Bits Bucket For August 28, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Is Joe Biden on the board of directors of FPL?
FPL: Rate increase will save customers money in the long run
By Dara Kam
Palm Beach Post Staff Writer
Wednesday, August 26, 2009
TALLAHASSEE — The CEO of the state’s largest utility wrapped up three days of testimony on a proposed $1.3 billion a year rate hike insisting that residential electricity rates will go down.
Wow - how Orwellian can you get?
(P.S. - I just *love* that word. Somehow it seems so… apropos… these days.)
FPL
“a proposed $1.3 billion a year rate hike insisting that residential electricity rates will go down.”
Joe Biden
“Well, people when I say that look at me and say, ‘What are you talking about? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, I’m telling you.”
P.S. Both of these statements sound pinocchian to me.
” - I just *love* that word. Somehow it seems so… apropos… these days.”
Eaten post?
P.S. Both of these statements seem Pinocchian to me.
“( I just *love* that word. Somehow it seems so… apropos… these days.)”
Good morning, HBB. I’m off to the Big City to see who got fat, who lost their hair, and who managed to retain their sense of humor through forty years of being the most reviled class in the history of American public schooling. And I’ll admit it, to see who found the best plastic surgeon….
I’m guessing at least 30% of RHHS class of 1969 ended up making their money in real estate brokerages. Should be a schadenfreudistic weekend!
Try to carry on here without me?
Have a safe journey.
Have a safe trip and a good time ahansen.
Kick a Realtor in the groin for me.
Then kick them again for me.
When will you be back with stories? I have to make sure I don’t miss out.
“…to see who got fat, who lost their hair, and who managed to retain their sense of humor through forty years of being the most reviled class in the history of American public schooling. And I’ll admit it, to see who found the best plastic surgeon….
I’m guessing at least 30% of RHHS class of 1969 ended up making their money in real estate brokerages. ”
Well Alena, you had the West Coast and I had the East Coast, or at least my little corner of New York State. My 40th high school reunion was this year. You say you never heard of Minisink Valley Central School in Slate Hill, NY? (Most people haven’t). It’s alumni include a few drunks and drug addicts, some professional athletes, a Director of Enforcement for the SEC, a President of Travelocity, one guy with over 50 patents, lots of houswives and guys with ten jobs over 40 years, but not too many realtors. Eastern Pocono, Southern Catskill, and Northern Appalachian real estate evidently didn’t have the allure of the Golden State. Probably never will.
Cobalt:
Talk about Zero Lot lines…. and does any trains still run over those tracks?
It was amazing to see how many abandoned tracks there are in America when people relied on trains to travel.
http://en.wikipedia.org/wiki/File:Slate_Hill,_NY.jpg
Industrial Archaeology is a fascinating hobby. It’s a game to pick out old roadbeds from the scenery - tree lines, lot lines, old culverts, bumps in the road - are all helpful clues. Plus, they make perfect bike trails and their conversion is a great thing.
Looking forward to the report when you return..:)
40 years after graduating from high school, shouldn’t EVERYONE be fatter and grayer? And most of the guys will have more forehead to wash in the morning.
40 years after graduating from high school, shouldn’t EVERYONE be fatter ??
I am guessing that Ahansen is within 5 pounds one way or the other of her weight when she graduated…
50% of all Americans are fat, good chance of seeing fat people.
What, have you been sleeping with her or something, scdave? How the hell do you know?
A HBB meet up group photo showed a pretty, elegant, slim, and sexy ahansen.
1,000 Banks to Fail In Next Two Years: Bank CEO
Thursday, 27 Aug 2009 CNBC
The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.
“We’ve already lost 81 this year,” Kanas told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They’re smaller companies.”
Failed banks tend to be smaller and private, which exacerbates the problem for small business borrowers, said Kanas, who became CEO of BankUnited when his firm bought the bank and is the former chairman and CEO of North Fork bank.
“Government money has propped up the very large institutions as a result of the stimulus package,” he said. “There’s really very little lifeline available for the small institutions that are suffering.”
The poor banks!!!!!!! We won’t have banks to kick around anymore.
There will just be a few very large banks to kick around, for anyone who dares buck up to the power structure they employ to retain their privileged status as the top parasites in the financial system.
their privileged status as the top parasites ??
Amen…Pirates in brick ships…
Sounds similar to the Monty Python skit in The Meaning of Life-The Crimson Permanent Assurance.
Sorry, should have included the link.http://www.youtube.com/watch?v=KX61PUZ3xkI
I popular bumper sticker here in Western Mass is “Don’t blame me, I bank locally!”
Our local bank chain, M&T is primarily owned by an Irish holding company. Almost no one I talk to appears to know this although many know Buffet owns M&T stock. Their faces change when I say, yeah, all of 6%.
Exactly, funny how the crowd that is always calling all banks evil seem to get awfully quite when it comes to the fact you’ll end up with a few mega banks. Yet they never offer any options.
When in fact there are numerous well run small local and regional banks, that their communities like and depend on. That have done a lot to help their neighbors out, over the years.
+1
I’ll restate what I did the other day - we’re far better off with lots of smaller banks than with just a few megabanks.
The very root of the problem of this whole bubble and bust has been the total detachment between mortgage investors vs. true home values. And the root of *that* is these big Wall Street banks.
If mortgages were made, and held, only by local banks (as they generally were before the last few decades, at least much moreso than now), then we wouldn’t have had this housing bubble.
“If mortgages were made, and held, only by local banks (as they generally were before the last few decades, at least much moreso than now), then we wouldn’t have had this housing bubble”.
+1
BINGO!!
I had to meet with the mortgage loan officer twice at our local savings and loan for my first mortgage. I had to have a letter from my employer, along with excellent credit and a down payment. The year was 1986. Funny how well that worked.
“…calling all banks evil…”
Don’t mistakenly put me in that group. So long as banks follow the law and engage in sound banking practices, more power to them!
“If mortgages were made, and held, only by local banks (as they generally were before the last few decades, at least much moreso than now), then we wouldn’t have had this housing bubble”
A banking industry with lots of small, locally connected firms is most likely more efficient in providing sound loan underwriting services than is Megabank, Inc armed with economies of bail.
I had to have a letter from my employer, along with excellent credit and a down payment.
Today, you need these to rent an apartment.
Ok, here is an OT.
My lovely wife had a great boss. He turned the “situation” at her workplace 180 degrees. He took a decidedly negative, destructive place and made it a place I would like to work at. A Good Man. They are still here and walk among us.
This guy at the end of business season meeting last year (4/15 was the last day, now you know what she does) announced that he has a serious pancreatic cancer. It was a very bad experience me since spouses were also invited to attend that meeting. The crawfish they served was excellent, but really lost its flavor after that.
My beautiful French wife sits down beside me yesterday and announces that his insurance company has terminated his policy. He is needs that insurance.
I’ll leave it with this comment: The Obama health plan is scary because of the cost involved; I’m hearing $3 Trillion. The status quo that leaves the current health “plan” in the hands of Big Pharma and Big Insurance is just as scary. Currently, our “health system” is basically The Wall Street Health System. Heads I win, tails you’re dead.
Is there a third alternative? One that might work?
Roidy
“Is there a third alternative? One that might work?”
Yes but it will never happen. What is it?
We the people de-limb FIRE. And I mean the entire power structure, piece by piece or a wholesale demolition derby. All insurers, finance and real estate interests get beheaded in one fell swoop. Imagine the deflation we’d get then. No need to raise minimum wages, no CPI BS, no Fed, etc.
Never happen though.
That is the irony - by unleashing the power of FIRE, the last few administrations have made the socializing of medical insurance necessary. Should never have let for-profit companies get into the business in the first place, and should never have let non-profits (a/k/a ‘charities’) become slush funds for the politically connected.
This is not a partisan complaint. Both sides are rotten with corruption with this issue.
ACH,
That is such a horribly sad story. I am so sorry for your wife’s boss.
Yes, we need to reform healthcare, and the insurance companies need to be used exclusively for supplemental insurance, IMHO.
What if the govt were to open more medical schools where the students could get their schooling for free, in exchange for working at public hospitals for “X” number of years after graduation?
That’s a terrible story ACH. He sounds like a good man.
Tell him to get a lawyer, NOW. Pancreatic cancer is fast-acting and highly terminal.
An attorney can file for injunctive (immediate) relief on something like this, if there is a legal basis. The way those a**hole health insurance companies draft their contracts, there may not be though.
I wish him the very best.
One way that hasn’t been brought up is to run health insurance in the way that utilities are run. Power companies and health insurance are similar in that they both have the luxury of consistent demand, and both hold semi-monopolies. The laws of supply and demand are so skewed because of this, that you can’t scream about “stifling free enterprise.” So why not regulate health insurance like the government regulates the electric company?
I saw a Frontline episode that had a case almost exactly like this one. Lady was spotting and her insurance company discovered she had had a problem 10 years before and they canceled her policy for some stupid reason. They only asked for a 7 year history on her application, IIRC. I think there definitely needs to be some oversight and it needs to be something that moves FAST.
Power companies and health insurance are similar in that they both have the luxury of consistent demand, and both hold semi-monopolies. The laws of supply and demand are so skewed because of this, that you can’t scream about “stifling free enterprise.” So why not regulate health insurance like the government regulates the electric company?
This idea has been brought up now and again, but it’s been portrayed as encroaching socialism, anti-competitive, anti-free market — never mind that US health insurance exists in an oligarchic, anti-competitive state where it’s heretical to wonder why costs can’t be lowered and efficiency improved.
anti-competitive, anti-free market
Just what part of LUXURY OF CONSISTENT DEMAND do these people not want to hear? These health insurance companies are shutting off health care for the exact same reasons that Enron shut off the electricity in California. If the laws of supply and demand are not running freely, then the market should not be running freely either.
Question? The democraps have total control, they don’t need a republocrap to pass their sickness care plan. If this party of compassion is just that, then way not pass this plan next week? They COULD do it, so why won’t they? The plan should be identical to their own, the one the taxpayers afford them.
Because too many are worried they will piss off enough voters that they would not be re-elected, and they would lose all the graft they receive, from lobbies. Plain and simple.
Question? The democraps have total control, they don’t need a republocrap to pass their sickness care plan. If this party of compassion is just that, then way not pass this plan next week? They COULD do it, so why won’t they? The plan should be identical to their own, the one the taxpayers afford them.
Unlike the republicans there is more diversity in the democratic party. There are many relatively conservative democrats that aren’t on board with a public plan. The health insurance lobbiests have been throwing cash at them. The more liberal wing won’t vote on a plan that doesn’t have a public option.
As a Democrap, I admit it is disappointing a full 20% of our senators are so corrupted by FIRE money that we can’t get a proper bill through the process. It would not be such a problem if a bit less than 90% of the GOP were not even more corrupt.
Your blaming the wrong people here.
“Your blaming the wrong people here”.
I am blaming no one, the question is simple. The dims run the show. If sickness care is in such dire need of replacement, they can change it, period!
Hell, the president could declare it a national emergency, and change the system with the stroke of a pen. The fact of the matter is it not about sickness care to the masses, but most people seem to be unable to grasp that. Just keep pointing fingers.
When some unfortunate bill does pass it will be a colossal failure of that you can be sure. Change you can not only believe in, change you will feel.
The problem with the Obama plan is that it does nothing to trim the excess cost. The US pays the most per capita for health care and ranks 36th for quality of service if you take life expectancy as gauge how good a health care the population receives on average.
The Obama plan is just another attempt by big business (lawyers, insurance, pharma, hospitals) to siphon more money out of the average worker bees into the coffers of the well connected.
1. Limit law suits. If you go to a doctor/hospital you’re taking a risk. You don’t like it? Don’t go, take an Asprin instead.
Malpractice insurance ranges as high as $150K/year. Guess who pays for it?
2. Cut out insurance companies all together. Health insurance should be not for profit.
3. High Co-pays for everything and everybody to limit abuse. $50 to see a doctor and $500 for admission to a hospital. If you’re sick you’ll pay it, otherwise you won’t.
4. Address education costs of doctors. Most start their professional life being $300K in debt. that’s not sustainable. Maybe scholarships with the obligation to work for the community for a fix salary in the $50 - $100K range for 10 years.
5. Most costs of developing new drugs are financed by the US consumer since other countries have price controls. Charge all those countries tariffs until they end their price controls.
Pharma also uses a lot of basic research funded by the NIH (US taxpayer). Make them pay for it.
6. More generic drugs.
7. More Nurse practioners you can go and see for your average ailments. Only see a doctor if you’re seriously ill. Most of the tests are done by labs anyway.
etc.
The Obama plan does nothing to address the exorbitant costs of our system. It will take more money by force from the working citizen and feed it to campaign donors.
Excellent ideas, Mike.
The Obama plan does nothing to address the exorbitant costs of our system. It will take more money by force from the working citizen and feed it to campaign donors.
It does appear to be the case. They just can’t understand that people no longer trust the government. The Democrats are now the party in power. They can’t blame everything on the Republicans. They are doing nothing to get us out of the wars that we have already lost. They are doing nothing to reign in Wall Street. They are doing nothing to reform the financial system.
Who trusts any of these people to clean up the health care mess? I know that I don’t. I just simply don’t trust them with anything.
Same turd, different wrapper. The only issues where Republicans & Democrats differ are flag burning, gay rights, abortion, prayer in school and other equally petty topics.
When it comes to lobbyist and campaign donations they all know who their true masters are. Hint, it ain’t you, the voter.
Any health care system that might emerge from this won’t be significantly better if corruption is allowed to rule it.
“$50 to see a doctor”
It’s going the way of health care for the well heeled only. At $50/visit you’ll have families just plain skipping doctor visits or going underground and self-treating. At current levels, I’ve had months where I’ve spent hundreds of dollars just in doctor and perscription co-pays. I’m talking school born illnesses sweeping through each member of the family, not anything serious. Perhaps the industry would consider changing certain perscriptions (ie, for ear infections or pink eye) to OTC. But that flies in the face of the necessary control to counter drug resistance issues brought on by overuse.
Don’t laugh at the self-treating. Last week my friend couldn’t get into a doctor who said they had no openings to see her. They told her she could go to the (already overburdened) ER if her condition worsened before they could fit her in. Her vet husband ended up bringing home the needed antibiotic.
My herbal remedy friend has found herself to be quite popular lately. And that’s among her nursing student buddies.
That’s the point. Only seriously ill people will go to the doctor. Not those that are just bored or suffer from some imaginary disease.
As I said, a nurse practioner for your average everyday constipation or headache and more generic drugs to treat common non life threatening diseases.
Hold a screaming baby in your arms, have the doctor look and say, wow, those are both badly inflamed and tell me that’s boredom induced or imaginary. Ever take a urinary tract infection to the nth degree? Of course you haven’t. But those that have know they’re not going to take an aspirin and head off to work. Gheesh! It’s not all that black and white.
Two summers ago I had this teeny little spot I had my doctor check out. In my mind, there was a 90% chance it was some minor issue. Instead I had stage 1 cancer. My surgeon said it was a great catch and most people wouldn’t have caught it. Instead of nasty chemo and stage 3 stuff we caught it at stage 1, treatable w/just a few snip, snips. It sounds like you’re advocating we forget screening and preventative treatment. It sounds like you are suggesting people wait until its going to cost a lot more to treat. Are you sure that’s what we want? Perhaps maybe only for the little people?
The problem with a giant copay is that 50dollars for me is nothing, for someone who barely has enough for food it’s huge.
The best plan is
1. Basic public plan that covers prevention, pregnancy, and therapies with high benefit to cost ratios.
2. Private plan for those who want the bells and whistles.
MD’s and drug companies may try to lower costs on therapies that don’t make the cut so that they can get patients that don’t have private option.
This is similar to medicare, many people by supplemental plans to cover the gabs of medicare.
The private plans would be grouped into different levels of care, so that the plans could be compared. ie gold, silver, and bronze. Gov would regulate them and prevent them from denying care covered under the plan.
1. Limit law suits. If you go to a doctor/hospital you’re taking a risk. You don’t like it? Don’t go, take an Asprin instead.
Law suits are less than .5% of healthcosts. Not a hecka lot of savings there.
Now the 35% spent on paperwork, that could be some real savings.
Law suits are less than .5% of healthcosts. Not a hecka lot of savings there.
Now the 35% spent on paperwork, that could be some real savings.
Sources for these numbers? The latter sounds plausible, the former doesn’t. If a doctor’s paying $150K a year for malpractice insurance, are you trying to tell me that’s only 0.5% of the annual cost of treating his/her patients?
newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all
If the crazy tax code was scrapped for something like 10% across the board for everyone then all those accounts and bookeepers couple be deploy to healthcare paperwork. Let people file their tax return on a postcard. No more social engineering with the tax code.
From measton’s link:
“McAllen is legal hell,” the cardiologist agreed. Doctors order unnecessary tests just to protect themselves, he said. Everyone thought the lawyers here were worse than elsewhere.
That explanation puzzled me. Several years ago, Texas passed a tough malpractice law that capped pain-and-suffering awards at two hundred and fifty thousand dollars. Didn’t lawsuits go down?
“Practically to zero,” the cardiologist admitted.
“Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures.
lawsuits maybe, malpractice insurance not.
Insurance companies get both sides don’t they? Sell insurance to the consumer, sell insurance to the doctor.
It would be a shame for them if that all went a way.
Great scam, ain’t it?
What about the hidden costs of malpractice? Specifically I’m referring to tests that are not necessary, but are ordered by the docs to cover them in the event of a future malpractice suit.
My speculation is there’s a lot of CYA in the practice of medicine today.
The docs make big bucks off all those tests. Saying they’re to cover themselves in case of malpractice is a convenient excuse.
The docs make big bucks off all those tests. Saying they’re to cover themselves in case of malpractice is a convenient excuse.
Not always the case, many MD’s are employees and don’t get a cut of most of the tests they order. They usually get a production bonus for procedures they perform as a fraction of their take home pay. The New Yorker article is a good one. A look at McAllen Tx vs El Paso Tx suggests that MD’s that have an ownership interest in say radiology business will order more tests.
That’s just is plain false.
That’s just is plain false. What are you referring to? Can’t tell from the context of your post.
1. “Limit law suits. If you go to a doctor/hospital you’re taking a risk. You don’t like it? Don’t go, take an Asprin instead.
Malpractice insurance ranges as high as $150K/year. Guess who pays for it”?
This is a must, however there is no provision in this plan for tort reform. Of course, it’s written by lawyers, so no surprise.
I like Ho Dean’s honest answer.
Mr. Dean’s answer was candid: “When you go to pass an enormous bill like that, the more stuff you put in it, the more enemies you make. The reason that tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on, and that is the plain and simple truth…. This bill has enough enemies. The more groups you take on, the more enemies you make.”
washingtontimes dot com/news/2009/aug/27/health-care-run-by-trial-lawyers/
Morning. 2nd cup. Idle thoughts on medicine.
Drugs: Drug companies don’t cure diseases, they
create them. Think the purple pill that everyone
has to take every day for heart burn. Heart burn a disease? Sheeesh…just watch what you eat and have a bottle of Pepto close at hand..
Viagra? Who really needs that silly pill? You’re
either active or you’re not. My wife look real
good in a nighty and she thinks Viagra is a joke, and I’m closer to 70 than 60.
If a drug company cured diseases, they’d cure themselves out of a job.
A friend was just handed a prescription that was
going to cost him $600 a month. He got it from
a firm in Canada for $110. My wife uses special
eye drops that cost over a hundred bucks a little
itty bitty bottle. We pay $23 from Mexico.
So…..how do we get the drug companies to
lower costs that are fair across the board?
“So…..how do we get the drug companies to
lower costs that are fair across the board?”
First, we take out their communication and power infrastructure with an airstrike. Then a ground attack with selective artillery and mortar strikes on the CEO’s headquarters. Lastly a cleanup involving rounding up all of the crooked Congressmen and Senators and waterboarding them into submission where they admit they took large bribes from the drug makers. That is literally what it would take.
Good idea, pbb.
Can I volunteer to help? I got great aim!
So…..how do we get the drug companies to lower costs that are fair across the board?
We stop letting Big Pharma’s lobbyists run roughshod over the legislative process. Pharma companies are not required to compete on price in the USA, and they’re terrified that the gravy train is going to end.
Heart burn a disease? Sheeesh…just watch what you eat and have a bottle of Pepto close at hand..
Apparently you haven’t read up on GERD, and you certainly don’t have it yourself.
And sometimes heart burn is a symptom for something much more serious, and expensive to fix. Any plan should wave the fees for a couple of visits per year to catch problems early.
I have GERD and thank god for generic OTC pills because I have to take them for the rest of my life. They’ve changed my life for the better.
I still watch what I eat, but I no longer live in pain and constant shortness of breath.
“A friend was just handed a prescription that was
going to cost him $600 a month. He got it from
a firm in Canada for $110. My wife uses special
eye drops that cost over a hundred bucks a little
itty bitty bottle. We pay $23 from Mexico.”
I order asthma inhalers from Canada for my cat. It’s the difference of having to put Kitty to sleep or not. I can’t imagine if I had to worry about the cost of my child’s medication. I wonder how many asthmatics are using the cheaper medications like Albuteral (the rescue inhaler) instead of the better and more expensive medications to control their asthma?
He got it from
a firm in Canada for $110.
Canada controls the costs of medicine.
Again if it’s not a free market why would anyone want to let Big Pharma choose the price.
There are some conditions where medications are superfluous. Restless leg syndrome comes to mind. However, with our 21st century diet, smoking and lack of exercise Nexium and the class of PPI’s it belongs to is very effective in controlling GERD in addition to preventing esophageal cancer (adenocarcinoma).
The French smoke more, exercise less, and eat all those naughty foods, and still outlive us! Must be quite a health care system they have!
EVERYBODY smokes more, drinks more, has more sex, and still outlive us. Still have healthier babies and so on.
The lack of stress in their lives is opposite of ours and they have health care. Oh and better educated.
You’ve struck to the heart of the matter.
Stress. We are by FAR the most overstressed industrialized nation and it’s killing us. But we blame everything but the cause of the stress.
And a LOT of the stress is in commuting time to an “affordable” home in the burbs.
It only makes sense to commute long distances if you are going opposite the traffic …
Whose going to decide what’s fair ?
No fat profit for pharma no new cool drugs down the pipeline. As a poster noted earlier US paying for all the neat drugs Canada and others get for less.
The pharmaceutical companies do not lose money in Canada. They just make less profit.
That they aren’t making a profit is a lie they tell you. It’s just not 1000%+ is all.
Yes, you can google it.
Rancher said:
“My wife uses special
eye drops that cost over a hundred bucks a little
itty bitty bottle. We pay $23 from Mexico.”
Glaucoma eye drops?
We’re paying $100/mo per type (X3)with Kaiser. Our nut to Kaiser, premium, drugs (off their formulary effective this year), co-pays =$14,000-/yr. It’s killing us.
Health Care= 1. quality 2. delivery 3. cost
Without being able to afford it, the rest doesn’t matter.
2. Cut out insurance companies all together. Health insurance should be not for profit.
I don’t agree with several of your prescriptions, but this one is dead-on.
The problem with the Obama plan is that it does nothing to trim the excess cost. The US pays the most per capita for health care and ranks 36th for quality of service if you take life expectancy as gauge how good a health care the population receives on average.
The Obama plan is just another attempt by big business (lawyers, insurance, pharma, hospitals) to siphon more money out of the average worker bees into the coffers of the well connected.
??? Not sure how lawyers are going to benefit, insurance companies hate the plan and are lobbying with wads of cash. pharma and hospitals like the plan because everyone would be insured.
The plan does reduce one important aspect of health care costs. Administration advertising ect. A public plan would get rid of the 10-20million dollar a year salaries for insurance plan ceo’s and their investment advisors and advertisors. Medicare dispenses far more healthcare per dollar than does private insurance. Down the road the private plan would likely be used to lower payments for medical services the way medicare has, and they would likely start using their purchasing power to get concessions from big pharma. That’s phase II right now they just want the plan passed.
Excellent reforms. On the med malpractice issue, instead of capping awards, set up a system like workers’ comp. Make it easy to demonstrate injury, and easy to get a small but reasonable reward. Get the lawyers’ profit motive out of the equation. And thereby make a system that brings bad doctors quickly to focus, too.
Nothing in the proposed health “insurance” reform bill 3200 tackles the real problems of cost.
1. Why does it take three doctors to review an mri or an xray?
2. If you don’t give me the new advertised drug, I’ll sue you for malpractice.
3. Can you imagine the amount of people on drugs? Water supplies now showing traces of prozac, etc, etc.
4. I’m too lazy to make an appointment with the doctor, so everytime the kids get sick, I take them to the emergency room.
5. I want health insurance, but why can’t they provide cradle to grave co-payment free?
6. I’ve been given six months too live, ok and my insurace company cancelled my policy, because I lied on the app. So, my only choice is to bankrupt the health care syatem, so i can stay alive for 180 more days in a hospital connected to a chemo bottle.
I cant fathom just accepting my clock has expired.
7. I have drunk and smoked all my life and now they tell me i need a heart and lung transplant. My
insurance company says no, but I’ll sue them for it. I take no personal responsibility for my bad habits..of course you the healthy will pay for this.
10. I’m 92 years old and they tell me i need a new liver to live to 93…you bet I’m in. bring it on!
Solution.
They shoot horses don’t they?
Terry: While I agree with most of what you say, there are many people on this earth who are “healthy” and morally worthless. I have been: Unhealthy, healthy, blah, etc. It is the human condition to some extent which, in my opinion, needs to be considered. Yes, penalize certain people in order not to create moral hazard, but don’t throw them to their grave. Some of the best-hearted people I knew were drug addicts, (not dealers). In other words, I would take June Bug any day over Dick Cheney.
P.S. Clean 16 years sometime in October. I mentioned this once before, but this is a blog.
Please, no Kudos “doin’ what I shoulda been doin”…all along.”
4. I’m too lazy to make an appointment with the doctor, so everytime the kids get sick, I take them to the emergency room.
This I doubt seriously.
and ATE.. keep doing it!
Thanks desert. Means a lot to me my friend.
Stupid smiley face, doesn’t ring true, with my little smile and sincerity of previous response to desert. Such is non-personal communication, I guess. Tugged my heart, I guess, is what I tried to say…
Got it though!
3rd alternative? 1000 Points of Light? (JK)
I found that story devastating and I hope he finds some source of support for his situation out there. I agree wholeheartedly with your post that the status quo is not working.
The current system has its death panels. The current system takes in huge amounts of money our whole lives and when we need it most tells too many of us we’re unworthy of receiving benefits in return. Of course if we actually start to treat all people, the money will be distributed differently. The boomers are moving into the “elderly” designation when they start requiring more medical assistance. Of course this bulge of population requiring extra spending is weighing on the insurance industry.
Perhaps its time to start reigning in the waste, redundancy and fraud instead of cutting people off in their time of need. AFAIK, the Obama plan didn’t attend to these issues either.
This is crazy talk! We have the best health care system in the world. Sure, we pay more and live shorter lives than almost every other western system, but does that really matter? The people trapped in those socialized systems are very envious of our plan- I read it on Drudge! Plus the grannies on Medicare would never tolerate socialized medicine. They love their free market care! Sorry, but this American wants to pay more for insurance when I don’t need it, and be kicked off my plan when I do. You know, the American way. Everything else is godless communism that I choose to ‘know-nothing’ about. Don’t believe me? Just listen to the moronic screams of the Medicare recipients bussed in to shout down the possibility of the rest of us receiving the same care WE provide to them.
LOL!
I had lunch last week with a person 65 and one 78. Both told me how much they were not in favor of a government sponsored healthcare solution.
we pay more and live shorter lives than almost every other western system
Can you back up this remarkable statement?
Ever been to a fast food restaurant?
“Remarkable” statement? I didn’t know something so obvious is remarkable. But anyways…
We are dead last among the G7 nations and 50th among all nations in terms of life expectancy. We’re down in the third or fourth world area of the index.
See for yourself. It’s CIA data. No ideological garbage from some nutty outlet (fox, drudge, etc)
http://tinyurl.com/mqk8vw
And here we have JohnsHopkins( not some “you’re on your own” nutcase clearing house of garbage)
data indicating we spend more on rip off insurance than any other countries by a whopping 53% margin…..
http://preview.tinyurl.com/9vr7z
“The United States continues to spend significantly more on health care than any country in the world. In 2002, Americans spent 53 percent per capita more than the next highest country, Switzerland, and 140 percent above the median industrialized country, according to new research from the Johns Hopkins Bloomberg School of Public Health. “
US healthcare spending is more than 15% of GDP, a greater portion than in any other United Nations member state except for East Timor (Timor-Leste). [Source: Wikipedia / WHO]
The US is 35th-ranked in life expectancy, behind countries like Jordan, Cyprus, and Bosnia-Herzegovina, in addition to all the usual suspects in Western Europe and Asia. [Source: CIA World Factbook]
We have the best healthcare system in the world!
This is more a function of our dietary and exercise habits not to mention a function of violence of our society. This is one where results do not prove causation - pretty basic actually.
How about infant mortality, we rank pretty low in that as well.
Oops, ravi. I responded to this in the wrong place earlier. Don’t the French eat all those high fat foods, smoke and drink more, and exercise less than we do? And yet they outlive us. Must be quite a health care system they have, no?
They also take six week vacations every year and three hour mud baths every night. Again, relying on the U.S. for military protection allows for a lot of extra luxury and freedom from stress.
How about infant mortality, we rank pretty low in that as well.
This is pure and simple a drug problem, with the crack babies completely skewing the statistics.
“This is pure and simple a drug problem, with the crack babies completely skewing the statistics.”
Can you back up this remarkable statement?
Yeah, SanFranGal: LeHigh may be right. But, can it be backed up?
three hour mud baths every night.
BS Lehigh.
“This is pure and simple a drug problem, with the crack babies completely skewing the statistics.”
Can you back up this remarkable statement?
Well, no, not easily anyway. This was based on my recollection of the 1993 health care debates. But please do check the Wikipedia article on infant mortality, especially this part:
“The United States counts all births as live if they show any sign of life, regardless of prematurity or size. This includes what many other countries report as stillbirths.”
This can all be googled and the data comes from reputable sources.
I would publish more links, but they take too long too show up. Besides, you have to do your own research sometime, you know?
As a nation, we are top of the heap, but as a society, we rank very low compared to other 1st world (industrialized) countries.
http://www.cepr.net/calculators/hc/hc-calculator.html
Lehigh- Check wikipedia for life expectancy. The US is 38th in the world. Every single western european nation is much higher that that (except Portugal who is 39th). Canada, Japan, and a surprising number of ‘third world’ nations are well ahead of us. And here’s a link that show’s we pay far more than these longer lived countries. I really think there’s no more central point in the debate than this. We spend more and die younger!
http://www.infoplease.com/ipa/A0934556.html
U.S. life expectancy at birth is now 78 years. The countries that are higher than this are only higher by 2-3 years, tops, and these are typically the ones that have enjoyed U.S. military protection, so have not had the same level of combat deaths that we have.
Interestingly, here’s a link that shows that elderly mortality in the U.S. is actually far BETTER than in Western Europe or Japan:
“In the United States, life expectancy at the age of 80 and survival from the ages of 80 to 100 significantly exceeded life expectancy in Sweden, France, England, and Japan (P < 0.01)…This finding suggests that elderly Americans are receiving better health care than the elderly citizens of other developed countries.”
www dot ncbi dot nlm dot nih dot gov/pubmed/7565998
… and these are typically the ones that have enjoyed U.S. military protection, so have not had the same level of combat deaths that we have.
Are you seriously alleging that combat deaths are significantly impacting average lifespan?
Here’s some data from the CDC for you (data is for 2006, the most recent year with “final” data on their site):
* Number of deaths: 2,426,264
* Death rate: 810.4 deaths per 100,000 population
* Life expectancy: 77. 7years
* Infant Mortality rate: 6.69 deaths per 1,000 live births
Number of deaths for leading causes of death:
* Heart disease: 631,636
* Cancer: 559,888
* Stroke (cerebrovascular diseases): 137,119
* Chronic lower respiratory diseases: 124,583
* Accidents (unintentional injuries): 121,599
* Diabetes: 72,449
* Alzheimer’s disease: 72,432
* Influenza and Pneumonia: 56,326
* Nephritis, nephrotic syndrome, and nephrosis: 45,344
* Septicemia: 34,234
US military fatalities in Iraq, 2006: 822
You do the math.
Or it might suggest we keep ‘em hooked up to machines for far too long at the end of their lives. And before anyone says it- no! I don’t want to be kept alive that way.
And I certainly don’t think our troop loss since WW2 has had a measurable effect on our life expectancy.
And if we’re grasping at straws, don’t forget our high incarceration rate should skew us higher in life expectancy. Prisoners live longer on avg. than those on the outside. (They get that government health care!)
I hope a socialized government run Medicare system has nothing to do with that.
I forgot my main point. In the US, according to one study you cite, people over 80 outlive the same cohort in other countries. During that part of their lives, aren’t they on evil socialist Medicare? So what exactly does that study prove?
aren’t they on evil socialist Medicare? So what exactly does that study prove?
My point was that that is the phase of life where people most come into contact w/the health care system, so the quality of health care has the most direct bearing on mortality rates. At other ages, lifestyle factors are more important.
It’s a conspiracy! Healthcare for the elderly… keep em’ alive at all costs to keep the healthcare/pharma bubble inflating…
Or it might suggest we keep ‘em hooked up to machines for far too long at the end of their lives. And before anyone says it- no! I don’t want to be kept alive that way.
Wait a minute, you were the one who first put forth life expectancy (along with expenditures) as the main metric of how good the health care system is. Now it’s BAD to be kept alive for too long?
Concerning expenditures, yes we spend way too much on health care, just as we do (did until recently?) on houses. I will elaborate later if I get a chance.
We spend more and live less than most everyone else. The one cohort that might outshine the rest of the world is the one cohort that gets government paid health care. Hmmm.
ET, thank you for the CDC data. I love data. But this is only for 2006, and life expectancy numbers have to take into account a century or more of data. Also, I do think that countries engaged in overseas conflicts (a whole other debate, I know) have a much higher indirect burden including stress and anxiety as compared to countries that stay “neutral”, and that this can be reflected in mortality rates. I admit that I cannot prove this rigorously.
Concerning your breakdown of deaths, we would have to look at similar breakdowns for other countries, and also by age, to try to trace this back to differences in the health care system vs. lifestyles. It’s going to have to be a pretty fine-grained calculation to account for the difference in, say, 78 years life expectancy in the U.S. vs. 80 years in England.
We spend more and live less than most everyone else.
Being in the top 30 out of (220?) countries is not being less than most everyone else.
The one cohort that might outshine the rest of the world is the one cohort that gets government paid health care.
That cohort also gets government paid health care in the other countries you’re comparing to, right? So why are we doing better?
I wouldn’t take that one study as gospel. It was done by two researchers and published in the New England Journal of Medicine- A conflict of interest might exist. Got any more stats that back this up? I’m not saying it’s false, but I need more than one article about one study in a healthcare status quo mag. And aren’t these countries that allow euthanasia? Do we outlive these countries in a healthy way? Or just hooked to machines? And why do these countries prefer their system to ours in every poll? I guess they’re stupid. (And they still outlive us.)
War deaths, even in WW2, were relatively small, in the scheme of things. Depending on where you get your numbers about 400,000 Americans died in WW2. Perhaps 65,000 in Vietnam, if memory serves. And these deaths were spread over many years.
Not to be insensitive to those who died, but statistically, it’s not huge.
We spend more and live less than most everyone else. This statement needs a great deal of explanation and further details to be supportable and comprehensible. IMO, not a fitting subject for a casual blog discussion. Not even our esteemed Congress has bothered to air this issue, beyond their usual bromides and bloviations.
tresho–scan above my comment- I and several others have provided all appropriate links. Do you read bottom to top?
I and several others have provided all appropriate links. You have not provided appropriate links. This is a bigger issue than most of the posters here seem to grasp.
tresho- I agree with you on the importance of supplying links. My links and several others that ‘prove’ my point are in the thread above my post you commented on. I’m not one of those with lengthy unlinked statements of ‘fact’. Nor do I leave my shorter assertions unlinked when challenged. But I won’t repeat links that are more or less directly above the post. Scroll up, my friend, scroll up.
You have not provided appropriate links. This is a bigger issue than most of the posters here seem to grasp.
BS.
I rarely provide links anymore because they seem to take forever to get through the HBB Percolator. But they’re accurately sourced — c’mon, choose a phrase and the source, pop it in The Google, and there you go. It’s not hard.
Ah, look here, the newest CIA data says we’re moving backwards in life expectancy (2009 est.: 50th):
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2102rank.html
US mortality rates from the CDC, if you can’t seem to use a QWERTY keyboard:
http://www.cdc.gov/nchs/fastats/deaths.htm
If your panties are on too tight to operate a computer properly, here’s a link to a considerable amount of WHO data, including relative GDP expenditures:
http://www.who.int/whosis/whostat/2009/en/index.html
You’ll have to download a PDF and actually read and stuff like that, so be forewarned: If you can’t even manage to use The Google, this will be very difficult indeed.
sad story indeed…i wish him all the best.
someone on my facebook page is outraged at the $ 110 he had to pay for his daughters eardrops. i felt like telling him that’s nothing compared to what he paid for his iphone…or how much he pays a summer to maintin his swimming pool. i don’t know what the solution to healthcare is…but i do know it’s somewhere in between this entitlement jackhole and your wife’s boss. sadly…i feel like the former is leading the debate.
“someone on my facebook page is outraged at the $ 110 he had to pay for his daughters eardrops. i felt like telling him that’s nothing compared to what he paid for his iphone…or how much he pays a summer to maintin his swimming pool.”
I couldn’t agree with you more. Priorities are all mixed up. People paying huge prices for houses, cars, and other toys and then complain about medical and food costs, things that they really need for a healthy life. Why the government should not only take care of all our health care costs but should also buy us a house, car, motorcycle, boat, tv and any other thing we fell entitled to.
Life is about choices, you can’t have everything!
OK. Let’s choose to do away with Medicare since it’s so cheap to buy free market insurance, especially for the Greatest generation.
the person in my example is 34…hardly the greatest generation.
I was responding to salinasron regarding his belief that health insurance is cheap compared to toys, and that we must choose where to spend our dollars most wisely.
I’d like to choose not to support people on Medicare who would deny me the same benefit.
As for your point about one guy complaining about expensive ear drops- well, somehow I feel that doesn’t quite support any sweeping generalizations about the health care system. And if you think our health care is relatively cheap, you’re either delusional or have little experience with it. Or you’re on Medicare.
Actually, a relatively high deductible policy with $25 co-pays costs me, my wife and 2 kids $600 monthly. Not terrible at all. Medicare is the most inefficient, top-down bureaucracy that is going broke very quickly.
“I was responding to salinasron regarding his belief that health insurance is cheap compared to toys…”
de·lu·sion (dĭ-lōō’zhən)
n.
The act or process of deluding.
The state of being deluded.
A false belief or opinion
now…at one point did salinarson or i say we believe health care is cheap and who is delusional?
“…outraged at the $110 he had to pay for his daughter’s ear drops. i felt like telling him that’s NOTHING COMPARED TO WHAT HE PAID FOR HIS IPHONE.” (emphasis mine) Said by you, quoted with approval by salinasron.
“now…at one (sic) point did salinasron or i say we believe health care is cheap and who is delusional?”
I would guess the delusional person is the one who can’t read his own post?
Not terrible at all Ravi- until something happens and you find out what that ‘relatively high’ deductible means when it’s applied to your bills. And a family of four for $600? Must be quite a deductible. And will that price remain as low as you age?
Ravi, your $600 a month for medical insurance is an astronomical amount for most people. You are lucky that you can afford that.
iphone $ 300 bucks plus $ 125 a month for the unlimited plan.
ear drops $ 110.
the iphone cost much more than the drops.
not only are you delusional…you can’t do math either.
michael, your reasoning baffles me. Are you saying health care is cheap or no? If you’re saying it’s cheap (and it sure seems like you are) then you’re delusional. If you’re somehow saying it’s expensive, then we agree. And I wasn’t aware I attempted to do math in my previous response.
treatment for pancreatic cancer is very expensive.
ear drops for swimmers ear is cheap.
(hypothetical example to follow)
250K healthcare cost for one pancreatic patient who can’t get insurance coverage may be a worthy case for government provided healhtcare.
100 dollars for 2,500 swimmer’s ear sufferrers…not so much.
universal healthcare reform should come somewhere between the two.
Hmmm…that’s either brilliant or nonsensical. I still don’t get it. Maybe you favor coverage for catastrophic events but not minor issues? OK. But often those minor issues become something catastrophic and it’s a lot cheaper to treat them before they do.
I take it they can legally do that? Arbitrarily cancel a policy when the going gets tough?
Yes, that is called “free market”.
Congress has been paid off to write bills that allow this.
Apparently so, though a lawsuit might change their mind. I had health insurance for many years in my twenties. I never used it. Haven’t had it since. I’m in my late 30’s now, and I figure if I get cancer or something- I’m dead. Honestly, with the way things are going, and considering this persons experience, I’m not sure having insurance is even much of a ‘benefit’.
Exactly.
Bingo x2
The health care “plans” that are being floated about will force you (and me) to buy insurance. We are the people who have been opting out of the “scam” of health insurance, and those greedy bastards can’t wait to get their hands on us, because we’ll be their most profitable customers.
More anecdotal stuff on bulk sales and “shadow inventory”:
Recently talked to some people who are involved in some bulk purchases from banks. Sounds like the banks are requiring a minimum of $10MM or more.
Supposedly, the banks really are keeping homes off the market because they are selling them at a 40-45% discount from their current market value (BPO) in these bulk deals. They want a quick close @ 14 days or less, all cash. Sounds like the govt is then covering some portion of their losses via the TARP (??? need to confirm this). They want them off their books within a year because the TARP (???) will be depleted.
Some of these deals have pre-arranged end buyers (many appear to be foreign nationals), many don’t. There is a ***LOT*** of money going into these deals. Some single deals are well into the hundreds of millions.
Yes, there is foreign money involved, too. Hearing some interesting stories. Will try to get more info and confirm a few details.
Not sure what all these investors intend to do with the inventory once they buy all this real estate…
Just FYI…
Surely foreign knife catchers are a good thing? Just like the Japanese ahansen wrote about a few days ago. Bank losses are reduced somewhat and the new foreign owners pay tax and maintenance costs.
Is it me - or does this sound an awful lot like the California garage sale?
Not a good thing. The end result of this may well be - literally - the U.S. selling large portions of itself to the rest of the world in order to stave off debt default.
Keep us posted CA renter. Is there anything online you can link to?
“California garage sale?”
Most garage sales in my ‘hood don’t involve any injection of TARP funds to make the sales go through. Is it different where you live?
Well - most garage sales *do* involve tarps, but not TARPs.
Just speaking in the very general sense of the U.S. as a whole - including the banks, fedguv, and J6P into the one entity. We’ve gotten ourselves into debt so far that the only way out is to sell assets to other countries; at fire-sale prices, at least relative to what the assets originally cost.
I’m wondering when things like national parks will be next on the block. God I hope it doesn’t come to that.
Packman,
No link, as this was all via phone conversations.
“Surely foreign knife catchers are a good thing?”
Even if they were taking a cut of TARP dollars as catching incentive? It’s always more fun to gamble if someone else is paying for the chips.
It’s not the foreign investors who are getting the TARP dollars directly. It’s the U.S.-based banks who are selling these wholesale who are getting some funds from the govt.
Seems to be a rather convoluted pathway, and lots of people making money in the middle — hooking up the selling banks with the main investors and then end buyers, with multiple people in between.
“It’s not the foreign investors who are getting the TARP dollars directly. It’s the U.S.-based banks who are selling these wholesale who are getting some funds from the govt.”
If a U.S.-based bank sells to a foreign investor and TARP dollars are used to sweeten the deal, then it is a bit tricky to say exactly into whose hands the TARP landed. For a make-believe example, suppose a TARP payment of $100,000 goes directly to a bank (the seller) as incentive for it to sell a foreclosure property which it originally would have been willing to sell for no less than $1.2 m. Suppose there is a foreign buyer (the buyer) who would be willing to pay up to $1,195,000 for the home, and not a penny more, and the next-best offer the bank could get for the home is $1,095,000 (there aren’t that many investors out there right now, so maybe this is not all that unrealistic…).
The bank, knowing that TARP money is available, lowers its asking price from $1,200,000 to $1,100,000. If the foreign buyer who would have been willing to offer as much as $1,195,000 comes in and snaps it up for $1,100,000, the seller receives $1,200,000, including $100,000 in TARP money.
An economist would say that the TARP funds were divided between $5000 in consumer surplus to the seller (they sold the house for $5000 more than market value = highest amount anyone would have been willing to pay) and $95,000 in consumer surplus to the buyer (they paid $95,000 less than the amount they would have been willing to pay for such a house). In this case, the $100,000 in TARP-injected consumer surplus effectively goes mainly to the buyer, even though the nominal payment went to the seller.
Absolutely. The foreign (and domestic) investors are getting the indirect benefit. No doubt about it.
Bah. Not sure what this all means yet. Selling off impaired assets is a good thing. Eventually the new “owners” will get sick of getting fined and the properties will get sold.
Either way. Its fine.
I was having similar comforting thoughts on my drive home from work today. The TARP effect on home sales (assuming there is one) is transient, unless Con-grass passes another TARP some time soon. Unless Bernanke and Geithner sound off another Orange Level economic terror alert some time soon, there will not be a sufficiently high level of panic in the populace to justify another massive lump-sum tax giveaway to the Wall Street bankers. In fact, the whole green shoots meme is antithetical to bailout legitimization efforts.
So I am thinking the banks will run out of TARP deal sweetener before the labor market recovers. At that point, housing prices will finally, at long last, have the long-awaited chance to bottom out at affordable levels, sans TARP, sans green shoots, sans recovery-level purchase demand.
Lucy,
That was the Chinese.
There seem to be Japanese, Chinese, Russian…but mostly, Chinese, from what I’m hearing.
Depending on the location, 40% off is qute a haircut. Maybe the companies are just playing house warehouse. Buy for 40% haircut, sell for 30% haircut. The question is: who is going to buy even at 30% haircut? Bottom feeders are smarter than that. And are these bulk sales recorded as true comp prices, and if not, why not? Is this all under the table?
And what chance does a little guy have in ANY of this? None at all. It’s like fuedal France. We have no choice but to rent indefinitely.
40% off would be a lousy deal for the bulk purchaser here in FL (anywhere in the state). Sales are only happening at least 50% off the highs. I would think a bulk purchaser would need to get the properties more in the 80% off range to cover the possibility of repairs, back-taxes, insurance, unpaid association fees, other fines/liens owed. Things are much worse here than the media report.
“And are these bulk sales recorded as true comp prices, and if not, why not?”
Assuming this practice is actually underway, I would guess a key purpose would be to hide price discovery by using TARP money to inflate the true market values (sticker price - TARP injection). But again, I would certainly like to see a few shards of evidence before jumping to conclusions.
TARP money is evil. The day the TARP was approved by congress was the last day America was still a great country. Days before when congress defeated the bill, I actually felt proud to be an American. The feeling was short-lived.
That’s a good point oxide. That is also why you here of these “bidding wars” I think anyway. Investor bidding wars.
TARP-stimulated bidding wars? Makes a lot more sense than recession-weary-household-driven bidding wars. It also makes a lot more sense to invest in real estate when other people’s money is injected to sweeten the deals.
Once each house is recorded as a sale, then yes, those comps are recorded. These are then reflected on AOL’s database, Zillow, etc.
Not sure about the initial sale being recorded, but I’m not certain either way. The final sale to the end buyers would be recorded.
The 40% discount is supposedly from **current** BPOs, not peak prices. These are already owned by the banks, so there shouldn’t be any additional liens in most cases.
I think the banks are shooting themselves in the foot here, as they could definitely get higher prices from retail buyers (of whom there seem to be plenty at this moment), but it appears that timing is the most important thing to the banks right now — getting them off the books ASAP.
“They want a quick close @ 14 days or less, all cash. Sounds like the govt is then covering some portion of their losses via the TARP (??? need to confirm this). They want them off their books within a year because the TARP (???) will be depleted.”
Now you have my conspiratorial sniffer all agitated. Is this a publicly announced policy, or some kind of backroom deal between whatever government entity administers the TARP and private banks? Wouldn’t it be tantamount to using ‘taxpayer money’ to pad bank profits, in the form of TARP injections to pad bank profits by making deals go through at prices above fair market value? Why is there a $10MM minimum, which would tend to keep most individual households (the ones who supposedly put up the TARP funds) from benefiting from the arrangement?
Above all, is this just hearsay, or do you have some hard evidence to offer? Because although it sounds plausible enough, there are plenty of reasonable-sounding though patently false rumors circulating these days.
Don’t people with 10 million dollars also have the brains to know that we’re heading into the next leg down in this thing?
My Columbo button is stuck on motive, motive, motive
And do you suppose “they” will be buying up all the commercial too?
And, the vacant house that is not listed on the MLS should have a recorded sale in the county records to the new investors, no?
‘…should have a recorded sale in the county records…’
My guess is that this would include the helicopter-dropped TARP premium, thereby ensuring that recorded sale prices reflect an artificially inflated price rather than true market value. Price discovery is to be avoided if at all possible; otherwise the comps would adjust to reflect prices affordable to local market participants. We can’t allow truly affordable housing to take hold, as the earth would turn into a giant fire ball and get sucked into the surface of the sun.
My Columbo button is stuck on motive, motive, motive
Funny Cereal!
“Don’t people with 10 million dollars also have the brains to know that we’re heading into the next leg down in this thing?”
Hundreds of billions of dollars have already been thrown away in the collapse of this real estate bubble. Why would you expect the losses to magically stop at this point?
“Don’t people with 10 million dollars also have the brains to know that we’re heading into the next leg down in this thing?”
Seems to me that people with $10MM would have a vested interest in keeping the party going and NOT seeing the next leg down. Not that there is much they can do about it IMO.
I think this was mentioned before
Bank A bundles its crap and sells to Bank B with borrowed Fed money and a guarantee against losses.
Bank B bundles its carp and sells to Bank A the same way.
They are pouring money into banks via 100 channels so that the public does not see the real picture. It’s be cheaper just to hand the banks a huge wad of printed cash, but that would piss off joe public.
PB,
If you want more details, feel free to e-mail me and/or call, as I can give you more info, though nothing is confirmed at this point.
None of this is “official” from what I understand, but it certainly aligns with what we’re seeing on the street.
…but it certainly aligns with what we’re seeing on the street.
———–
…and with what ahansen posted the other day.
Oddly enough, I was mentioning to my DH a few months ago that this would make sense from the Chinese perspective. Now, we’re hearing whisperings about this stuff.
I sent this info to my husband
He has been wondering all year (09) why the foreclosures haven’t been flooding the RE Market everywhere
He says that Banks were getting the TARP money to cover the RE losses, but it only lasted till the end of the year. ( it had to be used up/liquidated or they lost the TARP money)
Sound like they (Banks) have devised a way to keep the TARP money, sell the bad RE & eat their cake too….
Why are we not surprised ????????????????????????????
“…sell the bad RE & eat their cake too…”
Actually, it sounds like they might be eating your cake…
P.S. $700 bn could buy the banks a lot of cake!
This story reminds me of the sad saga of Randy “Duke” Cunningham. Does anyone else remember about how he got into hot water because of real estate deals which funneled money from defense contractors by paying him an above-market price for his Del Mar home. I guess it would be different if TARP funds were used to help pay banks above-market values for lots-and-lots of houses in package deals, though?
The banks are the sellers, and the TARP (??? need to confirm this is the money source) money is supposedly being used to cover some portion of the losses from the sales.
“…cover some portion of the losses from the sales.”
This sounds bogus. If the sale was going to generate a larger loss than the part covered by TARP, there would be no rational reason to sell, would there?
“Not sure what all these investors intend to do with the inventory once they buy all this real estate…”
That reminds me of one of my favorite Peanuts cartoons, which shows Snoopy the beagle swinging like Tarzan from tree to tree high above the ground, muttering to himself, “What are you supposed to do when you get to the last tree?”
“Not sure what all these investors intend to do with the inventory once they buy all this real estate…”
Sit back and let hyperinflation work its magic?
I bet that is the plan. But if hyperinflation were really an option, why wouldn’t the financial Wizards of Oz behind the curtain at least have created enough inflation to stem the massive real estate crash in progress?
And come to think of it, wouldn’t a little bit of financially engineered housing market wealth effects have been useful to prevent Japan’s 20-year-long residential real estate crash? Are their central bankers just not as smart as the American variety?
And why would hyper inflation actually help the price of houses? Unless wages hyper inflate in lock step, people won’t have money to spend on anything but food. And interest rates are commonly pushed up to fight hyper inflation, pushing non-cash buyers out of the market.
I’m not predicting hyperinflation, just saying it might be in their plan. And in all honesty, if you have billions to invest and inflation is a worry, real estate might be one of many places to hedge.
There was a link posted here about a week ago about a woman in Zimbabwe buying her bus ticket for 2 trillion Zimbabwe dollars. In a hyperinflationary situation such as that, even the craziest priced houses now would be a bargain, no?
“In a hyperinflationary situation such as that, even the craziest priced houses now would be a bargain, no?”
I am quite certain hyperinflation is not in the plan.
However, a period of ‘higher than expected’ inflation followed by crushingly high interest rates might be (blueprint: look at Fed policy over the years 1975-1982).
“In a hyperinflationary situation such as that, even the craziest priced houses now would be a bargain, no?”
I am quite certain hyperinflation is not in the plans.
However, a period of ‘higher than expected’ inflation followed by crushingly high interest rates might be (blueprint: look at Fed policy over the years 1975-1982).
WIN = Whip Inflation Now
“Unless wages hyper inflate in lock step, people won’t have money to spend on anything but food.”
Key difference between 1970’s and now: Union contracts (thank, Ronnie Raygun!).
I agree PBear- I was poking fun at those who think even in hyperinflation housing’s a bum investment. When a bus ticket is over a trillion dollars, I’ll just skip going to work that day and use the money I save to buy every house in town.
BINGO
You can inflate your way out of the problem if
1. People have savings that they will be forced to spend.
2. People can send a spouse off to work that was previously at home.
3. People can borrow money
This time inflation will not work, people don’t have extra money so they will spend more on the things they
need and less on luxuries.
Most spouses already work.
People are already in debt and banks won’t lend to them.
Small apartments might be a good inflation hedge at some point but larger homes are going to crash in value if there is inflation and higher interest rates. Of course larger homes will be subdivided and rented and put pressure on small apartment owners.
I would never advise the average joe to invest in RE now. But if you’ve got billions, you’re on a different investment plane, and may have interests that are aided by your ‘bad’ investments. Kind of like the CEO of a flailing firm making a big show of buying stock in his own company.
Well Obama could just raise the minimum wage to $50 an hour. That would sure cause wage inflation.
“Well Obama could just raise the minimum wage to $50 an hour. That would sure cause wage inflation.”
And unemployment.
Key difference between 1970’s and now: Union contracts (thank, Ronnie Raygun!).
Unions have all been gutted and BUSTED. Buh bye middle class. Helllooo long time unemployment and multiple bks due to financial devastation from Health Ins crises.
Is there any possibility that the bulk purchasers of these properties might possibly be the holders of MBSs that are behind the original mortgages?
Is there any possibility our government is helping to make good on past bad investments to ensure future Treasury purchases?
Or is that just the tin foil talking?
(Scared, don’t hurt me if it’s too over the top)
It could very well be that and more. The PTB play those kind of games all the time.
I think this happened with the Savings and Loans crisis. Already wealthy people got to buy the assets for pennies on the dollar. Sucks to be us! Maybe a web site that allows people to choose their 50% off house, and pools the cash to come up with 10 million to buy the set of homes is needed.
This is certainly a possibility (pooling money), but not sure you could pick your exact house first. You might be able to pick one once you buy the bulk package, though.
Americathon!
(great movie! if you haven’t seen it, get it!)
Just to follow up from yesterday’s bits bucket:
McAfee’s ranch in New Mexico, with the open airplanes and classic cars, sounds eerily like Michael Jackson’s Neverland. I should expect outlandish behavior from a guy who moonwalked for a living. But McAfee! For goodness sake, he’s a guy who protected our computers. I gotta wonder…
———
Here is the YouTube of Peter Schiff being laughed off of FoxNews. Tobin Smith is the guy with the Ramen Noodle hair.
youtube.com/watch?v=_HFNJw7xGSA
Most of the discussion is about interest rates, which I totally disagree with. Pat Dorsey says that the absolute interest rate “determines affordability more than anything else.” My god, my formal education in economics stopped in 11th grade and even I know this is nonsense. It’s PRICE!! I can’t afford a $750K house at 0%, but I could easily afford a $120K house at 12%. I can’t believe Fox News is paying these guys to be on TV. (wait, yes, I can)
Pat at least brought up the inventory question, which is closer to the truth. The housing bubble depended on the physical amount of buyers (ie, demand). The housing bubble deflated when we ran out of buyers, even when lending standards were still loose and interest rates were still low.
———-
DinOR, I have to disagree with you that housing was “just a bubble.” It’s a catastrophe for a few reasons.
1) This is a debt bubble. With dot com, people may have lost money, but the losses stopped at 0. Here, everyone went into debt, negative. It’s one giant margin call, just like in 1929-1930. And with houses costing $300-500K a pop, the debt racked up fast.
2) Derivatives/leverage/low reserves. If one subprime strawberry picker bought a $500K home, not only was it sold up the food chain, it multiplied (20? 30?) each time, because each bank who sliced and diced kept such low reserves. The final bagholder was AIG. Now we’re ALL on the hook for both the stupid debt AND the 20x leverege on that debt.
3) Property taxes. Local governments were idiots. Instead of treating the inflated tax income as a one-time windfall, they thought it was a permanent pay raise and adjusted their spending accordingly. We see the consequences now.
Charles Payne is a moron. I love how he says “the U.S. economy is not going off a cliff”. Good one. I used to watch the Fox News business shows. I can’t turn that $hit on any more. I don’t ever turn on CNBC. I hope others are boycotting these boobs the way I am.
Schiff was completely wrong about interest rates because he didn’t see government intervention coming in.
This was not the video Oly was thinking about. Tom Adkins is the guy with ramen noodle hair. You need to find that video.
Charles Payne is a moron ??
Yes he is….He was also one of Dubya’s biggest cheerleaders…I agree that those FOX business programs are tough to listen to but every once in awhile there is a morsel of good information that comes out of those programs…I listen when Wayne Rogers speaks…I also listen when the big toad WWF guy speaks now that I know he is married to Marideth Whitney…Gotta fiqure that he gets some good inside info during those intimate moments in the bedroom
“With dot com, people may have lost money, but the losses stopped at 0. ”
Weren’t they able to buy on margin too? Though I realize it wasn’t anything like this mess.
Intc raises guidance.Man the sheeple are really falling for this rally.Who are the tools buying AIG? The crap they are buying just has me laughing.Now all the money managers are telling you to buy because the economy is booming.
There probably were margin deals in dot com, but I don’t think they had the derivatives market backing it up, and it was probably heavily pay-to-play.
In housing, those high-end bankers allowed the higher risk because they had the gov bailout of Fannie/Freddie in the back of the their minds.
Margins and over-leveraged IPOs as well as stock “equity” that was soon to become worthless.
A lot of retirement and pension funds took heavy losses. You would have thought they would have learned then. I know I did.
“DinOR, I have to disagree with you that housing was “just a bubble.” It’s a catastrophe for a few reasons. ”
If we start with the premise that we had a credit bubble that drove a housing bubble, that raises an intersting discussion.
The credit bubble could have manifested itself in many different ways….
1) Corporate expansions whereby companies expanded production and distribution, undertook cost-saving investments, hired people, etc,
2) corporate R&D whereby companies invested the cheap money in future products
3) Infrastructure improvements whereby local governments undertook long-term capital projects with all the cheap money..
4) Higher Educations, making college more affordable
5) Consumer debt (including housing)
There are undoubtedly others (I first had this conversation a year ago so I forget all my details from back the).
Of that list, consumer debt, particularly housing, was by far the most disasterous outlet. Corporations are run by people who make rational decisions about future payback. They probably had first crack at Greenspan’s dollars, but passed when they determined that future product demand would be muted. Local govenment’s are slow and reactionary, so they came to the table late.
But consumers were the worse possible outlet. Most people are not financially able to do meaningful analyis. They are poor investors. And Mortgages allowed for margin rates that are unimaginable to other investors. All of this set up a total disaster.
Had the money from the credit bubble found any other outlet, there would still have been problems, but they would not have been anywhere as large as what we have now. It would have been so much easier to clean up from commercial over capacity or excess r&D than from consumer debt.
SEC chair: Derivatives data key for probes
August 28, 2009
(Reuters) - Getting better access to information on derivative transactions was a “critical” factor in U.S. regulators’ efforts to curb market abuses, Securities and Exchange Commission Chairman Mary Schapiro told Bloomberg in an interview.
Regulators needed information “that allows us to construct an audit trail, so that we can find insider trading, manipulation and other concerns that can reverberate through the entire marketplace,” the news agency quoted Schapiro as saying.
That ability “is really going to be critical,” she said.
Schapiro told a Senate panel in June that inquiries were being “seriously complicated” by difficulties identifying derivatives investors and determining the size of their trades.
Derivatives are financial instruments that derive value from an underlying asset. Credit default swaps, a type of derivative used to insure against debt defaults and speculate on a borrower’s credit quality, were central to the credit crisis that led to the global economic downturn.
Paulson’s plan to circumvent ISDA, using OTC Derivative trades was very successful for the insiders. What else matters to these guys/gals.
Prospects are grim for job growth in Las Vegas
Fri, Aug 28, 2009 Sun Coverage
Jobless rate leaps to 13.1 percent in Las Vegas (8-21-2009)
Las Vegas’ economy is going to need more than CityCenter’s opening — and massive hiring — to rebound to pre-recession employment levels, a local economist said.
Las Vegas’ jobless rate jumped 92.7 percent since July 2008, the state’s Employment, Training and Rehabilitation Department reported Aug. 21. July’s jobless rate was 13.1 percent, up from 12.3 percent in June and 6.9 percent in July 2008.
For the employment rate to return to pre-recession levels, an additional 60,000 jobs are needed, said Brian Gordon, principal of Applied Analysis, an economic consulting firm. In July 2006, as the economy boomed, Las Vegas’ jobless rate was 4.6 percent and the economy had a year-over-year increase of 48,900 jobs.
Prospects for job growth in the next six months are few. CityCenter is expected to create 12,000 jobs when it opens in December, and the 3,000 hotel room Cosmopolitan isn’t expected to open until the third quarter next year. CityCenter’s hiring could lower the jobless rate 1 percentage point, Gordon said.
“It will certainly help to stop the bleeding,” he said.
But the economy needs more jobs to heal.
One can see how they automatically think CityCenter will be a successful venture in the tone of that article. Sure they’ll hire, but how long will the jobs last?
Maybe long enough for the few smart people to double up, live cheap and save enough to get out in a year before it files for BK?
———————-
but how long will the jobs last?
Beat me to it.
“…Las Vegas’ jobless rate jumped 92.7 percent since July 2008″
My guess is that Denny’s is still selling a cup of joe for $1.99…they just don’t get it.
Is it a depression yet? Or do I still have to wait for Pravda to say so?
Treasury Document Called AIG Investment ‘Highly Speculative’
Aug. 28 (Bloomberg) — The U.S. Treasury said in a draft of a presentation that its $40 billion investment in the American International Group Inc. bailout was “highly speculative.”
A slide with the phrase was included in documents obtained in a Freedom of Information Act request by Judicial Watch, a group that advocates government transparency. The sentence was omitted from another version of the slide in a presentation describing the November revision to AIG’s rescue in which the insurer got $40 billion from the Treasury.
“The prospects of recovery of capital and a return on the equity investment to the taxpayer are highly speculative,” according to the first of the two Treasury slides.
Treasury Secretary Timothy Geithner told Congress in March that New York-based AIG, once the world’s largest insurer, was saved last year to prevent “catastrophic damage” to economic markets. The company still owes the Federal Reserve about $39 billion on a credit line after announcing more than $9 billion in asset sales.
“Why do you take out the fact that we are taking on risks for the taxpayers that are both huge and highly uncertain?” said William Black, associate professor of economics and law at the University of Missouri-Kansas City and a former U.S. bank regulator. “The last thing you want to spread is a culture in which people aren’t being absolutely blunt.”
Andrew Williams, a spokesman for Treasury, said the document with the “highly speculative” phrase was a draft created by the previous administration. It isn’t clear who at Treasury created the slides, entitled “Investment Considerations,” and who the intended audience was.
“The last thing you want to spread is a culture in which people aren’t being absolutely blunt.”
I’ve also noticed that shouting is sometimes necessary for getting an important point across, no matter how obvious it seems.
YOU GOT THAT RIGHT PROFESSOR
WE NEED MORE SHOUTING IN AMERICA
BECAUSE SOMETIME BEING PROFESSIONAL AND resolving problems over coffee and donuts just doesn’t work for some people.
“..that shouting is sometimes necessary for getting an important point across”
TrueDeceiver’s™ (Yellin’/ screamin’/ poundin’): “HANGING CHAD!!”…”HANGING CHAD!!”…”HANGING CHAD!!”…”HANGING CHAD!!”…”HANGING CHAD!!”…
Chad (The democrapt recount guy) hears:”HANG CHAD!!”…”HANG CHAD!!”…”HANG CHAD!!”…”HANG CHAD!!”…
TrueDeceiver’s™ (Yellin’/ screamin’/ poundin’):”Health reform means DEATH!!…”Health reform means DEATH!!…”Health reform means DEATH!!…”Health reform means DEATH!!…
Only 89 days ’till Thanksgiving!
What??
AIG stock up 264% in August
Shares soar nearly 27% Thursday on reports that salary for new CEO Robert Benmosche has been approved by Obama’s pay czar.
By David Goldman, CNNMoney.com staff writer
Last Updated: August 27, 2009: 4:15 PM ET
NEW YORK (CNNMoney.com) — AIG’s stock closed at $47.84 on Thursday. At the start of the month, shares were trading at a mere $13.14
Pump & Dump government style! (like there’s a difference)
Okay, so some Bushite wonk in Treasury (could have been Hanky Panky himself) made a Powerpoint slide saying it was speculative. Is it somehow LESS speculative under Time Geitner?
Ok, I need help understanding exactly what the BOJ can do, that it has not already tried in the past two decades, to combat the latest bout of deflation. What gives?
Link to follow.
Someone please explain, because aren’t rock bottom interest rates, zombie banks, and QE the pathway to endless prosperity?
Linky:
http://finance.yahoo.com/news/Record-deflation-in-Japan-may-rb-3400109337.html?x=0&sec=topStories&pos=8&asset=&ccode=
You could never tell there is a 20 years span of deflation by walking around in Tokyo. Everyone dresses in designer clothes, luxury cars everywhere and apartment prices still as expensive as hell. And they have high savings rate to boot so it is not like they are going into debt at the consumer level (gov’t is another story).
But… I thought deflation was supposed to mean the end of civilization as we know it?
I’m confused.
How about that homeless dude they found who had a bunch of money in the bank over there. He said he voluntarily lived in the park rather than exhaust his life savings on housing after losing his job. Went on to say he wasn’t the only one.
Now that’s a survival instinct.
Oh, and I didn’t think Tokyo was expensive at all. Compared to what tourists pay to shop here on crappy Michigan Ave. - Tokyo was a steal. Even at Y=94 it’s a better deal than my own city. Plus, the homeless there don’t hold a knife to your neck in broad daylight - as happened to a 80 y.o. guy yesterday in the middle of the Loop at lunchtime!
>Tokyo was a steal
Guess you didn’t order up some Kobe beef while there, huh? Expensive as hell but damn was it well worth the price!!!
Chicago can be a tough town. I’m guessing It might have something to do with the city of broad shoulders moniker, meat packing, and political machines.
To me, the first paragraph and the 2nd paragraph are at odds with each other.
Dell’s numbers show PC industry staggering back
Dell’s 2Q numbers show PC industry staggering back to feet, helped by consumers
SAN FRANCISCO (AP) — Dell Inc.’s second-quarter results reinforce what other tech heavyweights have shown recently about the health of the personal-computer industry: it’s still wounded by the recession, but is staggering back to its feet, thanks to consumers, bargain prices and little “netbook” laptops for surfing the Internet.
The Round Rock, Texas-based company reported Thursday that profit fell 23 percent and sales fell 22 percent in the May-July period. The results beat Wall Street’s forecasts, however, sending the shares up more than 6 percent.
Don’t you know? After a knockout punch, a boxer lying on the mat must be in better shape than he was 30 seconds ago in mid-fall, because he’s no longer falling.
(ignore the sirens in the distance)
I boxed a little, hate to disagree with on that one pack.
The PC market is not a place you want to be moving forward. We’re seeing a paradigm shift in IT (again) from high powered (high margin) desktops to dumb terminals (Wyse, etc) and NetBook machines; very low margin, high volume business. NetBooks are so cheap that they are nearly disposable (which is good for PC companies like Dell), but because there’s no margin, a single support call will wipe out any profit on the system. The day of the 1K desktop is over, a NetTop is more than adequate for 80%+ of users (and the monitor will typically cost more than that PC).
Add in the age of virtualization in the datacenter, and I don’t see how we see much growth in this industry. I’ve seen DCs go from 200 servers to 5 (after virtualization); that’s a massive hit to Dell/HP/etc bottom line (although the 5 servers that are used are relatively high margin, the absolute number is a fraction of what it used to be).
I don’t like that business model at all moving forward. Dramatically fewer sales, less high margin business.. Doesn’t look good to me.
You bring up some good points.
Going further, I was looking at netbooks on Tuesday (out of curiosity) and the tiny keyboards had my hands cramped in a matter of minutes. It was no better than texting which gave me the impression that is was just a really big iphone that didn’t let you talk to people.
My point being, why a netbook at all? Why not just iphone, android, blackberry etc, etc….Is the netbook just a short stop on the way to a single hand-held that handles phone, web, dummy terminal services?
Also, if the entire world moves to a netbook model with something like Google apps, I would think bandwidth would start to get pretty precious. But I don’t know enough about that market.
Just one man’s opinion….
It would take lot of space to explain how the market is moving for consumers, so I’ll just keep it lite.
Phones - extremely mobile communications, but still divided into “smart” and plain, thought eventually merging.
Netbooks - more data “productive” than smart phones. easier to use than phone keypads. holds more data. made more for surfing and lite data work.
Laptops - even more versatile and productive than netbooks. can handle heavier work loads. can handle voice, data and surfing.
Desktop - still the king productivity center, though divided between lite duty, home entertainment/productivity and business class.
Workstations - animation, video, programming, 3D engineering, industrial design. business only.
Servers - strictly business
I love my netbook. Small enough to take everywhere and cheap enough ( less than $200) I won’t get distraught if I spill coffee on it.
You see this dichotomy all the time in financial articles.
Spin baby! Spin! (Orwell in his grave, that is.)
“Today, Ben Bernanke is our tragic hero,” opines publisher Bill Bonner. “His flaw is as obvious as his challenge. He thinks he can stop the world from turning…. stop the seasons…avoid the hard, correcting winter by tempting the sun with bailouts, stimulus and cheap credit. His arrogance is an affront to the gods. The old tales tell us what will happen. He will fail. But when…how?”
Sounds like Bill has an extra “n” in his last name. All his answers are right here in the HBB! Someone clue this guy in, please.
“…He will fail.”
Don’t just love that good old American spirit & enthusiasm!
Henry Ford said on February 11, 1934: “Let them fail; let everybody fail! I made my fortune when I had nothing to start with, by myself and my own ideas. Let other people do the same thing. If I lose everything in the collapse of our financial structure, I will start in at the beginning and build it up again.”
No, he can stop the world. If he prints enough money, the stack of bills could easily extend to the nearest planet. Now if he uses some of the bills to buy some “Mighty-Putty” and glues the money stack together he can make a dollar-rope to lasso Mars and the Earth’s rotation will cease. He is approaching the first part of this plan with a vengeance!
Not sure if UK has a equivalent of the $8K tax incentive, but I thought the UK housing market was even more bubbly than the US one?
UK House Prices in Biggest Rise in 5 Years
By THE ASSOCIATED PRESS
Published: August 28, 2009
LONDON (AP) — House prices in England and Wales saw their biggest monthly rise in five years in July, a further indication that the housing market here is recovering from its crash, the Land Registry said Friday.
The average house sold for 155,885 pounds ($254,360) in July, up 1.7 percent on the month before, according to the registry’s house price index. The prices are still down 11.7 percent compared to last year.
Like the United States, Britain had a credit-fueled housing boom that has since turned to bust. But the market has shown recent signs of picking back up.
June saw the Land Registry’s first recorded price rise in 18 months. Earlier this month, British lender Halifax said U.K. house prices rose 1.1 percent in July — capping their first quarterly rise since 2007. The Nationwide Building Society, another lender, has said that house prices could finish the year with a slight gain.
The Land Registry said in Friday’s report that all regions were benefiting from the rise in prices, although Wales saw particularly strong gains.
The group’s data is based on properties which have sold more than once, a measure which excludes newly built homes. The registry only keeps track of prices in England and Wales, not the whole United Kingdom as the mortgage lenders do.
Correct headline:
UK House Price Still Down 11.7% YOY.
What? Who’d a thunk it. I thought C4C was going to save the whole worlds auto bitness…
Auto Industry | 28.08.2009
German car sector could face up to 90,000 job cuts
The German government’s decision to scrap its car-scrapping scheme may save it some cash in the short term, but a new study indicates that it could do serious damage to the country’s automobile industry.
The report, compiled by Roland Berger Strategy Consultants says the end of the scheme will sound the death knell along the entire automobile industry value chain.
And it is the sales end of the sector that stands to take the hardest blows.
“Once the scrappage bonuses run out, the risk of bankruptcy for German car dealerships is somewhere in the region of 30 to 40 percent,” the company said in a press release posted on its Web site.
It says as many as 30,000 jobs in automotive sales alone could disappear with the car scrapping scheme which has proved to be hugely popular with German consumers.
It stresses that although traders will sell more cars in 2009 than in the previous year, the current demand is artificial and will quickly come back to haunt the industry. It says 2010 could see as much as a 25 percent slump in demand.
The report adds that it is mainly the “wrong” dealers that are being hit. “The big dealer groups in particular, those who investments in the past are suffering under the burden of falling returns.”
Under the terms of the car scrapping scheme, the government has offered up to two million subsidies of 2,500 euros ($3,570) for anyone willing to send their old car to the junk yard and buy a new one to replace it.
Although Germans have taken full advantage of the offer, it has been controversial, with some studies suggesting most would have bought a new car anyway, and recent revelations that tens of thousands of the vehicles have not in fact met their fate in the crusher but have been shipped off to Africa for a new lease of life instead.
Gee… couldn’t see that one coming.
That article strongly implies that ending the program is what will hurt the German automakers.
That’s B.S. It’s overcapacity and malinvestment from during the global boom that is hurting those automakers. Plus all the current demand stolen in the recent past. To frame a gov’t program as the cause is ludicrous as it insinuates that bubble demand and capacity were normal!
That’s generally the justification method for all socialistic programs - show how much people are hurt by being taken off the government’s tit, as justification for needing a government tit; ignoring the other option - which is to have never presented it in the first place.
Kind of like justifying cocaine abuse as a good thing, by showing the crash that happens when you take away someone’s cocaine.
Insane, isn’t it?
+1
+1
Moreover, don’t they have an election soon? Mr. O would have been wise to save goodies like cash-4-clunkers for the mid-term.
“…but have been shipped off to Africa for a new lease of life instead.”
Old Benz = Militant Islamic car bombs with style!
Same thing happened with the Native Americans & the Spanish horses…funny how some ideas just keep returning…
It says 2010 could see as much as a 25 percent slump in demand.
The report adds that it is mainly the “wrong” dealers that are being hit. “The big dealer groups in particular, those who investments in the past are suffering under the burden of falling returns.”
Why is that the “wrong” dealers? They overreached and now — surprise — they’re burdened by all that debt and inventory. That’s wrong? (Or am I mis-reading something?)
PB - I’ve got a request in to Ben for your email addy, to send you that data you requested.
Cool. But now I will have to put my money where my keyboard was yesterday and turn on my thinking cap to carry out the calculation I described. This will require a large caffeine injection. Arghhh!
Forewarning - when you get the spreadsheet, you’ll think I’m a nut. But I’m actually just the squirrel collecting nuts. (Or maybe both - like Scrat from Ice Age).
all spreadsheets and no play makes packman a dull boy
all spreadsheets and no play makes packman a dull boy
all spreadsheets and no play makes packman a dull boy
(you’re just a squirrel, sent by grocery clerks, to collect an unpaid nut)
Proposed remedy:
More blog posts, less spreadsheets.
So long as you have no more than $250K at any single bank, sounds like you are good to financially survive the duration of the Great Recession’s vicious tail winds without undergoing deposit shrinkage. Happy FDIC Friday to all!
* The Wall Street Journal
* FAMILY FINANCES
* AUGUST 28, 2009
Most Deposits Safe Despite FDIC Fund’s Shrinkage
By JEFF D. OPDYKE
News Thursday that the federal fund protecting bank deposits has shrunk shouldn’t scare bank customers, but it is a reminder to manage accounts diligently.
The balance in the Federal Deposit Insurance Corp.’s deposit-insurance fund has fallen to $10.4 billion as of June, down from more than $45 billion from a year ago. The agency now has 416 banks on its “problem” list, up from 305 at the end of March. Already this year, the FDIC has closed 81 banks.
…
Congress last fall authorized the FDIC to temporarily increase deposit insurance to $250,000 per person, per account, up from the longstanding $100,000. Lawmakers recently extended the higher coverage to 2013. So, to ensure complete liquidity, an account holder should stay below the $250,000 cap at any one bank.
Any amount above that is at risk. When a bank fails, the FDIC sells whatever assets exist and splits the funds among the bank’s creditors, including account holders whose deposits topped the FDIC limit. Historically, those account holders have recovered about 72 cents on the dollar, said David Barr, an FDIC spokesman, though that has dipped to as low as about 40 cents.
Bank accounts also should be structured to ensure the greatest possible coverage. A joint savings account, for instance, provides protection up to $500,000, since two people share the account. By sharing some accounts jointly and titling others individually, a couple could protect up to $1 million in checking and savings accounts and CDs.
…
I don’t doubt that for a minute. “Safe” though is a relative term. Due to printing presses I’m quite positive there won’t be any FDIC-insured money lost at all. The big question is what’ll end up being the worth of that money.
And how long it takes before that FDIC check arrives in the “(e)mail”…
What do you bet they’ll yank the $250K limit on short notice if they find out one of the big boys are going under. Best to stay under the $100K I’m thinking, not that it’s a big problem for most of us.
Best to stay under the $100K I’m thinking
Gee, it’s going to be tough. It’s funny that for some people that is their biggest problem facing them and they think they have a rough life. Personally, I would love to have this problem. Luckily, I don’t. Has anybody seen my bottle of Jack? It has to be here, somewhere.
Money can’t solve genuine problems… and often makes things worse.
If life is good without money, it’ll be good with money. It it’s bad without money, it’ll be bad with money.
I think these Chinese stock market concerns over liquidity shortages are overblown. There is more liquidity where the liquidity already in the system came from.
As regards the ‘market rally’ stopping, I thought the Shanghai Composite was off by over 20 pct for August? Wouldn’t that already constituted a stopped rally? If not, how much of a crash it take?
The Associated Press
August 28, 2009, 6:09AM ET
China shares drop on worries liquidity might fall
SHANGHAI
Chinese shares fell Friday amid concerns about a possible decline in liquidity, ending the week down 3.4 percent.
The benchmark Shanghai Composite Index lost 85.71 points, or 2.9 percent, to close at 2860.69. The Shenzhen Composite Index for China’s smaller second exchange declined by 3.1 percent to 974.29.
Investors were disappointed by news reports that bank lending in August would show another decline after July’s sharp fall from the previous month. A credit boom helped to fuel a rally that drove the benchmark index up more than 80 percent by early August but prices have fallen on concern the government is tightening credit.
“The shortage of capital will stop the market rally,” said Cao Xuefeng, an analyst for Huaxi Securities in the western city of Chengdu.
…
“Bank accounts also should be structured to ensure the greatest possible coverage. A joint savings account, for instance, provides protection up to $500,000, since two people share the account”
FDIC coverage is for savings accounts. What about checking accounts? Isn’t a checking account (liquid money) protected no matter how much money is in the account? If true, then a checking account in this era of almost no positive return of interest on savings might be the better place to park one’s money.
Checking accounts can be covered under FDIC as well. The limits are basically “per social security number, per institution”. Merely opening another account (checking, savings, or CD) at the same institution and moving the overflow to it (once your first account reaches the limit) will not reset your coverage.
ANNOUNCEMNT: MORE GREEN SHOOTS FOR MEHIKO:
Whirlpool to cut 1,100 jobs, shut plant in Indiana
Appliance maker Whirlpool to cut 1,100 jobs, close refrigerator plant in Evansville, Ind.
BENTON HARBOR, Mich. (AP) — Whirlpool Corp. said Friday it will cut 1,100 jobs and close a refrigerator factory in Evansville, Ind., to cut excess production capacity.
The jobs will be eliminated in mid-2010. The Benton Harbor, Mich.-based appliance maker has aggressively cut costs as demand for big-ticket items has shrunk in the recession.
The company said it is still deciding what to do with 300 employees who work at a product-development center at the Evansville location.
Whirlpool will move the main Evansville production work to Mexico and another yet-to-be-decided location.
Al Holaday, Whirlpool’s vice president of North American manufacturing, said the cuts were “difficult but necessary.”
Its profit outlook for 2009 remains unchanged from a July forecast of $3.50 to $4 per share.
Whirlpool shares rose $1.04 to $65.58 in morning trading.
More good news, we need to crank up the cash 4 appliances ASAP.
A report from a friend in the swimming pool business, he’s hurting. We need a cash for swimming pools progrum also.
Paul Krugman had a piece about unemployment during a recovery from recession. In the past it has been V-shaped, but with more recent recessions there has been a long lag vs GDP.
The reason I speculate is that companies use the downturn as an excuse to close US factories and move the manufacturing overseas. Thus when spending increases the jobs that are created are not created here.
They do so at their own peril. As the US sheds jobs, the demand for these products declines as well. All these companies care about are short term profits. If it were up to me, I’d tax the living daylights out of EVERY single US company which is using foreign labor, and place tariffs on their products making them very expensive to import, and too pricey for Americans. You don’t want to use our labor? Fine, but your product will not sell well here, if at all. F*** these companies and their ‘profits’.
I have laugh at this stuff, some people are surprised, why? They don’t read the fine print on anything. Besides they thought the gubmint was givin’um something fo ‘free’.
Some Surprised By ‘Clunker’ Tax
Keloland.com
The Cash For Clunkers program is adding to the activity at treasurers’ offices all around South Dakota. First, people were asking for proof of ownership, so they could show they owned their vehicle for a full year, allowing them to cash it in. Now, they’ll be returning to register their new vehicle. And when they do, new owners need to bring every bit of paperwork provided to them by their dealer.
“That means they need their title, their damage disclosure, their bill of sale and the dealers have 30 days to get that to them,” Minnehaha County Treasurer Pam Nelson said.
But many of those cashing in on the clunkers program are surprised when they get to the treasurer’s office windows. That’s because the government’s rebate of up to $4500 dollars for every clunker is taxable.
“They didn’t realize that would be taxable. A lot of people don’t realize that. So they’re not happy and kind of surprised when they find that out,” Nelson said.
For now, the biggest impact of the program hasn’t hit this office yet, as most of the paperwork is still in the hands of the dealers. But Nelson expects to see move activity in her office in the next month.
“I’m anxious to see what it’s going to be like. I have no idea how many people we’re going to see. Hopefully the dealers can process their paperwork in 30 days,” Nelson said.
And that’s when the line at this office will give some indication of how many cars the government program moved off of local lots.
Nelson adds that if you did recently purchase a vehicle, ensure your dealer gets you the paperwork in time because if they don’t you could pay extra interest and penalties.
Is this some sorta state tax? I am surprised there are any states that do not collect when the car is purchased.
Yeah, I don’t understand the tax thing either. This guy says it’s tax-free-
http://www.goodfinancialcents.com/cash-for-clunkers-tax-free-credit-rules/
More news from the front line in Cali.
This is an e-mail from a good friend of mine talking about HELOCs in California :
We had our Home Equity Line of Credit ‘turned off’ last week - w/o any notice. Basically they said home values in CA have dropped ‘drastically’ and will likely continue to drop and that they decided to lower the credit line to Zero. They don’t reduce the credit line - either full amount or Zero. There new ‘policy’ is that the Loan to Value ratio has been reduced from 89% to 60%. And they also want that 60% to be based on the original assessment of the home value NOT their new lower value.
So even though our Loan to Value ration is within their new policy even w/ their lower assessment value — they still won’t adjust the credit line. IF we want to protest we have to get a new home appraisal and submit for consideration… after a long conversation it finally came out that even if we did that the only way it would reinstated would be for the home value to be the same or higher.
I’m glad we weren’t planning on using the HELOC for the patio remodel. But I was about to roll the other student loan amount into the HELOC in order to get the tax deduction for loan interest.
So we’re going to finally start the re-fi process, but who knows how that will go. I’m sure the process is so much more painful than it was 3 yrs ago.
Emphasis was mine.
So Helocs are still disappearing. They are in what is definitely considered a good neighborhood in Belmont.
More proof that I caught a knife! Don’t be like me! Keep that powder dry!
H.E.L.O.C.S.
Home
Equity
Lost
On
Continued
Slump
Here’s a current era HELOC example from behind “The O.C.” curtain:
Reader debates paying mortgage after down payment evaporates:
August 28th, 2009, by Mathew Padilla OC Register
Randy Johnson, president of Independence Mortgage Co. in Newport Beach, and a mortgage broker since 1983, answers questions…
Tommy in Costa Mesa asks:
Q. “I bought my house in September 2006 at the height of the bubble. I put $264,000 down on a $964,000 house. The house is now assessed at a value of $700,000, which means we have lost our entire life savings that we placed as a down payment. I have a 30-year jumbo loan fixed for 10 years at 6.25%. We have another seven years before the loan becomes adjustable. We can afford to put an additional $500 a month in principal on the loan but I do not want to do so if I am going to lose the house in seven years anyway. I am afraid the house will not appraise high enough for a refinance in seven years. Are there any fixed-rate refinances that apply to a jumbo loan? What should we do?”
A. “Reading stories like yours are painful to me and anything I can say in consolation would be inadequate…”
A. “Reading stories like yours are painful to me and anything I can say in consolation would be inadequate…”
Just call a spade a spade, you are fooked chump, enjoy your shack when it’s “worth” half that!
Would you like fries with that.
“I am afraid the house will not appraise high enough for a refinance in seven years.”
Seven years? Sound like at least someone is thinking ahead!
If he has 7 years and can make 500 bucks a month extra payments, he should be able to pay down the principal enough to refinance. Especially since by year 7 That’s an extra 42k he’ll have paid off.
Also, jumbo loans have fixed rate options. I just got one myself.
If he doesn’t think the house will be worth enough to refi in 7 years, he should walk now.
The correct answer is
Stop making payments on your house now.
If your lucky the bank will say nothing and you can live rent free for a couple of years. During that 2 years remove all the marble and appliances and fixtures for your next house.
During that 2 years remove all the marble and appliances and fixtures for your next house.
And sell the trees to a landscaping company.
“…home values in CA have dropped ‘drastically’ and will likely continue to drop…”
Oh right, and CA property assessments have also dropped ‘drastically’ to reflect it, by what — 2.4 percent or so — to reflect the ‘drastic drop’?
Actually, some have. If you purchased in 2007, you’re getting a sizable reduction.
Remember, everybody under prop 13 is already way UNDERPAYING taxes. So you have to have a heck of a reduction in newly bought homes to make up for 2% increase across the other 70% of the state.
So you bought your house for 130k 15 years ago. At the peak it would sell for 750k, but you’re paying taxes on it like it’s 210k. It’s now worth 400k. Will your taxes go up next assessment? Yes. By 2%.
Awesome reassurances
Yah, property taxes decreasing across the whole state is indictative of wholesale price collapse.
Thanks much for your example, which helped me find my thinking cap’s ‘on’ switch.
Here is another one:
- Suppose someone bought a San Diego home for $200,000 in 1998. It’s paper value (in terms of comp sales) tripled to $600,000 by 2005.
1. If the assessment was also set at $200,000 when the home sold in 1998, what was the current assessment as of 2005 (assuming the maximum allowed Prop 13 increase of 2 pct per year)?
Answer: $200,000*1.02^(2005-1998) = $229,737.
2. Assume the homeowner lost his job in 2009 and had to sell. Further, assume the sale price results in a 2.5 percent drop in the assessment, relative to the Prop 13 level.
a. Find the Prop 13 assessment level as of 2009, assuming it continued to reflect the maximum 2 pct annual increase.
Answer: $200,000*1.02^(2009-1998)= $248,675.
b. What would the sale price needed to have been to make the assessment to drop by 2.5 percent?
Answer: (1-2.5/100)*248,675 = $242,458.
c. How much lower would this sale price have been compared to the 2005 peak level price?
Answer: (1-242,458/600,000)*100 = 60 pct.
Conclusion: Don’t let that minuscule-sounding 2.5 pct drop in California assessments fool you. IT’S A BLOOD BATH.
U.S. credit card issuers pare lending limits.
NEW YORK (Reuters) - Millions of Americans have already seen their credit card limits shrink, and millions more face the same fate as lenders prepare for tougher U.S. consumer protection rules.
Since the financial crisis deepened a year ago, credit card companies have been closing millions of inactive accounts, cutting credit limits and raising interest rates to cushion themselves from record loan losses.
This is just the beginning of the biggest shake-up in the credit card industry in at least 20 years, analysts said.
Credit Suisse analyst Moshe Orenbuch estimated available credit card lines will be cut by about 20 percent, or $1.2 trillion, in coming months, and warned that “further cuts could result from the provisions of the new credit card law.”
Meredith Whitney, one of Wall Street’s best known and most bearish bank analysts, forecast that unused credit card lines will be cut by $2.7 trillion, or around 50 percent, by the end of 2010.
“Much of the credit line reduction to date has been driven by inactive account elimination, and I think in some respect you are seeing now a contraction in credit lines to individuals that are active,” said Sanjay Sakhrani, an analyst at KBW.
How in hell can we get out there and consume if you guys keep cutting our credit lines? I mean, we are known as the great American “consumer”. Charge!
Seems like the lending industry is collectively shooting themselves in the foot anymore. Don’t they realize that we will start calling them ‘deadbeats’ if they stop extending credit to anybody?
New York’s ’skinniest’ house on sale for a fat $2.7 million
By The Associated Press
NEW YORK - It’s 9.5 feet wide and 42 feet long (2.9 metres wide by 12.8 metres long) and is billed as the narrowest house in New York City. But there’s nothing small about its asking price: $2.7 million.
Located in Greenwich Village, the red brick building was built in 1873 and sandwiched between two larger structures.
It’s famous for other reasons, too. Corcoran real estate broker Alex Nicholas says anthropologist Margaret Mead and poet Edna St. Vincent Millay once called it home.
The three-story structure boasts plenty of light with large windows in the front and back, and a skylight.
The current owner bought it in 2000 for $1.6 million.
Nicholas says it’s a place for someone who wants a little history.
“…poet Edna St. Vincent Millay…”
Ode to an Underwater Homeowner (with deep apologies to the above-mentioned poet):
…
Painfully, under the pressure that obtains
At the housing market bottom, crushing my savings and my investments
(For mortgage debt makes shift to breathe and after a fashion flourish
Ten fathoms deep in care,
Ten fathoms down in an element denser than air
Wherein the net worth must vanish)
I trap and harvest stilling my banker’s needs;
I crawl forever, hoping never to see
Above my head the limbs of my FICO score no longer free
Kicking in frenzy, a home owner enmeshed in weeds.
Not bad, PBear! Are you perhaps an English professor? (Nah. You’re too creative;)
My English professor grandfather would take issue with that remark.
that was then, this is now
submit that sucker to the New Yorker
Foreign surgeons flown to UK to cut waiting times ‘botched one in three operations’
Read more: http://www.dailymail.co.uk/news/article-1209687/Patients-suing-hospital-botched-ops-horror.html#ixzz0PV0Ny43Z
Hey ravi- where have you parachuted in from with your heath care industry bromides? Did we show up on someone’s radar? How are the benefits? Good health care?
Why on earth do the have waiting lists, for simple operations. They should go to Canada, I hear their system is flawless.
Flawless is a tough condition to live up to, but the Canadians clearly prefer their system to ours, as do the Brits. And they spend less. And they don’t live in fear of losing it.
http://www.gallup.com/poll/8056/health-care-system-ratings-us-great-britain-canada.aspx
And they live longer.
Then the solution is simple, everyone that believes sickness care is a right, should move to Canada. It would save the U.S. trillions and no more complaints.
Folks worried that they won’t get a sickness care bill passed in the U.S. should stop worrying. D.C. will pass a plan of some sort, that is 100% guaranteed. It will not be based on Canada’s though, Barry has stated that will NOT work here.
It will be some contorted mess, and will not do what all of the hand wringers want it to, but never the less we’ll get it and the masses can all cheer the dims for saving them.
ummm…. this country was founded on fighting for what is right, we will fix health care, not run from the problem. It starts with sending all the lawyers to Canada.
ummm…. this country was founded on fighting for what is right, we will fix health care, not run from the problem.
Sorry, what this country was founded on and how we handle things today are oceans apart. See how well we are running from our debt.
Ask the 535 in control how often they look to our Constitution to guide their thoughts.
Reform lobbying, and limit campaign contributions and we’d see a lot less unpopular crap get passed by our ‘democratic’ government. But many who loathe the current setup would loathe the resulting one too.
“But many who loathe the current setup would loathe the resulting one too”.
Not I, my entire adult life I have been for less government, it’s never been tried in my life time. I have worked my ass off to keep what I have worked for. I believe in charity, but not forced charity. Who’s better to decide?
Nations have been down this road before, this is nothing new, the only difference is the date on the calender. It’s been tried before, this country is on the road to ruin, by it’s own peoples hand. I will not live to see the final curtain call, and I am glad of that. Sorry from the shit sandwich we are leaving for the incoming generations to chew on. But hey that’s their problem as long as we get “taken” care of.
You have been funding and promoting those who do not want less lobbying money.
Indirectly you are as responsible for this mess as all the rest of voters before you. And it isn’t going to change with telling ppl to move north. Turn off faux noise.
As Winston Churchill once said: Americans can be counted on to do the right thing — after every other possibility has been exhausted.
Economics 101 BCE …”O.K., students for today’s exercise, please write 500 times: “diarrhea is a liquid”
Wall Street Betrayal Seen in $4.8 Billion Company Debt Losses :
By Dunstan McNichol, Aug. 28 (Bloomberg)
‘Elaborate Scheme’
The securities are now worth $10 million, according to the suit, which said that “Merrill Lynch was engaged in an elaborate scheme to deceive investors about its involvement in the auction-rate market.”
Ayala Miller, a spokeswoman for Teva, did not immediately respond to questions e-mailed to the company. Bill Halldin, a Merrill Lynch spokesman, declined to comment.
In April, Texas Instruments, the second-largest U.S. semiconductor maker, sued New York-based Citigroup Inc., Morgan Stanley and BNY Capital Markets Inc., now part of Bank of New York Mellon Corp., over $521 million in auction-rate securities bought since 2005.
“They let us believe they would be liquid,” the Dallas- based company’s treasurer, Charlie Tobin, said in a telephone interview. “At the same time, within their institutions, they knew it was coming to an end.”
‘Pain Was Great’
“The pain was great,” said Anthony J. Carfang, partner at Treasury Strategies Inc., a Chicago firm that advises companies on working-capital management strategies. “These guys have had sleepless months, and you don’t soon forget that.”
Bristol-Myers Squibb Co., the New York-based pharmaceutical company, took an 82 percent loss in 2008 when it sold a portion of its auction-rate debt with a $642 million face value.
The maker of Plavix, the world’s second best-selling medicine behind Pfizer Inc.’s Lipitor, continues to hold $169 million worth of auction-rate bonds. It wrote them down by $75 million in the second quarter, according to regulatory filings.
Rebecca Goldsmith, a Bristol-Myers spokeswoman, declined to discuss the actions.
The market’s collapse also caused “staggering losses” to Teva, according to a lawsuit filed Aug. 6 against Bank of America’s New York-based Merrill Lynch & Co. unit, which sold $273 million of obligations to the Petah Tikva, Israel-based drugmaker.
‘The securities are now worth $10 million, according to the suit, which said that “Merrill Lynch was engaged in an elaborate scheme to deceive investors about its involvement in the auction-rate market.”’
Did someone at Merrill Lynch earn a nice fat bonus for perpetrating this deception?
Shifting wealth from companies that actually produce something to leaches.
Hahahahahahahahahahahaha…. (dang, I think I hurt something)
The lure of something for nothing gets ‘um every time…
Stimulus checks lure Floridians to their arrest.
MIAMI (Reuters) - Police in a Florida city used the promise of economic stimulus checks to lure 76 people to their arrest on a variety of outstanding warrants.
The Fort Lauderdale Police Department set up “Operation Show Me the Money” to round up people wanted on charges ranging from second-degree murder to guns and drug charges to failure to pay child support.
Using the name of the fictitious “South Florida Stimulus Coalition,” police mailed letters asking the suspects to call an undercover phone line and make appointments to claim their money. When they showed up at an auditorium and presented their identification, they were led to an area where uniformed police were waiting to arrest them.
Police said such roundups are safer and more efficient than serving warrants at people’s homes.
“You totally control the environment whereas when you’re walking up to someone’s home there’s an unknown factor there,” Police Sergeant Frank Sousa said on Friday.
The operation ended on Thursday night and Sousa declined to say how much money the suspects were offered.
“They were not large dollar amounts,” he said. “No one was promised thousands of dollars.”
Stimulus checks lure Floridians to their arrest. Police have been doing stings like this all over the country for years before the HB. My favorite scam of all time was the simple ad: “Last week to send your $5 to P.O. Box XXXX” Lots of money came in. Nothing was sent out in return.
Here’s a very special lowlife D.C. turd, this POS and a whole host of others should be in orange jump suits.
OOPS! CHARLIE FORGOT THIS $1M HOUSE
REALTY BITES TAX-THEM-NOT-ME RANGEL
NYP
WASHINGTON — Rep. Charles Rangel failed to report as much as $1.3 million in outside income — including up to $1 million for a Harlem building sale — on financial-disclosure forms he filed between 2002 and 2006, according to newly amended records.
The documents also show the embattled chairman of the Ways and Means Committee — who is being probed by the House Ethics Committee — failed to reveal a staggering $3 million in various business transactions over the same period.
This week, Rangel filed drastically revised financial-disclosure forms reflecting new, higher amounts of outside income and numerous additional business deals that had not been reported when the reports were originally filed.
In 2004, for instance, Rangel reported earning between $4,000 and $10,000 in outside earnings on top of his $158,100 congressional salary.
But the amended filings show that after the sale of a property on West 132nd Street, his outside income that year was somewhere between $118,000 and $1.04 million.
The forms filed by House members provide for a range of value on such transactions, so the precise number isn’t publicly known.
Rangel also lowballed his income by as much as $70,000 in 2002, $46,000 in 2003 and $117,000 in 2006, records show.
From the Agora5…
Trading volume continues to amaze us. Much like we reported Wednesday, Citigroup — just one single stock — accounted for 20% of NYSE trading volume yesterday. According to Wall Street Journal analysis, trading of Citi, Bank of America, Fannie Mae, Freddie Mac and AIG has accounted for an average 31.5% of daily NYSE trading volume since Aug. 5. Twice this week, they’ve measured over 40% of trading volume.
There are 3,162 stocks on the NYSE, and these guys get 31% of the volume? C’mon…
Interesting. One would think that VIX would be through the roof.
Is this more evidence of desperate folks chasing big returns? If so, this cannot end well.
Guaranty Financial Group Seeks Bankruptcy Protection (Update2)
Aug. 28 (Bloomberg) — Guaranty Financial Group Inc. sought bankruptcy protection from creditors less than a week after collapsing in the 11th-biggest bank failure in U.S. history.
The Austin, Texas-based company listed assets of $24.3 million and debt of $323.4 million as of June 30 in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Dallas. The asset and debt figures don’t include the value of Guaranty’s equity interests in its units, according to court papers. Three units also sought protection.
Guaranty, the second-largest lender in Texas with about $13.5 billion in assets and $12 billion in deposits, was closed by regulators on Aug. 21 after it collapsed under the weight of soured loans. Its banking unit was sold to Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest lender.
“Beginning in 2007, volatility in the credit and residential housing markets resulted in extensive impairment of existing mortgage-backed securities held by GFG and its subsidiaries,” the company said in court papers.
After the shutdown, billionaire Carl Icahn sold 3.4 million shares of Guaranty at 12 cents to 14 cents each, according to an Aug. 25 U.S. Securities and Exchange Commission filing. The sales left Icahn with about 15 million shares, the filing showed, or about 14 percent of the total outstanding. The stock has plunged 98 percent in the past year.
OT post for Olygal.
The Grocery Outlet has “Marlago” Aussie sauvignon blanc for $3. I’t pretty good. However, the same winery’s cabernet for $4 is pretty bad.
A realtor feel-good story for y’all:
http://www.detnews.com/article/20090828/OPINION03/908280393/1409/METRO/Realtor–lost-everything–but-found-peace
Updated Detroit unemployment rate: 29 percent
http://www.freep.com/article/20090828/BUSINESS06/908280323/1320/Nearly-3-in-10-in-Detroit-need-a-job
I now return to my regularly scheduled hamster wheel.
But Pravda hasn’t officially said it’s a depression yet!
NYC to track its building inspectors with GPS
Aug 28
NEW YORK (AP) - New York City will track its hundreds of building inspectors with GPS technology to make sure they are actually doing the inspections they report, the Department of Buildings said Friday.
The new scrutiny comes after an inspector was charged last year with faking a report that he had inspected a crane days before it collapsed and killed seven people.
Electrical, construction, elevator, crane and other inspectors will now have GPS tracking on their mobile phones so that department heads can follow their movements in real time through a web-based program.
Buildings Commissioner Robert LiMandri said the system will “ensure inspectors reach their assigned locations and are held accountable for their important work.”
Last year city crane inspector Edward Marquette was indicted on criminal charges of tampering with public records. According to the indictment, he indicated on a Department of Buildings inspection sheet that he had inspected a construction site on East 51st Street on March 4, 2008, when in fact he had not.
The crane collapsed 11 days later. Officials said it was unlikely an inspection would have prevented the tragedy, but the incident sparked an agency-wide examination of its inspection processes.
“Krugman Is 100% Wrong” About Deficits and Govt. Spending, RCM’s Tamny Says
Posted Aug 28, 2009 12:54pm EDT by Aaron Task in Newsmakers,
It may surprise those of you concerned about the $9 trillion deficit America faces over the next decade, but “deficits saved the world,” Nobel-prize winner Paul Krugman declares in his NY Times column today. “In fact, we would be better off if governments were willing to run even larger deficits over the next year or two.”
Krugman goes on to say the U.S. economy is big enough to handle a $9 trillion deficit, suggesting “the dangers are political, not economic.”
John Tamny, editor of RealClearMarkets.com, might agree about the political danger but says “Krugman is 100% wrong” about the deficits. “The economy is recovering despite the stimulus, not because of it.”
Taking a page from the Austrian School of economics vs. Krugman’s Keynesian, Tamny argues the government “should have done nothing” in the face of the economic crisis last year, for the following main reason:
* Government spending “crowds out” private enterprise and rising deficits raise the risk of a run on the dollar.
* Stimulus spending causes people to become unproductive because it shows enterprise isn’t rewarded. “It’s a disincentive to work,” he says, making a similar argument about unemployment benefits.
* Bailouts impede capitalism by rewarding failure and giving capital to non- or unproductive businesses, as we’ll discuss further in another segment.
“It may surprise those of you concerned about the $9 trillion deficit America faces over the next decade, but “deficits saved the world,” Nobel-prize winner Paul Krugman declares in his NY Times column today. “In fact, we would be better off if governments were willing to run even larger deficits over the next year or two.”
How about that? The “Bush” deficits were the most irresponsible things in the world, according to the NY Times last year. Now, Obama deficits at four times the size are the things that save the world.
A better explanation is that the NY Times is simply the mouthpiece for the Democratic National Committee. Anything pertaining to Bush or Republicans was and is evil and bad; and anything relating to Obama is so good only praise can be printed, never criticism.
NY Times = mouthpiece of the DNC
Daily Kos = mouthpiece of SEIU/ACORN
MSNBC = mouthpiece of Jeff Immelt and the other Obama economic pump monkeys
It is such a refreshing change to note that HB put a fellow so close to the common man in charge as “Pay Czar”… LOL!
Obama’s “pay czar” no stranger to big paychecks
Friday August 28, 2009, 2:14 pm EDT
WASHINGTON (Reuters) - The “pay czar” tasked by the U.S. government with ruling on the eye-popping compensation of some of Wall Street’s top earners is far from a stranger to big paychecks and the trappings of wealth.
Kenneth Feinberg made $5.76 million last year as a partner in his Washington law firm, Feinberg Rozen LLP, according to a government ethics filing obtained by Reuters.
And his assets, which include a stake in his law firm, two homes and dozens of investments, are worth anywhere from $11 million to $37 million, according to the filing, which places assets in broad value categories.
His homes are a $1.66 million house in Bethesda, Maryland, near Washington, and a $1.96 million vacation home in West Tisbury, Massachusetts, on Martha’s Vineyard.
Why, he sounds like the very salt of the earth!
“Each generation should be made to bear the burden of its own wars, instead of carrying them on at the expense of other generations. ”
~James Madison
I guess Bush wasn’t a Madison scholar. Surprise, surprise. Or is this Obamie’s fault, too? He does have an amazing penchant for being responsible for what came before him.
What’s this? When the hound from hell was making you big bucks they were da’man. Cool thing about hedge funds, want your money back, not so fast… Read the fine print, Mr, Savvy investor…
Cerberus clients overwhelmingly want out:
BOSTON (Reuters) - Cerberus Capital Management has been swamped with redemption requests with the Wall Street Journal reporting that investors are asking to pull out $5.5 billion or 71 percent of assets from its hedge funds.
Cerberus last month tried to entice investors into staying with the firm, but found that its clients overwhelmingly wanted to leave, the newspaper reported.
“We have been surprised by this response,” Cerberus chief Stephen Feinberg and co-founder William Richter wrote in a letter delivered to clients late on Thursday, according to the newspaper.
A spokesman for the firm was not immediately available for comment.
The bulk of investors elected to put their money into a fund that will liquidate hard-to-sell assets over time.
The news comes as several prominent hedge fund managers have closed their funds and as investors are less willing to leave their money locked up in potentially risky hedge funds.
Last year, when the average hedge fund lost 19 percent, Partners lost 24.5 percent on investments.
Cerberus Capital Management has been swamped with redemption requests with the Wall Street Journal reporting that investors are asking to pull out $5.5 billion or 71 percent of assets from its hedge funds.
Cerberus last month tried to entice investors into staying with the firm, but found that its clients overwhelmingly wanted to leave, the newspaper reported.
Hell, that deserves a hearty BAAHAHAHAAAAHAHAHAHAHAAAAHAHAAAA!
Where art thou now, Masters of the Universe?
I think the economy may be on it’s way to the pits of hell. Contrary to what the clown faced shills on CNBC would like most to believe, the anecdotal evidence I’m seeing points to more and more job losses, household financial distress, and overall stress in relationships, lives. In hindsight (foresight for many on this blog), I think we’ll realize that the bailouts for the “too big to fails” were a huge mistake, and really did nothing to address the fundamental problems we are facing. To date, there has been little to no discussion of the real problem- income and job destruction in the name of greed and globalization. So, down we go…
We’re in a race to the (wage) bottom on a rocket sled!
Can anybody explain Hyperinflation to me? All seem to agree that without wage inflation, none of it can happen and that makes sense. I also understand that the Japanese printed money like crazy and tried to prevent deflation/inflate and it did not happen to this day. However, I just was thinking about what little I know about hyperinflation which is that after WW2 in Europe people bought a loaf of bread with a wheelbarrow of currency, etc. which really stumped me: There could absolutely NOT have been wage inflation in postwar Europe, so where did everyone get the wheelbarrows of money from? Can anyone explain this please?
The main hyper-inflationary period in Germany was during the Weimar Republic before the Third Reich. In many ways that debacle had much to do with the rise of Adolph.
That hyper-inflation was caused by running the printing presses night and day, both as a way to fight the grip of a worldwide depression, and to reduce the insurmountable mountain of reparations debt from WW1.
I hope that helps, the correlation between the Weimar years and today are strong, and should not be ignored IMHO.
Well, hyperinflation was well under way (big time) in the Weimar Republic when Hitler was still just a small time agitator.
Hyperinflation is basically a ‘bank run’ on a currency. No one trusts it and everyone wants out of it and into another currency or commodity as soon as possible. It occurs when a country is perceived to be about to collapse, either economically or politically or militarily. It’s very hard to imagine how it would work in America, given that all our debts are in dollars (which we can print infinitely) and that the whole world still (!) depends on us to both buy their crap and protect them. High inflation I can well conceive, hyperinflation, no. I’m sure there are many here that would disagree. But if we were to collapse, what currency would be safe? Back to gold? Easily outlawed. Family joules?
Hyperinflation is an unusually high rate of inflation.
Inflation is when some amount of money buys less today than it did yesterday. There are many reasons for inflation.
——
A simplistic example in a simplistic economy:
Lets say there was a Gulf Coast hurricane. All the oil rigs and stuff go down. Oil becomes scarce and it’s price goes up.
Everything made from oil .. everything fueled by oil .. transportation costs of all goods.. virtually everything begins to rise in price.
How do people respond to such a rise in prices?
They see prices steadily rising.. a gallon of gasoline was $1 before the hurricane, then $1.50, and now it’s $2. What about next week??
$10 in the bank used to buy 10 gallons of gas. Today it buys only 5 gallons. Would you rather own gasoline, which is rising in price, or have cash in the bank which is falling in purchasing power?
In inflationary times, people would much rather own oil, gasoline, and other things than they want to own cash money. So, they take money out of the banks and buy stuff.
Everyone buying stuff means demand for that stuff has risen. A rise in demand for stuff increases in the price of stuff. All that buying may cause a shortage in the supply of some things, and prices rise even faster.
Without some change.. without some sort of intervention, this rise in prices feeds on itself.. and the rate of inflation (rise in price / less buying power of cash) gets out of control, and it may reach a point where it’s called it a period of hyperinflation.
———
Eventually the oil rigs are repaired, the supply of oil returns to normal. The price of oil falls, the price of goods fall. People stop buying stuff… demand for stuff falls, and supply rises.. and people then prefer to keep their cash in the bank.
The tables have turned. People would rather own cash, because cash buys more today than it did yesterday. The rate of inflation decreases to normal levels.
Did some (little) criminal law, and from the preliminary info I got, how can they “rule” MJ death a homicide? Manslaughter, yes.
I cannot believe an attorney would ask this. Are you SURE you’re an attorney? Seriously, homicide is NOT synonymous with murder. Even I know this from 1 measly criminal law class in college. Homicides do not always involve crime. Take self defense, for instance.
Grizzly, how much info do you need, that I won’t provide,(will as follows, with Judges names, phone numbers, etc., that I am a good attorney, judged by my peers. I know what you said. Give it up, or put some money up, a lot too my friend.
I’ll let Ben judge and I’ll put up 5K which is a lot for me.
This is Illinois. Shut Up.
Grizzly, you are right. I apologize for below/above.
Like I said, I did little criminal. I do PI and Comp mostly.
Therefore, I apologize to you for what I said.
Although somewhat successful, my criminal expereince was limited to DUI’s, a felony burglary, etc.
I admit when I am wrong and you are right.
P.S. “Hey Ben, I just withdrew the 5K I couldn’t afford anyway” :)).
Can we be friends? This bad lawyer is hunting for work now.
After thought. Hey Grizzly, you have been dogging me for awhile. I reinstate my bet with you.
We will send the money to Ben. Ben calls the Madison County Courthouse, in Illinois, and, he decides:
1: Whether I am an attorney,
2) Whether I am a good attorney.
If you win on either, you win the money. Since I quit my job and I am hunting for work, I cut it down to 3K.
Put up, or please let it go. Really, even if I am stupid, I enjoy it here and am tired of you hitting me. If you want to hit me, let’s go to the gym. I will make you my girlfriend, if you do.
I admitted my mistake.
I haven’t been “dogging you for a while”. Yesterday, I asked in jest if you were really an attorney because I found it hilarious, and somewhat ironic, that an attorney didn’t understand “monetize”.
After your latest question I cannot, for the life of me, understand how one becomes an attorney lacking even the most rudimentary understanding of criminal law. Your “shut up” comment says a lot.
Here’s a definition of criminal homicide(www.nolo.com):
Criminal homicide occurs when a person purposely, knowingly, recklessly, or with extreme negligence causes the death of another. Murder and manslaughter are examples of criminal homicide.
So homicide is just a preliminary ruling.
See above for my correction. Shot my Mouth Off Too Early.
(Ain’y the first time)!!
I love the line- “This is Illinois. Shut up.”
Not sure what it means, but I love it.
alph: Since Grizzly was right, and I am wrong, guess not much!
“Homicide” is death at the hands of another, in this case the doctor would be implicated because he gave the injections. The drugs listed would be on line one of the DC and listed lower should be other contributing conditions which could mitigate the drug effects on line one if the doctor had no prior knowledge.
I think that they will have a hard time prosecuting this one but will probably take a minor plea of some type, remove his medical license temporarily (in CA) and subject him to a civil suit.
Everything comes down to the lab doing the toxicology studies and the interpretation of the results. LA coroner’s office mainly deals in drugs of abuse, not Rx drugs.
I think that they will have a hard time prosecuting this one but will probably take a minor plea of some type, remove his medical license temporarily (in CA) and subject him to a civil suit. I don’t think the DA would have a hard time finding expert witnesses to testify that prescribing/administering/using Propofol outside of a hospital or clinic setting with continuous monitoring is severely negligent on its face. Making it a criminal offense is the next step.
From Dust to Bust - The Grapes of Wrath Revisted:
Looking back on the past few weeks, Johnnie Levy can see how she was driven to the brink of death and didn’t care.
The sharpest economic downturn of her 63 years stripped Levy of her beloved job as a seamstress and unravelled her world until she found herself sitting in a church hall in the black end of Tulsa waiting to see a nurse with a syringe in one hand and a Bible in the other.
Tulsa has seen its share of poverty and desperation over the years. In the 1930s, it saw a tide of hundreds of thousands struggling west along Route 66 to escape economic collapse in the north and the notorious dustbowl of drought and wind across the Midwest. Whether they had lost their land or their jobs, that flow of desperate humanity – chronicled so devastatingly through the fictional Joad family in John Steinbeck’s Grapes of Wrath – struggled hard to find enough to feed and clothe their children as they trekked towards an illusory dream of prosperity in distant California.
To travel the old road today – stumbling across crumbling ghost towns and half-abandoned communities, across the sprawling Native American desert reservations, through cities where people work all the hours they aren’t sleeping and still cannot afford to go to the doctor - is to encounter new despair, some of it still recognisable to the Joads.
The banks are once again evicting. Foreclosures plague the parts of northern Arizona and New Mexico traversed by the evicted 70 years ago.
But the monster – as Steinbeck described the financial system – has spawned modern beasts unknown to the Joads, such as the vast multinationals discarding American workers in favour of cheaper labour in Mexico and the health insurance companies that cut off the medical lifelines to the gravely ill.
(Full article) - http://tinyurl.com/ny3wuz
…stripped Levy of her beloved job as a seamstress and unravelled her world…
See how they made a funny there? It’s not all bleak! And remember that the last laugh is on you!
5:43 EST, and its Friday, and no banks have failed yet?
What the….!
no banks have failed yet? What the….! Never fear, just check out FDIC DOT gov for the latest bloodshed. Bradford Bank of Baltimore is the first on the list today.
Bradford Bank of Baltimore MD.
www dot fdic dot gov/bank/individual/failed/bradford-md.html
If, say, 15 banks a month fail through the end of the year, we could be up to 84 + 4*15 = 144 by year-end. How does that number compare to the historical annual numbers of bank failures?
Aug 28, 2009, 9:51 p.m. EST
2009 bank-failure tally climbs to 84
By John Letzing, MarketWatch
SAN FRANCISCO (MarketWatch) — Three more banks were closed by regulators Friday, bringing the 2009 toll to 84.
The largest of Friday’s three closures announced by the Federal Deposit Insurance Corp. was Affinity Bank, based in Ventura, Calif.
Affinity, which had total assets of $1 billion, deposits of $922 million and 10 branches in Northern and Southern California as of July 10, will be taken over by San Diego-based Pacific Western Bank, the FDIC announced.
The FDIC said former Affinity branch offices in San Francisco and San Mateo will be-open Saturday and the rest will re-open on Sunday.
The FDIC said it and Pacific Western entered into a loss-share transaction of approximately $934 million of Affinity Bank’s assets.
The federal agency estimated the cost to the Deposit Insurance Fund at $254 million.
Earlier Friday, regulars closed Baltimore-based Bradford Bank and Forest Lake, Minn.-based Mainstreet Bank.
…
And second up:
http://www.fdic.gov/bank/individual/failed/mainstreet-mn.html
#2
www dot fdic dot gov/bank/individual/failed/mainstreet-mn.html
Oly! Help!! Ol’ Grizzly is beating me up!!!
( I ain’t mad at him though).
You can play the game and you can act out the part
Though you know it wasnt written for you
But tell me, how can you stand there with your broken heart
Ashamed of playing the fool
One thing can lead to another; it doesnt take any sacrifice
Oh, father and mother, sister and brother
If it feels nice, dont think twice
Just shower the people you love with love
Show them the way that you feel
Things are gonna work out fine if you only will
Shower the people you love with love
Show them the way you feel
Things are gonna be much better if you only will
You can run but you cannot hide
This is widely known
And what you plan to do with your foolish pride
When youre all by yourself alone
Once you tell somebody the way that you feel
You can feel it beginning to ease
I think its true what they say about the squeaky wheel
Always getting the grease.
Better to shower the people you love with love
Show them the way that you feel
Things are gonna be just fine if you only will
Shower the people you love with love
Show them the way that you feel
Things are gonna be much better if you only will
Shower the people you love with love
Show them the way that you feel
Youll feel better right away
Dont take much to do
Sell you pride
They say in every life
They say the rain must fall
Just like pouring rain
Make it rain
Make it rain
Love, love, love is sunshine.
Oh yes
Make it rain
Love, love, love is sunshine
Yeah, all right
Everybody, everybody
Shower the people you love with love
This offer reminds me of the Friends of Goldman (non?) insider trading program. Is there such as thing as insider trading in the housing market?
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Don’t know if you will get this Prof. Bear, but thought you might like it. My best friend is a laborer at Hussmans in St. Louis. He drives 100 each way. We got “Box Seats Behind Home Plate” tomorrow night for the Cardinals.
Thought you might get a kick out of it. Not his season tickets. Based on merit.
Have fun! Your friend has a California-style commute in the Midwest. The silver lining is that (relatively speaking) there is no traffic there. I am fondly recalling when I taught a math class at McKendree College (east of Belleville) when we lived in West St. Louis County, and the traffic-free commute was actually bearable.
Dear Ms Varney:
Please, please, please shine a bright light on the cockroach bonus and bailout culture of Megabank, Inc, before the banksters steal and lie all the way to the ultimate demise of American prosperity. Breaking up Megabank, Inc into small, competitive, financially prudent, community-minded, responsible, efficient pieces will be good for the future of America’s children. Just do it!
It will also be much better for bankers and even President Obama himself if his administration carries out this necessary task rather than leaving it up to angry vigilante mobs wielding pitch forks.
It would also be great for the future of software innovation if she could figure out a way to break up Microsloth’s monopoly death grip on the software industry.
Business
America’s vigorous new antitrust policy
Return of the trustbusters
Aug 27th 2009 | NEW YORK
From The Economist print edition
Will the Obama administration’s actions match its tough talk on antitrust?
Illustration by S. Kambayashi
THE new head of the antitrust division of America’s Department of Justice, Christine Varney, sees Thurman Arnold, a predecessor who took office in 1938, as a model. Arnold’s appointment created an uproar. His book, “The Folklore of Capitalism”, published a year earlier, was widely seen as a satire on the inadequacy of the country’s antitrust laws. He was, in his own words, “responsible for the first sustained programme of antitrust enforcement on a nationwide scale.” This vigorous approach, in Ms Varney’s view, was an important part of “that era’s legacy for modern economic policy”. In other words, Ms Varney means business.
In recent years “the pendulum swung too far from Thurman Arnold’s legacy of vigorous enforcement,” Ms Varney argued in May in one of her first speeches after Barack Obama appointed her. Companies are likely to find themselves scrutinised at least as intensively as they were under the administration of Bill Clinton, when many senior antitrust officials in the justice department and Federal Trade Commission (FTC) cut their teeth on a celebrated anti-monopoly lawsuit against Microsoft. (Ms Varney was an adviser to the software giant’s chief victim, Netscape.)
…