Bits Bucket For September 2, 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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FHA on track for busiest year as it backs 23% of mortgages.
USA Today 9-2-09
Almost a year after the federal government launched its rescue of the housing market, nearly one in four new mortgages is insured by the Federal Housing Administration.
With less than a month to go in the 2009 fiscal year, the FHA is on pace for its busiest year.
From Oct. 1 through mid-August, applications for FHA single-family-home mortgages were up 50%, to 2.52 million, from the same period a year earlier.
Approvals for purchases, refinancings and reverse mortgages rose 70% to 1.67 million.
Eighty percent of the FHA mortgages for purchasing homes went to first-time buyers drawn to the FHA’s low-down payment requirements, starting at 3.5%. Private lenders making conventional loans typically require at least 10% down.
The FHA’s market share, about 3% in 2006, has swollen to more than 23%. With credit still tight, many borrowers could not get a mortgage without FHA help.
FHA loans “are one of the most important sources in this market,” says Mark Zandi of Moody’s Economy.com. “Without FHA, the housing slide would be much more severe. We wouldn’t be talking about a recovery now. We’d still be talking about a crash.”
FHA loans also have become more popular because of the demise of many subprime lenders, which sometimes allowed buyers to purchase a property with nothing down and no documentation of income.
“FHA loans also have become more popular because of the demise of many subprime lenders, which sometimes allowed buyers to purchase a property with nothing down and no documentation of income.”
FHA loans require no money down when the $8k gov tax credit is manipulated as the downpayment. Qualification is easy from what I understand. What has changed since the ‘demise’ of subprime lending?
“What has changed since the ‘demise’ of subprime lending?”
Um, nothing from what I can tell.
The whole point of a down-payment is for the buyer to have skin in the game.
2009 FHA is sowing the seeds of the walkaways of 2011 and 2012. With no skin in the game, they will be the least invested and the first to walk as prices continue to ebb away.
FHA is the new subprime—only this time the taxpayer IS definitely the bagholder.
Not only for the buyer to have skin in the game, but for the bank to have cash up front. If the buyer defaults, the bank may have to take a 10-15%(?) haircut in order to sell the proterty fast and cover expenses. The anticipated # of normal (medical/divorce/job loss) foreclosures has been risk-assessed and priced into the interest rates. At best, the bank can go recourse and attach the buyers other assets. At worst, the bank sells for a little less, but still pockets fees, leftover down pay, and principal and interest collected before foreclosure.
Banks (or bagholders) are in a pickle. In their greed for short-term gain and juicy fees (and with the knowledge that AIG/Uncle Sam would eventually save their cojones), those banks removed every single safety net that had been built in over decades. They didn’t bother to screen the buyers. The interest rates are too low to cover even normal foreclosures (thanks Alan!). There are many more foreclosures than priced in. There is no down payment cash up front to cover any potential losses. There was no interest collected on those I/O, sometimes very little principal collected on the neg-ams. Even no fees were collected because they were rolled into the defaulted mortgage. And worst, even the house itself isn’t worth the bank’s skin. The bank would have to offer a 40-50% haircut if they wanted a quick sale (and that’s if the FB didn’t pour cement down the toilets.)
Any one of these safety nets would have at least slowed the bubble and crash. Retaining down pay standards alone would have stopped it entirely.
From the looks of it the typical buyer in the $8000 tax credit (if you buy a house that is likely 20% overpriced) is a starry eyed twentysomething couple of newlyweds: http://money.cnn.com/galleries/2009/real_estate/0908/gallery.first_time_homebuyers/index.html.
Indeed it looks as the tax credit is being used in lieu of a downpayment for those who will likely be upside down in their mortgages within 18 months.
(being lazy here - sorry…)
Can someone explain in a nutshell the relationship between FHA and Fannie/Freddie? Or is there any relationship?
My (limited) understanding:
- The FHA promotes home ownership by guaranteeing investments in “low income housing” (i.e., housing which would presumably not otherwise be built or sold because the risk-reward ratio is too high for private investors).
- The GSEs (FNM/FRE) promote home ownership by providing a secondary market for mortgages which, according to the rational supporting their existence, the private sector would not be able to provide.
- More info is provided in the links below:
The Federal Housing Administration has insured over 35 million home mortgages and 47,205 multifamily project mortgages since 1934. Currently, FHA has 4.8 million insured single-family mortgages and 13,000 insured multifamily projects in its portfolio.
If you are a first-time homebuyer or haven’t bought a home in a while, this guide will offer valuable information about buying a home.
So is FHA the “public option” to private insurance such as PMI?
IIRC the US Department of Agriculture is also in the mortgage insurance business.
‘So is FHA the “public option” to private insurance such as PMI?’
My understanding is that FHA is targeted to help folks at the low end of the wealth distribution buy homes, while PMI would be for everyone else.
Nice
Gambling bankers can’t possibly create private financial insurance but average citizen must use private health insurance. I’d reverse it FHA and Fannie go private and provide a national health insurance plan.
“Gambling bankers can’t possibly create private financial insurance but average citizen must use private health insurance.”
Actually, the purpose of mortgage loan underwriting is for bankers to self-insure against default by carefully deciding who gets loans and who doesn’t. Obviously, if Uncle Sam guarantees a loan, the incentives for financially prudent underwriting standards are weakened, and the risk of making loans that will never be repaid (except by the taxpayer-funded guarantee) are increased. This is a good example of what economists and actuaries call the “adverse selection problem.”
Relationship = both are part of the Federal government’s web of programs which use various forms of subsidy to encourage home ownership. The FHA guarantees mortgages (with taxpayers picking up the cost of insurance).
The GSEs buy mortgages and securitize them. There was a long-standing belief (which fell somewhat into question last year) that the GSEs were “too-big-to-fail”, which gave them a market advantage over private competitors (i.e., they could purchase mortgages at a discounted interest rate and pay their investors less because said investors believed the GSE debt was guaranteed).
Now I have a question for whomever is paying closer attention than I: Was the GSE debt (i.e., MBS) effectively guaranteed?
Guess I get it - but that article is way misleading. It implies (indirectly at least) several times that the FHA is actually originating these loans, when it isn’t. E.g.:
FHA loans “are one of the most important sources in this market,” says Mark Zandi of Moody’s Economy.com.
The FHA isn’t the “source” of these loans, it just insures them. Some other entity (e.g. banks) are still the source of the loan itself.
Seems like more and more we see wording like this, with the intent seeming to be to guide the sheeple into believing that the government is providing the funding for everything. Which, in the end, may end up being a self-fulfilling prophecy unfortunately.
I have always thought that these FHA low or no down loans were a problem. The differences between these and the subprime loans are that income ratio tests and underwriting are done on the FHA loans. I am not sure what the exact ratios are, but they are stricter than the “anything goes” of yore.
Did they ever actually eliminate those seller assistance/Ameridream nonsense programs? I guess that it does not matter because the $8K windfall is more vile than the assistance programs. Or at least as vile. Please tell me that there is viable support for not renewing the tax credit. Whatever happened to a do-nothing Congress, I want that back. I am sick and tired of hearing real-estate types mentioning the credit.
Hello Everyone!!!!
First AGAIN!!! Unless the blog censor got me….
All is well here….
Hey, What do you guys think of the stock market? Oil is going lower and investors are looking for concrete evidence of a turnaround, not just feel good rhetoric.
I wish they would have been looking for concrete evidence in values of houses over the last 6 years….
It has not yet priced in the underlying reality of broke US consumers. In fact, one could argue the big “green shoots” rally from March 2009, which appears to be ending with the perennial “September slump,” was due to “irrationally exuberant” bulls choosing to ignore the underlying economic reality.
Stock prices eventually reflect underlying economic reality (get yourself a copy of Malkiel’s book, A Random Walk on Wall Street, if you want to review copious amounts of academic evidence on this point in a lay-friendly format).
My big question:
Before this slump ends, will we reach a point where “everyone” (even Goldman Sacks employees) think investing in stocks and houses is a dumb idea?
I’ll buy into the market when the Fed and the PPT stop.
The latest market bubble was caused by a simple flow of money from the Fed -> The Banks -> The market. It’s possible that the Fed was also buying stocks directly but that would take quantitative easing to a new level.
“It’s possible that the Fed was also buying stocks directly but that would take quantitative easing to a new level.”
Is it possible a Congressional audit would explore this possibility?
Most commentary on the Fed’s role in asset markets suggests that it chooses to turn a blind eye to bubbles, letting them inflate and deflate without intervention. I would think a key question to consider in a Congressional audit would be whether the Fed actively encourages bubble inflation as a policy tool. For example, does it use stock purchases to offset negative market forces, thereby deliberately creating the bubbles it pretends to ignore?
If this is the case, serious questions would arise about the stock market’s independence from government price distortion. If stock prices don’t reflect underlying asset value, costly misallocation of resources can result (Exhibit A: The bloated and inefficient financial sector).
* THE WALL STREET JOURNAL
* HEARD ON THE STREET
* SEPTEMBER 2, 2009
Carefully Examining the Fed’s Actions
By PETER EAVIS
Why shouldn’t Congress overhaul the Federal Reserve?
Support is growing for legislation to broaden Congress’s scrutiny of the central bank. Many on Wall Street oppose such moves, believing they would lead to politicians meddling with monetary policy.
However, there is plenty of room for changes that make the Fed more accountable while stopping short of getting Congress involved in setting interest rates.
…
“…when the Fed and the PPT stop.”
- What makes you think they are doing anything?
- Just in case they are, what makes you think they would ever stop?
Today’s WSJ: perhaps investing in stocks is a dumb idea. Probably because Wall Street wants to dump bonds, due to the risk of inflation.
But real estate looks good in places with big price declines, now that a bus driver can afford a $65K house.
http://online.wsj.com/article/SB10001424052970204047504574386802310702622.html
“There’s a good reason homeownership has been such a central part of the American dream. It delivers security, pride of ownership, a sense of community and decent investment returns as a bonus. I felt glad for my driver in Florida. He represents the other side of the foreclosure crisis. For every hardship story, and no doubt there are many, others are realizing their dreams of home ownership and getting what may well turn out to be the deals of their lives.”
“It delivers security, pride of ownership, a sense of community and decent investment returns as a bonus.”
Still talking about investment returns…long way to go yet, long way.
I don’ t know — hold onto a $65k house long enough and I suspect it may have some investment value down the line. How far down the line, who knows, but I suspect that’s not inaccurate.
Don’t let the token $65k example trip you up. Today’s aspirational HGTV watchin’ buyers won’t step foot in a $65k house.
Housing starts paying returns in a mere 30 years after purchase! The longer you hold it after having paid of the note, the more of a return you get.
Owning a PAID OFF house builds wealth. Owning a mortgaged house acts as, at best, an inflation hedge.
The problem is that there are very few like the Bus driver who are capable of purchasing a home, but didn’t already do so. Most are in debt up to their eyeballs and couldn’t possibly get a loan for a new purchase.
NOW they tell me it was a bad idea to go all into stocks with my 401(K) retirement plan allocation!
Well, then you KNOW it’s a good time to, yes?
“…you KNOW it’s a good time to, yes?”
I would concur if I believed decentralized individual investor decisions were what drove the stock market. The existence of 800 lb gorilla investors with virtually unlimited numbers of poker chips changes the game.
It has not yet priced in the underlying reality of broke US consumers.
That’s a load of a statement, PB for so many reasons. The consumer is broke. Bankers don’t quite realize yet that they will never get the principal back for those MBS-CDO’s, much less any interest. And the Chinese don’t quite realize the implications either.
So simple, so obvious, yet so far beyond the bovine brain’s ability to grasp. The situation is quite remarkable, when you pause to think about it, no?
Bankers don’t quite realize yet that they will never get the principal back for those MBS-CDO’s
Not true at all - they’ve already gotten much of it back in the form of sale of these MBS to Fannie/Freddie/etc. It’s them (and by extension the U.S. taxpayer) that won’t be getting their money back.
Heads bankers win, tails providers of free (govt-sponsored) risk insurance lose.
Hi Step!! Glad things are going well. I think I know nothing about the stock market, so no help there!
I don’t know anything about Vegas gambling, either.
As I have oft pointed out, the nice thing about the stock market is that you can play it in places like Utah, where gambling is illegal and socially unacceptable.
A friend’s coworker is Mormon and came in all excited about day trading. My friend is like, “You can’t do that, that’s gambling.” His coworker went to the priest or whatever, and comes back all said. Day trading is gambling in their world.
Isn’t dollar-cost-averaging gambling, too? Or is it ‘written in stone’ somewhere that the stock market always goes up? (11th Commandment?)
In Roulette, the green zero pays for casino and its upkeep, and the green double-zero pays for the profits of the casino.
Do you wish to place another bet?
Try 22 tonight.
This place is honest as the day is long.
Stpn2me,
Stay safe over there!
Look for 870-ish as the next support on S&P, and if we break that… hang on!
FYI traders: Deutsche Bank is pulling their 2x leverage bullish crude ETF (DXO) as of 9/9.
Stpn2me - I prefer playing poker with friends over the stock market. Much more social, I build lasting relationships, and until my buddy Steve drinks six beers everyone is playing by the same rules. I also have a more informed ability to make money.
Russian Professor: Collapse Of America Could Begin In Two Months
Doomsday author says Obama is doing nothing to forestall disintegration
Paul Joseph Watson Prison Planet.com
Tuesday, September 1, 2009
Russian Professor Igor Panarin says that events are continuing to confirm his doomsday prediction first made over 10 years ago, that the United States will completely collapse like the Soviet Union before the end of 2010, and warns that the chaos could begin to unfold in as little as two months.
Panarin, doctor of political sciences and professor of the Russian Diplomatic Academy Ministry of Foreign Affairs, told journalists during the unveiling of his new book yesterday that President Obama has done nothing to forestall the fast approaching crisis and that it could begin to properly unfold in November.
“Obama is “the president of hope”, but in a year there won’t be any hope,” said Panarin. “He’s practically another Gorbachev – he likes to talk but hasn’t really managed to do anything. Gorbachev at least had been a secretary of a regional communist party administration, whereas Obama was just a social worker. His mentality is totally different. He’s a nice person and talks nicely – but he’s not a leader and will take America to a crash. When Americans understand that – it will be like a bomb explosion.”
Since 1998, Panarin has been warning of a future disintegration of the United States and the collapse of the dollar. The recent election victory for Japan’s Democratic Party is another sign that the economic collapse of the U.S. is imminent, according to Panarin.
“Today I received another confirmation that the collapse of the dollar and the US is inevitable. Japan’s Democratic Party won the election, and I’d like to remind you that its leader [Yukio Hatoyama] has the snubbing of the dollar among his economic plans. In plainer words, he plans to transfer Japan’s monetary reserves from US dollars into another currency. The move will seriously accelerate the dollar’s exchange slump as early as this November. Disintegration will follow shortly,” he said, adding that next year China would also begin to massively dump the dollar and that Russia would begin to sell oil and gas for roubles.
Panarin previously stated that the dollar would eventually be replaced with “a common Amero currency as a new monetary unit”, referring to the Security and Prosperity Partnership agreement between the U.S., Canada and Mexico.
It’s a communist conspiracy!!!!!!
I wonder why he thinks that China will wait until next year before beginning to sell the US$ when he also believes Japan is just about to begin “snubbing” and the $ is going to slump in November.
details details… the poor guy’s trying to sell a book. Why harsh his mellow..
I’d put the odds of this happening as very likely. Very likely.
The timing, who knows? I believe when it happens the downdraft will come swiftly. This is the primary reason why I have been trading my dollars for hard assets.
Russia would begin to sell oil and gas for roubles.
Ain’t never gonna happen.
???
I don’t understand. They already are - 5 million barrels per day in fact.
Never mind - I misread the statement. Currently their sales are indeed in dollars, though they’ve talked for sometime about switching to rubles.
Russia knows better than to trust the ruble.
Even the Russians prefer dollars over rubles.
I’d be perfectly happy to buy their oil for rubles—on the one condition that I can easily buy forward currency contracts to protect against its decline. And the price I would willingly pay in rubles would reflect the cost of this currency “insurance” contract.
The reason the Russians don’t currently sell in rubles is that they don’t want to pay the cost of this insurance for me.
If that scenerio plays out you will see Russia and China collapse as well. No one will be buying russias oil or Chinas manufactured goods. Nope I think all the powers that be want a slow gradual decline to keep the peasants from rioting.
I’d still like to get the lowdown on those 2 Japanese fellas caught on the Swiss border with $134B in bonds a while back. Was it just tinfoil stuff or the real McCoy?
Those turns out to be fake bonds.
Yes, but why would someone print up $134B of counterfeits and try to pass them all at once? One would think that parties with that much industry would be a little smarter.
I imagine they were going to use them as collateral for a loan and keep them in a bank vault. People are taken like that all the time.
The next time someone tells me to “take off the tin foil hat”, I’ll do so and stick it up their patootie. I read this last night and realized this “one world” crap has been going on for a lot longer than I’d thought. I’m glad that bloated sack of waste is gone. He was willing to throw his country under the bus just to be president and I’ll bet this current administration is just the same.
http://www.forbes.com/2009/08/27/ted-kennedy-soviet-union-ronald-reagan-opinions-columnists-peter-robinson.html
Interestingly, this never got reported in the US, although it did get reported in England. Most of our politicians are traitors. Except they don’t realize that conquering entities, who may use the traitors, hold them in contempt. One of the barbarian conquerors of part of the Roman empire, actually admired Rome and was enraged when he found out what the local “senator” had been up to, in terms of corruption and treachery toward his own people. The barbarian tortured and put him to death. Today’s politicians shouldn’t be so sure of their rewards. History has shown that traitors have a hard time of it.
HA
Just ask Arlen Specter.
By chance, are you referring to Saint Kennedy?
Holy cow — you are right! He has already been turned into a saint in the afterlife…
Kennedy tried to get Andropov to appear on US TV to tell people that the USSR wasn’t hell-bent on destroying America? Horrors. And didn’t Reagan come to the same conclusion and deal (traitorously?) with Gorbachev a few years later, after he had gotten rid of his own administration’s tin-foil hat wearers? Oh, and hadn’t Reagan already secretly armed Iran at this time? (’Course that’s different, right?)
Keep your hat on.
Don’t forget Nixon went to China, and China was no longer the bogeyman. Ah yes, we only like to study history or read articles that support our tin foil hat theories.
I predict that, during his presidency, Barack Obama will do his own “Nixon goes to China” and visit the following countries:
1. Cuba
2. Iran
3. North Korea
And, no, the world will not end.
Wow — a dose of realism on this board. Nice change from the socialism paranoia. I’m glad I slogged back in.
Don’t forget Nixon went to China, and China was no longer the bogeyman. Ah yes, we only like to study history or read articles that support our tin foil hat theories.
Depends on what your tin foil hat theory is.
Many of us don’t believe that there was ever an intent for the world to become communist, but rather for an eventual “middle ground” to be found in the form of unified world socialism; at least amongst a large portion of the PTB. Nixon’s trip to China was a really big step in that direction.
why do I care about some Stalinist former colonel in the KGB predicting the doom of the USA?
someone help me out here..
One reason you might care is that the former Soviet Union is no longer controlled by the same parasitical financiers - the World Bank, Bank of England, Federal Reserve,etc, aka the PTB - that still control us.
The doom of the PTB might not be a bad thing for us, after all.
wow.. it almost sounds like you have pity for the USSR, and envy the current state of affairs over there..
The anti-banker aficionados sure are willing to make some strange bedfellows.
Wake up, Joey. The USSR ceased to exist twenty years ago.
The USSR went under twenty years ago.
well duh..
Can one not feel pity for the Third Reich?.. or for the Holy Roman Empire? (aka the First Reich)
“Can one not feel pity for the Holy Roman Empire?”
You can do as you please. I personally find the notion of ‘pitying’ government structures which long ago vanished from existence a bit odd.
“The doom of the PTB might not be a bad thing for us, after all.”
Sometinmes a bit of destruction has to take place in order to allow for more constructive ideas, institutions, etc. Kinda like the wrecking ball taking down an old building to put something better in place.
I don’t think the US, per se, will collapse. Its financial system, however, is another thing. And perhaps some of its goobermint.
As long as we don’t merge with Mexico.
please review dr zhivago. It can indeed be worse.
I shall have to watch Dr. Zhivago.
I advise reading it. The movie is too much romance.
…and big screen scenery, striking but tedious. I agree, it’s better to read the book.
I will read it, then.
I think I see your point. The fact that he is a Stalinist former colonel in the KGB pretty much makes it 100% certain that his argument is fallacious. On the other hand, if he worked for an American bank, I would give him the benefit of the doubt.
come on.. to top it off the guy is trying to sell a book.
Soviets have been predicting the downfall of the USA forever.. This particular guy was actively involved. Go ahead and hang on his every word for all I care..
I’m with joey on this one; if you read the guy’s predictions in details, they are VERY outlandish. While I believe we are failing in many ways to maintain, much less build our country’s position and standing, I really do not believe our decline with bear ANY resemblance to this joker’s predictions.
He’s getting his name in the headlines for his own enrichment, nothing more.
Yes, the commies were (are) incredibly disingenuous and hypocritical, but that doesn’t mean they’re always wrong. In fact it was from some of their propaganda that I first got my ideas about the role of corp’s in the U.S. economy.
Heck our own CIA didn’t foresee the collapse of the USSR, and in many respects predicting such an event was the prime reason for the CIA’s existance. Why would we expect better results from the KGB/GRU gang?
“Obama was just a social worker. His mentality is totally different. He’s a nice person and talks nicely – but he’s not a leader and will take America to a crash.”
He’s still campaigning. He’d be very happy just to sit in a car in the middle of a parade, smiling and waving to the populace, distributing blessings like the Pope, saying “Yes, we can!”
It’s interesting to watch, as the health care initiatives are tanking, that Obama is falling back into a mode of community organizing as the strategy for trying to push it through. Basic human nature I guess, you just go with what you know.
Waah! We’re halfway thruogh the first quarter and Obama hasn’t fixed everything yet, made world peace, and stopped the worldwide depression.
Don’t we counsel grasshoppers to have patience here?
I’d say Afghanistan is Obama’s biggest blunder, he just doesn’t realize it yet.
“Since 1998, Panarin has been warning of a future disintegration of the United States and the collapse of the dollar.”
The nice thing about stopped-clock predictions is that you can continue making it up until the point when either you die, or the prediction turns out correct. In the latter case, you get to brag about how you were right all along, and in the former case, you never have to live to endure mockery for your missed prediction.
Yeah, but (former) your clocked stopped, so you end up being right anyway!
clocked=clock
I think you are mixing your metaphors (did you confuse “clock” with “ticker”?).
Never Fight Da Bear!!!
Professor Bear,
Right, or you can always spin your “permanently high plateau” or “DOW 30,000″ to adjust to -actual- market realities etc?
But we didn’t need to be such a willing accomplice? In typical American fashion we must have figured, “If we truly ‘are’ going downhill, and this may BE the last generation to enjoy an enviable standard of living, well then let’s go out with a BANG!”
And for me, that’s what The Housing Boom was all about.
Totally agree PB. This prediction is worthless. While we all agree on this blog that the US needs to and will change in major ways, and that the USD is probably headed down, predicting the demise of the USA is a nutjob. Despite its many failings, the USA is not the USSR.
whereas Obama was just a social worker. His mentality is totally different.
Panarin smokes some good crack. How about Bush? Was he “just a failed investor”?
Betting against the USA has been a bad bet since 1776.
It has also looked a lot worse for the US at many points between 1776 and the present!
Thank you, Bear. The early years of the Republic (post-Revolutionary War) come to mind. Not to mention the Civil War and the Great Depression.
Is this that same guy for which there was a video of his presentation a month or so ago? I can’t find that.
If so - while I think he may be right on some fronts, he’s also pretty wacked about a lot.
Darnit. The price of guns (more like the ammo) is already in a bubble! What am I going to do!
Load your own.
Oh, you just try finding primers these days.
Of course, everyone buys all they can find, becuase the scarcity proves that there’s a conspiratoral supply problem.
Naturally, I have 10,000ish.
I’ve been out shooting only once this year because I don’t want to use up what I have. Last year I was competing every month or so and shooting every weekend.
I’d better brush up my skills soon.
After the last election I bought my S&W Sigma chambered in 9mm rather than .40SW under the assumption that there would be a lot of cheap surplus 9mm Luger out there.
Boy was I wrong.
He’s 2 years early, 2012 is the magic year! (i know, i know, perpetuating the Mayan calendar event…)
TTM Technologies announces plant closures
(AP) – 11 hours ago
SANTA ANA, Calif. — TTM Technologies Inc., which manufactures printed circuit boards, said Tuesday weak demand is forcing it to close two California plants that together employ 347 workers.
The layoffs represent about 11 percent of TTM’s work force, the company said.
In a statement, TTM said it expects to record between $11 million and $14 million in separation, asset impairment and disposal costs primarily in the third quarter. The closures are expected to result in about $14 million in annual savings, the company said.
“This is a very unfortunate but necessary decision based on the prospects of long-term weaker demand for these products,” said Kent Alder, CEO of TTM Technologies.
Excluding impairment charges and closure costs, the company said it’s on track to achieve its guidance for the third quarter. It has forecast earnings of 9 cents to 15 cents per share and revenue in a range of $134 million to $142 million.
On average, analysts surveyed by Thomson Financial expected profit of 15 cents per share and revenue of $138 million.
TTM said production at the Los Angeles facility will be transferred to other sites in California, Utah and Wisconsin.
Backplane assembly services provided by the Hayward plant will be transferred to the plants in Shanghai, China and Stafford Springs, Conn.
Fond du lac, Wisconsin. Mercury marine and its union has come to an impass over the companies demand to freeze wages for the next seven years. The union has rejected the demand. Now at an impass, Mercury has announced iwill move its headquarters and manufacturing south, closing its Fond du lac facility. This means 850 staff and union workers will be left without jobs. The city of Fond du lac and the state are trying to keep the jobs in Wisconsin by offering incentive packages..to no avail.
We all know boat and motor sales are down. Why doesn’t the company just lay people off? Why close a plant. Simple…GREED!
Probably because Oklahoma is offering them a better deal than Wisconsin.
The southern states enjoy a year-round recreational boating season, while Wisconsin does not. I’m surprised Mercury didn’t make the move sooner, given that there are probably more boat owners in the south than in the north. They would not only save on labor, but shipping costs, too being closer to more end users.
Greed on *whose* part? Seems like much of the proposal was simply in line with how normal companies work in other industries in the US - horrors! Yes, the wage freeze is tough, but is it better to have no work? The unions priced themselves out of jobs if they voted no.
That was my impression as well.
If the demand for recreational boats is down, that means that at the end of the day, profits will be down, and the company has to operate in its best interest.
If the Union really operated in the best interest of their members, and realized that at least they are being given a chance to negotiate, they should have sat down, and granted some concessions in order to save the jobs.
I think that the union was to blame for this one. I wonder how non-union workers feel about this? Maybe they were willing to accept makins some concessions to Mercury in order to save their job?
I for one can guess how non-union workers feel. I was one of them once, when my employer had a long and disastrous strike in one of the other divisions. The end result was that part of the company shutting down, amazingly to the cheers and hoots of the now-unemployed union guys. I guess they had more money in the bank than we worried and less-skilled peons did.
Somehow we kept our jobs, or many of us anyway, but only because our division was sold off to a large (and IMHO evil) “corporate agglomerator”. I bailed outta there a few months later for greener pastures in a new city as the new owner chopped headcount right and left.
Without the long-established sense of entitlement that unionization always seems to bring with it, I wouldn’t be surprised if some of the non-union workers moved to OK when the plant does.
Without the long-established sense of entitlement that unionization always seems to bring with it, I wouldn’t be surprised if some of the non-union workers moved to OK when the plant does.
These guys weren’t even making 3x’s minimum wage. I imagine they must be paying only minimum wage to make it worth their while to move a plant to OK.
I am sure the company will use this opportunity to get rid of the older and more higher paid non-union employees as well.
Skip,
I don’t know what these guys were making but a wage freeze “for SEVEN years” just seemed like throwing down the gauntlet!
( I mean, do you really need to be that emphatic? )
I don’t know what these guys were making
That’s the curious thing: Seldom does the press, or the companies or unions for that matter, report what the typical wages are in a lot of these negotiation cases. Our union guys had standardized pay rates that should have been easy to lay out, but it was rare that the numbers got reported. Just as well, or the public would have been appalled at how well paid they were compared to the typical local worker.
I guess I’d feel bad if the machinists/etc. were pulling down $12.50/hour at Mercury. But on the other hand, $50/hour+bennies would be a different matter. I’d take a wage freeze for seven years at that rate.
They were making $20/hr.
I’m sure the union guys realized that every year for the next 7 years they would be receiving a pay cut.
Maybe they all fell into the hyper-inflation camp and thought inflation would be very high in a few years and they would be working for nothing.
Even if inflation only rises to 7-8%, over seven years that would equate to over a 50% pay cut.
So do you agree to a 50% pay cut or a 99% pay cut? Decisions decision decisions.
I think the company wanted to move to Oklahoma all along and this was all just a PR move to make it seem the unions forced them to leave Wisconsin.
Skip,
Interesting, and it probably ‘was’ just a PR stunt now that you mention it. Can’t speak to WI’s cost of living, but it seems like a decent wage.
Marine engines are complex animals and everything has to be just right. Boaters are more particular about their boat mtr. than they are about the family car.
That aside, I’ve always wondered why they didn’t farm the warranty work out to older retired guys and just have them attend “factory authorized training”?
I find it interesting as to how anti union this blog is. So, if the union guy on the shop floor assembling motors makes with bennies and wages $50.00/hr, is it ok for the CEO to make $1,000/hr?
Organized people, don’t stand idley by while their fellow workers job gets outsourced.
If it wasn’t for unions, you would all be working 60 hrs a week, without vacations or sick leave.
The Fox valley is a very strong unionized community. Pipefitters, plumbers, electricians, mechanical contractors,
paper workers, even Oshkosh truck. The valley has always been know for high wages and a high standard of living.
You find very few slum areas in the valley. Nice neat affordable housing, from 6ok to 500k. The schools are some of the best in the nation. I suppose this is all because the unions suck!
Unions dont suck…unless they get way overboard with the total cost to hire
Tons of lawyers even doctors dont make $50 hr (x8 hours a day plus OT) what did the mechanic spend on his educmakation….maybe got a GED?
Face it its over……best they will do in the future is about 1/2 that…
Or If you want a HIGH pension payout you MUST be retired no 2nd job or career….You work you get docked.
If it wasn’t for unions, you would all be working 60 hrs a week, without vacations or sick leave.
Oh, so you know some lawyers do you?
Who exactly is going to buy all those new boats powered by Merc engines now that the HELOC $ is gone? Brunswick is toast.
Good news…
BP Makes ‘Giant’ Oil Discovery in Gulf of Mexico (Update1)
Sept. 2 (Bloomberg) — BP Plc, Europe’s second-largest oil company, reported a “giant” discovery at the Tiber Prospect in the U.S. Gulf of Mexico that may contain more than 3 billion barrels, sending its shares higher.
The well is located in Keathley Canyon block 102, about 250 miles (400 kilometers) south east of Houston, the London-based company said today in a statement. The Tiber well was drilled to a total depth of approximately 35,055 feet (10,685 meters), greater than the height of Mount Everest.
The latest discovery will help BP, already the biggest producer in the Gulf of Mexico, boost output in the region by 50 percent to 600,000 barrels of oil equivalent a day beyond 2020. It will also allay concerns over BP’s reluctance to invest heavily in unconventional projects, such as oil sands in Canada, to replenish reserves as maturing fields age.
“It will take a while to develop, the second half of next decade, but it’s very important,” Jonathan Rigby, an analyst at UBS AG, said in a telephone interview.
BP is developing nine projects in the Gulf of Mexico and in 2007 overtook Royal Dutch Shell Plc’s output in the region.
Kaskida Find
“It will be bigger than the 3 billion barrels” of oil equivalent discovered at the nearby Kaskida field, said Robert Wine, a London-based spokesman at BP. “This is a whole new geological play we’ve got here.”
US demand = ~20M bpd
3 B barrels = ~6 months of US demand.
Exciting, but it won’t change the global calculus.
(original Ghawar was 170 billion barrels)
“total depth of approximately 35,055 feet ”
Not exactly what I would call a gusher. What does it cost to lift that stuff? $70+ a barrel? What’s the EROEI (= Energy Returned On Energy Invested)? There’s still plenty of oil, it’s just a bitch to get at. Once the EROEI approaches a ratio of 1 it’s game over anyway.
35,055 feet. That boggles my mind. That’s over 6 miles deep, and under water.
That amazes me.
Bub that amazes me too. Heck, if I remember correctly, at 5280 feet per mile??? it is closer to 7 miles. I always enjoy that kind of wonderment, when you know humans are doing spectacular things. I cannot fathom the technology.
At that depth pressure is over a thousand times what it is on the surface.
jfp,
And I’ve wondered that myself. I have no grounding on the subject but it seems to me that at certain depths, the sheer pressure alone would bring it much closer to the surface just by ambient pressure?
Wow, forgot that point too jfp.
“I cannot _fathom_ the technology.”
Nice pun, ATE!
(btw, very sorry about the loss of your friend; I was late reading that thread).
Prime thank you so much. I value my friends here, and you are one of them.
I love technology. This is down right fascinating.
How many barrels of oil will it take to pump up those 3 billion barrels of oil, ship and refine them. My guess is about 2+ billion.
“US demand = ~20M bpd
3 B barrels = ~6 months of US demand.”
Double the fuel economy of the average car on the road and you’d get the same result forever.
World Production 2005: 78 million barrels per day. The new oil discovery of 3 billion barrels offers the world 38 more days of oil.
BP hasn’t said how big the field is. They’ve only said it’s > 3B bbl/day.
I did not read where they said 3 bbl per day. Reread the quote at the top of this thread. Big difference.
So you figure 10 billion. fine. 120 days worth of oil for the world.
Costco was just about empty yesterday afternoon.. about 5 registers open and one or two customers at each. Maybe 100 people in the store. I suppose it’s normal for a weekday. I usually go Sat or Sun.
But what gets me is these peanuts (salted in shell, 5lb. bag) are freakin OLD! .. and no expiration date on the stupid bag.
Maybe inventory is not moving as fast as it was… gotta be more careful.
On the other hand, TJ Maxx and Marshalls are booming (TJ is hiring). Jo-Ann Fabrics & Crafts was booming too.
[note: making clothes is not cheaper than buying. Mid-range common fabrics cost upwards of $8-10/yard, and it's not hard to spend $10-15 on trim and buttons. ]
I know nothing about clothes.. less than nothing. Didn’t even know Marshalls sold clothes.
Only thing i remember about Marshall’s/TJ Maxx was corporate owner suffered that identity theft thing.. stolen computer data.. some 50 million customers’ info was compromised.
“Didn’t even know Marshalls sold clothes.”
And I used to think Stein Mart sold glassware!
And I used to think Stein Mart sold glassware!
They just do ceramics - i.e. steins, right?
Marshalls and TJ-Maxx are off-price stores that sell mostly clothes and some housewares. (Marshalls had so many housewares that they spun them off into separate stores, Home Goods.) The clothes are quality fashion, but they are leftovers and one-offs from the big batches that Macy’s et al sell. The leftover stuff all gets heaped onto one rack, like a big grab bag, and you have to search relentlessly to put together a coherent wardrobe. It’s a bargain-hunter’s paradise. Some women shop every week when the new shipment comes in.
Jo-Anne sells the fabrics and trims for home made clothing.
Reminds me of The Onion spoof:
“Retail Analysts can’t determine if T.J Maxx is still in business?”
With unmanned registers and merchandise carelessly strewn in the aisles…
i sew and so many people comment that it must be great to save money. Nope, not in the least … almost always cheaper to buy. But it’s a hobby and you do get something that no one else has
I designed and put together a custom leather holster once.. required a bit of hand sewing… very satisfying and rewarding and I learned how to thread a needle.
It’s a kick working with clean, soft, lightweight materials as opposed to wood, rock and metals.
you sew what you rip
you drip when u sew wrong.
sew long, r.i.p.
alph, you always get me in trouble.
“[note: making clothes is not cheaper than buying. Mid-range common fabrics cost upwards of $8-10/yard, and it's not hard to spend $10-15 on trim and buttons.]”
Very true, but after seeing the crap they’re trying to pass off in the stores, I am this close - thiiiisss close - to giving home made a try.
Kim,
Can’t speak for apparel but “I’m there” w/ stereo equipt. etc. Over the last 5 years I must have thrown out a half dozen disposable radios. Now I scrounge for older Panasonic or GE radios/phonos and replace belts, needles, tubes and transistors. I’m going BACK to a corded phone.
If you’re looking at a cost benefit analysis, it just boils down to how much you play/wear them?
Old school “ghetto blaster” boom boxes go for a mint now. Not sure about the other breakdancer apparel.
Really?
My cousin just gave me one he had in his closet.
And BF is on a mission, his house looks like an old school stereo receiver graveyard.
My 20 year old Technics component stereo system is running great. It doesn’t have surround sound, but since I’ve never had it, I don’t miss it.
I know a younger geek who buys older stereo equipment and replaces the capacitors and other components in them to bring them back to life. Not sure what year on average, but the sound is good from the stuff. Not high end McIntosh type stuff, just normal consumer brands.
VA:
Lots of that classic stereo was made right here in Long Island City NY even McIntosh had a factory Marantz Fisher Lafayette, even Zenith made picture tubes here…
Lots of the 50’s early big cabinet stereos were made here too, magnovox, philco,
Bozak was made in my home town Norwalk CT
Amazing what quality this little corner of America produced….now the biggest employer is Fresh Direct and they need truck drivers and delivery people
My old roommate, a buyer for a mid level retailer, used to buy ultra marked down clothing during the clearance sales. She’d then take them apart and then remake them for a perfect custom fit. She always looked fantastic.
I wouldn’t. Not at the discounts that are happening at ‘better’ stores right now.
I’ve recently started sewing again and have found it to be a cheaper alternative for some things. You can find great quality fabrics in major city fashion districts and on the internet. I sewed some great summer dresses and halters this year, much better than what the stores carry.
Where is that one? The one here in Torrance is the most crowded. Parking lot - you have to wait for some shopper to come out to be able to get a space, last time I was there I had to wait fifteen minutes to park. Inside the store shopping carts near the free sample displays sometimes are 3 carts wide. I hate to go there.
Budget Crisis: City Takes Out $275M Loan
PHILADELPHIA (CBS 3) ―
Philadelphia is taking out a short-term loan to help with cash flow as Pennsylvania’s budget crisis continues.
Mayor Michael Nutter announced Tuesday the city will take out the $275 million loan from JP Morgan Chase. The loan comes with a 3 percent interest rate if paid in full by November 30. On December 1, the interest rate increases to 8 percent.
Mayor Nutter expects the city will re-finance the loan at a lower interest rate in the public markets – once Pennsylvania’s budget crisis is solved.
Mayor Nutter also said Tuesday that by the end of next week, he will submit a new pension plan to the public agency that oversees the city’s pensions. Officials in Harrisburg are forcing the mayor to take that step.
Last week, the State Senate signed off on the mayor’s plan to raise the city sales tax by a penny and delay about $150 million worth of pension payments this year – but only if the city cuts the costs of its pensions.
Going forward, the city must freeze pension benefits for current workers and reduce pension costs for new workers by 20 percent. The mayor has said a new pension plan might include some type of 401(k) option to cut costs.
Pensions eat up a large share of the city’s budget – this year it’s expected to be some 12 percent, or $450 million out of a $3.7 billion budget.
“The loan comes with a 3 percent interest rate if paid in full by November 30. On December 1, the interest rate increases to 8 percent.”
They got an adjustable rate mortgage! LMAO!
Mayor Nutter expects the city will re-finance the loan at a lower interest rate in the public markets – once Pennsylvania’s budget crisis is solved.
Yeah, but they are going to refinance to a fixed much lower rate once they get their FICO all fixed.
hahahahahahahahahahahahahaahahahahaha
Subprime nation. Sad.
Philly has always been in peril financially.
I can recall, as a youngster, hearing that Philadelphia was on the brink of disaster. And that was back in the 1960s.
Ed Rendell restored the city’s bond rating during his tenure. The unions mounted a recall effort because Ed didn’t spare them when it came to cutting fat. But he prevailed, and was so effective a fiscal manager that some of my friends were convinced he was a Republican.
He’s now our governor, still not Republican, and duking out PA budget with the state legislature’s majority leader - who is.
Being offspring of people who seldom set foot in Philadelphia, I have to give Ed credit. He’s the guy who cleaned up the streets of Center City.
And, as a result, people like the Slims have become regular visitors to the City of Brotherly Love. The Slim family especially enjoys hearing the Philadelphia Orchestra at the Kimmel Center.
Rendell cleaned up the city, but he didn’t stay.
Eight years of his predecessor, and now Mayor Nutter has to do a clean-up job.
Wonder if it will be a matching 401k?
The Treasury Secretary told Congress weeks ago that the national debt was about to hit the borrowing limit.
As of August 31st the debt was $11.813 trillion. There’s only $287 billion left on the credit card. Congress will burn through that by mid-October, if not sooner.
Then what?
< Since 1940, when the present inflationary cycle began, Congress has raised the national debt ceiling 71 times! It will do it again within a few weeks, probably with little or no media fanfare.
To grasp the magnitude of what the present debt is picture one billion dollars and multiply that number by twelve thousand.
It’s too big to ever repay.
But’s it plenty big enough to monetize.
My bet is, it will be repudiated.
“My bet is, it will be repudiated.”
Why bother to repudiate when we can just extend-and-pretend for decades instead?
Being that we’re at 173 years and counting, I think we can use the term “centuries” instead of “decades” at this point.
monetize, inflate, and wait
“It’s too big to ever repay.”
Actually, it is not too big to repay. The math is interesting. In round numbers it works out to something like $100K for every US family. Like the bill for a house that you will never get. Like two or three years of your gross income. Imagine what that means for you on a personal level if you are not given permission to default, like if you owed the money to the IRS. The government is just a pass through on the national debt. You and I are the bagholders.
Debt is slavery.
Who is Sparticus?
Total debt is around 380% of GDP. That’s probably to big to ever repay. So just borrow more to keep up the payments.
Blue; what you said scares me. Pay up or else.
Theoretically it probably could be repaid. The question is, how do you convince the huddled masses to pay enough taxes to chop away at that beast when services are reduced so drastically?
Consider it like a divorce! You make the house payments. You pay the utility bills. You pay the auto loan and the insurance, etc.
You live in an old van and eat kraft dinner.
Don’t ask me how I know this is possible.
I don’t even know why they bother declaring a limit. Congress never bothers to live within its boundaries and only ends up increasing the ceiling.
Same here. Though I wouldn’t propose them to remove it - it at least serves as a reminder that - you know, it didn’t always used to be this way. Maybe it’ll help a light pop on in a few peoples’ heads.
And as a side note - the fact that this limit exists as a absolute limit, not an inflation-adjusted limit, indicates that a constant state of N% inflation per year wasn’t once the norm.
11.8 trillion…..
That’s so much money that if you laid 100$ bills back to back (thin-wise) in one continuous neat packet (24,000$ per foot!!!!) you would end up with a stack that could circle the widest point of our planet (24,901 miles at the equator) 3.74 times! a stack 93,119 miles long. If you stood that stack of cash up it would reach nearly halfway to the fricken moon!
And it’s not quite enough, c’mon guys, we’re nearly to the moon, raise that limit!
Temporal,
Scary, yes - and that same math with single dollars laid end to end would loop around the sun…the obvious vaporization of all that supposed wealth will just disappear.
We’ll soon find a new temporary vessel of wealth to replace the vaporized pseudo-value dollar place-holder.
Did I just turn into a Goldbug? Wow…who’du thunk it?
No recovery until economic forecasts stop turning out perpetually “worse than expected”…
market pulse
Sep 2, 2009, 8:22 a.m. EST
U.S. Aug. ADP employment down 298,000
By Greg Robb
WASHINGTON (MarketWatch) - Companies in the U.S. private sector shed 298,000 jobs in August, according to the ADP employment report released Wednesday. The report comes two days before the Labor Department reports on nonfarm payroll growth for August. The decline in employment was more than the consensus forecast of Wall Street economists of a decline of 250,000 in nonfarm payroll in August, which also includes the government sector.
Indications
Sep 2, 2009, 8:33 a.m. EST
U.S. stock futures extend fall after ADP report
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) — U.S. stock futures lost ground on Wednesday, extending the hammering took on Tuesday after a report said the U.S. economy shed close to 300,000 jobs last month.
Stock futures took a turn for the worst after ADP said 298,000 private-sector jobs were lost in August, more than what the market was expecting.
Separately, the government said productivity in the second quarter was revised higher to 6.6%, the biggest gain since 2003. Still to come are minutes of the last interest-rate decision, due at 2 p.m., and July factory-orders data, at 10 a.m.
S&P 500 futures fell 3.6 points to 992.90 and Nasdaq 100 futures fell 6.25 points to 1,589.20. Futures on the Dow Jones Industrial Average shed 30 points.
…
“…the U.S. economy shed close to 300,000 jobs last month.
… productivity in the second quarter was revised higher to 6.6%, the biggest gain since 2003.”
Unless companies routinely fire their most productive workers and retain the least productive ones, there is nothing whatsoever inconsistent about rising (average) productivity and falling employment. This is especially the case if those not fired face the unsavory choice of adding some of their former colleagues’ work to their own work loads or being the next to get shoved out the door.
So unemployed people aren’t averaged in to the productivity numbers?
I believe the productivity numbers only apply to the currently employed. Suppose you had 300,000 people working last month, and today they are unemployed. Would they have just become more, or less productive than when they were working?
Now apply that logic to the total number of jobless US labor force members and ask whether that would be consistent with steadily rising productivity. I think not.
Plus, people who are worried about losing their jobs may well decide to work a bit harder.
Is it that they are working harder or is it that this event is only now exposing decades worth of bad practices and inefficiencies that cannot be hid any longer?
They also work harder when they’re given their fired co-workers jobs to do in addition to their own.
plus when cutting a workforce companies can choose to sacrifice people involved in long term development/mantenance and so spread the present sales over fewer workers. Sure you won’t have as many new car designs for 2012 but at least productivity is up in 2009.
This story brings to mind some frightening historical images…
Breadbasket drying up
California’s Central Valley normally serves as the nation’s food basket. But amid a severe drought in the region, many farmers are being forced to line up for food handouts and other assistance.
(Scroll down to where you see “Video and Radio »”…)
I watched that and that is bad. The good thing is there was food, and good people volunteering to help.
No mention of the Central Valley Project’s Tracy pumps on a hugely reduced pumping program due to a particular fish and a federal judge?
Has anyone appealed the decision of saving the smelt?
How about those that dealt the smelt?
I would love to play ‘Go Fish’ using smelt as cards. I imagine they would wiggle a bit when I stapled the numbers on their shining little silver bodies, but nothing I couldn’t handle.
Oly, there are only two things that … oh, well, nevermind.
Hi OLY GAL!!!
How about the decision of saving the water used by the many people who collectively suffer when water is withheld to save the smelt?
If they appealed it, it would merely go to the Court of Appeals for the Reversed Circuit in SF.
I guess a lot of these hungry workers could maybe go back to their legal country? Seeing as there’s no jobs, isn’t that how it’s supposed to work?
alph, probably no food there to eat either.
There’s plenty of food in both countries, they just don’t have enough money to buy it. And since many are ‘migrant’ workers, it seems like they should migrate back home. Mexico can feed their own poor, it might be time for them to quit relying on Uncle Sam.
“Mexico can feed their own poor, it might be time for them to quit relying on Uncle Sam.”
+1,000!
Hey Slim, I forgot to mention the other day, sorry about your friend who had the fall.
Thanks, ATE-UP.
When I was a wee little Slim, he was a guy I really looked up to. And, as an adult, he did a great roof repair on the family home after a tree fell onto it.
I miss him.
Mexico can feed their own poor, it might be time for them to quit relying on Uncle Sam.
+ 100 tacos de lengua and 20 Pacificos con limon!
Hay muchos tacos en una lengua, muchachita. Welcome back to the netherworld. Did you try my recipe in the field? I like Pacificos, too, but it used to bother me that they said ‘class B Mexican export’ on the label. (since removed) What the heck did that mean?
I don’t get the point of this article. Why can’t the stampede of a whole herd of bulls running over the edge of a cliff produce similar market movements to institutional investors pulling the plug?
Asia Markets
Sep 2, 2009, 6:38 a.m. EST
China’s stock gyrations not the work of small investors
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — Institutional investors are believed to be the catalyst behind the Shanghai stock market’s volatile moves in recent weeks, including Monday’s 6.7% tumble, the biggest single-day fall in 15 months.
The scale of the recent daily moves point to large fund flows that are the hallmark of institutional investors and exchange-traded funds, strategists say.
“Retail investors cannot have such power and cannot create such huge volatility,” said Castor Pang, a Hong Kong-based strategist with Sun Hung Kai Financial.
…
Industry Group Unveils Proposal To Overhaul US Mortgage Market
Dow Jones News
WASHINGTON -(Dow Jones)- A key industry group is proposing to replace Fannie Mae (FRE) and Freddie Mac (FRE) with a handful of small, shareholder-owned companies, subject to strict supervision and limits on their profits and activities.
The proposal, set to be released by the Mortgage Bankers Association Wednesday, comes as officials are grappling with how to reshape the government’s role in ensuring the widespread availability of mortgage credit in the U.S.
Last fall’s federal takeover of Fannie and Freddie amid the housing market storm illustrated the pitfalls of relying on two private companies with a public mission and lucrative ties to the government. Yet shifting away from that longstanding model is a complex task, requiring tough negotiations among various stakeholders and a plan for handling billions of bad assets at Fannie and Freddie.
The Mortgage Bankers have discussed their proposal with officials from Treasury, Fannie Mae and Freddie Mac and the companies’ regulator, as well as with members of the White House economic team. MBA officials also detailed the proposal for Federal Reserve Chairman Ben Bernanke and Fed Vice Chairman Donald Kohn Tuesday. On Wednesday they will meet with other industry organizations.
Debate about the future of Fannie and Freddie will likely intensify in the coming months. The Obama administration plans to unveil a proposal when it releases its 2011 budget in February. Meanwhile, House Financial Services Chairman Barney Frank, D-Mass., is preparing legislation.
“A key industry group is proposing to replace Fannie Mae (FRE) and Freddie Mac (FRE) with a handful of small, shareholder-owned companies, subject to strict supervision and limits on their profits and activities.”
If too-big-to-fail risk subsidies were eliminated from government policy, wouldn’t the free market spontaneously create a secondary market for mortgages?
The ‘handful of small, shareholder-owned companies, subject to strict supervision and limits on their profits and activities’ part worries me.
It sounds like the proposal may be dead on arrival due to regulatory suffocation.
Why not rely on Mr Market (unfettered by govt risk subsidies) to decide how many of these sort of firms we need? Or has belief in free markets died with the collapse of the fettered and chained market we witnessed last fall?
But this downturn has proven that free markets don’t work. Get with the picture man.
The data don’t support that conclusion. You would need to get some data from a society that did not have all these housing subsidies distorting the picture before you could start to address the question of whether the free market works.
Subsidies, schmubsidies. We’re talking LACK OF REGULATION, MAN!!!111oneone
(BTW - note the big ‘ol tongue poking my cheek out into the next room)
Mr. Market might tell Mr. Chinese Investor that he’s lost just about everything. Then Mr. Chinese Investor will go away. Then Mr. Dollar will go away.
Mr. Market can administer some very tough love.
Point taken. A sudden reversion to a full-fledged “free market regime” at this point might be far worse than what is currently happening. In fact, I heard on the radio this morning about a Vanity Fair article based on interviews with HP suggesting he came in to government believing in free markets, but soon realized the need for intervention at the height of crisis.
From the interview with HP: “But as I said to someone—it may not be a great analogy, but once you’re boiling in oil, it doesn’t make much difference” what the temperature is.
A sudden reversion to a full-fledged “free market regime” at this point might be far worse than what is currently happening.
True, but *worse* depends on the time horizon.
The U.S. was definitely worse off in the 1776-1781 period than otherwise if they had not rebelled, for instance.
In other words, offload Phoney and Fraudie debt to US Treasury and shut them down and open up two new storefronts to further distort shack prices.
“storefronts”
( I would have simply gone w/ “front” ) but hey, that’s me?
Right! Just what we freaking need! “Proposals” from the very @$$clowns that PUT us in this position! Sounds great guys, keep working on it.
HOw about this for a change to GSE’s, if the gov really wants a gse to support lending have them create a governemtn bank that competes with private banks. GSE will lend directly to any credit worthy borrower at an average of available rates + X% when customer puts 20% down. What they won’t do is purchase mortages from banks. They could lower X when banks were refusing to make loans and raise it when banks were lending freely.
I’m sure banks would hate this plan.
I’m with those who would do away with GSE’s but this would be better than insurning banks against losses and buying their worthless garbage.
Reproductive capacity among Hillbillies is well known, so a couple of new GSEs wouldn’t surprise anyone.
A rep from the Mortgage Bankers Association was quoted as saying “Our old toys are broken! We need new ones. Now! Now! NOW!” This was promptly followed by the rep falling on the ground swing arms and fists akimbo, while not so valiantly holding his breath for 3-5 second intervals.
Just remember, “A Watched Pot Never Boils.”
Sep 2, 2009, 1:00 a.m. EST
FDIC’s Bair warns on commercial mortgages
By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) — Federal Deposit Insurance Corp. Chairman Sheila Bair said late Tuesday that commercial mortgages may run more banks out of business this year and next.
In an interview with CNBC, Bair said commercial real-estate loans were “catching up” with residential mortgages as a threat to banks’ balance sheets.
“Commercial real estate is a looming problem. It’s going to be a bigger driver of bank failures toward the end of this year and into next year,” she said.
…
Totally OT but, the weather here has been delightfully unseasonable the past two days. Highs in the mid 70s and down to the 50’s overnight.
Since it was so cool, we spent last night peeling boiled tomatoes for the annual Canning of the Salsa. 150 sealed pint jars are now sitting in the basement.
Potatoes in salsa? Doesn’t compute. Enlighten me here folks, I love potatoes and I love salsa, just never heard of the combination.
Potatoes? I swear I see “tomatoes” up there but when I mentioned last night’s fun to a coworker, she thought I said “potatoes”, too. Maybe I’ve had one of those micro strokes and tomato and potato have switched places in my vocabulary.
Also, have you never had salsa on a baked potato?
gah! Major senior moment, there. Guess I saw peeling and tomatoes on the same line and my mind just… Can’t even blame a lack of coffee on that one.
Actuall, pototo salsa sounds pretty good, but I would think that the pototoes would turn to mush if you tried to can the stuff.
Salsa on pototoes is a little bit of heaven IMO.
Whew! I was worried.
How about salsa on diced roasted potatoes?
A relative just came down and dropped off some farm stand tomatoes and potatoes - guess I know what I’ll be doing this weekend. Peeling, slicing, dicing and -
mangia baby mangia
That sounds good. Next year I plan to grow my own potatoes using the garbage can method.
I had great luck with potatoes this year just by sticking them in the ground, the old fashioned way. Never did another thing until I dug ‘em up. Two-thirds are still in the ground until I need them. (I just planted potatoes that I had accidentally let get past eating condition- no special ’seed’ potatoes.)
I’ll plant a lot more next year, and more varieties, in the ground. Too easy, and the best I’ve ever eaten.
I’ve never pealed a tomato before. Sounds tedious.
It’s not that bad. You drop it in boiling water for a while and then pull it out and the skin comes right off.
wow, gardening sloth-style sounds so … relaxed
If it’s hard to do, it’s not worth doing!
You say potatoe, I say tomatoe.
Thats strange, I live here also and have never heard of this Salsa Canning Festival.
The Canning of the Salsa sounds like a family tradition. 150 pints don’t go far.
And it sounds like a tradition that ought to be expanded!!
Definitely a family tradition. We have the means to do more than 150 pints but tomato blight hit us pretty hard this year.
Since the organism stays in the soil for a while, that means I’m going to have to dig a new plot next year.
:(
samk: That sounds really cool. Glad you had a good time in good weather.
Thanks! It’s definitely a good way to spend some time with the family.
Where are you samk? I envy you your abundance of tomatoes.
I grew tons of tomatoes when I lived in Wisconsin, ate loads, cooked up a freezer full of tomato sauce that I ate the rest of the year (along with every kind of pickled vegetable). I never peeled them, I think the grinder thing I put them through separated out the skins.
In Texas, it takes a lot of inputs and labor and water just to get enough tomatoes for us and neighbors.
SW PA
I lived in TX for three years when I was a kid but we never tried to grow anything there.
Guys and gals, head over to CNN-Money and read about “What I bought with my $8,000 tax credit”, full of people who said “couldn’t afford the house until $8k credit came in”, “we really tapped out to buy this house but wanted to have the $8k credit”, etc. If you can’t afford to buy a house with $8K assistance from the gov’t, you have no business buying a house in the first place. This is the DUMBEST decisions ever as most of them will be in foreclosure sooner or later.
Here are couple of such examples:
Noel Delisle and Mike Spence
Location: San Carlos, Calf.
Property: 3 bed, 2 bath, 1,600 s.f.
Price: $750,000
“We felt like we had to hurry and buy before the end of the year so we wouldn’t miss out on the tax credit. That turned out to be truer than we thought: As we got closer to the end, we realized how much closing costs and other fees would add to the purchase price, which was high enough already.
The $8,000 tax credit is saving us. Wedding, new house, we’re tapped out. We’re definitely big fans of the tax credit!”
Alex Bauer
Location: Newport News, Va.
Property: 3 bed, 2.5 bath townhouse
Price: $257,000
If it was not for this tax credit, we would still be living in our two-bedroom apartment. Instead, my fiance and I closed on our first home in the last week of August.
When buying, the biggest problem I had was how to come up with a down payment. The house was $257,000, and I needed to put down 3.5% to meet the FHA rules. I didn’t have all of the $9,000 required, but then I found out about the FHA’s new program where you can use the tax credit for the down payment.
we got the credit, but it wasn’t a deal breaker. just a nice perk. We had to move from our very low rent apt, comparible rents matched mortgage, we had saved a ton over the past 2 years while renting, so we bought. We just got the $8K check in the mail this week … just a nice bonus for us. I agree - if you can’t afford a house without getting the $8K, you can’t really afford the house.
That “saving a ton renting” must have been awful.
Boy, they’re gonna look stupid when the debt pumpers in DC boost it to $15k during the darkest moments of this onrushing winter.
Oooh I hope they pass the 15K
I might just get off the fence here in NoVA
The current 8K ain’t a drop in the bucket for out still greatly overpriced DC area RE market!!!
But 15K - hmm, now yer talkn’ !!
“But 15K - hmm, now yer talkn’ !!”
Ah, but the list prices will just go up accordingly, at least in those still low inventory niches.
Just found trulia yesterday and saw quite a few under 100k, small but some nice areas. Now if you could get that mftd home, 1800′ 70k, low hoa, cherry cabs, GRANITE, yea, you read that right! uh huh!, 3/3, then 15k would help a bunch, and your overhead..
but who wants a 70k manuftd home as a first choice?
earthquake can you hear me, earthquake can you feel me, earthquake can you tell me whyyyyyyyyoooooowhyyy?
What is that tune from? of course w/o ‘earthquake’ insert.
“But 15K - hmm, now yer talkn’ !!”
I’ll wait for the 30K variant that should be along right around 2011/2012.
2014/15 will be the nadir. Expect at least 100k then.
Shelby, the $8K was almost immediately translated into $40K higher wishing prices. The $15K will almost immediately be translated into $75K higher wishing prices. Are you willing to go into that much more debt? It’s making a bargain with the devil.
Same as C4C.
They are both ruses to get marginalized people indebted more, hence afraid to say boo.
I’m refusing to participate.
I’ve asked this before, but haven’t seen it addressed. Does anyone believe the $15K will be structured like the $8K in that it doesn’t have to be paid back? I can’t imagine - especially since the rumor is it will be extended to non-first-time buyers and to higher income levels.
This sounds like 2004 all over again.these people have no business buying a home.
How many of these tax credit induced houses will be back on the market in two years?
At least the REIC is creating quite a churn for itself.
X-philly,
And the REIC must have known this going in? Temporary, short-term “ownership” is what their biz model is all about. Why aren’t more people seeing thru this?
You and I have seen this discussed on the HBB for some time - the mentality behind the RE mania. There is just an inherent belief that buying a house is the pathway to riches. I know, it defies all logic and economic fundamentals, etc. etc. But this is what the peeps believe because this is what they want to believe. (have to believe?)
In the PHL market, there are still REIC shysters on the radio exhorting the audience to buy RE with OPM. They’re not even shy about it. The one guy gives the addresses of the great foreclosure deals he’s closed on - and they’re in drive-by territory. People don’t care. They just think it’s their path to Trumpdom.
“Trumpdom”
Too funny! This is just what the REIC wants right now. Whether people were all in a tither over MEW-Bucks or Foreclosure Fortunes, they’re all worked up over RE ( and that’s good enough for them! )
It’s like Pepe’ Le’ Pew, in some sort of state of “perpetual arousal”? Come to me my little turtledove… mew, mew, mew.
“Why aren’t more people seeing thru this?”
I’ve shown a few folks how high the interest portion of a mortgage payment can be, and point out that ‘throwing away’ money rent or interest is the same thing. Might as well have been introducing cavemen to fire.
“Trumpdom”
Speaking of Trumpdom, interesting article out about how the trumpster hand picks the prettiest 15 young women for his beauty pageants, which Miss USA is supposed to be about education or something? Then the judges get to pick the rest. Now, HOW Rigged is that?
It’s like Pepe’ Le’ Pew, in some sort of state of “perpetual arousal”? Come to me my little turtledove… mew, mew, mew.
dinor you are twisted, in a good way!
It’s like Pepe’ Le’ Pew, in some sort of state of “perpetual arousal”? Come to me my little turtledove… mew, mew, mew.
Does anyone even WATCH those bizzarro contests anymore? Besides 60+ year old grampaws and/or someone who can’t find the remote?
It’s like watching sedate and uncoordinated strippers who insist on talking while pretending we’re listening and other annoying cr*ap like that.
“The $8,000 tax credit is saving us. Wedding, new house, we’re tapped out. We’re definitely big fans of the tax credit!”
That’s Noel and Spence, a hairstylist and a crane operator who bought a 1600 sq ft house for $750 K, because it was “the best entertaining house we’ve ever seen…and there’s a barbeque.” They are either trust fund babies or they’ve been lobotomized by HGTV. I suspect the latter.
This better be from The Onion or this country probably is in deeper shite than I thought.
CNN-Money. Close enough.
I had my hair cut at 3:00 yesterday afternoon. My stylist said she had been there since nine in the morning and I was her fifth customer.
Yeah, they’re raking it in.
I just got a newsletter from my dentist. Or I should say, my former dentist.
One of the articles was exhorting people not to postpone their dental appointments. Can’t imagine what prompted them to include such a thing.
And why is this gal my former dentist? Well, let’s just say that she used to be quite good at what you go to a dentist for. Then she discovered that she could make a whole lot more money if she went into cosmetic work.
To present the right image, she had the office remodeled. That must have cost a pretty penny. She also had a makeover, and, sorry to say, she was kind of a homely gal before. Now she’s a homely gal who’s had a makeover.
I noticed that her rates had gone up rather dramatically. And her office staff was really starting to push things like, oh, dental X-rays on just about every visit.
I’m of the mind that one should only be X-rayed if the dentist suspects a problem that needs diagnosis. Otherwise, you’re just lining the dentist’s pockets.
Last time I visited, I was pitched on a $655 deep cleaning, which was way too rich for my blood. But, to be double-y sure, I sought a second opinion from the dental hygiene training program at the local community college. Both the student and his instructor said that the procedure wasn’t needed.
My dentist wants me to get an x-ray about once a year. That seems excessive to me, but he assures me it’s necessary. I’m dubious, but it’s hard to just say ‘no, I think it’s a scam’ to your otherwise pleasant dentist. Anyone out there have any knowledge in this field? Am I getting drilled?
My mom’s half of the family are mostly dentists. None of them even have any scars or home-made tattoos or secret compounds or nuthin’. Man, they’s boring! But I have learned from their exciting and dynamic tooth-discussions at the few reunions I attended (this is before I got big enough to resist successfully) that X-rays sometimes provide a preliminary warning of incipient troubles that can emerge below the gum-line. For whatever that’s worth. I always assume that I will know when something’s going wrong, because it will hurt. It’s not like teeth just start falling unexpectedly out like daisy petals.
Oly, you telling the tooth?
Seriously, a lot of disorders can start in the mouth.
Yeah, I’m sure an x-ray might catch something early. But that’s true about everything. Should I get a full-body x-ray every year- it might catch something. What about the radiation? Maybe every five years?
Should I get a full-body x-ray every year- it might catch something.
I bet an X-ray would not diagnose whatever you’re gonna get. If there’s ever an ‘exotic ailment’ chart in the making, you are it. Now, I know that this is not a scientific sort of pronouncement, but nevertheless I’m going to stand by it. It’s like an arcane and mysterious sense I have, to know these sorts of things.*
Anyway, I love X-rays. I wish I had a bunch of me, as I’d like to see what I look like inside. I’ve been chatting up the vet who lives up the road from me, for this very purpose. Also I like his eggs, and he has a white lab coat.
*Aww, you’re not ever going to get an ailment. I can use the same arcane and mysterious sense to know this.
*waves hand disparagingly *
never trust eggs from a vet
I got no response to that firm proclamation.
It sounds like you know what you’re talking about, though. I guess.
Your post was ominous, so I was ominous back– that’s how I roll. I reward omen with omen. Let no man out omen me. Or wo-man.
If it ain’t broke, don’t fix it. At 18yo I was told that if I didn’t have my wisdom teeth removed immediately I was at risk of brain injury.
Needless to say, thirty years later I still have those same wisdom teeth stuck in my head. The sad part is I have never again been in a dentist office. I’ve still got a face full of healthy pearly whites and as far as I know, my teefus have yet to cause any drain bramage.
Maybe they read the old Mark Trail cartoon and are expecting to have great surfing in San Carlos.
It always gets me when people speak of a very expensive wedding ceremony as a “necessity”. I wonder how much these guys paid out.
Amazing how much pain a donkey will endure for the promise of the pleasure of just one carrot.
Alex Bauer
Location: Newport News, Va.
Property: 3 bed, 2.5 bath townhouse
Price: $257,000
If it was not for this tax credit, we would still be living in our two-bedroom apartment. Instead, my fiance and I closed on our first home in the last week of August.
When buying, the biggest problem I had was how to come up with a down payment. The house was $257,000, and I needed to put down 3.5% to meet the FHA rules. I didn’t have all of the $9,000 required, but then I found out about the FHA’s new program where you can use the tax credit for the down payment.
——————————————————————-
This one is mind numbing. For God sakes this guy has his head up his a$$!!!!!! You can’t scrap together $9,000 but you can afford $257,000????????
WTF!!!!!!!!!!!!!!!!!!!!!!!!
Worse yet, from the article:
got a great deal on the mortgage. The interest rate is just 3.5% for the first year and costs about $1,500 a month, with taxes and insurance. The rate goes to 4.5% the second year and caps after that at 5.5%, about $1,900 monthly, which we should be able to swing as our earnings go up.
…”be able to swing as the earnings go up”! That obviously implies that he can’t swing it now. Bad, bad. At least he has certain employment with Northrup Grumman. (Joke there. Just wait till his current project gets unfunded.)
These people should NOT be in a quarter milliion dollar townhouse, and that reporter needs to keep this guy’s phone number so they can run the story in 2011 about why he should have never bought that place.
“got a great deal on the mortgage. The interest rate is just 3.5% for the first year and costs about $1,500 a month, with taxes and insurance. The rate goes to 4.5% the second year and caps after that at 5.5%, about $1,900 monthly, which we should be able to swing as our earnings go up.”
Harrumph! Prices are not dropping as these newly minted FB’s rush to grab the brass ring. That’s what makes me the most angry. These buyers will be in trouble in just a few years. Meanwhile the house never quite gets to the people who could actually take care of the neighborhood and keep it stable. What a nightmare.
“that reporter needs to keep this guy’s phone number so they can run the story in 2011 about why he should have never bought that place.”
They’ll be just starting to get pinched in 2011. This is a 2012/2013 foreclosure waiting to happen, depending on how backed up the banks are by then.
You’ve got to watch that “swing as the earnings go up” thing. Because, in real life, that doesn’t always happen. Earnings can also swing down. And stay down for a long time.
I posted a link from WSJ that a friend of mine found today.
-33.% and CEO’s etc went up 44%.
Why didn’t someone tell me 20 yrs ago to get my mba in bs so I could rake in the dough Now? All the while ruining corps and lives.
Gosh. Sounds great.
You do realize the other couple couldn’t scrape together $8k, but can afford $750k, don’t you? They even said the $8k ’saved’ them. It’s a miracle!
They even said the $8k ’saved’ them. It’s a miracle!
Yep. Jeebus saves.
Oh my. o.0
Almost 260k for a slab built, vinyl clad crapshack! We have a long, long way to go before this thing is bottomed out.
There was just an article about an affordable neighborhood being built in the same region. $230K for tiny homes. This area doesn’t have the income, but they’ve got the debt.
Makes me want to leave badly. Raleigh and Northern Virginia are both on my radar.
Bwahaha Newport News is near me. Mostly gubbmit contractor jobs (Shipbuilding), etc. $257K for a townhouse is an insane amount .
From city-data:
- Estimated median household income in 2007: $45,359 (it was $36,597 in 2000)
- Estimated median house or condo value in 2007: $190,700 (it was $94,200 in 2000)
We lost out to higher bids several times, but we finally got initial approval four weeks ago on a short sale of a Spanish-style house. It cost $73,000. We’re waiting for final approval.
These guys are probably going to get hung out to dry, since most short sales end up not being approved.
The guys in Contra Costa county really take the cake. Rather than live within their means, they used the credit to push out the envelope.
We’re ecstatic … all our budget would buy was a three-bedroom, 1,600-square-foot house.
Instead, we were able to afford a 2,200-square-foot house that would have cost $880,000 two years ago….
The house was cost right at our absolute limit of $550,000, but it had roof damage. The house is about 40 years old, and it had never been replaced. Thanks to the credit, we were able to afford the repair, which cost $12,000.
So they leveraged up as far as possible even buying as-is with a 40 year old roof. Why didn’t they just settle for the smaller house they originally considered?
cougar, you are so right. However, when I was a kid in love, I would have done the same thing. It is just sad that now ( no production, no economy) there will be serious ramifications forever, for everything done wrong in the name of impulse and Greed. It will be in perpetuity.
Careful Ate… don’t go down the “she made me do it” route or you will be neutered on HBB.
Hey coug, I think you guys and gals already neutered me.
Whiskey Tango Foxtrot! 750k for 1,600 sq ft. Does not compute, does not compute.
You don’t live in San Mateo County. $750,000 in San Carlos is considered normal.
“fiance” LOL
Fiance, finances, FB’ers, GF’s, co-signers, no/low money down, “I’m glad we got in when we did”, etc etc etc…… Did we all just step out of the 2005 time machine?
finance a fiance’s fancy?
Is that similar to buying a lady of the night, for your own fantasy?
yes, but at considerably greater cost
Tee Hee!!!!
Say that fast 3 x.
Other articles currently running on CNN Money
1) Lost their home
These 4 families thought they’d never recover from foreclosure. They were wrong. More
2) Cut my pay…please!
More workers like Rebecca Eason are ready and willing to take significant pay cuts to find employment. More
3) Bleak outlook for raises
4) Be afraid. Be sort of, sort of afraid.
12:28pm: Wall Street’s so-called fear gauge, the VIX, has shot up this week. But with levels still well below last fall’s peak, this is just a cause for mild concern. More
5) Why are there no Mac viruses?Fortune (okay, this isn’t relevant, but I think I’ll read it out of curiosity)
#2 & #3 are signs that deflation is still around.
*shakes head*
This will end well.
Sigh,
Leigh
Sounds like China has us by the sack…
Inflation: How China May Be Forced To Use The Nuclear OptionMay 19th, 2009
It’s Inflation Week at Len Penzo dot Com. Follow me over the next several days as I explore the multiple facets and facts about this insidious scourge, the probability of its resurgence, its potential impacts on us, and strategies for protecting yourself and your personal finances. Hey, it’s not as fun as Shark Week at the Discovery Channel, but it’s almost as scary!
Raising taxes to pay for excessive government spending is never popular with the general electorate. As a result, printing money is how our spineless government leaders try to buy time so they can prolong their political careers. It’s a cowardly way to avoid making the tough decisions that need to be made in the face of deficit spending and, left unchecked, its primary effect over time is a high inflation rate.
The US government is currently indebted to the tune of approximately $11 trillion. Amazingly, that doesn’t account for the $49 trillion of Medicare and Social Security entitlement liabilities which will need to be paid off in the future. The United States Treasury Department doesn’t use these entitlements when calculating their debt to GDP ratio, but if they did it would be 680%! This partly explains why entitlements are not included in the calculations; if they were it would become painfully obvious that the country is basically insolvent.
As long as the dollar remains the world’s reserve currency, the US may just be able to avoid the worst effects of inflation. However, the dollar’s reputation as a safe haven continues to be chipped away with each new government bailout and socialist spending program that is implemented by our leaders.
It is no secret that Ben Bernanke and the Fed plan to minimize all of this God-awful debt by surreptitiously devaluing the dollar over time. Therefore the United States will continue to print money to cover their profligate spending while the fiscally responsible among us who are not saddled by excessive personal debt will continue to pray that hyperinflation continues to stay away.
Unfortunately, this tactic ends up emulating one of communism’s principle tenants — redistribution of wealth. By indirectly devaluing the dollar via inflation, the Fed will forcefully transfer the wealth of those who have managed to save responsibly over the years to those who have lived well beyond their means. Talk about sowing the seeds of public discontent!
Can you imagine the rage that would foment in those of us who watched the value of our retirement and other savings accounts wither to nothing in order to pay for the bills of those who mortgaged the farm to live way beyond their means? Meanwhile many who bought more home than they could reasonably afford, only to be bailed out by the taxpayers, will still have their McMansions. That, people, is how revolutions get started.
But all is not lost.
Ironically, because Communist China currently owns more US Treasuries than any other foreign country, this perverse tactic being tacitly endorsed by the Fed will end up adversely affecting the Chinese most of all. Indeed, China will not tolerate watching the dollar’s plummeting value begin to destroy a good portion of their accumulated wealth.
The big danger, of course, is that China could eventually get fed up with America’s free-spending inflationary policies and threaten to “take the nuclear option” by selling a significant portion of their US dollars. This, of course, would obliterate the American economy — and quite possibly take the rest of the world economies with it.
Then again, if our politicians would only show real courage by forcing us to take some badly-needed medicine, we would never have to get to that point.
It’s time for the Fed to strengthen the dollar by immediately raising interest rates to reward savers and encourage more responsible allocation of resources. It’s time to quit bailing out irresponsible lending institutions, automakers, and homeowners; allow creative destruction to heal the marketplace. Force holders of rotten loans to take their lumps and file for bankruptcy, if need be, and greatly reduce the credit scores and ratings of individuals and corporations who recklessly took part in the previous spend-now pay-later orgy.
It’s time for the United States to recognize that the party is finally over and turn the printing presses off before the dollar loses all credibility.
If we can’t convince our leaders to do the right thing, I am absolutely certain that China eventually will.
Destroy the US, how? All they can do with it ultimately is buy our crap, like we bought theirs. We have too much crap and not enough dollars. How would China spending their trillion USD be worse for the US than the Obama Stimulis Plan?
No way. There are already too many Chinese men without wives having to go live back on the farm. Its already a recipe for revolution.
Cops jump on swine-flu power: Shots heard ’round the world
Pandemic bill allows health authorities to enter homes, detain without warrant.
Posted: September 01, 2009
WorldNetDaily
A “pandemic response bill” currently making its way through the Massachusetts state legislature would allow authorities to forcefully quarantine citizens in the event of a health emergency, compel health providers to vaccinate citizens, authorize forceful entry into private dwellings and destruction of citizen property and impose fines on citizens for noncompliance.
If citizens refuse to comply with isolation or quarantine orders in the event of a health emergency, they may be imprisoned for up to 30 days and fined $1,000 per day that the violation continues.
Massachusetts’ pandemic response bill
“Pandemic Response Bill” 2028 was passed by the Massachusetts state Senate on April 28 and is now awaiting approval in the House.
As stated in the bill, upon declaration by the governor that an emergency exists that is considered detrimental to public health or upon declaration of a state of emergency, a local public health authority, with approval of the commissioner, may exercise the following authorities (emphasis added):
* to require the owner or occupier of premises to permit entry into and investigation of the premises.
they may be imprisoned for up to 30 days
Free medical care? What sick person would turn this down?
Skip, I have read several stories of people committing crimes to go to jail on purpose. I know a lot of others here have too, as well as you may have.
Posted: September 01, 2009
WorldNetDaily<———— May as well be faux news.
I feel mixed about this. During the 2nd more virulent pass of the 1918 Great Influenza, by the time someone realized they had something more serious than a cold, it was virtually too late.
If the gov did not make an attempt at enforced isolation, we’d accuse them of some dark plan to thin the herd.
This time last year a friend of mine called me in a panic about bird flu.
what happened to the bird flu? SARS…anyone?
Don’t inject me
maybe Big Pharma just needs to sell a lot of vaccine.
I know a lady who got Guillian-Barre from the 1976 swine flu vaccine. And my mother got the flu from a flu shot, which, BTW, was the last flu shot she ever took.
So, count me as a flu shot skeptic.
I was supposed to get in touch with you about that L & F agent, I worked for a different firm. (lthough they do cross-pollinate.)
I will tell you this: stay away from any PFR office on the Main Line.
There was a Keller Williams agent who was alright her name is MIchelle and last name rhymes with Worth.
Hey, X-philly. Here’s the agent I was referring to.
She and my mother have become quite friendly. I’d like to be sure that Mom is chatting with someone reputable.
I agree x-philly. 99% chance all the prep is for naught. Still it’s not like there isn’t precendence for the worst case scenario. I don’t lose sleep about it and in fact feel better that someone’s prepping for the potential Cat 5 rather than telling themselves it’ll never happen.
This makes no sense. Why would they introduce something like this now when there have been plenty of contagious diseases floating around forever? I’m going to sit in the corner with my tinfoil hat on and see if I can piece this together.
I posted in reply to Carrie, it hasn’t shown up yet, I guess because there was a link.
Go to UTube, “don’t inject me” video by Mike Adams, the health ranger.
There was a Bloomberg article about 2 weeks back that said about 60% of Japan’s medical personnel did NOT plan on getting the innoculation. To tell you the truth that’s how I feel. Heck I have to have a pretty screaming migraine before I’ll even take Advil. But if people were dying in high numbers I’d support enforced isolation.
I got a tetanus shot last month after an injury, but then saw a piece on tv about the ‘new improved’ tetanus.
Wisht I hadn’t.
This from a report written in June. Wonder how far this proposal has gotten, can’t find any new info.
How About a $15,000 Tax Credit For All Buyers, Even Millionaires
Jun 11, 2009
The housing recovery is in danger of failing, taking with it the economy. What do you do? Senator Johnny Isakson (R-Georgia) has the solution: A bigger tax credit.
The Gentleman from Georgia introduced legislation yesterday that would dramatically expand the $8,000 first-time buyer federal tax credit program:
* The bill nearly doubles the first-time buyer tax credit to $15,000 (which is the amount the National Association of Realtors, Mortgage Bankers Association, National Association of Home Builders and other housing industry stalwarts wanted in the first place);
* But wait - the bill eliminates the requirement that you have to be a first-time buyer (or not owned a home in the past three years) and allow everyone who buys real estate to qualify;
* The bill eliminates the income requirements. Even millionaires can qualify for a tax credit under Sen. Isakson’s plan;
* Want to buy a multi-family unit? As long as you’re going to live in one of the units, you can buy a multi-family building that would offer income opportunities;
* Can’t close by December 15th? No problem. The bill proposes extending the deadline by which you can take advantage of this extremely generous tax credit to one year from the date the legislation is signed into law. In other words, you’d be able to get a tax credit well into 2010;
* The bill would allow taxpayers to amend their 2009 tax return (due on April 15, 2010) for house purchases made in 2010, so wouldn’t have to wait until you file your 2010 return in 2011 to collect your $15,000;
Sen. Isakson has some powerful co-signers for his legislation, including Senators Lamar Alexander, R-Tenn., Jim Bunning, R-Ky., Saxby Chambliss, R-Ga., Chris Dodd, D-Conn., John Ensign, R-Nev., Joe Lieberman, ID-Conn., Lisa Murkowski, R-Alaska, James Risch, R-Idaho, and David Vitter, R-La.
In addition, according to the Senator’s press release issued yesterday, the National Association of Realtors and the Housing Working Group of Business Roundtable today endorsed Isakson’s efforts to expand the current homebuyer tax credit as part of recommendations to help return stability and growth to the U.S. housing market.
If the proposal sounds familiar, that’s because we’ve been this way before. But can Sen. Isakson scare White House economists enough to make it happen this time?
Another tripartisan (since Lieberman is in there) boondoggle.
Like the cash for clunkheads program, this one is too good at spending everyone else’s money to put people into debt that the really should not be getting into. Hopefully, since this one is predominately a GOP bill, it will have no chance. Till the Dems double down, that is.
Auctioneer: “$8,000, we have $8,000 now, do we hear…”
Sen. Isakson et al: “$15,000 sir! We’ll go $15, 000!”
Rep. Barney Frank: “$30,000 my boy! Our gang will go $30,000!”
Timmy “TaxFree” Geithner: (fill in the blanks as the madness escalates)
Isaaksons cozy relationship with developers that in fact amounts to accepting thick envelopes has long been known. But I wonder what they bribed Vitter with….. more hookers? That frees up Vitters wife for spouse swapper Ensigns bonus.
More ownership society lies from the family values hypocrites.
But, but, I thought Republicans were the Party of Personal Responsibility!
‘But, but, I thought Republicans were the Party of Personal Responsibility!”
They are….. they expect it from everyone but themselves. Hypocrites.
As opposed to the Dems, who are perfectly consistent in words and deeds. Like Algore wasting 4 billion gallons of water for a rowboat photo-op, while beating up everyone else to conserve natural resources.
No impact with that one Ali.
Try again.
Yes, indeedy-doody they are! And just think of all the REIC-ers who will hold them personally responsible if this $15k credit doesn’t go through.
Dang you beat me to it Jon. To be fair there is one Democrat Dodd, that has signed the bill. No big surprise
Neither party advances the idea of personal responsibility! The Nanny state wants everyone hanging on to their apron hem.
What does this tax credit mean to government revenues? Will some amount of income taxes not need to be paid? Will the govt have less of our money to flush down the partisan-political toilet?
If so, is there a reason to be against it?
The Gentleman from Georgia
Pet peeve.
Why do we call these ‘men’ Gentlemen when they ala Sanford, Ensign, etc do not behave in a Gentlemanly way. Nothing moral, ethical, and honorable about these “gentlemen” at all. Just call then sen or cong or whatever, but NOT gentleman.
Other pet peeve.
Regardless of whether a POTUS is in office or retired, they are all called POTUS, President so and so at all times. But the msm=idiots= call this current POTUS MR Obama. How disrespectful.
Doesn’t matter whether you like/respect the guy or not. You respect him for achieving the POTUS. And from day one, always call him by his title. President Obama.
I didn’t like the previous schmuck, but the media always called him President Bush, never Mr Bush.
Sorry had to get that off my chest. Along with all the spilt food.
LOL.
Dude, you’re totally smoking crack. President Bush was referred to as Mr. Bush quite often.
I will have to review. I don’t recall that.
Dude!
I know so well because “Mr. Bush” was my pet peeve and I was all set to hear everybody revert to “President” instead of “Mr.” with Obama. Turns out they didn’t!
You can search google news for “Mr. Bush” (be sure to choose all years) and you’ll see plenty. NPR was notorious for “Mr. Bush” (in my mind).
Cheers!
Nah Michael:
It was MEESTAH BOOOSCH!
Report: U.S. has lost 50% more jobs than estimated
San Francisco Business Times -September 2, 2009
A Sausalito investment research business says the United States lost 335,000 jobs in August, which is nearly 50 percent more than government guesses.
TrimTabs Investment Research guesses, based on daily income tax deposits, that the U.S. economy has lost 5.9 million jobs in the last year, the most recorded in records back to 1970.
The United States has lost at least 300,000 jobs in each of the last 12 months, TrimTabs says.
Payroll business ADP says that U.S. private businesses cut 298,000 jobs in August.
TrimTabs also says wages dropped by 4.1 percent, year-over-year, in August. Meanwhile, the M2 measure of savings — that’s bank savings, small-denomination certificates of deposit and retail money market funds — fell by $94.6 billion over the last three months. That’s the largest three-month drop on record.
Charles Biderman, CEO of TrimTabs, attributes that drop to people “yanking record amounts of money out of savings” due to the recession.
Biderman, who started the business in 1990, ended his press release with a warning worthy of Cassandra, saying, “While many investors are convinced the recession is over, real-time indicators show the economy has not yet bottomed, let alone started to recover.”
In its monthly employment report, ADP struck a more optimistic note, saying, “Employment losses are clearly diminishing.”
However, ADP also warned that employment typically lags behind overall economic activity, so that job losses are likely to take longer to bounce back.
ADP’s report showed the biggest share of losses in small businesses — those with fewer than 50 people — which cut 122,000 jobs from July to August. Big businesses with 500 or more people cut 60,000 jobs in the month.
I seem to recall that the recessionary period of the late 1970s and early 1980s was a double-dipper. Sounds like what we’re in now.
The question is, have we had the little dipper, with the big dipper still to come? Or vice versa?
Why are you opposed to equality for dippers?
Ursa major is still in waiting.
Charles Biderman, CEO of TrimTabs, attributes that drop to people “yanking record amounts of money out of savings” due to the recession.
Where’s that combotechie when ya need him?!?!?!
Great News! The Recession has Ended!!
Fed minutes: officials saw recession’s end in Aug.
By Jeannine Aversa, AP Economics Writer
On Wednesday September 2, 2009, 2:41 pm EDT
WASHINGTON (AP) — With the U.S. economy on the mend, Federal Reserve policymakers last month felt comfortable slowing the pace of one of its economic revival programs and not changing any others, according to documents released Wednesday.
Minutes of the central bank’s closed door deliberations, held Aug. 11-12, also showed Fed Chairman Ben Bernanke and his colleagues striking a much more hopeful note about the economy’s prospects compared with an assessment made in late June. Many Fed officials saw “smaller downside risks,” the documents stated.
Fed officials expected the pace of the recovery to “pick up” in 2010, but there was a range of views — and considerable uncertainty — about the likely strength of the upturn because of concerns about how consumers will behave.
Well there you have it - the recession is over!
What a triumph for Obanomics - evertything is fixed!
So, no more “We’re still cleaning up the mess Bush left behind”. Now, everything that happens, “Obama owns it”.
But when you look around in a few months and discover there seems to have been a catastophic economic collapse, you can be sure the Obama admin will be talking about how “no one could have seen this coming”.
But wait… What’s this?
Treasuries Rise as Fed Minutes Show Concern About Recovery Pace.
Sept. 2 (Bloomberg) — Treasuries gained, with the 10-year note yield touching its lowest level in more than seven weeks, as Federal Reserve officials in their August meeting expressed “considerable uncertainty” on the strength of recovery.
Government securities increased as minutes of the Federal Open Market Committee’s Aug. 11-12 meeting indicated differences on when to begin withdrawing record monetary stimulus. Bonds also advanced as factory orders rose in July less than economists estimated and ADP Employer Services said companies cut 298,000 jobs last month, more than forecast.
“People are looking to buy time until they figure out which way growth is really headed, which has been bullish for Treasuries,” said George Goncalves, chief fixed-income rates strategist at Cantor Fitzgerald LP, one of the 18 primary dealers that trade with the Fed. “Until the employment situation gets figured out, Treasuries look like an attractive place to park your money.”
Ten-year yields will climb to 3.76 percent at year-end, according to a Bloomberg survey of banks and securities companies, with the most recent forecasts given the heaviest weightings.
FOMC Minutes
“Most participants saw the economy as likely to recover only slowly during the second half of this year, and all saw it as still vulnerable to adverse shocks,” the Fed said in today’s minutes. “Conditions in the labor market remained poor, and business contacts generally indicated that firms would be quite cautious in hiring when demand for their products picks up.”
I see a double-dipper in our future. Anyone want sprinkles on it?
Hope that double dipper isn’t a teabag. Yep, I went there.
So, no more “We’re still cleaning up the mess Bush left behind”. Now, everything that happens, “Obama owns it”.
He already ‘owns’ it. His grace period ran out, he was given longer than anyone else who may have been elected would have been. Simple truth is he is just another in a long line of political windbag frauds.
The thing that will really push his followers over the edge, is the plan to take the “public’ option off the table on sickness care. Short lived admiration.
His followers are already pretty hot and bothered about the sacrifice of the public option. A quick read of The Daily Kos and Huffington Post will reveal plenty of anguish amongst the faithful.
you can be sure the Obama admin will be talking about how “no one could have seen this coming”.
I call Bullsht on that one. It isn’t even a Full yr, and he said before Nov last year, he warned it would be hard times.
I’d like to see YOU fix something like this in less than a yr with all the crooks still in CEO status etc.
U.S. consumer bankruptcies up 24 percent in August.
Wed Sep 2, 2009
NEW YORK, Sept 2 (Reuters) - Bankruptcy filings by U.S. consumers rose 24 percent in August compared with a year earlier and could reach 1.4 million this year, according to an American Bankruptcy Institute and National Bankruptcy Research Center report released on Wednesday.
Despite the spike, consumer bankruptcy filings last month were down 5 percent from July.
The August bankruptcies brought the 2009 number to 922,000.
Financial writers are morons.
Things do not rise and simultaneously fall.
“Bankruptcy filings by U.S. consumers were 24 percent higher in August compared with a year earlier…” is how it should read.
Does anyone else think the CNBc crowd is stupid?
Where do they get these evening schnooks
and the daytime ones as well.
Did you see that idjit Maria 2 days ago tell a congress
critter “if medicare is so good, why don’t you have it”.
He responded ” you have to be 65 before you are eligible
and I am 45″ to which she guffawed like an idjit.
Her corporateness Battyroma is batty.
GREEN SHOOTS………………StimUUUUlos $$$$
Wednesday, September 2, 2009
Brooklyn Heights spending stimulus money on lampposts
From the Daily News:
Let there be light - expensive light - on the streets of Brooklyn Heights, some locals say.
The upscale neighborhood is getting 65 new streetlamps this fall at $10,000 a pop - paid for with federal stimulus money.
But they’re not just any run-of-the-mill streetlamps; these will be fashioned with filigreed bishop’s crooks to make them look like antique streetlamps.
And, they cost three times as much as the perfectly functional lights they’re replacing.
“I’m not going to apologize for it,” said Brooklyn Heights Association President Judy Stanton, who helped broker the $650,000 deal. “I think it’s a valid use of stimulus money.”
Councilman David Yassky (D-Brooklyn Heights) is responsible for earmarking $250,000 of the money for retro lamps to be installed by the city Department of Transportation, and Rep. Nydia Velazquez (D-Brooklyn) has promised another $400,000 by the fall.
In all, the Brooklyn Heights Association hopes to replace 229 neighborhood lights at a total cost of $2.7 million.
Posted by Queens Crapper at 1:08 AM
Cripes - we need to just get 10,000 baseballs and start smashing millions of windows, and get past all this posturing.
The stimulus is about one thing and one thing only - spending money where it otherwise didn’t need to be spent, in order to win votes.
Brooklyn Heights Association President Judy Stanton, who helped broker the $650,000 deal. “I think it’s a valid use of stimulus money.”
WTF
They already HAD light posts that worked.
OH golly they could’nt have thought of some
JOB SAVING or manufacturing idea?
LOL–’stimuloss$$’…I may have to steal that.
I am not rich, but I am 40% into gold @ 600 an ounce. Gold is going through the roof today, up 25.00 today on haven demand. But, tommorrow, it could drop 100, saw it before. 980 now. Daffy Duck, can I have your cell number?
Hey y’all, I had to jump off the hamster wheel for a few minutes to ask a question about this article:
http://www.cnbc.com/id/32658981
My question involves the following:
“So the investors take the interest rate risk but they are not taking a credit risk.”
“The MCGE takes the credit risk, but the new insurance fund guarantees the principal and interest payment on the mortgage securities should something bad happen at the MCGE.”
“I spoke with the chief architect of the plan, MBA Vice Chairman Michael Berman, who says, “The key here is to virtually eliminate taxpayer risk and keep the risk in the private sector.”"
If McGee takes the credit risk, and the insurance fund guarantees principal and interest payments, where’s the risk to the private sector (i.e. investors), interest risk or otherwise??
Thanks.
I thought everyone would enjoy a followup about the house in Manlius, NY that was being sold at auction on Monday. From the local paper
“The house at 8401 Brae Leure Road in Manlius, was sold Monday for $478,500. About 50 people showed up for the auction, which allowed an opening bid of $1, and 18 bids were submitted, said Jim Kirby, the auctioneer from Coldwell Banker. The 6,108 square-foot mansion is assessed at $560,000 and was sold in 2003 for $822,500.”
Hi Joe, Thanks for the update. A $40% haircut. Wow.
That’s not going to help the sale of the house around the corner asking $1.2mm.
almost a BUZZZ cut
Thanks Joe,
Off doing other things today.
Yes, the Housing Market Has Rarely Looked Better!
by James B. Stewart September 2, 2009 SmartMoney.com
Passing through the Fort Myers, Fla., airport a few weeks ago, I noticed people eagerly signing up for a free bus tour of foreclosed real estate — with all properties offering water views. During the ride to my hotel, the young driver volunteered that he’d just bought his first house, paying $65,000 for a foreclosed property in nearby Cape Coral that had last sold for over $250,000. He said he’d never expected to be able to buy anything on a driver’s salary, let alone something that nice.
Last week, Standard & Poor’s reported that its S&P/Case-Shiller U.S. National Home Price index of real estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.
In short, the data suggest that real-estate prices hit a bottom some time during the second quarter, and have now begun to rise. There’s no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free fall. That means if you’ve been sitting on the fence, it’s time to act.
Ordinarily I’d never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock. But with real estate prices nationally now down about 30% from their 2006 peak, and showing signs of turning up, the prices aren’t likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can’t imagine a better time to buy than right now.
Overall, though, I can’t imagine a better time to buy than right now.
WMBZ you are kidding right?
I say more property is coming on the mkt in a month.
Well, if all houses were around 65k, then you are right. But they are not?
There are so many overpriced pos’s.
All I have to say to Mr. James B. Stewart is, “All real estate is local.” The “market” may look good wherever he is looking, but not so much in Scamville, CA, where foreclosure moratoriums and Dough-4-Dumps have painted plenty of lipstick on the pig.
Just got 200.00 knocked off rent! THanks Fasterpussycat.
Whoo hoooo!!! Another HBB winner! Congrats. That’s a lot of extra dough each month.
That IS super! What you gonna buy with all that extra money? Bullets? Beer? Gallons of honey? Cats? Hats with death-lasers mounted on them? Honey-covered cats wearing hats with death-lasers mounted on them? That’s the one IIIII vote for!
But that’s just me. Sometimes I’m not practical. Sigh.
Of course, now that I consider it, what’s more practical than a whole phalanx of well-trained honey-covered cats wearing hats with death-lasers mounted on them? Imagine walking imperiously down the street with those babies marching steadily along beside you!
Boy, I bet that dumb ol’ mail-lady would never lose another important package or the Safeway’s advertisements ever again!
*falls into happy daydreaminess *
I got a Mac with the extra dough.
Great - Ann’s buying the pizza at the next meet-up!
(Just kidding Ann. Anyone else think it’s time for another SD meet-up?)
YAY! You go girl…
Congratulations Ann!
Ann,
Good to see you posting again. You go gal.
Congratulations! I knocked off a few bucks from rent on two apartments this year - one in Los Angeles and one in Phoenix. Extra dough to put in T-bills.
…Extra dough to put in T-bills.
What, no laser-armored and honey-dipped cats for you, Bill in LA?
I completely spurn your unwise decision, man. Now how you gonna make the mail-lady respect you?!
rub honey on her cat?
alph, with the girls on board, I am going to leave that one alone.
Congrats.
DId I miss the tips yesterday for getting mine lowered by alot?
Well, I am back from the Olympia rainforest wilderness and feeling thinky. Here’s what I think:
1. I somehow have become totally wussified without noticing it was happening, sometime over the last few years.
2. There’s no place like home.
3. I really like trees. (I may have mentioned this before to you all.)
4. Gray’s Harbor county is fooked. I mean, really fooked. Jefferson county and Clallam county, too. Not even the DOT road-flaggers have all their teeth.
Besides Mt. Rainer and the Olympia Beer tour, the Olympia rain forest was my favorite place to go when I lived in the area.
Yes, and then you left us for some dumb city, missy. I forget which one it was, but I’m sure there’s no 250′ tall moss-draped trees in it.
SFO baygal. What is the Sausalito area doing RE wise?
I’d say toothless road flaggers is the best way to not get people to slow down for construction crews. Or maybe they’re toothless because people wouldn’t slow down for them. Chicken and the egg, I guess.
I can see you’re a thinky sort of fellow, binky, which is a virtue of yours. Anyway, he had SOME teeth, just not all of the ones that show in front.
As it happens, I have a bunch of big white extra teeth that show in front, so I should have spoken to the kindly fellow and arranged a deal where we averaged our teeth, because then everyone would have been the better for it.
Anyway, WHAT ‘chicken and egg’? Where! Where?!
Man, I was purely starving at the time and would have eaten anyone who suggested there was a chicken and egg handy*.
*This is part of the dawning and unwelcome realization that I have become wussified gradually. See, in the past I would have sought out my food, with a stick or something, but this time I only complained loudly and covertly eyed the limbs of handy persons and remarked upon how the average American ….
Ooops, I gotta go, the timer is going off for a triple pizza in the oven. later
(later)
That was a good pizza.
So, like I was saying, I complained loudly and covertly eyed the limbs of handy persons and remarked upon how the average American could stand to lose a few pounds for a good cause, such as me being super hungry, and I would spare the most important bits, so what’s the freakin’ fuss.
Besides, I knew everyone and felt confident they were all wholesome tree-huggers. Relatively germless and free-range…
Oly, the things you say (when normal) are things I say and also, I would guess, a lot of people here. Can’t speak for them though, of course.
You are a very fine lady.
Oly, the things you say (when normal) are things I say and also, I would guess, a lot of people here. Can’t speak for them though, of course.You are a very fine lady.
Why, thanks. That touches my heart.
…Except how do you know this? Maybe I’m just trying to lure you closer, so I can eat you.
Eat you without the unnecessary expenditure of calories involved in chasing someone*
*Naw, naw…I’m kidding.
Mostly.
With your relationship w/ Shorty, I am scared enough to believe you mean it.
Goodness, I would never eat Shorty. He’s all hairy, and plus he’s good pals with S*atan.
‘Never eat anyone who is good pals with Satan’, is one of my favorite mottos. That’s been the secret of my success.
Stupid Mr. Filter won’t let me say “smile”.
So, “smile” Goodnight Oly, and also, goodnight to all my friends here. You all mean a lot to me.
geoducks are satanic
geoducks are satanic
Them’s fightin’ words!
Hey, guess what, speakin’ of—tomorrow, on Sept. 3rd, I’m gonna sit down and watch how geoducks get fetched out! With a pulsing hose and everything. I may bring a camera.
*I mean the regular, licit way. When IIIII fetch them out I just run out there with a shovel and dig like mad and then those funny looking bits suck into the sand and try to get away from me.
Welcome back, Oly. Hope your days of wandering in the wilderness were refreshing and invigorating. Somehow that always clears my head like nothing else.
Don’t worry, you can always shake off the wussification now that you are aware of it. I came to the conclusions this year that I had gotten soft myself, and am well on the way to rectifying it now.
I came to the conclusions this year that I had gotten soft myself, and am well on the way to rectifying it now.
Really?! Whatcher doing? I’m busting with curiosity!
Eating roadkill? Sleeping on rocks? Bounding around in tickets with a dagger in your teeth? Serious, tell me quick what works.
I meant: ‘in thickets with a dagger’ and not ‘in tickets’, of course. Although I’d buy tickets for the event, for sure.
Say, now that I think of it, do you know how to preserve kelp? Can I freeze it? Or will that bust it up and make it into mush?
I fetched a big bag of tasty kelp off Rialto beach. It washed up in bucketloads. I had to snip the fronds loose from the bulby bladder thingie with my teeth, because I had unaccountably left my omnipresent scissors in the truck.
I would think that freezing would break the cell walls. Can you dry it? Either hanging upside down from the ceiling the way you would dry herbs, or if your climate is too damp for that, either pick up a food dryer or look for instructions how to dry food in your oven - Mother Earth News or Whole Earth Catalog archives perhaps?
Well, you seem to know these food things, silky, so I will go with drying. Plus, if I hang the stuff on the ceiling that way I can walk around with kelp brushing my head, and I can pretend I’m upside down in a kelp forest! That’s two good things.
I meant ‘zilky’, not ’silky’. Sorry.
Friend of mine sent me this. It regards another industry/jobs CEO pay etc.
“for anyone who needs motivation about these current negotiations,
here is something I pulled from a recent article that’s circulating,
it’s the real statistics for the legacy carriers since 9/11:
http://247wallst.com/2009/08/31/45418/#more-45418
I re-organized the stats to make them easier to understand, I also left out the stuff about fuel prices and load factors , since they have no real bearing on our wages.. ”
*******************************************88
- Employee wage/salary expense decreased by 33.5%.
- general management wages/salaries as
reported on DOT41 forms, increased by 44% as it climbed from $243 million to $350 million.
- - While the average air fare increased by $36( The average one-way passenger fare increased by 22%)
- , the labor wage cost for the average air fare decreased by 36% to $41.
- - The average passenger ratio to airline employee increased from
1,139 passengers per employee to 1,413. In other words, the flight attendant now resolve issues and provide customer service to over 24% more customers.
the average revenue generated per employee increased by an astounding 53% >average revenue per employee increased by over $110,000;
NYTimes
The municipal bond market may finally be coming out of the Dark Ages.
Three regulatory initiatives put forth this summer are bringing much-needed sunlight to this $2.7 trillion market. And individual investors, who accounted for 64 percent of all transactions last year, will be the prime beneficiaries.
Greater transparency in the muni market could not be more crucial for investors. Last year, 140 issuers defaulted on $7.6 billion in muni bonds; during 2007, there were only $226 million in defaults.
Wow I wonder what 2009 will bring another 30 fold increase? More
Of course, these moves don’t please everyone. In a recent letter to the S.E.C., the Securities Industry and Financial Markets Association, Wall Street’s lobbying group, complained about the Municipal Securities Rulemaking Board’s requirement that brokerage firms advise their clients of material information before a trade occurs. “This burden may impinge on the efficiency of the markets and may make dealers less willing to enter into trades with retail customers,” wrote Leslie M. Norwood, associate general counsel at the association.
Let’s hope that the regulators stand firm on these changes.
“With bond insurance no longer a factor, with so much of the market now unrated by the credit rating agencies, and with defaults and other evidence of broad credit declines appearing across the municipal market, retail investors are probably more vulnerable than ever,” Mr. Schmitt said. “This is no time for the regulators to back off the important disclosure developments, regardless of the pushback they encounter.”
I love the quote from Leslie, wouldn’t want those markets to become inefficient at stripping wealth.
By my eye’s reckoning of the P/E graphs in Shiller’s “Irrational Exuberance”, the ‘Seven Bad Years’ periods in 20th Century American financial history, which began in 1901, 1929 and 1966, all lasted a minimum of 16 years (the shortest being 1966-1982, 16 years), until the point when P/E (calculated over a long-term average of trailing earnings) finally bottomed out. If memory serves, then the present secular bear market (measured by downtrending Shiller P/E ratio) started in 2001, and we are eight years in. Will this one last the usual 16-20 or so year period (i.e., end between 2017 and 2021), or is it different this time? Economists who don’t drink koolaide or blindly place faith in mainstream consensuses want to know.
Finance and Economics
Buttonwood
A fair share
Aug 27th 2009
From The Economist print edition
Has the tide turned for corporate profits?
…
In terms of operating earnings, the best calendar year for the S&P 500 was 2006, when profits reached $88 a share. According to Citigroup, which has just raised its forecasts, earnings will not regain that level until 2013. The current era rather resembles the biblical dream of seven lean years.
…
I don’t expect to see the Fed stop sitting on interest rates until inflation is safely out of control…
Fed Tries to Prepare Markets for End of Securities Purchases
By Craig Torres and Vivien Lou Chen
Sept. 3 (Bloomberg) — The Federal Reserve is trying to prepare investors for an end to its housing-debt purchases, while keeping interest rates near zero, reflecting an economy pulling out of a recession with little momentum.
Federal Open Market Committee members discussed extending the end date of the agency and mortgage-backed bond programs, minutes of the group’s Aug. 11-12 meeting showed yesterday. The move would be aimed at avoiding disruptions in housing credit at a time when recovery prospects are clouded by rising unemployment and slowing wage gains, analysts said.
While the economy is projected to expand this quarter, central bankers had “particular” concern about the job market, signaling that the FOMC may need to see a peak in the unemployment rate before it begins withdrawing monetary stimulus. Some policy makers saw dangers of “substantial” declines in the inflation rate, yesterday’s report showed.
“They need to see labor markets improve and inflation stabilize, and not fall, before they even have a serious discussion about increasing interest rates,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York and former member of the Fed’s research staff.
…