HBB On The Road To San Diego
This thread can double as a bits bucket. I’ll be posting observations, etc, during the next few days on my trip out west.
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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Location:Northern Arizona, United States
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BTW, we should be having a special guest post/interview this morning, with the foreclosure expert who is interviewed posting comments on that thread.
Awesome. I’d really like to hear the truth about the foreclosure market, how it really works and what’s happening with the inventory being held off the market.
Me too, when I move back Raaachester, I would like to “snap up” a foreclosure.
In San Diego, if you can see farther than 30ft from your window, it’s considered a “view”, doesn’t matter what exactly you see. Once I went to look at a place advertised with a view expecting to see either ocean and cityscape, instead there were a few dirt mounds with some trees behind them. I told the lady I was interested in the unit with the view, she looked at me puzzled and explained that was a landscape view since it wasn’t directly facing another unit. LMFAO. Several times later when I visit my relatives in the midwest in their ~$100K houses, I say “nice view” when I look out and see trees, they look at me like I’m nuts, I tell them the view alone would add $100-200K to their housing value if it was in California.
You can blame Barbara and Whoopie for setting low standards for “The View”.
Perhaps the most over hyped aspect of a house during this bubble has been the “view”. In the Puget Sound area, there are innumerable listings which tout “peekaboo view”. This is nothing but a cheesy marketing tactic to try and squeeze an extra $50k-$100k out of some sh!tbox for a sliver of water that can only be seen from the bathroom window when standing on a step stool, with the trees blowing in the right direction.
+1, Grizzly. If I’m going to pay for a view, I want an unobstructed one which is also _protected__ (e.g. either by zoning restrictions on othe properties or view easements).
I don’t want to pay $100K for one, only to have it disappear when the neighbor puts a 2nd story addition on their house. If I’m paying for something, I want to make sure I can actually hang onto it, and have the right to re-sell it later.
“This is nothing but a cheesy marketing tactic to try and squeeze an extra $50k-$100k out of some sh!tbox for a sliver of water that can only be seen from the bathroom window when standing on a step stool, with the trees blowing in the right direction.”
You forgot the periscope.
“If I’m paying for something, I want to make sure I can actually hang onto it, and have the right to re-sell it later.”
You will not last in New Future Amerika, where all will pay and not get to hang on to anything!
With the post name, I was kind thinking of Dorothy Lamour as guest host/interviewee…
That sound you hear is the sound of the heads of idiots exploding. That smell is fried brains.
http://www.nytimes.com/aponline/2009/08/03/us/politics/AP-US-Economy.html
Well, get ready to bend over and pay those taxes with money you don’t have. And don’t forget that Turbo Tax Timmay is exempt.
knew it was coming, knew it was coming, knew it was coming!
Barry’s “read my lips” moment. Of course taxes will rise along with a myriad of new ‘fees’ and surcharges, which are all taxes.
During his presidential campaign, Obama repeatedly vowed “you will not see any of your taxes increase one single dime.” But the simple reality remains that his ambitious overhaul of how Americans receive health care — promised without increasing the federal deficit — must be paid for.
From 2000 - 2008 we got to see the Republicans destroy themselves. Now it is the turn of the Democrats. None of them has a clue.
But there’s never enough support for a third party for a dedicated fiscally responsible candidate to fill the breach.
So we’re stuck swinging between the two ding-dongs.
it’s a reactionary cycle.
p.s. I do believe certain astute and well meaning individuals in both parties do have a clue but they are overwhelmed by the pandering class of politico.
X-philly, I have a real estate question for you. It’s about a Long and Foster agent whom my mother has become quite friendly with. I need a second opinion, if you get my drift…
VAT is coming….How to bet on it is the question…Maybe short expensive discrecionary ?
I think expensive discretionary and capital spending would shoot up in the long run, and then crash.
During his presidential campaign, Obama repeatedly vowed “you will not see any of your taxes increase one single dime.”
A true statement - it’s going to be a whole lot higher than a single dime. And the frenetic printing of monopoly-money Bernake Bucks to pay off all the IOUs Uncle Sam is running up will make that dime worth about two cents in real purchasing power.
Actually, I am sure all of our taxes will increase by far more than “one single dime” so, from an insane point of view that only a politician could love, he was “correct!”
More taxes to pay for “free things” since raising taxes in a dying economy filled with the newly permanently unemployed and underemployed is Mission Accomplished!
Chains we can believe in!
Hey, middle class, your taxes have to go up to pay for those that don’t want to work and for those that want to continue to have billions funneled to them through Fed and Treasury bailout measures. Don’t forget about the proverbial rock and hard place.
At least stocks are set to rise again. All is well. Like Bobby Knight said, “just lay back and enjoy it”.
As long as the stock market goes up, Americans feel happy, even though it is mainly Megabank, Inc bankers on Wall Street who just received billions and billions in TARP bonuses who have the loose change available to capitalize on the bull run.
My bet is on a VAT being introduced.
If you tax value, you will get less of it.
If you tax value, you will get less of it ??
I think it will be more progressive Pbear….
Say; 3% on a vehicle that sells for under 20k but 6% on any vehicle 60k and above along with boats, airplanes etc…It also could be progressive on a item by item basis…3% on some trinket jewelry but 6% on a $50,000 gem stone…The wealthy will scream bloody murder but will still buy the stone…
IMO, thats the way they are going to be able to sell it in Washington…They will be able to say we are getting “The Rich” because we are taxing heavily the “stuff” that they buy…
I have to disagree on this one. They will say that it is going to be progressive and that it will tax the rich at a higher level. But at the end they will announce that they couldn’t get it passed that way. That is their M.O. Tell me of one promise that B.O. made to tax the fabulously rich that he has actually upheld. He has handed them buckets of money. Unless we mean taxing their ability to care for their money then I see no results from this guy.
Yes, another tax structure on top of the other tax structure.
It worked so well for Europe.
Nah, they will tax further the producer, not the consumer.
The PTB and a large chunk of this society seriously thinks the only problem is that people are not buying enough. They seem to see no other problems with our greater situation than that.
Nah, they will tax further the producer, not the consumer.
I dunno, it seems like our elected representatives at all levels would rather tax the consumer rather than producers. Unless those producers are furriners, that is.
Introducing a new tax is not a good way to increase revenue quickly. You have to draft the law, get it passed, draft regulations so people have some idea what the words mean, create forms, get the forms programmed for electronic filing, hire and/or reassign and retrain people at the enforcement agency, get information out to accountants and the people who program the commercial tax software, and about a billion other things. You would need 5 years minimum to implement it, and that is a very, very agressive timetable.
Messing around with marginal rates on current taxes and/or eliminating a few deductions or creduts is way easier.
Exactly. Way easier to tinker at the ‘margins’ than to try to ram through a new tax. If you make him too mad, Bobby Knight will throw his chair at you.
Inflation is a much easier way to increase taxes and has the added benefit that it requires no vote by Congress.
By the way, the administration’s favorite method for this is a little complicated. It involves converting the deductions from schedule A to 28% credits (not sure if that 28 is correct, it might be a little lower). Essentially you restrict the people who normally take a dollar dedcution worth 35 cents (39 cents if Bush’s tax cuts expire) for every dollar of deductible spending (state and county taxes, mortgage interest, charitable donations, etc.) and convert it to a 28 cent credit for every dollar of deductible spending. Since most people below the 28% marginal rate use the standard deduction, there is almost no gain in value for them, though the potential is there. For 28% bracket is is a wash. For over 28% bracket, they will loose some value to their deductions.
The last time someone mentioned this to Congress it got killed. The charities hated it. I’m sure the realtors were also in on the lobbying.
Don’t forget that state income tax doesn’t need to follow federal income tax. They generally do but even now there are differences (e.g. California treats all cap. gains as “ordinary income”).
How about California doing away with the mortgage interest deduction for its state income tax? It would be a lot easier to get this through Sacramento than a similar bill through Congress.
Would it? Lowering the value of the mortgage interest deduction lowers the value of real estate by increasing the monthly payments on a particular level of mortgage. How many CA legislators own homes? And in CA, wouldn’t that have to go to a referendum?
The concept is particularly offensive here because the government has not added value to anything in recent years, except banker’s wallets. At least in Britain they get “free” healthcare.
And that is the goal: the crushing taxes and stifling of innovation that we see in socialism combined with the corruption and bloodthirsty competition of capitalism. All will lead to “Epic Fail”, which will be our future.
Palmetto, the link no longer takes one to the original article, unless I didn’t read it carefully enough. I just glanced at the headline, and skimmed. It was about manufacturing.
We already have a tax on tax here, it’s called social security/medicare. Every year if you max out social security tax of ~$8000, you have the privilege of paying federal and state income tax of $2000 or $3000 on the $8000 tax. I never hear anyone else b*tch about this, but its chaps my hide every year.
Was this what the original article was about?
http://blogs.abcnews.com/george/2009/08/geithner-wont-rule-out-new-taxes-for-middle-class.html
Geithner was clear that he believes a key component of economic recovery is deficit reduction. When I gave him several opportunities to rule out a middle class tax hike, he wouldn’t do it.
“We have to bring these deficits down very dramatically,” Geithner told me. “And that’s going to require some very hard choices.”
It would appear that the NYTimes has pulled the original story.
I am shocked…shocked! that my buddy Barack is going to raise taxes on the middle class and “spread the wealth around.”
Oh yeah, now I remember I wrote in Ron Paul for President back in November 2008. I have a clean conscience.
I thought I was the only one who wrote in RP.
Nope, others did as well. Fat lot of good it did us, but at least I felt a little better.
Clean conscience here as well
Good move.
A clean conscience and a lighter wallet.
A clean conscience and a lighter wallet.
I think that’s a good trade, personally. I’m in the same boat.
I did the same. Only about 5% of us supported Dr. Paul, but at least we have the satisfaction of watching the dupes who voted for “change” as it dawns on them, just as we predicted, that they were sold a bill of goods.
The reality is that this mess was baked in before the elections. Ron Paul would have accomplished exactly the same thing in the same amount of time.
And speaking of which, I’m no Barry fanboi, but you can’t change 8 years of disaster of historical proportions in 7 months.
Get real people. Instant gratification is what got us INTO this mess.
Last I checked, nobody held a gun to Barack’s head and made him build an administration of Wall Street cronies, insiders, lobbyists, etc - he did that on his own.
Get real people. Instant gratification is what got us INTO this mess.
I don’t think anyone is looking for instant gratification. They’re looking for a change in approach/policy/thinking. So far, it’s same sh*t different day.
At least with RP I (and likely the others here) feel that wouldn’t be the case. That doesn’t mean the current mess would be magically cleared up..just that we’d actually be on the path to accomplishing something, rather than committing the same errors, only on a much grander scale.
Last I checked, nobody held a gun to Barack’s head and made him build an administration of Wall Street cronies, insiders, lobbyists, etc - he did that on his own.
+1
And it’s been a lot more than just 8 years of disaster. This particular mess started a lot more than 8 years go. It really started 96 years ago.
It really started 96 years ago.
I wonder if there’s anyone still alive who was of voting age in 1913? Because then we could all direct our anger and frustration at them
I wonder if there’s anyone still alive who was of voting age in 1913? Because then we could all direct our anger and frustration at them
LOL - bring out the pitchforks! People of voting age back then (if it was 16 - not sure) would be 112 now. Unfortunately the oldest man in the U.S., at 113, just died about two weeks ago. He was probably the last one dangit!
Do you actually think Ron Paul would have been able to make any sort of substantive change in the way things are run? Really?
And did you seriously want a religious fundamentalist representing our Country to the rest of the planet? C’mon guys, think it through.
I’m pleased, however that his Fed transparency bill has received such broad bi-partisan support. Think he’ll be much more influential (and effective,) in his current position than taking flack from all sides and all world markets as CIC.
To continue from yesterday’s bits bucket; 1.9% decline in consumer spending seems low to me, but then again, Arizona is not typical. Sales tax receipts here in AZ (aka Dumbf***istan) “are down 12.9% throughout the first ten months of the fiscal year.”
http://www.azleg.gov/jlbc/mfh-may-09.pdf
Wouldn’t sales tax receipts for the nation paint a true(er) picture of consumer spending?
The next step is for the govt to put a tax on essentials. We had that in NJ back in the last bust. So, there was a ‘tax revolt’ and hands across NJ to protest the toilet paper tax.
TP is taxed in AZ; only food is not taxed by the state.
sounds like food gets taxed on the way out
Not really, if you have a liquidity crunch you can use water, or leaves from those green shoots (or is it joshua trees?)
When I have a liquidity crunch, I use even more TP.
TP has been taxed in CA for quite a while.
Who needs toilet paper when you can buy a mcmansion with a bidet?
(kidding!)
People also spend money on services which aren’t subject to regular sales taxes.
services which aren’t subject to regular sales taxes ??
Isn’t that just a income tax increase ?? Wouldn’t the doctor or lawyer just raise their fee’s to offset the tax ?? If they didn’t it would be a pay cut…
You are assuming they aren’t already charging the maximum the market will bear. They probably already are. Very few services have completely inelastic demand.
They would probably end up eating some of the cost of the tax and passing on some. Demand for the service would go down a bit.
Sorry to keep agreeing with you, but right again. Services are the great taxing opportunity, especially since we’re now a ’service based’ economy. (Which apparently means we don’t get benefits, don’t make much money, and don’t really produce anything of value.) It’s hard to justify paying sales tax for lunch in a restauant and then paying no tax for a massage.
Ah, but the massage people are in the same “category” as doctors and lawyers - two groups that have a lot of sway with congress. This has been tried before in various states. Not much new under the sun when it comes to taxes.
Ok, not Congress actually but their state legislatures. Actually these folks have more sway with the state legislatures. Try to get elected to a state house or senate if the docs and lawyers (and accountants and barbers and plumbers and contractors etc.) in your district all hate you. Go ahead. I dare ya.
If you double-dog dare me, I’ll do it.
You’d have to start small, say, taxing tattoo parlors, massages, and dog walkers. You know, the easy pickings. Then you slowly expand….
I’d say a banker windfall profit tax is the way to go, given that they just had a windfall profit on the tax payers dime.
Tax the bankers bonuses, max.
AZ is indeed Dumb-istan. There’s nothing I’ve seen here that makes me regret being educated in PA and MI.
Monday, August 3, 2009 Mike Morgan Behind Enemy Lines (Florida)
Cash for Clunkers - Who Pays For It?
.
A New Home for Everyone -Do you remember the Clinton days when the theme was making sure everyone was able to buy a home . . . even if they could not afford it? That’s what put us into the trouble we are in now on a global scale. Well . . . we are repeating the same mistake by actually paying people to buy a new car, and in many cases, they are buying a car they cannot afford. So who is paying for this?
1 - You are, because it is your tax money that Obama is giving to your neighbors to buy a new car, that many of them cannot afford.
2 - You are, because when the car loan your neighbor took out blows up, the bank will run to the government for another bailout . . . that you pay for with your taxes.
3 - You are, because this is going to put used car dealers out of business, and they are either going to go to Washington for a bailout of their own, or they are going to go on the Unemployment List, or Welfare, or Food Stamps . . . or all three. And you will pay for that through your tax dollars.
4 - You are, because the car loans from many banks will be bundled up by companies like Goldman Sachs and the other Banksters, then sold to pension funds and other unsuspecting fools. This is a repeat of the Housing Bubble, but this time it is cars, not houses.
Fairy Tales and Sugar Plums - That is what the Bush, and now the Obama Administrations are feeding you. It doesn’t matter whether you or they are Democrats or Republicans, because the boys and girls in Washington are owned by Goldman Sachs and the Banksters on Wall Street. Your fairy tale will end in a nightmare, but your nightmare will be reality.
If you truly believe Obama is not going to raise taxes, ask yourself who is going to pay for the trillions of dollars Washington has squandered . . . and Wall Street Banksters have sucked up. Either taxes go up by a whopping 50% for everyone, or we cut out 50% of the services you depend upon, like Medicare, Social Security, the Military, Defense, Airports, Trains, Roads, etc.
Wake up America . . . we are headed for a Depression that will make The Great Depression look like a rehearsal.
+1 Ate Up! Couldn’t have ranted better myself!
This was written by Mike Morgan, who posts here under a different alias (Mike in FL?), wasn’t it?
Good post, ATE.
Used car prices will probably rise, but I doubt a lot of used car dealers will drop out.
Seems like there ought to be some great deals in the used car market a couple years down the road once a flood of people start losing the new cars they couldn’t really afford to begin with.
Seems like there ought to be some great deals in the used car market a couple years down the road once a flood of people start losing the new cars they couldn’t really afford to begin with.
Until the next prop job by the clowns in Worshington.
“Seems like there ought to be some great deals in the used car market a couple years down the road once a flood of people start losing the new cars they couldn’t really afford to begin with.”
Went to San Jose about a month ago to help a friend purchase a used car. On the Toyota lot we found a very low milage 2006 camry listed for $14K. The salesman (young man) said that another party the past week offered $10K and his boss said ok but the financing fell through, but that he was sure we could get the same deal.
If someone lost financing on 10K, they shouldnt be buying a car anyway…
If someone lost financing on 10K, they shouldnt be buying a car anyway…
Or at least they shouldn’t be buying a 10k car.
If I wanted the car and had that information up front, I’d offer $7K cash and maybe negotiate up to $8K.
Absolutely.
I have very little sympathy for used car dealers.
You must be in the used car business. No way this program raises prices on used cars. The decline of the economy has bumped used car prices up a bit, but then C4C came along and will wreck dealers who deal exclusively in used cars. This is akin to the argument that rents would go up once the housing bubble burst.
“Up” is relative.
My argument would be (both for autos and for rental homes) that while prices may not actually go up - due to this artificial stimulus they also won’t go down as fast as they otherwise would, which is a bad thing.
“If you truly believe Obama is not going to raise taxes, ask yourself who is going to pay for the trillions of dollars Washington has squandered . . . and Wall Street Banksters have sucked up. Either taxes go up by a whopping 50% for everyone, or we cut out 50% of the services you depend upon, like Medicare, Social Security, the Military, Defense, Airports, Trains, Roads, etc.”
Sounds like he never heard of the technology called the printing press, nor of the relationship between employment and output (i.e., employed workers — even (gasp!) government employees — generally produce more than unemployed workers, so the size of the service pie is not really fixed at 100% as he suggests).
Good job to Mike. Where was this published? Mike if you read this - it’d be interesting to see what kind of feedback you get.
Reminds of the Billy Joel song:
Now we take our time… so nonchalant,
And spend our nights so bon vivant.
We dress our days in silken robes,
The money comes, the money goes…
We know its all a passing phase.
We light our lamps for atmosphere,
And hang our hopes on chandeliers.
Were going wrong, were gaining weight,
Were sleeping long and far too late.
And so its time to change our ways…
But Ive loved these days.
Now as we indulge in things refined,
We hide our hearts from harder times.
A string of pearls, a foreign car…
Oh, we can only go so far… on caviar and cabernet.
We drown our doubts in dry champagne,
And soothe our souls with fine cocaine.
I dont know why I even care…
We get so high and get nowhere.
Well have to change our jaded ways…
But Ive loved these days.
So before we end (and then begin)-
Well drink a toast to how its been…
A few more hours to be complete,
A few more nights on satin sheets,
A few more times that I can say…
Ive loved these days.
Yes, it’s working at taking away future demand for new cars while lumping on more debt. It’d be interesting to see the stats with regards to how many jobs were lost because consumers stopped making smaller purchases due to having to make a larger car payment each month.
Obama says we to provide another 2 billion to keep the program afloat. What a bunch of cr@p.
Oh, by the way: I think the overwhelming success of ‘cash for clunkers’ has been fabricated/overhyped. The last few days I have looked at local dealerships as I drive by and they are the same ghost-towns they were before the program. I think the plan was to media-blitz the succes of the program to make it sound like time was running out on all the sweet dealz. Would you put it past the MSM/govt???
I went car shopping this weekend thinking I’d get rid of my old clunker…
Lots were so mobbed that you could not get a salesperson.
Lots were empty of new cars because so many had been bought the previous week.
Lots were full of old cars/trucks with the word “Clunker” written on them, the results of all the trade-ins.
So here in Ohio, People are buying cars like there’s no tomorrow.
(I ended up keeping my old clunker.)
The clunkers that are traded in cannot be purchased as the dealers have to destroy the engines to get the money from the government. I expect they just wrote clunker on all obvious used cars in the lot so that people would consider them if they decided that the new cars that were eligible for the program were not big enough for their needs.
Another massive waste of our nation.
Misguided, massive waste.
ruining perfectly good vehicles, that someone else could buy.
+1000000, desertdweller. The scale of this waste makes me sick.
I agree, desertdweller. It is not a net gain, environmentally speaking, when considering the resources required to produce the new cars. Very unfortunate.
I’ve heard of several people I know taking advantage of this program. So far not one had a car worth scrapping. What waste.
We just gave 2 TRILLION to the banks that was ONLY for the banks and just the top dogs at that, and now we’re complaining about a few billion that actually helps J6P keep his auto related job and new buyers get a deal and stimulates the economy at the working stiff level?
What’s good for the goose is good for the gander.
Do care about auto dealers and mfgs? Of course not. But that’s a lot closer to J6P getting some help that 2 TRILLION given to some guys is $5000 suits.
Same with the home buyer’s credit. It’s dumb, but it’s at least SOMETHING for the proles, er consumers.
We just gave 2 TRILLION to the banks
Wasn’t most of that money “loaned” rather than “given”?
So to use an analogy - basically you’re saying it’s OK for a murderer to kick a cat because hey - it’s not murder, right?
Just because it’s not really bad doesn’t mean it’s not bad. It’s still wasteful government debt-driven consumer spending that otherwise shouldn’t happen, and nothing more than a form wealth redistribution in the name of “stimulus”.
With regards to “saving jobs” please look up “fallacy of the broken window”. It’s a very good lesson.
No, I’m afraid I’m not talking about murderers.
You will be, with higher taxes.
Your children will be, as they will be saddled with the massive debt.
Your parents will be, as their savings will be inflated away.
Indeed, this will truly be an Double Plus Good Depression!
In consideration of the rumor that there is sales activity at the low end and the mid and upper level sales is static, how is that to be interpreted? Does this suggest that prices of the low end have fallen and the mid-upper end hasn’t? Or is it the fact that the only sales activity is that associated with what is affordable? Viewing the entire market from a price structure perspective, if the mid and upper end exhibit price declines thus compressing the lower end, should the mid end be selling also?
Exeter, I am just assuming that it is all bullsh*t and moving about with my life. The amount of lies being fed us are just overwhelming. The game is a joke. I think I am one of the few that never again plans to play the real estate game. And my life is better.
When everybody is shouting at the tops of their lungs, trying to sell their nonsense, all is just noise.
See my post below - it’s trickle down of demand. People who previously could “afford” high-end homes now can’t, but can still afford low-end homes. Thus the demand is shifting downward, and so it makes sense for the low end to pick up with the high end going stagnant. It makes perfect sense, and yes it is indeed happening.
P.S. the pickup in home sales at the low end means nothing in terms of an actual improvement in the housing market. It’s just people trading homes; and not only that but with an ever-increasing percentage being sales of foreclosed homes. There is not an increase in homes actually being built, which is what would really indicate a rebounding housing market.
+1. If anyone think I was talking about a housing rebound from my thread yesterday where I quoted someone making the same argument in the bits bucket, re-read it carefully. It said NOTHING about a housing market rebound as a whole, it just said lowest tier housing is finding demand in the some of the worst hit markets while all others have a lot more room to fall, and that is only a very small part of the overall national housing market, and thus it doesn’t remotely resemble a housing rebound nationally.
Well it’s the PRICES that they can’t afford, not the homes per se. At the end of the great adjustment/reshuffle, prices should fall until the richest 10% can afford the most expensive 10% of homes, the well off 30% can afford the most expensive 30% of homes and on down the line. If there are homes left, they will go vacant, Detroit-style.
I think that the lack of movement in high-end homes is best ragarded as a sympton of the fact that, in aggregate, the well off have more reserves* to burn through before they have to stop paying an unaffordable mortgage. Yes, we’ve all heart the strawberry picker with 750k house stories, but I believe that those are the exception rather than the rule.
*Of course for many, those reserves are really extra credit, not more money. Lets face it, there aren’t very many people who haven’t come close to maxing out their credit card balances before the stop paying their mortgage.
I have friends that have one of those high end homes - well, actually, it wasn’t tremendously expensive for their town, but pretty expensive all in all. They put down a huge down payment and the mortgage was probably no more than 2 to 2 1/2 times their combined incomes and was fixed rate fully amortizing. She got laid off, got a new job which lasted quite a while and recently was laid off again. As long as his small business continues to go well, they can last quite a while - 3 years at a guess and longer if they cut back more - without her working.
However, my friends are hardly typical of even prime level FB’s. And unemployment barely makes a dent on replacing her income.
Nah:
Well it’s the PRICES that they can’t afford, not the homes per se.
I think it’s both, probably moreso the homes themselves though. We’re coming out of this bubble with a lot less wealth than we had going in, because so much was wasted. A lot of that wasted wealth went into McMansions which are simply too much house for too few people. They can’t afford the utilities and upkeep for one thing. There’s a natural “balance” if you will of homes per populace; not just in the numbers of homes but also in the luxurity of homes (including size etc.). That balance went askew recently due to the bubble itself, and is now even moreso askew due to the economic downturn, because people in general have less wealth, shifting the average downward and crowding the low end.
In order for prices to meet back up with affordability now - not only do home prices have to come back *below* pre-bubble levels, but other affordability factors - taxes, utilities, maintenance, etc. also have to come back below pre-bubble levels. Being that the latter for the most part that’s just not happening at all - voila you get what we have which is very weak demand for high-end.
I think that the lack of movement in high-end homes is best ragarded as a sympton of the fact that, in aggregate, the well off have more reserves* to burn through before they have to stop paying an unaffordable mortgage.
Actually that’s quite contrary to the fact that jumbo mortgages have a much higher default rate than standard now - see article below. Your statement would imply that the lack of movement on the high end is due to less homes for sale, but that’s not the case - it’s due to less demand.
(P.S. this is why I think luxury builder Toll Brothers is still a good short bet, albeit risky due to the government meddling and inflation prospects)
Well I would argue that if they can’t afford to heat and maintain those McMansions, it’s probably because their mortgage costs are so high. I agree that the bubble in financing meant that too many “luxury” homes were built, but apart from size, all those granite countertops and gold plated fixtures don’t add significantly to the maintenance costs over formica and stainless steel alternatives. There’s a price that those homes WILL move at, and in all probability it is higher than the price that more modest homes will net.
NO BUYER CARES how much the house cost to build, they only care what other houses are going for. And anecdotally the lack of movement isn’t lack of supply (especially when you count “hidden” inventory), it the ability of many potential sellers to “feed the alligator” for another month rather than sell at a loss. And the lenders’ lack of appetite for more REO. So they list the house at their “wishing price” and then take it off of the market, waiting for the “market to improve.” For the most part the poor just don’t have that option, and houses at the lower end have come down to a price where the market is starting to clear.
A lot of that wasted wealth went into McMansions which are simply too much house for too few people. They can’t afford the utilities and upkeep for one thing.
Exactly. The amount of unused square footage in those McMansions can verge on the parodic. The utility bills for all those vaunted entryways and gift-wrapping room prob’ly don’t seem so sophisticated when there’s belt-tightening to be done.
So few of those monstrosities were built with a long view toward efficiency, either — whether it’s poor floorplanning, poor insulation, poor site planning, lack of shade trees and airflow, or just too many unneeded square feet, the typical inefficiencies are legion. Thus the former trophy houses become undesirable for both the current occupants and any future occupants with an ounce of common sense. Don’t even get me started on the aesthetic issues …
Well ET we agree on the aestetics, and stupidity of design, but WE’RE not the ones buying them. And builders may be optimistic, but they were generally adept at building the sorts of houses that people would agree-to-pay* large sums of money for. We’ve said it here before, granite countertops are the avacado green appliances of the future. But for now, people still want ‘em. At the end of the day, I think that the market clearing price for most of these McMansions will be higher than it is for more modest houses, even if the cost to heat, cool, and in many cases commute to them is higher.
*because the whole mess that we’re in is that many can’t afford to make the payments that they’ve agreed to.
Nothing to add, just:
gift-wrapping room
LOL at that one.
Don’t even get me started on the aesthetic issues …
Open house visited yesterday,2008-$2.5mill.
$2.4 refused.
2009-$1.9 still sitting, 1 ac
amenities for a house of this price should absolutely include several things, and apparently the architect &bldr were arrogant to those amenities, according to wife of bldr/co owner
The laundry room was the size of a regular bdr. Built for a double set of w/d. WTF? Large room.
Guest house was 400′ with kitchenette. Now that might sound good, but seriously, for what they wanted$$, they really skrood up this floor plan and amenities for a large 1ac lot.
This goes with all you are saying, way to much room, way to many bad choices for amenities IF you want to charge that much.
they really skrood up this floor plan and amenities for a large 1ac lot.
Now just imagine that on 1/4 acre and you’re looking at 90% of west Vegas “classy” ‘burbs built since early ’90’s.
Now just imagine that on 1/4 acre and you’re looking at 90% of west Vegas “classy” ‘burbs built since early ’90’s.
Now that sounds like the archetypal McMansion!
Take desertdweller’s description and cram it onto a Honda Civic-sized lot. A one acre plot is rare or nonexistent in most McDevelopments I’ve seen …
That was the lure that hooked me…a 1 ac lot in the middle of postage sized lots. reel me in baby!
it’s trickle down of demand. People who previously could “afford” high-end homes now can’t, but can still afford low-end homes. Thus the demand is shifting downward, and so it makes sense for the low end to pick up with the high end going stagnant. It makes perfect sense, and yes it is indeed happening.
And still very few 1st time buyers. So we’ll have lower end homes sold and occupied and an overabundance of upper end homes empty. Awesome.
Agree with you on the first time buyers. Many of those who might have been ready for 1st time homeownership in the 2010-2015 timeframe will instead be recent foreclosees, and unable to secure the credit needed to buy. But there’s no real reason for upper end houses to stay empty. WHEN (not if IMHO) prices begin to fall significantly at the high end, sales will go up. There are plenty of employed people with equity who will see their chance to move up. And when that happens, watch out. MEDIAN prices will edge up, and the REIC will cheer about the return of the appreciation fairy.
Agree with all of your posts, Jim A.
Yes, it’s the **prices** they couldn’t afford, not the homes, necessarily.
“In consideration of the rumor that there is sales activity at the low end and the mid and upper level sales is static, how is that to be interpreted?”
Is this a trick question?
In Houston, low end sales have dropped the least in both price and volume. Why? Because they are affordable.
Has Megabank, Inc diversified into the spook business?
Wall Street Journal
* AUGUST 3, 2009
Bank Spy Scandal Widens
Global Titan Deutsche Allegedly Aimed to Investigate 20 Critics, Including Investors
By DAVID CRAWFORD and MATTHEW KARNITSCHNIG
BERLIN — A detective at the center of the Deutsche Bank AG spying affair says the international banking giant’s effort to monitor its critics was more extensive than previously disclosed in that it involved a plan to target as many as 20 people, including a number of investors.
The detective’s statements appear to contradict the bank’s assertion that the spying affair was limited in scope. The affair came to light in May when Deutsche Bank said it had discovered efforts involving “questionable investigative or surveillance activities” directed by its corporate security department and outside contractors. It has so far disclosed four separate incidents involving its agents between 2001 and 2007 in which the bank used the detective, Bernd Bühner, and others to monitor people affiliated with the bank.
Though the spying activity originated in Germany, the implications for Deutsche Bank are global. The bank earns most of its profit outside of Germany at its bases in London and the U.S., where bank officials have found themselves trying to explain the affair to uneasy clients and regulators, including the Securities and Exchange Commission.
Mr. Bühner, a contractor who played a key role in most of the operations under scrutiny, told The Wall Street Journal in an interview that he received a list of names in 2006 at a meeting with Deutsche Bank representatives that included members of the bank’s legal department.
“They had the names ready. A paper with the list of names was prepared by the bank in advance of a meeting with bank officials,” Mr. Bühner said.
…
Corporate espionage is big business.
Another fun fact: worldwide counterfeit products make more money than the worldwide drug trade.
Reality sounds more and more like a cross between 1984 and Shadowrun these days…
Cash for Clunkers is working.
How about Cash for Shacks?
Define “working”.
Well it’s early to tell, but the usual definition of “working” for government programs is that the incumbents get reelected.
GMTA - see my post below
…the usual definition of “working” for government programs is that the incumbents get reelected.
Ha!
Define “working”.
Improving* Obama’s approval rating.
(* “Improving”, like the economy, being defined as “not falling as fast as it once was”.)
Isn’t the goal to improve the velocity of money? Getting people to spend money?
Same goal; just you’re talking directly and I’m talking indirectly.
In the end though it doesn’t help any. Velocity of money is indeed a good measure of the health of the economy, but only so if it’s not backed by new debt. Since this is backed by new debt, it’s no help to the economy. It only appears to be so by people who just don’t know any better.
On the news just now they showed some CfC footage from around the nation:
One stealership had painted a giant Uncle Sam thrusting out hands full of cash on one of their window. Tens upon tens for CfC lawn signs at another. Everything basically implying that this was money for nothing.
It seems the national atmosphere at this moment has me flummoxed. It’s like part orgy/part revival/part carnival. The bitter taste of sobriety last winter seems to have the drunks guzzling with a vengance.
I haven’t felt this way since the blood lust leading up to March 19, 2003.
Well if they pump enough money into the auto industry through this channel, they can make it look like the bailout of the automakers is working. Its a win-win until the rates for goverment bonds skyrockets.
I think this is psychological phenomenon. People have spent the last 9 months or so seeing the government give boatloads of money to the big financial institutions. Most folks barely know what these banks do, never mind understand why representatives of both parties are telling them that the world will come to an end if the bailouts don’t happen.
Then someone comes up with a program that lets them get their turn even if they aren’t collecting unemployment or one of the 4.6 people who have successfully gotten a mortgage modification in the 125% (formerly 105%) refinance program. They are back on the playground and finally the bell is ringing after they are the one at the top of the cool slide, not standing in line for a change at the swings.
Not that hard to understand really.
Seems like its working out great for the sign painters and the sign makers.
Even though they are not at the top of the slide, instead it’s MORE bend over!! . But, Polly, you’re 100% right.
I wonder what percentage of buyers were going to replace their clunker anyway?
John McCain supposedly asked, rhetorically, if the government was going to try to get people to eat more chicken by offering “cash for cluckers.”
That is a fowl thing to say.
cheep shot
TEE HEE !!!
I have a long post on this article at the end of yesterday’s bits bucket if anyone is interested…
Wall Street Journal
* AUGUST 3, 2009
High-End Homes Frozen Out of Budding Housing Rebound
BY NICK TIMIRAOS AND JAMES R. HAGERTY
KENILWORTH, Ill. — Housing is fast dividing into two markets: Sales of low- and moderately priced homes are picking up and values have stopped falling in some parts of the nation. But on the upper end, sales remain mired in a deep slump and price declines are expected to accelerate.
…
You beat me to it - I was just going to post the same article.
There’s a very interesting chart in there showing how jumbo prime is rapidly outpacing standard prime in delinquencies. Exeter - this answer your question from above. Yes indeed, there is now a growing spread between the upper-end and lower-end housing markets.
This makes sense in a trickle-down kind of way. As home prices drop - the size of the market for jumbo loans drops as well, as a percentage of the total market. Many people who previously could “afford” a jumbo loan now can only “afford” a standard prime. So there’s crowding (per se) on the lower end of the market.
Thank you P-man.
So basically we have a shrinking pool of buyers channelled to a specific price range. It seems at some point, the mid and upper price points should collapse, further driving down the lower price points.
Your thoughts?
Somewhat agree. There’s pressure in both directions. The lower price points seemed to collapse first, as the weaker players were flushed out first via foreclosures etc. As has been documented extensively on the HBB the high-end has been very sticky compared with the low end.
But now the high-end is starting to really give way, and the lower points are finally meeting a bottom (albeit temporary most likely). Though the high-end price collapse will help push down the low end; the stabilization in the low-end will push back upwards as well. It doesn’t make sense for two houses of different values to have the same price; the better house will always (generally) be more expensive.
This is exacerbated by the various prop-up efforts - the foreclosure moratoriums, the $8k stimulus, etc. For the most part this is propping up the low end, and that prop-up does exert upward pressure on each tier above.
As the economy shifts - what we’ll see, and what I think we’ll continue to see - is a shift of housing market demand in various locations.
- Florida and California will continue to be extremely weak. Florida simply because many of the boomer simply won’t be able to retire; or if they do they’ll end up living with the kids up north and not getting a Florida place after all. California because of the huge budget problems that won’t go away any time soon, further driving industry out of the state.
- The DC area will be first to bounce back, and in fact already is relative to most other areas. I live here so I’m seeing it firsthand - despite being a very bubbly area prices are indeed starting back up here some! I think they will go down some still, but it definitely looks like the bottom here won’t be as low as other bubbly areas. For-sale inventory is *way* down from bubble peaks.
- Though Vegas is getting absolutely hammered right now - I’ll bet it’ll bounce back, better than FL and CA at least. It’s the nature of the beast - in a down economy vices do well.
We all agreed in the discussions before the first price reductions really got started that there would be at least one dead cat bounce in housing prices. We are here at the first one. But dead cat bounce it is and the prices will continue down at a later date.
DC area will be bouncier than most because the jobs aren’t as devastated here, so there is more money around, but it will go down eventually. There may be a few hold out locations in Chevy Chase or the Rosemont nabe near Old Town, but I think even they will come down some. Not that it will make things affordable, but as other places come down, eventually people won’t be willing to spend over a million dollars more to cut 5 to 10 minutes off their commute.
Patience.
Exactly. If you can get a really nice 5 bedroom, 3 1/2 bath for $400K, you aren’t going to pay $395K for a 3 bedroom 1 bath. Well, at least most people wouldn’t. The next push down on the bottom is going to be surprising and devastating to the people who can’t figure this out. The ones who can actually afford that price range will find they are in much less house than they could have afforded if they had merely been willing to wait a few years.
Of, course, that is assuming you prefer the 5 bedrooms. Not for everyone, of course.
JTR coined the term for this:
“The great squish down”
Its happening. People just chose to be blind to it.
Got Popcorn?
Neil
“Exactly. If you can get a really nice 5 bedroom, 3 1/2 bath for $400K, you aren’t going to pay $395K for a 3 bedroom 1 bath.”
Polly, I agree with you 100%. As the mid and upper tiers start to crack with Alt A, Prime Jumbo and Option ARM blowups, entry level gets squashed.
The stage is being set for the next big leg down, I think…..weakening mid & upper tier, interest rates moving higher, lots more foreclosures in the pipeline, unemployment approaching 10%.
“The next push down on the bottom is going to be surprising and devastating to the people who can’t figure this out. The ones who can actually afford that price range will find they are in much less house than they could have afforded if they had merely been willing to wait a few years.”
That’s exactly my point Polly. Although current buyers and lower price points are getting what appears to be a good deal, the coming collapse of higher price points will make it look like they got bent over. It’s just gonna take some time.
Polly –
Your example is illustrative of the point I was trying to make with numerous posts yesterday. Thanks for the intuitive example…
Prof,
You are welcome. Funny thing is, I think this is a feedback loop that works no matter which end collapses first. If you can fit your life in 3 bedroom 1 bath and can get one for $200k, would you really be willing to pay $400K for the 5 bedroom 3 1/2 bath? Especially if the big one has no yard and is a longer commute to work?
Houston - 3 bdrm, 2 bath, 2 car garage, 1700-2000 sqft, 20+ years but in decent to nice neighborhood (but outside of city limits) and in good condition (move in ready but maybe not perfect): +/-$100K
Hmm, isn’t this what was discussed in my “controversial” thread from yesterday?
High end sales remain in a slump because high end prices are still too high.
The turnaround in the market requires affordability, from top to bottom. “High end” folks can hold out for wishing prices longer than “low end” folks.
Yes. The high-end buyers, even at the peak, usually had a down payment from the sale of a lower-tier house. They have a cushion.
The low end has already dropped 50%+ in many locations. It’s the upper end that’s sticky, but we are starting to see the inventory build-up that preceeds the price drops.
Since the govt is so heavily involved now, it will take even more time for this market to get back to “normal” (meaning 2000 prices, or so).
Major shocker here:
Wall Street benefits from Fed and Treasury
By Henny Sender in New York
Published: August 2 2009 23:04 | Last updated: August 2 2009 23:04
On a steamy July morning in New York recently, the US Federal Reserve, in accordance with announced plans, began purchasing $3bn in government bonds maturing between February 2021 and 2026.
Prices rose in anticipation of the Fed move.
Some two hours later, the US Treasury auctioned $39bn in five-year notes.
Prices for government debt dipped on expectations of increased supply.
So goes another day in the market for US government securities. The Fed buys debt to support the markets while the Treasury auctions debt to pay for government spending.
Wall Street stands in the middle, taking its cut every time. In recent months, that cut has been sizeable.
The new world of government debt trading has been marked by the widening of spreads between bid and offer prices – the stuff of Wall Street profitability – following the demise of Lehman Brothers.
…
With the average trading volume for Treasuries having fallen to $390bn a day from $566bn in 2007, trading with the Fed itself has become a more important part of the business. Fed behaviour figures heavily in how securities are priced.
…
On a steamy July morning in New York recently, the US Federal Reserve, in accordance with announced plans, began purchasing $3bn in government bonds maturing between February 2021 and 2026.
Prices rose in anticipation of the Fed move.
Some two hours later, the US Treasury auctioned $39bn in five-year notes.
Prices for government debt dipped on expectations of increased supply.
Um…. no. These moves are announced way in advance - and just the fact that someone is buying a bunch or selling a bunch doesn’t cause significant price swings. Price swings happen due to other factors - like a weaker-than-expected demand during sales or such.
The general gist of the article is correct - that the Fed definitely affects the markets (not when treasuries are actually bought, but when the announcements are made - usually months before), and that Wall Street takes its huge cut. The latter in fact is exactly why we have the out-of-control debt and bubbles that we do.
It sure looks like cash for clunkers is working for the auto industry. Maybe, the senate will allocate new funds with tighter mpg restrictions. After all, if the money ran out that quickly, then making it harder to qualify would make sense. Nah, that would be the logical thing to do.
Logic is to our government what celibacy is to a hooker.
There was a report today about running out of oil. Right on time, oil is up past $70 today…..
It looks like a set up to me…
Third chart down on the left
- doesn’t look like “running out” to me. Looks to me like we have stockpiles that are above the entire average range, and in fact just took a jump higher last week.
IMO the oil price rise is the anticipation of inflation, not low supplies.
inflation? So we should all buy houses?
It must be that futures trader at CitiBank again, the one that is getting the $100 million pay out.
Wouldn’t that be celibacy to a john?
Which john? Lennon, or Travolta?
A hooker is doing it for money to live.
The john is doing it because he can’t be celibate or keep it at home.
A hooker is doing it because she loves me!
Ate, you are delusional most of the time, yes? ;>
desertdweller: Yes Yes Yes!!!!! P.S. No means YES!!!
That’s an insult to hookers!
I resemble that!!!!
Actually, there was a report yesterday that a bunch of democrats were proposing just that - the money was used up too quickly so they want to tighten up the standards - in this case, make the miles per gallon improvement higher or you won’t qualify - to slow down utilization.
The goal of cash for clunkers was to provide a subsidy for the auto companies to dump more clunkers.
The problem is, now they’ll build additional clunkers.
New York Times
Editorial
Troubled Banks, Huge Bonuses
Published: August 2, 2009
Remember the outrage over the stupendous bonus payments at A.I.G.? A repeat is likely to play out on Aug. 13 when Citigroup and Bank of America formally ask the government’s permission to pay a round of bonuses to their topmost executives. Saved by taxpayers from the brink of collapse, Citi and Bank of America are still dependent on the public purse to survive. The federal pay czar, Kenneth Feinberg, would be right to reject requests for big bonuses at banks feeding from the public trough.
Beyond current bonuses, there is a more important item on Mr. Feinberg’s agenda: how executive pay will be structured at the nation’s banks in the future. Mr. Feinberg must approve bonuses for the 25 best-paid executives at the seven big companies that are still dependent on the Troubled Asset Relief Program — including Citi and Bank of America. He must also approve the structure of pay for their top 100 bankers.
His patience will be tested. Andrew Cuomo, the New York attorney general, revealed that Citi paid $5.33 billion in bonuses in 2008, despite losing $27.7 billion and taking $45 billion from the TARP. Bank of America got $45 billion from the TARP and paid $3.3 billion in bonuses. In all, 738 Citi employees and 172 at Bank of America took bonuses of $1 million or more last year. The Wall Street Journal reported that Citi paid the head of its energy-trading unit $98.9 million in 2008 and could award him as much as $100 million this year.
…
I think I need a job @ Citi or BofA. I haven’t seen a bonus in years! (Don’t say it’s because I read the HBB all day!)
“His patience will be tested. Andrew Cuomo, the New York attorney general, revealed that Citi paid $5.33 billion in bonuses in 2008, despite losing $27.7 billion and taking $45 billion from the TARP.”
I know nothing about banking and I can guarantee you I could lose $27.7 billion running Citi. I must be qualified for at least a $10 million bonus!
Jon, you are hired!
Methinks the politicians (on both sides of the pond) doth protest too much over outrageous banking bonuses.
BBC News
Papers predict huge bank bonuses
Page last updated at 03:55 GMT, Monday, 3 August 2009 04:55 UK
Several newspapers report UK banks will pay will pay over £4bn in bonuses this year despite the financial slump.
Barclays and HSBC will demonstrate that it is “business as usual” by reporting large revenues, the Guardian says.
The Daily Mail believes the revelation will “enrage millions of credit-starved businesses and families” who were left with the £37bn bail-out bill.
Liberal Democrat Treasury spokesman Vince Cable tells the Daily Express that the situation is “appalling” .
…
That was the entire purpose of the banking bailout. The main campaign contributors needed to get some return on their “investment”. Bankers are happy, politicians have to fake some outrage and the taxpayer gets stuck with the bill. Business as usual.
Personally, I think this is hilarious. The mega-financial interests bankrolled both Obama and McCain; of course they expected something in return. Now the fools who had every opportunity to see who owned these candidates, but chose not to, are outraged that the bankers’ greed and hubris is so brazenly on display - and is being richly rewarded by this Administration. So predictable, and yet the cretins are staring with slack-jawed wonder. What exactly were you expecting, morons?
Oh I know all politicians are paid off, and the master puppeteer is pulling the strings. I just knew this one was not old and stuck in his ways with way to many people he owed his allegiance.
The other choices were someone who can’t talk, think, but looks good in a skirt= you guys are so gullible/suckers-sheesh. And the old man who owes to many people to much.
And we know we can’t vote on a 3rd or 4th party until we eliminate campaign financing. Just 6 dollars dot org would help. Then Sammy you can run, me too, Oly gal would be an interesting candidate.
I mean really, what is it those other guys/gals have that we don’t. In fact we are way smarter imho.
They’re putting fish into abandon swimming pools to kill the mosquitoes..
http://www.nj.com/news/index.ssf/2009/08/bergen_county_uses_thousands_o.html
Now I’m picturing the compactor scene from Star Wars, but all over the state of Florida.
“Shoot it!!!”
“Where??”
“ANYWHERE!!!!”
This is quite common in Texas. They use mosquito fish and throw them into any standing water. Mosquito fish can eat their weight in mosquito larvae everyday.
“Mmmm, mosquito larvae!”
There’s only two things that smell like fish, and one of them is fish.
College Grad Can’t Find Job, Wants $$$ Back.
She went to college to boost her chances of finding a great job once she got out of school, but now that that hasn’t happened, Trina Thompson wants her money back.
Thompson, a graduate of Monroe College, is suing her school for the $70,000 she spent on tuition because she hasn’t found solid employment since receiving her bachelor’s degree in April, according to a published report.
The business-oriented school in the Bronx didn’t do enough to help her find a job, Thompson alleges, so she wants a refund. The college says it does plenty for grads.
The 27-year-old information-technology student accuses the school’s Office of Career Advancement for not living up to its end of the deal and offering her the leads and employment advice it promised, according to The New York Post.
“They have not tried hard enough to help me,” the beleaguered Bronx resident wrote in her lawsuit, filed July 24 in Bronx Supreme Court.
Thompson’s mother is proud of her daughter for completing her college education, but acknowledges Trina is upset that all her high hopes haven’t panned out.
70k for an “IT” degree from whatchamaycallit college? Ridiculous!
I say let’s outsource colleges. Well, at least 2 years out of 4.
College is mostly just a repeat of the same information year after year, no? They change the books up to generate tons of money from that, but otherwise we probably could outsource it. The online schools I guess have the right idea, they supposedly still charge the same high tuition fees though.
Frankly, education , IMHO, should be free or really affordable to all who make the effort.
Education & hospitals-health coverage have turned into ‘for profit’ biz and discriminatory.
+1, desertdweller! But we should also start _requiring_ some degree of effort… No more graduating people from HS and college who can’t read, write, or do 5th-grade math.
I agree DD, they are also two things that have increased in price way ahead of the inflation rate (along with autos and housing).
I agree. No one should be promoted to higher grade till they pass the skills tests etc.
IT unemployment in Silicon Valley is higher now than after the dot com bomb in 2001. Time for a moratorium on the editorials complaining about a shortage of IT workers(and time for college students to stop reading them).
CS and IT enrollment at Colorado State has dropped about 90% since 2000. The kids aren’t stupid. Almost everyone knows a long term unemployed IT or CS professional. It has become common knowledge that these are dead end professions.
Try to get into a nursing program. From what I hear the RN program at the University of Northern Colorado has a waiting list that is YEARS long. Of course by the time they graduate things will have probably changed in that profession as well.
Nursing is a job Americans just don’t want to do. I think we should have a guest worker program bringing in Mexican nurses to do the hard work. Pay could start around $4.00/hour…
CS is not IT. Your average IT grad isn’t going to write a compiler, or a structural analysis program, or an AI engine. Truly brilliant CS folks continue to be in short supply. But as numbers go, this is a small slice of the pie.
I know a guy who was an IT or IS or bus systems major and he’s CIO of a big company now and doing great. He told me he really doesn’t know squat about the technical side but is in charge of all the info systems for an int’l firm. He also looks good, has a great personality & family connections too.
I have a friend that started in a RN program, there are plenty of Americans going for it.
IT is different from CS. There are bright people in both, and dumb people in both. (No degree here but I work in IT and play with circuits and electronics at home).
Why would anyone go into anything other than banking at this point. I’m going to tell my kids to take the following classes; bloated banking CEO 101, lobbying 110, and advanced political whoring 300.
Nursing is full. I know of quite a number of ex execs, pilots,flight attendants, mgmnt, and 2 contractors( who say there will be less job insecurity) that are either finishing nursing programs, PA degrees, or waiting in line to get into schools. What I hear from them is that there aren’t enough teachers to teach nursing students.
From what I see, we will have plenty of nurses in 3 yrs and more to come.
What I hear from them is that there aren’t enough teachers to teach nursing students. Duckspeak for “nursing instructors are paid peanuts”
…but acknowledges Trina is upset that all her high hopes haven’t panned out.
Entitlement disease on the part of the student, or blowhardiness on the part of the school?
Did they breathlessly promise her a “challenging career in the fast-paced world of Information Technology”, or did she just spend $70k to find out that the world already has enough Windows SysAdmins?
Interesting…
still, good experienced sys admins are worth their weight in gold.
“Experienced” being the magic word.
“good” being the other.
Friends daughter is now licensed dental assistant from one of those schools who hasn’t found a job,through them or by herself for over 6 months. Now friend is paying for her school loan. ugh.
I can’t help but thinking that the dental biz is down these days. During the boom years, a lot of dentists re-oriented their practices toward cosmetic procedures, and uh-oh, the home ATM money is gone now.
Mine has called me to schedule.
He went from a 4 person office to 2. He does most of the work now.
The advertising used to be always left to high 4 color fancy magazines is now gone to tv, otherwise folks wont see your biz. It doesn’t matter what kind of biz either. Local Bizs are shelling out for tv.
+1000000000
So if the school has to give the tuition money back, will she give her degree back?
will she give her degree back?
That’s not in the manual of selfishness. She is just looking for someone to blame for her failure in this nation of non responsibility…
How did she get into college if she was born yesterday?
Metaphysics 101, I guess…
Lawsuits = root of many problems. (No offense to the lawyers who post here.) This should be thrown out.
This is just another case of a baby not getting her way. WHAAAAAAA!!! I want MY job!!!! WHAAAAAA!!! I shouldnt have to start at the bottom!!!! WHAAAAAA!!! I deserve a job!!!!
Sorry to burst your bubble, child. NO ONE CARES….
Seems like the IT degree she got was liberal arts. I have a degree in IT management. The field is saturated with liberal arts majors, and they wonder why they cant get hired. EVERYONE has a liberal arts degree because they are easy and broad….
Try getting a science degree like math, or an actual COMPUTER SCIENCE or engineering degree….There are PLENTY of jobs out there for that…..
But she might have to work for that….
Oh yeah, how childish. Someone going to college, getting a degree in something practical, and then wanting to work for a living.
BTW, there are no jobs in math, science, or engineering either. That’s what happens when you allow all your productive capacity to be transferred to Chindexico. You end up sucking.
So true. Every time I decided to switched employers this decade it took me at least a year to find a new job, and that’s with my big bad CS degree and my portfolio of patents.
When I switched jobs 3 years ago I had to interview the candidates to replace me. We had over 200 applicants, which explains why I would seldom hear back from jobs I applied for, even when I was a 99% match for the job. I imagine that now any open position probably draws several hundred applicants.
And they say this isn’t a depression.
Time to make new things. Build new products. While the jobs scene is looking pretty horrible, there is an uprising of the “tinkerer” scene. Microcontrollers, hacker-spaces (private labs of people building stuff), MAKE magazine, etc. There is now an inventors group in Williamsburg, VA (near me) that has recently started. Corporations are outsourcing R&D, and the people left over are starting to do it at home?
VaBe, let’s keep our fingers crossed that the spirit of the times is going your way. Your tinkering may yet take the world by storm. We can only hope. Lock those tinks up with patent protection. And then hire one of those predatory patent law firms.
If this is a real groundswell, it’s those tinkerers who are going to get our country back up off its knees. Yay! Go tinkerers!
Eastcoaster: I am lawyer, and I want to thank you for saying no offense to the lawyers who post here. Also, I think this case has curious, and (possibly insurmountable) possibilities. It is a game, my man, all the schools are sucking cash out of students/gubmint, and patting them (students) on the back. Then…see ya!!
She’s only been looking 4 months…….that’s nothing nowadays.
And how is she paying the attorney??
I’ll give you three guesses, and the first two don’t count.
These ‘business oriented’ schools are brilliant. They accept anybody, are great at getting you financing, and offer neat-o ‘majors’ like criminal investigation, construction management, conflict resolution, etc. most of which have few real world jobs available, but sure sound like they’d be ‘cool’ to someone who just got canned at the burger shack.
They also trot out stats about how they place 90% of their graduates, blah, blah blah.
But times are especially tough. Even during the 80’s recession I and others had job on campus recruiters make us offers. From what I have gathered in talking with younger kids today that sort of thing only happens to a select few. Which makes sense since all the corporate entry level hiring is now happening offshore.
These are corporations whose business model is to get individuals to go absurdly into debt and take their money. Not much different than Lexus sales or home builders.
It’s what America is built on.
I am shocked, just shocked that somebody with her attitude failed to land a job after college… Reality bites.
Does anyone know the state of the housing market around Oshkosh, Wisconsin? It seems that the low end is selling, like you all have said, and the high end is just sitting. We’re supposed to move there in a few months, and are wondering what to do.
We’re supposed to move there in a few months, and are wondering what to do.
If you have to ask……………….
I knew I could count on you guys! I love this blog! I’m just not sure that this area got as bubbly, so I’m not sure what to expect. I was dead set that we were going to rent, but my husband wants to buy…..
Mikey will set you straight. I was in Wisconsin recently, near Madison. Prices were way too high. Layoffs were happening in manufacturing. Taxes were rising. Everybody seemed over leveraged. I’m sure those are all positives for housing.
Patience is key now. I’ve followed this blog for years, but now that it’s time for me to make a decision on housing, I’ve turned from objective to subjective–a little difficult. Thanks again.
Dont’ buy for 2+ yrs.
When recession 87ish got started, I bought foreclosure in nice area of my to’wn for 70k in 1994.
1994
-1987 =7 yrs and for the next few yrs the prices were still
going nowhere here in desert till 1998 ish.
Wait Pamela.
check out the prices. If they’re too high, don’t buy. My town supposedly didn’t get bubbly but it’s BS. Prices are still way over 3X median incomes and way in excess of rental values.
Definitely rent.
I’ve several relatives living 50-100 miles due west of Oshkosh - entire area is overpriced. (Meaning anything between the parallels from Stevens Point on the north to Madison on the south).
And don’t let the “but, it’s on the water!” R.E. promoters get to your husband. Lake Winnebago is too shallow to be of much value. Okay to look at, but otherwise, not much.
Good people in Wisconsin, though. That’s a plus. Ditto the summer weather. Hard to complain about 75-80 degree weather and clear, deep blue skies.
Thanks so much for your help! I really appreciate it!
Sorry kiddo with a hubby like that, I’d make sure your name is not on any mortgage papers….do you really have to move with him?
———————————————————-
but my husband wants to buy
well see he’s smart because he doesn’t want to throw their money away on rent.
/s
I’m the one who wants to move–after living overseas for 5 years, I’ll move to an igloo in Alaska–as long as it’s in the US, I really don’t care! That’s the problem, we’ve rented here for 5 years–we’re both ready to get on with things. Hurry up, bubble!
Patience grasshopper.
2+ yrs.
Pamela:
The only good reason to buy right now is….drum rooollllllll
That you intend to die in that house so price really doesn’t matter much.
Thanks for all your advice, too. It’s such a great cheering section here!
Wisconsin definitely had a bubble. Sell him on renting “to get the feel of the neighborhoods” which is a very good idea even in a normal market. Buying before moving into the town is crazy. If you’ve lived there for even 6 months, you’ve figured out where the traffic sucks, what areas have stuff you’d like to live near, and you’ve probably figured out which areas are downwind from the cow farms. Get him to agree to a six month to feel the area out, then try and sell him on the full year so you can shop during the bargain months. Watching the prices decline further might make him wait even a little longer.
(Of course, house shopping in the snow makes it harder to inspect foundations/etc)
Also, thank you for your input. I have learned so much from everyone over these years, and you’re helping a ton now!
I agree with sf.
I lived in and outside Oshkosh for a few years, years ago. I liked living in the country better than town, but you have to be able to deal with severe weather. The town itself is nothing special, although the lakeside park is pretty - but there is so much to see and do in WI and the UP.
Getting to know traffic is particularly important for Oshkosh. When I lived there, there were frequent long long trains stopping traffic in town. In mild weather, there were frequent long waits at drawbridges, so that sailboats or cabin cruisers could pass through (even if the boat itself wasn’t too tall to go under the bridge, their antennas often prevented it).
My co-workers and I couldn’t go anywhere except the deli right across from campus for lunch, because of the risk of getting stuck waiting for a train or drawbridge and being late for 1:00 class.
The nicest thing about Oshkosh is the opportunity for outdoor recreation. It would be a shame to miss before or after work bike rides or walking or cross country skiing (days are short in winter) because you didn’t locate yourself well with respect to what you like to do.
“He cautioned, though, that even as foreclosures level out in some states, they’re doing so ‘at very high levels.’”
A new permanently high plateau?
Yahoo/AP
From the above story:
“Nationally, seasonally adjusted home resales in June were up 9 percent from January. New-home sales surged 17 percent in the same period. Construction is up nearly 20 percent since the year began. And prices rose in May for the first time since June 2006.”
What the Eff?
Construction is up nearly 20 percent since the year began
I’ve taken the liberty to highly exactly what the eff is:
It’s very normal for construction to be up during the summer - it always is. Construction is indeed “up” month-over-month.
The key is though:
- It’s very much down relative to last year (e.g. 582k units in June 2009 vs. 1078k units in June 2008)
- It’s very low (peak of bubble was 2M units monthly; average is about 1M)
That’s what the eff is. “Up” is always relative.
I’ve taken the liberty to highly exactly what the eff is:
Thank you.
That’s why I keep reading this board.
If anyone asks, you can give them:
this perspective.
Quite a whopping jump of 488->582 we had from January to June (as long as you ignore the previous 40 years).
Heritage Plantation goes south
The failed development north of Crestview has everybody involved shaking their heads
http://www.nwfdailynews.com/news/crestview-19381-heritage-plantation.html
and the best quote in the article:
“Then there is Richard Carter, who just purchased at public auction the 44 acres he once owned just south of the development. Carter’s lawyer, Bill Ketchersid, said the certificate of title is supposed to be granted Aug. 10.
Carter has a long list of gripes, including that Heritage Plantation’s sewage plant was built on a site where he ran a landscaping nursery.
Carter said Friday that he plans to shut down and remove the plant when the title is transferred.
“He has destroyed my whole life with his Florsheim shoes, Docker pants attitude,” Carter said. “I am bitter. Yes, I am bitter.”
This is the only place I can come for some sanity and escape all the BS that’s in the news. After reading and listening to all the economic spin put out over the weekend, Joe 6 pack is probably believing that we’ve hit bottom and the roller coaster ride is over. I’ll give Obama credit for having some big nads for calling a bottom. IMHO we’re not anywhere near a bottom yet. I’d say it’s top of the 6th in the first game of the double header. The fall is where all hope is abandoned.
Muddyfoot: I playes AAA ball. I agree with everything you said.
playes=played
“U.S. manufacturing contraction slowest since August”
Rally on, boys and girls. We’re dying but we’re not dying as fast as we were. Oh, brother!
Wait, this IS August.
Reminds me of “Hey we’re lost, but we’re making good time!”
Come to think of it - the whole economy right now reminds me of that.
Govt. Wasting Time & Money: “Deleveraging Is a Freight Train,” Boockvar Says
Boockvar cites three “successful” programs as examples of what he calls the government’s wrongheaded approach:
Cash for clunkers: “They’ll give you $4500 but they want you to leverage up to buy the [new] car,” he says. “Paying down debt, saving more - that’s the key to putting this country on a firmer foundation.”
Loan modifications: The only reason housing markets like Arizona and California are starting to bottom is because of high foreclosures, he says. Given the high levels of “re-defaults” by people who’ve gotten loan modifications, all the government is doing is forcing people to make higher mortgage payments vs. paying rent, ultimately costing those individuals money and preventing the natural “clearing” of the market, he contends.
The Big Two: The “quick rinse” bankruptcies of GM and Chrysler have been hailed by some as a great success, but Boockvar disagrees. Effort to keep the automakers out of bankruptcy last year wasted time and money. “We are making the same mistakes as Japan,” he says.
“We need to incentivize the jobs creators — that’s the private sector,” Boockvar declares. “We want the private sector to be creating jobs, not the government throwing out money to those people they think should be providing the jobs.”
Boockvar’s solution to what ails America’s economy is simple in theory but highly complex to accomplish, and runs counter to the prevailing winds in Washington: “We have to start making things the rest of the world wants, incentivize businesses to make things here…and recalibrate so we’re less dependent on consumer spending to [where we're] saving more, investing more and making things,” he says.
…all the government is doing is forcing people to make higher mortgage payments vs. paying rent, ultimately costing those individuals money and preventing the natural “clearing” of the market, he contends.
I like combotechie’s take on that, however. Those people are voluntarily supporting the banks with their money, as opposed to the govt supporting the banks with ours.
I am all for continued ignorance on the part of GFs who willingly make their excessive, bubbly mortgage payments - better them than us.
I like combotechie’s take on that, however. Those people are voluntarily supporting the banks with their money, as opposed to the govt supporting the banks with ours.
Um… are you not familiar with the $9.9 Billion of taxpayer money going directly to the banks as “incentives” for this program?
are you not familiar with the $9.9 Billion of taxpayer money
I forgot about that…
Shiite.
We need to incentivize the jobs creators — that’s the private sector,”
Wait, Amerika still has a private sector?
Yes it does. But remember, The One still has at least 3.5 more years to fully implement his Marxist vision.
..We have to start making things the rest of the world wants..
..be happy to do that.. any suggestions what the rest of the world wants that they can’t make themselves? .. aside from weaponry..
And wouldn’t it be cheaper and more profitable to make things in China? America is dead until Americans are willing to live like the Chinese.
America is dead until Americans are willing to live like the Chinese.
Which comes first,
1. Americans willing to live like the Chinese
2. Riots
3. Protectionism
My guess is 2 and 3 but I’ve been saying that for a long time and so far nothing.
ok.. so what’s the next phase in America’s future? We appear to be tapped out as far as supporting ourselves with consumerism. Manufacturing is going, going, gone for good.. might as well face it. So, where’s the money going to come from in the next 50 years?
Time for some science fiction. I think we’ll have to colonize other countries. Yeah.. sounds stupid, but other countries offer a lot of opportunity for growth, and it’s either grow or die.
Other countries offer a whole new batch of consumers as well as a viable labor force (ours costs too much, or soon will, to be viable) as well as various natural resources, undeveloped land.. a lot of sub-American infrastructure that could be brought up to speed..
Say we owned Mexico… the 51, 52, 53 and 54th States. A world of possibilities opens up. Canada might be better since it’s got few people and lots of resources. I’d go for that, ‘cept for the crappy weather.. We should pick somewhere close to home at first.. get a feel for what colonization is all about, and then expand across the sea..
Joey, you want to be in charge of the drug lord gangs?
yikes. Or rope them into the interior and we take over the oceanside regions? Scyfy..for sure!
like everything else, the idea has it’s downside…
But is swapping all the woes and costs of illegal immigration for a few additional gangsters a good tradeoff?
Think of the silver mines.. the oil.. An entire coastline as long as California’s plus both sides of the Gulf of Calif.. Want a house on the beach in cabo? Then there’s the cheap labor.
Mexico would be an outstanding income producer for many decades..
Source?
All good stuff. Though I’m wondering what his idea of “incentivizing” businesses is.
incentivizing .. is that a real word?
That would have to mean make business more profitable.. that would mean cutting the cost of doing business here, with things like less govt regulation, less environmental concerns, less legal costs like a cap on lawsuit damages.. lower business taxes, restricting imports.. Maybe price and wage controls.. aint gonna happen, except the last one. They’ve already got a good feel for wage controls.
But i don’t see how incentivizing can jive with being “less dependent on consumer spending” unless we sell goods and services overseas, and that aint gonna happen anytime soon..
Yahoo Finance with Aaron Task (video)
http://tinyurl.com/m2vfy6
Thanks - will have to check it out later.
Seattle bank teller chases robber, loses job.
Associated Press
SEATTLE — A Seattle bank teller has lost his job because he ran down a would-be bank robber and held him until police arrived. Jim Nicholson, 30, who had worked for more than two years at a Key Bank branch near the Seattle Center, says he understands the bank’s strict policy that employees comply with robbery demands and avoid confrontations.
But he told The Seattle Times that instinct took over when a thin man in a beanie cap, dark clothing and sunglasses pushed a black backpack across the bank counter on Tuesday and demanded money.
Nicholson threw the bag to the floor, lunged toward the man and demanded to see a weapon. The man bolted for the door with Nicholson in pursuit.
He chased him several blocks before knocking him to the ground with the help of a passer-by. Nicholson then held the man until police arrived.
On Thursday, Nicholson was fired. Key Bank spokeswoman Anne Foster declined to comment on Nicholson and his actions.
Police and the FBI discourage such heroics. Bank tellers are trained to get robbers out the door quickly and are advised against possibly escalating a situation over money that’s federally insured.
Nicholson said he understands why he was fired.
“They tell us that we’re just supposed to comply, but my instincts kicked in and I did what’s best to stop the guy,” he said. “I thought if I let him go he would rob more banks and cause more problems.”
The depths we have sunk to. People are actually *punished* for heroic actions now.
(shakes head)
Is there any sane country anymore? Please let me know - I’d like to move there.
Heroic? Dumb or stupid. Putting your life on the line to protect the governments money?
Nicholson threw the bag to the floor, lunged toward the man and demanded to see a weapon.
Now THAT takes balls! Demanded to see a weapon? LOL, that’s what I am talking about!
Heroic? Dumb or stupid.
It’s only stupid to passive or submissive people. If we had alot more people like him, these idiots would think twice about robbing an establishment.
+ 1000 Stpn2me, thank you. The man should be rewarded, not fired.
If we had alot more people like him, these idiots would think twice about robbing an establishment.
Yeah, it’s all macho fun-and-games until someone gets an eye shot out.
Hopefully that “someone” is the criminal.
Oh wait, I forgot. Law-abiding citizens shouldn’t be (and in some states aren’t) allowed to carry guns.
Hopefully that “someone” is the criminal.
Yeah and if it’s not, so sorry for the poor sucker who happened to be in the bank when Super Teller decided to foil some evil-doers.
Everybody loves the youtube videos where the guy comes in to rob the banker and the banker shoots and kills him! 5 stars and lots of views.
Too bad Hank Paulson wan’t chased and tackled when he threw the backpack before congress and demanded $700billion.
Too bad Hank Paulson wan’t chased and tackled when he threw the backpack before congress and demanded $700billion.
He had a gun though.
(The U.S. armed forces are headed by his branch of government)
“Too bad Hank Paulson wan’t chased and tackled…”
Didn’t Big Hank play college football? Perhaps he outran his would-be Congressional tacklers?
Here is where the difference between right and wrong start to diminish. Enough of these, the society collapse, a new one have to restart and to reestablish the difference.
Putting your life on the line to protect the governments money?
Eh? Don’t know about you but I keep my money at the bank too. I don’t consider it the government’s money; not yet anyway.
(There’s more to it than that obviously, but the principle remains.)
Putting your life on the line to protect the governments money?
Umm..that’d be MY money. And possibly yours.
There’s no such thing as “the governments’” money.
Don’t be so pedantic you guys. Haven’t you ever seen the movie Heat? He’s referring to the fact that your deposits are federally insured. Not that I think that matters here unless the bank fails as a result of the robbery.
Well - obviously the bank isn’t going to say “I think that was customer Bob’s $10,000. Sorry Bob - that guy just took your money.”
In the end - it’s paid for by “other people” in some fashion, be it bank fees, less profits, higher taxes, inflation, whatever. It’s why theft is illegal.
(though less so every day)
Don’t be so pedantic you guys. Haven’t you ever seen the movie Heat? He’s referring to the fact that your deposits are federally insured
That was my entire point, bink. *federally* insured. ie us taxpayers. Packman’s comment is valid too, but I was referring to the point that *I’m* the one insuring the money. As are you, and all the other taxpayers on the board. It’s *our* money. Not the government’s.
Actually, I should correct myself probably. I’m not sure what % of the FDIC moneys comes from banks having to pay into the fund, and what comes from the taxpayers.
Actually, I should correct myself probably. I’m not sure what % of the FDIC moneys comes from banks having to pay into the fund, and what comes from the taxpayers.
I believe it all comes from the banks, though with the taxpayers as backstop if the FDIC runs out reserves. There’s been a big hubbub lately about the banks’ FDIC fees increasing to build up the FDIC reserves to hopefully avoid a bailout. Not sure how it’s going though - I’d be curious. The media’s been surprisingly quiet on that front lately actually.
There’s been a big hubbub lately about the banks’ FDIC fees increasing to build up the FDIC reserves to hopefully avoid a bailout.
Yeah, that’s why I corrected myself. I had a recollection of that issue.
“I thought if I let him go he would rob more banks and cause more problems.”
Maybe the guy reminded him of Bernanke?
the guy was never meant to be a bank teller.. the sooner he got fired the better for him.
“Police and the FBI discourage such heroics.”
It cuts into their own business and sense of control.
It probably relates to their insurance company, who doesn’t want covered employees chasing an armed robber for a couple thousand $. Tellers are trained to cooperate with robbers.
Bingo.
Plus, if the robber is hurt, he can probably sue the bank for the actions of its employee. I mean, I hope he would lose, but just defending the suit could cost more than the contents of one teller’s drawer.
This is one guy who will find a job somewhere. Talk about getting your name out there.
And if the robber turned and shot the teller and/or bystanders, there’d be lawsuits all over the place.
That’s part of the problem. Unless of course you were referring to the teller or bystanders suing the thief - though I doubt they’d get much from a transient.
Yeah, but the insurance company is just recognizing that lawsuits will occur, and trying not to encourage it. (It would also be nice to think the bank execs don’t want their underlings getting capped for chump change.)
Some time ago I got interested in the dye packs banks use to thwart thieves. I was thinking they might be started by a radio transmission at the door. If this was the case then a box could be built to start the dye packs sitting in the teller doors by transmitting the radio signal, for the lols. But unfortunately (for the prank) they are still mechanical or some such. Someone else built a box that locks up the wheels on anti-theft shopping carts (while still in the store). We don’t have those carts in my area though.
The teller will probably be on letterman, leno, conan, other shows shortly. And he will be working at a much better job.
Passengers were trained to cooperate with 911 hijackers.
Passengers were trained to cooperate with 911 hijackers.
What’s your point? Are you saying that tellers should try to disrupt all robbery attempts on the possibility that the money will be used to kill several thousand people?
Seems a little far-fetched.
The criminal might just continue on to the next criminal act and other criminals are encouraged by the success.
More analogous would be if, at the conclusion of a successful hijacking in which no one was hurt, the hijackers were walking away across the Cuban runway and a stewardess ran off the plane and tried to detain them. Heroic but misguided.
You leave the criminal with the choice between doing right and wrong. The Cuban could have crashed in to a Miami high rise on the way instead no way for the passengers to know looking out the side windows. Far more people are killed by people with criminal records than terrorists in this country. How many people were killed by terrorists here last year, or the year before that?
“…far more people are killed by people with criminal records than terrorists in this country.”
So, following your logic, we should just execute all criminals, even the petty? After all, if we let them live, they could turn out to be worse than the 911 hijackers. (Incidentally, did any of the 911 hijackers have criminal records?)
Roughly 15,000 people are murdered in the US every year. How many are killed by career criminals, could it be north of the 3,xxx killed on 911, each and every year? People in this country misplace their fear based on what they are fed by the MSM.
Over 30,000 people a year in the US are killed in auto wrecks, many caused by otherwise petty traffic violations. Hey, but I hear drinking is fun! I know speeding is fun! I wouldn’t know speeding is fun if it carried the death penalty. You couldn’t force me to speed. I know this is on the extreme side and not practical.
So its ok for the banks to steal trillions of tax dollars but not ok for a robber to steal a few bucks back?
Not to worry. You can still get yourself into trouble (via too much overhead) and get a bailout:
http://www.azstarnet.com/sn/fromcomments/303353.php
The way you steal is apparently far more important than how much. In fact, it appears that the more you steal, the less the risk that you get in trouble?
it appears that the more you steal, the less the risk that you get in trouble?
As a kid, I had a high school social science teacher tell me something very similar.
He said, “If you’re going to steal, don’t steal anything less than a million dollars. Anything less is not worth it”
“Anything less is not worth it”
Not only that, it appears the risks of getting caught and punished go down considerably with each additional digit added to the amount stolen.
As a kid, I had a high school social science teacher tell me something very similar.
He said, “If you’re going to steal, don’t steal anything less than a million dollars. Anything less is not worth it”
Are are lot of your ex-classmates GS employees now?
Given that the guy was a transient - I doubt he had many tax dollars stolen from him.
Well, how’s this for a rude awakening. I get in to work today and see the pop ups from the local MLS… and the house my daughter goes to for daycare is a ‘new listing.’
Now I have to find new daycare?
This could be an interesting thread…
BTW, what is the approximate break-even gross income required to make it worthwhile for the second spouse to go to work and pay for child care, as opposed to staying home and taking care of the kid?
How much more income is required to reach the break-even for each additional kid after the first?
Of course there’s no such calculus if you’re a single parent.
According to Reader’s Digest, the break even point is around $30,000 a year.
readersdigest.ca/money/cms/xcms/can-you-afford-to-be-a-stay-at-home-parent-_108_a.html
You’ve got to be really careful with those calculators. They often forget to include all the items to consider such as:
1) the person who stays home because they make a lot less money may have had access to better health insurance;
2) the person who stays home can’t put money into tax advantaged retirement, flexible spending, etc. accounts;
3) the person who stays home will lose opportunities to advance in his or her career which will result in a lower salary at re-entry which may last for the rest of the career or may result in not being able to re-enter work force at all;
etc.
There are savings beyond just the child care such as business clothes and dry cleaning if applicable, eating out, etc.
My wife and I make virtually comparable amounts. She makes a little bit more, in fact. Staying home is a 50% haircut in income. We don’t need a calculator for that.
There are savings beyond just the child care such as business clothes and dry cleaning if applicable, eating out, etc.
Very true — my savings on transit costs, eating lunch downtown, dry cleaning, etc. are considerable. Coupled with the savings in child care costs, it’s more than a little hill of beans.
“BTW, what is the approximate break-even gross income required to make it worthwhile for the second spouse to go to work and pay for child care, as opposed to staying home and taking care of the kid?”
It depends on the area. We used to pay $500/month for excellent full time daycare in Virginia. I worked part time and still came out ahead. Its over $1000/month for full-time care here in our corner of IL.
We’re blowing about that much, too. There were some cheaper places and some more expensive ones, too. We went with the one that many other people we knew recommended.
Back in 1995 in Newton, MA the nearest day care was asking $300/wk for an infant. The child was however fed organic babyfood.
Welcome to the circus, SFBB.
My child’s inadequate, bubble-related daycare conundrums resulted in me switching jobs so I can stay home. That was one of my difficult bubble-sit months.
Just remind yourself, “I didn’t buy in 2005.”
Wow, that was almost one year ago. Time is flying!
It’s crazy how fast they grow up. Our kiddie is almost 10 months and trying like crazy to walk. She learned to crawl a whole week ago, but apparently has no interest in staying on the floor.
Our critters are about the same age — our lad is about 9 and a half months old and wreaking havoc with his new mobility.
I have been putting off baby proofing because I’m lazy. Looks like I should have done it while I had the chance!
I have 4 more weekly daycare payments. 5 years and approximately $50,000 later, I’m finally done. Now it’s $250/month for after care during the school year and then summer camp fees.
Congrats on moving to a slightly less expensive stage…
So does anyone here want to speculate on what is going to bring about a recovery (whatever that is)? It used to be that the big manufacturers would rev up to rebuild inventory, but that is a tiny part of the economy now. Over-leveraging, building houses, technology & massive federal deficits has gotten us through the last couple of downturns. Besides the deficits, I don’t see any of the others making a big dent. Any ideas? Or are we just looking at the current situation as the “new normal”, meaning we are living the full recovery?
If I had to guess about the drivers of the recovery, i’d put the following as job creation drivers in the next 5-10 years:
I’m going to align this with what Mr Prez wants, not whether I think they are the most cost/benefit efficient or not.
1). Gov’t Sponsored upgrade of the back-haul telecom networks, resulting in increased bandwidth for businesses. Increased bandwidth will drive crazy new technologies.
This is essentially a construction project.
2) Energy-efficient and networked-intelligent cars. This is being spearheaded overseas, but Ford has been pretty forward thinking as well. This goes hand-in-hand with back haul telecom upgrades.
3) ‘improved medical record-keeping’ and some degree of insurance management.
4) Electrical system back-haul improvements. To route electricity more efficiently. This is also essentially a construction project.
5) After 4, then will come energy creation projects, via solar and wind. The improvements in solar are starting to rapidly increase with each iteration of technology. 5 years from now, solar panels will actually be useful.
6) new retail construction in suburbs - the tigher, mixed-use ‘urban look’ will increase the cost, but also value in suburban construction. Say goodbye to easy parking and endless parking lots, but hello to outdoor, somewhat more walkable retail.
What will not drive the future economy:
social networking
ethanol
luxury goods~yachts will fall out of favor
luxury retreats & spas
shopping and ease of distribution ~ ie Amazon will not be the wave of the future.
Sports & arenas will take a hit, both college and pro.
Strange…… I am seeing lots of job ads quite a few paid jobs for this type of work. Maybe just a fad?
Or will all companies have to be linked in with twitter face book myspace and all the others to get their message or special offers out, because nobody watches tv anymore?
——————————————————————–
What will not drive the future economy:
social networking
THIS is what will get us out of the depression real fast, when you can spend say $10K on panels that will take you off the grid for 9-10 months a year…..just need the grid for the hottest and coldest days.
Multiply that by 50-100 million homes, and …..jobs jobs jobs
Let alone solar cars in the sunny desert and CA regions…
——————————————
5) After 4, then will come energy creation projects, via solar and wind. The improvements in solar are starting to rapidly increase with each iteration of technology. 5 years from now, solar panels will actually be useful.
I agree with you on social networking not driving the future economy. Can’t help thinking that a lot of social networkers are like the salesmen on the car lot. They’re too busy talking to each other while the customers are coming in, looking at various cars, then leaving.
“So does anyone here want to speculate on what is going to bring about a recovery (whatever that is)?”
Lower dollar?
Futures Movers
Aug 3, 2009, 2:11 p.m. EST
Crude oil tops $72 as dollar tumbles, U.S. stocks rally
Natural-gas futures jump 10% as commodities rally across the board
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) — Oil soared above $72 a barrel on Monday to its highest level since early June after upbeat data on global manufacturing activity spurred a rush into commodities, stocks and other assets seen as benefiting the most from a worldwide economic recovery.
Natural-gas futures rallied 10%, copper rallied 4.4% and ICE raw sugar futures soared to their highest level in more than three years. The Reuters/Jefferies CRB Index, a benchmark that tracks the prices of major commodities, rose 3.6% to 266.1 points.
Further supporting commodities, U.S. stocks rallied after posting the best July in 12 years. And the U.S. dollar hit its lowest level of the year as investors bought currencies seen holding more leverage to global growth. Dollar weakness tends to boost dollar-denominated commodities because it makes them cheaper for holders of other currencies.
“You’re seeing a tremendous amount of money flow into the oil market tied to dollar weakness and equities strength,” said Tariq Zahir, managing member at Tyche Capital Advisors.
“It’s a bit of a bubble going on here. We do feel that the rally will be relatively short-lived. The fundamentals are very bearish,” Zahir said.
Bye bye $ - we hardly knew ye.
The oil price spike in the midst of a glut speaks volumes about the perception of the US $.
Heaven help us if we actually do end up with an oil shortage. It’ll go up to $150 *without* speculation, and quite possibly stay there permanently this time.
“Heaven help us if we actually do end up with an oil shortage.”
Cash for clunkers suggests we won’t…
Eh? Not making the connection.
A “clunker” is defined as a car which gets low gas mileage (mine doesn’t qualify at 30 mpg). Replacing clunkers with high mileage vehicles will presumably increase average fleet mpg, reducing fuel demand. (At least that is my understanding of the plan — not sure it is foolproof, though…)
“Heaven help us if we actually do end up with an oil shortage.”
Cash for clunkers suggests we won’t…
Except non-U.S. demand is growing relative to U.S. demand. CfC will have little impact on global demand.
Reducing U.S. oil consumption is useful for a variety of reasons, but it won’t do much to reduce eventual oil supply shortages.
Collapse the $$$ so that we are cheaper labor than the Chinese? Won’t the Chinese just keeping pegging to an ever lower dollar? I’m not sure we will win that race to the bottom.
“So does anyone here want to speculate on what is going to bring about a recovery (whatever that is)? ”
A failure to enact of all current government proposals (health care, Cap & Tax, etc.) would be a huge stimulus.
AP ENTERPRISE: Biggest revenue drop since 1932
Plummeting tax revenues starve government just as Obama embarks on big plans
Stephen Ohlemacher, Associated Press Writer
WASHINGTON (AP) — The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.
The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.
Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.
The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.
“Our tax system is already inadequate to support the promises our government has made,” said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.
“This just adds to the problem.”
While much of Washington is focused on how to pay for new programs such as overhauling health care — at a cost of $1 trillion over the next decade — existing programs are feeling the pinch, too.
Social Security is in danger of running out of money earlier than the government projected just a few month ago. Highway, mass transit and airport projects are at risk because fuel and industry taxes are declining.
The national debt already exceeds $11 trillion. And bills just completed by the House would boost domestic agencies’ spending by 11 percent in 2010 and military spending by 4 percent.
For this report, the AP analyzed annual tax receipts dating back to the inception of the federal income tax in 1913. Tax receipts for the 2009 budget year were available through June. They were compared to the same period last year. The budget year runs from October to September, meaning there will be three more months of receipts this year.
Social Security tax receipts are down less than a percentage point from last year, but in May the government had been projecting a slight increase. At the time, the government’s best estimate was that Social Security would start to pay out more money than it receives in taxes in 2016, and that the fund would be depleted in 2037 unless changes are enacted.
Some experts think the sour economy has made those numbers outdated.
“You could easily move that number up three or four years, then you’re talking about 2013, and that’s not very far off,” said Kent Smetters, associate professor of insurance and risk management at the University of Pennsylvania.
The government’s projections included best- and worst-case scenarios. Under the worst, Social Security would start to pay out more money than it received in taxes in 2013, and the fund would be depleted in 2029.
The fund’s trustees are still confident the solvency dates are within the range of the worst-case scenario, said Jason Fichtner, the Social Security Administration’s acting deputy commissioner.
“We’re not outside our boundaries yet,” Fichtner said. “As the recovery comes, we’ll see how that plays out.”
The recession’s toll on Social Security makes it even more urgent for Congress to address the fund’s long-term solvency, said Sen. Herb Kohl, D-Wis., chairman of the Senate Aging Committee.
“Over the past year, millions of older Americans have watched their retirement savings crumble, making the guaranteed income of Social Security more important than ever,” Kohl said.
President Barack Obama has said he wants to tackle Social Security next year, after he clears an already crowded agenda that includes overhauling health care, addressing climate change and imposing new regulations on financial companies.
“Over the past year, millions of older Americans have watched their retirement savings crumble, making the guaranteed income of Social Security more important than ever,” Kohl said.
Read:
“Now that housing’s done, we’re working frantically to find another asset with which we can cause a price bubble that isn’t subject to inflation measurements to which Social Security is tied. We’ll get back to you.”
So, ben is just passing yuma, and hopes to be there before PB leaves. Me too.
I passed a yuma once. That was the most painful experience of my life. Those little things burn like heck when they come out.
I passed a yuma once.
You took that joke right out of my fingers.
Must have been the good yuma man…..
Anyone have an ETA on the get-together tonight?
An earthquake measuring 6.9 struck Monday in Mexico but people in San Diego’s downtown high rises felt the shaking.
Whoo hoo a rock and roll HBB party
I didn’t feel a darn thing which is really weird because I’m so sensitive to earthquakes.
I bet they thought it was the extra burrito they had last night.
Ben’s ETA at the restaurant is sometime between 4 and 5 as far as I know. I hope to be there at 4:45.
Anyone going to be wearing a buttonaire or something like that so I know who the HBB crowd is?
i’m bringing nametags and spicy nuts. I usually dress in bright colors and I’ll be sporting a camera!
wear gold blazers
Can’t miss ‘em
I’ll be sporting my Yellowstone T-shirt. Looking forward to meeting you all.
wear gold blazers
Excellent idea!
weather report for carlsbad area today: 87 dgrees!
wilting weather for sd.
How many TARP bonuses add up to $33 million?
MarketWatch dot com
BANKs
Merrill ends in fine
Bank of America, led by Ken Lewis (left), pays $33 million penalty to settle charges it misled shareholders about bonuses paid to Merrill Lynch execs.
Hoo boy THAT’S going to sting!
Stocks are the place to be for the moment for anyone with extra money lying around to invest (e.g., TARP bonus recipients). I always find predictions that a big runup in stocks will be followed by a correction to be very puzzling; if everyone knows there will be a correction, why are they plowing in to the market — to lose their shirts later on?
Wall Street stocks rally sharply
By Michael Mackenzie in New York
Published: August 3 2009 15:44 | Last updated: August 3 2009 21:39
US equities rallied sharply on Monday and the S&P 500 closed above the 1,000-point threshold for the first time since November.
Improving economic data and a global rally in commodity prices and banking shares boosted sentiment and extended the market’s strong run from July into the new month.
“An overshoot to 1,100 on the S&P 500 index is very plausible, with the possibility of a correction later on in the year,” said Tobias Levkovich, chief US equity strategist at Citi.
“if everyone knows there will be a correction, why are they plowing in to the market — to lose their shirts later on?”
Everyone knows their can’t be a correction until I get back in.
N.Boortz 8-3-09
Barack Obama and the looters are making all sorts of plans to raise taxes on the producers. If you wish to stay in this country there may not be all that much you can do to escape higher federal income taxes. You can, however, beat some of the rap by moving to a state that has no state income tax. Perhaps that ought to be your first move. If you’re out of work right now your chances of finding new and meaningful employment might be better if you were to move to a state where economic improvement will come sooner and stronger. States without a state income tax will be leading the economic recovery, so perhaps one of those states should be in your plans.
So .. what states are those? Here’s your list: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Note also that Tennessee and New Hampshire only tax interest and dividends, not wages and salaries. If the looters realize their tax dreams the marginal rate for high-achievers in Georgia will be over 50%. That ought to create a bit of southbound traffic on I-75.
But wait (as they say), there’s more! States with lower taxes will have the edge when it comes to economic recovery, but there’s another element to consider .. unions. States with right-to-work laws, where you can’t be forced to join a union in order to work, will certainly have an edge over forced-union states when the recovery gains steam. Of the states with no state income tax, Alaska, Washington and New Hampshire are forced-unionism states. They’ll be lagging behind when it comes to economic recovery. So … if moving is an option for you, consider Florida, Nevada, South Dakota, Texas, Tennessee and Wyoming.
Now .. if the looters make things so bad that you might have to consider leaving the country, you might want to look at the 2009 Index of Economic Freedom from The Heritage Foundation.There are five countries/city-states that have a higher index of economic freedom than the United States. With the Democrats passing laws restricting executive pay and the government takeover of certain businesses, I’m sure that the U.S. is moving on down the list. At any rate; here, in the order of their rating for economic liberty, are the Top Five: Hong Kong, Singapore, Australia, Ireland and New Zealand. Delta is ready when you are — but you may get bumped.
Thanks for the info mate.
G’day.
You can be forced to join a union in Texas. The laws are not as clear cut as you make out.
Doesn’t Singapore cane people for chewing gum? And Hong Kong, they’re owned by China, right? Take those two off my ‘extra freedom’ list.
What? Oh, it’s ‘economic freedom’, I see. Economic freedom + martial law = fascism? Once again, not high on my ‘move to’ list.
http://federaltimes.com/index.php?S=4214918
USPS may close 1,000 post offices
Gee and I thought the 700 number I heard last week sounded nasty.
..Most experts agree the agency needs to cut its labor costs, which account for roughly 80 percent of its annual expenses.
Well damn! A few hundred more astute insights like that one and I might be convinced the govt is capable of running a business..
I can think of a few Tucson-area post offices that ought to be shut down.
Kraaap The one here in Sunnyside is always crowded sometimes out the front door…they just dont have enough tellers so you take a big risk of a ticket with the 1 hour parking meter outsdie
And the one in Long island city used to be open till 7pm last year great for mailing ebay packages after work…but no more closes at 5
And get this they are open till 4 pm on Saturday but the last truck leaves at 12 noon…no kidding a package or letter will sit over the weekend or until Tuesday (holiday weekend) before it gets shipped out even priority mail……brilliant
And even wackier an usps employee takes the remaining express mail and drops it off at the processing center on her way home. Talk about cutting expenses
The Postal Service also needs to close some of its mail processing facilities, many of which have excess capacity. That’s particularly a problem at facilities that handle first-class mail; those facilities, on average, are operating at 50 percent of their capacity.
The Postal Service has been able to close only one of its 400 processing facilities so far..
I walked into a local PO for something odd, and needed to talk to a supervisor… and the guy was so proud of a new machine just installed that, out of the blue, he offered to take me back and show it. I declined the invite.
It was a machine that read hand scrawled zip codes off letters and then sorted them accordingly, without human interaction as fast as you can feed it.
I’d feel good about betting that not a single man-hour of labor cost was saved by the installation..
Funding Dries Up in ‘Cash for Incumbents’ Program
Scott Ott - ScrappleFace
(2009-07-31) — A pilot program to replace older, inefficient, high carbon-emission Congressmen with greener models has already run out of funding, according to a bipartisan statement by Congressional leaders.
“It’s all gone,” said Senate Majority Leader Harry Reid, D-NV, “America will just have to keep what I like to call her ‘classic’ members of Congress.”
The so-called ‘Cash for Incumbents’ program provided up to $4,500,000 for each politician who voters replaced with a modern public servant that burns less IRS revenue, and emits fewer vitriolic toxins into the atmosphere. The measure contained a provision requiring voters to ‘junk’ the old politician, to ensure he doesn’t return to Capitol Hill as a lobbyist.
House Minority Leader John Boehner, R-OH, explained that the funding disappeared overnight.
“It didn’t get spent. It just vanished,” said Rep. Boehner. “I’ve heard reports that it was transferred to the Congressional Franking Commission to be used by members to send important legislative information to their constituents…but that’s just a rumor.”
G.M. Plans Thousands of Layoffs. August 3, 2009
DETROIT — General Motors expects to lay off thousands of factory workers after the number who voluntarily quit through a recent buyout and early retirement program fell short of the carmaker’s target.
G.M. said Monday that about 6,000 hourly workers had left as of Saturday. That means the company still has about 48,000 hourly workers, which is 7,500 more than its year-end goal of 40,500.
A G.M. spokeswoman, Sherrie Childers Arb, said the company planned to meet with the United Automobile Workers union to determine how it could meet its goal by Dec. 31, but she said the company was not considering another buyout offer.
“Some people will go into a layoff situation,” Ms. Childers Arb said. “Others will be offered positions at other G.M. facilities. But we probably would not be able to find positions for all of those workers.”
Workers who agreed to leave their job received cash payments of $20,000 to $115,000, with the largest amount going to those who gave up retirement benefits other than their pensions. Departing workers also received a voucher worth $25,000 toward a new-vehicle purchase.
The cuts are part of the turnaround plan that G.M. developed under the oversight of the Obama administration. G.M. has borrowed $50 billion from the government to help it restructure and spent a little more than a month operating under bankruptcy protection.
The turnaround plan also calls for G.M. to close a dozen more plants and to cut thousands of salaried jobs. It is eliminating 35 percent of its executive ranks and recently reassigned a number of executives to new roles.
Boohoo. unable to attend Carlsbad Beer Summit.
Will have my own beer here and read the blog.
Have fun kids!
“On May 20, 2009, Rep. Gary Miller introduced H.R. 2529, the Neighborhood Preservation Act. The bill proposes to address the persistence of foreclosures and unsold housing inventories. Specifically, the bill would temporarily permit a bank or mortgage servicer to enter into a long-term lease for properties acquired through foreclosure with an individual or the prior homeowner of a foreclosed property. Under the bill, the prior homeowner would have the option to lease the property with the choice to buy back the home.
The bill would also enable the lender to sell the property within five years into a more stable market, and thereby potentially recover all or part of the loss that would otherwise have occurred with an immediate sale in a saturated market.”
http://www.gop.gov/bill/111/1/hr2529
Has anyone else seen this???????
I F*@#ing give up! When are we ever going to catch a break!
The credit bubble allowed people to borrow more, thus driving up house prices.
The federal, state and local governments are doing all they can to keep housing prices high.
Eventually though, with the removal of the credit bubble, house prices will inevitably come back in line with incomes. I don’t think it’s going to be a quick process though, with the government taking money from you, your children and your parents, and funnelling them to banks and the NAR.
My recommendations are, if you really want to live in a house, find one to rent. Not a crapshack with a ridiculously high rent obviously designed to cover a bloated mortgage, but a reasonably priced place. Rents cannot stray too far out of line with incomes as it is difficult to finance rent with credit. Or find a nicer apartment. I recently did that. I found a place that was 20% bigger, and interestingly, I’m saving 20% on rent. The crime rate is comparable to what I have currently.
I think people need to figure out how to optimize their day to day existence, and not wait for some far off event out of their control to one day bring them happiness. I do certainly want to buy eventually, but I sure as heck will not (willingly) finance some infestor’s retirement with my actual cash. Now, of course, the financial industry and NAR have a tremendous amount of pull in DC and will likely cause inflation (Buffet believes this), and they will do their best to take my savings that way. But… I will then have to find ways to protect that value. But, that’s another post.
Where’s my post on H R 2529?
Testing???
Hmmmmmmmm….
smacnyc.com/home.html
Looks delicious.
Sheila Bair grew a pair and Timmay threw a hissy. Stay the course, Sheila — don’t let the unelected central bankers overthrow our government!
For those of you who are not keeping score, Stammerin’ Hank’s replacement at Treasury is the former president of the New York Fed and a long-time Plunge Protection Team Member. He’s also a FB, which creates a rather interesting appearance of a conflict of interest for someone who has undue potential influence over the future course of real estate prices.
BTW, I personal view it inappropriate for a sitting Treasury Secretary to rant and curse at his colleagues. JMHO…
* The Wall Street Journal
* AUGUST 4, 2009
Geithner Vents at Regulators as Overhaul Stumbles
By DAMIAN PALETTA and DEBORAH SOLOMON
WASHINGTON — Treasury Secretary Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration’s faltering plan to overhaul U.S. financial regulation, according to people familiar with the meeting.
The proposed regulatory revamp is one of President Barack Obama’s top domestic priorities. But since it was unveiled in June, the plan has been criticized by the financial-services industry, as well as by financial regulators wary of encroachment on their turf.
Mr. Geithner told the regulators Friday that “enough is enough,” said one person familiar with the meeting. Mr. Geithner said regulators had been given a chance to air their concerns, but that it was time to stop, this person said.
Among those gathered in the Treasury conference room were Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro and Federal Deposit Insurance Corp. Chairman Sheila Bair.
Friday’s roughly hourlong meeting was described as unusual, not only because of Mr. Geithner’s repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House. Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.
Mr. Geithner, without singling out officials, raised concerns about regulators who questioned the wisdom of giving the Federal Reserve more power to oversee the financial system. Ms. Schapiro and Ms. Bair, among others, have argued that more authority should be shared among a council of regulators.
“You are talking about tremendous regulatory power being invested in whatever this entity is going to be,” Ms. Bair told the Senate Banking Committee last month. “And I think, in terms of checks and balances, it’s also helpful to have multiple views being expressed and coming to a consensus.”
…
The Business Insider
Geithner Goes Ape On Bair, Bernanke, And Schapiro Over Regulatory Reform
Moe Tkacik|Aug. 3, 2009, 10:22 PM
We’ve been watching various regulators bitch about Tim Geithner’s proposed regulatory structure overhaul with some amusement (what else do Sheila Bair and John Dugan agree about?)
The Treasury Secretary, on the other hand, is not amused. According to the WSJ, he blasted the feuding FDIC chairman and Comptroller of the Currency, along with Ben Bernanke, SEC chairman Mary Schapiro, CFTC chairman Gary Gensler and others, at a briefing Friday:
Friday’s roughly hourlong meeting was described as unusual, not only because of Mr. Geithner’s repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House. Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.
The various regulators, of course, are just looking out for their own agencies and people. And it was Congress who asked for input from the regulators into Obama’s regulatory overhaul plan in the first place.
…
I keep reading media pronouncements that OBwan will not tax the middle class. Somebody is definitely lying here, and I guess time will tell who that somebody is. (I personally don’t much care — I am in the middle class, but a fairly adept tax avoider at this stage in life (avoider, not evader!))…
Wall Street Journal
* REVIEW & OUTLOOK
* AUGUST 3, 2009, 8:08 P.M. ET
Teeing Up the Middle Class
Joe the Plumber’s tax vindication is nigh.
Few of President Obama’s 2008 campaign pledges were more definitive than his vow that anyone making less than $250,000 a year “will not see their taxes increase by a single dime” if he was elected. And he was right, very strictly speaking: It’s going to be many, many, many billions of dimes.
Asked about raising taxes on the middle class on Sunday on CBS’s “Face the Nation,” White House economist Larry Summers wouldn’t repeat Mr. Obama’s pre-election promise. “It is never a good idea to absolutely rule things out no matter what,” Mr. Summers said—except, apparently, when his boss is running for office. Meanwhile, on ABC’s “This Week,” Treasury Secretary Timothy Geithner also slid around Mr. Obama’s vow and said, “We have to bring these deficits down very dramatically. And that’s going to require some very hard choices.”
These aren’t even nondenial denials. The Obama advisers are laying the groundwork for taxing the middle class while claiming the deficit made them do it.
…
Sam Stein | HuffPost Reporting
Nassim Taleb Rips Summers, Geithner, Bernanke (VIDEO)
First Posted: 08- 3-09 11:10 AM | Updated: 08- 3-09 01:58 PM
One of earliest and most outspoken experts who warned of disaster before the nation plunged into an economic crisis called out the president Monday for turning to advisers who either missed, fundamentally misunderstood, or contributed to the financial industry meltdown.
Nassim Taleb, author of the book “The Black Swan,” took some highly personalized swipes at what he deemed “the triplets” — Barack Obama’s chief economic adviser, Larry Summers, Treasury Secretary Timothy Geithner and Fed Chairman Ben Bernake — during an appearance on MSNBC’s “Morning Meeting with Dylan Ratigan.”
“Let’s look at them,” said Taleb. “They don’t seem to understand risk. They have their models and were blinded by their models. The first person not to understand risk is Larry Summers … [L]ook at Harvard’s finances, all right? He is going to do to us what he did to Harvard?”
“Second one, look at Geithner,” he added. “In the rare instance in which you have to look at someone’s behavior, the gentleman’s house, he couldn’t understand the risk of the real estate market? That the house could drop in value? Look at him. He is stuck with his house. Look at the numbers. You can see a lot of jokes on the way with someone with these mortgages.”
“The third person is Bernanke,” Taleb said. “We’re giving more power to the Fed, who got us here?”
Ouch. For the record, Harvard’s endowment dropped more than 20 percent last summer after risky investments — ignored by Summers — turned up lame. Geithner, meanwhile, had difficulty selling his New York home after moving to D.C. because of a lousy housing market. He was ultimately forced to rent his house at a rate that was short of the monthly mortgage payments on his two loans.
…
While Americans get their underwear in knots over the prospect of middle-class tax increases, handouts of billions of dollars to the financial sector through stealthy moves like summarily providing previously-nonexistent free guarantees of company debt remain largely unnoticed.
Got bonuses?
Wall Street Journal
* BUSINESS
* JULY 28, 2009
Banks Profit From U.S. Guarantee
Lenders’ Earnings Reap the Benefit of FDIC Backing on Company Debt
By MARK GONGLOFF
It is the gift that keeps on giving.
The government’s guarantee since November on new debt issued by financial firms such as Citigroup Inc. and General Electric Co. will save those companies about $24 billion in borrowing costs during the next three years, according to an analysis by The Wall Street Journal.
In the second quarter alone, the eight largest issuers of corporate debt under the Federal Deposit Insurance Corp.’s Term Liquidity Guarantee Program cut their interest costs by about $2.2 billion, increasing their profits and delivering an extra jolt to the stock market’s two-week rally.
Citigroup saved nearly $600 million in the latest quarter on the $44.6 billion in medium-term FDIC-backed debt it has issued, or about 14% of its overall profit of $4.28 billion. Goldman Sachs Group Inc., which posted record quarterly profit of $3.44 billion, is cutting financing costs by roughly $205.5 million every three months by selling corporate debt through the government-assistance program instead of on its own.
“You can’t ignore the TLGP when you look at bank earnings,” says Daniel Alpert, managing director at investment bank Westwood Capital LLC. “It has reduced their cost of funding and ensured that the market has the kind of liquidity required so that trading revenues have been so high.”
…
The $33 million SEC fine would have been far more impressive if it were much larger than 1/100th of Merrill’s $3,600 million dollars in bonus payments for 2008. And it pales in comparison beside Merrill’s reported $27,600 million loss for 2008. This fine might well qualify as the “lightest wrist slap, ever” by comparison to the magnitudes of monies involved.
By the way, is it even legal for companies to pay billions in bonuses to top managers in the same year they lost tens of billions of dollars? I would think this would be a breach of fiduciary duty to the shareholders, but then I am not a securities law expert. (Fortunately, I am also not a BoA shareholder
. But I am quite sure that A. P. Giannini has tossed and turned in his grave throughout this episode in corporate history.)
Wall Street Journal
* AUGUST 4, 2009
BofA Hit by Fine Over Merrill
Bank Pays SEC $33 Million in Bonus Dispute; Sallie Krawcheck Hired in Shake-Up
BY DAN FITZPATRICK AND KARA SCANNELL
Bank of America Corp. agreed to pay $33 million to settle a civil lawsuit alleging that it misled shareholders about billions of dollars in bonuses promised to Merrill Lynch & Co. employees when it bought the troubled firm at the height of the financial crisis last year.
…
On Dec. 5, shareholders of both firms approved the sale. Three days later, Merrill’s compensation committee approved $3.6 billion in bonuses. Merrill employees received their bonuses on Dec. 31, one day before the deal closed. Merrill reported a net loss of $27.6 billion for 2008.
…
Has anyone done a full accounting yet of how many billions of dollars in banking bonuses at banks with multi-billion dollar losses were funded out of the TARP last year?
Aug 3, 2009, 10:54 a.m. EST
Geithner: We do not plan to ask for more bank bailout money
A financial collapse is “not going to happen” Geithner said
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — Treasury Secretary Timothy Geithner said the Obama administration doesn’t plan to ask Congress for more funds to expand an existing $700 billion bank bailout program it launched in October.
“We do not plan to ask for more money and I think it’s quite unlikely that we do,” Geithner said on ABC’s This Week program on Sunday. “People need to understand that we will do what is necessary to make sure that viable businesses, families that have been very conservative and prudent, have access to credit at reasonable terms.”
…
“Most economists” are reportedly looking for a bottoming of residential investment as a sign the economy will soon start growing again. Is this belief whatsoever reasonable, given the extent to which the residential construction industry appears to have already built out the housing market’s needs for the next few decades?
Economic Report
Aug 4, 2009, 9:02 a.m. EST
Personal incomes fall 1.3% on stimulus timing
Real consumer spending falls 0.1%, third drop in past four months
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - Personal incomes of U.S. residents fell 1.3% in June, reversing the 1.3% gain in May that was due to a one-time stimulus payment to Social Security recipients, the Commerce Department reported Tuesday.
Excluding the one-time payment in May, incomes fell 0.1% in June after a decline of less than 0.1% in May. Incomes are down this year despite the continuing prop to incomes from the stimulus, including tax credits and expanded unemployment benefits.
The 1.3% decline was in line with estimates from economists surveyed by MarketWatch. See Economic Calendar.
The monthly report released Tuesday expands on information released last Friday with the benchmark revision to gross domestic product. The revisions show that incomes, spending and savings in 2007 and 2008 were all modestly higher than previously reported. Incomes and spending in the first half of 2009 were revised slightly lower.
The recession has been deeper than previously reported. GDP is down 3.9% from its peak, the largest economic contraction in the post-World War II era.
Most economists are forecasting an increase in GDP in the current quarter, largely because of a powerful swing in inventories and the possibility that residential investment has finally bottomed after falling for 14 straight quarters.
For households, however, the monthly report shows few signs of economic growth. The recession may linger even as GDP rises.
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Who pays for this program? I would assume renters and responsible home owners who did not buy more house than they can afford pay for it?
market pulse
Aug 4, 2009, 8:57 a.m. EST
Treasury: Home modification program on strong pace
By Ronald D. Orol
WASHINGTON (MarketWatch) - A government loan refinancing program is on pace to offer help to three to four million homeowners over the next three years, the Treasury Department reported on Tuesday. U.S. loan servicers have begun modifying more than 230,000 loans for troubled homeowners on the verge of foreclosure, according to the report. More than 400,000 modification offers have been extended by loan servicers. The Treasury department hopes to have 500,000 loan modifications started by November 1.
June consumer spending was up, but incomes were down. This comes closer to confirming my suspicion that when this blows it’s going to be a Krakatoa-like event.
It’s either that or all these people falling off the rolls this summer are quietly slipping back into higher paying jobs and simply not bothering to tell anyone about it.