Bits Bucket For September 25, 2009
Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
James Surowiecki offers some commentary about ratings agencies and how they’re completely embedded into the current system in the latest issue of the New Yorker:
If we’re going to reform the system, fixing them should be high on the list.
Unfortunately, that’s not an easy task, since over the years the government has made the agencies an increasingly important part of the financial system.
[...]
But there’s a much bigger problem, which is that, even though nearly everyone knows that the agencies are compromised and exert too much influence, the system makes it impossible not to rely on them. In theory, of course, the mere fact that a rating agency says a particular bond is AAA (close to risk-free) doesn’t mean that investors have to buy it; the agencies’ opinions should be just one ingredient in any decision. In practice, the government’s seal of approval, coupled with those regulatory requirements, encourages investors to put far too much weight on the ratings.
Packman, I think you were talking about precisely this issue sometime in the past couple of days …
ET, didya see our y-o-y median is down ~23%? Looks like the city is bearing the brunt right now too.
No, I didn’t, I just saw the Chicagoland number, -18.7%.
I also noticed Edgewater condo sales are down 33% year-over-year. (!)
From the Trib article on the new numbers:
“Condo sales, until the beginning of this year, were the best part of our market,” said David Hanna, president of the Chicago Association of Realtors. “There aren’t any buyers for this stuff because the lending process is tortuous.”
Also, the condo market for move-up buyers is hampered by the high cost of jumbo mortgages of more than $417,000 and the higher down payments required for those loans. Foreclosures and short sales are bringing down comparable prices within buildings too.
“Prices are a disaster and it’s creating this vacuum in the market where everyone’s prices are pulled down,” Hanna said. “And it’s happening in the best buildings in the city.”
Well yeah Mr. Hanna - that’s because a $417,000 condo in a town like ours is travesty. There’s no affordable mid-range out there. There are hovels like mine that can be sold to cash buyers and then it jumps straight up to $250k plus.
BTW - the old CAR H.Q. on Peterson Ave. is still vacant. The agents are having trouble moving their own property.
seems like there’s no getting away from the need for ratings..
Why not just rate the rating agencies according to their performance.
Whenever one of them is mistaken (it rates something too high OR two low), subtract points and lower it’s rating, AND discount whatever bonds it rated some appropriate amount.
The accurate agencies get a shiny gold star, while the ones that don’t know what they’re doing wear the dunce cap.
I dunno how many there are (maybe 5 major ones?) but there probably should be about 50 rating agencies for the sake of healthy competition..
“I never went to bed with a 2 but I sure woke up with a lot of them.”
That’s Jack Daniels for ya.
Better yet, ban rating agencies.
Caveat Emptor.
No need to ban them. Simply getting rid of the extant cartel and making the rating agency business more competitive should suffice (think “Wisdom of Crowds”…).
Who listens to these ratings agencies? It just goes to show that being stupid and having boatloads of money are not mutually exclusive. T-Boone Pickens comes to mind…
think “Wisdom of Crowds”…).
Group think? Not such a good idea in businesses.
I think wisdom of the crowds refers more to the diversity of opinion within a crowd than the unifomity within it.. Like the saying.. “Let the Internet decide” instead of “mob mentality”
who has the time, experience and the tools to research .. i’d pay someone to do it.
Just rate the agencies like agencies rate bonds.. the junk-agency would be revealed for what it is and will suffer for it, while the AAA agencies would flourish.
Any possible incentive to falsely rate a bond would disappear due to peer pressure since “Oops, we were wrong” will cost them.
“Any possible incentive to falsely rate a bond would disappear due to peer pressure since “Oops, we were wrong” will cost them.”
Just like all the pundits and politicians are paying for their ’subprime is contained’ comments?
When stock analysts knowingly make false calls other analysts stay quiet. Strong Sell won’t be countered by Strong buy or vice versa.
These games allow rich clients to reduce loss by getting joe 6 pack to react.
“who has the time, experience and the tools to research .. i’d pay someone to do it.”
I think I just found the answer to the question I posted above. It’s this kind of mentality which leads to bogus ratings agencies.
Rating agencies. I have a parable on that!
When I was 16 I bought a car on the advice of a friend of mine. That was the WORST piece of junk! British Ford as a matter of fact.
What I didn’t do was to understand what I was buying and understand what the underlying costs/benefits/risks were. I used my friend as a Ratings Agency. I took responsibility for this decision because I accepted his advice. I knew this to be my failure in due diligence. Yes, I’ve made some similar mistakes since then, but I’ve tried to practice some due diligence in most matters.
The moral to this story is this: I am responsible for my decisions. I can listen to advice and act on it or no, but the fault is not the advice giver.
The best decisions I’ve ever made? When I took no one’s advice but my own. Of course, I tend to irritate people at times because they offer advice, I listen politely, completely ignore it, and do what I think is best.
Roidy
At least you listen.
Advice should encourage thoughtful consideration, not discourage it.
It’s entirely clear that investors should be doing their own due diligence. Anyone who got burned listening to Moody’s, et al, has nobody to blame but themselves. We’ve been poking holes in Moody’s forecasts for 3 or 4 years on this blog, yet the sheeple continue to eat up what they say.
Was that a Ford Cortina?
The Pinto that replaced the Cortina in the US market was certainly no improvement.
The Pinto was a great car, after you pulled out the junk 4 cylinder motor, and dropped in a 289, 302, or 351. (that’s a 4.7 liter, 5 liter, or 5.6 liter, to all you kids out there……
……)
Especially if you weren’t concerned about turning or stopping.
2.3 is fine once you make the head breathe and put a big turbo on it.
LOL, Yes! A Ford Cortina. When it ran it was fast. Getting it to run was another matter entirely.
Roidy
When I took no one’s advice but my own. Of course, I tend to irritate people at times because they offer advice, I listen politely, completely ignore it, and do what I think is best. You sound like you have never truly been in need of advice. People who are not omniscient may have to stoop a bit. When my mother needed cancer surgery, I called a friend of mine doing a surgical residency at the University of Michigan and a cousin working in an ICU of one of its teaching hospitals. Both recommended the same man, who had just completed his general surgical residency. He was an excellent choice & saved mother’s life.
Well it’s a pretty difficult problem. How do we ensure a modicum of stability in banking and pension funds, especially when there is a government sponsored backstop for them (FDIC and PBGC)? Some bonds and investments are riskyer than others. Short of hiring a gazillion government employees to do due dilligence and rate the bonds, we’re going to HAVE to rely on private companies to rate them.
I suppose that we CAN have government standards that go into a bit more datail than simple “investment grade” , eg no CDO(squared) etc. But this isn’t the only place where the government gives non-government entities de facto regulatory authority. While NIST issues many standards, the government also uses standards written by outside organizations.
Well it’s a pretty difficult problem. How do we ensure a modicum of stability in banking and pension funds, especially when there is a government sponsored backstop for them (FDIC and PBGC)? Some bonds and investments are riskyer than others. Short of hiring a gazillion government employees to do due dilligence and rate the bonds, we’re going to HAVE to rely on private companies to rate them.
Here is how
1. People with bonds they want rated don’t get to pick their rating agency.
2. Bonds are rated at periodic intervals by different rating agency
3. Compensation of rating agency comes from a central clearing house. Not directly from those that issued the bonds and some of the compensation should be the bonds which have to be held to maturity.
4. Rating agencies can’t sell other services, ie if we rate you nice will you buy our service package B for say 10 million
That makes since, so it will never happen. Wall Street can’t game that system.
I like measton’s system too, but never underestimate Wall Street’s ability to game the system. They’ll figure it out.
to game the system. They’ll figure it out.
Goldmans does that now, at end of trading day, say last 30 minutes or so..down all day, but oh, look, now it is up within minutes of the bell. Often enough that it is really obvious. Gaming.
Yep - that article hits on exactly what I was talking about. Yet more evidence that centralization of authority is a bad thing.
What the article doesn’t go into is how the agencies not only were given central authority by the SEC to rate all these securities and complex derivatives - they actually worked hand-in-hand with the investment banks to create much of them.
What the article doesn’t go into is how the agencies not only were given central authority by the SEC to rate all these securities and complex derivatives - they actually worked hand-in-hand with the investment banks to create much of them.
To be fair, Surowiecki only gets one page an issue. While your point is a good one, the man must be relatively concise.
While your point is a good one, the man must be relatively concise. What the man omitted was the most important part of all, that ratings agencies are mandated by government regulation of organizations like pension funds. That fact may well have been second nature to him, but not to the people he was aiming his message at.
In theory, of course, the mere fact that a rating agency says a particular bond is AAA (close to risk-free) doesn’t mean that investors have to buy it;
Unless that persons pension fund manager, retirement fund manager, endowment manager does it. I think that’s been the biggest component of this game. Many of these financial managers had restrictions on what they could invest in. The criminals at the top had to figure a way to allow them to steal from conservative investors and thus they developed the MBS and rigged the ratings game. Then the financial managers of these restricted funds were free to start handing cash to the Wallstreet criminals. I imagine that many of these managers were bribed, some were coerced by the great ponzi scheme’s early returns.
“The criminals at the top had to figure a way to allow them to steal from conservative investors and thus they developed the MBS and rigged the ratings game.”
Correct, a total swindle. And the solution: Zyklon-B
Interesting choice of gas you state: http://en.wikipedia.org/wiki/Zyklon-b
Simmering anti-semitism? What gas do you suggest to use on the Christians responsible for this?
Thanks neuromance for responding to the Zyklon-B comment. I read it earlier in the day without recognizing the implication, although I know history.
Yikes, rms….
Please tell me that didn’t come out exactly the way you intended it?
Hey…those bonds have a AAA rating and the Blessings of Our Masters of the Universe you non-believers!
What could possibly go wrong? ..possibly go wrong..go wrong..rong
Ooops!
Look,there was no logic in these AAA ratings. The new business
models of spreading out risk in trenches in CDO’s was not proven by a test of time . I read one time that they didn’t even include fraud in their models on real estate loans and they used a model from days gone by that people don’t walk on their real estate loans and it’s the last bill they will stop paying ,in spite of the fact that using your house like a ATM became a popular leverage scheme .
Real Estate can’t be churned like stock ,(its more of a long term holding investment ) yet the Industry was treating real estate like that .
It’s Friday already. Yesterday I took off and toured the Silent City of Rocks National Reserve. It would probably be a National Monument except much of the land is privately owned.
http://www.nps.gov/ciro/photosmultimedia/index.htm
Somehow the Silent City of Rocks struck me as a metaphor for places like Las Vegas.
Ever read The Martian Chronicles, by Ray Bradbury? I always liked his descriptions of the dead chess cities in the deserts, formerly occupied by the extinct Martians.
Pssshhh… That’s nothin’
Garden of the Gods makes the link listed above look like McDonalds. Could that site be more commercialized?
Just wanted to send out an extra special thanks to DennisN for a fantastic tour of Boise!
I’d rec. it for anyone that’s looking for a sane place to live. Withing minutes of a major metro you’re out at Swan Falls watching birds of prey do what they do best, miles of orchards and wineries, amazing views and wonderful people.
( Although the “No Gang Colors Allowed” at the Cowgirls Saloon in Kuna was a little alarming? )
Also great crowd at the college and and all the brewpubs downtown. Don’t forget to see the native “Map Rock” drawn by inhabitants thousands of years ago. Both Dennis and I were amazed it wasn’t littered w/ graffiti ( like it would be in so many other places? ) If you’re in a place where you’re shopping for a place to retire or even just move period, you really need to Boise on your list. IMHO. Thanks again Dennis and don’t forget I still owe you a dinner.
DinOR
Don’t listen to this guy! Idaho is BAD. Horrible. Stay away. Please?
Shizo,
LOL! Right, absolutely correct. I found their insistence on using English as the primary language endlessly frustrating. As for their incessant use of turn signals and eagerness to return shopping carts where they won’t DING your car? Well just two-words: Uptighty Whitey!
Yeah, if you like “liberal and vacant use of driving lanes” lack of adherence to the Rules of the Road and basic civility, Idaho is definitely not for you?
It was sad to admit that Portland, OR used… to be a LOT like this. No more. Now we use our brights on the interstate. If you don’t like it well then you’re just a little p@ssy.
After reading my post I just wanted to say that was not meant in any way as a slant toward you DinOR… I was just trying to express how the locals feel about being invaded by (primarily) califonians. They move here because of our quality of life, then 3 months later start complaining- because “such-and-such” is not like their old home, and then they want to change it… well- GO HOME THEN!
Like I tell our cali neighbors and a few cali people I work with, “We are glad you are here, just don’t tell your friends…” (in jest of course).
Brewpubs? It’s already hosed. 30 years ago the locals were happy to get a can of Coors. LOL
When I first got here, my rental landlord cum realtor had this to say about newcomers. When I discussed getting rid of my CA plates as fast as possible, he told me not to worry: the locals were even more annoyed by liberals coming in from OREGON.
Glad to be a host. Sorry you didn’t have a day to blow going up into the Sawtooth Mts. though. Also sorry that Tablerock Brewpub ran out of Hopzilla before we got there.
Map Rock is only 700-800 years old IIUC. Well the rock itself is much older but the Indian hieroglyphics aren’t that old.
Looks like a tourist trap to me and that elf thing is tacky and a little creepy.
Give me Moab, Joshua Tree or Old Rag Mountain over that.
tourist trap
packman was funnin’ ya, sleeper
Yep. I’ve been there with my in-laws - and it is *very* much a tourist trap. Just though the “City of Rocks” and “Rock City” connection was funny.
I’d much rather go to the City of Rocks one DennisN posted. Give me natural creations instead of man-made (or man-enhanced) any day.
The City of Rocks was an important signpost on the California trail. My great-great-grandmother Anna Cook passed through it in 1862 on her way to California. I still have her Colt 1851 Navy revolver as a family heirloom.
It doesn’t photograph well. Like people say about the Grand Canyon, you have to see it to really appreciate it.
Leaving via the south entrance, I noticed I was only 10 miles north of the Utarr border. I was half tempted to drive over the line, toss off a brewski, and belch in honor of Olygal. But I didn’t.
aNYCdj, saw your comment yesterday about F***ed Company - That was the first message board i ever used, just as a . but still fun. I have no idea how many of us were there but i notice there is no trolling of usernames here, even though its so easy, and that was always popular on FC. Good times.
FIRST……yeah lucieeee!!!!
F-ed company was fun until Pud decided to become a low grade porn hustler.
As opposed to high grade?
That is where my handle is from. I used it on there. I frequently tell people about the tent city honda post, and how that person seemed to be the first one predicting the housing bubble.
Teed-Off Residents Drive Developer to Brink of Ruin - WSJ
NAPLES, Fla. — It’s not easy living on a golf course.
Bonita Bay Group, once a premier developer of upper-crust golf communities in this upper-crust town, is on the verge of collapse. The company says it will be forced to file for bankruptcy if it has to refund $245 million in golf-club membership fees some homeowners are demanding, in a battle that’s pitting residents against each other and against the company that sold them lavish dream homes during the height of the boom.
Through the 1990s and the earlier part of this decade, Bonita Bay was regarded as one of the leading developers in the Naples area, which has the highest per capita income of any locale in the country except Stamford-Greenwich, Conn. Bonita Bay launched seven Naples-area communities where houses sold for up to $12 million and came with access to exclusive golf clubs with restaurants, tennis courts and pools. Its homeowners have included Richard Schulze, the billionaire chairman of Best Buy Corp., opera diva Kiri Te Kanawa and New Jersey Nets President Rod Thorn.
Today, like many other Sunbelt developers, Bonita Bay is being squeezed by debt and plunging sales. But its biggest problem is a dispute over the deposits homeowners plunked down for memberships in the golf clubs, a marina and other clubs. Many members want to quit the clubs and get their money back for reasons ranging from cheaper golf elsewhere to the desire for ready cash. Their membership agreements say the deposits — up to $185,000 per member — are refundable on demand, a relatively unusual stipulation homeowners say was a big part of the appeal of joining.
Yet Bonita Bay says the agreements also stipulate that the rules “may be amended from time to time,” thus allowing it to cancel the refund policy at its discretion — and that at any rate, it can’t pay the money.
Angry residents have filed at least 15 lawsuits against Bonita Bay seeking the return of their deposits and accusing the company of civil fraud.
“the Naples area, which has the highest per capita income of any locale in the country except Stamford-Greenwich, Conn.”
Seriously? Well bust my britches, that’s news to me. (Palmy scratches head and takes anothe sip of coffee) They’re kidding, right? Sorta like “prime is contained”, right?
That looked doubtful to me as well. According to this, Naples is 26th just in Florida, at $61,114.
http://en.wikipedia.org/wiki/Florida_locations_by_per_capita_income
The real rich never have much income.
Of course, some of that may change with the whole UBS affair.
“The real rich never have much income.”
Exactly. And, they love to cry poor.
That is a truly sad story, all those poor people not being able to get their club membership money back. How can attrocities like that happen in modern day society? Why isn’t the government doing something? Think of the children!
Al,
LOL, and… I feel just about the same for the developer?
Why isn’t the government doing something? Think of the children!
Weren’t you just telling us that government has a role in distributing and regulating wealth? So there you go.
It’s unfortunate that the government wastes it’s time with things like EI and public schools when they could be making sure that socialites aren’t overpaying for golf club and marina memberships.
How’s this for a platform for a politician to run on: affordable yacht docking slips for everyone!
Meanwhile, on the other side of Florida:
Food stamp applications soar in Palm Beach County, Treasure Coast
By JOHN LANTIGUA
Palm Beach Post Staff Writer
Friday, September 25, 2009
As the unemployment rate soared in the past year, the number of people signing up for food stamps in Palm Beach County and the Treasure Coast also skyrocketed, by nearly 50 percent.
The figures were released this week by the Department of Children and Families, which administers the federal program in Florida.
“The increase in Palm Beach County was 49 percent, but we have seen other counties in Florida that have gone up 75, 80, 90 percent,” said Perry Borman, DCF regional director for Southeast Florida. “I would guess that the state has never seen such a dramatic increase in the past.”
As of August, 48,236 households in Palm Beach County were receiving food stamps, also known as the Supplemental Nutrition Assistance Program, or SNAP. That compares with 32,299 households last year.
The dollar amount distributed in stamps increased even more sharply, in part because federal stimulus funds were used to augment benefits. In July 2008, food stamp aid distributed in the county was $6.7 million per month. It climbed to $12.98 million this past August.
Borman said the food stamp program’s traditional clientele — people mired in long-term poverty, including the homeless — have been joined by people who never asked for assistance before.
“We’re seeing an increase in a different kind of people applying — the working poor,” Borman said. “People have lost their jobs, they own a house, money has dried up and they turn to public assistance.”
In Martin County, the number of households receiving food stamps increased from 3,077 in August 2008 to 4,937 in 2009, a rise of 60.4 percent. Benefits totaled $1.25 million.
In St. Lucie County, assistance was distributed in August to 17,337 households, up from 12,151 in 2008, an increase of 42.7 percent. The total distributed was $4.66 million.
“This is pretty unprecedented,” said Cheri Sheffer, DCF spokeswoman in the two counties. “But here on the Treasure Coast we have some pretty tremendous unemployment statistics.”————>>>>
and to the north of Naples…. there’s this:
Childhood hunger, hitting close to home
By Tiffany Lankes
Published: Friday, September 25, 2009 at 1:00 a.m.
This week, restaurants across the country are donating a portion of their profits to Share Our Strength, a national organization that aims to end childhood hunger. The event runs through Saturday. The Herald-Tribune used the event as an opportunity to talk to two Sarasota County teachers who see the effect of hunger on children firsthand.
Here are their stories in their own words: Deb Witham, Booker High “We have several students who live with their families in a motel room. It’s hard for some of our families to accumulate sufficient funds for a security deposit on an apartment, but they can scrape enough money together to pay for a motel. We worry about these students because most hotel rooms do not have cooking facilities.
“A teacher revealed he had a student who went with his family to McDonald’s every night for dinner. Each family member was allowed to have one item from the $1 menu. This was the only way they could afford to feed their children. That teacher gave the student $20 to take home for food.
“How are the children living under these conditions getting the nutrients they need to be successful in school? “Nearly every teacher on campus has ‘loaned’ a student money for lunch, knowing that it will never be repaid.————–>>>>>>>
This is all part of the “green shoots” jobless recovery, right?
Bonita Bay…. should be Botany Bay…. mutiny… KHAAAAAAANNN!!!!! And so on…
Ohhhhhh… double bogey. This will knock them right off the leader board.
(Bloomberg) — Japan’s exports fell for an 11th month in August.
Shipments abroad dropped 36 percent from a year earlier compared with a 36.5 percent decline in July, the Finance Ministry said today in Tokyo. From a month earlier, exports fell 0.7 percent, the second straight decrease.
Today’s report suggests the boost in overseas demand that helped the economy expand in the second quarter may be moderating as governments exhaust stimulus spending. New Prime Minister Yukio Hatoyama meets his counterparts from the Group of 20 nations in Pittsburgh today to discuss how to sustain a recovery from the worst global recession since the 1930s.
“Even with all those global stimulus measures, the recovery in exports has been extremely slow,” said Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. “Final demand worldwide remains weak.”
And no Smoot-Hartley to blame…
Good point Skip…
U.S. large-loan bank losses triple to $53 billion: regulators
(Reuters) - U.S. regulators say that the level of losses from syndicated loans facing banks and other financial institutions tripled to $53 billion in 2009, due to poor underwriting standards and the continuing weakness in economic conditions.
According to the Shared National Credit Program (SNC) 2009 Review, an annual inter-agency report released on Thursday, credit quality deteriorated to record levels with respect to large loans and loan commitments.
The Shared National Credit Program which was set up in 1977 to review large syndicated loans now reviews and classifies all institutional loans of at least $20 million that are shared by three or more supervised institutions.
According to the report, criticized assets rated ’special mention’, ’substandard’, ‘doubtful’ and ‘loss’, touched $642 billion, representing 22.3 percent of the SNC portfolio, compared with 13.4 percent a year ago.
Classified assets rated ’substandard’, ‘doubtful’, and ‘loss,’ rose to $447 billion from $163 billion in 2008.
The volume of SNCs rated ‘doubtful’ and ‘loss’ in 2009 rose almost 14-fold to $110 billion, while non-accrual loans touched $172 billion, up from $22 billion in 2008.
The report also said foreign banks held about 38 percent of the $2.9 trillion in loans, while hedge funds, pension funds, insurance companies and other entities held about 21 percent.
Good morning wmbz,
Here’s some more coverage on the subject over at FTdotcom:
“More than one in three dollars lent by non-bank institutions such as hedge funds, securitisation vehicles and pension funds, went sour, according to the figures, compared with 11.5 per cent for US banks.
The results will increase fears that, in spite of a recovery in the shares and balance sheets of many banks, the epicentre of the crisis has moved to the hedge funds and investors that gorged on cheap credit in the run-up to the turmoil.”
From:
Financial groups hit by surge in loan losses
dated today
Good Morning…
“hedge funds and investors that gorged on cheap credit in the run-up to the turmoil.”
Love the use of the word “gorged” very fitting.
Unfortunately, LETTERMAN took the “G” from gorged and meaning that the non-bank lenders were GORED.
…But what about Naomi?
Please tell me there’s no way taxpayers are going to be forced to bail these people out.
And that epicenter sure gets around! Housing, banking, now it’s with the hedge funds. I hope it’s using protection.
Again the goal
Spray paint crap with gold and sell it too conservative investors. Non conservative investors got into it as well by leveraging their positions making said MBS 30x as toxic.
US May Face ‘Armageddon’ If China, Japan Don’t Buy Debt.
24 Sep 2009
The US is too dependent on Japan and China buying up the country’s debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.
“It’s almost Armageddon if the Japanese and Chinese don’t buy our debt,” Robertson said in an interview. “I don’t know where we could get the money. I think we’ve let ourselves get in a terrible situation and I think we ought to try and get out of it.”
Robertson said inflation is a big risk if foreign countries were to stop buying bonds.
“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It’s not a question of the economy. It’s a question of who will lend us the money if they don’t. Imagine us getting ourselves in a situation where we’re totally dependent on those two countries. It’s crazy.”
Robertson said while he doesn’t think the Chinese will stop buying US bonds, the Japanese may eventually be forced to sell some of their long-term bonds.
“That’s much worse than not buying,” he said. “The other thing is, they’re buying almost exclusively short-term debt. And that’s what we are offering, because we can’t sell the long-term debt. And you know, the history has been that people who borrow short term really get burned.”
The only way to avoid the problem, he said, is to “grow and save our way out of it.”
Pick-Your-Payment Nation.
Armageddon?
hmm.. i doubt God’s plan is to use a credit cutoff by China and Japan to usher in the end times… although it’s nice to think we might be close to ending this earthly experiment.
But anyway, when you owe the bank $1,000, it owns you. When you owe their banks right around $1,000,000,000,000.13, you own them. China’s and Japan deserve some credit for being aware that it is they who are on the hook, not us.
China can’t cut us off. As the saying goes, millions of idle hands are the devil’s tools.
More like 100’s of millions, and I shudder at the thought.
For how many years now has the US faced Armageddon if foreigners stopped buying our debt? I’ve long since lost track since this alarm bell was first rung…
Its been a long time, that’s for sure. It’s just that our appetite for foreign debt has been growing at a phenomenal rate lately. I mean, who would have envisioned trillion dollar plus budget deficits even just a few years ago? Is there even enough money out there to borrow, especially since we aren’t buying as much imported crap from them anymore? Does anyone here harbor any hope that the budget deficit will shrink back to a “mere” 300 billion or so any time soon?
I have been called a nut job by people for suggesting that the US may be at the end of its rope, and that like the former Soviet Union it may cease to exist as a poltical entity will little notice (I guess the pundits on CNBC and elsewhere will say in unison “no one saw this coming!”). Pat Buchannan has predicted that the collapse of our house of cards will be so swift that our our armed forces overseas will be left stranded with no way to get home (I personally don’t think it will be that sudden).
“For how many years now has the US faced Armageddon if foreigners stopped buying our debt? I’ve long since lost track since this alarm bell was first rung…”
It makes it all the more sad, that there has been so much notice and yet so little done. But heh, that fire on the first floor will take a long time to reach the 25th, so why rush for the exits?
“It makes it all the more sad, that there has been so much notice and yet so little done. But heh, that fire on the first floor will take a long time to reach the 25th, so why rush for the exits?”
I interpretted it more as how little power any of us really have. It seems to me lots of people have been waving their arms about this debt for a long, long time. Some people have made movies about debt, some have marched on Washington, some campaign for the elimination of the Fed Reserve, some get the word out to their clients, some create open blogs and cultivate intelligent public discussion. Yet it all feels so fatalistic like the end cannot be avoided.
As I stated early last year (before the crash) i figured a stock market crash and the US would allow China to spend their money and buy up the Dow 30 companies on the cheap….GE MS at single digits…IBM at $50…..i also thought they would buy GM and Chrysler…..and maybe exxon mobil, and our problems would be “solved”
——————–
I don’t know where we could get the money
We don’t let chinese buy oil companies.
LOL. See yesterday’s discussion - China and Japan currently are not even the biggest buyers of U.S. debt - Great Britain is. At least for the last 9 months or so.
Of course that begs the question - who’s the biggest buyer of GB’s debt?
Yup. Here we are again!
We also need to realize the the biggest holder/purchaser of US debt isn’t China it’s the banks and the Fed. And they can just print more moola to buy more US debt.
Weimar….here we come!
oh Oh can I have a guess I know I know!!!
Is it the USA possibly via a private investment bank?
A perfect circle of printed money
Sept. 24, 2009, 12:01 a.m. EDT
Rare earths are vital, and China owns them all
By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) — Rare earths may not be on most investors’ radars, but they are certainly in almost any high-tech item they use — and in the world of rare earths, China is king.
The U.S. Geological Survey recognizes 17 different rare earths, materials with science-fictionesque names like lanthanum and gadolinium. They are used in everything: glass polishing and ceramics, automotive catalytic converters, computer monitors, lighting, televisions and pharmaceuticals.
‘China is the Saudi Arabia of rare elements … [and] like oil, rare elements will flow to the highest bidder.’
Mark Williams, Boston University
“We are addicted to rare earths as much as we are addicted to oil,” said Byron King, editor of Energy & Scarcity Investors, published by Agora Financial LLC. Yet “none of these elements are famous like gold or silver. None gets shipped in giant ore freighters like iron, aluminum or copper.”
“Without these elements, much of the modern economy will just plain shut down,” he said.
And yet, King said, “the only people who really study these elements are master’s- and PhD-level chemists and solid-state physicists … and national leaders in places like China.”
In fact, China has all but cornered the market. The rare-earths space is like a Monopoly game, in which Beijing owns Boardwalk, Park Place, and well, pretty much all the properties, while the West owns St. James Place.
“China is the Saudi Arabia of rare elements,” said Mark Williams, a risk management expert and finance professor at Boston University. And “like oil, rare elements will flow to the highest bidder.”
China accounts for about 97% of global rare-earth production — 139,000 metric tons of material in 2008 — and it also consumes about 60% of the world’s rare earths, according to Sean Brodrick, a natural-resources analyst at UncommonWisdomDaily.com.
Meanwhile, the U.S., which is also a major buyer of rare earths, mined no rare-earth elements last year, USGS said.
“China is consuming more of its own rare earths all the time, so it’s exporting less,” Brodrick said.
That fact could pose a significant problem for the world market, given that rare earths are used in so many products and gadgets.
Without these elements, “you can say goodbye to much of modernity,” said King. “There will be no more television screens, computer hard drives, fiber-optic cables, digital cameras and most medical imaging devices. You can say farewell to space launches and the satellites … and the world’s system for refining petroleum will break down too.”
Technology play
Indeed, rare earths are also critical in the cutting-edge technologies promised to create a new green economy and save the planet from a climate-change apocalypse.
“Really, if there are limited rare-earth supplies in world markets, then there will be a very limited ‘green’ future,” King said. “There will be a limited future, period.”
The electric motor in Toyota’s market-leading Prius hybrid, for example, requires 10 to 15 kilograms of lanthanum for the battery, according to William Gamble, president of Emerging Market Strategies in Rhode Island.
The Prius’ battery also uses 1 kilogram of neodymium, the key component in the alloy for permanent magnets, he said.
In fact, neodymium is the only element that can create strong permanent magnets, although engineers have tried to find a substitute, King said.
And it’s a little-known fact, he added, that strong magnets “are critical to the guidance systems of every missile in the U.S. defense inventory.”
Meanwhile, lanthanum, the most commonly used rare earth, has been a key substance for petroleum refining over many decades, so even “non-green” cars depend on the rare earths.
“China’s dominance of rare-earth output gives that nation an overwhelming advantage in developing many forms of technology, both now and in the future,” King said.
Holding back
With such a stranglehold on the market, China is doing whatever it can to keep other nations from encroaching.
“Recent statements suggest [China is] going to limit outside exports, as well as shut down the polluting in-country mines,” said Brent Cook, author of investment letter Exploration Insights. “They are centralizing supply.”
“Just as Rio Tinto and [Turkey's] Eti Mine can effectively stymie any competitor production by controlling the borate market, China can and, I believe, will do the same to emerging producers,” said Cook, who is also a geologist.
Brodrick said China has a “1-2-3 plan” to “dominate the world’s rare-earths market for decades to come, and with it, the energy technology for the 21st century.”
The first step involves limiting exports. This year’s export quota is poised to be the smallest yet, and plans for further restrictions are in the works, he said.
Secondly, Beijing also appears to be forcing manufacturers that use rare earths to move to China.
“Companies that want rare earths from China can get them. They just have to move their production facilities to China” because of those reported export restrictions, Brodrick said.
And third, he said, China has made moves to buy up other rare-earth resources around the world.
He points to the case of two Australian companies, Lynas Corp. and Arafura Resources , which plan to open mines in the next couple of years that would have a combined production equal to a quarter of the annual global output of rare-earth metals.
When the credit markets collapsed last year, both companies lost their financing. Sensing opportunity, China stepped in, with government-owned miners providing the money needed to finish construction of the two companies’ mines and ore-processing factories, he said.
In exchange, the Chinese companies received 51.7% of Lynas and 25% of Arafura. Read about rare-earth investment prospects in Commodities Corner.
Beijing’s strategy is a long-term one: King said that while China’s rare-earth output may hold up for a few more years, it’ll almost certainly fall after that.
“The Chinese know this,” he said, and so when the global markets see news about China limiting exports of rare earths, “it’s both to preserve the ores and assets and to create a draw to pull new industry into China.”
Market’s loss is China’s gain
And China’s grasp on the market will be hard to break.
China gained its monopoly on rare earths because it was able to “undercut everyone else’s price over the past decade,” according to Emerging Market Strategies’ Gamble.
The Chinese rare-earth sector also gained a leg up by swallowing some serious environmental consequences.
“Many rare-earth elements are very toxic,” said Marcus Hudson, president of commodity-hedging advisory firm Hudson & Associates. “With China’s lax rules on environmental safety, there is an environmental nightmare waiting to happen.”
Yet despite such price and regulatory advantages, smaller exploration companies in other nations are starting to make progress on new rare-earth projects that could chip away at Chinese dominance.
“What has to happen to take control out of Chinese hands is obviously new mines outside of China,” said Cook. “There are a number of junior exploration companies right now working on that.”
As examples, Cook cites Canadian firms Rare Element Resources Ltd. , Avalon Rare Metals Inc. and Quest Uranium Corp. .
“So there really is no shortage in rare elements, and in fact, there are enough deposits out there to easily fill demand, but at a price,” he said.
At least until now, rare-earth production was not very economical, but if prices stay high, we will see many new mines outside of China, he said.
But, he added, the “problem is that China controls the price and could put any new producer out of business by dropping prices.”
““Companies that want rare earths from China can get them. They just have to move their production facilities to China” because of those reported export restrictions, Brodrick said.”
And they think that us slapping a few tariffs on tires is considered economic warfare? The commie mindset of the Cold War still lives in China. Make no mistake about it.
Yeah, yeah, yeah. China has rare earths, blah, blah,blah. But do they have corbomite like the USA does?
Do they have Dolomite like teh US does??
The Dolomites are in Italy
The difference between the US PTB and the Chinese PTB is that the US has a four year timeframe and the Chinese have a 1,000 year timeframe.
Does anyone know if China can feed itself? That might be their Achilles heel.
Here is a thought for you:
Rare earths aren’t as rare as you think they are.
There are rare earths all over the world, just that nobody can compete with China at this point in time. I wouldn’t be alarmed about this at all.
Precisely. They have cornered the market by undercutting competitors on PRICE. But that does not mean that competitors cannot spring back in other parts of the world if they take advantage of their near-monopoly by jacking up the prices.
“In fact, neodymium is the only element that can create strong permanent magnets, although engineers have tried to find a substitute, King said.”
No there are other strong magnets
Samarium Cobalt magnets A samarium-cobalt magnet, one of the two types of rare earth magnet, is a strong permanent magnet made of an alloy of samarium and cobalt. They were developed in the early 1970s. They are generally the second-strongest type of magnet made, less strong than neodymium magnets, but have higher temperature ratings. They are expensive, brittle, and prone to cracking and chipping.
neodymiums also crack easy I’ve used both
Spain is sliding into a full-blown economic depression with unemployment approaching levels not seen since the Second Republic of the 1930s and little chance of recovery until well into the next decade, according to a clutch of reports over recent days.
Ambrose Evans-Pritchard
10:28PM BST 24 Sep 2009
The Madrid research group RR de Acuña & Asociados said the collapse of Spain’s building industry will cause the economy to contract for the next three years, with a peak to trough loss of over 11pc of GDP. The grim forecast is starkly at odds with claims by premier Jose Luis Zapatero, who still says Spain’s recession will be milder than elsewhere in Europe.
RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear. The group said Spain’s unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression.
Spanish workers typically receive 50pc to 60pc of their former pay for eighteen months after losing their job. Then the guillotine falls. Spain’s parliament has rushed through a law guaranteeing €420 a month for long-term unemployed, but this will not prevent a social crisis if the slump drags on.
“Spain is sliding into a full-blown economic depression”
Sounds unbelievably dramatic…
Nobody expects the Spanish Inquisition!
Bring in….. the comfy chair!
The group said Spain’s unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression.
Wow. I guess they better redouble their efforts to get American and European tourists there and spending again.
I wonder what the Davos crowd will be discussing behind closed doors the next time they meet?
The same thing they seem to be discussing every meeting… Madonna’s new video?
a) this year’s champagne grape harvest and what it portends
b) truffles, ditto
c) the coming ski season
d) the new Patek Phillipes, and the old ones
e) Naladhu vs. The Chedi Phuket
Spain will never get the numbers of UK purchasers of flats and villas that they had for a few years. There were real British FB horror stories, even well before the bubble burst - people buying houses that developers built on land they didn’t own, people signing purchase contracts without a clue what was in them, and the like.
Anybody know anything about the holiday home market in Croatia? Hip well-heeled Brits were buying there after the British expat and holiday crowd in Spain became the butt of jokes.
I have a friend that just got back from Czech, he said almost every pub had a sign - “No British”.
I wonder if there was a sports event that drew the rough aggressive football fan type Brits - the yobs.
You wouldn’t think that they would turn away patrons just for things like complaining about not being able to get a proper cup of tea, no Marmite, beer too cold etc..
I love the smell of Napalm in the morning…
Yessiree, how’s the globalization working out?
Oh, HERE’S how it’s working out. LOL, New World Economic Order, right? LMAO! This oughta work out well.
http://www.reuters.com/article/newsMaps/idUSTRE58O1FB20090925
“I love the smell of nail polish in the morning….”
-Jason Stackhouse
No problem, just send them over here we are ‘creating’ gubmint jobs left & right.
Government layoffs to hit some 25,000 in Puerto Rico
By CB Online Staff
Caribbeanbusinesspr.com has learned that the administration of Gov. Luis Fortuño will be announcing the dismissal of some 25,000 government employees over the coming days.
Government Development Bank President Carlos García, who heads the administration’s Fiscal Stabilization and Reconstruction Board, is scheduled to give a press conference at 1 p.m. Friday where the second round of layoffs are expected to be announced.
A source said dismissal letters will be going out to these 25,000 or so employees with notice time running from 30 days to 60 days to 90 days depending on the position held.
Some five agencies will be exempt from the layoffs including the Police, Fire and Education departments.
When taking office last January, Fortuño had predicted layoffs of at least 30,000 central government employees to help reduce the $3.2 billion budget deficit he inherited and balance the budget by cutting $2 billion in costs. To date, there are about 23,500 fewer employees in government this year due to attrition, cancellation of so-called temporary contracts with 6,797 workers and dismissal of 7,816 regular employees. (CARIBBEAN BUSINESS 9/24).
Labor Department figures show that in August there were a total of 201,300 central government workers, the lowest level recorded in the past two decades.
200K “central” government workers on an island of 3.7M people? That sounds excessive to me - it’s over 5% of the total population. And that population figure includes children and others not in the labor pool.
dismissal of some 25,000 government employees ??
Must not have a union like their counterparts in California…
Government layoffs to hit some 25,000 ??
What, No one day per month Furloughs ?? They must not have a union like their counterparts in California…
FirstBank seeks foreclosure on 116-acre project
cbnews@caribbeanbusinesspr.com
FirstBank Puerto Rico wants to seize a 116-acre site in southern Miami-Dade County from the developer of the Venetian Parc residential project.
The bank filed a $39.4 million foreclosure action on Sept. 16 against Quantum Ventures and managing members Augustin Herran and Oscar Barbara, according to Miami-Dade County Circuit Court records.
Venetian Parc was approved for 154 single-family homes and 58 townhomes, but there is no record of construction starting on what once was farmland.
The site is located west of Miami Metrozoo, along Southwest 176th Street, between Southwest 157th Avenue and Southwest 149th Avenue.
Quantum Ventures bought the property for $47.9 million in 2005 and obtained a $39.4 million mortgage from FirstBank Puerto Rico.
Fort Lauderdale attorney Avi Benayoun, who represents FirstBank Puerto Rico in the lawsuit, did not immediately return a call seeking comment.
They paid $413,000 an acre, in that part of Dade County. Holy cr*p. Even if I was a lettuce or tomato I wouldn’t want to live there.
Tax incentives seen boosting new U.S. home sales in August.
WASHINGTON (Reuters) - Sales of newly built U.S. homes likely rose to their highest level in a year in August, supported by government-sponsored tax incentives and growing signs of the economy’s recovery, according to a Reuters poll.
The survey of 71 economists forecast sales of new single family homes increasing to an annual rate of 440,000 units in August from 433,000 units in July, which was the highest in 10 months. It would be the fifth straight month of advance in sales.
Homes sales have been boosted by an $8,000 tax credit for first-time buyers and the lowest house prices and mortgage rates in decades. With the tax credit expiring at the end of November, there are concerns that sales could slip and stall the housing market’s recovery from a three-year slump.
The collapse of the U.S. housing market is one of the main forces behind the domestic economy’s worst recession since the Great Depression of the 1930s.
Incoming data continue to suggest the recession that started in December 2007 has probably ended, a factor that analysts said was encouraging people to buy houses.
“It appears Americans are growing more interested in home-buying as the economy recovers,” wrote analysts at Moody’s Economy.com in a research note.
The Commerce Department will release the new home sales report on Friday at 10:00 a.m. EDT.
“It appears Americans are growing more interested in home-buying as the economy recovers,” wrote analysts at Moody’s Economy.com in a research note.”
Regurgitating the Kool-Aid, and drinking it again. Yeah, I know that’s disgusting, but no more so than the comment above.
Hey, ya gotta have something to keep your mind off your expiring unemployment benefits.
Indeed - those who are without a job need to hurry to buy their house while they can still get the tax credit since without a job or tax credit, you’ll miss out on this “great time to buy or sell real estate.” Hahahaha!
Sales of newly built U.S. homes likely rose to their highest level in a year in August, supported by government-sponsored tax incentives and growing signs of the economy’s recovery
The morons in our media are really something. We get some growth due to government-sponsored tax incentives and everything is peachy. The people should be ashamed of themselves, if they had any shame. Every paper in this country has turned into a 1978 version of Pravda and they wonder why they are not read, nor respected. Here’s a clue for you, you baboons, you are complete and total appartchiks for the machine of government and big business. Just die already.
Sigh, I’m tellin’ ya….
I wuz watching some grinning, chirping PBS news reporter in front of the UN, blathering on about something or other. I kept wondering if her head would explode like a ripe melon in the hot sun and what that would look like. As a result, I missed what she was saying.
That would be Margaret Warner reporting on the nuclear situation with Iran. She’s not half bad. Stay away from Paul Solmon, the bald economics guy. He’s an insult to PBS’s audience. I even wrote PBS/Jim Lehrer twice to tell them so.
NAR logic:
Free money to home buyers is good for home sales. Ergo we need more free money to home buyers.
“It appears Americans are growing more interested in home-buying as the economy recovers,” wrote analysts at Moody’s Economy.com in a research note.
Americans love free stuff. It matters little whether the economy is growing or groaning.
“Americans love free stuff.”
Like that’s a bad thing. I like free stuff. Illegal immigrants like it too. Gee, we’ve got something in common.
America. Land of the free…
“I like to be in America. Everything free in America…”
Ah, those West Side Story lyrics….
Land of the free…stuff…
Bernstein’s lyricist nailed it.
I fail to see the logic in viewing this as “free stuff”.
If i buy a house, my income tax is reduced by some amount under the plan. It’s a tax cut. They TAKE LESS of my wages than they might have. The government is NOT-taking some of my money.
I am “getting” nothing, for free or otherwise.
If someone breaks into my car and steals the navigation system and a laptop but leaves the radio, did i get a free radio because it wasn’t taken?
There’s actually a bit of a problem with the language barrier here in the US. Foreign language speakers may understand the word “free” in one way, while English language speakers know it has a few different meanings and which meaning applies to which context.
Language and communication is everything, and many Americans may not understand that foreign language speakers interpret things differently and thus behave accordingly. For example, I was reading over on another website how, in certain versions or dialects of another language, there is no construct for personal responsibility. No “I dropped the plate and broke it”. Instead, “The plate dropped and broke”. No sense of personal causation. Which would definitely explain some behaviors that native born, English speakers don’t grock. This would also inadvertantly foster a victim mentality. Of course, not being a linguist, I wouldn’t know if that’s really true, but it does make sense to a degree. We sometimes associate the word “free” with an idea of liberty. Someone who only understands it as “no cost”, would have a hard time understanding the other concept.
And so I do think, in these current times, there are those who come to the US as “the land of the free”, in search of free stuff and free benefits, etc, rather than for personal liberty. They actually understand it that way and many haven’t been disappointed.
‘I fail to see the logic in viewing this as “free stuff”.’
Take an undergraduate economics class and get back to us.
“Take an undergraduate economics class and get back to us.”
You’re debating a failed and flawed ideology, not logic. No matter the level of calculus imputted, babbling ignorance is the retort.
heh.. Take economics to better understand faulty logic? hehe.. HAHA! Yeah!
omg.. you guys kill me sometimes.. heh.. that’s a good one.
Jeoy,
I agree the tax rebate isn’t getting something for free, but I disagree with your reasoning as to why. Something is free when you get it unconditionally, yet you have to buy a house to get the tax credit. Buying a house is a pretty significant condition.
If I was randomly picked to have a reduction of a liability (taxes owed), I would consider that getting something for free.
joey, I would totally agree with your analogy—as long as I could get the same tax benefit without buying a house.
As the subsidy stands, it is a clear subsidy on a house purchase, and the best way to understand it is in terms of getting part of the house for “free” (actually, at taxpayer expense).
If the subsidy were 100% of the purchase price (instead of 10%) with no cap (instead of capped at $8K), then it would be exactly a free house. At a lower percentage and cap, it is a partially-free house.
What JuvenileJoy is implying is that he owes nothing for the services he recieves, hence his tax burden is somehow confiscatory. In other words, he’d opt to be a freeloading welfare case no different that the rest of the tax whiners.
Also, that “Free” tax credit comes from basically printing money, which devalues our wages and savings.
Fortunately, in New Future Amerika, wages and savings won’t be the concerns of most folks.
“If I was randomly picked to have a reduction of a liability (taxes owed), I would consider that getting something for free.”
= Household stimulus #1
Most houses are more than 80,000. So virtually all home sales will receive the 8K. But prices are dynamic. Give people 8K and the price goes up by 8K, or a little more.
You talk about a strict percentage of house price subsidy (in this case 100%). That is different than a de facto lump sum payment, which is what the 8K is. None of the subsidies are strict percentages of house prices, which is what you’re talking about.
Percentage of house price subsidy versus de facto lump sum - apples and oranges. So, no, no one is getting anything for free. The lump sum 8K gets built into the house price.
If the government decided to go for a strict percentage of house price subsidy, then, house prices would skyrocket again till the montly payment reached maximum pain level for the debtors.
Gosh….I wish I was free to create my own currency and print it ad nauseum to control the entire political and economic system of the great ‘ole USA. Nope. Guess I’m not so free after all.
I saw the re-make of Shaft last night, picked up a cheap video at the thrift store. Really enjoyed it. Isaac Hayes’ theme song riffed all through the movie as the background sountrack. Awesome, classic piece of music that really has some legs. Great to see Richard Roundtree in the flick, too, as “Uncle” John Shaft.
What does this have to do with housing? Nothing.
Hayes got the Academy Award for Best Music..
if we keep going it’’s bound to tie into housing somewhere down the line…
Hayes got the Academy Award and the HELOC crowd got “the shaft”.
Oh, wait, I just got it. The Christian Bale character in the movie was the cold-blooded heir to a real estate fortune. And unafraid of the boyz in the hood. Willing to use them, not willing to have them in his milieu.
Now I got the theme song locked in my mind. Thanks a lot!
Yeah the song was one of my favorites. I don’t recall watching the show much. Was it a short-lived series?
I watched South Carolina beat up on Mississippi. How did Ole Miss get a #5 ranking?
You were obviously looking at the Moodys Top 25 College Football Poll. Go Gophers!
“I watched South Carolina beat up on Mississippi. How did Ole Miss get a #5 ranking?”
Ole Miss is the only team that beat Florida last year. Glad to see The Ole Ball Coach can still win a few for SC. Florida plays KY tomorrow night. Hope to see a 50 point margin.
Yes, it does have something to do with Shaft.
When the bank takes a FB’s property, don’t they all complain that the GOT the Shaft?
Here you go a good version of the theme song.
http://www.youtube.com/watch?v=PfK-UzQ48JE&feature=related
This one is good too
http://www.youtube.com/watch?v=V3gp7B8WC4Q&feature=related
+1 I guess you haven’t lived until you see an old white Brit guy playing Shaft of the ukelele. Did you see their rendition of Smell like Teen Spirit?
I guess Mr Market expects ‘better than expected’ new home sales, consumer sentiment and durable goods orders today?
* The Wall Street Journal
* TODAY’S MARKETS
* SEPTEMBER 25, 2009, 8:17 A.M. ET
Futures Point to Higher Open
By SIMON KENNEDY
Stock market futures climbed as investors awaited another round of housing data.
Less than two hours before the start of trading, Dow Jones Industrial Average futures were 26 points higher at 9661. S&P 500 futures gained 3.2 to 1047.5, and Nasdaq 100 futures gained 1.5 to 1701. Changes in futures do not always accurately predict early market moves after the opening bell.
U.S. stock indexes fell Thursday, led by the materials sector, after a weak reading of home sales deepened investors’ worries about the broader U.S. economy. The Dow Jones Industrial Average closed down 41 points, while the Nasdaq Composite lost around 24 points and the S&P 500 dropped 10 points.
New-home sales figures and consumer sentiment data are due after the market opens. Before that will come the figures on August durable goods orders.
…
Overseas, most Asian markets ended lower, with Japanese stocks falling as Nomura Holdings suffered its worst percentage drop in at least a year a day after announcing a $5.6 billion share offering, dragging on most financial shares. Tokyo’s Nikkei 225 Average closed down 2.6%. European indexes were mostly lower in midday trading.
Run away! Run away!
U.S. Stock Futures Retreat After Durable Goods Orders Slump
By Rita Nazareth
Sept. 25 (Bloomberg) — U.S. stock futures fell, signaling the Standard & Poor’s 500 Index may extend its biggest weekly drop since July, as an unexpected slump in orders for durable goods spurred concern the economy is struggling to recover.
General Electric Co.,Intel Corp. and Citigroup Inc. lost more than 1 percent after the Commerce Department reported a 2.4 percent slide in bookings for goods meant to last several years. Research In Motion Ltd., maker of the BlackBerry, tumbled 14 percent after its sales forecast trailed analysts’ estimates.
“Two steps forward, one step back,” said Michael Strauss, who helps oversee $25 billion at Commonfund in Wilton, Connecticut. “After a batch of good economic reports, investors got disappointed with durable goods orders numbers.”
…
GE should be shut down for many reasons, not the least being CNBC. I was watching a clip last night with Erin Burnett interviewing somebody. I no longer watch that network, ever. Watching that empty-headed shill Erin Burnett made me realize why. She is an insult to anybody calling themselves a “journalist”. Keep boycotting CNBC and all of the other corporate propaganda entities. The best way to slay the beast is to ignore it.
Burnett is an insult to feminine intelligence and intuition. Her and Cocaine Larry “I’m not gay” Kudlow share the same 3 brain cells.
Come on, at least she’s hot. If we are going to be lied to on TV (99.99% of all TV “news”) at least we can look at something nice in the meantime. Just kidding….
Erin Burnett and “hot” are not words I would use together. Skanky is a word I would use but not “hot”. Then she opens that gateway to hell she calls a mouth and all bets are off. Perhaps she could tame that hair of hers someday.
Erin Burnett was a Vice President at Citigroup…one of how many?
She began her career at GOLDMAN SACHS & Co. as an investment banking analyst focused on mergers and acquisitions and corporate finance.She is a member of the Council on Foreign Relations .
Taken from her bio.
With her GS credentials, she is future cabinet material.
Now you all know how we got into this mess.
Multiply Erin Burnett by a thousand. No, make that 10,000. Now give them trillions of dollars to play with.
These people have NEVER lived in the same world as the rest of us.
Marie Antoinette is a piker compared to them.
Sorry… make that a million people. Literally.
NYCboy - since when are hot and skanky mutually exclusive?
Just kidding ladies and I apologize for my rudeness it was just too good to pass up.
She is also a Williams grad so she is close to my heart.
“since when are hot and skanky mutually exclusive?”
WTF…..
UPDATE 1-U.S. durable goods orders drop 2.4 pct in Aug
Fri Sep 25, 2009 8:58am EDT
(Adds details, market reaction
WASHINGTON, Sept 25 (Reuters) - New orders for long-lasting U.S. manufactured goods fell unexpectedly in August, dropping by their biggest margin in seven months, following a plunge in commercial aircraft orders, the government reported on Friday.
The Commerce Department said durable goods orders tumbled 2.4 percent, the largest decline since January, after rising by a revised 4.8 percent in July. New orders for July were previously reported to have increased 5.1 percent.
Analysts polled by Reuters forecast orders rising 0.5 percent in August. Compared with the same period last year, new orders were down 24.9 percent.
Durable goods orders are a leading indicator of manufacturing activity, which in turn provides a good measure for overall business health.
U.S. stock index futures fell on the report, while government bond prices rose.
“This is a bit of a reality check for people. It means there is more to be done and we are not out of the woods yet,” said Doug Roberts, chief investment strategist at Channel Capital Research.com in Shrewsbury, New Jersey.
…
Let’s see now, in 24 hrs. there’s been a miss in used house sales, Japan’s imports and exports are down again, and now this durables report.
Could there be some change blowin’ in the wind?
some change blowin’ in the wind ??
Next Shoe ?? Black Swan ?? Double Dip ??
“Could there be some change blowin’ in the wind?”
I smell lots of plunge protection, especially following all the G-20 chest thumping about how their
international collusioncoordinated efforts have rescued the global economy from Great Depression Deux.There’s that word “unexpectedly” again.
Nobody expects the Spanish Inquisition!
Sounds like if the G-20 deal goes through, US consumers will get to consume less stuff and Chinese consumers will consume more stuff.
* The Wall Street Journal
* SEPTEMBER 25, 2009
G-20 Near Deal on Economy
Plan Calls for Peer Review of Each Nation’s Policies on Growth; G-8 to Take a Back Seat
By BOB DAVIS, JONATHAN WEISMAN and STEPHEN FIDLER
[Demonstrators walk away from pepper gas released by police during a protest prior to the start of the G20 Pittsburgh Summit in Pittsburgh, Pennsylvania September 24, 2009. REUTERS/Carlos Barria (UNITED
STATES POLITICS CONFLICT BUSINESS)] Reuters
PITTSBURGH — The Group of 20 nations is close to an agreement that would require members to subject their economic policies to a type of “peer review,” according to several senior G-20 officials, in a shift that would expose the U.S. and China to broad scrutiny of the way they run their economies.
Also, the G-20 heads of state will announce on Friday that the G-20 will become the permanent council for international economic cooperation, eclipsing the Group of Eight, a senior U.S. administration official said.
“It’s a reflection of the world today,” the official said Thursday night. “It’s basically pulling international cooperation into the 21st century.”
The G-8 will continue to meet on matters important to the most-developed economies, such as international security issues. But those meetings will come as world leaders converge for other events, not in major summits.
The initiative was pressed by U.S. President Barack Obama, but it satisfied the demands on Brazil, China, India and other large developing countries, which have bristled at being left out of G-8 conclaves.
Under the G-20’s proposal aimed at improving coordination of global economic policymaking, the world would reduce its reliance on U.S. consumers. The Chinese would boost domestic demand, the U.S. would trim its borrowing from overseas, and the Europeans would encourage investment, said a number of G-20 officials involved in the talks.
…
Who ever said that you can take a World as big as this and take it Global,especially when you don’t have the same rules in every Country .
This concept of a Global World order ,which is just another way of saying
Big Business wants the World as their oyster ,at the expense of screwing up local economies and common folk , is a joke . I would really like to see this work out .
There was nothing wrong with Countries trading with each other ,if the trade balances were fair ,but when we went into BIg Business trying to
take advantage of the cheap labor pools of the World,(no doubt in part in response to Unions gaining to much power and benefits ) ,it was the selling out of America .
We are dealing with Communist Countries as if they own us . I never thought I would see the day where China would tell us what our economic policy should be . I have nothing against other Countries ,but what has your government done for you later other than break your back. China has a serious problem with how many people it has
and that should not be confused with what problems the United States has . Crashes use to kinda be limited to local areas ,but with this new World order ,when one Country sneezes ,the other side of the earth with cough. There is much more security in diversity .
“the U.S. would trim its borrowing from overseas”
hahaha and we’ll put 20% down on home loans and pay credit cards off every month
Who’s the man who wont cop out when there”s trouble all about?
Shaft…can you dig it?
Home sales end 4-month rise
Economists say dip should be temporary
By Alan Zibel
ASSOCIATED PRESS
2:00 a.m. September 25, 2009
WASHINGTON — Four steps forward, one step back.
Single-family-home resales dipped unexpectedly last month, falling 2.7 percent from a month earlier, the National Association of Realtors said yesterday, reversing steady monthly gains since April. Most economists, however, called the drop temporary and said they expected sales to strengthen later this fall.
“It doesn’t change the underlying trend of improvement,” said Dean Maki, chief U.S. economist at Barclays Capital.
But even if sales do turn upward again, Maki and other economists don’t predict prices will follow. Though prices have stabilized this summer, many economists are forecasting a downward turn over the fall and winter and expect prices to finally hit bottom early next year.
…
“Most economists, however, called the drop temporary and said they expected sales to strengthen later this fall.”
Do sales normally strengthen later in the fall, or would this be a first if it happened?
“Do sales normally strengthen later in the fall, or would this be a first if it happened”?
Nope, traditionally sales slow, but pay no attention to history. The “economists” must have deemed that it’s different this time. Of course there is always that hope for change.
The economists are now much smarter and more accurate than earlier today, when they were miles off in their estimates of durable goods and new home sales.
It’s amazing that all they basically have to do is say whether something will be heads or tails, yet they’re “surprised” 90% of the time. Economists must love surprises, maybe that’s it.
“Economists must love surprises, maybe that’s it.”
I know my young sons just love when I surprise them, jumping out from behind a door and saying ‘”boo”. They laugh and get all exited. It stands to reason then, that economists must have the mentality of toddlers.
It’s amazing that all they basically have to do is say whether something will be heads or tails
The Harvey Dent school of economics?
I blieve cash for clunkers v. 2.0 aka home appliance enrgy star rebates is due to be rolled out soon. Surely it will be a “success” by accelerating all future sales for the entire next year and put them in Q4. See also, cash for clunker, v. 1.0 Auto bailout.
Do sales normally strengthen later in the fall ??
Never…
Near-record low home building permits suggests the San Diego building industry will remain in the deep freezer for the foreseeable future. I guess some other industry besides home building is going to have to lead the dawning recovery which economists claim to see on the horizon.
County’s economic indicators rise again
Index moves upward for 5th straight month
By Dean Calbreath
Union-Tribune Staff Writer
2:00 a.m. September 25, 2009
Despite continuing high unemployment and a sharp decline in home building, the outlook for San Diego County’s economy continued to show signs of improvement last month, according to an index of leading economic indicators released yesterday.
It was the fifth consecutive month that the index — maintained by the Burnham Moores Center for Real Estate at the University of San Diego — moved upward, after a three-year decline.
“We haven’t hit bottom, but the negatives are not quite as negative as they have been and the positive signs are getting stronger,” USD economist Alan Gin said.
…
“San Diego’s unemployment rate may have already peaked if seasonal-adjustment trends hold true to form,” said Kelly Cunningham, economist with National University’s Institute for Policy Research.
Cunningham said that while the local unemployment rate reached a 26-year high of 10.4 percent in July, after seasonal fluctuations in employment are taken into account, the actual peak in “real” unemployment may have happened in May.
The most negative economic indicator was housing construction. August was the third-lowest month on record for home-building permits, exceeded only by this January and February.
Gin said that while that means less work for the beleaguered construction industry, it also has an economic upside.
“With fewer houses being built, that means more of a chance to work off the inventory of homes to be sold,” Gin said. “And that can lead to more stable prices, which would be good news for the people who have been struggling against foreclosure to hold onto their homes until the market improves.”
“more stable prices, which would be good news for the people who have been struggling against foreclosure to hold onto their homes until the market improves.”
Hmmm . . . Q: so if you are struggling against foreclosure (meaning you are not making your payments), how is a stable price good news?
A: It isn’t.
I’m afraid you misunderstood that quote Mr. D,
“and that can lead to more stable prices, which would be good news for us in the REIC because people who have been struggling against foreclosure will foolishly hold onto their homes hoping the market will improve, and we can squeezed every last ounce of blood out of them.”
You probably missed the wink Gin gave to the reporter, as well as the evil grin.
I guess KB Homes’ share price should rally today thanks to a contrarian move on this ‘worse than expected’ earnings report?
UPDATE 2-KB Home loss worse than analysts’ forecasts
Fri Sep 25, 2009 8:32am EDT
* Loss of 87 cents/shr vs. year ago loss of $1.87/shr
* Analysts looked for 73 cts/shr loss-Reuters Estimates
* Revenue down 32.8 pct
* CEO warns not to expect “meaningful improvement” soon (Recasts, with comparison to Reuters Estimates)
BOSTON, Sept 25 (Reuters) - Homebuilder KB Home (KBH.N) reported a deeper quarterly loss than Wall Street had expected, and its chief executive warned he does not expect “meaningful improvement” in the U.S. housing market in the near future.
KB on Friday reported a third-quarter net loss of $66 million, or 87 cents per share, less severe than the loss of $144.7 million, or $1.87 per share, recorded a year earlier.
The loss was deeper than the 73 cents-per-share loss Wall Street had braced for, according to Reuters Estimates.
Revenue came to $456.3 million, down 32.8 percent from $679.1 million a year earlier.
Its shares fell 4.5 percent to $17.70 in pre-market trading.
“It will likely be some time before we see meaningful improvement in the economic conditions that are essential to our industry’s future growth,” said CEO Jeff Mezger.
…
Here’s the headline from Market Watch.
“KB Home narrows loss as orders rise”
That sounds like positive news to me. Orders were up 62%. Believe none of what you read and 43% of what you see.
Believe none of what you read and 43% of what you see ??
I am a firm believer in “Watching The Big Boys” if you want forward indicators…Kind of the same thing as “Follow The Money”…KB has a local project that they got into back in 2006..Purchased
the site from United Laboratories…There was a free-for-all trying to buy this site…I think it went for 2 mil per acre with high density, maybe 20 units per acre…Anyway, they completed all the infrastructure, built the 8 models and shut the project down…Early this year, they broke ground for one building (4 units)…I sensed that they new something…I believe the something was continued low rates along with the tax credit…They completed that building, started and finished another and have started one more (3 buildings, 12 units in a year)…Good sign ?? I don’t think so…There is at least 40 more buildings to go…Green Poop…
OMG — what kind of housing stimulus bomb does Government Sachs know about that the rest of us don’t? I am thinking the tax credit is going to be extended to speculators. More gambling money is good for keeping home prices up on a permanently high plateau, and for helping Megabank, Inc unload toxic assets on the rest of the world. Main Street gets screwed, and Wall Street gets rich, as usual.
New Home Sales May Climb 30% in 2010, Goldman Says (Update1)
By John Gittelsohn
Sept. 24 (Bloomberg) — New U.S. home sales may jump 30 percent next year, buoyed by low mortgage rates and a “greater than 50 percent probability” that Congress will extend a tax credit for first-time buyers, Goldman Sachs Group Inc. said.
New home sales in California will lead as property values rise and transactions climb to more than 525,000 nationally, analysts led by Joshua Pollard wrote in a note to investors. The firm raised its recommendation for D.R. Horton Inc., Meritage Homes Corp., Toll Brothers Inc. and M.D.C. Holdings Inc.
“Phrases like ‘the worst is well behind us’ and ‘things remain encouraging’ capture the mood of many constituents we met with on residential real estate,” Pollard said after visiting California. “The mood was much more negative on commercial real estate.”
…
I call interest rates on 30 year mortgages to approach 6% next spring and kill the whole party. Of course the caveat is that Heli-Ben needs to really stop the purchase of Fannie/Freddie toilet paper….which on second thought won’t happen.
But on the flip side if people aren’t buying now with rates at historical lows then they won’t be buying next year.
There’s only so many 1st time suckers they can rope into the game and those folks aren’t able to get >$350k homes based on the requirements for the tax credit (at least they shouldn’t be).
“Of course the caveat is that Heli-Ben needs to really stop the purchase of Fannie/Freddie toilet paper….which on second thought won’t happen.”
So that puts you in the camp of those who believe there is no macroeconomic budget constraint? Why do you believe this?
I know! I know! Pick me! …ummm
Current events?
I don’t think there’s a macroeconomic constraint because it hasn’t happened yet. They’ve shoveled trillions of dollars into the bankers’ pockets and there’s been no negative result - the recession continues, but they just keep dragging it out, and the stupid people of this nation are happy to see this. I’ll believe the Fed can’t paper over this mess when I see it, I guess.
“I don’t think there’s a macroeconomic constraint because it hasn’t happened yet.”
I don’t believe there is an actual constraint, but that doesn’t mean that there isn’t a price to be paid. It may not be for years or decades, but it is inevitable due to events set in motion now.
I see three possible outcomes:
1) Governments that are crippled by servicing debt. High taxes and few services.
2) Governments that print money to pay their debts and create crippling inflation. A growing percentage of the populace finds itself living in poverty as the cost of basic necessities rise.
3) Governments default on their debts. There is a serious loss of face and money can no longer be borrowed. I think this is the best option (didn’t use any form of the word cripple in option 3). And as I would recommend to any FB, when default is inevitable, do it early so you can move on.
“So that puts you in the camp of those who believe there is no macroeconomic budget constraint? Why do you believe this?”
Because the PTB knows how to rig the inflation #’s and by doing so this allows them to implement these schemes.
The only number that really matters is the price of a barrel of oil. You’ll know Ben and Timmy have finally screwed the pooch when it starts to skyrocket back up.
I would be hesitant to vote against GS.
“New U.S. home sales may jump 30 percent next year, buoyed by low mortgage rates and a “greater than 50 percent probability” that Congress will extend a tax credit for first-time buyers, Goldman Sachs Group Inc. said.”
That’s funny that GS can’t say 100% chance of an extension. They should remember what they told congress to do. Oh wait, 100% is greater than 50%. Can’t go lying.
New home sales in California will lead as property values rise and transactions climb to more than 525,000 nationally, analysts led by Joshua Pollard wrote in a note to investors. The firm raised its recommendation for D.R. Horton Inc., Meritage Homes Corp., Toll Brothers Inc. and M.D.C. Holdings Inc.
yes we have really low unemployment in CA and all make bank
Gold is down pretty big again today. Say goodbye to $1,000 per ounce, at least for now. You know Golem Sacks must be making money on this, somehow.
San Diego County multifamily unit construction authorizations:
August 2008 451
August 2009 4
Year-on-year percentage change
(4/451-1)*100 = -99.1%
Drop expected for apartment values in 2010
By Roger Showley
Union-Tribune Staff Writer
2:00 a.m. September 25, 2009
Although they think they own the best real estate to weather the recession, local apartment investors, managers and analysts still expect values to drop in 2010.
“The good news is that we haven’t heard anyone single out apartment investing” as a bad move, said Robert Vallera, a principal at Commercial Realty Advisers, at a briefing yesterday on the apartment market and the overall economy.
…
There’s only darkness on the construction side, according to a report on building permits released yesterday by the Construction Industry Research Board. The Burbank-based group said a record low of just four multifamily housing units was authorized in San Diego County in August, down from 32 in July and 451 in August of last year. Year to date, there have been only 778 units approved, down from 2,431 for the same period last year.
Single-family production was no better, a near-record low of 98 homes authorized, down from 151 in July and 213 in August 2008.
“I think we’re in a period where we’re trying to get back to a normal market,” said CIRB director Ben Bartolotto. “It’s hard to read it. We’re forecasting that things will improve.”
Statewide, he said, 2008, 2009 and 2010 are likely to represent the least construction activity in 40 years of record keeping. He’s projecting total housing units for this year at 39,500, eclipsing last year’s low of 64,962. Next year may come in at 65,000, he said.
The California Building Industry Association said the drop in construction statewide is partly due to the lapse of the $10,000 new-home tax credit that spurred interest early this summer. An $8,000 federal first-time-buyer tax credit expires Nov. 30.
…
“August 2009 4″
I think I detect a bottom in San Diego County multifamily housing unit authorizations.
If anybody would like to comment (just post no sign up) please go here and read the first post. It’s your buy now or be priced out story. http://www.sgvtribune.com/ci_13412107
See even the old philanderer FDR thought we all have a “right” to a ‘decent’ house. So no more crap shacks, for 600k.Now lets get dem lawmakers going on this…
Writer/director Michael Covel (”Broke: The American Dream”) recently attended a private screening of Michael Moore’s new documentary film, “Capitalism: A Love Story.”
“Michael Moore ends his film with recently uncovered video of FDR talking to America on January 11, 1944. Looking into the camera a weary FDR proposed what he called a second Bill of Rights - an economic Bill of Rights for all regardless of station, race, or creed that included:
* The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.
* The right to earn enough to provide adequate food and clothing and recreation.
* The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
* The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
* The right of every family to a decent home.
* The right to adequate medical care and the opportunity to achieve and enjoy good health.
* The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment.
* The right to a good education.
“As FDR concluded and the film ended, I was shocked at the reaction. The theater of 400+ stood and cheered wildly at FDR’s 1944 proposal. The questions running through my head were immediate: How does one legislate words like ‘useful’, ‘enough’, ‘recreation’, ‘adequate’, ‘decent’, and ‘good’? Who decides all of this and to what degree?”
Covel nails it exactly! Re-read FDR’s stirring laundry list of “rights” above. You might be moved to stand and cheer, too. More than two-thirds of Americans would. And therein lies the problem. Our political leaders pledge at every election to secure these rights for us and they perpetrate whatever fraud it takes to create the illusion they’re coming through for us.
First some terms need to be defined: decent, adequate, useful, good, etc. Then we can get down to brass tacks.
There in lies the rub.
I don’t think decent houses in the 30’s had indoor plumbing.
Exactly, are we talkin’ indoor plumbing “decent” or are we talkin’ dream home/man cave/princess portico/home theatre “decent”?
Americans love free stuff.
By my count, 1 of 8 of those points are in keeping with capitalism.
* The government may not prevent you from getting a useful and remunerative job in the industries or shops or farms or mines of the nation.
* The government may not prevent you from earning enough to provide adequate food and clothing and recreation.
* The government may not prevent every farmer from raising and selling his products at a return which will give him and his family a decent living.
* The government may not prevent every businessman, large and small, from trading in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
* The government may not prevent every family from living in a decent home.
* The government may not prevent you from getting adequate medical care and the opportunity to achieve and enjoy good health.
* The government may not prevent you from getting adequate protection from the economic fears of old age, sickness, accident, and unemployment.
* The government may not prevent you from getting a good education.
There - I fixed it for you.
First drafts are usually rather broad and vague.
Most people I know don’t mind working for a living. They DO mind getting paid about as much a college intern or taking pay cuts, getting shafted on the job (think Dilbert) and being tossed to the curb at the first sign of a little economic trouble.
They do mind banks and CC companies playing games and constantly changing the rules of the game. They do mind corporate government. They do mind having their pensions taken away and their jobs being offshored.
Remember what the illegals say? “We do the jobs that Americans won’t?” They conveniently leave out “… because you can’t live on the wages.”
So when they see the rich and wealthy shafting everybody else and getting sweetheart deals from the government and the sheer gall of their entitlement mentality, why wouldn’t they want the same thing?
Every right involves a responsibility of someone else to observe that right.
Who’s going to compel the providers to pay for these things?
Who’s going to compel the providers to pay for these things?
Notice there was NO answer to this question….
Some of these rights were implemented in Russia, and even were written into the Soviet constitution.
“* The right to a job,
* The right to medical care and health,
* The right to education”
and of course, “The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment”.
I wonder, how much of America’s middle class life-style was allowed to thrive in order to compete with the Soviet model? If the masses are shown they’re better off as a “middle class” under capitalism than the “everyone is adequately provided for but equally poor class” under socialism, there’s no fear of social upheaval or god forbid revolution a la Russia. Interesting that FDR said this in 1944, after many years of Depression.
Lots of plunge protection is underway already early this morning. Should be a great day for day traders going long US stocks, as green shoots of liquidity are dumped into the market.
Dow Jones Industrial Average
Get out why you can.There is going to be a huge run for the exits when this thing turns.dont know when it will be but closer to the top than the bottom.
What makes you think the Plunge Protection Team can’t keep the market decoupled from economic reality forever?
So that puts you in the camp of those who believe there is no macroeconomic budget constraint? Why do you believe this?
Zing. Fundamentals always win ……………………………………………………………………………………………………………………………….. eventually.
There’s that word again…”unexpectedly”
Durable Goods Orders in U.S. Unexpectedly Decreased (Update2)
Sept. 25 (Bloomberg) — Demand for U.S. durable goods unexpectedly fell in August, signaling companies are planning to curb spending on concern gains in sales will not be sustained.
Orders for goods meant to least several years dropped 2.4 percent, the worst performance since January, the Commerce Department said today in Washington. Excluding transportation equipment, orders were little changed.
Restrained consumer spending and near-record excess capacity mean companies will probably not boost investment in new plants or equipment in coming months. The report indicates the jump in auto sales from the Obama administration’s $3 billion trade-in program may not give other industries a jolt, raising concern any factory rebound will be uneven.
“Firms are delaying spending where possible,” said David Semmens, an economist at Standard Chartered Bank in New York. “The U.S. has a disappointing recovery ahead. We are not going to see the kind of rebound we are used to.”
This guy’s point might be true for countries that don’t have a Plunge Protection Team to drive up the stock market in ‘contrarian rallies’ whenever ‘worse than expected’ numbers are released, but it is patently false in the US of A.
Europe Markets
Sept. 25, 2009, 9:02 a.m. EDT
European shares lower after weak U.S. data
Gains from commodity-sector offset losses for industrials
By Sarah Turner, MarketWatch
LONDON (MarketWatch) — For the second time in two days European shares turned lower following weak U.S. data, with durable goods data behind Friday’s move.
After holding in a tight range through the morning, the pan-European Dow Jones Stoxx 600 index (ST:SXXP 239.14, -0.84, -0.35%) traded down 0.4% at 239.12 in the afternoon.
So far this quarter, the Stoxx 600 has gained 16.6%, extending a rally that started in March on the back of hopes that the global economy is on the mend.
But downbeat news from the U.S. housing sector on Thursday and a 2.4% drop in total U.S. durable goods orders weren’t well received by equity investors. See full story.
“We’re at a point in the cycle when any thing that doesn’t meet expectations is going to be greeted with a certain degree of skepticism,” said Peter Dixon, strategist at Commerzbank.
“The debate over the last few weeks has been that markets are overextended and consequently when we get to a situation where the data doesn’t meet expectations, there’s always going to be scope for a sell off,” he added.
…
As predicted by many, the post “incentive” spending crash is here. If anything “Cash 4 Clunkers” merely cannibalized future car sales, probably at the expense of other purchases.
““Firms are delaying spending where possible,” said David Semmens, an economist at Standard Chartered Bank in New York. “The U.S. has a disappointing recovery ahead. We are not going to see the kind of rebound we are used to.””
So, what’s the consensus prediction for David’s future. Concrete shoes in the Hudson? ‘Accidental’ fall out of a 20th story window? I’m assuming the PPT has a militant wing.
The likelihood just went up that Congress will take a look under the Fed’s hood…
market pulse
Sept. 25, 2009, 9:26 a.m. EDT
Frank backs Rep. Ron Paul’s Fed audit bill
By Ronald D. Orol
WASHINGTON (MarketWatch) - House Financial Services Committee Chairman Barney Frank, D-Mass., said he backs legislation introduced by Rep. Ron Paul, R-Texas, that would require the Government Accountability Office to audit how the Federal Reserve implements monetary policy and examines every aspect of the Fed, including how much it has lent and will lend to specific banks as part of its bank bailout program. “We are serious about some legislation in this regard,” said Frank at a hearing on Paul’s bill. “I have some concerns, some time needs to elapse before certain disclosures take place, we are working together; we want there to be publicity but we don’t want there to be a market effect in the near term.” The legislation introduced by Paul, which requires approval by the House Financial Service Committee before it comes to a vote by the full House, has 295 supporters in the House.
…
I am wondering if the Congress will look into the question of whether the Fed is pegging housing and stock market price levels? I would think such activities are unprecedented (if they are occurring), but I am not sure.
Thoughts?
Correction: I don’t believe the Fed has previously targeted housing prices. I guess Plunge Protection in the stock market dates back at least to the 1987 crash, if not earlier…
“Thoughts?”
Here is my thought. Criminals commit crimes.
“We are serious about some legislation in this regard,” said Frank at a hearing on Paul’s bill.
“Some legislation” means Frank plans on revising the bill so it is toothless and bears no resemblance to Paul’s original bill.
How did Frank get elected anyway and how does he get re elected ? Just his voice sets my teeth on edge.
Bumbling Barney’s Audit of the Fed:
Barney (spoke like a drunk Elmer Fudd) to Bubbles Ben Bernanke: “You guys doing anything illegal?”
Bubbles Ben (while operating a huge printing press that is spewing cash all over the place): “Nope!”
Barney: “Okay, looks like you pass the audit.”
As he is leaving, he trips over Turbo Tax Cheat Timmy, who’s stuff money in his pockets, and rolls down a flight of stairs.
Yep, our Dear Leaders in action!
“If you shine a light on the confidence game that the modern economy has become, you’ll destroy the whole thing.”
I think that’s the fear from the audit.
Remember this? Souter is/was a true POS.
Conn. homeowners’ property seized by city in landmark ‘05 Supreme Court case still undeveloped
September 25, 2009, 5:45 am EDT
NEW LONDON, Conn. (AP) — Weeds, glass, bricks, pieces of pipe and shingle splinters have replaced the knot of aging homes at the site of the nation’s most notorious eminent domain project.
There are a few signs of life: Feral cats glare at visitors from a miniature jungle of Queen Anne’s lace, thistle and goldenrod. Gulls swoop between the lot’s towering trees and the adjacent sewage treatment plant.
But what of the promised building boom that was supposed to come wrapped and ribboned with up to 3,169 new jobs and $1.2 million a year in tax revenues? They are noticeably missing.
Proponents of the ambitious plan blame the sour economy. Opponents call it a “poetic justice.”
“They are getting what they deserve. They are going to get nothing,” said Susette Kelo, the lead plaintiff in the landmark property rights case. “I don’t think this is what the United States Supreme Court justices had in mind when they made this decision.”
Kelo’s iconic pink home sat for more than a century on that currently empty lot, just steps away from Connecticut’s quaint but economically distressed Long Island Sound waterfront. Shortly after she moved in, in 1997, her house became ground zero in the nation’s best-known land rights catfight.
New London officials decided they needed Kelo’s land and the surrounding 90 acres for a multimillion-dollar private development that included residential, hotel conference, research and development space and a new state park that would compliment a new $350 million Pfizer pharmaceutical research facility.
Kelo and six other homeowners fought for years, all the way to the U.S. Supreme Court. In 2005, justices voted 5-4 against them, giving cities across the country the right to use eminent domain to take property for private development.
The decision was sharply criticized and created grassroots backlash. Forty states quickly passed new, protective rules and regulations, according to the National Conference of State Legislatures. Some protesters even tried to turn the tables on now-retired Justice David Souter, trying unsuccessfully in 2006 to take his New Hampshire home by eminent domain to build an inn.
In New London the city’s prized economic development plan has fallen apart as the economy crumbled.
Unlike many, I don’t think Kelo was wrongly-decided - it’s simply a bad state of legal affairs. The Constitution (I.e. Amd. V) is pretty specific about eminent domain. It’s OK as long as the property is paid for. There’s nothing said about what the government intends to do with the property. This may be bad from a policy standard but not from a con law one.
A lot of “bad” SCOTUS decisions were really properly decided, such as Dred Scott v. Sanford. Back in the day it really reflected the then-status of con law, prior to the enactment of the Reconstruction Amendments 13, 14, and 15.
No, the Fifth Amendment LIMITS the government’s power, it does not grant new ones. The Fifth Amendment is part of the Bill of Rights, not a back-door way to imply new government powers not granted elsewhere.
If the courts read the Third Amendment the same way they do the Fifth, President Bush would have had the authority to station troops in Barbara Streisand’s living room, because it was a time of war.
Texans were soo mad about that court case they changed the eminent domain laws to prevent that from happening in Texas unless you are Jerry Jones.
Yes, they wrote in a clause specifically for Jerry Jones so he could still take any land he wanted for his stadium.
That’s f’n funny if true?
Currency Alerts
US Dollar Steady Ahead Of September Consumer Sentiment Index, August New Home Sales Reports
9/25/2009 9:55 AM ET
TOP MARKET NEWS
Iran Developing Second Uranium Enrichment Plant Capable Of Making Nuclear Bomb
Durable Goods Orders Show Unexpected Decrease In August
(RTTNews) - The final reading of the University of Michigan’s consumer sentiment index for September is due to be released at 10:00 am ET. The report is expected to show that the consumer sentiment index rose to 70.5 in the month.
At the same time, the Commerce Department is due to release its new home sales report for August. The consensus estimate calls for an increase of 1.9% in new homes sales in the month to 441,000.
New home sales coming in ‘worse than expected’ should stoke a green shoots stock market rally today. Buy stocks now, or get priced out forever!
The silver lining for prospective new home buyers: The median new home sale price fell a record 9.5% from July to August. On an annualized basis, the rate of price decline was
((1-.095)^12-1)*100 = -69.8%.
market pulse
Sept. 25, 2009, 10:00 a.m. EDT · Recommend · Post:
U.S. new-home sales flatten out in August
By Rex Nutting
WASHINGTON (MarketWatch) - Despite a record drop in prices, sales of new homes flattened out in August after four months of strong increases, the Commerce Department estimated Friday. Sales of new homes rose a statistically insignificant 0.7% in August to a seasonally adjusted annual rate of 429,000 from a downwardly revised 426,000 in July. Sales were down 3.4% from a year earlier, and are up 30% from the low in January. Sales were weaker than the 440,000 annual pace expected by economists surveyed by MarketWatch. The median sales price fell a record 9.5% from July to August. Inventories of unsold homes continued to fall in August, dropping 3% to 262,000, the fewest in 17 years.
…
“The silver lining for prospective new home buyers: The median new home sale price fell a record 9.5% from July to August. On an annualized basis, the rate of price decline was
((1-.095)^12-1)*100 = -69.8%.”
Geeze, we’ll be lucky to see half that price drop around here.
But at least the prices of our shacks did more than double during the Bubble, so that’s good, right?!
Great news on consumer sentiment. Given the improvement in consumers’ moods, there seems to be little need to extend the first-time home buyer tax credit giveaway to the REIC.
market pulse
Sept. 25, 2009, 10:06 a.m. EDT
Consumer sentiment soars in late Sept.
By Greg Robb
WASHINGTON (MarketWatch) — Consumer sentiment improved in late September, according to media reports on Friday of the Reuters/University of Michigan index. The consumer sentiment index jumped to 73.5 in late September from 70.2 earlier in the month. The increase was well above expectations. The consensus forecast of Wall Street economists had expected sentiment to rise to 70.5. The gain is much higher than the recent high in sentiment of 70.8 in June. Sentiment is now at the highest level since early 2008.
The economists are 0 for 3 today, and it not even noon! Sunday they’re picking the Lions to win by 30.
ot, but interesting.
I was curious as to who was on the so called Conference Board:
Conf. Bd Chairman -CEO Cambell Soup Co
btw, they own Godiva Chocolates
Aetna
State Frame
Credit Sussie
Aloca
Merek & Co
Pricewaterhouse Cooper
Deutsche Bank
Yale School Of Economics
some Asian conglomerates & a few other trustees.
Let’s not forget University Business Schools are funded by Fortune 500’s. They have no objectivity anymore.
“Iran Developing Second Uranium Enrichment Plant Capable Of Making Nuclear Bomb”
Yea but Iran is trustworthy, they would only build one for ‘peaceful’ proposes.
As long as they are good about self-regulating we should be fine. It’s no different than that other WMD factory known as Wall Street.
Oooops, guess I was wrong.
“President Obama sharpens a standoff with Iran, calling the country’s activities “a direct challenge” and demanding that Tehran comply with rules on nuclear nonproliferation”.
I’m a LOT more worried about Pakistan, who ALREADY has the bomb now..
’cause that’s where the Taliban is at NOW!!
We have a winner!
I’m a LOT more worried about Pakistan, who ALREADY has the bomb now..
’cause that’s where the Taliban is at NOW!!
I have no f’n idea what China was thinking, they were worried about India so they handed the bomb off to an unstable coutnry full of religious net cases with guns.
China has fought a war with India over a border dispute. They sliced through the Indian lines like a hot knife through butter.
If they destabilize India, force it to spend resources defending against Pakistan, their strategic hand is strengthened.
Iran Developing Second Uranium Enrichment Plant Capable Of Making Nuclear Bomb - Durable Goods Orders Show Unexpected Decrease In August
There may be some correllation between these two items….
Once you’ve got the U235 or P, the rest is pretty straight-forward. Most of the time spent in the Manhattan Project was performing manually the thousands of calcuations that could today be performed in minutes on a cheap PC.
Iran Developing Second Uranium Enrichment Plant Capable Of Making Nuclear Bomb ??
Meaning that there are at least two more…How long before Israel reacts ??
Now We’ve Heard Everything: The “Reverse Square-Root-Shaped Recovery”
Sep 25, 2009 Henry Blodget
Some people think the recovery will be “V-shaped”: a sharp fall down followed by a sharp rise up. Some people think it will be “W-shaped”: a sharp fall down, a sharp rise up, and then another sharp fall down when inventory restocking and stimulus run out. (Some people used to think it would “L-shaped” or “U-shaped,” but the sharp recovery so far appears to have proved them wrong.)
Last month, we described how Charles Schwab chief investment officer Liz Ann Sonders thinks the recovery will be neither “V-shaped” or “W-shaped” but “square-root-shaped” recovery: a sharp fall down, a sharp rise up, and then a long period of treading water.
Well, now we’ve heard everything.
Greg Ip, the brainy U.S. economics editor for the Economist, thinks the recovery will be “reverse square-root shaped”: a sharp fall down, a sharp rise part of the way back up, and a long struggle.
(Okay, the image isn’t perfect, and we hope Greg doesn’t think the economy is just going to END).
Why does Greg think we’re due for a long workout?
Because that’s what history suggests happens after financial crises like the one we just had. It takes a long time to work off the debt that got you into the pickle in the first place, and while you’re working off debt, you just can’t grow as rapidly.
\
\
\
\
[ Oh shit! ] /\
\ / \
\ [ WTF? ] \
\ / \
\/ \
[ Oh, My! ]
\
\
\/\/\……………………/\……/\…….
[ OUCH! MOMMY! ]
Reverse square root “recovery”:
\
\
\ /\
\/ \
\
\___________________________________…
OK, the formatting bombed on that one…
Take 2:
\
.\
..\
….\. /\
…..\/. \
……….\
………..\___________________________________…
When we start to hear the words “plateau” associated with the flock market DUCK AND COVER!
My guess is TPTB are thinking that the housing market drove stocks 2000-2005/6, so the inverse must be true… Drive up the DOW/S&P and housing will follow. It is just so dumb, it might work!
Sales of booty rest mattresses, ain’t what they used to be.
U.S. bedmaker Simmons seen filing for Chapter 11: report
(Reuters) - U.S. bedmaker Simmons Co is expected to file for Chapter 11 bankruptcy protection under a plan where it will be sold to Ares Management LLC, a private-equity fund, and the Ontario Teachers’ Pension Plan, the Wall Street Journal said, citing people familiar with the matter.
Atlanta-based Simmons, which is owned by buyout firm Thomas H. Lee Partners, will likely announce the plans later on Friday, according to the paper.
Simmons, Ares Management and Ontario Teachers’ could not be immediately reached for comment by Reuters.
Did you guys see all the mattress places pop up during the bubble?Seems like there was one on every corner.Sams club is selling mattresses now.There must be good profit margins in that business.
“Did you guys see all the mattress places pop up during the bubble?”
Big time. 1800Mattress, 2-3 sleepys within a 5 mile radius. Just another indicator screaming something wrong that everyone seemed to dismiss.
As Bobby Knight once said, “just lie back and enjoy it”.
More layoffs, this time at a company that I have some affection for:
http://www.variety.com/article/VR1118009163.html?categoryid=16&cs=1
Rhino Records lays off 30-40
“Move comes as sales of physical recorded music continues to decline steeply. Rhino has long been considered the industry standard for boxed set retrospectives, but demand for such high-ticket items has been strangled by the music market slump and shift to digital sales.”
awwwwww but truthfully Rhino is probably run out of anything more to market.
Personally I have bought probably less then $50 in downloaded music. I still want the psychical product. Though i have sold probably a thousand of the common cd’s. I have an extensive collection of dj type cd’s and import and 12″ mixes long out of print bought in the early-mid 90’s when i changed over.
You would be amazed at the totally obscure 45’s i have and yet they will show up on ebay . I still have a super rare white label promo 45 of Chubby Checkers the Twist on Yellow vinyl…..with picture sleeve….the more common red vinyl went for $235 last year…
That’s a shame. Rhino puts out some excellent re-issues.
I know several people who own or work for independent music labels. The one I’ve talked shop with the most (an owner), said their sales are actually up this year over last year, partially due to quality of releases. Declining CD sales are an issue for labels, of course, but for many smaller outfits that’s been offset by A.) increased vinyl sales, B.) the lower overhead/inventory associated with digital downloads, and C.) smaller production/advance outlays as high quality home recording becomes even more ubiquitous.
Why should a big banking cartel do business in secret if it directly affects the dollar in your pocket?
The House Financial Services Committee is hearing testimony on HR 1207, The Federal Reserve Transparency Act of 2009, and Thomas E. Wood, Jr., is telling the committee this: ” The superstitious reverence that Americans have been taught to have for the Federal Reserve is unworthy of the dignity of a free people. The Fed enjoys a government-granted monopoly on the creation of legal-tender money. It is not an unreasonable imposition for Americans to demand to know about the activities of such an institution. It is common sense.”
Would any sensible citizen object to this point of view? Not if they have the faintest idea of the depth of the monetary disaster the Federal Reserve’s operations have visited upon the nation over the years.
“There is no good reason for Americans not to know the recipients of the Fed’s emergency lending facilities. There is no good reason for them to be kept in the dark about the Fed’s arrangements with foreign central banks. These things affect the quality of the money that our system obliges the American public to accept.” ~Tom Woods
Has the Fed always had the power to pick winners and losers in the helicopter drop recipient game, or is that a newfangled intervention under BB?
It pays to polish the right apple… Wonder what ‘ol Owlgores kick back is? The good news is they are bound to sell millions of their go-carts at $89,000.00 a copy.
Gore-Backed Car Firm Gets Large U.S. Loan
The Wall Street Journal 9- 25- 2009
WASHINGTON — A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.
The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla, like Fisker, is a California startup focusing on high-end hybrids, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.
The awards to Fisker and Tesla have prompted concern from companies that have had their bids for loans rejected, and criticism from groups that question why vehicles aimed at the wealthiest customers are getting loans subsidized by taxpayers.
“This is not for average Americans,” said Leslie Paige, a spokeswoman for Citizens Against Government Waste, an anti-tax group in Washington. “This is for people to put something in their driveway that is a conversation piece. It’s status symbol thing.”
DOE officials spent months working with Fisker on its application, touring its Irvine, Calif., and Pontiac, Mich., facilities and test-driving prototypes.
Matt Rogers, who oversees the department’s loan programs as a senior adviser to Energy Secretary Steven Chu, said Fisker was awarded the loan after a “detailed technical review” that concluded the company could eventually deliver a highly fuel-efficient hybrid car to a mass audience. Fisker said most of its DOE loan will be used to finance U.S. production of a $40,000 family sedan that has yet to be designed.
“It’s the ability to drive significant change in fuel economy across a large market segment” that swayed the department to approve the Fisker loan, Mr. Rogers said. “We got quite excited.”
Both start ups have produced good technology and should be funded. Tesla has a model S that should have a lifetime cost similar to a high end Taurus, and they have a cheaper model in the works. The big three have repeatedly wasted billions it’s time to let some of the small players have a shot and loaning them money to start mass production is certainly more reasonable than bailing out banks.
Statement before the United States House of Representatives, September 23, 2009
Government has been mismanaging medical care for more than 45 years; for every problem it has created it has responded by exponentially expanding the role of government. Points to consider:
1.) No one has a right to medical care. If one assumes such a right, it endorses the notion that some individuals have a right to someone else’s life and property. This totally contradicts the principles of liberty.
2.) If medical care is provided by government, this can only be achieved by an authoritarian government unconcerned about the rights of the individual.
3.) Economic fallacies accepted for more than 100 years in the United States has deceived policy makers into believing that quality medical care can only be achieved by government force, taxation, regulations, and bowing to a system of special interests that creates a system of corporatism.
4.) More dollars into any monopoly run by government never increases quality but it always results in higher costs and prices.
5.) Government does have an important role to play in facilitating the delivery of all goods and services in an ethical and efficient manner.
6.) First, government should do no harm. It should get out of the way and repeal all the laws that have contributed to the mess we have.
7.) The costs are obviously too high but in solving this problem one cannot ignore the debasement of the currency as a major factor.
8.) Bureaucrats and other third parties must never be allowed to interfere in the doctor/patient relationship.
9.) The tax code, including the ERISA laws, must be changed to give everyone equal treatment by allowing a 100% tax credit for all medical expenses.
Laws dealing with bad outcomes and prohibiting doctors from entering into voluntary agreements with their patients must be repealed. Tort laws play a significant role in pushing costs higher, prompting unnecessary treatment and excessive testing. Patients deserve the compensation; the attorneys do not.
10.) Insurance sales should be legalized nationally across state lines to increase competition among the insurance companies.
11.) Long-term insurance policies should be available to young people similar to term-life insurances that offer fixed prices for long periods of time.
12.) The principle of insurance should be remembered. Its purpose in a free market is to measure risk, not to be used synonymously with social welfare programs. Any program that provides for first-dollar payment is no longer insurance. This would be similar to giving coverage for gasoline and repair bills to those who buy car insurance or providing food insurance for people to go to the grocery store. Obviously, that could not work.
13.) The cozy relationship between organized medicine and government must be reversed. Early on medical insurance was promoted by the medical community in order to boost re-imbursements to doctors and hospitals. That partnership has morphed into the government/insurance industry still being promoted by the current administration.
14.) Threatening individuals with huge fines by forcing them to buy insurance is a boon to the insurance companies.
15.) There must be more competition for individuals entering into the medical field. Licensing strictly limits the number of individuals who can provide patient care. A lot of problems were created in 20th century as a consequence the Flexner Report (1910), which was financed by the Carnegie Foundation and strongly supported by the AMA. Many medical schools were closed and the number of doctors was drastically reduced. The motivation was to close down medical schools that catered to women, minorities and especially homeopathy. We continue to suffer from these changes made which were designed to protect physician’s income and promote allopathic medicine over the more natural cures and prevention of homeopathic medicine.
16.) We must remove any obstacles for people seeking holistic and nutritional alternatives to current medical care. We must remove the threat of further regulations pushed by the drug companies now working worldwide to limit these alternatives.
True competition in the delivery of medical care is what is needed, not more government meddling.
1.) No one has a right to medical care. If one assumes such a right, it endorses the notion that some individuals have a right to someone else’s life and property. This totally contradicts the principles of liberty.
A: Written by someone who does not understand infectious disease.
2.) If medical care is provided by government, this can only be achieved by an authoritarian government unconcerned about the rights of the individual.
A: BS europe canada and japan are far from authroitarian and this is just a scare tactic.
3.) Economic fallacies accepted for more than 100 years in the United States has deceived policy makers into believing that quality medical care can only be achieved by government force, taxation, regulations, and bowing to a system of special interests that creates a system of corporatism.
A: We alreayd have a system of corporatism having a public option would be anticorporatism.
4.) More dollars into any monopoly run by government never increases quality but it always results in higher costs and prices.
A: Wrong again Medicare the VA the canadian health care system Britains health care system, Frances health care system all provide equal or better results than the US private pay at a fraction of the cost.
9.) The tax code, including the ERISA laws, must be changed to give everyone equal treatment by allowing a 100% tax credit for all medical expenses. How does this help people who are poor or middle class with kids??
10.) Insurance sales should be legalized nationally across state lines to increase competition among the insurance companies.
A: They are already legal they just have to abide by the laws of the state. Now are these people for state rights or not??
11.) Long-term insurance policies should be available to young people similar to term-life insurances that offer fixed prices for long periods of time.
14.) Threatening individuals with huge fines by forcing them to buy insurance is a boon to the insurance companies. A: Agree 1000% this is the dumbest idea yet, insurance companies will then feel free to jack up rates. A public option is a much better plan, like fraince mandate high copays based on your income cover only things that work, and if people want more then they can go to the private market.
15.) There must be more competition for individuals entering into the medical field. Licensing strictly limits the number of individuals who can provide patient care. A: Wrong author doesn’t understand how physicians can create work, if you flood the market with physicians your going to find a lot more tests and procedures being done.
16.) We must remove any obstacles for people seeking holistic and nutritional alternatives to current medical care. We must remove the threat of further regulations pushed by the drug companies now working worldwide to limit these alternatives.
A: The biggest obstacle to holistic and alternative medicine is that most of it doesn’t work any more than a placebo. We don’t need more snake oil salesman out there.
A: Wrong again Medicare the VA the canadian health care system Britains health care system, Frances health care system all provide equal or better results than the US private pay at a fraction of the cost.
Measured how? And how come people from all over the world come here for treatment of serious conditions?
A: They are already legal they just have to abide by the laws of the state. Now are these people for state rights or not??
Of course the states need to de-regulate as well.
We alreayd have a system of corporatism having a public option would be anticorporatism.
It would be governmentism, which is even worse.
The biggest obstacle to holistic and alternative medicine is that most of it doesn’t work any more than a placebo.
That’s what I thought until a masseuse lowered my blood pressure in 1/2 hour from 147/99 to 125/80. (Now you’ve probably raised it back up again.)
“Measured how? And how come people from all over the world come here for treatment of serious conditions?”
There are various studies that look at aggregate results across the entire population, and the US doesn’t tend to fare very well either on outcomes or in cost. We’re talking average here. If you look at the high end care available to those who can afford it, the US is likely the best. It serves the wealthy extremely well.
governmentism? You mean the same government that wiped out polio, small pox, tuberculosis, and yellow fever and currently provides funding for all other forms of illness not yet conquered?
Yeah, we can’t have THAT!
“…that they are endowed by their creator with certain unalienable rights, that among this are life liberty and the pursuit of happiness.”
“Life.” That would be the opposite of “Death” which is usually what diseases bring.
Try to also remember that a new mutation of deadly infectious disease can’t be bribed, lobbied, politicized, philosophized, bullied or legislated out of existence. And while we’re on the subject of basic biology, most mutations comes from… wait for it…. wait for it… poor health and bad living conditions among a crowded population.
And as sure as the sun rises every day, there WILL be another epidemic plague of some sort. The question is how bad will we let it become?
I agree with you but I do have to note that tuburculosis is far from wiped out. It has actually become frighteningly virulent in recent years.
governmentism? You mean the same government that wiped out polio, small pox, tuberculosis, and yellow fever and currently provides funding for all other forms of illness not yet conquered?
I didn’t realize that Jonas Salk was “the government”. It’s just amazing to me how the gov’t gets its fingers in every pot and then gets full credit (among the governmentists) any time anything goes right. It’s like a mutual fund manager who starts 20 funds, and then after a few years quietly folds the ones with poor track records and loudly trumpets what a genius he is for the one fund that did well.
And once again, the question is what else the money allocated to gov’t research funding could have done had it not been first forcibly appropriated from taxpayers.
I didn’t realize that Jonas Salc went to private school, I didn’t realize he came up with all of the funding and organized the world against polio.
Yes gov money could have been much better spent on say new furniture for some CEO’s office.
Of course they aren’t Jonas Salk.
But then Jonas Salk isn’t the government. Nor did he have their ability to ramp up production, distribution and enforcement did he? (BTW, yellow fever was mostly wiped out in this country by physical action taken against standing wander and the regular spraying of pesticides. More “governmentism.”)
As for TB, guess what? The new strain XDR TB was the direct result of… lack of adequate medical care as people either couldn’t afford medicine and TB re-surged in their area and those who could afford some medicine, couldn’t afford the entire treatment and so help TB become resistant.
But most of all it is the governments of the countries with the highest incidences not ensuring an adequate vaccination and treatment regime.
Again, a society that puts a price on everything values nothing.
I didn’t realize that Jonas Salk went to private school, I didn’t realize he came up with all of the funding and organized the world against polio.
Yes gov money could have been much better spent on say new furniture for some CEO’s office.
New England J. of Medicine 2003
BACKGROUND: In the mid-1990s, the Department of Veterans Affairs (VA) health care system initiated a systemwide reengineering to, among other things, improve its quality of care. We sought to determine the subsequent change in the quality of health care and to compare the quality with that of the Medicare fee-for-service program. METHODS: Using data from an ongoing performance-evaluation program in the VA, we evaluated the quality of preventive, acute, and chronic care. We assessed the change in quality-of-care indicators from 1994 (before reengineering) through 2000 and compared the quality of care with that afforded by the Medicare fee-for-service system, using the same indicators of quality. RESULTS: In fiscal year 2000, throughout the VA system, the percentage of patients receiving appropriate care was 90 percent or greater for 9 of 17 quality-of-care indicators and exceeded 70 percent for 13 of 17 indicators. There were statistically significant improvements in quality from 1994-1995 through 2000 for all nine indicators that were collected in all years. As compared with the Medicare fee-for-service program, the VA performed significantly better on all 11 similar quality indicators for the period from 1997 through 1999. In 2000, the VA outperformed Medicare on 12 of 13 indicators. CONCLUSIONS: The quality of care in the VA health care system substantially improved after the implementation of a systemwide reengineering and, during the period from 1997 through 2000, was significantly better than that in the Medicare fee-for-service program.
Now Factor in that Medicare provides fee for service care at a fraction of the cost of private insurance .
Now Factor in that Medicare provides fee for service care at a fraction of the cost of private insurance .
You left out this part…
“With Medicare undercutting payments to hospitals and doctors for patients 65 and older, what keeps the American medical system afloat are younger, private individuals who are not covered by Medicare paying full freight (and then some). ”
www dot the-signal dot com/news/article/17995/
And you forgot the part about how private health insurance puts those who develope chronic or expensive health care costs on the state via medicaid.
You also probably don’t know that private insurance works out similar deals with hostpitals and doctors. There have beeen a couple of posters who reported their medical bills and how much less than the actual cost insurance companies had to pay.
From the cbo cost per capita 2005
US $6401 - In another paper they discussed the fact that if this were due to obesity alone it would be 3100.
Luxembourg 5563
Norway 4384
Switzerland 4177
Austria 3519
Iceland 3443
France 3374
Candada 3326
Germany 3287
Australia 3218
Netherlands 3183
Denmark 3108
Sweden 2918
UK 2732
Italy 2532
Japan 2426
I believe all of these countrries have smilar or better outcomes than the US.
Hospitals MD’s and clinical services account for 60% of the cost now in 1990 about 75%. In 1980 maybe 80%.
In terms of growth in expenditures
Prescription Drugs. For much of the past 40 years, spending on prescription drugs contributed only modestly to overall spending growth. The growth of spending on prescription drugs accelerated sharply around 1980, but its relatively small share of total spending at that time limited its effect on total spending. Since the mid-1990s, however, spending on prescription drugs has been a much more prominent component of growth in total spending. From 1995 to 2005, it grew by an average of about 10 percent per year.
Costs of Administering Public and Private Insurance. One notable change is the recent jump in spending for the administration of health insurance (see Figure 4). Growth rates for administrative costs have varied substantially over time, but this category was not a major contributor to overall spending until the late 1990s. From 1995 to 2005, spending on administrative services grew by about 7 percent per year.
Remember the last catagory provides no benefit to the patient and has grown at 7%/year depsite information technology and outsourcing that should have slashed costs. Despite investment returns that should have allowed them to cut costs. So where did that money go corporate supporters????????? It went to bloated insurance companies and CEO’s making 10’s of millions per year. It provided absolutely no benefit to patients.
So administrative overhead has become a significant part of health care costs? And to solve this, we need to hand everything over to the GOVERNMENT?
Yes because as noted above every one of those socialized or heavily regulated systems noted above delivers health care for a fraction of the costt. Yes because medicare and the VA deliver health care for a fraction of the cost.
See I fall back on facts you fall back on ideology.
Free Market Capitalism has value when the consumer can easily understand and compare products and there is real competition. Neither of these things exist in insurance or medicine. Thus there can be no effective market. People pick their insurance based on, employer pick, television adds with ducks cavemen and lizards, or based on cost alone and the vast majoirty have no idea what willl get covered and how long they will be covered. You should see the look in their eyes when they get dropped after developing an illness.
Measured how? And how come people from all over the world come here for treatment of serious conditions?
You might not know this but many Americans travel to foreign countries for medical care. West Virginia considered legislation to give incentives to leave the country.
Your study with an n of 1 is meaningless
it may have felt good and relaxed you. It may have lowered your blood pressure (how long??) but did it improve your chances of not having a stroke or a heart attack??
Should insurance medicare pay for massage??
How does this compare to say hydrochlorothiazides???
Not all studies with n less than 30 are meaningless. Think about a study with an n of 2: H-bombs dropped on Hiroshima and Nagasaki.
Some times a very small sample is large enough.
That must have been one hell of a back rub then!
There’s a new listing in my area that has the following disclaimer:
Investor Alert - Agreement of sale must be approved by Medicaid.
What on earth does that mean?…
Old person is on medicaid and in nursing home. Proceeds from the sale of the home go to medicaid. Or something like that.
Medicaid must have put a lien on it? Either that or he deeded the house to them?
$4k is the Medicaid eligibility limit in most states for assets.
WTF? Never heard that one before.
What on earth does that mean?…
It means the Kids lost their inheritance because the old geezer didn’t trust any of them to be financially responsible and sign the house over to them 10 years ago.
They have a lien to reimburse them for the cost of the nursing home care. It could part or all of the purchase price. Its very a common event if no planning is done.
Exactly.
Been going on what, forever? Clearly the geezer wasn’t clever enough to put the place in irrevocable trust before the Medicaid look-back, however long that is now.
Elder Law in a nutshell.
“The point is to consider housing in relation to purchasing power/relative performance, not just in nominal dollar terms. Housing will always have value as shelter and land will always have value as productive dirt, but we must be skeptical of the constant hype that “a home is your best investment.”
- Charles Hugh Smith
We must be patient until the sheeple are often heard to repeat among themselves, “Housing is the worst investment.”
Sugar’s ‘Perfect Storm’ May Triple Price by June, PFGBest Says
Sept. 25 (Bloomberg) — Sugar futures may triple to the highest price since 1974 as a “perfect storm” of technical and fundamental indicators “come together in a pretty strong way,” said Martin Snow at commodity broker PFGBest.
Raw-sugar futures may jump to 66 cents a pound in New York before June, expanding a 2009 rally that sent prices to a 28- year high this month, Snow said. The price has gained 94 percent this year as adverse weather hampered harvests in Brazil and India, the world’s largest producers, threatening to extend a global-production deficit into next year.
“India is having the worst monsoon season in seven years, so they’ve got a crop-shortage problem until next year,” Snow, a senior commodity specialist, said on Sept. 23 from Los Angeles. “Brazil has some weather problems themselves, so they’re not able to fill the gap. You’ve got a set-up for a perfect storm, in terms of price construction, at least between now and going into the summer next year.”
India, expected to import 6 million metric tons this year, will need more in 2010 to make up for cane-crop declines, analysts and traders said. The world’s largest consumer of the sweetener will permit duty-free imports of white sugar until May or June, extending an earlier exemption, Farm Minister Sharad Pawar said. Last month, the duty-free window was widened to Nov. 30 for refined sugar and until March 31 for raw stock.
If only the Dept of Ag had done a better job last year forecasting sugar usage for our country or was allowed by the sugar industry to wave sugar tariffs.
Buy Gold! Buy Gold! Buy Gold!
Buy bullets! Buy bullets! Buy bullets!
Buy sugar! Buy sugar! Buy sugar!
Next? astronaut diapers
“The more you eat, the more you sh!t”…Woody Guthrie
I’d like to see how Goldman Sach’s is positioned on this. I suspect sugar can be stored for very long periods of time. Remember last year how we were aobut to have world wide food shortages and people were running off to SAM’s to buy 50# bags of rice that had recently been marked up. I smell more of the same.
Exactly. Remember by the time this kind of news hits the MSM, it’s only for the suckers.
Again, it doesn’t mean you can’t make money. But most people won’t. (or will but then get greedy and stay too long. same dif in the end.)
Classic, just classic: from WaPo today:
Clock Is Ticking for First-Home Buyers
$8,000 Tax Credit Is Set to Expire Nov. 30 — Unless Congress Extends It
First-time home buyers are scrambling to take advantage of an $8,000 tax credit set to expire in coming weeks, while Congress considers whether to extend the program or risk removing what may be one of the few supports underpinning the housing market.
……………
Vivianne Couts, a Northern Virginia real estate agent, said she’s watched people make irrational decisions to get in under the deadline.
“In some cases, the people are overbidding by more than they would be saving,” Couts said.
Pettit said he’s lost out on several bids for that very reason, but he’s pressing ahead. He’s looking for a home in the $165,000 price range in Prince William County, which limits him to foreclosed homes in dire need of repair, he said. Pettit figures the $8,000 tax credit is about the only way he can afford to make the needed fixes.
“Pettit figures the $8,000 tax credit is about the only way he can afford to make the needed fixes”.
Which means he can not afford it, but why should people let little things like that get in the way. This is America, home of the consumer.
People are just nuts in NoVa
ANYTHING to get the RE bubble up & running again !!!
So many people here underwater & can’t S/S or Foreclosure due to one of the owners having their posh Govie job that has a Security Clearance.
These boys must maintain perfect credit or no more job.
Street after street of these FB’s in LoCo & PWC Virginia…
Two-meal diet aids in oldest man’s longevity
GREAT FALLS, Mont. — So what does the world’s oldest man eat? The answer is not much, at least not too much.
Walter Breuning, who turned 113 on Monday, eats just two meals a day and has done so for the past 35 years.
“I think you should push back from the table when you’re still hungry,” Breuning said.
At 5 foot 8, (”I shrunk a little,” he admitted) and 125 pounds, Breuning limits himself to a big breakfast and lunch every day and no supper.
“I have weighed the same for about 35 years,” Breuning said. “Well, that’s the way it should be.”
“You get in the habit of not eating at night, and you realize how good you feel. If you could just tell people not to eat so darn much.”
His practice of skipping supper began when he first moved to Great Falls from Minneapolis in 1978. He lived in the Yellowstone Apartments at the time and would walk downtown to Schell’s in the Johnson Hotel or the Albon Club on the second floor for lunch.
In 1980, the Albon Club moved to the Rainbow Hotel, and the owners asked Breuning to be manager, which he did for 15 years.
“I never started eating supper again,” Breuning said.
He gets up at 6:15 a.m. and has a big breakfast every day at 7:30 a.m. Usually it’s eggs, toast or pancakes.
“You can order anything you want, just like a restaurant,” he said.
“I eat a lot of fruit every day.”
Montana Gov. Brian Schweitzer sent Breuning a fruit basket after a recent visit.
“Boy, I tell you that was good fruit. I ate the whole darn thing,” Breuning said. “Peaches, pears, everything, it sure was good.”
In addition to eating fruit every day, Breuning also takes a baby aspirin.
“Just one baby aspirin,” he said, “but everybody gets that for their heart. That’s the only pill I ever take, no other medicine.”
And he drinks plenty of water.
“I drink water all the time,” he said, and just a bit of coffee. “I drink a cup and a half of coffee for breakfast and a cup with lunch.”
Breuning said he has been healthy all of his life and believes diet has a lot to do with it.
“If people could cut back on their normal weight, it wouldn’t be quite so bad,” he commented. “They just eat too much!”
Mr. Cole noted that he also worked for the railroad for 50 years!
Genetics + good habits.
He’s right about the main thing. Overeating will kill you quicker.
Overeating + sitting on your behind or lying on your couch too much…
Wha…?!
‘Push back from the table while you’re still hungry’?!
That’s crazy-talk. I push back from the table when I’m so full I have to be rolled away like a pill-bug. A noisy pill-bug that continues to shout: ‘Just one more tater-tot! Hey, watch out for that chair, you almost banged my head! And get me more beer for when I become thirsty as I roll along the sidewalk!’
Truly, who wants to live to be 113 if I they have to eat two meals a day and be all abstemious and stuff? I bet this guy never hangs out in bars philosophizing, or befriends strippers, or holds bonfires in the woods, or stays up all night watching stupid zombie movies, or climbs slippery trees at night, or anything else fun.
He doesn’t even cuss, for Heaven’s sakes. He says ‘Darn’. I mean, I ask you.
I’ve already decided I’m never gonna die, but if by some horrible and unprecedented miscalculation it turns out I do, I’m going to be thrilled to go to Heaven*.
And that is because Heaven is nothing but one unending buffet, and the plates are always warm and clean, and you never have to stop eating. Until you get ready to go to the bar and the strip club and the bonfire, and then you go to your 5 acre shoe closet to make your selections…
So, if you look at it that way, measuring the average life expectancy of the American male, which is 75.6 years, then this foolish, foolish man by living to be 113, has deprived himself of almost thirty-seven years of Heaven.
It’s enough to make you weep.
*No sassy remarks from any of you. I AM going to Heaven. I mean, if I consent to die in the first place, which I do not.
Truly, who wants to live to be 113 if I they have to eat two meals a day and be all abstemious and stuff?
Give me bacon, and give me death!
A pox on abstemious, zombie movie-hatin’ weenies!
(Harrumph.)
Yar, matey!
…Mmmm, bacon…..
*lapses into happy reverie *
Good to see you, Oly!
…Mmmmmm………..baaaaacon……
It’s good to see you too, Primey. I always like to see your posts.
What a nice evening hereabouts, huh? Still and bright and golden!
At least down the road from you it is. These microclimates we’ve got here are annoying. But I can see to the north, all the way to the Olympics, and it looks like you too must be being bathed in a shimmery evening right now.
Say, did you know there are Orcas hanging out down here by Olympia?! I’m hoping to see some.
Maybe if I can make a sound like bacon I can entice them closer…
*makes a bacony sort of sound *
Bacon is even better than that, except bacon makes you fat, and that makes you thinner.
What’s your favorite zombie movie, ET?
Mine is ‘28 Days Later’. I recall the time when I said out loud while I was philosophizing at a bar, I said: ‘Why we gotta have such stupid-a** SLOW zombies? Any sorority girl could get away from such laggards. I disapprove!”
And then only 2 short weeks later the first adverts for ‘28 Days Later’ came out. It was a sign from Jeebus that He likes good zombie movies too.
At least, I took it that way.
Oh, for those of you who haven’t seen ‘28 Days Later’?
The precis is: ‘they built a much faster zombie’.
Way OT…
LOL! I just read some excerpts from Mo Kadfi’s speech at the UN’s annual freak show and clown circus. Damn, he sounds a lot like most of our gubmint officials, all over the board and saying nothing that anyone other than a whack job could make head or tails of.
Poor thing couldn’t find a place to pitch his tent after the Donald gave him the boot. Oh well the good news is that their ‘carbon’ foot print was about the size of Texas and they accomplished what they always do… Nothing!
He stayed at the Libyan embassy.
Have you seen his bodyguards? Google it!
Non-story. Next?
WASHINGTON (AP) — U.S. commercial banks earned $5.2 billion trading derivatives in the second quarter, as the level of risk eased in the global market for the complex financial instruments, according to a government report released Friday.
JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. — account for 97 percent of the total derivatives reported to be held by U.S. commercial banks.
Credit default swaps, a form of insurance against loan defaults, account for an estimated $60 trillion of the over-the-counter derivatives market. The collapse of the swaps brought the downfall of Wall Street banking house Lehman Brothers Holdings Inc. about a year ago and nearly toppled American International Group Inc., prompting the government to support the insurance conglomerate with more than $180 billion in aid.
Contracts on interest rates and foreign exchange rates also figure prominently in the derivatives market.
Congress is weighing legislation to impose broad new oversight on derivatives. The Obama administration’s proposal, part of its plan for overhauling U.S. financial rules, would subject the banks that trade derivatives to requirements for holding capital reserves against risk and other rules. A new network of clearinghouses would be established to provide transparency for derivatives trades.
Last year as the credit crisis raged, U.S. commercial banks recorded their first industrywide loss on derivatives trading. The $836 million loss compared with trading revenue of $5.49 billion in 2007, according to the comptroller’s office. Just Don’t LOOK UNDER THE RUG!!
What I’d like to see is who is loosing all this money on derivatives? That would be quite informative. That’s what the US people should see.
“A new network of clearinghouses would be established to provide transparency for derivatives trades.”
I paid attention in class, and there is one called the Int’l Swaps Derivative Assoc (ISDA). What a load of cr*p coming out of DC. What’s new!
“JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. — account for 97 percent of the total derivatives reported to be held by U.S. commercial banks.”
Does holding so many financial weapons of mass destruction pretty much guarantee these firms’ place in the too-big-to-fail club, including free (taxpayer-provided) bailout insurance against financial crisis?
A data point I have noticed over here regarding the state of the economy. I have noticed that there are fewer used cars advertised on cars.com. I have also noticed that there are fewer low mileage 2-5 year old cars advertised. Mostly seeing newer cars (probably lemons or repos) or older vars with 100K+ milles on the odometer.
I can only guess that people are keeping their 4 year old, 40K mile cars instead of trading them in.
It will be interesting to see what kind of new cars people will purchase when the old cars finally become too old and unreliable? By that time Saturn should have a stable of cheap (and junky) Chinese cars with a Saturn logo slapped on them. Mr. Penske might have made the right bet, assuming the dollar hasn’t collapsed by then.
First bank to fail today (#95 for the year) ;
Georgian Bank
– Treasury officials and regulators are weighing a fresh round of bailouts for banks that were deemed too risky to qualify for earlier aid.
Representatives from the Treasury Department, Federal Deposit Insurance Corp. and House Financial Services Committee discussed the plan by phone Thursday, said California Bankers Association Chairman Dan Doyle, who was on the call.
Small community banks are struggling as commercial real estate and other loans go sour. Officials and industry representatives are considering how to get money to those banks, Doyle said Friday.
The new program could force Treasury to postpone closing its $700 billion bailout fund, which is scheduled to expire this year. That decision has become a political hot potato amid public backlash against bailouts and a rising deficit.
Looks like those commercial loans are forming a mighty sunami. Treasury absolutely will not let TARP end with even $1 left in the account. I find it hopefull that they are worried there might not be a TARP 2.
Since the crisis is over and recovery already is underway, I guess these new proposed bailouts amount to little more than theft from Main Street tax payers to be given away to banks?
Bank of America Rejects SEC Claims in Bonus Suit
September 25, 2009
NEW YORK (Reuters) - Bank of America Corp formally denied U.S. Securities and Exchange Commission claims accusing it of misleading shareholders about bonuses it let Merrill Lynch & Co pay employees before the companies’ January 1merger, and said it is seeking an order dismissing the regulator’s complaint.
The bank’s response, in a Friday filing, was expected, and came 11 days after U.S. District Judge Jed Rakoff rejected its $33 million settlement with the SEC over the $3.6 billion of bonus awards.
Rakoff, who is still handling the case, was upset that the accord did not require disclosure of the names of executives and lawyers who vetted the bonuses and the decision not to disclose them, and yet left shareholders on the hook for a fine. He called the settlement a “contrivance” that violates “the most elementary notions of justice and morality.”
In its answer to the SEC’s complaint, Bank of America maintained that the proxy statement for the merger did not contain false or misleading statements, or omit key facts. It also said it was not negligent in preparing the proxy statement.
SEC spokesman John Heine said: “As we alleged in our complaint, Bank of America did not provide investors with complete and accurate information about the bonuses to be paid by Merrill Lynch to employees.”
“We intend to prove in court that their disclosure failure violated the federal securities laws,” said Heine.
…
“Rakoff, who is still handling the case, was upset that the accord did not require disclosure of the names of executives and lawyers who vetted the bonuses and the decision not to disclose them, and yet left shareholders on the hook for a fine.”
What are the names of the f_cking executives and lawyers who screwed BoA & Merrill shareholders in favor of paying massive bonuses out of TARP funds to executives who threw billions of dollars away?
Companies don’t screw shareholders. Executives and lawyers screw shareholders. Let’s name names, and get the tarring and feathering underway.
I like your anger PB. We just need a few million to join us and a lot of tar and feathers.
I don’t like my anger. I would rather not have any good reasons to be angry. Venting is an energy drain and a distraction — I just hope some good comes out of it for somebody.
NEED…MORE…HEROIN…
It’s Time to Stop the Home-Buyer Bailout
Ryan Goldberg Sep 25, 2009 9:15 am
Why renters are fed up with the government’s efforts to boost housing.
Home sales fell last month, and so be it. Every home that doesn’t get sold is another bailout I don’t have to finance.
Congress included an $8,000 tax credit for first-time home buyers as part of the stimulus package passed last winter. As many as 40 percent of all home buyers this year will qualify for it, and it’s expected to cost the government $15 billion — more than twice the original forecast — thanks to its popularity.
The tax credit is scheduled to expire on November 30. Not surprisingly, the real estate industry, including the 1.1 million-member National Association of Realtors, wants Congress to extend the credit at least through next summer, and to expand it to $15,000 and allow all buyers to qualify. The cost: $50 billion to $100 billion.
This is a redistributed tax from renters to buyers. As a proud renter, I’ve had enough. I didn’t flip houses as investments, nor did I buy one I couldn’t afford. So why must I pay for others to speculate and swim in risk?
For too long the American religion of home-ownership has cast its spell on our society and packed the pews of Congress. “Owning a home lies at the heart of the American dream,” President Bush declared in 2002. But look where that dream has led us: subprime housing and unsustainable suburbanization and near-depression.
Considering its role in fostering the economic collapse, providing tax credits to prop up the housing system is sort of like offering a recovering addict his drug of choice. What’s more, with Fannie Mae (FNM), Freddie Mac (FRE), Ginnie Mae, and the FHA involved in 85 percent of all mortgages, renters — as well as everyone else — are paying to prop up real estate prices. To top it off, the Fed has its $1.45 trillion mortgage purchase plan.
…
where’s the INFLATION !! must have inflation print more money give to consumers give to banks grow money supply jobs will follow good paying FIRE jobs all dirty or hard WORK done in China very cheap to finance giant Ponzi scheme
“This is a redistributed tax from renters to buyers. As a proud renter, I’ve had enough. I didn’t flip houses as investments, nor did I buy one I couldn’t afford. So why must I pay for others to speculate and swim in risk?”
redistributed from the future of America to troubled banks and there crappy over leveraged assets. You have to pay because you don’t have a well paid lobbist in Washington DC
I just luv the comments to this article. For instance:
The government must immediately drop everything it’s doing and and run to the rescue of housing and the realtors — it is more important than the space mission.
We must double the $8k tax credit or even make it 3 or 4 times, make it $16k so that people can jump into a debt hole that is $400k deep … at a time when they can lose their job any second.
Posted by: free_np | September 24, 2009 5:39 PM
I want 400K for free when is that available ?
Course if you guys and everyone else gets it everythings goes up in price 400K
Why not just take your $8K in credit and use it to buy a home for $7,100, leaving $900 to invest in new furniture? (See article posted below for details…)
Why do people believe low interest rates are good for the housing market? Don’t they realize that low interest rates just lead to higher prices, and the monthly payment is what remains the constant?
Interest rates plus prices intersect to provide a monthly payment that the population can afford.
But wait - who do high prices and low interest rates benefit?
“…who do high prices and low interest rates benefit?”
1) Taxing authorities
2) Banks
The Fed wants to maintain its position above the reach of the US Constitutional system of checks and balances. No surprises here…
And Bawney Fwank is playing right along with the Fed’s strawman of “interference with independent monetary policy.”
I don’t personally give a rat’s ass about monetary policy, and so far as I am concerned, the audit need not go there. Let’s summarize it right here for the terminally stupid: THE FED FUNDS RATE WILL STAY AT ZERO FOR THE FORESEEABLE FUTURE.
The questions I would be interested for the Congressional audit to explore include:
1) Does the Fed peg US stock index levels?
2) Does the Fed peg the dollar price of gold?
3) Does the Fed fix housing prices?
4) Are there any limits on what kind of interference the Fed can undertake in otherwise free markets?
5) Are there any limits to the Fed’s discretion in deciding which firms to bail out and which firms to rescue?
6) Is the Fed liable to shareholders of firms whose stock prices get driven down to zero due to heavy-handed Fed interventions?
Please correct me if I am wrong, but I don’t believe any of those questions would impinge upon the independence of monetary policy.
P.S. Higher rates would be good for helping the housing market find a bottom, instead of going Japanese for the next twenty years. Once the housing market bottoms out, there will be no need for the Fed to purchase 80 percent of new mortgages, as private banks would be happy to lend against collateral that was expected to rise.
Fed’s Alvarez Says Audits Could Lead to Higher Rates
By Craig Torres and Scott Lanman
Sept. 25 (Bloomberg) — Federal Reserve General Counsel Scott Alvarez said audits of monetary policy by the U.S. Congress could lead to higher interest rates and reduced confidence in central bank policy.
Congressional audits of monetary policy could “cause the markets and the public to lose confidence in the independence of the judgments of the Federal Reserve,” Alvarez told the House Financial Services Committee today in response to a question from Representative Dennis Moore, a Kansas Democrat. Alvarez said in his prepared remarks the audits would probably “chill” the central bank’s discussions on interest rates.
Fed Chairman Ben S. Bernanke and his colleagues are trying to persuade lawmakers not to pass legislation sponsored by Representative Ron Paul of Texas that would repeal the central bank’s immunity to audits of monetary policy. Fed officials used emergency powers to protect creditors of Bear Stearns Cos. and American International Group Inc. during the financial crisis, prompting congressional scrutiny.
“We don’t want to give the rest of the world or, more important, domestic investors the impression that we are somehow in a formal way injecting Congress into the setting of monetary policy,” said Representative Barney Frank, a Massachusetts Democrat and chairman of the committee. “That could have a very destabilizing effect.”
…
Subprime Sam’s mortgage lending operation is raising questions:
Now, US govt is giving out subprime loans
Vivek Kaul / DNA
Friday, September 25, 2009 2:13 IST
Mumbai: “There are few references in life so common as that to the lessons of history. Those who know it are doomed to repeat it.”
– John Kenneth
Galbraith in A Short History of Financial Euphoria
Once bitten, twice shy? Not if it’s the government of the United States.
In a bizarre piece of logic, the Barack Obama-led administration has been giving out subprime loans through the Federal Housing Administration (FHA), a government agency.
Prime home loans are the best part of the market, where only borrowers with good credit ratings get a home loan. Subprime home loans are the worst, typically involving borrowers with very bad credit history and who won’t get a loan in the normal scheme of things. No reiterating how the shower of such loans opened the floodgates of the current financial crisis upon us.
Why then is the US government giving out these loans again, and through a government agency? Experts say the idea may be to prop up the housing prices, which have gone on a free fall.
“It probably is to support the financing on the housing finance market and therefore housing prices generally, as well as supporting the home ownership aspirations of the lower socio-economic part of the society,” says Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives.
…
Public / private sector ambiguity example: Is the Fed part of government, or is it a private banking institution?
* The Wall Street Journal
* SEPTEMBER 25, 2009, 3:52 P.M. ET
UPDATE: Fed’s Warsh: Mortgage Mkts Need ‘Significant Reform’
(Updates with additional comments from Warsh during audience question and answer session.)
By Howard Packowitz
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)–A top Federal Reserve official said Friday that the mortgage financing system is in need of “significant reform,” having played a major role in creating the worst financial crisis since the Great Depression.
Fed Governor Kevin Warsh said the mortgage debacle negatively altered the “contour” of the panic tied to the credit crunch and the ongoing recovery.
Responding to audience questions at an international banking conference in Chicago, Warsh called for more explicit distinctions between private sector involvement and the government sponsored enterprises known as Fannie Mae and Freddie Mac.
Warsh acknowledged he and others at the Fed may have overlooked the problems at Fannie and Freddie. But, he said they were “perfectly predicted and predictable.”
One of the lessons learned, said Warsh, is that “ambiguity” between public and private sectors “does not work.”
…
Simple way to call Fed’s bluff on concerns regarding interference with monetary policy independence:
LEAVE MONETARY POLICY OUT OF THE SCOPE OF THE AUDIT.
Who cares about how soon they plan to lift interest rates up from the 0 percent level? There are far more interesting questions to ask about the recent conduct of the Fed besides non-questions about monetary policy.
Fed official: policy audits undermine independence
Fri Sep 25, 2009 4:47pm EDT
By David Lawder
WASHINGTON (Reuters) - Letting a U.S. agency audit Federal Reserve monetary policy decisions would undermine the U.S. central bank’s independence and could hamper its ability to control borrowing costs and support the dollar as the world’s reserve currency, a Fed official said on Friday.
Lawmakers are considering a measure that would let the Government Accountability Office, an investigative arm of Congress, review the Fed’s decisions on monetary policy, in which the central bank sets targets for interest rates. The audits also would cover the Fed’s discount window and open market operations.
“Enactment of the bill would tend to undermine public and investor confidence in monetary policy by raising concerns that monetary policy judgments in pursuit of our legislated objectives would become subject to political considerations,” Fed General Counsel Scott Alvarez told the House of Representatives Financial Services Committee.
“These are not audits in the sense that a CPA or accountant would conduct an audit. They are really policy reviews, they are reviews that often times are involving interviews or depositions of participants, looking at records and coming to an independent policy judgment,” Alvarez said, adding that the Fed’s decisions could be seen as reacting to GAO findings and congressional criticism.
…
* The Wall Street Journal
* REVIEW & OUTLOOK
* SEPTEMBER 26, 2009
Too Big to Ignore
Volcker says Treasury’s reform will lead to future bailouts. He’s right.
President Obama’s economic advisers are struggling to sell their financial reform plan to . . . an Obama economic adviser. Paul Volcker, the Democrat and former Federal Reserve chairman who worked with President Reagan to slay inflation in the 1980s, now leads President Obama’s Economic Recovery Advisory Board. He warned in Congressional testimony Thursday that the pending Treasury plan could lead to more taxpayer bailouts by designating even nonbanks as “systemically important.”
“The clear implication of such designation whether officially acknowledged or not will be that such institutions . . . will be sheltered by access to a federal safety net in time of crisis; they will be broadly understood to be ‘too big to fail,’” Mr. Volcker told Congress.
Rather than creating broad bailout expectations destined to be expensively fulfilled, the former Fed chairman wants Washington to draw a tighter circle around commercial banks with insured deposits. Those inside the circle get heavy oversight and are eligible for assistance during a crisis. Assumptions that various other firms also enjoy the federal safety net “should be discouraged,” said Mr. Volcker.
We don’t agree with all of Mr. Volcker’s prescriptions—nor he with ours—but on too big to fail he’s exactly right.
…
While San Diego homes are still typically offered for sale above $500,000, at least there is one American city where Fannie’s and Freddie’s affordable housing mission has been realized beyond anyone’s wildest imaginings.
I am curious whether the Fed leadership sees green shoots of recovery in Detroit?
* The Wall Street Journal
* REAL ESTATE
* SEPTEMBER 26, 2009
In One Home, a Mighty City’s Rise and Fall
Price of Typical Detroit House: $7,100
By MICHAEL M. PHILLIPS
DETROIT — On a grassy lot on a quiet block on a graceful boulevard stands the answer to a perplexing question: Why does the typical house in Detroit sell for $7,100?
The brick-and-stucco home at 1626 W. Boston Blvd. has watched almost a century of Detroit’s ups and downs, through industrial brilliance and racial discord, economic decline and financial collapse. Its owners have played a part in it all. There was the engineer whose innovation elevated auto makers into kings; the teacher who watched fellow whites flee to the suburbs; the black plumber who broke the color barrier; the cop driven out by crime.
The last individual owner was a subprime borrower, who lost the house when investors foreclosed.
A city that began a slow slide 60 years ago has now entered a free fall, pushed by the twin crises of housing and cars. Detroit’s population peaked at 1.85 million in the 1950 census. It is now less than half that. In July, unemployment hit 28.9%, almost triple the national average.
And the median selling price for a home stood at a paltry $7,100 as of July, according to First American CoreLogic Inc., a real-estate research firm — down from $73,000 three years earlier. A typical house in Cleveland sells for $65,000. One in St. Louis goes for $120,000.
But, battered and forlorn today, both Detroit and 1626 W. Boston Blvd. were solid and optimistic 90 years ago.
…
This story by itself is worth a copy of the dead tree edition of the WSJ, in my opinion. It chronicles the entire history of 1626 W. Boston Blvd’s ownership from when it was built in the early 1990s to its present state of vacancy, and recent sale price of $10,000 to its current owner.
Here is my favorite passage:
Kimberly Carpenter: Big, Risky Debt Pile
In 2005, they found a buyer, Kimberly Carpenter, willing to pay their $189,000 asking price. They were too relieved to question why Ms. Carpenter’s closing documents recorded the sales price as $250,000.
“We were just praying and praying we could sell it so we could move to the golf course,” says Ms. Andrews.
County records show Ms. Carpenter took out simultaneous loans of $200,000 and $50,000 from First NLC Financial Services, a unit of Friedman, Billings, Ramsey Group, an Arlington, Va., investment bank. First NLC specialized in subprime mortgages — loans for borrowers with damaged credit.
At the time, Detroit was swept up in the subprime-lending frenzy that hit much of the country and eventually sparked the financial crisis and deep recession. Lenders became quick to loan to high-risk borrowers.
Ms. Carpenter, 37, says she was buying the house on behalf of her father, Lewis Maxwell, whose own credit record was too blemished. “My father handled all of that,” she says of the financial details. Her father, who worked on the Chrysler assembly line, died of cancer in 2007.
David and Ruth Andrews say Ms. Carpenter paid them $189,000. They say they don’t know what happened to the other $61,000 entered into sales records.
“I have no idea about any of that,” says Ms. Carpenter. “It’s over. It’s out of my head.”
…
What about the role of the “big national banks” in sparking an epic housing bubble, through their subprime lending securitization efforts? Shouldn’t the states have rights to protect their citizenry against “bank robbery”?
* The Wall Street Journal
* SEPTEMBER 25, 2009
Comptroller of Currency Criticizes Part of Bank-Regulation Proposal
By DAMIAN PALETTA
WASHINGTON — Comptroller of the Currency John Dugan on Thursday blasted a key provision in the White House’s proposal to overhaul supervision of financial companies, labeling as “radical” a move that would allow states to enforce tougher consumer-protection laws against nationally chartered banks.
He also said his agency was working closely with the Federal Reserve on new policies related to the way banks pay their executives, and could issue similar standards.
Mr. Dugan’s agency supervises national banks, and many banks opt to be regulated by the OCC because its rules pre-empt many state consumer-protection laws.
The White House’s plan would create a new agency, called the Consumer Financial Protection Agency, that would establish national standards for products like credit cards and mortgages but would allow states to pass even tougher restrictions. The White House’s proposal in this area has long been a goal of consumer groups and certain Democrats who have complained that federal regulators like the OCC haven’t been tough enough on banks.
In a speech Thursday, Mr. Dugan blasted the proposal. “This radical change is fundamentally at odds with the concept of efficient national standards for national products and services offered across state lines in national markets — a concept that has been central to the economic prosperity of the United States since the adoption of our Constitution,” he said in a speech to a group called Women in Housing and Finance, according to prepared remarks.
…
Sounds like the Fed’s next move may be to strike a coup de grace to the remaining vestiges of the housing bubble. Of course, there is also a good chance this could prove to be a head fake, in order to generate some free psychological housing market stimulus when they announce the change of heart.
* The Wall Street Journal
* SEPTEMBER 26, 2009
Official Sees Aggressive Rate Boosts in the Offing
By JON HILSENRATH
A senior Federal Reserve official said the central bank could push interest rates up more aggressively than usual when it decides to shift away from its easy monetary policy.
Fed officials have gone to great lengths in recent weeks to reassure investors that they will keep interest rates low for “an extended period.” Until now, they haven’t articulated how aggressively they would move once interest-rate increases do kick in.
“When the decision is made to remove policy accommodation further, prudent risk management may prescribe that it be accomplished with greater swiftness” than is customary, said Kevin Warsh, a Fed governor, at a conference on banking Friday at the Federal Reserve Bank of Chicago.
…
“We are at a critical transition period, of still unknown duration, and we must prepare diligently for an uneven road race ahead. If policy is not implemented with skill and force and some sense of proportionality, the success of the overall endeavor could suffer.”
While Mr. Warsh doesn’t speak for the Fed as a whole, and a full debate on the issue likely isn’t complete, his comments were a signal that officials are considering aggressive rate increases once they are convinced a durable recovery is on track and decide to take steps to head off inflation. Excepts of his speech were published in The Wall Street Journal on Friday.
An aggressive approach to rate increases would be a sharp departure from the Fed’s approach after the last recession earlier this decade, when it cut its target federal-funds rate to 1%, committed to keep it low for a long time and then signaled to markets that rates would rise only at a “measured pace.” In moves engineered by former Fed Chairman Alan Greenspan, the Fed pushed rates up in small, quarter-percentage-point increments over two years.
Some economists argue the Fed’s gradualist approach helped to stoke the credit bubble earlier this decade.
The idea of an aggressive approach to interest-rate increases has been in the air at the Fed for several weeks. At its annual retreat in Jackson Hole, Wyo., in a much-talked-about paper, economist Carl Walsh, from the University of California, Santa Cruz, argued that “there is no support for raising rates at a gradual pace once the zero rate policy is ended.”
Mr. Warsh’s comments mark the first public embrace of that idea by a senior Fed official. In its latest policy statement, the Fed reiterated that for now it expects to keep its target rate extremely low for an “extended period.”
The timing of rate increases will be dictated in large part by how the economy performs. If the recovery is weak and inflation continues on a downward path, as some on the central bank’s policy-making committee expect, the Fed may be on hold for many months to come. If the recovery proves to be stronger than expected and the economy’s slack is soaked up quickly, or if inflation expectations start to rise, the Fed could move more quickly.
Mr. Warsh, who has never dissented at a Fed policy meeting, put himself in the camp of officials who would lean toward moving quickly, saying, “Policy likely will need to begin normalization before it is obvious that it is necessary,” he said.
Futures markets are pricing in almost 100% probability the fed-funds rate will be raised to half a percentage point by next May.
LEBANON, Tenn., Sept. 25, 2009
Living Outside the System
Dozens of Homeless Tennessee Families Have Set up Camp in a Makeshift Community
By Seth Doane
Although U.S. home sales are up, as many as 800,000 people are expected to become homeless this year. Seth Doane reports from a Tennessee community that knows the struggle all to well.
(CBS) Tammy and Troy Renault Look like any middle class couple, but someone else is living what used to be their home.
Almost everything they own is in storage, reports CBS News correspondent Seth Doane.
Now, home for the Renaults and their four kids is a campsite - a tent and a borrowed trailer.
Troy said that how they ended up there is Economics 101. When he lost his job with a construction company and had trouble finding work on his own, the bills piled up, and everything else came crashing down.
“You go from ‘do you pay your lights and water’ or ‘do you pay the house payment and sit in the dark’”, Troy explained.
…
How many vacant homes do we have again in the US of A? Is it 18 million plus?
Houseless, not homeless stay at Tenn. campground
Published online on Friday, Sep. 25, 2009
By TRAVIS LOLLER - Associated Press Writer
LEBANON, Tenn. — Terry Lee Ballard holds a sign when he goes looking for work in front of hardware stores. It reads: “No job. No food. Almost homeless.”
He’s almost homeless because he lives at a campground in a tent with a roommate, two cats and a dog.
Drive through Timberline Campground about 30 miles west of Nashville and it’s difficult to see the difference between Ballard’s campsite and some of his vacationing neighbors, but a closer look reveals he and others aren’t here by choice.
The campground welcomes people who have lost their homes but not their desire to keep their families together, out of homeless shelters and off the streets.
Ballard, who at 52 has worked as a songwriter and construction worker, tries to make the best of his situation. Outside a mesh window of his tent, an electric air conditioner blows a cool breeze into the nylon dome, which can heat up like a greenhouse under the Tennessee sun. Wooden pallets covered in carpet scraps cover the floor of the tent keeping his bed, coffee maker, electric two-burner unit and toaster oven off the sometimes soggy ground.
“The cool thing is, it’s a place to live and I don’t feel homeless as long as I have this,” said Ballard, who is behind on campground rent payments. “But we’re about to lose this.”
…
Did the feds webjack the ForeClosuretown dot com web site? I used to be able to go there to browse hundreds of foreclosure listings in upscale San Diego locales like La Jolla, Rancho Santa Fe, Poway, Rancho Bernardo and Carmel Valley. Now when I enter a zip code on the search line, the Foreclosuretown interface is replaced by a crappier-looking one (looks like a Federal Government creation) entitled National Foreclosure Alert, and virtually no listings show up any more.