Bits Bucket For February 16, 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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These guys are tripping all over themselves hoping to come up with the “magic” formula.
Geithner Pressed By G-7 to Move Fast on Bank Bailout…
Feb. 16 (Bloomberg) — Finance chiefs from the Group of Seven nations joined the chorus of U.S. investors and lawmakers pushing Treasury Secretary Timothy Geithner to move faster to fix the banking system.
Stung by domestic criticism for failing to provide details last week on just how he plans to clean up banks’ toxic assets and revive lending, Geithner was told by foreign policy makers at weekend talks in Rome that speed was of the essence.
“A concrete U.S. plan would have positive spillover effects on markets and economies elsewhere,” said Marco Annunziata, chief economist at UniCredit MIB in London. “They are also probably hoping Geithner unveils the magic formula, which they could then also adopt.”
The G-7 finance ministers and central bankers want Geithner, 47, to tackle a U.S. credit crisis that lies at the heart of the worst global recession since World War II. Bank stocks, as measured by the Standard & Poor’s 500 Financials Index, have fallen 30 percent this year and ended last week lower than before Geithner presented his rescue plan on Feb. 10.
If China paid its workers real wages instead of serf wages, you think the financial world would be in this mess? The status quo is unsustainable. Chinese workers need a New Deal.
wages in China are going up many times faster than in the US.
I don’t think you should blame the Chinese for the situation.
They are still a pittance. And with the mass layoffs now happening over there I suspect that they won’t be getting raises anymore.
This is what some of them (Chinese) are up against this spring. (tried posting it yesterday but it didn’t take)
http://business.theglobeandmail.com/servlet/story/RTGAM.20090213.wchina0214/BNStory/Business/home?cid=al_gam_mostview
Comments are fascinating–never seen a three-way roundtable (or melee) between Canadian, Chinese, and US posters.
“…wages in China are going up many times faster than in the US.”
That’s not saying much since US wages are going DOWN.
I expect they are willing to live with that to which they are accustomed. Perversely, the seeds of revolution are often sewed by a rising standard of living, as expectations can easily grow faster than the economy’s natural growth speed limit.
sowed (mental spell checker is on the blink today)
Its hard to keep people down on the farm after they have had a taste of city life.
It depends on where the farm is, and what the city is like.
standard of living for many Chinese in the cities has climbed enormously over the last 10-20 years; wages don’t say anything, purchasing power is far more important. Look in the bigger cities like Shanghai: it looks FAR more wealthy (cars, clothing, dlean streets) than most Dutch cities, and I guess also wealthier than the average Middle America town - despite the lower wages. Of course, this doesn’t apply to everyone but it shows how fast things are changing; there is a huge middle class now.
The problem of this is that they are now used to a quickly improving standard of living (especially the young people) which is dangerous when things start going downhill. The other problem is of course that with rising wealth people aspire other things like freedom of speech and religion, political influence etc. for which China is not yet ready (although they are doing pretty good on that front as well IMHO).
Feb. 16 (Bloomberg) — Consumer prices in the U.S. probably posted their first annual decline since 1955 and new home construction fell further in January, economists said before reports this week.
The cost of living probably dropped 0.1 percent in the 12 months to January, according to the median forecast in a Bloomberg News survey ahead of Labor Department figures due on Feb. 20. A Commerce Department report two days earlier may show builders broke ground on the fewest houses since record-keeping began in 1959, a separate survey indicated.
The Labor report may renew concern among some Federal Reserve officials about the risk of prolonged declines in prices, which erode profits and make debts harder to repay. The housing figures will underscore the difficulty President Barack Obama will have in arresting the industry’s three-year slump.
“Given the rising odds of deflation, there’s certainly no pressure on the Fed to raise rates and it gives them the green light for further credit easing,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. Meantime, housing is unlikely to recover in the first half of the year, he said.
Obama will unveil his strategy to stem the mortgage crisis the same day as the housing-starts figures. The focus of the plan will be to cut monthly payments to help keep struggling borrowers in their homes, aides said.
the risk of prolonged declines in prices, which erode profits and make debts harder to repay
The perpetual motion machine is broken.
“…to help keep struggling borrowers in their homes…”
or
“…to help keep struggling borrowers from walking…”
Depends on one’s POV I suppose.
“The focus of the plan will be to cut monthly payments to help keep struggling borrowers in their homes, aides said.”
Without getting into the tricky question of the incidence of the tax (which could even fall on holders of greenbacks through an inflation tax or future generations of taxpayers through debt issue), this policy amounts to charging taxpayers to fund revisions of mortgage contracts. Banks and the struggling borrowers are the beneficiaries of the taxpayer-funded wealth transfer.
“Banks and the struggling borrowers are the beneficiaries of the taxpayer-funded wealth transfer.”
Sigh. It’s just not going to work out anyway, so why worry about wealth transfers? As if there’s any wealth to transfer.
It’s more of a debt transfer - take the debt off the hands of the irresponsible and spread it around to everyone.
I’m not sure the struggling homeowners are benefitting. They will see their 30yr loan increase to a 40-50yr loan. They will never be able to move. The banks hedge funds and other stock holders are the ones getting the benefits. How many almost foreclosed homeowners trips to Vegas or the Bahamas have had to be cancelled???
“It’s more of a debt transfer - take the debt off the hands of the irresponsible and spread it around to everyone.”
Thanks for the suggestion, but I will stick to the wealth transfer explanation. To get the full picture, you need to compare the amounts hedgies and banking executives earned over the past decade to the amount of bad debt that is about to get ’shared’ with Main Street.
One of the beauties of disaster capitalism (the school of economic management favored by the Greenspans, Summers, Geithners, etc of the world) is the intertemporal decoupling of the period when the cream of the crap earn outsized paychecks from the disastrous aftermath when everyone on Main Street is involuntarily fleeced to help clean up the mess in order to stave off the crisis.
Bet they don’t teach that in the Samuelson textbook, do they now? Nor in Romer’s macro-book either.
You have to learn all the good stuff in the real world.
Love it!
the most irresponsible person in the room was the mortgage broker, and that ape got to walk away with the gains scott free.
Keep talking like that, PB, and I’m going to pick up my pitchfork and head to DC.
I am inclined to believe that while disaster capitalism can provide excellent short run benefits to pig men, over the long run it can spell the demise of a nation’s wealth base. This is my personal view of what has happened to America over much of the post WWII era — we were a wealthy country in the mid-20th century, but we let pig men and their disaster capitalist exploits rape, rob and pillage the national treasury to bring us to the sorry state of indebtedness in which we currently find ourselves. And so far, all the evidence points to an attempt to quickly return to business as usual by the same group of economic leaders as those who ran the roaring 90s economy of the Clinton presidency.
“intertemporal decoupling”
Sweet. I am going to look for opportunities to use that phrase.
“…the most irresponsible person in the room was the mortgage broker, and that ape got to walk away with the gains scott free.”
Nonsense. They were just pawns in the game. The Wall St. bankers, and ratings agencies were the ones who orchestrated the giant rip-off.
“intertemporal decoupling”
Since none of the pig men could have possibly seen the disaster coming, it is hard to hold them accountable for raping, robbing and pillaging their companies and the entire U.S. and global economies.
Preach it Jas!
Ups, I mean: Preach it PB!
Yes, but by framing it as “keeping borrowers in their homes” it implies the gov’t is in full control and has the ability to “grant” housing to whomever it chooses. OTOH, by framing it as “keeping them from walking” it implies the gov’t is behind the curve and frantically reacting to events - not guiding them.
In this event we are seeing classic examples of the “politics of power” and it seems more than a few folks are willing to indulge the gov’t in building its illusion of total control.
+1 insightful
Our country will not survive by subsidizing failure.
France is still around, what are you saying?
France is still around because of external factors. Other countries’ armies liberated them: the EU is a Ponzi scheme to support their otherwise-unsustainable social welfare state by bleeding other EU members.
Will France be the second or third muslim nuclear power?
If tax payers keep people in over priced homes and then the prices fall the tax payers made a terrible investment.
Oh, it is an attempt to con people into not walking, and it won’t work. People will still walk.
The government is so not in control.
On “Meet the Press” yesterday, I think someone said the goal was to reduce monthly payments to 31% of income. Would this be enough of an incentive to stay in an underwater mortgage, compared to the alternative of renting? Of course, property taxes would increase the payments to more than 31% of income. Probably the deciding factor would be how much you are underwater. If you have no prospect of recovering any equity and would have to sell at a loss for the foreseeable future, you might as well walk.
Anyone that bought near the top of the bubble will see they are much better served by walking, rebuilding credit, and being able to buy 2 years from now when prices are way off even today’s lower prices.(lower than bubble, not lower than affordable).
“Consumer prices in the U.S. probably posted their first annual decline since 1955 and new home construction fell further in January, economists said before reports this week.”
Would this be properly classified as disinflation or negative inflation, Hoz?
Lol.
A failure to understand long division is a serious handicap in financial circles.
Thank jeebus I’m still on the winning team…
the undoctered CPI numbers are still firmly in the black, around 8% currently (look at shadowstats.com).
I wonder when did they start using the term “Credit Easing”? When they suddenly jumped from DefCon 5 to DefCon 3 with the realization that the vertical lines on their bank solvency graphs might actually be important and decided they might OMG have to pierce the Zero Interest Rate Barrier?
FT Home
US
Economy & Fed
Market fears of deflation abate
By Krishna Guha in Washington
Published: February 15 2009 21:01 | Last updated: February 15 2009 21:01
A funny thing happened on the road to deflation: the bond market decided it is not becoming more likely.
While the economic outlook has deteriorated in the past few months, the inflation rate expected to prevail in the medium term has not fallen. Most market-based measures suggest it has gone up a little – not just in the US but in the UK and the eurozone as well.
That is striking, because the prospect of an even larger gap between supply and demand – which puts downward pressure on prices – would normally heighten deflation fears.
It is also good news, because deflation would amplify all the other problems facing the economy.
The disparity may indicate that unconventional monetary policy – creating money to buy assets and make loans – is working at least in the limited sense of preventing a deepening recession from fuelling potentially self-fulfilling deflationary expectations.
There are three possible explanations for the apparent failure of market deflation fears to mount alongside economic weakness.
The first is that the deflation scare of October and November was an illusion caused by extreme swings in market demand for liquidity. If so, investors could be getting more concerned about deflation – but easing liquidity strains are hiding this. That is possible but if it is true, the level of deflation concern even today is not that great.
The second is that investors are increasingly convinced that central bankers are both able and willing to prevent sustained declines in prices.
The third is that the market is balancing deflation fears with growing concern that the extreme steps taken to avert deflation will end up causing high inflation. It is impossible to tell from the data which explanation is true (possibly a bit of each).
Fourth explanation: Like housing, the prices of everything else always goes up.
“Fourth explanation: Like housing, the prices of everything else always goes up.”
I think banks will have to loan money again for prices to go up.
Or shortages develope because companies fail and get replaced with government owned business.
I see no shortgage of workers these days the usual reason for wages to go up.
What’s the difference, if there is one, between raising tariffs on imports; and inflating your money supply through deficit spending and printing dollars?
The first way sounds much more politically visible and likely to spark a trade war. The second policy is far more broadly targeted, penalizing not just trade partners but anyone owed fixed dollar obligations (e.g. owners of U.S. debt, current or future retirees with fixed income pensions, etc).
Curious as to why do you think these are equivalent?
whether there’s an answer or not sorta depends on what point you are trying to make. How are they similar?
they both raise the consumer price of imported goods and lessen the price differential between domestic and foreign labor
One is a cause, and the other is an effect? In computering, it is important to know the inputs and the outputs so you can keep the garbage in and the garbage out on opposite sides of the powerpoint. It’s not easy to do once both sides get smelly…
Tariffs only have an impact if you are importing. No trade, no impact.
Tariffs can be a very good thing, without them we wouldn’t have any foreign car manufacturers building plants in the US and showing up GM/Chrysler/Ford.
“…without them we wouldn’t have any foreign car manufacturers building plants in the US and showing up GM/Chrysler/Ford.”
Hard to say what would happen if the current policy regime were not in effect, as one cannot rerun history the other way.
I wonder what US companies are paying their European workers. I find it very hard to believe that they are paying them crummy wages–on the contrary, as foreign employers, they have probably had to make oodles of concessions. So why is it that our jeenious car manufacturers can sell small, inexpensive, fuel-efficient, and yet relatively safe cars in the Eurozone and England (by relatively safe I mean they have higher side impact standards to meet than cars here but there is less emphasis on GVW and rear impact protection; also, countries like France and Germany impose stricter limits on commercial traffic on their highways)?
There standard excuse in the US is that small cars are not profitable. Of course they were forced to change their tune when the Japanese were eating their lunch, but after the imposition of quotas which cut the available volume, the Japanese went for heavier, higher profit cars and once again the Big Three had the happy situation of not needing to build or even import and rebadge any small cars.
IIRC, small cars in europe (even american) are not cheap. In fact, they are quite expensive.
my understanding is that small european cars do not meet our guidelines either in environmental restrictions or in the area of safety. We make it difficult to import those types of cars and these restrictions are, in effect, “tariffs”.
Down by san francisco bay, in the Marina near the Safeway store, many years ago, there was a big empty lot filled with hundreds of cute, tiny little eurocars.. The story I got was someone gambled and bought them thinking they might be sold in our market.. it was around the time of the oil embargo and fuel economy was all over the news. They rusted to the ground..
As for Japanese manufacturing, if nothing else, they are willing to make a combined effort between workers, business and government, and do whatever makes Japan more efficient and competitive.
Last i heard Japanese mfgrs utilize over half of the all high tech automation and robotics in the world, and are always innovating. In contrast, the US auto industry is pretty much battling union labor plus govt regulations.. it’s an uphill fight to say the least.
I haven’t been to the bank or ATM in three months. Yet every time I open my wallet the last eight weeks the smell of new money rises, like airplane glue or perfume from the U.S. Mint. I have an urge to look at my fingertips to see if they’re green, like grass stains on the knees of my blue jeans when I was a kid. Twenties, tens, fives, and ones. The cash can only come from Ralph’s (grocery), Trader Joe’s (grocery), or the Arco gas station, the only places I’ll throw down a hundred.
Anyone else notice this? Or have I been sniffing too much lettuce?
You’ve been throwing down too many hundreds. Where do you get all of those?
Went to cash in January 2007, thanks to this blog. And a new Toyota four-cylinder. Left WAMU before the axe, went to Wells Fargo. Then ran out of ideas. And that’s it, for the duration. Maybe a lottery ticket, here or there.
“Went to cash in January 2007, thanks to this blog. And a new Toyota four-cylinder. Left WAMU before the axe, went to Wells Fargo. Then ran out of ideas. And that’s it, for the duration. Maybe a lottery ticket, here or there.”
Smart moves.
I use CC’s only to reserve rooms. CASH or checks for everything else. No direct deposit bullshit.
Using cash fosters continuous awareness of how much one is really spending, i.e., the impulse shopper’s nightmare.
DOC
“Anyone else notice this? ”
Now that you mention it, yes.
Hundreds aren’t something I’ve seen for a while.
Mine always smells fresh. I bought the BIlly Mays Money Printing Kit for $19.95 and now I make all of my money at home.
LOL
Well if every guy, just bought a new McMansion, two Chevy’s and a barely post-teenage trophy wife complete with Credit Cards, America wouldn’t have this problem with all this fresh, smelly CASH floating around
Wisconsin and the Milwaukee(it’s different here) area meet Recession’s Job Reality
White collar workers hit by recession.
Number of unemployed professionals zooms up 92%, outpacing all other groups
By Joel Dresang of the Journal Sentinel
A title, a college degree in architecture, 20 years of experience - none of that was enough to protect John Mierow from losing his job.
“The day and age where people work 30, 40 years for a company and retire are gone,” said Mierow, a Wauwatosa man who lost his job as a construction project manager in October. “They’re gone.”
…Mierow is confident he’ll find a new job soon, but the competition is growing: The number of unemployed white-collar workers is up 92% in the last 12 months, the steepest climb of any occupational group, according to the latest government data. Unemployment among college graduates is up 90% during the same span.
http://www.jsonline.com/business/39650377.html
““The day and age where people work 30, 40 years for a company and retire are gone,” said Mierow, a Wauwatosa man who lost his job as a construction project manager in October. “They’re gone.”
Job security has been gone for as long as I can remember. When I entered the workforce in 1997 after college, I had no illusions of working for 30 or 40 years for a company. Even my father didn’t do that. Longest he worked for any one company was about 10 years.
And to be honest the idea of working 30-40 years in one place has absolutely no appeal to me. I get itchy after being on a project for 6 months and start thinking about moving on to next thing. 30 years in the same company? Good lord.
I’m starting to understand by Mr. Mierow is having a hard time finding work. The guy thinks it’s 1985.
It’s different in Milwaukee?
Different from WHAT?
Manny,
Heck when I got out of college in 1975 there was already a job market with no such thing as “lifetime employment”.
My clueless dad gave me grief all during my career, to the effect of “how come you useless kid don’t get a REAL (i.e. lifetime) job?” His thesis, which he counseled me on during my childhood, was that you get THE job, put your feet up on the desk, and then coast to retirement.
He worked all his life for AT&T, a corporation which really hasn’t existed since around 1983.
Hmm my Billy Mays money printing kit had all of the bills smelly like oranges. And they were greasy, like big city sliders.
Don’t you mean BILLY MAYS!?!?
Swear to god that guy either has a hearing impediment or has lost the use of his ‘indoor voice’ through atrophy. Or both.
No matter what he’s peddaling, I turn over - I get cross when people shout at me to buy things.
BTW - how did he get famous? Other than being a Brian Blessed lookalike with a Paypal account?
he lost his hearing through repeated use of OXY…er…CONTIN!
“Mine always smells fresh. I bought the BIlly Mays Money Printing Kit for $19.95 and now I make all of my money at home.”
Lol.
Make sure you wash your prints of with Oxyclean.
Mike
edit…………..’prints OFF with …………….
Mike
Any dry them off with some “Sham-WOWs”
(Made in Germany, I might add….)
“I bought the BIlly Mays Money Printing Kit for $19.95″
You paid way too much!
Naah, he paid cash by using Sallie Mae’s printing kit first.
I love the smell of fresh money in the morning - it smells like Victory!
Yeah,
Funny you should mention it - I use my bank ATM card several times a week (PNC no fee) to withdraw 60 bucks at a clip for everyday spending and for the past few months the 20’s being dispensed are brand new uncirculated bills.
Makes you wonder how many other huge unsecured loans Wells Fargo has made…
Yesterday, GamePolitics and other outlets reported that financially-troubled Midway, publisher of the Mortal Kombat series, had filed for Chapter 11 bankruptcy protection.
Since that time GamePolitics has combed through federal court records for additional insights into Midway’s status. We’ve learned, for example, that Midway claims $167,523,000 in assets versus $281,033,000 in liabilities.
Perhaps more interesting, however, is the list of Midway’s top 30 creditors. Among these, Wells Fargo Bank has the most to lose. The troubled game publisher owes the bank an eye-popping $150,000,000 of unsecured loans.
I would venture a guess that the high ranking WF loan officer who approved this was a big time Mortal Kombat gamer himself.
$150 million…. yikes. That gets the attention real quickly.
Which banks are solvent?
“Which banks are solvent?”
That’s the 3 trillion dollar question and what this current scene is all about, is the effort to avoid an answer to it.
I sort of collect pinball machines and arcade machines. Bally/Midway made their last pinball in 2000, but continued to make gambling machines and such. Sad to see the pinball side go. Nonetheless, I hope they make it.
You wouldn’t happen to have an old Gottlieb “Bank-A-Ball” from the 1960s would you?
A cursory look at the software isles at Fry’s: A couple of shelves about 20-ft wide devoted to productivity software, office apps, CAD apps, etc., and several full length isles packed on both sides from the floor to the top shelves with gaming software. Same for gaming workstations, which are loaded with multiple video cards, raid striping disk systems, etc., totally extreme hardware. Gaming has been driving the industry.
Video games surpassed hollywood several years ago.
Most software is sold directly to corporations. The corporate market dwarfs the consumer market.
What a finishing move!
Ha ha ha
Haha hahahaha
Hahahahaahahahahah
This is hardly surprising on the part of WFC–a mortgage broker went public on YouTube last year about how trashy their mortgage paper was, so no shock that they were making other bad loans as well.
The game industry has been in a growth phase that covered for a lot of bad decisions. But things are no different from when Atari went under–it’s an extremely risky, competitive business. One year you’re on top of the world, the next year your new release flops.
Plus, it’s karma; the game industry is notorious for treating its employees very badly. (EA is among the worst, and as they pay a lot in typically lucrative licensing deals, I suspect they’re in for a whacking this year.)
McMansion? Nope, a real mansion in the uppity D.C. suburb of McLean, Virginia. Sold in 2005 for $6.5M. The bank is now asking $2.5M. Check out the photos; the “great room” could be a movie set if they ever remake Dr. Zhivago.
http://www.franklymls.com/FX6834977
I don’t get the 3 front doors thing.
Wow, what a gorgeous house. A place like that would require a staff to maintain it.
Personally, I’d go for something that’s a little more cozy.
It would make a nice hotel.
The taxes for 2007 were $54,000. Ouch!
I guess the friggin’ realturd agent was too lazy to sweep and pick up around the outside before taking the pictures. How much commish would these tards need to make before they would do a little manual labor?
how disgusting …
It looks like one of Saddam Hussein’s palaces - gaudy and cheaply built.
This is even worse. At least Saddam used expensive materials, and the best builders he had access to. This place is one of the most repulsive eyesores I’ve ever seen. It screams cheap materials and illegal labor. That stone veneer on the front is totally inappropriate. Stone signals weight and strength, and should be used as an “anchor” near ground level only- unless the entire residence is constructed of it. What an architectural abortion this place is. The architect and builder should be ashamed of themselves. I could draw up something better and I’ve never been to school for such.
+1 for telling it like it really is
if they ever remake Dr. Zhivago
I’m not seeing it
It looks like one of the houses from the HGTV show Dream Builders
I flew in and out of Dulles several times in the last few months. I noticed what looked to me like a whole development consisting of mansions. Is this place in that area?
(I don’t really remember how far from Dulles they were - laying somewhere between the wooded area with occasional farms and the tract suburbs w/ big box stores and apartment buildings, I guess.)
It was kind of novel to me - different bird’s-eye view than your usual tract home developments, “luxury” tract home developments, larger acreage “estate” developments, or clustering of mansions around a feature of natural beauty (riverfront, lakefront, etc).
You probably flew over Ashburn, VA or South Riding, VA going into/out of Dulles or as I like to call it my personal versions of Hell.
A perfect example of how money can’t buy class or taste.
The house doesn’t look too bad from the back. Not great from the front, imo.
The kitchen is laid out all wrong. The sink, stove and fridge are all way, way too far apart to easily cook. You should have all of those only a few feet apart, even in a large kitchen. Why is the countertop supported by those ugly wooden brackets? Something wasn’t done right.
LOL! Sending cash payouts to tax payers should fix it, they are bound to come out of their 20 year slump one of these decades.
TOKYO (AP) — Strangled by the collapse in global export demand, Japan’s economy shrank at its fastest rate in 35 years in the fourth quarter and shows no signs of reversing course anytime soon.
Japan’s gross domestic product contracted 3.3 percent from the previous quarter, or an annual pace of 12.7 percent, in the October-December period, the government said Monday.
That was worse than expected and the steepest slide for Japan since the oil shock in 1974. It is more than triple the 3.8 percent annualized contraction in the U.S. in the same quarter.
“There is no question that this is the worst economic crisis since the end of World War II,” said Economy Minister Kaoru Yosano. “The outcome clearly shows that Japan’s export-dependent economy has been severely hit.”
Chief Cabinet Secretary Takeo Kawamura went further, calling the economic downturn a once-in-a-century calamity.
Rattled officials hinted they may soon call for more government steps to stem the widening damage but urged lawmakers to first give final approval to a $52.2 billion extra budget, which includes cash payouts to taxpayers.
Thirty years ago many pundits were convinced Japan would become the world’s number one economic power.
Yep, I recall that. Seems they overpaid for a lot of acquisitions here in the US and people were all paranoid we’d have to learn Japanese. Tokyo was valued at more than the entire state of California, or some such silly thing. And then the bottom fell out.
History repeats. I wonder how many foreign individuals and companies are finding their investments in the US to be worth less than what they paid?????????????
OTH, I’m really hopeful that when this is finally worked out (NO! Do not accuse me of calling a bottom in anything!) globalization will enter into a better and more productive phase. This would be a real turning point for humanity. Of course, I am worried about what we may need to endure to get there.
Roidy
Globalization is dead. An experiment that failed miserably. The EU is pretty close to breaking up, I understand. And I don’t think there will be a whole lot of foreign investors anxious to hear some Wall Street trader at the other end of the phone line saying “Pssst, hey, I’ve got some CDOs for ya, Mr. Pu.”
Palmy, you read Sammy’s link last night about Eastern Europe, what did you think? Sounded pretty dire and the E.U. doesn’t seem up to the challenge at all.
I did, edge, and that’s when I realized that globalization had failed. There had been some prior posts on this blog about rumblings of discontent in the EU, but that was the most dire to date.
All this globalization push came from the EU anyway. Friggit, we fought the Revolution to get out from under the thumb of the Brits in the first place, but it seems like we wanted to follow their failed model with the NAU. Which is now not going to happen. I think the deliberate failures to enforce immigration law here was an undercover attempt to put the NAU in place, among other things.
I don’t like having another Depression, but in a funny way, it arrived just in the nick of time.
I did respond, edge, but my post seems to have been eater. Sammy’s post was what made me realize globalization was RIP.
As long as American labor is expensive, globalization will be alive.
Okide:
I think that if the housing crash is allowed to continue, that would go a long way to normalize pay. After all if you do not need to make 250K to pay for a 1950’s crapshack, but only 25K, you would start being competitive in the world again.
It all trickles down from the basic cost of putting a roof on your head. The cheaper the roof, the more money you can put away, or in case of looking for another job, the cheaper you can be, and still keep some money in your pocket.
Has very little to do with it, at this point. Too many other issues. Wall Street really screwed the pooch on this one and as I’ve said before, the securitization debacle far and away dwarfs labor in terms of expense, LOL!
Globalisation may change form but its certainly not dead.
Amen, pinch. I don’t mind making $20.00 a week if a house costs me $5.00
“Globalisation may change form but its certainly not dead.”
Dead like doornail. RIP. Like the EU.
One of those systems that works great on the way up, horrible on the way down. It is brain dead. Like Terry Schiavo, it’s on life support, but eventually someone will disconnect the feeding tube.
The Davos crowd thought that globalization would make them even richer. Since its having the opposite effect they will dump it into the dust bin.
TESTIFY, In Colorado. That is EXACTLY the point. Davos was a real fun fest this year, LMAO!
The Davos crowd thought that globalization would make them even richer. Since its having the opposite effect they will dump it into the dust bin
I think there are plenty of DAVOS member that got out at the top and even those that didn’t made a crap load of money.
I’m still not convinced, sorry. Outsourcing happened between the 70’s and the 90’s, when housing was still reasonably priced.
Well, wait and see. Mankind is just not advanced enough for globalization, as we have seen. There would have to be a global language, global culture, global customs, etc. And as we’ve seen, various national and ethnic groups are not exactly willing to give up their languages, cultures, customs, etc. You can see that right here in the US, where a sort of balkanization is taking place. Now, if all of a sudden, it emerged that there was intelligent life on some other planet hostile to this one, we might see some globalization as mankind unifies to battle the Arcturians.
Nations would have to deal fairly and equitably with each other, and they don’t.
The only ones who want globalization are the Davos crowd, and even they can’t agree. Sure, there were winners. But there were losers, too.
The jig is up. Globalization, RIP!
I agree with Oxide…for now and palmy over the longer term. As long as corporates can money-grub by making things cheap overseas, they’ll do it.
Either our standard of living will take a nose dive or “their’s” will increase.
I predict ours takes a nose dive until things equalize to a point that its cheaper to make things here again. At that point, I guess I’d agree that globalization has died.
“I predict ours takes a nose dive until things equalize to a point that its cheaper to make things here again. At that point, I guess I’d agree that globalization has died.”
Globalization is not _dead_ at that point; it has merely reached the point of equilibrium in production costs. It will be “alive” as long as the forces that pushed them there continue to maintain them there. The signs of it (job migration, etc) will be less visible, but it will still there there behind the scenes.
“It will be “alive” as long as the forces that pushed them there continue to maintain them there.”
Aw, sheesh, the forces are dead and have nothing to push or maintain. Like I said, “Want some CDOs, Mr. Pu?”
And the more globalization is forced, the more it breaks down into smaller units of cultures and ethnicities clamoring for their individuality. There’s just WAY to much distrust among nations and financial entities. This financial debacle is the epitaph for the failed experiment.
I certainly hope that globalization isn’t dead! I just can’t accept that. We cannot continue to have half the world living in poverty. It really doesn’t speak well of humanity. I mean come on, we can do better.
That being said, should we go back to rich idiots racing their personal Lear jets across the Atlantic? I’ve posted here before, and you know what I think about such arrogant stupidity.
Still, IMHO, we will see another and better form of globalization than the crapola we have seen so far. It will provide a way out of poverty and despair for people. It will be properly channeled and regulated. It will take into account people’s needs and provide good solid economic development and opportunity - not debt slavery. I promise you that it will not be perfect and will have problems. Of course, if there weren’t problems then it wouldn’t be any fun now, would it?
I’m just fearful of what we will need to endure to get there. It won’t be nice and many will suffer and may die. No kidding.
BTW, did you see Mr. Magoo on House of Cards on CNBC? He is still in denial and will not admit his mistake. I nearly vomited. My wife was appalled at the old fool’s intransigence. Geez.
Roidy
Fellow citizens of Earth, what makes you think we Arcturians would want to have anything to do with your planet?
Damn those Martians and there rumor machine.
Trust us when we say, the rest of galaxy wants nothing to do with your planet. As long you continue to provide us with free entertainment you will be safe.
The fundamental force of globalization is not dead. Are you saying greed is dead?
The desire to increase earnings by driving down workforce expenses is the primary driver of globalization. I see now way in which that has changed.
There may be short-term set-backs for globalization if the forecasts for beggar-thy-neighbor are borne out; trade wars and protectionism would definitely put a damper on it for a while.
But the fundamental forces are alive and well, and will return in the long-term.
“But the fundamental forces are alive and well, and will return in the long-term.”
Yes, well, epidemics do happen on occasion. For now and in the future for as long as this current debacle and its effects are felt and remembered, the globalization experiment is kaput, on many levels. The big Agribiz failing in favor of buying local (got peanut butter?). The US breaking up into smaller balkanized areas of culture and ethnicity. The death of securitization. All over but the whimpering.
if all of a sudden, it emerged that there was intelligent life on some other planet hostile to this one, we might see some globalization as mankind unifies to battle the Arcturians. The Arcturians are much smarter than you give them credit for. Whenever I gaze on the strange visages of Greenspan and Geithner, I get the strong impression they are under the control of alien intelligences hostile to life on this planet. At the very least, they fail to exhibit human intelligence friendly to life on this planet.
You made one mistake, Mr. Potter: you double-crossed me and you left me alive!
Globalization is completely impossible to escape from. Bikes are the best examples. Just look at the success of Shimano components for American made products. Many popular bicycles include parts from a dozen or so different countries. There is no easy way to back away from this kind of integration, and it is strongly profitable. To bring this back to housing, this same kind of global integration is likely to be increasingly common in construction.
Earthling tresho says: “The Arcturians are much smarter than you give them credit for.”
Yes we are. See my posting above. You huuumans (borrowed this from a Ferengi) are too funny. Please keep it up.
There is no easy way to back away from this kind of integration, and it is strongly profitable.
————————-
Profitable for whom?
IIRC it was the Imperial Palace grounds alone that were valued at more than CA. Anyone remember that one?
Thanks for the correction. Sheesh, the Imperial Palace.
…Tokyo was valued at more than the entire state of California…
Given current budget deadlock in Sacramento, California’s
dismal credit rating, oceans of personal, corporate and
government debt, that statement may still be true!
oh come on. that did not work out - but it is obvious that Dubai is worth more than Germany
Ha ha yep.
Dubai 2007 = Japan 1985.
Turning UAE,
I think I’m turning UAE,
I really think so!
“oh come on. that did not work out - but it is obvious that Dubai is worth more than Germany :-)”
does germany have near slave labor, and great beaches?
Did Germany construct a fake island where when you turn on the taps only cockroaches fall out?
(Source: New York Times.)
“does germany have near slave labor, and great beaches?”
They did in 1941 and look where that got them.
My FIL grew up in the Weimar Republic and prewar Nazi Germany. He said that from a prosperity point of view it was night vs. day. He said that it was too bad that Hitler went off the deep end.
This also makes me wonder about the Euro Davos crowd. Their grandparents got to watch the great depression lead to the rise of tyrants, which in the end resulted in much of Europe being bombed into oblivion, and their grandparents owned a big chunk of that Europe. I wonder if they fear history repeating itself, except this time with nukes.
“Now, many expatriates in Dubai talk about the city as though it were a con game all along. Rumors spread quickly: The Palm Jumeira, an artificial island that is one of this city’s trademark developments, is said to be sinking, and when you turn the faucets in the hotels built atop it, only cockroaches come out.”
Verifying FPSS post above.
(Sometimes, you just have to check, and yes, this was one of those times)
“Did Germany construct a fake island where when you turn on the taps only cockroaches fall out?”
no, but the Dutch did …
Max Keiser had some nice jokes about the longstay car parks for expats at the Dubai airport.
Good boy.
I was feeling a bit lazy and hung over this morning to track it down.
Welcome FPSS
FPSS
Keeping your eyes closed will not prevent the cold light of dawn and a party hangover
Funny!
The Palm Jumeira, an artificial island that is one of this city’s trademark developments, is said to be sinking
Yes, it’s said to be sinking by its own developers. The thing is built on sand, which will continue to erode over time, requiring permanent dredging to keep the islands built up.
sinking and requiring permanent dredging, just like the Netherlands itself?
They should have known that there was a catch when they hired these Dutch offshore workers for the job
You know, come to think about it, Jesus has a parable about building a house on sand. Just goes to show housing bubbles have been around since the days of Jesus.
…Tokyo was valued at more than the entire state of California…
Given current budget deadlock in Sacramento, California’s
dismal credit rating, oceans of personal, corporate and
government debt, that statement may still be true!
Japanese is easier to learn than English, so whatever. Nihon no koto ga suki desu kara…
Anyway, another object lesson in why extrapolating without context or analysis is the road to perdition. Bubble-time growth slopes do NOT extend to infinity.
Naruhodo, ne.
“Japanese is easier to learn than English…”
The spoken language, but not the written.
Nihongo ga hanase masu ka.
i mean, watashi wa nihongo ga hanase masen
deeeemo–
chotto dekimasu ne. ~_^ ii desu yo.
“Sending cash payouts to tax payers should fix it, they are bound to come out of their 20 year slump one of these decades.”
Did they copy the Bush stimulus plan or something? How’d that work out for us? Did it fix the consumer economy, or the rest of the economy, for that matter? (How many rescue plans ago were those Greenspan-recommended direct payments to taxpayers, anyway?)
P.S. My recollection was that most of the U.S. version of cash-to-household stimulus payments either went directly into the bank or were used to pay down debt, rather than stimulating consumption as the measure was intended to do. Unlike Americans, the Japanese are well-known for stuffing cashola under the matress in tough times. Will the stimulus payments come with War-on-Saver style incentives to make sure the money gets spent, not saved?
“Unlike Americans, the Japanese are well-known for stuffing cashola under the mattress in tough times.”
So were the Americans during the tough times of the Great Depression. Methinks these lessons are being relearned.
Good for the economy in the long-term, very bad for the economy in the short-term.
The beat goes on.
makes little difference if they stuff what little is left from their paychecks in a bank or under a mattress. The bank’s aren’t lending, nor is the mattress.
There is very little left over after all the bills are paid and the economic impact of these savings, if spent, wouldn’t be much. So, imo, this is good short term as well, because the over-inflated economy must shed all traces of the Bubble before any real recovery can begin.. the sooner everything is chopped down to a sustainable size, the better.
At that point the really big money will step in.. investment money.. money currently hiding in the form of gold, treasuries, CD’s, cash deposits etc. which became favored in the (ongoing) flight to safety.
I am in Japan now, I can tell you life aint easy here, the savings rate is high banks pay no interest etc etc.
I was trying to explain to a Chinese classmate, that while we Americans have a high income, we buy houses that are too big, cars that are too high, organic food that is over hyped, hell my buddy has student loans and still spent 60,000+ for wedding.
“At that point the really big money will step in.. investment money.. money currently hiding in the form of gold, treasuries, CD’s, cash deposits etc. which became favored in the (ongoing) flight to safety.”
Wouldn’t you love to know how much of the Fed’s super low subsidized interest rate lending to banks went straight under the proverbial mattress of short term treasuries and other guaranteed cash instruments? Like you, I am expecting a flood of money now hiding under proverbial mattresses to pour into hard assets once everyone is convinced a bottom is in. I guess that is why the PTB are trying so desperately to engineer a false bottom.
Professor:
This is where my idea of directly paying down consumer credit cards makes sense. Get $1000 off the principle or 0% interest for the next 5 years. You know people will spend it when they are short of cash.
——————————————
stimulus payments either went directly into the bank or were used to pay down debt, rather than stimulating consumption
Japanese don’t actually use mattresses…
damn, that took me all day to get…
I thought you were referring to their appetite for bonds and gold…
Last winter someone was leaving sacks of money in public restrooms in Japan - the story goes that it was a novel way to encourage spending.
At least now they won’t have to go to the can to get it.
How did their helicopters target the cash drops to land inside public restrooms?
Maybe they came up through the sewers, like the rest of the vermin?
Ninja
The problem with the $600 is that it was enough to buy something for about a month, but that’s about it. Now, if Bush had given out, say, $200,000 to each household to pay off their debt, that would kick start the economy. This is what the right-wing radio folks are advocating that Comrade Messiah do. Obama is refusing to do it, knowing it’s akin to opening a new credit card to pay off the old credit card.
It would also crash the dollar overnight. You wouldn’t be able to buy a sheet of toilet paper if they did that. And you think they don’t understand that?
Who owns all the wealth?
They’re not as stupid as you think they are.
By “they” you mean Rush & Sean & Glenn et al? No no, they know what they’re talking about. They aren’t being serious about a $200K drop. They are just mocking Obama with it: “yeah, since you’re being a socialist anyway…” total snark.
But the listeners are too stupid to pick up the snark.
$200K per household is an insane number. That is $20 trillion. There is only $14 trillion in total consumer debt and $11T more in non-finanical sector business debt.
What we need is more like $3-4 trillion. That is enough to drop the average debt from 3x annual income, to only about 2x. That is enough to halt the debt collapse, stop deflation, and ignight inflation.
Is $3-4 trillion consumer debt nationalization an insane number? We’re going to have more than $2 trillion added to the deficit this year. Add another $2 trillion next year, and we’re there.
The problem is, they are using the bulk of the money to clean up afterthe collapse instead of using it to prevent the collapse.
Of course, that just deals with the debt collapse. It does nothing to figure out what new bubble we can ignight to create jobs (for awhile until that bubble pops).
The decoupling theory was right afterall, just not as intended.
I think this record contraction of the economies worldwide is also due to lack of people. The birth rate among people with educated backgrounds is declining severely around the world.
There’s the middle class squeeze, where it’s expensive to raise kids compared to 40 years ago.
When is the MSM going to realize the birth dearth is the crisis behind the curtain?
I have often wondered this as well. In the past 30 years the U.S. has aborted 30 million babies, they would pick up the huge slack in the economy right now.
Japan has a severly declining population, so of course their economy is going to shrink and so will Europe’s. Europe and Japan and both very sick and tired civilizations. They’ll hardly be recognized later this century due to their inability to reproduce themselves. Both are on suicide watch.
Civilizations that don’t value children literally have no future.
“Civilizations that don’t value children literally have no future.”
There’s a big difference between having children and valuing children. Indicriminately spoinking out litters doesn’t mean that children are valued, in fact quite the opposite.
There’s no correlation between population and economic prosperity. If that were the case, just about every country south of the border would be economic powerhouses.
And only recently have India and China become major economic players and that’s been put in reverse. In fact China had to severly restrict population growth by government policies.
I agree. Although in my opinion I think more births would continue the mother of all Ponzi schemes, I am not confident as “Observer” that the 30,000,000 people (had they not been aborted) would be productive, let alone civilized. They would most often be in disfunctional families at best and one parent households at most.
Nothing less than two loving parents with time to nurture the kids is important to raise kids properly.
“Nothing less than two loving parents with time to nurture the kids is important to raise kids properly.”
Exactly. That IS what it takes.
Spoinking out litters of cheap labor is what made India and China economic players in the first place. Rise with the Americans, fall with the Americans.
I agree with most everything you both wrote.
However, the first act of valuing “children” is to have them. I agree that they are not the same but they are related. To not have them, shows you don’t “value” them enough to bring them into the world.
I agree the population and prosperity are not totally correlated but shrinking populations are not signs of a heathly society. It is not without reason that the major powers throughout history grew in strength as their populations grew. Sure there are factors that contribute to prosperity but a healthy growing population is definitely one of them over the long-term.
“There’s no correlation between population and economic prosperity.”
Correction: There is negative correlation between population and economic prosperity, at least in countries with viable (developed or developing) economies.
“a healthy growing population”
And therein lies the rub, the operative word being “healthy”. Instead of a healthy, growing population, what we’ve got is an unhealthy, growling population.
These situations are nothing new. I was watching a fascinating documentary on the ancient Mayan culture, which, as one architect pointed out, was a victim of its own success. When the society could no longer feed itself due to crop failure, it propitiated the weather gods with human sacrifice, in one case slaughtering 40,000 people over a period of four days. Population problem solved. When enough people were sacrificed, the priests decided that the gods has been appeased. LOL! Their pronouncements sort of coincided with reducing the population to a manageable level.
“They would most often be in disfunctional families at best and one parent households at most. ”
So no one raised in a one-parent and/or dysfunctional family can be a productive member of society? Weren’t Walt Disney, Beethoven, etc. raised in dysfunctional families?
How about you? Would you rather be raised in a dysfunctional family or not exist at all?
However, the first act of valuing “children” is to have them. I agree that they are not the same but they are related. To not have them, shows you don’t “value” them enough to bring them into the world.
I don’t think anyone could value children more than that women in Cali that had the octuplets.
‘I don’t think anyone could value children more than that women in Cali that had the octuplets.’
I am not even going to get started on that discussion. I am fairly high-strung and excitable—-I don’t know if any of you have noticed that, but it is true—-but real, sincere, serious wrath seldom comes to me. However, that horrible, selfish, emotionally malformed wretch of a woman sure brought it out. I seriously, I mean, I cannot even believe…
*breathe through the nose, breathe through the nose *
Anyway. I hope the fertility doctor loses his license, at the VERY least.
When you put humans into a supply and demand curve, add in globalization, it should be pretty clear why wages are going down. There may be an immeasurable value in children from an emotional standpoint, but economically not so much.
There may be an immeasurable value in children from an emotional standpoint, but economically not so much. There’s no economic value in people whatsoever.
What about slavery? In our past, slavery has always been a viable method of expanding one’s holdings, and dealing with labor issues (Egypt, Babylon, Middle American Indians, Mongol hordes). Given the mainly male Chinese population, I forsee a takeover of other areas that have an excess of females (maybe in Middle East? Where they are always for sale?)
Today we have child labor (Pacific Ring, Carribean Isles, Afghanistan) and, as always, the Sex Trade (Rush et al). NOT so civilized, are we yet?
Note: This Writer having earned a Biology degree, had no kids, no abortions, no guilt, no free-loading relatives, & remembers ZPG. (NO dope experiences, either - not even coffee! And I vote Democrat.)
ANYWAY, I looked up the U.S. census data, and after the baby boom, it appears that the birth rate (the ones that aren’t aborted) of Generation “letters of your choice” remained about the same as the huge “lump in the snake” that the Boomers were called. Common sense would indicate that “National Wealth” shared between few would be a greater chunk than if same amount was shared by many.
The sex trade is alive and doing well here in the United States also.
I have often wondered this as well. In the past 30 years the U.S. has aborted 30 million babies, they would pick up the huge slack in the economy right now.
Except many would have down’s syndrome or birth defects, some would have resulted in the death of the mother, many would be born to unfit mothers, and most would be unwanted. Hard to see how this would stimulate the economy, rather they would drive up the gov’s medical bills and prison costs.
And yet, the vast majority wouldn’t fall into the buckets you just described. It must be nice to be the arbiter of deciding who deserves to have kids and who should be born. I know I’m not that wise. Thank goodness we have people in this world that can make such wise decisions.
The subject implies the declining number of productive people in society. Darwinism at work does not add to productivity.
“In the past 30 years the U.S. has aborted 30 million babies, they would pick up the huge slack in the economy right now.”
WTF?
I tried to read this a couple times to glean a smidgeon of substance.
No dice.
DOC
Uh-oh, now you’ve done it. The common wisdom hasn’t gotten past the Population Bomb hoax yet.
Most of what people know (or “common wisdom” as it were) is 30-50 years behind what is really happening.
Idiocracy
Regarding the huge debts the US government now owes and the stimulus spending on the way. Rather than just print money to repay this debt, would it not be more logical for the Government to declare bankruptcy?
This option would allow the Government to avoid repaying the debt without causing hyper-inflation or destroying the $ and thus leave commerce in the US (and internationally) relatively intact. Bankruptcy would have the added benefit of allowing the Government to restructure, or just walk away from, its SS and medicare obligations.
Holders of T bonds would be destroyed but those with cash or non-government bonds would be relatively unharmed - wouldn’t this be more politically acceptable than destroying the $ and ruining everyone?
Walk away, USA.
****snarkage alert****
But what about the Full Faith And Credit Of The United States Of America?
****end snarkage alert****
You wouldn’t be able to cut taxes without cutting spending. So taxes would never, ever get cut. Is that the kind of world you would want to live in?
I’m TIRED of assorted blowhards getting on TV and saying that the government still needs to “value those bad assets.”
I call BS. I think they already have valued those assets, and they are just afraid to tell us that those assets are worth 10¢ - 20¢ on the dollar. There would be a worldwide depression within hours.
(I’m guessing that your average FB has a 10-20% chance of paying back 27 years of high payments.)
BINGO. Bank management holding out for yesteryear’s prices, begging whomever they can to suspend mark to market. All the while, exacerbating the collapse.
What would they mark the assets to? Some yesterday’s fantasy prices? It seems suspending mark-to-market would only serve to perpetuate the fake economy we’ve had the past decade.
—– Bank management holding out for yesteryear’s prices…
Because, you know, they aren’t going to give it away. Jeebus, my local investment bank is as much an FB as my local strawberry picker.
At least the strawberry picker PICKS something…unless people want to pick their own strawberries…
These blowhards need our support. The FBs need to be convinced they should keep up with their payments instead of walking.
The banks need the money, and if the banks can’t get the money from the FBs then they’ll have to turn to the taxpayers.
When they talk of “valuing” assets i think they mean pushing them onto the open market and seeing what the market actually pays for them.
Of course, right now this is a huge risk, practically doomed to fail at this point. Investors want to pay the very least possible and will probably decide 10 or 20 cents is far too much.
I recall a year or two ago (3?) when it was revealed that the genius 20-something quants packaged the MBS into tranches, and mixed in some toxic waste according to their equations, and rated it as a package.
When people found out they might own some toxic waste but didn’t know if they did, or how much, trading stopped. Ratings were unknowable. I think that risk is still unknowable, and I would only pay bottom dollar for any of it..
There is lots of highly rated, good debt that will be repaid in these packages. The puzzle will be solved when someone figures out how to separate the good debt from the bad. Valuing the whole package by selling it as a package is going to undervalue that good debt.
But if someone can figure out a way to pick the wheat from the chaff, a large portion of those securities will be valued fairly, will be sought competitively, and will be valued at a fair market price.
As for the toxic waste left over, it’s probably left up to us to eat it.
As for the toxic waste left over, it’s probably left up to us to eat it.
————————-
Us????? WTF? The lenders can “eat it.”
The prices are what they are at any given point in time. If investors thought there were undervalued assets there, they would be crawling all over them trying to find the nuggets.
Many of those assets are 100% worthless. The holders of those assets should not get a penny more. There is NO reason for the taxpayers to take on a single cent of liability for these assets.
The nuggets of good debt were chopped into little pieces which were then distributed among numerous securities packages with a variety of characteristics. It’s no simple matter to just find all the pieces, much less to get permissions to modify the contracts and restore these loans to their original configuration.
The government might be able to force the issue.. that will be (or was) their first impulse.
A much better (and safer) way, imo, would be to bribe investors.. or somehow make them want to cooperate. Make it more profitable for them to go along with the program than to resist.
And that’s where our being burdened with the toxic debt comes into play. It can be the carrot on the stick.
Or we can stay on the path we are now on.. deny the real cause of the financial market’s problem.. throw megatons of taxpayer money around, hoping some sticks.. assume govt knows how to run businesses more profitably than business people do.. watch jobs continue to evaporate as unrelated, healthy businesses and industries are caught in the whirlpool and sucked under.
Builders losing out on new homes.
Sale prices falling back to mid-1990’s levels.
2 million plus population, exactly 19 permits issued in the big 3 counties last month.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20090216/BIZ/902160328/1001
No one is building in Detroit? Shocker!
A comparison to Detroit of 1979 would be nice though.
Not just the city itself, but the wealthier ‘burbs. Oakland is supposed to be one of the wealthiest counties in the country.
On my brief route to the freeway this morning I was finally awake enough to count at least 9 homes that are foreclosed and vacant, plus another 4-5 that have been for sale a year or more. Nothing is selling, and the empty ones are spreading.
The house with the “short sale, make ANY offer” sign is still sitting there, with no takers.
FT.com
Co-ordinated inflation could bail us all out
By Tim Leunig
Published: February 15 2009 19:33 | Last updated: February 15 2009 19:33
Recessions are not unusual, but the extent to which the origins of the current crisis are financial is. We must therefore consider whether unusual financial solutions are required. The global economy would benefit from a pre-announced, temporary, globally co-ordinated bout of moderate inflation.
Since it takes about two years for central-bank policy fully to influence inflation, a sensible policy would be to target 4 per cent inflation for the five years from 2011, followed by 2 per cent thereafter. In Britain, the government would simply redefine the Bank of England’s inflation target. At central banks with theoretically greater independence – the US Federal Reserve and the European Central Bank – Ben Bernanke’s term as Fed chairman is up for renewal in 2010 and Jean-Claude Trichet’s term as ECB president ends in 2011. Global co-ordination between the central banks should, therefore, be possible, limiting the impact on exchange rates from a decision to take unilateral action. An increase in inflation by an extra 2 percentage points for a period of five years would have many benefits – for governments, companies, households and the banking system.
It would help government finances by inflating away 10 per cent of total government debt. This lowers the interest burden for future taxpayers. Since taxes are levied primarily on income, this has both equity and efficiency benefits. It is (more) equitable as the cost of recession will be borne by wealth holders as well as income generators, and it is (more) efficient in that it reduces the extent of incentive-reducing tax rises on income in the future.
Last year we showed that we can cause inflation byu ensuring the mega-rich have money to buy up commodities.
Unfortunatly, commodities then have to be sold to consumers at those inflated prices for the inflation to “stick”. This requires consumers be able to get raises to match the inflation, or the commodity bubble pops on excess supply and insufficient demand.
There will be no raises in this world of massive oversupply of everything and imploding debt collapse.
Therefore, there can be no sustained inflation. ANY price increase will immediatly trigger further decreases in demand and explosion of supply, instantly undoing the price increases.
Just look at the price of oil, wheat, copper, etc. from 2008.
“Just look at the price of oil, wheat, copper, etc. from 2008.”
Lol. A year ago this month it was announced that the world was running out of these things and we were all doomed.
combo,
Does this give you any pause?
research.stlouisfed.org/fred2/series/BASE
(disclaimer except for 10% in physical metals that I hold in a safety deposit box, I’m all cash. Thus, I want you to be right. And I understand the arguments presented by yourself, PB ….)
Muir -
Everything anymore gives me pause. After you carefully look over the monetary base charts check out the money velocity charts.
Pause, pause, pause.
It’s true that money to an economy is comparable to blood in a body.
It’s also true that it is the circulation of blood in the economy that gives the body life just as it is the circulation of money that gives the economy life.
Well I screwed that one up. I meant to say that it is the circulation of blood in the BODY that gives the body life.
thx combie
looked at
Nominal GDP/MZM, Nominal GDP/M2 (Ratio Scale)
Most timely I found was
research.stlouisfed.org/publications/mt/page12.pdf
It’s still a tug-of-war, isn’t it?
Fed at one end, godzilla at the other end.
“It’s true that money to an economy is comparable to blood in a body.”
Curious whether it is also true whether pumping in huge amounts of money to an economy to restart lending is comparable to pumping in huge amounts of blood to a body in order to get its heart to start pumping again?
There IS blood in the streets…ha combotechie you’re caught in your own Freudian slip….
Devil’s advocate: Morgan Stanley
Morgan Stanley’s Jocahcim Fels and Spyros Andreopoulos look at the possibility of hyperinflation hitting the western shores of the UK, Europe and the US in their latest note. Their conclusion is a little scary (our emphasis).
”One stark lesson from the ongoing financial and economic crisis is that so-called black swans — large-impact, hard-to-predict and seemingly rare events — can occur more frequently than generally believed.With policymakers around the world throwing massive conventional and unconventional monetary and fiscal stimuli at their economies, we think that it is worth exploring the black swan event of very high inflation or even hyperinflation.
While such an outcome is clearly not our main case, the risk of hyperinflation cannot be dismissed very easily any longer, in our view. We discuss the historical evidence, the conditions that can lead to very high or hyperinflation, and whether and how it might happen again”
…given the size of the current and prospective economic and financial problems, and given the size of the monetary and fiscal stimulus that central banks and governments are throwing at these problems, investors would be well advised not to ignore this tail risk, especially as markets are priced for the opposite outcome of lasting deflation in the next several years. Put differently, we believe that buying some insurance against the black swan event of high inflation or even hyperinflation makes sense and is relatively cheap currently.”
I keep saying it: look outside the US and you will see that you are wrong. Look at the gold price and you can see that you are wrong.
Wages and prices of many everyday required goods and services are going up like never before in the last 10-20 years. The only exception in Europe is petrol prices, without a doubt to keep the voters happy. Prices of stocks going down (check) and houses going down (hardly, in Europe mainland) is NOT deflation but just disinflation (a bubble that is leaking). Even the official, heavily manipulated CPI number is still positive in most of the world and expected to start increasing again soon in Europe (and without a doubt, in Asia too).
Inflating away is the most stupid policy I can imagine - which almost guarantees that the feds will choose it. Oh yes, ‘it takes two years for inflation to kick in’: just as sure as all the other economic wisdom we have heard from these experts.
P.S.: so the FT is saying we should punish savers (’wealth holders’, to make the theft more acceptable), and give debtors even more profit by inflating away their debts? Rates on savings are close to zero (and have been net negative for many years already, in most of the world). Inflating at 4% yoy for a few years means that savers are robbed of at least 10-20% or so of their assets (in reality more of course because the CPI is doctored).
This guy sure has listened to Uncle Ben with his ’savings glut’ nonsense. And of course, this will sound great to the general public who are deeply in debt. Do these people really believe the bulls*** they are writing?
In the long run we are all dead, but Keynesian thinking is dying a very slow death.
Behold — Arthur Laffer showed me the Way and the Truth and the Light, for only Tax Cuts are the road to Salvation, and only the Supply Side can set me Free.
“Co-ordinated inflation could bail us all out”
And candy-crappin unicorns™ could keep us all in candy from now till kingdom come.
PB,
I’m as disgusted with the article as you.
My point is that it is amazing that they are this brazen to talk about it openly.
And, I do believe they are CAPABLE of attempting such a scenario.
As to whether the ATTEMPT succeeds in creating hyperinflation, I leave that to my betters in these matters at HBB.
(I do believe this is a totally different conversation than the inflation/deflation debate)
I was reading some of the text of the Stimulus bill that Obama will be signing and I have found a section where the wording does not match any of the reports I have read in the media. I am wondering if we have an intentional slip-up or if Congress just created an accidentally massive tax break for people that buy expensive cars.
Section 1008 says that you can deduct interest on a car loan, but that the loan cannot exceed $49,500.
Section 1009 says that you can deduct sales and excise tax on a car purchase, but that the sales and excise tax cannot exceed $49,500.
Anyone else want to take a crack at the language?
`(6) QUALIFIED MOTOR VEHICLE TAXES-
`(A) IN GENERAL- For purposes of this section, the term `qualified motor vehicle taxes’ means any State or local sales or excise tax imposed on the purchase of a qualified motor vehicle (as defined in section 163(h)(5)(D)).
`(B) DOLLAR LIMITATION- The amount taken into account under subparagraph (A) for any taxable year shall not exceed $49,500 ($24,750 in the case of a separate return by a married individual).
IMO, grasping at straws is all this is. There is no way anyone that can be approved for a loan right now will run out and buy one of these moneypits. There are seas of RV’s sitting on storage lots that were purchased during the boom. It was the fade to have an RV to go along with that Mcmansion, not anymore.
Lawmakers add tax cuts for cycles, RVs to stimulus
Under the stimulus legislation, purchasers of new cars, light trucks, motor homes and motorcycles will be able to deduct the sales tax they pay through the end of this year, a provision with an estimated cost of $1.7 billion. Including recreational vehicles and motorcycles added about $100 million to the cost of the tax break, according to calculations based on revenue estimates by the congressional Joint Committee on Taxation.
The original Senate-approved language also allowed deductions for the interest paid on vehicle loans, but negotiators dropped that in an effort to make the bill less expensive.
http://biz.yahoo.com/ap/090213/stimulus_motorcycles.html?.v=1
I believe at one time you were allowed to deduct your car loan and credit card from your income taxes.
Pre-Reagan, right?
ET, there is a good chance I’ll be jobless come July. We can start the world’s only Dad/unemployed/bubble-blogger band!
Ah, I’m sorry to hear that.
On the bright side, we’d be only a pink-slipped daddy bubble-blog drummer away from a Dystopian Power Trio.
I guess there are some minor issues of geography, but Pavement seemed to get around those just fine …
PS. I replied to your bubble-killing-music thread last night, but I guess the post was eaten.
On youtube
Julio`s McDonalds Question (Ft. Meyers Town Hall w/ Obama)
or
Julio of Mickey D`s Gets His Big Break on Countdown w/ Keith Oberman
I would love to read a background check on Julio like the one they did on Joe the Plumber. Like that`s ever gonna happen. But if they did I`ll bet it would be really entertaining.
Two different scenarios. JoeTheMoron burst on the scene with arrogance, ignorance and a boatload of lies, misinformation and illegal activities.
Julio expressed humility and a willingness to set aside his pride and ask for help.
My bet’s on Joe then.
“Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.”
~Josiah Stamp, 1927. (Wealthy Englishman.)
Lofty rhetoric don’t pay the bills.
- FPSS
Did Alad hijack WMBZ’s account?
By the way, for those of you that hate “the system,” there are several communes you could join and live your cashless fantasy.
I have several friends from TN that grew up on the Farm in Summertown. They liked it.
The FARM down in Summertown, TN, dispite the Stephen Gaskin tie dyes, Midwifery Center and Plenty International went commercial years ago.
It still looks different(ageing hippies culture and young wannabe’s) but it’s a business enterprise like everything else now …Peace
“went commercial years ago”
You’re kidding me? I was there in 1996…
That was 13 years ago Muggy. A couple of young friends were there for a while in 2007-8. Maybe that’s just their opinion or maybe once again things had to change a little under the surface for the community economic survival. No condemnation was meant as they loved it and everbody there.
Even a course in fundamentals of permaculture and ecovillage master planning costs money. There are lots of nice people still down there regardless if you stay with old friends or in the Eco Hostel
-SFBAG
Off topic maybe, but how should one pronounce “wmbz”?
I’m using “wombats” right now.
I say it like the guy in the Howard Stern movie: W mmmmmmmm Bee Zee
Wambosi?
Like in that Jason Bourne movie (the first one.)
oW, My BallZ?
Lol. I’m trying to cram as many Idiocracy refs as I can in 24 hours,
Welcome to Costco. I love you.
Wasabi?
Why is the media/government keep saying there are no banks lending?
Over the weekend, I spent about 15 minutes shredding credit card applications from multiple banks and several offers to open a line of credit with my current banks.
I think the problem is the fact that banks aren’t lending just to anyone to do just about anything. There is credit still out there, but banks are only lending to people with a solid credit history and an income because they realized they need to be repaid.
I just don’t see what’s wrong with that? What does the government want? Do they want banks to be lending money to anyone like crazy? Not a good idea!
An economy built on people getting loans they can’t repay, can not survive if we only lend to people that can repay.
We have to get the loans flowing to people that can’t repay, or the economy is doomed.
Brett, it is possible to stop banks and other lenders from sending you that flood of unsolicited credit card offers. Visit www optoutprescreen com.
We did it a number of years ago and it works.
I was just about to suggest just shutting down the whole sh*t show. You can just forcibly shut down anyone looking at your credit profile.
(Free bonus: reduced chance of identity theft.)
They try to give you some completely BS guff about restricted credit, etc. Who cares?
I bet most on this blog have reached a point where if we need credit, we’ll call them not the other way around.
“I bet most on this blog have reached a point where if we need credit, we’ll call them not the other way around.”
Yup.
I called a credit card company to request a specific card once. The guy on the phone was somewhat confused, with not having to explain a bunch of cards or having to answer a bunch of questions. Must not happen that often.
Muggy,
Ok, so the banks and basically all those involved in giving out credit, use the reporting systems and FICO scores.
If we the people, really want to send these banksters to hell, its simple. BOA, CITI, VISA, AMERICAN EXPRESS.
1. Everyone permanently freeze their credit reports.
2. Close all credit cards, except one. That one being from a locally owned bank. I only say one, because it will take time for these jerks to realize, we don’t need them anymore.
If everyone closed credit card accounts and froze their credit reports, all hell would break loose in the financial industry. We would in effect tell them that their rating of us has now turned into a rating of them.
3. Why can’t we the people, organize, and refuse to pay?
If everyone in this country refused to make a payment for one month, these jerks would be out of business. The time to strike is now, while their balance sheets are in trouble. One month, and these rip-off artists, would be on their knees. I really beleive is time to organize people and take control away from these greedy thugs.
After you.
Which pretty much sums up why it’ll never work.
Terry,
I don’t really want to shut down the credit card companies. I don’t pay any interest or fees because I pay the balances off every month, and I find their services convenient. I’ve already taken control away from the greedy thugs in a very simple, painless way.
That sounds about as workable as the “don’t buy gas on Friday” protest email that used to go around. A total waste.
FPSS said: “You can just forcibly shut down anyone looking at your credit profile.”
How does one do that?
On Saturday, we got a call from our credit card’s fraud dept about over $1,000 in charges made that day that looked fishy to them, as indeed they were. So, for the second time this year, we’re being issued a new credit card number.
Ironically, we had just voluntarily gotten a new card number because we were getting nervous about our credit card info being out there on too many websites. Sheesh. :rolleyes:
Search for “credit opt out” - there’s a phone number you call, and you can opt out of it permanently.
They will try and scare you blah blah blah.
They will mail you letters which you have to sign, etc. and return. They are just trying to make it hard for the average person.
Just shut the show down.
Thanks, Faster. I looked into this and it sounds like a good idea, as we don’t plan on opening any new accounts or buying anything on credit in the foreseeable future.
I think the threat of very tight credit without government bailouts is becoming an empty one, hence the “stimulus” package “allowing” banks to pay back the government without having to raise new capital to replace it with. Congress realized with billions of tax payer dollars, the banks hoarded the money, so it is better off putting money elsewhere. Perhaps it should take the TARP money to leverage brand new banks not soiled with housing related losses? A “bank” exists to make money loaning to people/organizations. If a “bank” doesn’t do this it won’t make profits - the Treasury is better off using its newly printed money elsewhere.
Does anyone really think this is going to end well for shareholders of Bank America, Citigroup, etc? Time will not heal the insolvency faced due to Mortgage Backed Security Losses. Sooner, rather than later, people will lose patience with these zombie institutions which have no purpose other than delaying the cold, hard reality of insolvency. It took the Japanese a decade to come to this reality, will we learn from their example?
What does the government want? Do they want banks to be lending money to anyone like crazy?
In a word, yes. Govt is not stupid. But understand that it has no interest in a population that thrives without them. As such, it has no interest in “helping” us out of a financial bind.
It will select certain remedies and attempt to satisfy what people want only to the degree that goverment itself is helped.
Take perpetuating this over inflated, easy-money based economy of the last few years, for instance.. Supporting such a thing seems pretty stupid on the face of it.
But this is what the FBs, economists, the labor force, banks , businesses and many others are crying out for. Govt contributions in the form of spending our money on this “problem” combined with increasing it’s control over private enterprise through newly imposed controls and regulations and new debt, combined with raising taxes and fees to offset this “loss” are also what governemt wants.
So, ask and ye shall receive.
Brett,
I have exactly the same observation. All my CC limits are insanely high, and they keep sending me more and more offers for even more credit. I do have an excellent credit score, and very little debt; but isn’t that the idea? We only lend to people who can repay, I thought that was actually the plan behind credit card (and home/auto) lending.
Sure, if you’re subprime; I’d imagine it’s very difficult to get a CC. However, for those of us who are prime, with little debt; I don’t see a credit crunch at all. What I see is a return to sanity. In fact, even if my limits were all cut in 1/2 tomorrow, I’d wouldn’t think credit was tight. I could charge a BMW on a few of my cards, even though I do make a good income, that’s probably too much credit extended.
With little debt, I have a horrific credit score.Pay all cards in full all the time, my one auto loan was paid 0 lates. Have one $309 item from Verizon that I can’t shake, been fighting it for years. Other than that…
Welcome to politics 101. Politicians aren’t as dumb as they look. They know P&B sold the public a bill of goods to get the money. So, when the opportunity presents itself, they call them on it. It’s better than being accused of allowing a financial system collapse. In politics, it’s a lie for a lie.
Read those offers. I got one from Discover card. Been a member since 1981. My credit score is well above 750 and they were offering me a balance transfer at 22.9% with a 3% fee and no max. I have never received anything with lousy terms like that from Discover before. I think banks are hoping senseless fools will take the offers without reading the terms.
I dont accept any more, period! I have one credit card that I use for my everyday expenses, and I pay off the balance at the end of the month.
What does the government want? Do they want banks to be lending money to anyone like crazy? Not a good idea!
Not *anyone*! Just poor people, so they don’t feel discriminated against.
Have you seen Maxed Out? The interview with Elizabeth Warren is fascinating. She did a presentation about defaults and recommended they stop lending to low income/lousy repayment history customers. The bankers in the room were saying, “Hmm, that’s really interesting,” until one guy stopped them all cold:
“But Professor Warren, subprime is where we make all our profits.”
Yeah, I saw maxed out.
There’s a real problem here: poor people pay the highest prices for EVERYTHING. (And Rich People never pay for anything!)
Look at what’s marketed to the poor: everything from payday loans, advance income tax refunds, rent-to-own furniture. All with horrible terms.
But do you want a country where we presume people aren’t smart enough to decide for themselves?
Haven’t you noticed? We already have that country.
I think the real issue comes when we collectively are forced to pay for the banksters’ risklove behavior… shutting down subprime (with regulatory requirements on housing, with anti-usury laws on loans) wouldn’t stop poor, stupid people from being ripped off (Vinny the loan shark wants your business) but it would have stopped ALL of us from being on the hook when those loans went sour.
Brett,
Sometimes your posts remind me Bye FL. The one who wanted to move to Oil City PA.
OMG… Hell no! I would never advice anyone to move to PA… not me!
Brett, just in the matter that you are both young ‘uns, and unpretentious, and seekers (not many young ‘uns amongst our somewhat cynical company, you will have noticed). We were rather tough on Bye FL, for the reason you mentioned. I miss him also, and wish him all the best. In fact, I took the long cut through Oil City on the way to Pittsburgh for a dog show, in his honor.
Not a half bad place. The former company town for Pennzoil, which means that the legacy houses were all solid. Oil companies have exacting work to conduct under unforgiving conditions (doesn’t take much but default to start a refinery fire) in a hostile environment. They cannot afford to hire slackers or liars. Therefore, hiring standards are high, and the pay is very very good. Evidently, the old guard were equally thorough in demanding solid middle class construction. Lots of brick.
Pittsburgh itself has declined in population from 700K to 300K over a span of thirty years. Oil City started with a lower base and less economic diversification. It has not fared as well.
But for urban homesteading, this is not a bad place at all. I could see the beginnings of a kernel of like minded community.
Not for me. But only because I have my mind set on forty acres and a mule, with a spring, creek, pasturage and woodlot right there on the homestead close to hand and right under my thumb. Got a feeling it’ll take awhile to find a community of spirit for that.
http://www.amconmag.com/article/2009/feb/09/00016/
Ron Paul, the lone genuine conservative among the GOP Hollow Men, finds his calls to abolish the Fed are being well-received by young people, who are starting to realize just how badly the boomers have screwed them. Meanwhile a grassroots movement is starting to have Peter Schiff challenge Chris Dodd in the next Senate race. It’s good that young people are waking up, even as their elders continue with their zombie-like acquiescense to the Nanny State and Big Brother.
Funny you posted this, I just finished watching this (very long) documentary on central banking:
http://video.google.com/videoplay?docid=-515319560256183936
It’s good, speaking directly to the damage caused by the Fed, and the people who get rich because of the boom/bust cycles. It’s worth watching, although it will suck up 1/2 your day if you go through it all in one sitting!
I’ve thought alot about this recently. The Left and Marxists have be thinking they are on the verge of winning (creating a socialist America) but in reality perhaps they are about to witness the total collapse of the Nanny state and the reemergence of individualism and Capitalism.
Revolutions overturn the existing heirarchy and the existing heirarchy in the industrialized world for the most part over the last 100 years has been ever-growing gov’ts and gov’t intrusion in economies. The financial collapse of the industrialzed world may bring about the opposite of what one would expect.
The Left and Marxists have be thinking they are on the verge of winning (creating a socialist America) but in reality …
Just this weekend, several prominent “conservatives” openly talked about nationalizing US banks.
So who’s doing what to whom, for what purpose?
They aren’t truly “conservatives” then.
My only point is that sometimes the universe deals us new situations and answers that were never obvious before, but after they happen or discovered we realize that it actually was obvious all the time. Just think of all the scientific discoveries and innovations the past 100 years. The previous 100 years nearly no one had an inkling of the changes that were to come. Just as no one today has any inkling of what the next 100 years will bring.
At the time, the Roman Empire was thought to endure forever. In more recent times, even as late at the mid-80s most thought that there wouldn’t ever be change in the Soviet Union.
There are no “true conservatives”.
Even Ron Paul takes advantage of Congressional earmarks to benefit his constitutes.
When people are desperate they demand more government intrusion into their lives, not less. And people are becoming very desperate.
My brother is a deputy Sheriff. Says crime in the area is going through the roof, but it is stupid crimes. People who have worked their whole lives, have been layed off, burned through unemployment and savings and have to find a way to feed their kids. They don’t know how to steal from a convenience store and they are doing stupid stuff and getting caught.
These folks don’t give a crap about a collapsing $$$ or government deficits. They care about making sure their kids don’t go hungry for a second or third day.
“These folks don’t give a crap about a collapsing $$$ or government deficits. They care about making sure their kids don’t go hungry for a second or third day.”
They are truly fools, then. Most areas have food banks where you can walk in and walk out with bags of free groceries–no questions asked.
I don’t believe for a minute that people are actually starving in America.
As long as there is Ramen, no kids in America will starve.
(Personal observation)
Most food banks are NOT no questions asked–they use some criteria from the food stamp office. Which means those who don’t work are ahead in line of those who do … I don’t know what’s fair, personally, but I can tell you those who lose out think it’s unfair.
Now, they do have weekly free chow lines, no questions asked … the crackheads and the homeless line up along with every obnoxious scammer in town.
Sadly, they can’t even sell the 40k truck anymore. A country without a profligates safey net.
If the current depression-y thing that we have now is capitalism, then I for one welcome my Socialist Overlords. And in case you haven’t noticed, so do the “capitalists” on Wall Street, most of whom are now acting stragenly like Reagan’s “welfare queens.”
The re-emegence of “individualism” is likely to look like a cross between Bleak House and Mad Max.
I, for one, can’t wait for front-row seats to Jarndyce v. Jarndyce.
At the very least, it promises to be very entertaining. Throw in some popcorn, and you pretty much don’t need a tee-vee.
well said
despite spite typo for strangely
I just got back with my littleman from the park. Five families: 4 dads, 1 mom. Most men I know that are in their 30’s worry about keeping their job; most women wish they could stay home with the kids.
God bless the bra-burners!
Women say:
What do we want? Stupid day jobs!
When do we want them? Starting in the mid-90s!
What do we want? Stupid day jobs!
When do we want them? Starting in the mid-90s!
Men say:
What do we want? Oprah!
When do we want it? Every weekday at 4pm!
What do we want? Oprah!
When do we want it? Every weekday at 4pm!
Well done Muggy!
LOL, Muggy. I always wondered why the feminists thought it was such a big prize to have some crappy corporate job.
blog ate my comment, but the gist of it was because I wouldn’t have to kiss up to a man for my daily bread … btw, I’d die (or kill him) first …
Keeping my job & my stress.
So you’d rather kiss up to some incompetent, bailed-out, pointy-haired boss?
Wow, now I’m depressed. That’s like an anti-Valentine.
PS. Try again with your post. I am curious.
My boss isn’t pointy-haired, but he’s almost as dumb. I’m surrounded by examples of the Peter Principle, but we’ve got some good eggs working here too.
Anyway… it’s good my post got blocked because I got kind of nasty. Kind of motivated me to go back to work this afternoon with a bit more fire, as I was feeling tired and blue.
I like men just fine, but I don’t like them that way, and there is no way in h— I would enter into a sexual relationship with one. That’s the price for the free room and board, and I’m not paying it.
No joke, a prof in college wanted me to be her grad asst. for women’s studies.
I have no issue with women in the workplace. The real issue is it’s just another stupid boomer legacy, that stay-at-home moms are worthless. Another screw-it-all-up “cultural gift” from the selfish generation, who really is changing the world, man. And woman.
I loved Andrea Dworkin. She was pure venom.
I’m with ya. Winter Sierra storm nixed snow outing with daughter, so we are finishing report on missions for school. She can eve do plural possessives.
Last night, I went to dinner with a friend. Friend’s friend was also there who just got laid off as a manager of a gym.
Laddie is moving back to parent’s basement in CA. He “owns” two rental apartments in NYC. Plan, needless to say, is to “rent” them out.
Yep, that’s gonna work out really good. Oh, and he plans to purchase in CA “as soon as possible”.
Lawd, this whole country is filled with mental midgets. It’s like work to even go to dinner these days, and not be surrounded by open-faced droolin’ short-bus mouth-breathers.
“Experience keeps a dear school, but fools will learn in no other.”
- Benjamin Franklin
“Listen!
All you wanna do is ride around Sally (Ride Sally ride)
All you wanna do is ride around Sally (Ride Sally ride)
All you wanna do is ride around Sally (Ride Sally ride)
All you wanna do is a ride around Sally
One of these early morninings
I’m gonna be wiping your weeping eyes
I bought you a brand new Mustang
A nineteen sixty-five
Now you come around Signifying a woman
That don´t wanna let me ride - Mustang Sally now baby oh lord
Guess you better slow that Mustang down”
-Wilson Pickett
Ohhh, good song mikey
“It’s like work to even go to dinner these days”
LOL. A little OT, but this reminded me:
We were at a semi-expensive and well known steakhouse for Valentine’s dinner. There we saw a striking and beautiful young couple. The girl was in a red satin dress and her hair in an updo. She obviously put in a lot of money, time and effort to look extra nice for her valentine. He did his part too: he bought her a gorgeous red and white rose wrist corsage. Charming, no?
Well, at least it was… until she spent the whole dinner talking on her cell phone and ignoring her poor date.
That sucks just reading it. Poor guy.
A good rule for guys…
If your date takes a call while you are out at dinner, get up, excuse yourself, and leave.
If she can’t give you her undivided attention during a meal you are probably paying for, then you probably shouldn’t be paying for it!
dude,
The same rule applies to the men. I have no problem walking out on a man with a phone glued to his ear.
Absotively, tit for tat.
You didn’t really write “short-bus,” did you? Man, so nice to see political incorrectness is not dead.
You haven’t been reading here long, have you?
‘Short-bus’ is actually one of the mildest, sweetest, most decorous phrases that Fasty habitually dispenses when he gets the urge to declaim.
ROTFLMAO
There we were eating some amazing Ethiopian food, and I have to put up with this completely absurd tale of woe.
Well, what would you have done, Ms. High-Heel-Sparkly-Tiara-Princess? (*)
(*) besides drinking more which I did do.
“You haven’t been reading here long, have you?”
Besides. we all love those goofy bastards!
Wifey and I went to an RV show Saturday. Herds of marketing and sales types there and some of the garbage I heard was mind numbing. Example: I heard a marketing guy telling a group “tourism is going to skyrocket in 2010″ without anyone in his group of listeners asking how/why or based on what. He just said it and it was accepted. Groupthink a’la NAR.
Second: I met with a the national marketing director of Jayco who I’m on a first name basis with. Their sales are down by a third and he was mimmicking the same line, “banks won’t lend”. That was my entry point and leaned on much of what I learned here, CR and Mish. He was dumbfounded at the extent of my understanding and he began to ask very fundamental questions, presumably to develop some kind of forecast.
My point is this…. Even these upper level finance guys in consumer discretionary businesses have ZERO understanding of what’s going on nor do they view the last 15 years of consumption type economy in proper perspective. They believe the housing bubble years were normal and here to stay. The direct link between MEW and RV sales has been severed and if there were an new economic paradigm, it is now.
My point is this…. Even these upper level finance guys in consumer discretionary businesses have ZERO understanding of what’s going on nor do they view the last 15 years of consumption type economy in proper perspective. They believe the housing bubble years were normal and here to stay.
Most marketing types have no training in market research or economics. They are salesmen, and most wouldn’t know a supply or demand curve if it hit them in the face. They only thing they know is that its always a great time to buy.
Who is buying those $100,000.00+ motor homes now I wonder, even with lower priced gas? Our biggest RV dealer has a 3 acre lot full of them.
I agree that class A rigs aren’t selling. It’s the lower end towables and lightweights that are affordable.
“……He just said it, and it was accepted.”
Just because no one called him a moron to his face, doesn’t neccesarily mean that the listeners were drinking the kool-aid, I would just be inclined to let a guy like that spew, especially if he was talking to a bunch of adults that should be able to recognize BS when they hear it.
I’d be more inclined to challenge idiots, if they are telling a bunch of kids stuff that is patently wrong.
The huckster was right in one respect. There’s going to be a lot more camping/touring in the US and a lot less foreign vacations for Americans in the future. That’s simply the result of little money left over after expenses for most people.
But you don’t need a $100K truck to go camping. And it boggles the mind why those wackos go to the wilderness and spend their time watching satellite TV.
I am a little old for backpacking, but can have a luxurious car camping experience in my Miata. It holds a walk-in 6 man tent, air mattress, ice chest, propane stove and lantern, and much more. And the Miata gets 30+ mpg.
Plus you can drive with the top down and enjoy the fresh air and sunshine.
Too true. Back in my college days some friends and I took half the summer and toured Yosemite, Glacier, the Tetons, etc. One of my favorite memories was taking turns bathing in a water spigot in a campground in Yosemite (didn’t yet know to sneak into housekeeping…). While holding the soap while a friend was bathing I discovered I could see into a huge RV with bump out rooms, which was completely sealed to keep the A/C in and the wilderness out. What were they doing to entertain themselves in their sealed RV while in the middle of Yosemite National Park? That’s right, they were watching a nature show on TV.
LOL!
Even though we now rent an RV when we camp. It’s just a whole lot easier when you have small kids.
LOL, That reminds me when I was a kid we used to go back packing for up to a week in the high country around Tuolome. When we came back to the valley (no doubt smelling like something a bear wouldn’t eat) we would pass all these fat ass “campers” with their BBQ’s, televisions and coolers of beer and look at them with the utmost contempt.
If anything I feel even more like that now.
“much more?” lol
All you need is a Home and Park Motorhome made in Kitchener…self contained RV good mileage, compact and doesn’t cost 100K.
here’s my point:
Country Coach Bankrupt, full liquidation proceeding.
Marathon- hint: used prevost bus conversion prices are falling faster than upside down bus-nuts can burn’em without an investigation…
yowza, if the conversions are going (those were supposed to be the ‘economy’ option) then the private coach op’s are in trouble. Would you want to be sitting on an expensive lease for a piece of rolling stock that’s plummeting in value? Ouch.
(Translation: in a year or two someone will be buying used coaches cheap and undercutting you big time!)
Went to Circuit City last night to see what kind of good deals were in the offering. The store is just about cleared out of merchandise. Most everything was marked 25-30% off. Really surprised me that people think 25% off a $1800 LCD TV is a bargain to be had. Heck you lose that much a month after you purchase it. I was sure they’d be at 50% off by now, looking for a camera myself. I guess if you can find enough suckers you can keep the liquidation at 25-30% off inventory. Go figure.
The suckers here in So. Cal think 20% off of peak 2005-2006 house prices is a good deal. Good grief. Still lots of delusion out there.
Yep..California may not be the quite the Titantic but they are merrily sailing along into the housing STORM like the S.S. Edmond Fitzgerald.
May the legend live on…
Superior they said never gives up her dead…
C’mon Bay Area Gal next verse!
When the gales of November come early.
Our 10 year old projection TV is giving up the ghost. It appears that I will break down and buy somehing to replace it with.
CC is for suckers. Sears prices are cheaper right now.
Also went to Circuit City. They had a Sony TV I was looking at- marked “Originally $599, Now Only $499!! Then went to BJ’s and saw the exact same tv at their regular price of $399.!!!!!!!!!!!
The only stuff you will get a deal on is anything branded “Circuit City”. They can’t sell that stuff to wholesalers.
They can’t sell that stuff to wholesalers.. They will sell it to places like Big Lots, look for the Circuit City branded stuff to show up in 6 months or so. Microcenter is still selling stuff marked “CompUSA” in their stores.
Keep in mind, it’s also probably 25% off after a price increase of 20% that occurred before the sale.
My GF and I went 2 weeks ago when I think things were at 10% off. I was amazed how picked over the place was…
Reminds me of Mervyns as they were shutting down. Raise the price 100%, then offer 25-30% off.
The prices are from the liquidators that bought the leftover merchandise. This is also true with Mervyns.
Here’s an example of how the CC liquidators are ripoff artists.
I’m looking for a 22″ LCD for my fifth wheel. Samsung LCD at CC “bargain priced, bottom line” is $383. BestBuy across the road? $330.
Nationalizing banks seems to be gaining traction. How might that impact the markets? Plus, hopes of a workout outside of bankruptcy court are slipping away from GM and especially Chrysler. Add to that, the first quarter ever of negative earnings.
Markets hate the unpredictable. Nationalizing means that the gov’t will prop them up no matter what happens. The market should like that.
hmm.. How would the markets respond.. i dunno. But what would life be like for the average person if government owned all the banks?
Govt takes your paycheck, to be deposited or perhaps cashed… Govt observes and records every penny you spend and what it’s spent on.. unless it’s a cash deal.
OK.. I’m gonna guess that holding or spending cash money will quickly be outlawed… gold would probably follow.. bartering too.. Any non-electronic transaction will be a crime against the State.
If the government was nearly that efficient, we wouldn’t be in the mess we are in now. They can’t even track their *own* spending.
Amen. I don’t buy gov’t conspiracies, for precisely that reason. Understaffed, incompetent and STUPID.
Even if there were contingencies against civil unrest, there is NO WAY that gov’t can control all the people, all the time.
can’t track their own spending.. heh.. true… But to be fair, do they have any interest in trying to track their own spending? Most efforts go towards hiding their own spending.
I’m just trying to imagine how a banking system owned and controlled by govt might act. It would have free reign.. virtually total control. If it hits a roadblock, it can create new laws, throw out old law, regulate or deregulate itself wherever it sees an opportunity to gain advantage and power.
While we all know government exists only to serve us, someone may want to look up the word “serve”.
Hmm, I would expect more of a zombie like the state home insurance co in Florida… running broke all the time, needing to be funded by taxpayers and running the profitable co’s out of business…
as for the privacy of your data, you think the banks have your best interest in mind? you think they aren’t full of underpaid staffers looking to steal data en masse or just dick around with or spy on accounts for fun? google bank data breach for some lulz.
and now that I’ve thought about it, nationalization sounds like a stupid idea. just BK the lot of ‘em!
Chrysler keeps sending us purchase orders for work like they’re going gangbusters. We’re getting P.O.’s now for their 2011 prototypes.
I just keep billing them ASAP and hope for the best.
hmmmm…That makes zero sense. Believable but I’m not sure what they’re basing their sales forecast on but it’s certainly not reality.
Hmmm… Do you really want some government bureaucrat determining whether or not to lend you money, or the talented financial managers at these bankrupt banks?
It’s a tougher call than one would expect.
My suspicion is the same people will be operating and working in the banks.. govt puts bank employees on the govt payroll, and adds another layer or two of bureaucracy… and shazzam.. our banking problems are all solved.
Desperate builders want to work in Antarctic
12:55 13 Feb 2009
By Grant Prior
Leaders of the the British Antarctic Survey have been swamped with applications from unemployed builders to work at the South Pole.
The BAS advertised yesterday for 17 plant technicians, six carpenters, six electricians and six or seven plumbers to brave freezing conditions at its ice station
The research group said its website crashed after being inundated with applications from construction workers desperate to work in Antarctic conditions for £23,000 a year.
Linda Capper, from the Cambridge-based organisation, told the Daily Mail: “The phones have been jammed all morning.
“We were hopeful there would be a big uptake, especially as the construction industry is suffering in the UK at the moment.
“The thing that is most striking is the stunning scenery. You feel very small. You find yourself in this gigantic landscape where the horizon is a long way off and you can see icebergs the size of cathedrals.”
let’s hope they don’t run out of ice to build on in the near future …
With global warming underway, the Arctic may be one of the world’s hot real estate market in the second century of the current millenium. And they aren’t making any more land up there around the north pole, either. I suggest real estate investors looking for the chance to tap into new markets invest there often with large amounts of capital.
Oops — wrong pole! They actually aren’t making any new land in Antarctica, either, so far as I am aware. (Spreading centers are in the middle of the oceans, not on continents…)
Ssssssh! If we send them to the Arctic and then wait for the ice to melt we could be rid of them forever!
(and it would almost be worth it.. almost)
Plus they could feed the endangered polar bears. Sounds like a win-win idea to me.
But then all those water-logged floaters would gum up the penguin swimming lanes. We can’t have that. I love penguins. They’re so adorrrrrrrrrable.
The polar bears may find humans to be too toxic
how much per acre for an iceberg? I will ask my RE agent. Will it still float with granite, travetine, and stainless appliances? As long as it doesnt turn upside down I might flip it…
Just read that BMW has cut production at its MINI factory in England and laid off staff. Just last summer demand was so high that the local dealer in Denver had zero inventory. I took our MINI in last week for service. Thay must have about 100 new Cooper and Cooper S’ models on the lot (I didn’t see any Clubmans though).
Also I found it interesting that a large number of the Coppers were very basic models, low on options, most did have the sun roof, but that was about it.
The Mini dealer down the street from me never had more than 2 or 3 cars since they opened. When you bought one you paid sticker and waited 2 months for your car.
Now they have 30-40 sitting there.
Hm, maybe some deals in the offing? (In the old days, dealers often got purchasers to pay WELL over sticker.)
Too bad I am in love with bike riding now–you couldn’t even drag me off of it. Even a MINI seems like such a bore.
The Denver dealer didn’t gouge. You paid MSRP, and that was it. I didn’t ask what they were charging today. They did have lease special and 5.9% financing, but that was it. No rebates (yet).
Wow, Mini? They and Subaru have been wildly popular in Portland, too.
Also consider the Mini that most people want: Cooper S with all the fixins. Aren’t those now around $30K or more?
Minis are just like any other “fad” car. The manufacturer spends the first two years filling the demand from the “Gotta have it, whatever it costs” types……then about 2-3 years into production, everybody that wants one, HAS one……Just about the time they add more production to meet the “demand”.
Goodbye Dealer markups, hello factory rebates.
If you get an S with all the options, yes. We got a base with the sun roof and sport seats. 20 grand.
Speaking of UK, the singer van morrison is a friend of a friend of mine and I met his adorable daugher. She told friend that her uncle killed himself after losing 80 million of real estate and family money. Can someone here find the story?
google
“van morrison brother-in-law”
Yup…
Wall Street Journal
* JANUARY 21, 2009
Irish Tycoon Found Dead, Suicide Suspected
By CASSELL BRYAN-LOW and CARRICK MOLLENKAMP
Irish property tycoon Patrick Rocca was found dead Monday morning at his home near Dublin, in a suspected suicide.
Mr. Rocca, 42 years old, was involved in property through his company Accorp Properties Ltd. in Dun Laoghaire, Dublin, according to company filings. He was a member of a prominent Irish family of Italian descent, which has been involved in the tile business. Mr. Rocca was married with children. His sister Michelle is musician Van Morrison’s partner.
That is awful. 42 years old and Irish royalty.
Van’s daughter is a real live princess. When I met her I wanted to curtsy. She is beautiful and gracious.
Is she single?
It’s easy to be gracious if you’re rich.
Too bad he didn’t stop recording after the stuff with “Them”. Van solo stuff=over-rated. Van+Them=one of the all-time best UK 60’s bands.
Boy these stupid SOB’s don’t get and never will, do it and where will the beer trade go? Out of state & under ground.
Outrage brewing over proposed 1,900% beer tax hike!
Lawmakers say tax will help budget; brewers warn of lost jobs.
08:32 AM PST on Monday, February 16, 2009
By ERIC ADAMS, kgw.com Staff
PORTLAND, Ore. — Five Oregon state lawmakers want to impose a hefty tax on beer and have introduced a bill that brewers say would cripple them.
Four Portland legislators joined a Springfield senator to introduce Oregon House Bill 2461, which would impose a $49.61 tax on each barrel of beer produced by Oregon brewers.
The tax would raise revenue for the state at a time when budgets are running in the red. Specifically, the bill says it would fund prevention, treatment and recovery programs for those addicted to alcohol and other substances.
It also defends the tax by claiming alcoholism and “untreated substance abuse” costs the state $4.15 billion in “lost earnings” as well as more than $8 million for health care and nearly $1 billion in law enforcement-related expenditures.
HB 2461 claims Oregon ranks 49th among states in its malt beverage taxation rate, which has not been raised in 32 years.
They could always just move across the border to business-friendly Idaho. Heck we already grow most of the hops.
One US beer barrel equals 31 gallons. Right now Idaho is considering raising its 1961-era beer tax from 15 cents/gallon to 52 cents/gallon, or from $4.65/barrel to $16.12/barrel. Knowing our legislature I’m sure the final bill will have a tax lower than the 52 cents.
See story
http://www.idahostatesman.com/newsupdates/story/669810.html
A good time to switch to whiskey.
What hooey. Tax likker if you’re so worried about substance abuse.
Soon the cry, “Beer and Bonus.”
Or was that “weed and stimulus”?
Sin tax here we come
Well, I’ve always been a fan of good syntax.
You are one witty kitty cat
Today, I love Kunstler:
“The Baby Boomers came back from the land, clipped their pony tails, discovered venture capital, real estate investment trusts, securitization of “consumer” debt, and the Hamptons. Greed was good. (No, really….)”
He misses the boat with this quote: I suspect that President Obama has learned over the last several weeks that the nation’s banking system and economy — indeed, the whole world’s — are in way worse shape than anyone imagined before January 20. His idea of “anyone” is limited.
He misses a lot.
I sympathize because 1. I am reckless in the same way 2. He means well
too Pollyanna about the President.
Is he a dummy? No. But he is beholden to the cabal that got us in this mess.
Kunstler is wrong on Clinton, too. Clinton was well aware of the banking problems. But he was also complicit with Greenspan in continuing the party. Bush, following some stupid Neocon programme, made it much, much worse.
Well, an interesting analysis but a lot to challenge in that article, too.
The Boom Is Over. Long Live the Art!
By HOLLAND COTTER
February 12, 2009, New York Times
LAST year Artforum magazine, one of the country’s leading contemporary art monthlies, felt as fat as a phone book, with issues running to 500 pages, most of them gallery advertisements. The current issue has just over 200 pages. Many ads have disappeared.
The contemporary art market, with its abiding reputation for foggy deals and puffy values, is a vulnerable organism, traditionally hit early and hard by economic malaise. That’s what’s happening now. Sales are vaporizing. Careers are leaking air. Chelsea rents are due. The boom that was is no more.
Anyone with memories of recessions in the early 1970s and late ’80s knows that we’ve been here before, though not exactly here. There are reasons to think that the present crisis is of a different magnitude: broader and deeper, a global black hole …
All the asshats buying up the good stuff to hang in their Aspen “ski-in” condoze, so they can look at them 1.5/52 weeks per year.
I used to notice a similar effect in PC Mag and Byte. Haven’t picked one up in eons.
Serial bottom callers, WAKE UP FROM YOUR SLUMBER AND BEHOLD THE HANDWRITING ON THE WALL.
ECONOMIC PREVIEW
No sign of bottom yet in worst-hit sectors
Upcoming housing, factory, layoff data could be as bad as any, economists say
By Rex Nutting, MarketWatch
Last update: 10:08 a.m. EST Feb. 15, 2009
WASHINGTON (MarketWatch) — You know things are bad when the best economic news over the coming week is likely to be a report showing that consumers paid higher prices for goods and services.
Any hopes that the economy is beginning to bottom will probably be quashed by the data due in the coming week, which are likely to show further worsening in the housing industry, manufacturing and employment, economists say.
The most meaningful news could come at mid-week, when President Barack Obama outlines his government’s plans to reduce home foreclosures, and possibly in the process, put a floor under the economy. As for the regularly scheduled releases for the week, “the data flow suggests no let-up in the recession,” wrote Ethan Harris, co-head of domestic economics for Barclays Capital.
If consumers pay higher prices, housing will collapse faster leading to more problems with banks.
You can’t inflate your way out of this mess not with Chindia setting the budget constraint for payroll for jobs.
Plus, you just about annhilate all marginal industries (not that they need much help at this point.)
“If consumers pay higher prices, housing will collapse faster leading to more problems with banks.”
Why is it so hard to see that lower home prices, not a floor under an artificially high plateau, is what is needed to turn the market around? Or is the hidden goal to keep the real estate sector in the toilet for the foreseeable future by starving it of home sales transaction liquidity? Perhaps if the housing sector undergoes a fundamental overhaul as a result of a prolonged real estate collapse, something good will come out of this policy over the long term?
Housing is an expense, and like all expenses it should be kept to a minimum. Why is this so hard for policy-makers to grasp?
Everything you need to know about this debacle can be gleaned from a firm understanding of accounting, the role of a budget constraint, and the solid unshaking belief in the power of long division.
But yes, I do believe that good will come out of this long-term but the near-term pain is likely to be horrific.
They want to hold up house prices so that fewer people will walk.
IF we let prices freefall back to equilibrium, they will be sub-year-2000 prices. There will be something like $6-7 trillion in total “upside-downess” and minimum of $4-5 trillion in real losses to banks.
They are just trying to keep people in houses to keep them paying to limit the total loss.
It won’t work.
“The most meaningful news could come at mid-week, when President Barack Obama outlines his government’s plans to reduce home foreclosures, and possibly in the process, put a floor under the economy”.
The pathetic part is that so many millions truly believe that/hope gubmint CAN put a ‘floor’ under the economy. Barry is to unveil his magic plan this week. Wonder what it will be? The never before tried continued spending.
So that’s what it’s gonna be - a “new” announcement every week?
At this point it might be wiser to drop the issue and go on an extended trip to Europe or Asia. Over the longer term it is politically risky to set up expectations with these weekly announcements. Why not pace things out a bit? What’s the urgency?
The plan is simple. Rather than wiping away the Trillions of “upside-downness”, the government will make a portion of your house payment… IF you are just the right amount of upside-down, and have just the right amount of income so that you can not afford the full payment but can afford the payment if the government pays a few hundred of your payment each month.
The number of people eligable will be small, and few will actually accept the help in being a wage slave.
Everyone I know that is upside down wants a principle reduction so that they are no longer upside down. They have NO desire to pay back the $500K loan on a house now worth $350K. They don’t want a year or two of help at a few hundred a month. They want out from under the crushing debt load, plain and simple.
“They don’t want a year or two of help at a few hundred a month. They want out from under the crushing debt load, plain and simple.”
This is what blows my mind! Why dident they think about that before they signed onto that much debt? I would have NEVER taken out a loan of that size without knowing I could pay it back in full (without selling my home).
No deal.
The same outcome happens regardless. They get a principal reduction, the value of all homes goes down in turn.
They don’t get the principal reduction and decide to walk? Same thing.
One takes longer than the other but I’m on board the combotechie program. Keep ‘em in the house as long as possible to keep taxpayers off the hook. And even that won’t hold up prices. So, ultimately, what’s a loan owner to do?
“Hollywood” accounting or no, and that’s all the current plans amount to, people can’t pay what do they don’t have and aren’t going to have for the foreseeable future.
And that is, literally, the bottom line.
Yes it is, eco.
Falling housing prices are NOT the problem. Falling wages over many decades (masked by a credit bubble) are the problem.
If housing costs could be kept under 10% of a family’s budget, the economy would strengthen immediately. Fixed costs need to come down dramatically…housing being the most expensive fixed cost for most families
A Government-Mandated Housing Bubble
Peter J. Wallison and Edward J. Pinto, 02.16.09, 12:01 AM EST
Subprime enablers: Fannie, Freddie, HUD and Barney Frank.
http://www.forbes.com/2009/02/13/housing-bubble-subprime-opinions-contributors_0216_peter_wallison_edward_pinto.html?partner=yahootix
No, it was not the GSEs that caused most of the problems. Also, low rates forced investors to take on more risk because many investors “need” to earn a certain return in order to remain solvent (think pension funds and insurance companies).
The GSEs actually downsized their portfolios during the most toxic run-up in the 2004-2007 timeframe. They increased their portfolios and were forced into more toxic loans AFTER the damage was done. IMHO, this was to try to save the lenders ahead of the “credit crisis.” The PTB knew what was going on, and tried to nationalize (eventually) these loans via refinancing the private-lable loans into GSE loans at the peak of the credit bubble.
Now this is what i call creative thinking! I can think of a few people i’d like to have a doll of to feed to my rottweiler.
NY toy fair vendor offers Madoff doll — to smash
AP Monday February 16, 1:29 pm ET
Mad at disgraced investor Bernard Madoff? There’s a toy just for you.
One of the vendors at this week’s Toy Fair is offering the “Smash-Me Bernie,” a $99.95 Madoff lookalike doll that wears a devil-red suit and carries a pitchfork. It comes with its own hammer — so you can pulverize it.
$100? For a doll?
Yeah, but its value will appreciate 40% a year, I promise.
Talked to a friend in the flag business. She said that car dealers just aren’t ordering these days. A couple national clients owe her thousands - 18,000 owed by one big hotel chain.
There you go! This is the kinda collateral damage that is simply hidden from plainview.
It’s obvious now that you mention it.
Its a shame when people can’t afford patriotism any more.
Yeah… a shame. lmao.
Can anyone think of good ways to short Dubai?
I knew California was broke, and I knew our poor state was broke, but damn Kansas? I thought it was different there. Some body better start clicking their heals…
Kan. suspends income tax refunds, may miss payroll.
By JOHN HANNA
Associated Press Writer
TOPEKA, Kan. - Kansas has suspended income tax refunds and may not be able to pay employees on time, the state’s budget director said Monday.
The state doesn’t have enough money in its main bank account to pay its bills, prompting Democratic Gov. Kathleen Sebelius to suggest transferring $225 million from other accounts throughout state government. But the move required approval from legislative leaders, and the GOP refused Monday.
Budget Director Duane Goossen said that without the money, he’s not sure the state can meet its payroll. State employees are due to be paid again Friday.
Goossen said the state stopped processing income tax refunds last week.
GOP leaders are hoping to pressure Sebelius into signing a bill making $326 million in adjustments to the budget for the fiscal year that ends June 30.
Legislators approved that bill last week, but it has not reached her desk.
Goossen said the state might also have to delay payments to public schools and to doctors who provide care to needy Kansans under the Medicaid program.
The state has transferred funds before when it has been short of cash in its main bank account. Most recently, the state issued the special certificates required in July and December for transfers totaling $550 million.
Each certificate requires the approval of the State Finance Council, which consists of the governor and eight top legislative leaders.
The council was scheduled to meet at 1 p.m. Monday, but Goossen said Sebelius canceled the meeting because Republican leaders told her that they would not authorize the internal borrowing.
Some Republicans question whether that borrowing would be legal. When the state issues a certificate, it must promise that the money can be paid back by the end of the fiscal year. But the state already is projected to have a deficit in the current budget.
The legislation approved last week is designed to fix that.
I was speaking to my accountant who informed me that people who are due a refund are calling him and filing earlier than usual this year.
Seems they want to make sure they get their money before Uncle Sam decides to hang onto it for a bit longer a la California (and now Toto-ville)
I wonder what the sum total will be over the next couple of years in cuts to state budgets. Something tells me it will be equal to or greater than the stimulation from the One.
In borrowing, who comes first, the states, or the feds?
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!!!!!
My refund direct-deposited last Thursday!!!!!!!
As the drag-racers say, “He who snoozes, loses”.
I’m pretty certain we’re going to owe money, so we’ll be snoozin’ until April 15 (maybe the 14th, since the post office is always so crazy on 4/15).
I’m still laughing……..my accountant and I had discussed the possibility that they might do this. He didn’t think so, thought my attitude was much too cynical, but didn’t dismiss the possibility out of hand.
Unlike just about everyone else, who said the government would “never” change the rules, or screw with refunds.
I’m making my “I told you so” list as I speak……:)
“……..But damn Kansas?”
State is taking big hit on receipts, specifically due to the massive drop in sales/deliveries/orders of bizjets, parts sales are way down, Boeing & Co., Spirit Aerosystems, Cessna, Bombardier, and Hawker Beechcraft and sub-contractors are laying off people right and left, and no, there is no UAW-like “Jobs-Bank” (where people get paid for doing nothing) in the aerospace business.
If the Feds were smart, they would re-open the bidding on the new USAF tankers right about now.
Add to that layoffs at Sprint, etc. in the KC area…..
Well, most of Kansas is full of down-to-earth, humble, and fairly smart people (their education system is FAR superior to anything I’ve seen in California, and this is backed up by standardized test scores typically in the top 10% of all states). However, snobby places like Lawrence and Johnson County had many home equity type people…these places were where Californians sought out—the downfall of these places couldn’t happen to nicer people.
Finally, this must be the reason we had to pass the stimulator package, can’t have a stink’n credit crunch screwing up folks sex drive!
Credit crisis could crunch men’s testosterone:
The stress caused by the global economic downturn could reduce men’s testosterone levels, a British doctor warned Monday.
Chronic stress caused by redundancy, financial worries or working longer hours could make levels of the hormone drop, said Richard Petty, the medical director of a top London men’s health clinic.
Testosterone, the hormone produced by the testicles, triggers the development of male sexual characteristics. It is linked to sexual function, circulation and muscle mass, as well as concentration, mood and memory.
“When a man becomes grumpy or irritable, it’s easy to blame work or simply the effects of ageing,” said Petty.
“In the short-term, stress can increase levels of testosterone and this is useful to help people respond quickly to pressures and new situations.
“But chronic stress, which is ongoing, is a major factor in the decline of testosterone.
“Chronic stress occurs all too frequently due to our modern lifestyles, when everything from high-pressured jobs to unemployment keeps the body in a state of perceived threat.”
Lower testosterone levels of the hormone can cause lethargy, irritability, lack of concentration and a low sex drive.
Petty advised men to reduce their stress levels as much as possible by resting, eating healthily and exercising.
If this jackass is getting a single dime of government money, I would like to nominate him to be the first honorary “budget cut”
He should go back to driving stock cars.
PB, I saw you r post today about the stake employment specialist in the Poway stake. Contrary to what your wife reported there should always be an employment specialist in each ward and stake. In good times this is obviously a calling that gets little attention and probably just gets a “place marker” at the table. In bad times it comes to the fore.
Oddly enough it was this type of help within the mormon community that got them thrown out of Missouri and Illinois. The locals didn’t like the fact that they voted as a block and bought and sold among themselves, kind of like the thing that has caused persecutions of the Jewish peoples across the ages, writ small.
There is a new link on the front page of LDS dot org that gives job hunting tips, it’s actually quite good for those who could use such a thing. I’ve said it before and I’ll say it again, there are worse places for refuge in hard times than a church with no paid clergy and an extensive history of self sufficiency.
The locals didn’t like the fact that they voted as a block and bought and sold among themselves, kind of like the thing that has caused persecutions The Mormon offshoot on Beaver Island in Lake Michigan acquired a reputation for piracy & was driven away with the aid of the US Navy.
No doubt. History is written by the victors. I love tales of US military forced used on citizens. Utahr was also occupied for a time by the US army before statehood.
Dude,
Because of one of your posts a while back, I did some research into my family ancestors and just realized that my grandfather was a polygamist!
My family belonged to the group that remained in Illinois and Missouri (RLDS).
correction: ancestry
Very cool. I think a lot of people would gain a greater degree of self awareness if they understood better where they came from, and what their predeccesors went through to give them what they have.
“We took a little money out to build our swimming poll, you know, ’cause I have three boys and I gotta keep ‘em happy.”
http://www.cnbc.com/id/28993790/?slide=9
CLASSIC! Look at this fool with the soul patch on his chin. Check out the “deer in headlights” stare on the face of wife.
All you got to do moron is be an adult and take care of your kids. The pool, Xbox, high price sneakers, whatever are just extras. Why would you risk you livelyhood on a house you can’t afford and extras?!?
Oh, btw…..does anyone know a place on the net where the entire CNBC House of Cards piece is posted? Already checked CNBC, YouTube, and hulu.
Yes, Ernesto, it’s the boys’ fault that you did what you did. Way to go.
And if you think that’s part of the cost of having kids, perhaps you should have reconsidered having them if you can’t afford them…
that’s nothing … my FIL more or less blamed the kids for him buying a brand-new Sea-Ray boat…
he’s still making payments on his mortgage… I have yet to turn up proof positive that he refied, but the clues all fit (his obsession with the ‘value’ of the home, that fact that the land and construction costs would not add up to what he says his mortgage is, his sudden acquisition of boat and new car, etc.).
I’ve heard/seen at least a dozen Remax commercials over the last week so I sent their headquarters this link reminding them that they’re being watched closely.
http://tinyurl.com/2qtxs5
strap on yer crash helmets…
FOREX goons are gonna run the queens gambit.
I will note the technology failures that are have taken place in the last few days.
-satelites colliding
-nuk-you-ler subs touching helmets.
-autopilot planes going down.
GLOBAL FINANCIAL INDUSTIRAL COMPLEX FOUNDATIONS are shaking violently.
/tinfoil off.
looking forward to Inside the Meltdown on PBS tomorrow, it’s gonna run like a home movie. I should TIVO it….
WSJ dot com
* FEBRUARY 17, 2009
California Vies to Close Budget Gap Amid Dire Conditions
By STU WOO
SACRAMENTO, Calif. — California legislators geared up for another late-night session Monday to reconsider a proposal to close the state’s $42 billion deficit, after aborting a vote Sunday night because they failed to find one more Republican vote needed to approve a budget.
This government has important work to do! Why can’t the little people understand that? It is here to provide for our well being, and the bigger it is, the better things are for us. Get it?
We should be begging them to increase fees and taxes. We’ll find a way to pay it. Unemployment is no excuse for being selfish. Find some money. Check behind the cushions on the sofa… the bottom of the laundry bin.. There’s always the blood bank.. a couple pints never killed anyone.
We can cut back on food.. lord knows we’re overweight. We still waste money on milk and fruit juice? Tap water is practically free! Open your eyes!
How about all these smelly little pets running around.. they cost serious money and return nothing! Wasteful spending on pets is unconscionable! And what genius decreed that we need to comfortably heat our homes? Has nobody heard of jackets, sweaters and blankets?
Opponents claim the people cannot afford the burden of increased taxes and fees in these hard times. The truth is we cannot afford to let government shrink!
We must cut our spending to the bone so we can maintain that Jabba the Hutt in Sacramento in the style it is accustomed to.
It’s stupid to make them waste precious time and resources overcoming spending limits we imposed on them with Prop 13.
Why must we make them force us to pay more? Open your wallets (or veins) and contribute willingly!
hoz, you watchin the day after?