Bits Bucket For May 28, 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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I had steak and eggs this morning…yum yum
I had green eggs and ham.
Sam I amn’t,
I ain’t Sam.
I do not like green eggs and ham.
I will not try your sham Neg am.
I do not like them, Sam I Am!
I had:
One Fish
Two Fish
Red Fish
Blue Fish
Try an omlette made with some green salsa sometime - yummy. And you can then have green eggs and ham!
I am going to make myself a guacamole omelet for breakfast tomorrow morning in honor of your suggestion… (no green ham, though…)
I always wondered in that book if it were just the eggs that were green, or the eggs and ham that were green. They needed parenthetical operators in that book.
green (eggs and ham) does not equate to (green eggs) and ham.
Guacamole may burn….I just use the green version of Tabasco or Tapatio hot sauce plus some salsa crude (chopped tomatos, cilantro, and onions).
You should see my guests’ reaction to being served “green eggs and ham”.
I had “Scrambled eggs Super-Dee-Dooper-Dee-Booper, Special deluxe a-la-Peter T. Hooper”.
Although I skipped the eggs from the moth-watching Sneths. It’s just not sporting to sneak up and poach the eggs from someone in a moth-watching reverie. I enjoy watching moths myself.
You keep Auricana hens, too? Best green (and blue) eggs on the planet!
My neighbor the vet has Auricana hens, so I get to enjoy eating pretty eggs all the time! Sometimes I get to take care of them, when he goes on a trip, and it’s fun, although not so fun that I want to do it all the time.
He had some pheasants he hatched out from a nest a client found while mowing their lawn. They were such beautiful birds, with blue, and speckles, and iridescent green heads, until raccoons ate them.
The days when I used to like raccoons are FAR behind me.
We get ring-necked pheasant road-kill in the farmland around my house. What a waste.
Speaking of frog-hunting meth-freaks killing each other…..
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/BA8N17SL3K.DTL&tsp=1
I’ve said we have a race between rising personal savings rates as Americans sober up (good) and the rising federal deficit, falling dollar, and fear of a U.S. default and/or de facto default via inflation (bad).
One points to five years of painful stagnation followed by a possible recovery, as in the early 1990s though perhaps worse. The other to a possible lurch back into crisis.
The bad news seems to be taking the lead.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aF9BcKvlnjkc&refer=home
Remember that whenever that the personal savings rate is discussed that paying down debt counts as savings. If you’re making $60,000 a year after taxes and pay down your debt by $6,000 this year (on your $200,000 mortgage) but don’t put anything in savings and don’t accumulate any extra debt (eg, spend $54,000 on other stuff): congratulations! Your personal savings rate is 10%.
Personal savings rate = [(income - taxes) - (goods and services purchased)] / [income - taxes].
Calling it “personal savings rate” is a misnomer; it really should be called “different between income and what you spent on everything else”. And all those people that said it was ok that the personal savings rate was negative because of 401k accounts? I’m wondering where that theory started because the way I see it from the Bureau of Labor and Statistics calculates the rate it obviously includes 401k contributions.
Getting out of the hole is as good as climbing up the pole, net across the whole population. Either way, the U.S. become less dependent on capital inflows from abroad, and the savings from those Americans who do save can be used for something other than past debts.
The amount of money involved with debt defaults completely overwhelms any changes to the savings rate, but has a much bigger affect on households savings. Loan writeoffs aren’t counted in the savings rates, but they have the affect of making households balance sheets a lot less worse. Plus these households are then spending less on debt service (lowers future spending) thus making the savings rate look better going forward.
Dont be fooled by any reports about improved savings rates, unless it also explains the affects of debt writeoffs.
I’m not making a comment on whether your observation about 401k contributions being included is correct or not, because I just don’t know. However, if you are trying to create a number that allows longitudinal studies, the 401K contributions (by the individual and any matching by the employer) should not be included because when people had defined benefit pensions, the incrimental increase in value of a vested pension was not included. Since the former is meant to be a substitute for the latter, including it would create the illusion of an increasing savings rate as industry transitioned out of defined benefit and into defined contribution.
The fact that people didn’t think of their defined benefit pensions as piggy banks to just empty out whenever they needed a little extra cash and they do think that way about their 401ks is a secondary issue.
Well I would argue the contrary point. Since conventional benefit plans ARE a liability to those paying them, they SHOULD be counted as income to those who receive them.
I’m not saying that including or excluding either is right. Only that the statistics of yesteryear didn’t include the value of the defined benefit. If you want to compare apples to apples you have to exclude the 401ks that took the place of defined benefit pensions that were never measured so they can’t be put into the old statistics.
Point taken. I guess it’s like persuading people that the mortgage interest deduction is NOT a subsidy of homeownership, but instead an attempt to equal the playing field with landlords, who get to deduct their interest as a business expense.
I’m pretty sure that the savings rate counts post-tax investments only, so your typical 401-k savings are excluded, until you cash them out (and pay the taxes if applicable). then, the difference is basically as you stated:
Personal savings rate = [(income - taxes) - (goods and services purchased)] / [income - taxes].
Pensions are not funded at the same time as a 401k. Pensions are sometimes not funded 100%. Pensions may exist on paper only.
Joe the plumber has a base pay of $100k. He puts $15k into a 401(k) and pays $30k in federal and state taxes leaving a take home pay of $55k. His ‘income’ for purposes of personal savings rate calculations is $70k.
In 2008, since Joe wants to keep up with the world he has been running a personal savings rate of -5% - meaning that his outlays are $73.5 a year. But – look at what I outlined above with his take home pay. In order to run a personal savings rate of -5%, Joe needed to go $18.5k into debt. Yes, he has $15k in his 401(k), but still…
Now that it is 2009 we’re running a positive 5% personal saving rate, let’s assume Joe’s work falls off 10% and he only makes $90k this year but keeps his 401(k) at $15k. His tax burden is about $28k, let’s say. His income for purposes of personal savings rate is $62k. Since Joe follows the crowd, he runs a personal savings rate of 5%. That means he only spends $59k this year. But his take home pay is only $47k this year.
Big deal, you say – Joe has money in the 401(k) to the tune of $30 k, and he racked up $30.5k of debt, big deal, right?
Well, let’s run the example for 2009 assuming that Joe stops his contributions to his 401(k). Income is still $90k and his taxes are now more like $31k. So his income for the personal savings rate is $59k. To get a savings rate of 5% he only spends $56k and pays down his debt from last year.
Net effect after our second chance of 2009:
401(k): $15k
Debt: $18.5k - $3.0k = $15.5k of debt.
Methinks the only reason the savings rate is going positive is people are ceasing to fund their 401(k) in a last ditch effort to reduce debt aquired previously. As that happens, notice the effect of the reduction of the 401(k) contribution. Assuming that Joe has a zero interest rate loan, it takes him over six years of a savings rate of 5% to offset a single year of a negative savings rate of -5%.
Ouch.
That is plausible. And even more plausible when you realize that a lot of employers have cancelled or suspended 401k matches.
And the fact that their previous contributions are worth a third of what they were two-three years ago.
“And all those people that said it was ok that the personal savings rate was negative because of 401k accounts?”
I thought it was home equity wealth gains that made the negative personal savings rate OK?
article from slatedotcom today.
portion-
I’m interested also in another, more amorphous question: Now that moving is less common, is it harder to take in stride? The answer, judging from the responses I got to my questions about uprooting connected to the recession, is that it all depends on the reason why. Some people were deeply dismayed by moves that signified for them a scaling back of aspiration. At the same time, I was struck by the stoicism of some of my correspondents, especially those who were moving not for themselves but for their families. They weren’t retreating to their parents’ homes in that time-honored, if fraught, mode of hiding out in your childhood bedroom. They were moving, or helping their parents move, because their family needed them.
Erin is an MBA graduate. She has a good job. Her husband did, too, until he was laid off recently. They own a house in Seattle. They also have two cars, two dogs, and no kids. They can pay their bills with her salary and what he’s collecting in unemployment insurance. It’s Erin’s mother-in-law who is in trouble. She had a second mortgage for her condo in Reno, Nev., that she treated as a revolving line of credit, while taking the money that Erin and her husband sent every month, using it to pay down the mortgage, and then spending it again. When her mortgage came due, so could a balloon payment of $25,000, Erin and her husband realized. “We were in shock,” Erin writes. “Just at the time that she should own her own house free and clear, she would lose it.”
Refinancing didn’t work. Erin and her husband moved her mother-in-law from Reno to their house. The moving expenses went on their credit cards. They hoped to sell the condo for $80,000 to pay off Erin’s mother-in-law’s debts—she paid nearly that much for it before the housing bubble—but the sagging market means the current price is probably more like $45,000. So no go.
Erin didn’t complain as she outlined all of this. Her husband is used to taking care of his mother—”He has been helping her make financial decisions since he was 10,” Erin writes. And so they are dealing. “I guess what it comes down to is that I could stew in resentment, but it wouldn’t change the situation. I get frustrated and annoyed, and have the occasional fit at my husband—usually over silly small things. That way, when the big stuff comes up, I can cope.”
Andie—not her real first name, and you’ll see why in a minute—is in the midst of a more vertigo-inducing parent-child role reversal. Her father’s business is ailing financially. Her mother works, too, but not for a high salary. Andie, who is 29, is the oldest child; she and her siblings grew up going to private school. Now Andie’s parents are falling $5,000 short every month. And so Andie decided to move back from the East Coast job and city she really loved to her parents’ West Coast home. She found a new job with an Internet startup, not in her field but the best she could do quickly. She is giving her parents $1,100 a month from her salary.
Actually, Andie is giving the money to her mother, because her father doesn’t know. “On some level does he know they’re in trouble? I don’t know. I’ve never talked with him about it,” she says. Andie thinks of the payments as rent, but her mother hates the idea that she would ever charge one of her children to live in her house and prefers to say that ‘Andie is helping them through a difficult time.’ ” Andie is paying for other expenses as well, like a family lunch with her grandmother in the hospital for Memorial Day, though she’s not sure how long she can keep that up.
The hardest part, perhaps, is coming to terms with her parents’ limitations. “I can’t make them into frugal people who are good financial planners,” she said. And so even as she funnels her salary their way, she watches as her parents hold on to certain upper-middle class habits. Every month, they host a big dinner for the extended family. “I think my mother would rather declare bankruptcy than compromise on that.” When her mother talked to Andie’s younger sister about going to public school for her senior year, “My sister bawled and said, ‘How come everyone else got to go to this school we all went to? And that made my mom feel terrible and she said, ‘OK, we’ll figure out some way.’ ”
You can dismiss this as privileged whining, I suppose. No one is going homeless. But it seems to me that her family’s crisis, however self-manufactured, presents all kinds of delicate complexity for Andie to sort through. She moved home to help her parents because she couldn’t stand to see them slide down the financial chute. “If I weren’t here to help, I couldn’t function,” she says. “It would consume my thoughts.” And so she is home, and she is helping, but that means shoring up a lifestyle for her parents and her younger sister that she knows is probably unsustainable. “I don’t think my parents have long-term plans, and I don’t know what my future reality will be because I don’t know what will happen with them.” That is a lot of subsuming of one’s own identity. When Andie moved, she left behind her independence and re-entered her parents’ world. And yet even as she is close by and supportive, she has to hold herself apart because she can see the frailty of their choices. Not easy.
That’s just sad on so many levels.
I’m not an economist nor do I play one on HBB or TV
What I do see as a layman is a big battle and a massive pysop job in progress. To use the old and worn out Special Forces cliche that I hate so much, “The battle for Hearts and Minds” is at work. A huge propaganda war wages on the homefront.
Make NO mistake about it, it’s a Class War between each of them to preserve their own cliques and status quoes.
One one side is the MSM, RE/FIRE and our gov’t and on the other side is the consumer, taxpayer and j6pack.
The weapons are financial, fear and intimidation and so on. Very few bullets are flying yet the object is survival.
Tactics are asset presevation, valuations, bailouts, interest rates, and other incentive modes of torture.
Plan, heck in the final analysis, nobody needs a REAL plan or a thought out over-all sensible strategy, this is after all, a freakin’ WAR !!!
Ooops…I think I may have just stepped into a Econ 101 classroom or temporary deflationary minefield by mistake.
HELP!!
Why are there ‘parens’ around ‘Weakness’ in this title?
Gold to Rise on Dollar ‘Weakness,’ Deutsche Bank’s Lewis Says
By Alex Emery
May 28 (Bloomberg) — Gold will rise this year as investors seek a haven from a slumping U.S. dollar, said Michael Lewis, head of commodities research at Deutsche Bank AG.
Investors concerned they may lose their savings as banks go out of business are also paying a premium to hold gold certificates through Exchange-Traded Funds, Lewis, based in London, said yesterday in an interview in Lima.
“The interest rate, exchange rate and equity environment still remains quite constructive for gold, particularly in the short term,” he said. “We may see a bit more dollar weakness, and the appeal of gold will continue for inflation-hedging.”
Meltdown 101: Why is the dollar weakening?
By MADLEN READ – 16 hours ago
NEW YORK (AP) — The U.S. dollar spiked when the economic crisis was peaking, and it’s falling now that a recovery’s in sight. What gives?
The relationship between the country’s economy and its currency, it turns out, is more complicated now than ever as the government assumes a larger role in propping up the financial system and encouraging economic growth.
…
Q: Why is the dollar retreating?
A: It’s partly because the U.S. economy is weak. Usually, a currency is regarded as a barometer of a country’s economic conditions, or standard of living. But even more so, the dollar is falling due to the nation’s growing debt.
The dollar actually gained in value versus rival currencies when jitters about the U.S. economy were peaking in the six months leading up to March. That’s because investors were even more worried about other countries’ economies, which tend to lag the United States.
But as the months wore on and the Treasury Department continued to issue record amounts of government bonds into the market to finance its stimulus and bailout packages, the dollar has become less and less attractive to investors. The U.S. budget is expected to hit a record high of $1.84 trillion this year.
A poor economy and high debt weaken a country’s currency because investors decide that they’re better off buying bonds, stocks and other assets in countries with stronger economies and more stable debt. Stronger countries’ assets — and, thus, the currencies those countries use to value their assets — are more likely to rise in value, and their debt is less likely to default.
My head is spinning over the myriad cross currents buffeting the currency markets.
Wall Street Journal
* OPINION
* MAY 28, 2009
Why Beijing Wants a Strong Dollar
China won’t torpedo the economy by dumping our bonds.
By ZACHARY KARABELL
Twenty years ago, in the wake of the suppression of the student movement that had taken over Tiananmen Square, it seemed as if China’s brief opening to the world had come to an end. In fact, 1989 marked the beginning of China’s supercharged path to economic reform. The results have been tremendous: China is now the second pillar of the global economy and is increasingly vital given the vulnerability of the United States.
The U.S. now relies on China for credit, a fact that is generating considerable anxiety in Washington and Beijing. Last month Chinese Premier Wen Jiabao called for more international oversight of the world’s major “reserve” currencies. While he didn’t specifically mention the U.S. dollar, the message was clear. As the largest holder of U.S. debt, the Chinese government is restless as the $2 trillion in foreign reserves it holds fluctuates primarily based on the management — or mismanagement — of American financial institutions.
Odd how running over your own kids with a tank would relate to anything.
I don’t recall them running over anyone. I do recall that one guy standing in front of the tank by himself and the tank trying to go around him.
definitely squished people from that episode in history. Images NSFW.
In Soviet China, YOU break for tanks!
Well, James, ten years after the Ohio National Guard shot a bunch of our own students, the United States, too, was flush in the middle of a boom and a piller of the world economy.
Ergo, the way out of our current mess seems clear….
Again, we can make those dollars worthless more quickly than the cheap plastic tchokes that they traded for them disintegrate.
If you were a shill for the DB Gold fund, what would you tell the sheep?
Wall Street Journal
* TODAY’S MARKETS
* MAY 28, 2009
Rise in Rates Jolts Markets
By LIZ RAPPAPORT
Treasury yields and mortgage rates surged Wednesday to their highest levels since November, dealing a blow to the Federal Reserve’s efforts to stimulate the economy by keeping borrowing costs low.
The gap between yields on two-year Treasury notes and 10-year notes, known as the yield curve, widened to 2.75 percentage points, its highest ever. Stocks also slipped as investors worried that the higher Treasury yield could jack up market interest rates, damping economic recovery. The Dow Jones Industrial Average dropped 173.47 points, erasing nearly all of Tuesday’s 193-point gain, closing at 8300.02.
The Fed has made low mortgage rates a priority in its strategy to stem the U.S. recession. To achieve that, the central bank has been buying mortgage-backed securities and Treasurys. Through programs announced since last fall, it has bought more than $460 billion of mortgage-backed securities and more than $125 billion of Treasury bonds.
But the winds turned against the Fed in recent days, as investors worry the government’s approach could lead to inflation. The government will sell nearly $2 trillion in U.S. Treasury bonds this year to fund its stimulus programs, and investors worry there won’t be enough demand for it. Slack demand would send bond prices down and push up the government’s cost of raising money.
“The market is looking at the over $1 trillion deficit and how we’ll finance it and concluding it is too big to finance without Fed assistance. But Fed assistance is causing inflation worries,” says James Bianco, president of Bianco Research. “We’re caught in a vicious cycle.”
I laughed off FPSS’s alert when the yield rallied 12bps to 3.15 so maybe he was onto something. But how long will it take the FedReserve to start buying down the yield(again)?
Even the Fed will hesitate at purchasing truly unending amounts of debt…
The more they buy, the more comparisons to Zimbabwe.
So long as everyone thinks bond yields are rising on optimism over sprouting green shoots, where is the problem?
I think the fed might have hit a wall. I don’t think they will be able to get mortgage rates back to where they were, even just last week, any time soon…if ever. WIth an increase in bond auctions, we are probably going to see treasury yields rise which in turn will draw investors into treasuries and likely out of mortgage bonds as they will get a better return on treasuries. Add to that the number of refinances that have taken place over the last few months, and there have been quite a few, but not really for anyone that was at risk of losing their home, at least not that I was or am seeing. It was mostly for people with great credit and lots of equity …that paper will be hitting the secondary market any time, which will also need to be absorbed. The green shoots are toast.
Being a lender you’re probably more tied into this than me, but here’s my thoughts.
I’m not so sure that investors will be drawn into treasuries and away from mortgage bonds based just on treasury yields going up (as has been the case normally). Right now there’s an increasing spread between the two, and the reason is the risk perception; and perhaps rightly so.
The perceived risk on mortgage bonds is getting lower over time, as prices fall and we get closer to a real bottom, and also due to ever-increasing potential for looming inflation. Mortgage default risk is mostly based on *nominal* price bottoms, not inflation-adjusted bottoms
The perceived risk of treasury bonds though is getting higher over time - e.g. see this weeks warnings by the ratings agencies.
This is natural as this massive debt gets shifted from the mortgage sector to the treasury - the risk decreases in the former and increases in the latter; therefore the yields will change accordingly without an actual shift of investors from one to the other. Or (as the case may be) you can get a case where mortgage rates don’t really rise much, but treasuries continue to rise even as investors *do* shift into treasuries.
Just speaking theoretically mostly though - in reality I do think that both will indeed rise - however I think that we’ll continue to see a faster rise in treasuries. I do think the Fed could drop mortgage rates back below 5% if they increase their buying, but the real thing holding them back is the inflation expectations of course.
I knew rates were going to soar. Even told our lender last week to get us locked in. But his attitude was…nah! Don’t worry. Doesn’t matter now, but this move in rates was obvious.
The wife and I go in Tuesday to sign paperwork for refinancing down to 5.125% from 6.75%. I was in no hurry; told the wife I thought efforts to juice consumer spending via reduced mortgage payments would drive down rates to 4% and maybe lower. She kept after me ’til I made call ’bout three weeks ago. I’m glad she did. Her only regret was not going to some on-line offer like one of her co-workers, who boasts frequently of refinancing at 4.75%. However, I insisted on sticking with the local community bank, with which I have had two previous mortgages and one home equity loan over the past 20 years. Maybe it’s an unwise move; maybe not. Maybe someone will pull out of their hats tricks that does drive down 30 year fixed to 4% or lower. At this point, though, I’m happy we can get a proverbial bird in the hand.
At least we can expect the stock market to do well today on this non-news, which is already fully priced in by the omniscient Mr Market.
AUTOS
GM bankruptcy becomes nearly certain as offer to bondholders fails
The automaker voids the tender offer after a majority of its bondholders refuse to swap their debt for equity. The company now appears likely to file for Chapter 11 by Monday.
By Ken Bensinger and Jim Puzzanghera
May 28, 2009
Reporting from Washington and Los Angeles — General Motors Corp.’s last-ditch, Hail Mary bid to avoid bankruptcy fell with a thud Wednesday as its bondholders overwhelmingly rejected a deal to swap their debt for equity in the company.
That offer was a central element in the automaker’s efforts — guided by the federal government — to restructure outside of court. Without it the company appears almost certain to file a Chapter 11 petition by Monday.
I heard a report that the government did not allow GM to offer the bond holders more equity. It may be that someone in power prefers a GM bankruptcy.
You mean all the bond holders? Our owners as Carlin would say.
I think they get 100% of the company and better recovery in the bankruptcy. The plans to sell off Opel, Saturn exc should generate at least 20 billion.
I would like to see Chevy survive this fiasco. Pontiac will reportedly get axed. Too bad.
I’d prefer the bondholders don’t get screwed here. Its playing by the rules at least.
They are upping the ante now:
DETROIT (AP) — General Motors Corp. says it will offer bondholders 10 percent of the company’s stock with warrants to buy up to 15 percent if they agree to support selling the company’s assets to a new company under bankruptcy court protection
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
GM is up around 9% this morning. Hey Muggy, ya wanna touch a real hot plate? Try day-trading GM this week.
RE: Pontiac will reportedly get axed
Pontiac is indeed getting the ax.
And the outrageous thing is GM are still marketing the brand until 2010.
“Hey buddy, got a great deal for ya on a G8…80% depreciation when ya drive it off the lot.
Need a part?
Take a spin on the Wheel of Fortune. Maybe you get that sway bar you need to pass inspection and maybe you don’t.
When quizzed about recent purchasers gettin’ the depreciation stuffed up their collective wazoo, the PR flaks essentially said tough titties for morons…shoulda been readin’ the biz page of your local news rag.
I would argue that the bondholders misjudged the politics of a government bailout. The correctly judged that the government would move hell and highwater (and borrow huge amounts) to prevent the loss of all those jobs. However they didn’t see the extant to which using tax money to pay off messers moneybags would be politicly impossible. THAT is why the union got a much better deal than other creditors. And arguably it is putting politics ahead of economics like that which is why we don’t want the government running these companies.
RE: It may be that someone in power prefers a GM bankruptcy
Yesterday’s WSJ article says it’s the hedge fund credit default swap holders who want to see the ship sink hard.
A bunch of brooha about nothin’.
What idiot is ever gonna by a GM mobile.
People in my workplace are certainly talking about doing it given the deals GM is offering, so Mr. & Mrs. Regular Sixpack will.
RE: People in my workplace are certainly talking about doing it given the deals GM is offering, so Mr. & Mrs. Regular Sixpack will.
You mean the deals the US “Governmental Motors” taxpayer is giving.
Talk is cheap.
When they all actually pull the trigger on a Cobalt or Sebring purchase, get back to us.
My guess in the end they will all skulk off to a Honda dealer for a Fit.
I assure you they will. The husband is a GM retiree and they don’t buy foreign. Not everyone in Michigan buys foreign, for Pete’s sake. We do, but not everyone.
“…this non-news, which is already fully priced in by the omniscient Mr Market.”
Why is it only bad news that’s “already fully priced in”?
What is it about 35 mpg fuel standards that oil traders don’t understand? Is it that they cannot grasp the high likelihood that other countries will follow suit if the US successfully comes up with the technology to implement them?
Wall Street Journal
* MAY 28, 2009, 8:07 A.M. ET
UPDATE: OIL FUTURES: Crude Up At 6-Mo High On OPEC Rollover
By Lananh Nguyen
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)–Crude oil futures rose to fresh six-month highs Thursday in London after the Organization of Petroleum Exporting Countries left its output targets unchanged at a summit in Vienna.
In a decision largely expected by the market, OPEC - which produces 40% of the world’s crude - cited the state of the global economy as a reason for leaving its production policy unchanged.
Despite some recent positive economic indicators, “the world is nevertheless still faced with weak industrial production, shrinking world trade and high unemployment; for this reason, the conference decided to maintain current production levels unchanged,” OPEC said in a press release.
The technology is out there for far more than 35MPG. Europe has the VW Lupo Diesel, that does around 70, and some of the Diesel Jags, and subarus are in the mid 50’s… Even in the late ’80s there were cars that averaged over 35, like the small hatchback civic, or the ginourmous MB diesels…
If you want fuel economy, you will need lightweight cars, with few options, and efficient engines. Of course that is not what the US customer wants, as they want either gargantuan SUV’s or Hybrids… Go figure.
“The technology is out there for far more than 35MPG.”
Is it:
- safe
- commodious
- stylish
- cost-competitive?
If yes to all, why am I not driving a 35MPG+ car then?
This might take some time to show up, and please do remember that this was a Ford product until late last year when it was sold to our Indian brethren…
http://jalopnik.com/5119558/2010-jaguar-xf-s-diesel-better-faster-gets-35-mpg
Yeah, well the American automotive manufacturers always have been pretty dumb about marketing fuel efficient, comfortable cars over here. That is why I always buy Japanese.
Fuel efficient, comfortable cars are not nearly as profitable as big, dumb, comfortable SUVs. It would seem to be very much in American car companies interests to have Americans believe that small, fuel efficient cars are dangerous and somehow unAmerican or at least unmanly.
And from many folks I know their marketing campaigns have been very successful.
“Fuel efficient, comfortable cars are not nearly as profitable as big, dumb, comfortable SUVs.”
Doesn’t the profit function depend a wee little bit on (1) the availability to use cashed out home equity wealth gains to fund a purchase, and (2) gas prices (as in rising, due to oil that roughly doubled in price over the past few months)?
I dunno, would you say all that about a Corolla? Mine gets just about 35 total.
- stylish?
…would you say all that about a Corolla…
HA HA!– sorry — HAHAHAHAHAHAHAHA!
Heh. It’s okay - I drive a ‘96 Explorer which has been through the wringer.
The Corolla is the world’s most boring car, and I like it that way. Mine’s 8 years old and other than routine maintenance, absolutely no issues. Love it.
In terms of the decrease in MPG since the 80s, the problem is that nowadays every car has so many more safety features built into it that all the cars are heavier–the current corolla gets worse gas mileage than mine does from 2001. I’d love the higher mpg, but ask me how I feel after I get rammed by an SUV coming home from work
Corolla has all the alternatives beat, hands down. Comfortable, relevant, economical(affordable) and easy to maneuver.
My Corolla is hitting the decade mark next month, yet I can’t help but think of it as a new car. I’ve put almost no money into it. Sure it’s boring, but I don’t need to buy self esteem.
“but ask me how I feel after I get rammed by an SUV coming home from work’
thats right so why not charge license fees based on weight, Corrola 50.00 per year giant SUV 2000 per year.
“but I don’t need to buy self esteem.”
Al
oh
Al
Dont you realize how un american you are, all those marketing people working through out the night try to find a way to convince you of your inadequacies, they have mortgages Al and children and car payments. If you dont buy in to it Al they could loss their jobs..
THEIR CHILDREN MIGHT HAVE TO GO TO PUBLIC SCHOOL!!
My 1993 Lexus 300SC 3000cc 6cylinder inline gets 25-to30mpg, premium only. Has 125k now, drive 3k miles per year at present; expect it to last 20+ years without major problems -
Until it shows…
“Our spoiled European brethern will soon be able to get the slinky Jaguar XF four-door coupe in diesel trim with 440 lb-ft of torque, quicker-than-V8 performance and 35 MPG US.
In theory, the 2010 Jaguar XF S was fitted with a diesel V6 in order to help raise the brand’s eco cred and lower their C02 emissions. In reality, the XF S gets enough torque to push the luxury saloon to the 60 MPH mark in less than six seconds, faster than the normally aspirated V8 version and less than a second slower than the supercharged V8.
The new 3.0-Liter twin-tubro AJ-V6D engine offers a 16% increase in power and 15% increase in torque, helping to lower the 0-60 MPH time by nearly two seconds and stretching the top speed to the 155 MPH electronically limited level while at the same time increasing mileage by 12% over the smaller engine. Me-ow. Of course, you can’t get one here.”
Nobody in the US wants a diesel.
Anyone remember the diesel Cadillacs from the 80s?
I will take a diesel any day over a hybrid.
They are far more efficient, and if needed, I can make my own fuel. Just because the person in back of me might salivate while smelling McD’s does not mean that the technology for Diesel engines produces more torque, and far better MPG that gas engines.
I never quite understood why diesel engines were so maligned here. Most of the world loves them. I used to have a Lister-peter diesel engine that was over 60 years old, with no refurbishing and ran with no problems. Also, diesel engines far outlive their gas with ethanol brethren…
Pinch-a-penny,
Very interesting. Was the Lister in your boat? Perhaps the Floridians can chime in but it was once explained to me that marine engines get worked much, much harder!
Higher RPM’s and sadly ( for them ) a marine engine never gets to coast “downhill”. If we could retro-fit all of the Ford Taurus’ out there w/ Detroit 3-53’s, would the world be a better place though?
The lister was actually used in a farm, for running a sugar mill. It was an ancient very simple design, that just kept on running. The fact that it was a diesel, also allowed us to run it with waste oil, or any other oil that was handy, and that was a plus. Marine engines take a pounding, not only from the revs, but also from the salt that corrodes everything it touches inside the cooling system…
I love boats… I just cant see myself with one, unless I am extremely wealthy, and able to afford the maintenance…
Pinch,
Oh I see. Can’t imagine that environment would exactly be “cake duty” either? I thought I understood Diesel ( the inventor ) originally intended his engine ‘to’ operate on waste oil.
If you look on the DDC (Detroit Diesel Corp.) website, they claim to provide parts support for the 53 Series for the next 50 years! Mind you, they actually stopped making them several years ago when the new emissions standards were rolled out. Is ‘that’ not simply amazing?
Oh yes… If you ever saw the engine, it was a marvel of simplicity. It had a center piston that powered a simple wheel through the crankshaft, the crank also had the valve train attached to it, that opened and closed the valves.
The design we had was similar to this one:
http://www.mfrfp.com/Lister%20Engine%20Old%20Style.JPG
and it was so simple, no electrics to go wrong, easy to reproduce almost any part, and you started it by cranking the side wheel, but you had to be carefull of the kick!.
The environment was rather icky, as the sugar cane was crushed using this engine, and of course it was coated in sugar cane sap, very sticky and sort of corrosive.
I think that I can remeber a speck of green on the far side of the engine!.
I like diesel motors as much as anyone when it comes to performance, but if everyone were driving a diesel, the rate of respiratory illness would skyrocket. The particulate matter and filth that coats the earth from their exhaust system is prolific. Diesel is NOT the answer.
IIRC Mr. Diesel’s original engine ran on powdered coal dust.
I have a diesel VW and I love it. City driving 40mpg. As far as particulate matter the new ultra-low sulfur fuel that the US has mandated since (I think) 2006 allows for new emissions technologies that drastically reduce the particulate matter. I guarantee if you were driving behind me you would not know I am driving a diesel car.
Comments like skroodle’s are ridiculous. No, actually I don’t remember the diesel Cadillac, and neither does anyone else under 40. Diesel is the next wave … great cars in the next two years from VW, BMW, and Honda that will combine fuel efficiency with performance and good looks. This isn’t daddy’s 80s diesel.
http://www.popularmechanics.com/automotive/new_cars/4237945.html
I never noticed anything wrong with the air in Europe and it seemed that half the cars there were diesels.
“I will take a diesel any day over a hybrid.”
+1, Pinch…
“but if everyone were driving a diesel, the rate of respiratory illness would skyrocket.”
Biodiesel reduces the production of particulates by roughly half.
Plus diesel engine technology has improved dramatically in the levels of particulates produced.
Your fathers diesel with a cloud behind it is not the same beast as the diesel of today…
“Biodiesel reduces the production of particulates by roughly half……”
But increases road rage of people driving behind you, when they smell your smelly-a$$, french fry powered POS.
Whatever happens, I can guarantee you that cars are going to be hellaciously expensive five years from now.
The PTB have decided that the automobile is the root of all our problems, and are on a course to make them as expensive and inconvenient to operate as possible……the aim being, to force people onto public transportation. We can’t have all these people making their own choices about what vehicle suits their lifestyle, unless of course, you are a government employee/legislator, or a banker with bail out money out the wazoo.
Little cars suck. Got a Honda Civic Rental car for two weeks last year…….two weeks of hell, my head mashed into the headliner, blisters on the side of my leg from rubbing the console and knees mashed into the lower dash, left shoulder hunched forward to clear the C-pillar, and blood clots from the cutoff circulation. Water-boarding would be a more pleasant experience.
You sure it was a Civic? Civics are nice cars these days. I also don’t think I’ve ever seen one in a rental car fleet. I suppose if you’re a really big guy they might be a bit small. I’m medium size, am a “car guy”, and would much rather drive a Civic than any of the cars I’ve ever rented in my life so far. I’ve never had the option of renting anything exotic, though, it’s just been all the standard stuff from Avis, Budget, etc..
Yep, that doesn’t sound right. Our 05 Civic is the perfect car.
And the newest model Civic was car of the year by Car and Driver. Exemplary ergonomics were a large part of that decision.
MD
I’m wondering why we all need 260+ HP engines to go 0-60 in under seven seconds in a 4,500 pound SUV?
Bad Chile,
Often wondered that myself? What’s your f@cking hurry, right? Unless you’re driving to the hospital telling your wife “breath honey, b-r-e-a-t-h” you’re not getting anywhere, any faster than ‘my’ slow @ss. 0-60? How about arriving in (1) piece?
“I’m wondering why we all need 260+ HP engines to go 0-60 in under seven seconds in a 4,500 pound SUV?”
To get the hell away from certain drivers?
“I’m wondering why we all need 260+ HP engines to go 0-60 in under seven seconds in a 4,500 pound SUV?”
Illusion of safety + manhood proxy.
I’m with you on the SUV thing. Not on horsepower, though. Is it so horrible to want to make wasted commute/travel time into something at least a little bit entertaining? Helps keep you paying attention, and does give you the freedom to easily get away from people you’d rather not be next to as long as traffic is flowing reasonably well.
Because the US car companies are m*rons including the Japanese car companies than manufacture in the US.
Tell me how they sell the same car in China for higher mpg than the one they make in the US. I mean, seriously, China has higher fuel efficiency standards!
Is it really that they are morons, or is it that they mistakenly believed themselves too big to fail?
“…China has higher fuel efficiency standards!”
Oh, my dream…1 billion Chinese driving around…smashing into one another…filing insurance claims & injury lawsuits! You think any communist Chinese lawyers will be able to win a lawsuit against a party member?
Raise the fuel efficiency standards, and people will drive more miles. The end result is the same.
I’m not saying that we shouldn’t have higher fuel efficiency standards, just that they won’t accomplish anything much with regard to reduction in petrol consumption.
Now, if you raise the price of a gallon of gasoline a couple dollars, that’s a much different story. At least for those people subject to the price increases.
If the price increases aren’t globally applied, though, there will always be someone else to take up the slack. 5-1/2 billion people on the planet want what the other 1/2 billion of us already have. No matter what we in the more developed nations try as policy, we (as a planet) will just keep consuming until the supply really starts to run out, then the price will rise, and we’ll all consume less.
Build more roads/highways and people drive more miles.
iftheshoefits,
And that isn’t just so much Blue Sky either. We’ve seen that play out in reality time and again. We’ve already discussed a mileage based tax.
Here’s what’s funny though? Go to look up just about any older luxury sedan ( take Jag’s while we’re on the topic ) You can find any n-u-m-b-e-r of older models that -still- only have 60 to 80k miles on them! In many cases w/ less than 5k miles per year!
How did ‘that’ work out when so many econo-boxes have quadruple the miles?
Dinor: Old jags specially the ones in the ’80s suffered from Lucas, prince of darkness electrical systems. In fact most British cars from the ’80s had the same downfall. You can get a nice mid ’80s jag, in pretty good condition, change out all the Lucas for Bosch electrics, and the FI for a Megasquirt type system, and you would blow the doors off a lot of current luggsury sedans.
Tax gas, return the money in payroll tax deductions, credits toward cars w better mpg, and public transport. Problem solved. Just pay for Iraq war and security in the middle east and other gov services to big oil, and for the tax breaks we give to domestic production with a gas tax and problem solved. We could also fund the department of transportation and all highway spending via a gas tax.
If you did this
No one would want a giant SUV.
How about just banning these grossly oversized behemoths like SLOBurbans, TaWhores and Ford Excretions? Just what is the purpose of these putrid blights upon humanity?
Say….. I did hear that Ford shutdown it’s Excretion assembly line. Can anyone confirm?
It’s easy. For the chinese autos, remove all of the required metal for safety that is found in the US version of the cars. Less weight, more MPG.
“Raise the fuel efficiency standards, and people will drive more miles. The end result is the same.”
Doesn’t it depend on the price of automobiles? Suppose the price of a car went up by a factor of, say, ten (just for illustration) to meet the new mileage standard. Then at ten times the depreciation rate as before, depreciation would crowd out fuel as the variable cost of driving. One would avoid driving a car because (1) you couldn’t afford to buy one, or (2) the increased depreciation cost per mile more than offset the lower fuel cost per mile.
Again, I ask if it is really possible to have cost efficient 35 mpg cars which are safe, commodius, reliable etc, then why am I not driving one (and I do generally prefer fuel efficient cars over gas guzzlers)?
PB, of course if cars go up in price enough there will be fewer NEW cars on the road. But in that case, older, less fuel-efficient cars will be kept in service longer. Regardless of the outcome, total gasoline consumption will still mainly be driven by the price per gallon, and the overall state of economic activity.
My (unstated) assumption I guess, was that increased replacement costs for vehicles meeting the new CAFE standards will not be that signficant of a factor in vehicle costs. I believe that this has to be the case, because the alternative will most certainly leave our new president in charge of an even bigger, steamier heaping pile of dung than they are already taking on with GM and Chrysler.
So why don’t we have these cars now? I imagine it is in large part due to the problems the engineers will have in maintaining crashworthiness while simultaneously reducing vehicle weight. At the outset I predict that overall, the lighter more fuel efficient vehicles will not score as well in the standard crash tests. They may figure out how to do better eventually, but not right away. So there will be some increase in vehicle purchase prices, but the other costs will be hidden this way (increased insurance costs due to poorer crash ratings). And of course the vehicles will be more sluggish.
Professor: I hear ya. But it is the old saying, Fast, Good, Cheap. Pick 2.
Pinch-a-penny,
Thanks for bringing that up! Fortunately I’ve owned several in the past, helped friends, owned British bikes and play an avionics technician on TV!
So none of that really intimidates me. I’d rather trace shorts than pull cam chains etc. I will say, my good friend at Monte Shelton says… early/mid 90’s -back- ( only if you are a collector or enthusiast ) and avoid 88-89 as that’s when their… gov. had to step in.
I would… consider a LUMP ( Less Upkeep More Performance ) SBC retro-fit, but really more as a daily driver. IMHO.
I love the looks of Jags. I love their style and pose. I would love to have one one of these days, as I have a soft spot for the XJ series, even though it is the more common one. I do think that people have been successfull in swapping out the notorious bits specially the electrical sytems, or at least modifying them to the point that they are functional again, and have fairly reliable cars, that also look really good.
I would love to have the XJC though. I do think that it is one of the pretties XJ’s ever.
I would do this on a project car only, and keep my Daily driver in good working order though. A friend of mine that restored cars, always would have a daily driver to get to his make money endeavour, and the other to fix over the weekends as time permitted.
“…China has higher fuel efficiency standards!”
Oh, my dream…1 billion Chinese driving around…smashing into one another…filing insurance claims & injury lawsuits! You think any communist Chinese lawyers will be able to win a lawsuit against a party member?
Apparently the chinese, who haven’t been drivers for ages, are having many accidents, dumb accidents etc. Saw it on TV in Japan and the footage was amazing,ie: one car just stopped in the middle of the fwy. Another car keeps driving like a bat outahell and crashes right into the stopped car. What is interesting to that was there were no cars in front of stopped car, no cars in right lane, no cars but the two of them, so the fast driver could have switched lanes.
g’night irene.
BF’s H put a chevy engine into a 80’s great looking Jag.
No one would ever know, the car ran great and looked better.
New electrical too.
Well, from my experience if you can handle the brunt of gay jokes then the Prius is just fine. Plenty of utility in that vehicle.
Hybrids are only competitive and useful in places with high traffic, otherwise you might as well just get a normal vehicle.
Still were talking about walking away from vehicles that get under 18mpg (Expedition) to the 30mpg range (many normal sedans) and poof your gas use drops by nearly 50%.
Have to figure use increases in China would stabilize prices or drive them up in the long run.
Anyhow… seems like a serious analysis is needed and too long to post here.
why am I not driving a 35MPG+ car then?
1-Because the auto mftrs didn’t want to make a Jaguar model into an electric/hybrid car. It is possible to have gorgeous auto body models that get great mileage, and idiot american buyers would rather just go along as sheep, like now, paying higher prices for gas.
2- oil corps/auto corps etc lobbyed congress cheats in office to pass bills that make it impossible to get the same cars that overseas gets offered.
I have my tin foil hat on today, but it is already so hot, I am baking.
You don’t live in Europe.
RE: Of course that is not what the US customer wants, as they want either gargantuan SUV’s or Hybrids… Go figure.
You forgot to add that the number of cupholders for adults in the front seats and the number of DVD screens for the kiddies in the rear seats are VERY IMPORTANT in what makes a motor vehicle attractive to US purchasers today.
(snicker)…what a nation of overfed buffoons.
Well said HD. And don’t forget OnStar for when the behemoth wife drops her triple cheese burger behind the overstuffed seat. With Onstar, the response team can deliver a dozen donuts and six pack of diet soda.
LOL! Right and all those features are SO important as soccer moms go to return DVD’s before getting hit w/ a late fee?
You think maybe, just maybe, some of the so called male sex is accountable?
Good point SFBAGirl. There are plenty of guys lumbering around in the only vehicle able to haul their fat a$$es between their overgown gargantuan house and dunkin donuts.
Hey I’m single and had 3 LCDs in my car. It was hooked to an xbox running a hack to turn it into a media center. I kind of miss it, but was worried my car would be broken into. The screens cost like $70 each 5+ years ago for the rear ones.
Onstar is interesting. Was doing research on it, because if we could hack it we could call into random people’s vehicles and stream their conversations to the youtubez for LOLz. The old system used a Motorola AMPS cell phone base, the new ones use digital cell phones. The issue is the cell accounts that are behind it use random phone numbers
Lolol was wondering when you chicks were gonna start piling on here.
Whoever it is that you see in the mirror every morning, is who is really accountable, male or female, rich or poor, red-state soccer mom or blue-state city lib.
I know I’m taking all the fun out of the discussion, but there it is.
Police are able to listen in via Onstar, so I don’t think the phone numbers are truly random.
Oh and I should add that the overwhelmingly largest factor in energy footprint is household income level. In general, people who earn more, use proportionately more energy, regardless of their political leanings. This should come as no surprise when you think about it for a minute. Who do you see riding the busses for the most part?
So it works out that a lot of those red state fat slobs that some folks love to diss on will use significantly less energy than their detractors, mostly because their poor sorry a**es can’t afford otherwise.
SFBAGal,
O.K, soccer DADS! ( We good? )
SFGal, nailed it!
The bigger the car, the tinier the person driving it, or fewest people being transported.
Not always, but that sure gets your attention.
The onstar phone numbers aren’t assigned in a block in a single area code as far as I know. Each vehicle is registered into a database with onstar (this is our guess). Most likely the police got access to the vehicle through the onstar call center folks.
Today’s cars are either meant to be either
1. A command center for Mommy.
2. An environmental isolation pod, designed to surround Daddy in sensuous climate control comfort as he creeps toward his exurban McMansion during rush hour. Either that, or a Mobile Master of the Universe Office, where he can Twitter and ‘Berry to his heart’s content.
I swear, if they found a way to but a bathroom in these things, Daddy would never come home.
And to think that my Mommy’s command center has been a Volkswagen. Since the 1970s. Not the same car, but the same brand.
She loves to infuriate drivers of behemoths by whipping into parking spaces that they can only dream of. Then she adds insult to injury by singing, “Volkswagen does it — again!”
I’m guilty of loving vehicles. I pray for more energy efficient ones, with less of a carbon footprint, but that will also lead to mass congestion which is equally as problematic. I have always been fond of traveling around this vast country, admiring the surrounding landscape as I pass it by, oftentimes stopping to appreciate the beauty. I like to take the roads less traveled, and just happen upon places along the way. I love little diners, and funny little towns, and all things off the beaten path. This country is huge, and one could spend their whole life discovering it.
Oh, for goodness sakes! When I was a pup, we car-driven kids amused ourselves by…
1. Counting Volkswagens. (They weren’t that common back then.)
2. Watching the scenery
3. Making up scary stories and sharing them with everyone else in the car
4. Singing along to the commercials on the radio
5. Counting the railroad cars if we went along a section of track. Same game was equally fun when stopped at a crossing.
Somehow, we managed to survive to adulthood.
Safety, milage and pollution do ot enter the equation, when I purchase a vehicle. First, I pay cash, then like all good Americans from the sixties, I want power and speed off the line. If I cant smoke the tires, it aint worth buying.( In third gear ) I use my vette alot, and so what if it only gets 10 miles to the gallon. What, am I going to take the money with me when i die, hell no! If you think thats bad, you should see what kind of milage my 69 Dodge charger gets…..stand on it and when that 440 kicks, gas and money are left in the rear view mirror. Nothing like coming to a stop sign with a tuner and showing what a real muscle car sounds like and what it can do.
I love running into guys like you at lights with my crappy little AWD Mitsubishi that 60 foots in the 1.6s on all-seasons :-). I love muscle cars but they’re so helpless at a traffic light if you don’t drive on ET-Streets or better all the time.
A 100mpg car is not the answer to our problems, although it might seem like it. The problem is we have a global monetary system that depends on perpetual growth and we live on a finite sphere. That is the problem and a “super car” will only put off the day of reckoning a short while.
“…will only put off the day of reckoning a short while.”
So true. A few years ago, I was all over the “rising tide raises all boats” (aka capitalism is not a finite trough) ideology. Rah, rah Friedman and all that jazz. Then I realized that all of this capitalistic growth is predicated on infinite resources for its continuation. Long term prognosis = FAIL. If nothing else, we need SEE (social, environmental AND economic) accounting to check our progress. As Joel Salatin opined in Food, Inc. (opens 6/12), imagine what would happen if we measured success by how many fewer people had to go to the hospital with a chronic disease this year than last year [rather than a higher stock market]
MrBubble
PS: Please go out and see Food, Inc. when it opens on the 12th! It savages ALL political parties, so please don’t turn your back on what may appear to be, at first, a tree hugger issue. The part of the movie with the family is weak, but the rest is really good. We all have the power to take back the means of food production in this country.
PB — check out Jevons Paradox on this issue [although Wiki gives some arguments against just giving up.]
True but “consumer desires” have been moving away from that steadily over the past 25 years. I personally loved the early Honda Civics. Cheap, reliable, easy to maintain and a blast to drive. But the latest Civic, though it’s a brilliant car, is as large and heavy as an Accord waggon from the late 80’s
My 1959 Austin-Healey “Bugeye” Sprite with mighty 1275cc motor constanty got around 45 mpg on the road.
And, no doubt, about a zillion SPG (Smiles Per Gallon).
I really miss my ‘73 Triumph GT6.
“My 1959 Austin-Healey “Bugeye” Sprite with mighty 1275cc motor constanty got around 45 mpg on the road.”
That is when it actually stayed ON the road…. Tell the truth, where did you roll it?
My first care was one of the ginormous MB diesels.
32 to the gallon, city or highway, and an absolute maximum speed of 55 mph.
And people knew you were coming!
My 1983 Honda Civic FE got 55mpg. But you had to drive it 55mph to get that. At 70-75 it got closer to 38mpg. I miss that car, all 48 factory horse power and 1800lbs of it.
35 mpg standards won’t be introduced until 2015 or so. Oil traders only care about today.
They should come up with some sorta market place for commodities traders to meet that are interested in the future.
There is a NYMEX 2017 contract trading, though with very little open interest.
Only if they were irrationally myopic. If they were forward looking, and assuming the futures market is sufficiently complete and/or sufficient storage capacity was available, today’s price would either reflect changes that are anticipated by 2015 or would present an arbitrage opportunity.
Yeah!
The spectre of banks using 90+% taxpayer money to buy their own trash at inflated prices appears dead (and so might the whole trash for cash PPIP program).
People familiar with the matter say the FDIC is expected to delay a test run of the program that was set to take place next month. The program could be put on hold in the near future, people familiar with the matter said. FDIC officials had initially believed the program could buy as much as $500 billion in loans.
The program has also been controversial. Bank trade groups asked the FDIC to allow banks to use the program to purchase their own assets, which some felt could allow banks to game the process. Ms. Bair on Wednesday said that would never have been allowed to happen.
http://online.wsj.com/article/SB124346787723260427.html#mod=testMod
Apparently not all banking scams stay under the radar screen of the bond market vigilantes.
Thank you for posting that article last night, PB. I am enjoying the failure of this scheme to shift the banks losses on to the taxpayers!
As Ben is apt to point out, taxpayers are not really the target group for shifting losses on toxic assets, unless you count as “taxpayers” anyone who holds or is owed payments in dollars.
A glimmer of (truly) good news. Thanks for posting that!
Multiple auto-related bankruptcies by Chrysler, GM, and now Visteon around here. Many woes and worries, of course, people losing their houses, retirement benefits, etc. My employer is beginning to have some financial trouble because of the downturn in surgical procedures, etc. Days of cash on hand have dwindled.
Well, Now that GM & Chrysler are on their financial hands & knees…those southern Senators in Kentucky/Alabama/South Carolina/Tennessee have suddenly developed a serious case of: “Well, shut my mouth”!
But who is going to buy cars from Government Motors?
Like I said yesterday, consumerism is now the highest form of patriotism. But you’ve got to buy the right things, from the right places.
Count me out.
What? Do you mean that not all surgical procedures are necessary?
Actually most of ours are. We are a Tier I, nationally known medical center. People are losing their health insurance left and right. If it hasn’t spread to your area, it will. Our state is just the flagship of economic. I believe that in another 3-4 years, you won’t be able to tell one state from another economically.
Wall Street Journal
* REVIEW & OUTLOOK
* MAY 28, 2009
The Bond Vigilantes
The disciplanarians of U.S. policy makers return.
They’re back. We refer to the global investors once known as the bond vigilantes, who demanded higher Treasury bond yields from the late 1970s through the 1990s whenever inflation fears popped up, and as a result disciplined U.S. policy makers. The vigilantes vanished earlier this decade amid the credit mania, but they appear to be returning with a vengeance now that Congress and the Federal Reserve have flooded the world with dollars to beat the recession.
Treasury yields leapt again yesterday at the long end, with the 10-year note climbing above 3.7%, its highest close since November. Treasury yields had stayed low, and the dollar had remained strong, as long as investors were looking for the safest financial port amid the post-September panic. But as risk aversion subsides, and investors return to corporate bonds and other assets, investors are now calculating the risks of renewed dollar inflation.
…
The surge in the 10-year note is especially notable because its rate helps to determine mortgage lending rates. The Fed is desperate to keep mortgage rates low to reflate the housing market, and last week it promised to inject hundreds of billions of dollars more in this effort. This week the bond vigilantes are showing what they think of that offer, bidding up yields even higher. It’s not going too far to say we are watching a showdown between Fed Chairman Ben Bernanke and bond investors, otherwise known as the financial markets. When in doubt, bet on the markets.
Good thing Volcker is still around DC, as he can offer advice as to what the Fed should do when they have to chase up l-t T-bond yields…
When I look around my neighborhood I realize how screwed Florida really is. There are hardly any families or young people. The only people I see below 50 are the dudes mowing lawns. Exactly who will be replacing all of these people in the next 15 years?
The people in their late 30s??
“The people in their late 30s??”
Yes, but my point is, for every homie in their later 30’s, there’s 7 gangstas in their 60’s.
It’s like Florida is a snapshot of the post war boom, which of course, is over.
This should be a good thing. There are too many humans. Since I do not believe in initiation of force, I would rather that we naturally reduce our population over generations by having fewer births replace more natural deaths, or that we somehow colonize space.
I’d much rather have people live longer more youthful lives and colonize space than for any peaceful person to die off, of course.
Much of our pollution woes are caused by overpopulation. For instance, what good are pollution controls that cut auto emission in half if the number of car owners triples?
+1 for Bill. And +10 for the perfect example. Cut car pollution in half but triple the number of tailpipes. Given that information, I wonder how many people could calculate the net change in the pollution level.
It’s amazing how the root cause of ever-greater pollution is never discussed.
Perhaps if you remembered his earlier posts that he was in favor of plagues, disease and war killing millions of innocent people because it reduced population levels, you would not be so quick to agree with his views.
Are there any facts to back up the overpopulation == pollution?
I seem to read not too long ago that the air quality in LA is better now than it was in the early 70’s while the population has climbed.
I have an acquaintance that grew up in Pittsburgh in the 50’s, back when you had to use a scrapper to remove the burned coal ash from your windshield before driving to school in the morning.
Wasn’t there a time when the Hudson river regularly caught fire? (sorta like the Houston ship channel does now)
Remember on the Andy Griffith Show when Goober discovered a dinosaur while digging a new oil pit?
I think it is ignorance, not overpopulation that is the causation of pollution.
Natalie, you slandered me. I dare you to find the post. I recall it was someone else. I do not wish death on people.
“Are there any facts to back up the overpopulation == pollution?”
Facts are not the point. The overpopulation hysteria set just wants to live its own cocooned fantasyland where goods and services magically appear, but there are fewer consumers competing with them.
Reality is that the earth could easily support twice the current population, and everything else being equal, we’d probably all be better off.
Skip,
People produce polution, just in varying amounts based on lifestyle and techology. If population growth continues unchecked, eventually it will have to overwhelm our environment. Are we getting close to the brink? Not sure, but eventually (next year, next century?) we will have to stop population growth. I’m sure there are plenty of sacrifices we can make to reduce pollution, but will we make them?
Someone posted that they wished the swine flu killed millions of non-Americans to reduce population. I replied something like well maybe if they started with you. I am pretty sure you responded that anyone that who is against population reduction through disease must be someone that was overpopulating the world themself, and indicated you were in agreement that you wished the swine flu killed many more. Are you denying this exchange happened? I cannot figure out how to search the bits buckets on here. Perhaps I am wrong, but that would be rare.
“People produce polution, just in varying amounts based on lifestyle and techology.”
People also CLEAN UP pollution and develop newer, cleaner manufacturing processes.
Didn’t we have this exact conversation a few weeks ago? Why is this so hard to remember?
Karen, i saw that post. It was a week or so ago. That was not me who posted it. I did not wish swine flu death on anyone. I recall reading it and several people replied, being upset with his post.
If you were not certain who posted it, why would you stab in the dark?
I don’t want you on the jury when I go to any trial! The U.S. is becoming too much a police state already!
oops, I’m responding here to Natalie, not Karen.
Natalie,
I believe the poster was Brett not BIL.
Yes. The original poster was Brett. I couldn’t remember the original poster’s name this morning. I am pretty sure Bill agreed with him. The only reason Bill sticks in my head so clearly is that it surprised me because Bill has never posted anything that bothered me before and seems like a smart and nice guy so I was shocked. I wish I could find it. If I interpreted wrong it wrong I apologize.
oops, I’m responding here to Natalie, not Karen.
Whew.
I feel better now.
LVG,
I do remember that thread a certain amount, and I also remember that I would have liked to respond to it.
“People also CLEAN UP pollution and develop newer, cleaner manufacturing processes.”
I do agree with this statement, however it doesn’t refute mine. People may clean up some pollution, but they can’t elimate it. Landfill sites still exist. Recycling and waste burning efforts require energy. New manufacturing processes may be cleaner, but they still use energy and produce waste. We could even see a period of time when our demands on the planet decrease, but eventually population growth would outstrip it (1 year, 100 years?). As an extreme case, a large enough population of people who do nothing more than eat grains, drink water, sleep, breath and procreate will overwhelm the earth’s ability to cope.
What advantages are there to continued population growth? What are the dangers? I think the later outweigh the former, which are largely political. I would like to see people choose to limit the number of kids they have, but would not condone any coercive methods to achieve it. I would certainly not suggest swine flu to be the answer.
Natalie,
The person who made the reply you reference was sleepless_near_seattle. I don’t think Bill even posted in that thread.
YES. I FINALLY FOUND IT AND WAS WRONG.
I AM SORRY BILL.
LVG, hadn’t seen your response to Skip when I made my second post.
“Reality is that the earth could easily support twice the current population, and everything else being equal, we’d probably all be better off.”
I’m curious what makes you believe this. How would twice as many people make things better? However, you specified twice as many people as apposed to an unlimited number, so we must be at least somewhat on the same page.
Thank you Natalie!
“I think it is ignorance, not overpopulation that is the causation of pollution.”
It’s a factor, but let’s take a straw man argument. Let’s say you’re the only person on the planet. You could pee outside in a new place every day with no worries. Now try that tactic when you’re one of a hundred billion. Same answer? For the correct answer, please go behind any large rock on a road in Pakistan. It isn’t just pee. <>
MrBubble
Google “the human footprint” Look for the National Geographic link.
Also google “plastic continent pacific ocean”.
Next google “tons of annual air pollution.” Then “tons of pesticides.”
Then look for “overfishing.” Then “freshwater supplies.”
This planet has a carrying capacity. To be honest, nobody is really quite sure what it is. But that it is finite, is beyond deabte.
Dang it!
The question is, who pays for nursing home care when people in their 50s, 60s and 70s who have left their families behind hit their 80s and 90s?
No problem here. We have a single-payment disability and long term care policy issued by Smith and Wesson.
Won’t be goin’ to no stinkin’ nursing home.
Which is why the rise in Reality TV shows focused solely on how large a family is are so disgusting - the Duggars with 18 kids, Jon and Kate with 8. My son once had a colony of mice (a gift from an exbf of mine who had snakes,) once the population reached critical mass, they started eating their own young.
They are disgusting. There is nothing worse than over-breeding slobs.
Heck. When I was young my hamster ate all her babies. “Mom, where’d all the babies go!? And momma hamster got really fat…” “Oh I don’t know little VaBeyatch, maybe they got out of the cage…”
“The question is, who pays for nursing home care when people in their 50s, 60s and 70s who have left their families behind hit their 80s and 90s?”
Nursing home care is paid for by Medicaid, which is paid by a combination of federal, state & county money. So taxpayers. And since Florida outcompetes other states for retirees, Florida taxpayers get stuck with a disproportionate tab.
That is one of the dirty little secrets of Florida’s “growth” model.
Right. And many of those Florida gets stuck with are from NY.
On the other hand, NY gets stuck with others who come here just for Medicaid services.
They ought to get rid of the state and local share of this program as part of health care reform.
“No problem here. We have a single-payment disability and long term care policy issued by Smith and Wesson.
Won’t be goin’ to no stinkin’ nursing home.”
Right. Until after the call to 911 to help you off the floor, when the state realizes you’re unable to take care of yourself and sends you there…
Exactly who will be replacing all of these people in the next 15 years?
A bazillion illegals?
We used to call them Newlyweds and Nearlydeads….
ooops….The above was in rely to “When I look around my neighborhood I realize how screwed Florida really is. There are hardly any families or young people. The only people I see below 50 are the dudes mowing lawns. Exactly who will be replacing all of these people in the next 15 years?”
Illegal immigrants
Real houselold debt, wealth, and income. A paper from the San Francisco Federal Reserve. Warning: Pdf.
Oops, forgot the link: http://www.frbsf.org/publications/economics/letter/2009/el2009-16.pdf.
Combo -
Thanks for posting this.
Unfortunately, I’m less than impressed. If this is what the Fed Reserve of San Francisco deems newsworthy to its subscribers, I say stop your subscription.
As it stands, the information contained in this Fed release falls under the “obvious to the most casual of observers” category.
I can get similar “resting on our laurels” information from jokester outfits like Morningstar.
Thanks for posting that, combo.
I like how, at the end, they suggest defaulting on the debt is about as burdensome to the borrower as paying it off (gee, you’d have to deal with lower credit scores). The very best thing for all concerned is massive defaults, IMHO.
Gets J6 out of debt sooner, and teaches the financial industry a lesson about selling too much debt to people who don’t have the ability to pay it off.
I apologize in advance if someone posted this already:
http://finance.yahoo.com/real-estate/article/107122/Is-Your-Home-a-Good-Investment?
The article says long term TIPS are a better investment than real estate.
I like TIPS because I do not like the burden of having possessions. TIPS are usually electronic. You can buy paper Series I bonds, which are a form of TIPS, but they are small enough to store in a safe deposit box.
A gal friend of mine once complained to me that she had to dust all her collectibles. Since then, I liked using the term “dust collectors.” I have things I would much rather do than clean a McMansion all day or putter around Home Depot every weekend or mow a lawn. And you do not have to dust off paper Series I bonds!
Long-term TIPS sound tempting. But the article didn’t define the duration. Would it be five years? Ten years? Or even longer term?
We are all saved now…..and the coffee has never
been sweeter than this morning as I sit here and
contemplate whats coming down the road…….
NY Post reports investors are betting that the Obama administration will start leaning more on Fannie Mae (FNM) and Freddie Mac (FRE) to kick-start the housing market by giving them the OK to buy mortgages worth up to $1 million. Current law prohibits the two government-run mortgage giants from buying home loans valued at more than $417,000 nationally, or up to $729,000 in areas where home prices are high. But some mortgage traders and analysts think that could soon change. Steve Kuhn, a Goldman Sachs alum who now helps run a mortgage hedge fund for Pine River Capital Management, thinks conforming loan limits could eventually be raised to “$729,000 nationwide and $950,000 in high-cost areas,” and he’s betting his hedge fund’s money accordingly by buying up nonconforming loans within these ranges. If the prediction by Kuhn proves correct, homeowners with high-priced homes in areas like New York and California would be able to refinance at lower rates. It would also help banks burdened by these loans get them off their books.
Of course they will need to give them more and more powers to perpetuate the real estate scam the Obama administration put in place. They did not start it, but have made it much worse in its attempts to engineer a fix. Very few, if any, of their rescue the homeowner plans have worked despite the rhetoric. Things will get worse until we actually have no more money to throw at all of the problems. Other then buying down the 30 year fixed rate so people with good credit and actual equity can refi, all other plans have failed. I appreciate their help in letting me refi below 5%, but it won’t fix the problems they are (wrongly) trying to fix.
I am losing exactly ZERO hours of sleep lately thinking about the Gov propping up housing. We’ve already reached the tipping point where FB’s are too UpSideDown to qualify regardless.
And it seems we may have found our black Swan…
Mr Market and the Bondholders.
Who’d of thunk?
Rancher…
Thoughtful post… From where I sit, they can offer refis for higher-cost homes in California all they want. They still will have a big problem, three actually. Many people have lost their jobs. If they invested a down pmt. for their home, that is gone. And the prices on the higher end homes are just starting to crack, which surely would make many people think twice on refinancing an investment that is sinking.
So for many of the borrowers, there is no incentive to refinance, whether it is a jumbo, mumbo-jumbo, or whatever type of loan.
Disclosure: This is hot Central Calif., which I would never try to pass off as a “coastal” area, but it seems like the same economic factors are at work. The bubble blew up housing prices to the stratosphere hereabouts.
Back to my Aspartame-free Diet Shasta Cola.
They will be betting wrong.
High end, high priced housing cannot in any way shape or form, start, carry or sustain any kind of recovery.
Oh, but wait! Maybe this will help those poor, poor distressed executives who have come upon hard time due to their smaller banking bonuses and dwindling stock values if they can renegotiate their mortgages.
*smacks forehead* What was I thinking?! Of COURSE this will pass!!
Dumb question of the day:
Does anyone else notice a whole lot of corporate restructuring going on in America?
You mean Time Warner/AOL that never should’ve happened in the first place?
I guess I primarily had automotive, housing and banking in mind as examples of industries either undergoing or soon to undergo perestroika.
Do you mean the quiet but ongoing layoffs in Corp America?
I’ve noticed a lot of corporate deconstructing going on. Very little constructing.
Would Schumpeter have called it “creative destruction”?
Happy Birthday billinLA. I look forward to turning 50 in a few years myself.
muggy, I looked at the Rochester link yesterday, mostly to figure out if you meant NY or MN. What’s the median income for that area? Is $117K a reasonable multiple of income?
I am seeing foreclosure activity pick up after a few months’ lull. Big crashing of prices still ahead. People who have been living beyond their means for years through serial refis are having trouble coming up with even the 31% DTI amounts that are part of the homeowner rescue plan. Lots of irrationality, wishful thinking, and denial out there.
Time to get some more canning lids and get ready for some serious hunkering down.
Hi Karen, yes, Rochester, NY — sorry!
$117k is a reasonable multiple, however the taxes in that county (Monroe) are unbelievably high and the utility costs can be astronomical in the harsh winter. There is little job security at any employer and most of my friends that stayed are severely underemployed.
If you can score a professional job upstate, you’re set and can live very well.
Thank you Karen!
Moderation is the best way, except when staying in shape and enjoying liberty.
Happy 50th. We promise no half century comments. Well after that one.
Karen,
You may want to visit Rottenchester mid winter before doing anything. Then take at look a the local economy(and wages), then take a look at property taxes. If after that you think it’s still a good idea, make an appointment at the local psychiatrists office.
LOL
(laughing)
Hello Blano…. It’s true though isn’t it….
A big hi to you too……
I kinda thought it true, though I’m a bit biased because of the Newyorican buzzsaw I went through there last summer.
Aww, c’mon Ex! It’s not THAT bad.
I actually know what winters in Rochester can be like. I’m with Muggy reverse snowbirding is for me. Ice fishing anyone?
I mentioned here once before that my old neighbor, a gay man, had a large group of gay friends who were flipping houses (close to 20 men) around Seattle. Anyway, they felt WA state had become too expensive so they moved on to, in their words, “the most undervalued market in the US”, Rochester, NY. This was in 2006. Perhaps they got out early enough, but I have my doubts.
Karen, while there is plenty of stupid consumption, it was in fact corporations that have been living beyond their means.
At our expense.
Did you know that 75% of all personal bankruptcies are from medical expenses? Or that most business bankruptcies are from mismanagement or fraud?
“Figures don’t lie, but liars figure.”
The New York City-based bank said Rochester was chosen along with three other U.S cities to service the bank’s mortgage business. Chase did not immediately disclose the other locations.
The service centers will help restructure mortgages with customers who may be having financial trouble, Chase officials said. The new positions will include loan specialists and underwriters.
http://democratandchronicle.com/article/20090528/BUSINESS/905280328/Chase+bank+adds+250+jobs+in+downtown+Rochester
Financial Times
Plummeting house prices
Published: May 26 2009 15:04 | Last updated: May 27 2009 10:16
Housing markets are not merely stumbling. Data released on Tuesday showed that within the 20 US cities measured by Standard & Poor’s Case-Shiller indices, the pace of decline is accelerating in the third year of the housing market’s slump. From the September 2006 peak, prices are down 31 per cent on average. Before Lehman Brothers collapsed in September, prices were falling by just over 1 per cent each month. In March, the rate hit 2.2 per cent.
Based on the experience of housing market reversals elsewhere, the US has further to go. Analysing 15 developed countries that have experienced housing slumps between 1973 and 2007, Goldman Sachs found that they lasted six years on average. The typical real fall in prices was 31 per cent. Japan’s slump since 1991 is the longest, while the Netherlands and Finland saw the deepest, with prices halving.
The US ultimately may not be the worst hit. Ireland’s market is off nearly a fifth from its 2007 peak, while the UK, which only topped out last year, has already lost 15 per cent. The experience is far from uniform across America. Dallas, Texas and Charlotte, North Carolina, are down only a tenth thanks to moderate inflation during the boom. Detroit, on the other hand, did not share in the good times but is now suffering with its car making industry: prices are back to 1995 levels. Meanwhile, Minneapolis has just taken the record for the fastest annual decline, with prices down 23 per cent in March.
Yet the US housing market remains the most important. On a day when consumer confidence showed improvement to levels typical in the depths of previous recessions, consider the $380bn of wealth lost in March due to the fall in house values. Were that rate to continue for the rest of the year, notes Real Time Economics, the total loss in 2009 would be about equal to the economic output of China. Plummeting house prices do not suggest a rapid recovery.
“Plummeting house prices do not suggest a rapid recovery.”
I think the opposite is true. This whole mess was the result of insane house prices (excessive debt leverage). They were the problem, not the symptom. Once the problem is removed, recovery can begin. Also it will limit more wasteful governmental spending on a prolonged decline.
“Also it will limit more wasteful governmental spending on a prolonged decline.”
I agree, Tim. Rather strongly, I might add.
Also, I’m rather amazed that no one on this board has yet commented on the notion that the Feds have only issued 4% of the TARP money to date. In many ways, that is a good thing, but what’s being done with my tax money in the meantime?
ALSO - Did you hear that prime mortgage defaults now outpace subprime defaults?
ALSO - 46% of all foreclosures in the good ole USA are in California, Nevada, Arizona and Florida. No wonder the rest of the country is pissed at people living in those areas. They oughta be! Scarlett letters for all.
I don’t think people should be pissed at people that live in FL,CA,NEV etc. I think they should be pissed at people that speculated in those states.
Can I put a giant “R” on my forehead?
“Also, I’m rather amazed that no one on this board has yet commented on the notion that the Feds have only issued 4% of the TARP money to date.”
I had not heard that. Link, please…
“Also, I’m rather amazed that no one on this board has yet commented on the notion that the Feds have only issued 4% of the TARP money to date.”
I had not heard that. Link, please…
I would second that. Eudeman not sure where you got that info but it’s wrong. JPM, GS, and MS for instance applied the other week to pay back their $45B portions that had already been disbursed to them. That’s 6.5% of it right there with just those three companies.
It was on CNBC - Wednesday a.m. They talked about it at length.
“California, Nevada, Arizona and Florida. No wonder the rest of the country is pissed at people living in those areas. They oughta be! Scarlett letters for all.”
For all? Even those of us screaming into the wind about the coming destruction? Those of us living in crappy houses without A/C because we would not buy a house we knew we could not afford even though we were offered $800,000 loans with no docs? Those of us warning others and preventing a few people from facing foreclosure right now?
Gee thanks a lot.
The recovery will not begin because the economy ran on debt for a long time. This debt was fueled by HELOC’s and other instruments, now that loan standards have gone up the lies will be subtracted from house prices and whats left will not be able to pull demand forward. Its an L shaped future.
Perhaps the correct statement is, “Ongoing futile efforts to mitigate plummeting house prices do not suggest a rapid recovery.”
Comment by Tim
2009-05-28 06:55:38
“Plummeting house prices do not suggest a rapid recovery.”
I think the opposite is true. This whole mess was the result of insane house prices (excessive debt leverage). They were the problem, not the symptom. Once the problem is removed, recovery can begin. Also it will limit more wasteful governmental spending on a prolonged decline.
———————–
Agree 100% with this, Tim.
The foreclosures and declining prices are the **solution** to the “affordability crisis” of a few years ago (why does nobody in the MSM ever mention this?).
September 2006 + 6 years = September 2012. I am gradually getting my lovely wife used to the idea of renting a home for three more years…
Just show her images of the Northridge earthquake…gotta be expensive $$$ to rebuild from the foundation up…not to mention the cost of earthquake insurance, which only 18% in Calif have policies. You silly “bitter renters”…
What is the deductible on those earthquake insurance policies?
Most insurers do not even offer it. If it is offered, it’s very expensive. I have renter’s insurance and it does not cover earthquakes.
If I had $12 million net worth, I’d use $2,000,000 to buy a lot in Palos Verdes and just pitch a tent where I’d sleep. I’d have a house on that lot, but use it to store any inanimate stuff.
The last time I checked was 20 years ago - the deductable was in the $50K-$100K range. Essentially the cost of rebuilding from the foundation, since the land itself is generally not damaged by the earthquake unless you have (had) a view lot on a cliff. I never had quake insurance on my SJ house over 25 years, thinking that minor quakes wouldn’t push the deductable and the big one would bring in a government bailout.
And good luck getting that fire policy if you live in the hills of Southern Calif.
Rebuilding at $500 sf can really screw up one’s finances
Florida’s a big, lowland swamp & yet most folks don’t have flood insurance. Homeowner’s insurance won’t cover flooding because the insurers know they would have to pay out. Cheaper to cover hurricanes.
But everyone knows the feds will bail us out. Thank you America! Suckahs!
I am waiting for another Northridge-sized quake as a sign that a housing market bottom is near.
2005 + 7 for your fellow SoCal blogger
I’ve been a Bank of America customer for a good while, but it’s my second bank. I don’t use the account much. I recently logged in to check it, and found that they had converted (without my permission or approval) my account to an “Advantage Checking.” This resulted in a $20 fee every month, for a stack of services that never used. The “no fee” balance on that particular account was $5000, and I was a bit shy of that. A quick google found some other people hit with the same scam. Banks must be getting desperate or something.
I had to sue Bank of America. My checkbook was stolen, and the thief wrote over $40,000 in checks on the account. Once I first noticed the problem, I put a fraud block on the account. I also asked to empty my other accounts. They convinced me not to, claiming there was no cross-over or set-off. Well imagine my surprise when they started emptying my savings account to cover my negative $35k checking account balance, despite the fact I had multiple blocks in place, filed a fraud affidavit with their fraud department, submitted the police report and explained to them the situation at great length. I will never use them again.
I used to be really happy with the service at my bank - M&T. Then the branch manager left, and I noticed a decided change in that office’s practices and general atmosphere. I did move a good portion of my account, when I found out to which bank former manager had relocated - and saw that it has a four star rating.
But there’s enough still in there to make me nervous, especially after last week when a customer doing a transaction had a bit of an argument with the current branch manager. Those of us on line agreed that she was wrong and the customer was correct re: the transaction he was attempting to complete. I went outside to talk to the guy after he left, he said that M&T was taken over by some outside management concern (?) and that’s why former manager left.
The last straw for me is the asst. manager who never fails to ask me if I have a debit card when I present a personal check for cashing. WTF business is it of hers whether I want to use a debit card or not? Here’s my check, it’s your job to cash it ya big putz. I get the impression it’s entirely too much trouble for her to cash my check. It’s these minor incidents that are signaling trouble for me, so M&T bank, we are parting ways, except for a nominal amt. in checking.
United Savings Bank - based in Philly, I think - has a five star rating, no NINJA loans, none of that junk.
“Advantage Checking.” !? Certainly not your advantage.
Find a good credit union.
+1 and an Amen to that.
About 5 years ago I got hit with the same scam. We stayed with the bank (BB&T) long enough to convince them to reverse the charge, then moved everything we had on deposit there to a highly rated credit union. Never had a single regret.
When we moved to IL, I picked a new credit union. The service from those two institutions has been far better than anything I’ve received at any “for profit” bank.
My main “bank” is a credit union. Bank of America was convenient when I needed to wire money to China for electronics parts for projects, and they have $2 bills sometimes (fun for tip at restaurants). I’ll leave BofA most likely for USAA’s bank.
You will not regret the move to USAA. Excellent service. Great website. Bill pay is easy and if the bill is from an organization that does not take electronic payments (like my landlord) they will mail a paper check.
USAA has been pleasant and polite every time I deal with them. I had a complex transaction to do and completed it over the phone, poor guy (name was Bill, definitely a Texan considering USAA is out of San Antonio) must have spent 45 minutes on the phone with me.
About 15 minutes after we were done, he called back and just wanted to reconfirm one of the transactions; when I said yes he apologized for the call back.
Good rates on CDs, savings accounts. Used my USAA ATM card all over Australia for a few months to pull Aussie Dollars and got great exchange rates and all my ATM transaction fees we refunded at the end of every month.
Sometimes complaining to the OCC will get you your money back. The complaint form is on the occ governmental website. Yes, find a credit union or local bank. All national banks are the devil despite what Kiefer would have us believe.
National banks are NOT your friend. Local banks are suspect as well. Especially if they are looking to get bought by the bigger banks.
My credit union just gave me a brochure that included interest-bearing checking accounts. (My checking account used to earn interest, but when Greenspan pushed rates way down, that interest was no more.)
I think that the fine print said that I had to keep $3k in the account to avoid being charged. I’ll double-check the next time I’m at the CU, but…
…tying that much up in a checking account is what caused me to close a Bank of America account.
Furor grows over partisan car dealer closings
“Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans.”
http://tinyurl.com/qzaxm8
Well, since the current Gov’t of Opie Obama will own 70%…I’d close every single dealership in Kentucky/Alabama/Tennessee/South Carolina…they don’t need’em anywho…just ask Shelby’s Corker McConnell…Honda, Fiat & VW, is all America needs!
Put another way,
America clearly does not need the divisive, partisan political actions championed by the Chicago mobsters Rahm Emanuel and Barack Obama.
Only the totally clueless would now consider the Obama administration as representing the PEOPLE of the United States.
The Obama administration CLEARLY represents the interests of the DNC and Socialist/Marxist agenda, EXCLUSIVELY.
Note to the clueless: never assume political victory as assured without sacrifice or cost.
You certainly have your buzzwords and indignation down pat, even if the argument (once again) is fact-free.
I call BS on you Cobalt. Your rage needs to be redirected at congress of yore, and current. We wouldn’t be in this big fat mess if not for congress/senate since Reagan and the following crooks of congress.
Oh God, now it’s Reagan.
Why can we all get along
it was OUR fault we wanted executives pay to be based on performance.
so they did what we told them to do until it ended.
Next time we wont be so stupid….here is your set pay and that’s it!
PS: that is what a board of directors is for….fire the loser
Right, don’t address the specific allegations, just continue w/ mushroom-induced comments and cheap shots while decent people and profitable businesses are being forced out into the street.
Regular gut-buster ain’t it!?
“…just continue w/ mushroom-induced comments and cheap shots while decent people and profitable businesses are being forced out into the street.”
Precisely…that’s what the good ole “Southern boys” have been doing…verbally trashing GM/Ford/Chrysler/Jeep… telling American’s in all 50 states that they are junk…Michigan and all the American suppliers to Detroit are building cr@p…Ha, I smile when I pull up next to a KIA in my Jeep!
Please cite examples of “verbally trashing”.
Better yet, re-read Muggy’s link and all the hyper-links therein. Not *everything is a joke. Provided there’s a shred of evidence ( among all of that ) how would you feel?
Or is this the payback you’ve been waiting for all these years?
From the horse’s a$$ mounth:
Rash Limpbaughs: I want him to fail!
Senator Shelby: I want Detroit to fail!
“…There are three million American jobs built around the U.S. automotive industry. Do we want them controlled by China? Frankly I really don’t.
“…Of course, The automotive industry in Alabama is owned by Mercedes Benz, Honda, and Hyundai. There are no American automotive companies there, so he doesn’t give a rat’s ass about Detroit. They’re his competition. So he is happy to see them go into bankruptcy.”
“But apparently, Senator Richard Shelby, who has no problem with the Germans, Japanese and South Koreans owning the automotive industry in the backwards southern state of Alabama has no problem handing the entire U.S. Automotive industry as cut-rate goods to the only foreigners who have enough money to buy it.”
“…I’ll agree that the top management of the U.S. Auto industry need to be replaced and the industry needs to be restructured further (they’ve already moved a long way towards becoming more efficient), but definitely not by Chinese Communists.”
http://politicsplusstuff.blogspot.com/2008/11/sen-shelby-let-gm-file-bankruptcy-so.html
Now what does Mr. Shelby mean by : “Others”?
Senator Shelby Opposes $25 Billion to Aid Automakers:
By Jeff Bliss Nov. 16 (Bloomberg) — U.S. automakers should not get $25 billion in proposed federal loans to save them from possible bankruptcy, Senator Richard Shelby, the top Republican on the Banking Committee, said.
“Companies fail every day and others take their place,” Shelby said on CBS’s “Face the Nation” today. “There’s not a bank in this country that would loan a dollar to these companies.”
Hwy50,
Dude, firstly you -have- to abandon that stupid Rash Limpaughs cr@p. It’s never (once) gotten a laugh out of me. Or anyone else for that matter. Same goes for your cute little spins on GWB. So-freaking-old. AFAIK ‘you’ are the only guy quoting them here?
It’s why I skip over 99% of your posts. Which is I suppose half the reason you do it. We let it slide so it gets palmed off as fact. Truth be told, most of it isn’t worth the effort to refute.
Shelby certainly isn’t alone in expressing frustration over GM and Chrysler. Would it make you feel any better had a Dem said it? Insofar as the majority of dealers being Rep anyway? There’s only been (1) Obama supporter that’s gotten the ax and probably b/c he only came up w/ $200. Something I’m sure he’ll think a lot about as he’s trying to rebuild his life.
Right, don’t address the specific allegations, just continue w/ mushroom-induced comments and cheap shots while decent people and profitable businesses are being forced out into the street.
Here’s what statistician Nate Silver had to say about the allegations today:
“There is just one problem with this theory. Nobody has bothered to look up data for the control group: the list of dealerships which aren’t being closed. It turns out that all car dealers are, in fact, overwhelmingly more likely to donate to Republicans than to Democrats — not just those who are having their doors closed.”
(Emphasis mine.)
ET,
That’s already been soundly refuted. I know you won’t but go to Michelle M’s website and please to note *jeff saturday’s post below. It’s pretty cut and dried. The spin you’re sharing is from 6:30am Pac.
$450,000 to $450?
1000 to 1?
I don’t think even the car dealer demo could possibly be THAT warped toward the GOP.
I do agree that the control numbers need published as well. Where are the numbers for the dealerships that stayed in business, especially the bottom 25% in sales.
No, I won’t go to Malkin’s site. She’s a partisan harpy.
But I will keep my eyes open to see if any rational commentators have something to add to the discussion.
ET,
Who ELSE is c-o-v-e-r-i-n-g it? Hell, I check the HuffPo now and then just to see what other people are thinking, but obviously anyone that doesn’t agree w/ your take on things is a “harpy”.
But we’re all relieved that you’re all over it by “keeping your eyes open”!
Fascinating. My father, a neighbor and I were just talking this past weekend about how it seemed that way, based on the empirical evidence of our observations. Thanks for the link!
This is a suprise?
What comes around, goes around. Back at cha CreepyCorkerMcConnell gang of thieves.
Right, let’s set aside all that partisan bickering and put the economy and the American people first! ( Right… )
Whatever guys.
Follow the evidence trail, below, and judge for yourself.
Dealers on the closing list donated millions to Republicans, $200 for Obama
The initial pass at the list of shuttered dealers showed they had donated, in the aggregate, millions to Republican candidates and PACs and a total of $200 to Barack Obama.
In fact, I have thus far found only a single Obama donor ($200 from Jeffrey Hunter of Waco, Texas) on the closing list.
Another review of all 789 closing dealerships, by WND, found $450,000 donated to GOP presidential candidates; $7,970 to Sen. Hillary Clinton; $2,200 to John Edwards and $450 to Barack Obama.
Now, and this is important, Chrysler claimed that its formula for determining whether a dealership should close or not included “sales volume, customer service scores, local market share and average household income in the immediate area.”
Dealer Jim Anderer told Fox News’ Neil Cavuto he can’t comprehend how his dealership can be among those killed: he stated that his sales volume ranking is in the top 2 percent of all dealers.
Furthermore, Anderer says explanations aren’t forthcoming. “They won’t tell us. They seem to be running for cover right now because they won’t give us a solid explanation. They come up with all these reasons, but none of them seem to make sense… This is insanity. The government is stealing my business. And they’re telling me there’s nothing I can do about it… There was no process that you could put your finger on and say, ‘Hey, we cut 25 percent of the lowest performing dealers.’ They didn’t do that. Nobody will give us a real clear explanation of the formula that they came up with.”
The odds of a non-partisan process being employed can best be illustrated by RLJ.
The Mysterious Case of RLJ
In Smith’s research, one company kept popping up on the list of dealerships remaining open. The company is RLJ-McLarty-Landers, which owns six Chrysler dealerships. All six dealerships are on “the safe list.”
RLJ’s owners “are Steve Landers (long-time car dealer, 4th-generation dealer), Thomas “Mack” McLarty (former Chief of Staff for President Clinton), and Robert Johnson (founder of Black Entertainment Television and co-owner of the NBA’s Charlotte Bobcats)… McLarty campaigned for Obama in 2008, and Johnson has given countless amounts of money to Democrats over the years.”
jeff saturday,
Right and Michelle M ran it as her lead article this morning as well.
cobaltblue,
Please to notice had it not been for my response to Hwy50’s fluff comment, this tangent of the thread would have up and died right then and there? This very “dust-up” ( that I normally seek to avoid ) is the very reason most of his “damage control” posts go unchallenged.
Look man, I’m not even that big a fan of dealership owners to begin with? And I’m ‘about’ as much a Republican as I am a “Catholic” but wrong is wrong. Where’s the outrage from BO supporters?
My point is posting that was not partisanship, but more to the effect of the fed monster that we all seem to dislike here, FWIW.
Muggy,
Nor was it my intent to turn it into a circus. I just grow tired of knee-jerk political reactions/spin to ‘everything’.
Anyone with half a brain -knows- this entire… debacle rests solely in the hands of GWB.
Dont forget Cheney…Cheney helped too !!
(he was in the coalition of the willing)
“…but more to the effect of the fed monster that we all seem to dislike here, FWIW.”
This monster could easily be put down by rolling it up in an old shower curtain, insert the free end of the hose that is shoved up the SUV’s tail pipe…a one page “how to” in Popular Mechanics.
I won.
Sincerely,
- Barack Obama
Cute!
Tell all the boarded up Chrysler dealers that “He… is ‘their’ President too”.
“…The government is stealing my business.”
Now one has to wonder…if there are any people in the proximity of the Texas Rangers baseball stadium that could also make that statement?
Shrub: “I’m a Tayhos oilman! Look at my hat, look at my Ford F450 pickup…hehehehe”
Hwy50,
For the love of God man can you -please- at least attempt to complete (1) single post *without using the partisan tags of “Rash” and/or “Shrub”?
Or are you simply incapable?
I’m not feeling ANY sympathy for ANY dealership for ANY reason.
What about the mechanics that worked there?
Nope. None of them. Been screwed over too many times.
Rip off alert!
Wait till the banks mess with our unused credit cards.
If it goes too far, I will allocate some of my free time to figure out how to start a class action lawsuit. It is about time that consumers get some protection against the rapacious behavior of Megabank, Inc, and I am not talking about an Uebermensch Fed policeman, either.
Terminating an unused credit card can really hurt a FICO score
Then other companies like insurance companies quote you higher rates because you’re supposedly a risk.
From Bloomberg:
Mortgage Delinquencies Rise to Record on Job Losses
The combined percentage of loans in foreclosure and at least one past due was 11.18 percent, the highest ever recorded by the Mortgage Bankers. The percentage of loans 60 days past due and 90 days or more past due all broke records set last quarter.
—
Stunning numbers today
Stunning numbers, and the market rallies… Crazy world.
Every bad news release is a sign the housing bottom is that much closer, which provides inspiration for the bovine herd to stampede back into stocks.
New York Times
More Homeowners Facing Foreclosure
By JACK HEALY
Published: May 28, 2009
More homeowners than ever before are falling behind on their mortgage payments and sliding into foreclosure, according to figures released on Thursday, a sign that the country’s housing crisis is spreading through the ranks of previously stable borrowers.
About 5.4 million of the country’s 45 million home loans were delinquent or in some stage of the foreclosure process in the first three months of the year, according to the Mortgage Bankers Association. About 12.07 percent of all mortgages were delinquent or in foreclosure, up from 11.93 percent at the end of 2008.
Temporary halts on foreclosures imposed by lenders and mortgage underwriters have mostly ended, and banks are moving quickly against delinquent homeowners.
Housing specialists said the number of foreclosures would probably keep rising as more people lose their jobs or are forced to trade full-time work for part-time. Nearly six million jobs have been lost since the recession began a year and a half ago, and many economists expect the unemployment rate to rise to 10 percent from its current 8.9 percent.
More defaults by unemployed homeowners could shunt more houses onto an already saturated market, economists said, dragging prices down farther.
“We’re still caught in this vicious cycle,” said Patrick Newport, an economist at IHS Global Insight. “These numbers were horrible, and they’re going to get worse. This problem’s going to be with us for a while.”
Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look
Levy Viewed as Way to Reduce Deficits, Fund Health Reform
This headline in the Washington Post is a warning shot across the bow of the good ship USA. With the IRS reporting a 34 percent dip in tax collections in April, compared to the previous year, and with the Treasury Department needing gobs of money to keep up with the federal bailout schemes, there is no alternative to creating a new tax source. (Another option is to slice government spending to the bone, but that’s the last thing Congress will consider.)
Listen for the chatter to increase in support of a Value Added Tax (VAT). Among the chief arguments will be, “Most of the other advanced nations have a VAT. Why can’t we?” And “With this new money we can fund universal health care for all!” The VAT…
We up north here have had the g.s.t. (vat) for a long time. Now our Provincial govt. wants to combine the provincial sales tax with the g.s.t. for a combined tax of 13% on everything you buy and any service you purchase ie. haircut, plumber, etc. Good luck because, bottom line, you’re broke and the debt holders want their money just like when we were broke in the early nineties. We seem to be going down that road again with a 50 billion deficit for this year (roughly 500 billion if extrapolated to your population)
Nations with VATs do not have local sales taxes. This will go over like a lead balloon.
No alternative my A##
Here is an alternative, create a new tax bracket for those making over a million dollars a year.
Sales tax is regressive.
Maryland did exactly that.
They lost 33% of their millionaires within one year of enacting the “soak the rich” tax.
“Maryland did exactly that”.
Yes sir, and now what’s their genius gubnor O’Malley(fighter for the little man)going to do, to make up for the short falls?
Tax everyone more of course!
So if the country does this, will everybody move out of the U.S.?
Hmmm…coming from So Cal, a less populous country would be rather nice. Talk about affordable housing!
a 10% VAT tax?
ummm…what comes after depression?
“ummm…what comes after depression?”
World War.
What do I win?
A green smiley.
I have a great way for them to raise money. Tax campaign contributions in excess of $500 to an individual politician and in excess of $2000 FROM an individual donor at 1000%. Yep, 10 bucks in taxes for every buck you donate over the $500/$2000 marks.
That way, if you want to buy our politicians, at least we’ll be getting some tax money out of it.
12 pct. are behind on mortgage or in foreclosure
Delinquencies and foreclosures set record in 1st quarter, driven by prime loan defaults
On Thursday May 28, 2009, 10:05 am EDT
NEW YORK (AP) — An industry report shows that a record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit.
The Mortgage Bankers Association said Thursday the foreclosure rate on prime fixed-rate loans doubled in the last year, and now represents the largest share of new foreclosures. Nearly 6 percent of fixed-rate mortgages to borrowers with good credit were in the foreclosure process.
At the same time, almost half of all adjustable-rate loans to borrowers with shaky credit were past due or in foreclosure.
California, Nevada, Arizona and Florida accounted for 46 percent of new foreclosures in the country.
wmbz,
And… it would be ‘my’ guess that CA, NV, AZ and FL accounted for 46% of the “old” FC’s as well? My question is, why wasn’t there more of a local focus on all of this from inception?
Now that we’re seeing many of these are “prime” fixed rate loans from people w/ “good” credit it’s obvious the PTB ‘take’ from the onset was entirely incorrect? Rather than look at this by gauging the mortgages by their respective grade ( we should have been looking at Zip Codes ) ?
Oh… of course I haven’t a shred of proof it would have turned out any differently but what ‘might’ have happened had the Fed/FDIC/PMI/OCC/OFHEO moved in SWAT Team style to these afflicted areas and basically shut them down like an insolvent bank?
I’m somehow picturing them “sweeping the area” and checking house-by-house for… well, occupants for one? Blam! Tagged and bagged. “Yeah, we’ve got a dead one”.
Then check if the “occupants” are in fact current? “Clear!”
If they aren’t “cleared”, do they WANT to be there? Are they willing to submit to a workout or are we dealing w/ squatters here? Anyway, you get the idea.
Well Armando Falcon (of OFHEO)got KO’d by one of the drunks by the punch bowl when he had the tremerity to suggest that maybe people who were going to drive home should taper off on the sauce.
“The market was also unnerved by news that a record 12 percent of mortgage holders were behind or in foreclosure in the first quarter.”
It’s amazing how much The Inevitable is called “news’” these days.
Let’s see:
- Prices still plummeting down
- Unemployment still shooting up
And they’re taken by surprise by still-rising delinquencies?
Not unnerved enough. SRS is down, financials are up. Market is deep in fantasyland now.
I panicked yesterday, frantically moving some retirement acct money into stocks again. Where else to go when your money is stuck there for the time being, and inflation is on the horizon? So I went into equities, TSM etc for maybe 30% anyway. The assumption is stocks overall will inflate along with the dollar.
Meh. I probably blew it.
Could you not have gradually moved that 30% retirement cash into tax-advantaged, low cost equity index fund(s)? Fortunately, if you already have appropriate (to your age and goals) index funds - even a taxable account will be pretty darn tax efficient. I believe if one has good odds of a decade or more of life expectancy that it is a good time to be moving some fixed assets into appropriate equity index fund(s). You know the oft repeated mantra “when others are selling from fear, it’s might be a good time to buy.” Caveat: everyone’s financial situation is unique and they need to look at all the risks in their asset allocation and time horizon.
Some like TIPS in their fixed tax advantaged account if they think the effects of inflation will weigh negatively on their return over their investment horizon. I’m not sold on more than 10 to 15% TIPS holding in any asset allocation plan.
Yup, it’s gotta be wrong if I made the jump…I did go into index funds though. TSM is total stock index. At Vanguard you have to start new funds with minimum 3000 most the time, so it makes phasing in hard for me.
No TIPS or index funds with the 401k. Stuck with Franklin until I quit or get fired.
me, I am going the opposite route. Moving from equities back into income funds and waiting for the market to crash again.
I probably blew it too.
Here an article that shows how out of touch with American culture I am:
http://www.marketwatch.com/story/retiring-debt-free-should-be-your-goal
Retiring debt free should be the goal? It never occured to me that anything else was even possible!
That’s what 15-year mortages were for. If you were getting older, banks didn’t want to lend past your possible retirement. Age 40? A 15-year is all you would get.
What happened?
I think it illegal now to not give loans to old people just because they are old.
why should they worry about being debt free when the government will just force those who are debt free to bail them out?
How about retiring debt-free and dollar-diversified, so that one is out of reach of the Fed’s ongoing War on Savers?
Our good friend in Utah, Rick Koerber, the Free Capiitalist, was indicted a few days ago for running a $100M real estate Ponzi scheme. I have been waiting years to see this guy go down. Indicted by the feds. That’s going to leave a mark.
http://saltlakecity.fbi.gov/dojpressrel/pressrel09/slc052609.htm
Evidently his business operations never made a dime and all the payments to investors were made from other investors money. According to the indictment he also had his “businesses” cover hundreds of thousands of dollars of his luxurious lifestyle but he failed to report the income–or even file a tax return for one year–so he is also being charged with tax evasion.
Nice find! Thanks.
Koerber was involved with several businesses in Utah, including Founders Capital, Franklin Squires Investments, and Franklin Squires Companies..
You know, it seems to me I saw a few of his advertisements now and then over the last few years, when I’d go to Utarr for Christmas with the fam.
Koerber, as a part of his seminars, encouraged first line investors “to act and think like a bank,” according to the indictment, by obtaining money from other people to place with Founders Capital.
‘Act and think like a bank’? So…recklessly and stupidly?
For example, Koerber spent $850,000 on restaurants, loaned $800,000 to an associate for a restaurant, and spent more than $1 million on expensive automobiles. In addition, the indictment alleges, Koerber spent more than $5 million on making movies.
Ooooh, now I’m dyin’ to know what KIND of movies this jerk made.
“Ooooh, now I’m dyin’ to know what KIND of movies this jerk made”
Says the “R”-Movie Star of “The Adventures of the Mighty Maiden of Muck and the Killer Clams”
Itchy and Scratchy movies, I hope!
World Massively Short Dollars - Rick Ackerman
Scores of millions of homeowners who are mortgaged to the hilt have implicitly bet against the dollar. So have financiers who have used derivatives to borrow dollars in some leveraged fashion. There are hundreds of trillions of dollars worth of these instruments still in play, most of them denominated in U.S. dollars, and if they cannot be rolled forward, the borrowers will have to settle up in cash. Similarly urgent demand for otherwise shunned equity shares creates short squeezes in the stock market all the time, and there is no reason why a fundamentally worthless dollar could not be squeezed higher by the same implacable forces.
A rising dollar is most surely not what the world needs right now, since it will increase the real burden of debt on all who owe dollars. That is the crux of deflation, not the increase in the money supply that inflationists have been blathering about for years. Who cares what the supposed money supply is? Most of the yo-yos who cite growth in the money supply as inflation per se don’t even know the difference between money and credit. You should pay them no mind in any event, since the far more important concern, at both the personal and macroeconomic levels, is whether your and everyone else’s debts are becoming easier to service, or harder. As long as the latter condition persists – and it will, unless a bailout package comes along that arbitrarily adds three or four zeros to every American’s bank account – all who owe will be subject to the asphyxiating effects of deflation.
Hey Wombats, your post makes me happy. Especially since my family will be totally debt free soon (I’ve been letting my wife’s student loan ride since it was consolidated at 3% minus the .25 for ACH — I figure I might as well pay it off).
As Combo would say, welcome to an era where debt sucks, and cash is king.
“Especially since my family will be totally debt free soon”
Congratulations!
“Especially since my family will be totally debt free soon”
Woo hoo……more money to trade with!!!!
A rising dollar is most surely not what the world needs right now, since it will increase the real burden of debt on all who owe dollars. But what of those who are owed those dollars. THEY( *cough* China) certainly don’t want to see any dollar depreciation.
As long as the latter condition persists – and it will, unless a bailout package comes along that arbitrarily adds three or four zeros to every American’s bank account – all who owe will be subject to the asphyxiating effects of deflation.
BINGO
Of course if your bank account is zero adding a few zeros doesn’t make much of a difference. I’m playing deflation until I see falling unemployment, and rising income. Those printed dollars have to end up in the hands of the people in a way that makes those people believe that their incomes are secure. One time payments, giving money to banks that hoard it or speculate on commodities ect will not be effective IMHO.
Guy burned down his house and all of his renter’s stuff because his “flip” didn’t workout.
that’ll show em.
the very definition of ‘bitter renter’
What a _d*mb*ss!
Walking away from the mortgage would have been more financially advantageous to him by far, and _dramatically_ lower risk! No risk of, say, killing someone by accident.
Plus he could have pocketed their rent for 12 to 18 months before foreclosure actually occurred…
Wow. Unbelievable.
Way OT, but I`m grabbin a Big Mac and heading down to Clematis.
Noon ‘nude’ protest showers meat-free message on Clematis Street
By ANDREW MARRA
Palm Beach Post Staff Writer
Thursday, May 28, 2009
WEST PALM BEACH — If two girls showering nude on Clematis Street can’t convince you to go meat-free, can anything?
People for the Ethical Treatment of Animals is playing its trump card today, trotting out two “PETA beauties” to take naked showers in downtown West Palm Beach behind a sign that admonishes meat-eaters to “clean your conscience.”
PETA says raising animals for food produces more greenhouse gas than all the automobiles and planes in the world.
The girls will be showering at noon at the corner of Clematis Street and Narcissus Avenue, according to a PETA news release.
Their banner will read “Clean Your Conscience: Go Vegetarian! 1 lb. of Meat = 6 Months of Showers.”
“PETA says raising animals for food produces more greenhouse gas than all the automobiles and planes in the world”.
I swear these kooks can rattle off some serious BS ‘facts’ !
I am having yard bird for lunch today, if I was in the area I would go down to view the shower scene though.
Enjoy your Big-Mac!
Narcissus Avenue? Perhaps they should have chosen a different street.
I wish I could be there and hawk Big Macs and Quarter Pounders to all the gawkers.
I can’t believe these PETA animals are going to contribute to the destruction of the rain forrest by putting up a banner. Plus the soap and shampo bottles made from plastics/oils that are discarded into all the landfills, not to mention the wasted energy resourses and pollution released to make said products. Then they go on to release contaminated water that will runoff into the sewer system and into an already polluted ocean. Fish will die because of what they are doing. How dare they kill the poor little fishys.
I am going to have to go down there and spank those two.
Wow..I’m all for going vegetarian now too.
“I want one order of a large leafy lettuce sandwich and one side order of two naked PETA beauties TO GO..and HOLD the lettuce please !
I didn`t make it down there but here is the update from the PB Post.
The two twenty-something girls began showering at noon at the corner of Clematis Street and Narcissus Avenue.
They attracted plenty of oglers and drew the ire of a police lieutenant, who complained that a group of young students on a field trip was congregating nearby.
Passerby Mike Anderson said he enjoyed the view but doubted their message would have much impact.
“I’m still going to get a hot dog after this,” he said.
1 lb. of Meat = 6 Months of Showers.
Must… resist… commenting…
Can’t do it.
1 lb. of Meat = 6 Months of Showers.
Is this an exchange proposal or something? Sign me up!
I have become speechless about this economy and housing market. Where I live, trash houses with no foundations are still on the market for $300,000. Rents are less than $1,000. It seems that people will just hold out forever.
But, I am looking for a 13′ fiberglass camper to tow with my subaru. Anyone have one?
300K? You can get a pretty decent place in Larimer County for 300K
Heres a green/housing bubble in the works
http://www.earthship.net/index.php?option=com_content&view=article&id=476&Itemid=69
LONDON, (AFP) – The world is sitting on a “powder keg” of social unrest, which risks exploding as human rights are eroded by the global economic slowdown, Amnesty International warned.
But its annual report — detailing abuses from China to Guantanamo Bay and from Sri Lanka to the ex-Soviet Union — said the global meltdown also offers a chance to rebuild an economic framework putting human rights at its heart.
“There are growing signs of political unrest and violence, adding to the global insecurity that already exists because of deadly conflicts which the international community seems unable or unwilling to resolve.
“In other words: we are sitting on a powder keg of inequality, injustice and insecurity, and it is about to explode,” said Amnesty chief Irene Khan.
Pakistan alone is worrisome.
“In other words: we are sitting on a powder keg of inequality, injustice and insecurity, and it is about to explode,” said Amnesty chief Irene Khan.
Yep same old tired pat line that crowd been trotting out for as long as I can remember. They do have to justify their existence, I guess.
It might be different, there.
TARPON SPRINGS — Police blame a local developer for installing “no parking” signs around a popular city restaurant that resulted in 233 tickets being written in a two-year span.
http://www.tampabay.com/news/localgovernment/article1005017.ece
In a 23-page report released this week, Kochen said developer Mike Bronson admitted recently to installing the signs along the city’s right of way after initially denying it.
… “I’m glad Mr. Bronson admitted to the act and the Police Department has been very proactive in this matter,” Dalacos said. “I still have concerns about what action we can take to, at a minimum, have Mr. Bronson reimburse those tickets that were paid.”…
The report says criminal charges against Bronson would not be feasible at this time, but makes no mention of other possible penalties….
I can’t remember if I’ve ever mentioned this before, but just in case I haven’t, let me notify you all: I hate developers. I hate them all. I really, really do.
Wonder why it took 23 pages to explain it.
Wonder why it took 233 tickets to catch it.
“…makes no mention of other possible penalties….”
Shall I interpret that to mean that they are open to suggestions? I got yer back, Oly.
Hate is a strong word for me. But after thinking about what you said Oly, I understand what you mean. Desecration of Mother Nature, and Money for nothin’ and the chicks are irrelevant.
Hey Professor - did you notice oil just went above $65? Just wondering.
You can control some of the prices some of the time, but you cannot control all the prices all of the time.
BTW, high oil prices => high gas prices => higher household fuel expenditures => lower household housing service expenditures => lower demand for owner occupied and rental housing => lower home prices and rents, ceteris paribus.
Thanks Mr. Bear…it’s been awhile since I’ve had a play date with Latin.
Discere docendo
Say good buy to those consumer confidence numbers.
It’s all good. Worse consumer confidence will help bring down l-t bond yields and mortgage rates…
BTW, high oil prices => high gas prices => higher household fuel expenditures => lower household housing service expenditures => lower demand for owner occupied and rental housing => lower home prices and rents, ceteris paribus.
Oh what a wicked web the cartels weave
When first they gouge and then deceive.
(Apologies to Sir Walter Scott.)
Dubai RE fraud : A picture is NOT worth 1000 words.
“I only handed over my money because I was shown property under construction,” said UK-based Ebony and Ivory Investor’s group spokesperson Moses Oye. “That’s my simple gripe. It’s a black and white issue.”
http://www.independent.co.uk/news/world/middle-east/dubai-property-scandal-claim-emerges-amid-media-blackout-1691537.html
The most frightening part of the story is this:
On Thursday, after local and regional media had been alerted to the situation by angry investors, news agencies across the city said they were silenced by senior representatives of the Government of Dubai, as orders were issued for reports of the storm to be pulled.
———————–
Wow. AFAIAC, they’ve just admitted guilt.
BTW, DinOR, your state now joins Florida in the Fast Food 9/11 call fad!
Suh-weeet!
Seriously? Did someone get short-changed on the amount of shrimp in their shrimp-fried rice? LOL!
And all this while I thought most Oregonians were too rain-soaked/depressed to complain about any…thing! Actually we’re catching up in a lot of ways. 10th worst RE decline ( w/ plenty of room to move up! ) and 2nd in unemployment. We’ve commented locally that it’s just mind-boggling to note we were at 5.8% just last year?
DinOR,
You’re in Ashland, aren’t you? How’s the town holding up? Anything selling?
Lisa,
Actually I’m up right near Salem. We only go to Klamath Falls once a month for “reserve weekend” but the wife and I love it there!
As we’ve discussed on the PortlandHousingBlog, Ashland is in a world of hurt. Just yesterday while walking to our SIL’s b’day, we noticed -several- realtor-owned foreclosures and then it struck us! Even though OR is constantly described as being “late to the party” it’s… bull.
We’d been appreciating at a good clip ever since the dark hours of the very early 90’s and never looked back. Just like Ashland, a lot of the failed flips you see, belong to realtors! One in particular that jumped out at us was a quaint Victorian some realtor bought and fixed up from 2003 to 2005. She put it on the market the ‘minute’ the paint dried but there it sits. Vacant and foreclosed!
Locally, I’ve no alternative, that really from 2004 on here in Marion County, the majority of money “made” was from getting loans and building new homes! (Not from selling existing homes) From realtors to MB’s to developers there was this huge rush to “get projects done” but for the most part, everything has sat since 2005? Small matter. Living off of borrowed money on homes you knew may or may ‘not’ sell had to be positively heady!
Slim’s first and only visit to Ashland came during the early 1990s. I was there for a United Bicycle Institute class (good trade school, BTW), but did get some time outdoors as well.
On my two-wheeled wanderings about, I noticed a lot of high-priced, recently built housing. I was puzzled as to where the money and jobs were coming from. The local economy sure didn’t have such things.
DinOR,
Thanks for the update! I’m looking at Ashland as a strong possibility for my next house, which will be the retirement house that I try pay off in 10 years or less. I’m in CA now, and with the budget fiasco, it’s just going to be more & more difficult to afford to live here.
Try Grants Pass, it’s a better town without
the snob appeal.
Make sure to bring your own job to Oregon. Is there a worse state for unemployment? Check out this stress map:
http://hosted.ap.org/dynamic/files/specials/interactives/_national/stress_index/index.html?SITE=YAHOO&SECTION=HOME
The market these days is day trader’s dream, wild up and down swings in the same day. It’s like a plane that is out of control and violently gyrating up and down while the pilot tries to regain control. You don’t know if the pilot will regain control and safely land the plane or will lose control and have it spiral into the ground.
Either way it’s going down.
Monday, May 25, 2009
Orange Grove: It’s time to nationalize grocery stores…
Government should ensure we all have enough, but not too much, to eat.
By RICHARD E. RALSTON
Executive Director of Americans for Free Choice in Medicine in Newport Beach
One of the great scandals of our age is the fact that America spends more on food than any other nation. Many political leaders are now calling for urgent reform to bring spending on food under control. While food spending is rapidly increasing and many Americans are overweight, some do not have enough to eat.
Despite this high spending, the United Nations reports that, according to surveys they sent to government officials around the world, the quality of U.S. food is ranked very low. Officials in France report that their food is the best in the world. More insulting is the higher ranking that British experts give their food.
Leaders in Congress now point to what they see as the root of the problem: corporate greed in the form of grocery stores and restaurants operating on a for-profit basis. They promise to replace all private grocery stores with a national system of government commissaries, which purportedly will operate far more efficiently without the administrative overhead required to make a profit. As it will take some time to organize the national network of commissaries, initially groceries will be available only at offices of the Department of Motor Vehicles and U.S. Postal Service, which will provide the models for developing a government commissary system.
Congress and the administration say they will achieve further efficiencies by prohibiting all advertising of food and food products. Consumers will find shopping much easier if personal preference is eliminated in favor of whatever foods government makes available.
http://www.ocregister.com/articles/food-government-new-2425213-groceries-commissaries
End ag subsidies? Yeah, right…
P.S. The idea that the obesity problem stems from grocery stores and restaurants operating on a for-profit basis is utterly moronic.
It’s past time for gubmint to close down all Whole-paycheck stores, Trader Joes, Whole Foods etc. All money grubbing grocery stores, to much profit being made! LOL! Screw the free market, it’s not fair!
Perhaps we can switch to the North Korean food distribution system. At least the days of the ‘fat’ American would be over! We’ll all be slim and trim.
Tongue&Cheek
From The Onion I presume?
OCRegister.com
Link wouldn’t post, from the OCRegister.
Original of the article appeared in Capitalism Magazine, April 17, 2009, with the following title:
” It’s Time to Nationalize Grocery Stores
“
Note that the OCRegister also deleted half of the original article.
I just checked out the listings for Bozeman, MT. Just those for ERA, they alone have over 500 pages, this includes commercial and nearby areas like Livingston.
Just unbelievable. Many many huge luxury homes in the millions. Talked to a UHS there the other day, she was putting her investment house on the market for about 650k, it was nice, but more like 300k nice, looking at the photos. She had just dropped the rent from 2500 to 1500, sold the washer, dryer, and refrigerator. She admitted everything there was pretty much dead except for the cheaper stuff.
Anyone up there have more info? Seems like carnage to me. This is Bozeman, as they say in Bozeman…
“She admitted everything there was pretty much dead except for the cheaper stuff.”
Same stories heard around the Columbia Basin. The only homes selling are those priced about 2.5-times the region’s median income. The RE rags at Safeway are chock-full of hillside view homes or those on the lake’s edge. Someone is making money winterizing them.
This is ridiculous! HOA’s can tell you what you can and can not put on your car now?
http://www.myfoxdfw.com/dpp/news/HOA_Asks_Vet_to_Remove_Bumper
Complete horse sh!t, but of course to wacko control freak kooks it makes complete sense. They are the perma-pissed hate America crowd. You can’t miss them, they generally have a constipated look on their face.
” they generally have a constipated look on their face.”
You got that right. It must be hard going through life with that look on your face.
Now now, be honest. There are wacko control freak kooks on both sides. And somehow they all seem to wind up in HOAs! Good reason to never live in an HOA.
Good thing there’s no HOA in my neighborhood. That KXCI community radio sticker on my front window would be a source of complaint.
Then there are my interior doors. Full of bike culture stickerage. Very bad indeed!
Michigan’s April regional unemployment rates May 28, 2009 4:59 PM ET
All Associated Press news(AP) - Michigan’s regional seasonally unadjusted jobless rates for April ranged from a low of 7.8 percent in the Ann Arbor region to a high of 16.4 percent in the northeast Lower Peninsula.
The state’s major labor market areas, their seasonally unadjusted jobless rates for April and the change since March
Just out horror movie, see what can happen when you turn down a 3rd. mortgage request!
Drag me to hell…The Movie.
The Plot.
Christine Brown (Alison Lohman) is a loan officer with only a good job and a promising future. With a promotion up in the air between her and another employee, her boss, Mr. Jacks (David Paymer), advises her that she needs to demonstrate she can make “the hard calls” and make tough decisions. When Mrs. Ganush (Lorna Raver), an elderly Slavic woman, asks for a third extension on her mortgage, Christine, against her better instincts, denies her in an attempt to prove herself. In desperation, Ganush prostrates herself before Christine, begging and kissing the hem of her skirt. As a crowd of customers and employees gathers, Christine panics and shoves the woman away, gravely insulting her. That night, in a parking garage, Ganush, enraged and humiliated, exacts revenge by pulling Christine out of her car, and rips one of the buttons on her jacket off before using it to place a curse upon her.
False Confidence
John Browne
Posted May 28, 2009
“Socialism is the philosophy of failure, the creed of ignorance and the gospel of envy,” said Winston Churchill. Although it inevitably lowers living standards, socialism feels good - at least at the outset - as “free money” flows in great abundance. Keep this in mind as we examine the “good news” about consumer confidence.
Last week, it was reported that consumer confidence has seen an unexpected lift. In response, the sluggish stock market saw a manic 196-point rally.
This mania overrode losses from the week’s other big news: Great Britain was put on negative credit watch by Standard & Poor’s; the U.S. markets tanked on expectations of a similar downgrade domestically; and, Case-Shiller reported an unrelenting slide in home prices. In other words, the economic decline continues.
So, why are consumers so confident? They are being deceived by “free money” into believing in the power of socialism.
Since the start of the crisis, the Fed has held interest rates to an artificially low level, greatly helping borrowers who can obtain credit. Also, the Administration has made it clear that it will not allow a major bank failure, even if accounting rules have to be changed to give the appearance of solvency. Including guarantees, the entitlement-based stimulus packages have sprayed trillions of dollars into the economy, with minimal oversight.
None of these policies aid recovery, nor do they allow resources to be allocated more efficiently. Instead, they prolong economic dislocation, increase the influence of the federal government, and drag America deeper into debt.
It is true that the financial collapse that threatened does appear to have been averted by “officially” hiding and avoiding the problem of toxic assets. But the lesson from Japan, which did the same, is that avoidance is no cure and will only allow the wounds to fester.
In other words, the government is forcing the bone to heal before it’s been reset, so that even if we’re happy to be limping now, it will be that much harder to ever correct our gait down the road.
Most of the evidence shows, with the damage done to debtor countries like America, world trade is shrinking at an alarming pace. Socialists may argue that any further economic decline will simply be met by additional government spending. But this raises a novel and alarming question: how much more can the Administration spend? Or, more critically, how much more can it borrow?
We are in an age of massive deleveraging. Cash is scarce and becoming more scarce by the day. The recession is worldwide, and even creditor nations like China are spending their reserves on internal economic stimulus. In aggregate, major debtor governments have spending plans of some $5 trillion in the near term. From where will such a substantial sum come in a world long of paper debts but suddenly short of cash?
If the U.S. Treasury fails to find buyers for its massive calendar of debt, the Fed will have to raise interest rates. This will hit all borrowings, including mortgages. It will be likely to drive consumer spending down, bankruptcies up, and unemployment to depression-era levels.
Already, with the securitization markets dead and some $3.5 trillion of underwater commercial real estate loans, America’s economy looks set to take another hammer blow - a blow that might be too big for Daddy Government to handle.
Consumers may be confident that something is “being done” to solve the economic crisis, but either do not understand or have misplaced faith in what the corrective policies amount to - socialism. It may feel good now, but it is neither wise nor sustainable.
All indicators are still negative, and the government’s actions have merely covered over that weakness. Indeed, it appears that the Administration is driving us deeper into recession. It is likely that, when reality dawns, the rush from the U.S. dollars, stocks, and bonds will be truly devastating.
So, ignore the vagaries of consumer confidence polling and stick to the enduring laws of economics. Production leads to stocked shelves, but looting leaves them bare.
If interest rates go up, does that mean that saving money, y,know, for a rainy day, might become worthwhile again?
“Socialism is the philosophy of failure, the creed of ignorance and the gospel of envy,”
If I may, a much better definition:
“Socialism is the fight against selfishness that ignores sloth.”
dude 2009
ITEM: Luxury carmaker Porsche came very close to bankruptcy in March. Only a dramatic rescue operation saved the company, but it’s still on the skids. Over the coming weeks, the sports car manufacturer — which is up to its hubcaps in debt — could find itself in an increasingly difficult financial situation if it doesn’t swiftly merge with Volkswagen.
(From Der Spiegel)
By next year it will be 1 in 5, maybe even more….
NEW YORK (Reuters) - One of eight U.S. households with a mortgage ended the first quarter late on loan payments or in the foreclosure process in a crisis that will persist for at least another year until unemployment peaks, the Mortgage Bankers Association said on Thursday.
“We clearly haven’t hit the top yet in terms of delinquencies or the bottom of the housing market,” Jay Brinkmann, the association’s chief economist, said in an interview.
It would be way more interesting to see those broken down by years.
People who’s mortgages originated in 80-81 : .01% are behind.
People who’s mortgages originated in 2005-6 : 75% are behind.
(Note, I made those up. I’m just a guessin!)
You’d be surprised how many ’80s folks took the HELOC bait.
But those aren’t originated in 80.
Truly astonishing.
People like this guy are infuriating. Complaining about mortgage rates creeping up and saying lending standards are too high.
WHAT ABSURD NONSENSE!
http://www.foxbusiness.com/search-results/m/22385640/washington-hurting-the-housing-market.htm
Not surprised considering it’s from vociferous Fox News.
Side question for anyone who may know - often the WSJ has some really good charts in their printed version that aren’t there with the same article in the online version. Does anyone know if there’s any way to see or get these charts?
An example is today’s A1 article on the bond rate jump, which has two good charts in the print version, but none in the online version.
I’ve seen this several times, and it drives me nuts since I often save the articles online, and would like to save the charts too.
Thanks
Despite massive government borrowing to fill the hole left by the credit bubble, it seems that someone will have to pay for this.
The question becomes, who pays? Those responsible? Or those not responsible?
Buisnessweek
Smart shoppers for used cars know how to avoid lemons. Now buyers of residential mortgage-backed securities are likewise learning how to distinguish the bad from the good. That bodes well for healing housing finance.
Prices of privately issued mortgage bonds, which fell sharply earlier this year, have rebounded well since early March. According to Amherst Securities Group, a specialized broker-dealer, mortgage bonds backed by 30-year fixed-rate prime loans issued in 2006-07 are trading for a little less than 80% on the dollar, up from just 55% in March. Adjustable-rate loans rated in between prime and subprime and issued in 2006-07 are trading for about 60% on the dollar, up from less than 40% in March. That’s evidence that buyers are scouting for value instead of treating the whole market as undifferentiated toxic waste.
Meanwhile, early repayments of principal are rapidly shrinking the $3.7 trillion pool of residential mortgage-backed securities that were issued privately during the go-go years, 2004 through 2007. The smaller the pool gets, the less trouble it can cause. When a borrower pays off a mortgage ahead of schedule, the owners of the mortgage-backed securities get their money back early, and the face values of their bonds shrink. The shrinkage is happening on both ends of the spectrum: Creditworthy borrowers are prepaying as they refinance into cheaper mortgages made possible by easy monetary policy. The least creditworthy, meanwhile, are losing their homes to foreclosure. That’s cleansing the system as investors receive whatever the foreclosed house resells for (minus fees) and write off the rest of what they were owed as a loss.
Help from the Market
Amazingly, only $1.7 trillion worth of the $3.7 trillion in securities remains, according to Standard & Poor’s Market, Credit, & Risk Strategies group (mhp.), which, like BusinessWeek, is a unit of the McGraw-Hill Companies. All this even before the launch of the government’s Public-Private Investment Program, which is intended to move those assets into stronger hands. “The market has kind of resolved a lot of the problem,” argues Michael G. Thompson, the managing director who runs the S&P group, which is separate from the ratings group.
Well if Rancher can start the day with coffee, I can end the day with dinner.
What’s really odd is how much worse “restaurant” food is for you. I can cook a similar menu item and I know it’s got a lot less fat and sodium in it.
Tonight: chicken Marsala over noodles.
1 boneless chicken breast, cut into smaller pieces so it’ll cook faster. Marinate in balsamic vinegar and olive oil for an hour or so (maybe add some basil and paprika). Cut up an onion and 5 cloves of garlic, brown in saute pan with olive oil . When onions begin to caramalize, throw in chicken and cook on all sides. Toss in sliced mushrooms, cook somewhat, deglaze the pan with Marsala, cover and simmer.
Toss egg noodles in a pan of boiling water. When done, drain, put in bowl, cover with chicken Marsala.
Eat with copious quantities of Cabernet to cut your cholesterol via the “French effect”.
Hey, it works for me!
My point though is that a restaurant would cook the onion/chicken in bacon fat and throw in huge amounts of salt.
Dataquick numbers for California median sales prices for cities in april are out.
Santa Clara Co -38% YoY, Sacramento -30%, Riverside -40%, Los Banos -45%, Stockton -46%. I think Stockton will drop through the $100K barrier in the next month or two. Sacramento maybe next year; it’s at about 125K now. Salinas dropped under 200K. The big gang war there probably didn’t help.
Marin -28%. The higher end areas are often down “only” 20% or so from last year. There’s still a lot of room to fall there.
Late in the day but I thought I’d post tonight and then tomorrow morning. For the Firefox users, I have a web page up now that’ll allow you to “automatically” install the extension I’ve been working on, as well as a feature list and screenshots.
http home.avvanta.com/~drumminj/joshuatree.html
Makes this blog a lot easier to keep up with and navigate, IMO.
Will post clickable link below.
Link: http://home.avvanta.com/~drumminj/joshuatree.html