a significant long-term relation with other financial market instruments, but the short-term relations are largely absent.”
Portfolio optimization using art from Russia. Probably better off using art from Peru, Bolivia or even Iowa. At least it has better risk/reward characteristics than long US Treasuries.
India’s is squarely within the bubble, and all of them are within the large twin bubbles.
FAIL.
They are gonna get crowbared in the eye going forward.
Well if you wanna gamble how about
XRU
fortunately it is so small that you can’t lose much. LMAO
I tend to stay away from Russian products minus vodka (and once, caviar.)
I take that back.
I also go to the Brighton Beach markets every once in a while to get their black rye bread, and assorted vareniki (although that is American-made!)
So to sum up my completely incoherent posts:
Russian food products = YES
Russian financial products = NO
Cheers, comrade!
‘I tend to stay away from Russian products minus vodka (and once, caviar.)’
Not me! I’ve met several Russian products I heartily approve of. One was named ‘Nikolai’. Yes, really! Just like a character in a Dostoevsky novel! Except less prone to killing people and then brooding about it. I think. Well, anyway, I’m here, ain’t I?
Moving on: Besides being interestingly complex and moody, he could even do that one jumping up and down with crossed arms dance, like in old movies! Although I had to pester the livin’ hell out of him to get him to do it, and I don’t think he really knew the dance but was just placating me and making stuff up. I suspected this but didn’t even care.
See, I had made up my mind; I was gonna see a Russian do the jumping up and down with crossed arms dance. And I did. And it was great. The End.
I bet he did a lot of dances in all kinds of positions too.
I can see you’ve knowed some Russians yourself.
Yes, a graceful and coordinated people, those denizens of the Siberian steppes…and, I’m pleased to note, I didn’t even get killed once.
So far, anyhow.
(Of course, there’s not that many Russians around here. A fact I am often lamenting.)
dating.
Mr. Tom Coughlin to retire from family to spend more time with the Giants. His wife is not handing it well.
http://www.theonion.com/content/video/tom_coughlin_retires_from_family
A moment of silence please:
Doubledown Media, the once-rising publisher of magazines aimed at the Wall Street elite, has shut down.
“These are unprecedented times,” president Randall Lane wrote in an e-mail to staffers late Monday night. “The combination of the media depression, the Wall Street implosion and the credit slowdown were collectively too much for our company—probably any company in our shoes—to overcome.”
The New York-based publisher of Trader Monthly, Dealmaker, Private Air, Corporate Leader and the Cigar Report—which had been forced to cut the frequency and circulation of its titles, lay off more than a third of its staff and reduce salaries for the rest—was working desperately to find a buyer.
If you’ve never seen “Trader Monthly”, you really owe it to yourself to grab a copy somehow. Try not to bust your diaphragm laughing (I am NOT responsible for any injuries when you laugh yourself silly!)
Dammit, there go some of the last scorn-worthy things. What will we heap scorn on now? It’s practically depressing.
BWAHAHHAHAHHAHAHHAHAHAHAHHAHAHAHAHAHHHHHHHHHH!!!
“Doubledown Media”
Names says it all.
Permanently temporary?
The Federal Reserve on Tuesday announced the extension through October 30, 2009, of its existing liquidity programs that were scheduled to expire on April 30, 2009. The Board of Governors and the Federal Open Market Committee (FOMC) took these actions in light of continuing substantial strains in many financial markets.
The Board of Governors approved the extension through October 30 of the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), the Commercial Paper Funding Facility (CPFF), the Money Market Investor Funding Facility (MMIFF), the Primary Dealer Credit Facility (PDCF), and the Term Securities Lending Facility (TSLF). The FOMC also took action to extend the TSLF, which is established under the joint authority of the Board and the FOMC.
From the same PTB that brought you:
“the next six months are critical for Iraq”
Agent Smith: We’re willing to wipe the slate clean, give you a fresh start. All that we’re asking in return is your cooperation in bringing a known banker to justice.
DOW Chemical, One Thousand One Hundred and Forty Four-ish Week Low.
*there is no bottom, not in any liquidity trap.
Glad you’re clueing in to the situation, Urs-ula?
R U tryin to git me to buy into the FLooR plan?
What’s the FlooR plan? I’m lost.
Clue me in.
You could be right, but it is still a US company. So what does it profit you if the stock doubles and the dollar loses 50%.
Are you Clue or Vozzie or ? or Ursula ?
GE shows profit NBC sells out SuperBowl Ads.
Newest collectible: Stock certificates of failed banks. Citi’s is real pretty, maybe I can snarf the Sheik’s billion share certificate. I never owned a billion share certificate before.
OK, you’re making me jealous here.
I missed out on collecting the stock certificates of the dot-coms. I totally need to fork out for the IB’s, etc.
Damn you, damn you!
Me too… What do these tend to go for?? Or what did they go for in the post-dot-bomb era?
you know its me, dont be coy.
Question:
If HOG’s borrow at 15%, what do PIGS borrow at?
Petunia says that Porky does not warrant to be in the pen.
Here suey suey suey.
he said /she said…jib-jab…potato /po-tat-toe
Federal spending…no, tax cuts!
Federal spending…no, tax cuts!
Deflation!…no, Inflation!
Deflation!…no, Inflation!
Popcorn & whiskey…no, Gold!
human bondage…home bondage:
“For a few moments, the fate of the battle, and the war, came down to two regiments firing at each other at point-blank range, on a blistering hot day, on a hill thick with trees and undergrowth. Oates led his men in five charges. The 20th Maine repulsed each one. Soldiers on both sides collapsed, Chamberlain later wrote, “like grass before the scythe.” The engagement often broke up amid the rough terrain into small groups of cursing, sobbing men, stabbing and clubbing one another. Chamberlain’s men had exhausted their ammunition, and Oates’s troops were advancing yet again when Chamberlain gave one of the war’s most audacious commands: at a time when many officers might have ordered a retreat, and knowing that another assault might break them, he led his exhausted force downhill in a bayonet charge. The 15th Alabama, shocked at the sight, reluctantly gave way and then fled. Their dead and wounded carpeted the hill.”
“Fifty thousand men were killed or wounded at Gettysburg. A national cemetery for the dead was swiftly created and Edward Everett, the era’s most celebrated orator, was recruited to give a speech at its formal dedication in November 1863. The official program indicated that the President of the United States would also offer a few remarks. In fact Abraham Lincoln viewed the event as a crucial opportunity.
He had been anxious to find an occasion when he could summarize what he saw as the larger importance of the war, to explain to Americans why the awful suffering they were enduring was necessary. In a speech lasting less than five minutes “he gave the battle a higher meaning,”…
Hwy, goes back to planting sunflower seeds…;-)
“higher meaning”
There wasn’t one. There isn’t one now.
There is no pain, you are receding.
A distant ships smoke on the horizon.
You are only coming through in waves.
Your lips move but I cant hear what youre sayin.
When I was a child I caught a fleeting glimpse,
Out of the corner of my eye.
I turned to look but it was gone.
I cannot put my finger on it now.
The child is grown, the dream is gone.
I have become comfortably numb.
‘Wall St., a Financial Epithet, Stirs Outrage ‘
http://tinyurl.com/akfpff
“I’d almost rather say I’m a pornographer,” said a retired Wall Street executive who, for self-evident reasons, asked not to be identified. “At least that’s a business that people understand.”
Hahahaha! More fun to add to today’s p0rn considerations.
From the article:
“……she thinks she deserves one (a bonus), given the millions her department earned”.
Which begs the question? How were these millions “earned”?
Were they earned by value added transactions, providing capital to companies/individuals for responsible expansion, acquisitions, or purchases?
Or was it “earned” by speculation in commodities (driving prices up for everyone), or by churning accounts to generate fees?
I’ve seen too many poor decisions made, and regular people screwed over in the past 20 years, in the effort to make Wall Street happy.
Sympathy…….in the dictionary between “Sh#t” and “Syphilus”
‘Sympathy…….in the dictionary between “Sh#t” and “Syphilus”’
Wow. That’s a sentiment worthy of being cross-stitched in pink floss, for placement next to the ticky cat clock on my kitchen wall.
Off topic:
The rest the country probably wasn’t aware of this, but this article shows what was scrolled across the bottom of the screen every time NBC showed Matt Millen’s face before, during, and after the Super Bowl. You can hardly talk football in Detroit without someone ragging on NBC nowadays.
Me, I thought it was kinda funny:
http://sports.yahoo.com/nfl/blog/shutdown_corner/post/Matt-Millen-s-NBC-commentary-comes-with-a-warnin?urn=nfl,138326
Thanks for the article. I grew up in Detoit - lifelong Lions, uhhh … ‘fan’.
Well I know one of our best friends has the LAST job they will ever fire you from.
It will telegraph to the employees ‘WE’RE ALL FREAKIN’ DOOMED!” in the best Mogambo style
—-
—-
—–
keep going
——–
He is the editor of the Xerox company newsletter….
boo yah!!!!!!!!!!!!!!!!!!!!!!!!!
http://www.latimes.com/business/la-fi-westside2-2009feb02,0,132182.story
“L.A.’s Westside succumbs as housing goes south”
Where’s LA_investor_girl at ???
behind the proposition.
NEW YORK CITY-The national default rate for commercial real estate mortgages held by depository institutions will more than double from 1.8% for the fourth quarter 2008 to 3.9% by the end of 2009, according to a report released late Monday from Dr. Sam Chandan at Real Estate Economics.
President and chief economist at REEcon, Chandan also predicts that default rates for commercial real estate loans will continue rising over the next few years, reaching 4.7% in 2010 and finally arriving at a peak of 4.8% in 2011. From there, the default rate is projected to decline to 4.2% over the course of 2012. …”
Globe Street
Interesting that commercial Real Estate analysts project another 4 yrs of downturn.
I’m not familiar with Dr. Sam. Is he normally gloomy Gus or Ozzy optimist?
More a realist than a pessimist, definitely not NAR economist material. Geared toward commercial real estate and real estate law.
” Jan. 15 (Bloomberg) — Commercial landlords with good credit are finding they are increasingly unable to refinance their properties, said Sam Chandan, president and chief economist of Real Estate Economics LLC.
Chandan, formerly chief economist of the real estate research firm Reis Inc., in a speech today, called this “one of the significant challenges we face” this year. He spoke at a meeting of the New York chapter of the Urban Land Institute. …”
Think Mr. Zandi
Thanks.
oh, snap
I’ve been quite procrastinate-y about getting a new used bike, since I have one that works (but it’s a child bike and it sucks).
Prices for a solid used bike since last year have gone from $40, to $45, to $50, to $50 WITH REPAIR ISSUES! Arrrrghhhhh!!!
On the other hand, it seems like more expensive bikes are up for sale (but I’m not in the market for those).
Someone is trying to pawn off a used MAGNA (crappy Chinese bike) for $45! Not worth $25! Seriously!
http://gainesville.craigslist.org/bik/1013888313.html
What the h@ll gives? I mean, gas prices came down, lol.
I am seeing WAY more bikes on the road than three years ago. Have to fight ‘bike traffic’ on the sidewalk, hello. GNV residents have bad credit, no car for you.
I’m just ticked because I want a deal, but the price keeps coming up. Damn.
Wait until its 90+ degrees out and everyone is headed inside for the air conditioning. That will be a good time to buy a bike.
Just like I waited for the nice, soggy, incessantly-rainy grey PNW Christmas season to look for a kayak.
Hello, little bargain kayak!
‘Cept I didn’t get a motorcycle. Sigh. Maybe I can get one from some local foreclosure-ee one a these days. Because I hear it’s not different here, after all….
BWAHAHAHAHAHHA!
Los Angeles Opera
“Los Angeles Opera has laid off 17 of its 100 workers and ordered a pay cut of as much as 8% from each remaining staffer’s salary.”
Daily Variety Newspaper
January 27, 2009
“The opera ain’t over till the fat lady’s sings.” Dan Cook
I think she is singing loudly.
Wow…. The inflatinary preasure is really building now.
true enough, lol
All orchestras, etc, really screwed now. Galleries too, apparently. Hope they didn’t buy too much art during the bubble phase. Oops, I mean, “acquire.” (Not actually euph. for ‘buy’, more for ’steal’, since that’s how many museums got their best pieces!)
GNV’s local orchestra really hustled for money this year, which I applaud. Some real ads in the program for once, and some private donors came through. What worries me is next year. The corporate sponsors may shut off the spigot. GNV despite its size has a pro orchestra, not community orchestra, though I’ve heard better performances at free Harvard student group concerts. (The kids probably rehearsed more.) The conductor is a trust fund baby, not worried about him.
darrell in phx
Have you thanked your employer for getting you out of US Treasuries near the top? lol
Always better to be lucky!
Call it the Great Repression. The reality being repressed is that the western world is suffering a crisis of excessive indebtedness. Many governments are too highly leveraged, as are many corporations. More importantly, households are groaning under unprecedented debt burdens. Worst of all are the banks. The best evidence that we are in denial about this is the widespread belief that the crisis can be overcome by creating yet more debt.
The US could end up running a deficit of more than 10 per cent of gross domestic product this year…. Today’s born-again Keynesians seem to have forgotten that their prescription of a deficit-financed fiscal stimulus stood the best chance of working in a more or less closed economy. But this is a globalised world, where unco-ordinated profligacy by national governments is more likely to generate bond market and currency market volatility than a return to growth.
FT — Niall Ferguson: Beyond the age of leverage: new banks must arise
Continued…
There is a better way to go but it is in the opposite direction. The aim must be not to increase debt but to reduce it. Two things must happen. First, banks that are de facto insolvent need to be restructured – a word that is preferable to the old-fashioned “nationalisation”. Existing shareholders will have to face that they have lost their money. Too bad; they should have kept a more vigilant eye on the people running their banks. Government will take control in return for a substantial recapitalisation after losses have meaningfully been written down. Bondholders may have to accept either a debt-for-equity swap or a 20 per cent “haircut” (a reduction in the value of their bonds) – a disappointment, no doubt, but nothing compared with the losses when Lehman went under.
More…
The second step we need to take is a generalised conversion of American mortgages to lower interest rates and longer maturities. The idea of modifying mortgages appals legal purists as a violation of the sanctity of contract. But there are times when the public interest requires us to honour the rule of law in the breach. Repeatedly during the course of the 19th century governments changed the terms of bonds that they issued through a process known as “conversion”. A bond with a 5 per cent coupon would simply be exchanged for one with a 3 per cent coupon, to take account of falling market rates and prices. Such procedures were seldom stigmatised as default. Today, in the same way, we need an orderly conversion of adjustable rate mortgages to take account of the fundamentally altered financial environment.
“A bond with a 5 percent coupon would simply be changed for one with a 3 percent coupon, to take account of falling market rates and prices.”
Still another case made for staying in cash.
Interesting proposal to solve the problem mrkMaven . I tend to agree with you that the problem has gotten so widespread that
the loans need to be adjusted . It doesn’t solve the problem about the people that will walk regardless .
Another possible solution is to nationalize the mortgages at these adjusted rates so people can withstand the crashing markets . I just don’t know what % of the borrowers will be
interested in such a remedy . Unless the payment is similar to
rental rates ,borrowers might still want to walk on the obligation . But, Black Swan Events might fall under the realm of no other choice type of solution ,in spite of contract law .
Not that I agree with these extra-ordinary measures ,but a case could be made that no other option exists .
Feb. 3 (Bloomberg) — Treasury three-month bill rates rose to a more than three-month high as credit market improved and speculation increased that the government will boost the economic stimulus package, according to Miller Tabak & Co.
The rate climbed seven basis points to 0.31 percent at 4:49 p.m. in New York. That’s the highest level since 0.39 percent on Nov. 12, when Congress was debating an automaker bailout amid concern the industry would collapse. Rates turned negative Dec. 9 for the first time ever as investors rushed to Treasuries as a safe haven. It averaged 3.03 percent for the last five years.
“Following several months of hiding under rocks, investors are peeking out,” Tony Crescenzi, chief bond-market strategist at Miller Tabak in New York, wrote in a note to clients today. “This is apparent in T-bill yields, which have moved up sharply since the beginning of last week.”
Investors are speculating the almost $900 billion stimulus package will be increased following an “intensification of worries about U.S. banks,” Crescenzi said. Robust corporate bond issuance “indicates a crowding out of Treasuries is underway,” he said.
Companies sold $146 billion of bonds in the U.S. last month, the most since May, and even high-yield, high-risk junk debt had the best start to a year since 2001.
Since short-term Treasuries “are likely to remain anchored to the low fed funds rate,” Crescenzi said. “The yield curve will steepen. Its degree of steepening indicates that the odds of recession one year hence have fallen substantially.”
Bloomberg.com now has a headline that there are now 19 Million empty homes.
Even Bloomberg doesn’t quite get it! It says the banks “seized” the homes (how can you seize something that’s yours?) and not-quite-correct logic like:
“When you’re underwater and prices continue to fall, you tend to walk,” Miller said in an interview. “It’s a downward spiral that’s tough to stop because it feeds on itself. Foreclosures encourage other foreclosures and falling prices discourage buying.”
….as if the current value of an item you purchased and your willingness to pay what you agreed to in a contract are related as a matter of course.
Bloomberg missed it, there are 19 MM vacant residences this also includes condos, commercial apartments and seasonal resort properties. It is not just houses.
Bwa ha ha.
City of Vancouver B.C. apparently planned to finance their 2010 winter olympics (they “won” in 2003) by selling 1000 some luxury condos built to house athletes. They recently had to put in 300M and guarentee the rest of the loans to get them finished after the builder lost financing. Epic timing there.
They now have to sell for over 1M a piece to break even / pay for the games / some similar fantasy that I couldn’t hear clearly through the laughter.
And Chicago is trying so hard to win the Olympics and just in the middle of this mess.
Yeah and some goof ball tried to build a weird tower that was a 1.5 hr ride from the top elevator to the ground. I wonder how the Blagojovich monument looks - the big hole in the ground - although, I bet pot holes on the local expressways are deeper.
Bubblelonia central:
http://money.cnn.com/2009/01/23/autos/government_car_incentives/index.htm
Toprak said he would rather see a program that makes it easier for customers to actually get loans, not just provide extra cash or make interest on loans deductible for those who can get them. Right now, he said, auto loans are just too hard to get to begin with.
Puke!
I have it on good authority that the Globalista PTB are calling open season on taxpayers.
a No limit.season.
Im opening up a “tax levey” letter as I type….
poor bastard dont know whats coming….
dont be scared.
Intent to levy, means you gotta pay up sucker.
yes sombodies got to pay for this might as well be us… until we get fired and have to work for 1/3 less money and no benefits. Its going to be great.
I see home sales have picked up !!? maybe I didn’t get the memo buy the dip its bottomed only go up from here.
One more thing a guy from work has declared bankrupcy and quit paying his mortgage live rent free for a year etc, anyway Wells Fargo has motioned to speed up “somthing I forget what he said” to get him out as fast as possible ….. I guess usually you have to wait for a court hearing before a bank can foreclose ? Wells Fargo doesn’t want to wait.
It is “pending” home sales. Doesn’t say sold homes.
Vozzie
Taxes are only a means of controlling inflation. You must be making to much on Craigslist.
If you don’t like paying taxes, I suggest you become a politician. Better yet, become an appointee to a cabinet post.
So I am on mean and nasty pills.
“…India Friday slapped a ban on import of toys from China after cheap supplies from the neighbouring country upset the applecart of the domestic manufacturers. The ban, notified by the Directorate General of Foreign Trade, will remain valid for six months. While the government notification did not cite the reason for the ban, sources said it was concerned over a rise in imports of toys. A concern had also been raised over the safety of children playing with the Chinese toys, which were found to be toxic. Most of the varieties, including wheeled toys, dolls, stuffed toys, toy guns, wooden and metal toys, musical instruments, electric trains and puzzles are covered under the ban….”
PTI News Agency
Trade wars
and
from Mr. Dong Tao (Credit Suisse)
“…We are concerned about the quality of bank lending but the move to increased lending would be positive news for China’s GDP and global demand. We do wonder how banks conducted their due diligence to allow them to lend one-forth of last year’s lending within three weeks. The potential consequence to the health of the banking sector remains to be seen. Nevertheless, with this massive credit expansion, our upbeat 2009 growth forecast of 8% is more likely to be met….”
China is throwing moneys around like confetti (most going to Japan) and if their stimulus package falters, the China banks will be toast. Just what the world needs more Zombie banks.
“…CBO’s forecast is based on the assumption that current laws and policies governing federal spending and taxes do not change. Thus, the forecast does not reflect the impact of any fiscal stimulus package or other elements of the new Administration’s economic program….
…
Under those assumptions, CBO anticipates that the current recession, which started in December 2007, will last until the second half of 2009, making it the longest recession since World War II. (The 1973–1974 and 1981–1982 recessions both lasted 16 months; if the current recession continues beyond midyear, it will have lasted at least 19 months.) It could also be the deepest recession during the postwar period in terms of the difference between actual and potential output. By CBO’s estimates, economic output over the next two years will average 6.8 percent below its potential. The unemployment rate will increase to 9.2 percent by early 2010, up from a low of 4.4 percent at the end of 2006. The peak figure would still be below the 10.8 percent unemployment rate seen near the end of the 1981–1982 recession, because the unemployment rate was much lower at the start of this recession than it was before the downturn in the early 1980s. According to CBO’s forecast, real gross domestic product (GDP) in 2009 will average 2.2 percent below its level in 2008 and in 2010 will average only 1.5 percent above the 2009 level (see Table 1).”
Statement of
Douglas W. Elmendorf
Director
The State of the Economy and Issues in Developing an Effective Policy Response
before the Committee on the Budget U.S. House of Representatives
January 27, 2009
The 92% Insolvent Solution?
46 of 50 States Facing Bankruptcy in 2009 or 2010 - From Freedom Arizona.Org:
“Freedom isn’t free. Not in Arizona, not anywhere.
There is a high chance a majority of the States within the United States of America could file for Chapter 9 bankruptcy. There are currently 46 states with high budget deficits, Arizona being one of them.
In fact, Jan Brewer, the newly appointed Governor of Arizona has a major crisis on her hands, one that Arizona and national media isn’t covering. The alarming news is the State of Arizona has 90 to 120 days before they completely run out of money. After that, all bills and tax refunds owed to the citizens will go unpaid.
Before Janet Napolitano left for her new Homeland secretary position, she had a stand-off with Arizona Treasurer Dean Martin. The AZ Treasurer forewarned Napolitano about Arizona’s financial crisis, but she refused to heed his words.
With neighboring California on the verge of bankruptcy this year, many States will follow in their steps.
Many States are already scurrying to cut unwanted costs, cut State-funded programs, raise taxes, not issue tax refunds to their citizens, and borrow money just to survive in 2009. Unfortunately, many banks — the same banks the Fed bailed out — are refusing to loan money to the States and their Treasury agencies.
The article, State Budget Troubles Worsen, at the Center on Budget and Policy Priorities website is an excellent piece to read. It shows where each State currently stands in these challening economic times, and you see 46 of the 50 States are clearly in the financial red.
It’s very possible you’ll see the end of the United States as we know it. If the Fed doesn’t bailout the States when their cash dries up and the banks don’t loan them money, then our States will be left in financial ruin. This would be a tragic and unprecedented event never experienced in the United States.
No State has ever filed bankruptcy, but it could be coming to a State near you this year.
We are on the brink of something far worse than the Great Depression.”
Do you have a link on this story ? This seems to be very alarming news
in my book . I am trying to get my head around what this would mean if 46 of the 50 States went BK . I am posting late so I don’t know if your around put if you are ,do you have anymore information on this ?
And Stimulus bill aside this is the CBOs cost analysis for HR1. H.R. 1 would specify appropriations for a wide range of federal programs and would increase or extend certain benefits payable under the Medicaid, unemployment compensation, and nutrition assistance programs. The legislation also would reduce individual and corporate income tax collections and make a variety of other changes to tax laws.
H.R. 1
American Recovery and Reinvestment Act of 2009
As introduced in the House of Representatives on January 26, 2009
“…CBO and JCT estimate that enacting H.R. 1 would increase budget deficits by $526 billion over the 2009-2010 period (about 19 months) and by a total of $816 billion over the 2009-2019 period….”
CBO
Since Prof Bear poohed the idea that taxes are a means of the government controlling inflation. Here is another formula to play with:
Δ(G-T) = Δ(S – I) + ΔNFCI
Δ (Delta) = Rate of Change
G-T = fiscal stimulus
S-I = Private sector Net Savings
NFCI = Net Foreign Capital Inflows (aka bond buyers)
If the government spends more, we have to be large net savers or foolish foreign investors have to ante more. Better off eliminating all federal taxes and relying on foreign investors.
What you call fiscal stimulis used to be more honestly called “deficit spending”.
Posted on Monday, February 2, 2009
Dry January raises fears California faces 3rd year of drought
By Matt Weiser | Sacramento Bee
Water experts are having a hard time finding the right words to describe what lies ahead, after recording a dismally dry January in California.
“Scary,” “grim,” and possible “conservation mandates” are offered up.
Yet it’s easy for the experts to sound out a clear warning: This may become, simply, the worst drought California has ever seen.
“Our worst fears appear to be materializing,” said Wendy Martin, drought coordinator at the state Department of Water Resources. “It’s going to be a huge challenge…”
Aladinsane out tree huggin again? Enjoy it now cuz soon they’ll be tender.
tender = tinder?
Wow , its late ,but I’m trying to get my head around all the financial bad news, as well as this drought problem . I can just picture that if
the drought is true and they impose mandatory conservation ,we could have all the lawns being brown and you won’t be able to separate them from the foreclosures . At least that would solve the brown lawn problem .
Anyway , I have been at the emergency hospital for the last 48 hours dealing with heart attacks and crazy sh*t . No need to go into it ,its to crazy for words .
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