Bits Bucket For October 20, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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first?
Honorable Siebe:
You have been indentured to be the go-to person for the day
Anything we ask you must answer correctly or be banished into HBB hellll.
First off…. WHAT is your favorite color?
Whoopie!
Goodnight, don’t let the realtors bite.
My realtor friend has a home in Malibu. Their basis is around 1.4mil. They were offered 3 million and declined a few years back. Now they are having to sell because the market has gone cold and they’re broke.
They got an offer for 2 mil.
They turned it down.
Dipscheisses.
Are they really? The market is turning, the bottom is in. They’d be fools to just give it away. The signs are everywhere (on the news). Mass media misdirection is a victimless crime.
“They got an offer for 2 mil.”
Would the FHA guarantee this?
They didnt tell you about the $1million heloc they got at the top of the market.
$2mill….i’m broke i cant sell at $2 mill, i’ll be homeless boo hoo
Friends don’t let friends befriend realtors.
Hahaha!
THE Money Quote of the day.
Caught the exchange about Libertarianism late yesterday.
It is a Utopian fantasy that will never work in the real world. Want to know why?
It requires the population to be educated enough to trust them to make their own decisions, and responsible enough to accept responsibility for their own actions……..both of which are in pretty short supply right now.
From top to bottom, the USA has too many stupid people, in positions where they are making too many stupid decisions.
I’d be happy if we would just get back to the “Punishment fitting the crime”.
(Rant on)
Put all this money spent on “data mining software to work. Let’s start by having a few hundred “perp walks” of guys in Brooks Brothers suits. And none of this “voluntary surrender at their lawyers office, with the raincoat covering the handcuffs” stuff……..I want to see some “Dog, the Bounty Hunter” takedown action, some battering rams and SWAT teams, and some people hogtied and thrown into the back of a police van……. I want to see some “droopy drawers” from some people $hitting/pi$$ing their pants. I want to see some building contractors/developers get their a$$es sued off, by the families of people murdered by an illegal immigrant/undocumented worker that they hired.
And I want to see it covered live on CNBC. Better yet, have Cramer and Kudlow arrested live, for dispensing such BS investment advice.
Nobody on Main Street has any confidence that our leadership even understands what has been wrought, much less come up with a coherent plan to deal with it…..or worse, they do understand, but, like the Titanic, are having the First Class passengers board the lifeboats, while the folks in Steerage everything is under control, while locking them in below decks, and letting them go down with the ship.
(But, hey it was their fault……they should have bought a First Class ticket……..)
If the PTB haven’t noticed, J6P’s faith in the system having the will/ability to enforce the rule of law is rapidly eroding. We’ve already seen how much chaos two wackos in an old Chevy with an AR-15 can cause. Never mind a couple guys with a credit card, a Ryder truck, some anhydrous ammonia and diesel fuel. We have over 300 million people in this country. Does anyone doubt that there are people here in the good old USA capable of staging a repeat performance? Ask our friends in Iraq how much chaos can be created in an urban environment by just a few hundred/thousand guys with guns..
A whole bunch of people are going to end up losing everything in this debacle……….probably millions of them who played by/believed in the “rules”. Is there any doubt in anyone’s mind that a “Baghdad, Revisited” event is possible here? (If it happened, I wouldn’t exactly consider it a “Black Swan” event). You are already seeing people kill their own families. Any bets on when someone decides to turn their guns in a different direction?
(Rant off)
Sorry about the rant………one of the things that I discovered while out of work is that while I have things set so I can hold my head above water financially (as long as the unemployment checks show up), I have too much time to think about things.
I read your rant and conclude if a educated man with special technical skills can be this frustrated then we (all of us) may in fact have something to be very concerned about in the possibilities that you pose…Hang in there Gfixer…
“I want to see some “droopy drawers” from some people $hitting/pi$$ing their pants.”
LOL! I’d even pay real money to see it.
Good idea! Maybe the investigations, prosecutions and trials could be paid with exclusive pay-per-view footage!
It is a Utopian fantasy that will never work in the real world. Want to know why?
It requires the population to be educated enough to trust them to make their own decisions, and responsible enough to accept responsibility for their own actions……..both of which are in pretty short supply right now.
X-GS, I agree that there need to be some cultural norms accompanying a libertarian legal structure, and that those cultural norms are sorely lacking in this day and age. But it does not follow that libertarianism cannot work in practice.
Consider this quote:
“Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” (John Adams, October 11, 1798.)
According to your logic, therefore, the U.S. Constitution is a Utopian fantasy which can never work in the real world (once people have lost their moral bearings). But I believe that, in the process of composing and fighting for the Constitution, a lot of people ACQUIRED moral bearings that they may not have realized they had.
I would also point out that, in the period from the Revolution to the Civil War, we had something much closer to a libertarian free-market economic and legal system than we have today (with the obvious exception of slavery, so you can confine the picture to the North if you want). The central bank charter was revoked by Andrew Jackson, and corporate influence and corporate charters were virtually non-existent. The results were stupendous– we grew from an obscure colonial backwater to a major world country in a few generations.
The nattering wingnuts yammering about philosphy and ideologies that in reality know nothing about?
Priceless.
Exeter
You consider me a “wingnut”? That statement is pretty hilarious.
Ideologies that I know nothing about? It’s kind of hard to even have a discussion about “Libertarianism”, since it seems that everyone has their own unique definition of the term.
Its always some kind of variation of “maximizing individual liberty, and minimizing government intrusion”….My cynical view of human nature is that you need government (in some form) to make and enforce laws, to keep the criminals and cheaters in check. Otherwise, you have anarchy.
Most of the Republicans/right wingers that you hate so much, seem to be the most rabid supporters of Libertarian philosophy. Especially the Wall Street “Masters of the Universe”. I think they are just lobbying for a “Get out of Jail Free” card.
These guys have been operating in a Libertarian environment for the past 30 years, and we now see where that takes us.
My cynical view of human nature is that you need government (in some form) to make and enforce laws, to keep the criminals and cheaters in check. Otherwise, you have anarchy.
And with government, the criminals and cheaters take over the government instead, as we see all around us. Is this an improvement? It certainly doesn’t seem that way to me. At least with private criminals and cheaters, you may be able to defend yourself successfully, but once they have a government to help them accomplish their depradations, that is pretty much impossible.
The WARNING PBS or Frontline.
Really really good example of the FACT that the PTB did in fact know exactly what was going to happen in 1997. But those pasty faced wealthy white men didn’t want to hear it from a woman. Watching their ‘tidbits’ during those yrs and ensuing, really really pisses me off, and it really pisses me off that men are so dismissive of women. Really smart women.
Bast ards. I hope Greenie really ‘gets his comeuppance’ And Rubin, and so forth. And the law students at Stanford in the late 60s who were against Brooks for “taking a spot a man could have gotten to avoid going to Vietnam”.
Brooks was the Head of her class and was the first woman to be President of the Stanford Law Review.
rant /off for now.
LehighValleyGuy,
Well, agreed but in support of X-GSfixr, there was a time when stupid people in this country -knew- they were stupid! You didn’t have janitors w/ 8th grade educations trying to become the next Donald Trump.
They actually were smart enough to realize they were lucky to have their day gig and simply did it to the best of their ability! The world was a better place as a result of it.
But now everyone that isn’t in a medically diagnosed COMA thinks they can daytrade and flip their way to financial independence without having to save a dime! ‘This’ is why we can’t get off the Bubble go’round.
This is so true.
I sat in on a couple of those get rich quick meetings at the behest of acquaintances, and the common theme was:
“9 to 5 is for LOSERS”!
And I would think - Why - What if you like your job?
The implied message. “EARNING money is for losers.”
The people that do well that make it on their own take risks, and sometimes it pans out.
People flipping houses and what not took the risk of borrowing against their primary residence and buying other properties, as taught by hucksters.
Nothing wrong with risk, just as long as the failure rests with the risk taker and not the public.
Being in the corporate jet business, one of the things you get to see is these guys up close. There are a lot of these guys that you would not trust with your lunch money, if you can get around the media generated aura/bull$hit, and get to see them up close.
OTOH, I’ve seen some that quietly go about getting things done; one demands a lot from his employees, but he compensates them well, spares no expense maintaining a clean, professional working environment, and makes sure that everyone has all the tools they need to get the job done. He is involved in joint ventures worldwide, because people like Toyota, Mercedes-Benz, Porsche, etc. know what they are going to get when they do business with him.
He’s what we used to call an “Industrialist”. We need a lot more like him, and fewer professional money shufflers.
lot of these guys that you would not trust with your lunch money, if you can get around the media generated aura/bull$hit, and get to see them up close.
OTOH, I’ve seen some that quietly go about getting things done; one demands a lot from his employees, but he compensates them well, spares no expense maintaining a clean, professional working environment, and makes sure that everyone has all the tools they need to get the job done.
But again we are talking the rat bastids who are the 20% and the good men/women who are the 80 quiet %.
You got the 20% who are bastids, unethical, and ruin it for everyone.
“…These guys have been operating in a Libertarian environment for the past 30 years, and we now see where that takes us….”
BINGO, X-GSfixr! Thank you.
“…These guys have been operating in a Libertarian environment for the past 30 years, and we now see where that takes us….”
BINGO, X-GSfixr! Thank you.
Um… no. A libertarian environment in no way allows for a central bank, nor government backstops, nor government-mandated and funded housing programs, etc. etc. etc.
“It requires the population to be educated enough to trust them to make their own decisions, and responsible enough to accept responsibility for their own actions……..both of which are in pretty short supply right now.”
The evolutionary processes of adaptation and natural selection can change a population faster than you may realize.
The evolutionary process changes things but not always for the better PB just take a look at Afghanastan
Poverty pushes people into groups religious political ect to try and gain some empowerment. The groups then fight each other. Those that command the largest group of dumb and blind followers often win leaving a population of fearfull or dumb and blind people.
PB,
Very true, and as a result of that “with my hands-free Bluetooth and freshly-minted MBA, I’m e-v-o-l-v-i-n-g into something completely NEW!” attitude drives the suits away from making smart trades into “printing money mode”.
Anyone recall the Mutual Fund Scandal in Sept. ‘03? Who needs to make educated guesses and put actual cap. at risk when you can late-trade and market time based on stale pricing!? I mean any putz w/ an ETrade account can’t do that!
They want to make their money upfront now basically betting on the horse race after it’s over! Try doing that in your Etrade acct. you PIKERS!
Hey, I was in those funds! lol. Strong, right? At least they’d execute a trade in real time, right before the bell. Vanguard makes me wait a day. So much for buying on the dips.
with my hands-free Bluetooth and freshly-minted MBA, I’m e-v-o-l-v-i-n-g into something completely NEW!
Wish I could post the link to the photos of the motorcycle inbedded into an auto. The auto driver was talking on the cellphone and didn’t look, pulling out and the motorcycle.. well you can’t tell where the motorcycle begins or ends. Rider and 2 auto psgrs dead on site. Truly a horrendous photo. The auto/cycle are on display somewhere to show what talking on a cell phone can do.
Evolution in a fast way.
And we have to deal with them while trying to get a job…..I’m scared
From top to bottom, the USA has too many stupid people, in positions where they are making too many stupid decisions.
top to bottom, the USA has too many stupid people, in positions where they are making too many stupid decisions.
Sounds like my management at my corp.
Good Morning Fellow HBB’ers. Let’s do this right!
Welcome to this meeting, please be seated and have some COFFEE before we decide the Fate and the Future of the Known World.
Humm…a 2 million dollar profit on a shack. That would outfit mikey in the latest piece of BMW piece of junk of his choosing.
From top to bottom, the USA has too many stupid people, in positions where they are making too many stupid decisions.
That, in a nutshell, is the number one problem facing the USA. Our march to IDIOCRACY is well advanced. Stupid people are easily manipulated by flim-flam men, with the visible results occupying the corridors of power. Unless and until voting is restricted only to those who pay more into the system in taxes than they take out in benefits - sorry, ACORN, AARP, and Wall Street shysters - and policies are enacted that actively discourage parasitism and rampant overbreeding by imbeciles and welfare queens, we as a nation are pretty much screwed.
IDIOCRACY was a documentary, not a comedy. Eventually, nobody will understand why the movie was funny…. or that it is even fiction.
http://www.youtube.com/watch?v=L0yQunhOaU0&feature=PlayList&p=61BD46E4083F5888&index=0&playnext=1
America, meet your future.
Unless and until voting is restricted only to those who pay more into the system in taxes than they take out in benefits
I think I’ve mentioned before that this is one of my ideas to help right the direction of this country. Those on gov’t assistance get a reduced voice in how the gov’t is run. I don’t think people should be totally disenfranchised, but by having a vote worth 1/2 of what a “productive” member of society has, the populace can’t keep voting themselves more and more money from the treasury.
Of course there are all kinds of gray areas with this idea, and exceptions, etc. But I think it’s relatively sound overall.
Then the line would get moved. “Productive” meaning only those who bring home $200K/yr, then $500K/yr, etc.
Obviously poor people hanging out all day making babies will just vote for freebies.
“Unless and until voting is restricted only to those who pay more into the system in taxes”
Like the electoral college superdelegates?
snork, CarrieAnn. Good one.
Still no luck on the aircraft mechanic job front?
Have you looked at the airforce as a warent officer type of position? Might be a good gig.
As for the risk, remember seeing any significant casualties for the airforce that didn’t involve a pilot and or drinking?
Too old.
Google: “Dos Gringos I’m a Pilot”
Dad had a number of 33 LPs that were air force songs.
Overoveroveroveroverover and over again.
lol.
ugh.
Libertarianism is working in this world and has always worked. It’s called operating the way you would want to live your life by ignoring bad laws, being lost in the shuffle, traveling to a community where your harmless mutual voluntary action is legal and practicing it there and then returning back home, and so on.
It’s all BS that libertarianism does not work. It worked in drab Soviet Russia in the black market.
Don’t believe me: Read “How I Found Freedom in an Unfree World.”
I don’t care what others think about my lifestyle, which is offensive to many people, but does not initiate force, the threat of force, or fraud against anyone. To “hale” with them.
This should thrill the Obama voters, just one more straw on the camels back.Next up ‘free’ houses for moderate to low income? Or will ‘they’ buy them and create life long mortgages for the serfs? “The federal gubmint is now attempting to play the role of the investors” Sweeeeet!
Small firms, home buyers to get a boost
More administration efforts on tap to target economic trouble spots
Tuesday, October 20, 2009
The Obama administration rolled out an initiative Monday to help moderate- and low-income home buyers, launching what sources familiar with the planning said will be a series of proposals aimed at healing two badly wounded areas of the economy: small business and the housing market.
In an effort to encourage homeownership, the Treasury Department announced an initiative to help ailing state and local housing finance agencies provide inexpensive mortgages to underserved borrowers.
Later this week, the administration plans to ask Congress to raise the ceiling on the amount of money companies can receive from the Small Business Administration’s major lending programs, the sources said.
Indeed, Treasury officials would not even say how much money they would be committing to the housing program they announced Monday. In the weeks leading up to the announcement, the officials discussed investing as much as $35 billion, according to government sources.
Under the program, the Treasury, along with mortgage financiers Fannie Mae and Freddie Mac, will buy the bonds used by housing finance agencies to fund mortgages, which can carry an interest rate that is a percentage point lower than loans made by private lenders. Called HFAs, these agencies have been strapped during the financial crisis because investors have been unwilling to buy their debt. The federal government is now attempting to play the role of the investors.
“Treasury Secretary Timothy F. Geithner said the program will help stabilize the housing market. The initiative will provide hundreds of thousands of affordable mortgages and enable HFAs to rehabilitate tens of thousands of affordable rental properties, a Treasury press release said”.
There’s that word again “affordable” yet it has never been defined by the PTB.
And that word “stabilize”. Apparently an inflated bubble/balloon is considered more stable than a deflated one. I guess to a kid they look more “stable” when you look at the surface tension, compared with a flimsy uninflated one. Inflated bubbles tend to have very fast periods of destabilization though, and make loud sounds.
(balloons I mean)
How will all the bankersters “earn” huge bonuses if the banks have to recognize their losses?
“Treasury Secretary Timothy F. Geithner ??
There is some interesting revelations comming out in Sorkin’s new book out today “To Big To Fail”….Paulson and all these guys new in June prior to the September crash that we were headed for a meltdown…
For that matter, many posters here knew we were already in a financial panic in August 2007, though we may not have been able to predict when the Treasury Secretary would precipitate full-blown meltdown by hitting the “Panic Now” button.
Of course they knew . All you had to do was watch what they were doing to set up the bail outs . One of the first moves the
Feds/Treasury Sec. made was getting a raising of the limits on government backed loans . There was no logical reason to raise government loan limits in a declining market . Also , Paulson and BB had to get some more power for them approved by Congress/Senate .Than when you saw them allowing more than just regulated Banks to go to the discount window ,it was clear that a financial meltdown was being avoided so they could set up the bail outs and than came the “FIRE” ,we need a 700 billion blank check . I believe they knew in the early part of 2006 or earlier.Come on ,all of a sudden Paulson retires from GS and becomes the Treasury Sec.
What is funny is all these bogus accounts of the meltdown in which they made up stories of a last minute realization of the meltdown in which they were forced to save the financial systems in two days .
Months before the AIG meltdown they were allowing Investment firms ,Insurance Companies ,and unregulated Banks to come to the discount window . I remember BB saying in essence that those short term loans were backed by good paper and they would make money on those loans . Yep ,sure bet . The Feds were keeping them alive until they could set up the bail outs . You can’t tell me that they only knew at the last minute that AIG couldn’t pay off on the credit default swaps .JUST WATCH THEIR ACTIONS ,NOT THEIR WORDS .
I was thinking them guys new to much to.
???
They knew it in 1997.
PBS or Frontline. The WARNING.
Tonight.
Excellent.
May have to view online now.
scdave,
June of what ‘year’?
2008
Yet another plank in the “A broke government for a broken economy” platform. How many market distortions do we really need?
Bbbbbbut Bbbbbbut Bbbbbbut Bush did _____________________
http://www.youtube.com/watch?v=kNqQx7sjoS8
Title of the clip: “Home Ownership and President Bush”
Subject: “American Dream Downpayment Fund”
Content: How to use taxpayer’s money to qualify low income buyers to make down payments, in order to help them join the Ownership Society, and also fund the affordable housing tax credit to increase affordability of housing in neighborhoods where housing is scarce…Don’t want there to be “fine print” preventing people from owning homes…Bring others into the process; the real estate industry benefits when people buy homes; how to create a sustained commitment by the private sector that will have a powerful impact?
- Expand capital available to buyers
- Overcome barriers (to low-income buyers)
- Provide the education needed
- Achieve a more stable America by qualifying 5.5m more minority homeowners
More on how the GSEs will be coerced to empower low income people by helping them become homeowners…
How did this Republiscam plan work out?
When has Retardicanism ever worked out for anyone?
It never does.
However, please let us know when the Dumb-o-crats fix all of our problems with “hope’n'change.”
One party, two faces.
One party, two faces.
More like, two hairy ass cheeks, same bunghole.
“Home Ownership and President Bush”
Dated May 17, 2002
That clip makes me think W did not get enough credit for his role in blowing the housing bubble to smithereens.
OBWan’s housing market conundrum:
- His guys are W’s and Slick Willie’s guys.
- Lots of those guys are Goldman’s guys.
- Wall Street greed continues to trump what would best serve the national interest.
- Rather than facing up to what went wrong and charting a new course, the Obama financial brain trust is supporting a frantic effort to get back on the path to housing market disaster that was followed by W and Slick Willie.
Look at who Obama’s major campaign contributors were. They are the same as W’s & Slick Willies. The government is just a facade for Wall Street.
Until there is a constitutional amendment banning private financing of political campaigns, we will be slaves.
So you’d rather have public financing of political campaigns? Good lord man.
Certainly. Much rather have my politicians beholden to me. You’d rather have them beholden to Goldman-Sachs? Wow!
YES YES YES EDDIE………….
Everybody gets the same amount to start with no pacs no contributors all funded out of the $3 we checkoff on our tax returns….
NO MORE limiting debates between the 2 anointed candidates….
and just like a Primary ALL will be in the first 2 debates, then the top 5 then the top 3 no less then 3 EVER…..for the final 3 debates
And in your perfect little world how do you keep the white house from circumventing that? You are naive if you think the party in power wouldn’t have an advantage.
I’m gonna sneak that in on my “Millionaire Tax Expert Big Brother’s” 55″ 1080 screen…before desert is served this… THANKSGIVING!
Your right Edneo…
Maybe I place to much personal blame on Bush for what happened on his watch…I mean, when your past history shows that you are a buffoon and you are placed in the position of the President of the United States what should I have expected…Now we will just deal with the fallout, as a nation, as best we can…
lmao… edneo…….. edneo-confederate?
It’s 9 months into the new guy’s watch and the only thing the kool-aid drinkers can say is yeah but Bush. And of course they forget that the last 2 years of Bush were with nancy and harry running congress.
But why quibble with facts. And why dare lay any blame at Obama’s feet? A $1.4T deficit, more than 3X the last deficit? Bush’s fault. 10% and rising unemployment? Bush’s fault. Afghanistan on the verge of collapse? Bush’s fault. Losing the Olympics….you guessed it, Bush’s fault.
I do love how the most ardent anti-real estate posters here are also the biggest kool-aid drinkers. How’s that never ending real estate bailout going for you?
Eddie,
In spite of what you might think, most folks here aren’t “anti-real estate”. On the contrary. We’re all about affordable… real estate, stable neighborhoods and fairness in the transaction process.
In fact, as long as it’s reasonably priced, we don’t have any qualms about RE as an investment at all? It’s when you have the deck stacked by the NAR, MBA/Real Estate Industrial Complex ( REIC ) that we get riled up.
+10
Dinor,
Whatever the term is, you know what I meant by “anti real estate”.
Point is Obama and the Dems have done everything they can and then some to keep prices artifically high. Tax credits, bailouuts, loan modification programs, you name it.
DinOR,
A well grounded response.
You can’t say that - it is racist!!!!!
‘…most folks here aren’t “anti-real estate”…’
Not anti-military here, but anti-MIC.
Not anti-real estate, but anti-REIC.
More generally, I am against political-economic greed coalitions of all stripes.
Not anti-capitalism, but anti-free markets.
Eddie, while one can’t generalize about HBBers, what the others have been trying to tell you is that we are bothered about everything that set up the current housing-related economic collapse. Ben and the bloggers saw it coming well in advance, and knew that it was going to be a monumental problem. Setting it up involved administrations from Reagan, through Clinton and Bush. Since the collapse, Kool-aid has been served by Bush (through Paulsen) and Obama (through Geitner). By reinflating bubbles, they hope to push the problems down the road. I would recommend that you think about the complexity of what has happened instead of trying to blame one political party.
Eddie- missed the video from 2002. He still loves little shrub.
Poor JoyBoy.
“Not anti-capitalism, but anti-free markets.”
I always suspected you were, given your alliances with Wall Street’s government-supported Megabanks…
Exeter:
Bush has been gone for 9 months and you still can’t let go.
10% unemployment
Afghanistan in shambles
$1.4 trillion deficit
And you response….yeah but Bush.
Pathetic.
REhobbyist:
My sense is that HBB is against anything to do with the “system” be that whatever you want to define it as. Banks, home ownership, stock market, etc.
The economic collapse is the collective ’see I told you so’. But it’s an illusion. The so-called collapse is no different than every other end-of-the-world collapse. The 2001 recession was the end of teh world. So was the 1990 recession. And the 1981-82 and 73-74 and so on. We had a recession, it was pretty deep, now it’s over. In 6 or 7 years we’ll do it again. That’s how the business cycle works. Nothing new.
Oh and remember how the Japanese were going to take over in the 80s? Now it’s the Chinese. Or is it the Mexicans? Or the Indians? Or the Russians? So hard to keep up with the barbarians at the gate this week.
I’ve posed this before and never got an answer: if everyone saw all of this “collapse” coming, why didn’t you become rich beyond your wildest dreams from it? You could have had 1000X ROI had you simply bought options on banks and mortgage companies.
if everyone saw all of this “collapse” coming, why didn’t you become rich beyond your wildest dreams from it? You could have had 1000X ROI had you simply bought options on banks and mortgage companies.
Eddie, if you hadn’t realized, the gov’t changed the rules many times over during the bust. That’s one risk one must always account for, and thus can’t go “all-in”. No one knew exactly how it was going to play out, just that certain things were unsustainable.
MM Funds were gov’t insured, gov’t takeover of freddie and fannie, bailout of AIG, extending mark to fantasy for banks, TARP, etc etc etc.
Any single bet could have been decimated by any of those changes.
Desperate times call for desperate measures.
Desperate times call for desperate measures.
The problem is that we’ve become extremely loose at what are considered “desperate times”. Used to be that meant we were losing a war and our actual national sovereignty was at stake. Now “desperate times” is any time our GDP takes a 2% hit. (Even after rising 80% the previous 10 years)
Like it or not, these desperate times call for saving the banks.
Among other things, banks serve as clearing houses for financial transactions. If it is felt that a financial transaction will not be cleared then the transaction will not take place, which means the economy comes to a screeching halt.
Cash transactions don’t require banks, do they?
Is it a good idea to pay a truck driver thousands of dollars in cash for his delivery to Walmart? Thieves would just love that.
Cash transactions don’t require banks, do they?
Well, the cash ultimately comes from a bank, but I realize that’s not the point you are making
I agree…”saving” the banks wasn’t/isn’t necessarily the right course of action…
Is it a good idea to pay a truck driver thousands of dollars in cash for his delivery to Walmart? Thieves would just love that.
Yeah I know - sorry I was just being snarky.
You have to realize though that the actions of last fall were very much not necessary to save all banks. Yes many would have failed, but the stronger banks would still exist, and would have been able to pick up the pieces. In the long run our economy would be much stronger for it.
Oh we need a banking system. But if you want to build a hill, should you start by filling in a crater? Instead of bailing out existing non-solvent banks should we instead allow the creation of new banks? Is the “goodwill” of existing banks worth more than the gaping hole in their ballance sheets?
packman,
Interesting point. I have a friend in Whittier, CA and his wife has worked as a Loan Officer for a local credit union for years. She said they are constantly fighting off “we need to get ‘ramped UP!’ ” banking types all-the-time..!
They can’t -wait- to get their hands on all those deposits “just sitting there” and do some REAL damage. Thankfully they’ve held them at bay ( for now ) But it’s hard to retain your bus. model when there’s that much external pressure. No wonder we have so many banks in peril?
You have to realize though that the actions of last fall were very much not necessary to save all banks. Yes many would have failed, but the stronger banks would still exist, and would have been able to pick up the pieces. In the long run our economy would be much stronger for it.
BINGO
You could also nationalize the banks that failed then brake them up and sell them to the banks that didn’t fail. That way you are rewarding sound banking and not Vegas banking. This is basically what the FDIC does for smaller banks. I think the arguement against this was the gov didn’t have enough man power to accomplish this. Simple solution gov hires the existing bank employees and sends out a message that anyone who tries to abuse the tax payers will go to jail.
It depends on what you mean by “banking system”. Couldn’t some private company like Walmart develop a system of credits and debits (not too different than Western Union) by which money could be “banked” at one location, say the Walmart receiving the truckload of goods, and be withdrawn near the senders locale?
Just a bank without lending.
It depends on what you mean by “banking system”. Couldn’t some private company like Walmart develop a system of credits and debits (not too different than Western Union) by which money could be “banked” at one location, say the Walmart receiving the truckload of goods, and be withdrawn near the senders locale?
Just a bank without lending.
Interesting idea, but I’m guessing it just wouldn’t work due to the inherent tendency to fraud/theft, and general overhead costs. Banks actually do server a purpose in this scenario, acting as an independent (to varying degree) third-party. E.g. when you use a credit card to pay for something, the credit card company (acting in essence like a bank) is the third party that helps the payee know that you’re “good for it”. A bank provides an audit trail, subject to accounting and legal standards - things that are just too much overhead for a business to maintain on its own if it tried to manage its own money account.
Plus just the logistics of transferring funds over distances. If you’re a business buying stuff 1,000 miles away from your nearest location, you don’t want to have the courier carry the cash with them for payment; instead you can have an account in a bank that has a branch both locally and at the other end, and withdraw the funds from there.
That model would in fact work very well, and has done so for thousands of years. It still is in operation some places where there are no “banks” as we know (and largely loathe) them today.
It still is in operation some places where there are no “banks” as we know (and largely loathe) them today.
Got any examples that aren’t third-world countries?
As much as we loathe banks - they’re kind of like electricity. They can do great harm, and yeah technically we could do without them, but we’d be taking a step back to the dark ages.
Under the program, the Treasury, along with mortgage financiers Fannie Mae and Freddie Mac, will buy the bonds used by housing finance agencies to fund mortgages, which can carry an interest rate that is a percentage point lower than loans made by private lenders. Called HFAs, these agencies have been strapped during the financial crisis because investors have been unwilling to buy their debt. The federal government is now attempting to play the role of the investors.
Seems like an excellent segue back to the article posted yesterday on the reinflating bubble.
Countdown to the next crisis is already under way
By Wolfgang Münchau
Published: October 18 2009
We did not need to wait until the Dow Jones Industrial Average hit 10,000. It has been clear for some time that global equity markets are bubbling again. On the surface, this looks like 2003 and 2004 when the previous housing, credit, commodity and equity bubbles started to inflate, helped by low nominal interest rates and a lack of inflation. There is one big difference, though. This bubble will burst sooner.
So how do we know this is a bubble? My two favourite metrics of stock market valuation are Cape, which stands for the cyclically adjusted price/earnings ratio, and Q. Cape was invented by Robert Shiller, professor of economics and finance at Yale University. It measures the 10-year moving average of the inflation-adjusted p/e ratio. Q is a metric of market capitalisation divided by net worth. Andrew Smithers* has collected the data on Q, a concept invented by the economist James Tobin.
Cape and Q measure different things. Yet they both tend to agree on relative market mispricing most of the time. In mid-September both measures concluded that the US stock market was overvalued by some 35 to 40 per cent. The markets have since gone up a lot more than the moving average of earnings. You can do the maths.
The single reason for this renewed bubble is the extremely low level of nominal interest rates, which has induced people to move into all kinds of risky assets. Even house prices are rising again. They never fell to the levels consistent with long-term price-to-rent and price-to-income ratios, which are reliable metrics of the property markets’ relative under- or over-valuation.
Add measures like this one to the causes of the new bubble, and of the next crisis.
I heard a little something about this program on Morning Edition while I shivered in bed and waited for my temperature to rise (It was over 100 last night, rapidly heading in that direction this morning). Sounded like another boondoogle, but I have to admit I didn’t get a lot of details. If this is funding for the state agencies, perhaps all the details are handled at that level.
But there was ANOTHER story that was more interesting. A affordable ownership program in Brooklyn. The stuff was affordable because the land (in blighted neighborhoods) was free. The houses were sturdy but small and “cookie cutter.” The purchasers had to save up a downpayment, including having to show the source of any largish bank deposits so they couldn’t fake their savings. People were regularly rejected and told to go back and pay off more debts, improve credit score and save more money before they could buy. And - here is the real kicker - payment (they didn’t say whether it was all PITI or just the mortgage) had to be no more than 20% of income. Twenty percent! Given that less wealthy people are unlikely to get a lot of benefit from itemizing deductions (even in a high tax jurisdiction like NYC) that sounds about right. It is what I would love to pay.
The program has had less than 10 forclosures in the entire program in an area where forclosures are close to 10% for other owners. I wish they had specified what % those 10 were. Glad to know that someone in the affordable housing community actually gets it. The administration program for refinancing is at 31%. Completely unaffordable unless you are expecting your income to rise rapidly over the next few years.
Get well soon, Polly.
That idea for truly affordable housing is a nice one.
I can only assume the govnerment will try to shut it down at some point - can’t allow affordable housing!
Thanks pondering. I went to the minute clinic at CVS last night. They did a quick response flu test that was negative, but it turns out that those tests are only about 50% accurate. If this is a cold, it is the weirdest one I have ever had. Almost no head congestion at all, dry cough, achy lungs, fatigue, headache and fever right around 100. I never get a fever with a cold.
I would be worried about you, Polly, except that you are as lucid as ever. Get well soon. If you’re not better by tomorrow, you should probably call your doctor (fever, headache, cough.) Post tomorrow, please, so we don’t worry about you.
Will do. Promise. And the CVS nurse gave me a list of urgent care clinics in the area, plus regular docs that take walk ins. My regular physicians practice is in the city near my office. It would be hard to get there. Maybe I need a doc out here.
My lungs feel clear, and I don’t think my air capacity is down, but breathing is not very comfortable. Maybe the airways are constricted a little? Not sure. My instinct has been to keep at least somewhat verticle most of the day. I’m trusting the instinct.
Polly,
Get yourself checked out for pneumonia.
Please take care of yourself.
Citi’s Mortgage Problem 10.20.09
The Home Affordable Modification Program is increasing delinquent loans at Citi.
Citi cited the Home Affordable Modification Program, which was enacted to help stabilize the housing market, as being ineffective at lowering delinquency levels. The bank hints that this loan modification program is actually making it tougher for the government-supported bank to manage its balance sheet.
HAMP is part of the Making Home Affordable initiative started by the Obama administration to help up to 9 million Americans reduce their mortgage payments. Making Home Affordable has two components–Home Affordable Refinance Program (HARP) and HAMP. HARP will give up to 5 million homeowners with loans from Fannie Mae ( FNM - news - people ) and Freddie Mac ( FRE - news - people ) a chance to refinance. HAMP will give $75 billion to keep up to 4 million Americans in their homes and “preventing avoidable foreclosures,” according to Making Home Affordable’s site. The U.S. Department of Housing and Urban Development says 500,000 trial loan modifications have been started under the Making Home Affordable program.
Citi said in its third-quarter earnings report that delinquent mortgages are increasing because of HAMP.
And we should take this as an indication as to how (un)successful that new effort (detailed in your prior post) will be.
If the path to universal prosperity and happiness was always hidden in the greasy palms of politicians, I doubt it would have taken until 2009 for mankind to figure it out.
31% of gross income is too much. Much too much. Even if you keep your job it is too much. Might be OK if you can get to work very cheaply, have grandma/pa helping out with babysitting, low or no student loans, low or no car payments and low healthcare costs. Might be.
Also depends where you live. In California 10% of gross goes to state income tax. In Florida, 0% goes to state income tax. Huge difference in the calculation.
10% of gross? I really have to get some of your drugs, Eddie.
There is not a state in the Union that taxes gross income. Neither does the federal government. All have various exclusions, adjustmetns, deductions, credits, etc. That is why you pay taxes on your TAXABLE income, not gross, not adjusted gross, only taxable. 31% of taxable income would be pretty darn affordable for a lot of people.
And most of the states that have low or no state income tax have higher property taxes. New Jersey being a bit of an exception because it has relatively high income taxes combined with very high property taxes largely due to its highly redudant and wasteful system of tiny municipalities and substantial county governments.
Hey, now!
I’m from New Jersey, and we’re darn proud of our waste! Hehehehe…
*grin*
New Jersey: Come for the pollution, stay for the corruption!!
“…Come for the pollution, stay for the corruption!”
Maybe the Chinese Gov’t could reverse corruption & pollution and use it for travel brochure.
For single and married filing separately taxpayers:
– 1 percent on the first $7,168 of taxable income
– 2 percent on taxable income between $7,169 and $16,994
– 4 percent on taxable income between $16,995 and $26,821
– 6 percent on taxable income between $26,822 and $37,233
– 8 percent on taxable income between $37,234 and $47,055
– 9.3 percent on taxable income of $47,056 and above.
Yes, you’re right. Not 10%, how silly of me to think it was that high. It’s only a measly 9.3%. I bet most people don’t even notice it gone.
And taxable income gets pretty close to gross income the higher the gross income gets. At about $175K the highest state income tax marginal bracket becomes the effective state bracket.
“Yes, you’re right. Not 10%, how silly of me to think it was that high. It’s only a measly 9.3%. I bet most people don’t even notice it gone.”
According to a quick calculation, someone earning $50K per year would pay an effective rate of 4.7%.
Someone earning $100K: 7%
So you are saying that taxable income gets somewhat close to gross income for people making over $175,000? Does that include adding back in contributions to 401k? contributions to flexible spending accounts? Pre-tax payment of insurance premiums? All those are part of gross income.
And people making over $175K are what percent of the general population?
My statement stands. Governments don’t tax gross income.
Citi closes gas-linked MasterCards without warning
NEW YORK (AP) — Shannon Burdette tried to pay with her Shell Mastercard after filling up her gas tank this weekend but found the card rejected.
Confused, she called the customer service line on the back of the card, issued by Citibank, and was told the account was closed because of something that appeared on her credit report. But when the Sykesville, Md., resident got a copy of her credit report online, the only negative thing she saw was “closed at credit grantor’s request” on the Shell MasterCard account.
“They said there was a routine review,” said Burdette, who maintained that she and her husband, Brian, used the card regularly and always paid the bill on time.
Burdette isn’t alone. People across the country have been reporting similar experiences in postings on various consumer Web sites.
Citi confirmed the basics. The bank said in a statement it “decided to close a limited number of oil partner co-branded MasterCard accounts.” That includes not only Shell, but Citgo, ExxonMobil and Phillips 66-Conoco cards.
The close date was Wednesday, and letters were sent out Monday to customers informing them of the change, a Citi spokesman said. The bank would not say how many cards were shut down or how much available credit they represented.
But unlike the bank’s move to shut down its Home Depot cards, Citi did not discontinue the sale of these cards altogether. It is still accepting applications, promising rewards like 3 percent cash back on fuel purchases and 1 percent cash back on other spending.
No law, including the Credit CARD Act that has started to take effect, prevents banks from closing down credit accounts without warning. Credit card issuers all maintain the right, typically listed in the fine print on credit card agreements.
Citi would not say why the cards in question were shut down, issuing a statement that said only it continuously evaluates its products.
“It is kind of an extraordinary action, but these are extraordinary times,” said Ben Woolsey, director of marketing and consumer research for CreditCards.com.
He noted that Citi is not the healthiest bank. In fact, Citi posted $8 billion in consumer credit losses for its third quarter last week, including both mortgages and credit cards. Like many banks with big consumer lending portfolios, Citi is expecting defaults on credit cards to rise in coming months. Credit card delinquencies typically track the unemployment rate, which is at 9.8 percent and is expected to top 10 percent soon.
Analysts noted following the earnings report that Citi has sharply reduced its outstanding credit to consumers.
A card being closed may, but does not always, damage a person’s credit score.
Such scores, which lenders use to determine if you’re a good credit risk, take into account a series of factors, including how long you’ve had credit accounts, your payment history and the balance versus available credit.
It could be that last factor that hurts consumers most, said John Ulzheimer, president of educational services for Credit.com. If a consumer had a high credit limit on the closed account, and that credit is no longer available, it could alter the “utilization ratio” for the person’s remaining credit. If another type of credit carries a high balance, the loss of the credit line could push down their score.
Ulzheimer said banks have been routinely making such moves in the past year and a half, mostly on a case-by-case basis. “Every once in a while you’ll get a huge pop in one particular card product,” he said.
Card holders who think their cards were unfairly shut down can try to contact the bank and ask for reinstatement, but Ulzheimer didn’t hold out much hope for success. “In this environment,” he said, “it’s not as successful as it was in the heyday of credit cards, where you could in fact call and plead your case.”
It’s not throwing them in the HAMPer that makes the clothes dirty. But the HAMPer doesn’t make the clean either. These loans were, for the most part bad ideas from the get go. The question is WHO suffers the losses, not how bad the losses will be.
“We’re in a place we haven’t been since the Depression: Our economy is so completely *ucked, the rich are running out of things to steal.”
~ Matt Taibbi Rolling Stone Oct 2009
What makes that quote so disturbing is the distinct possibility that it is true…
The time to start producing anew is well upon us. Too bad the leadership thinks that the recent consumer past is a sustainable model for the future.
start producing anew is well upon us ??
Yep…The new normal…What does it look like.?
Detroit.
Too bad the leadership thinks the thing which most needs producing is more McMansions.
So now a sports writer who tells jokes and is a guest on MSNBC and Bill Maher’s show is an authoritative voice on the economy because he writes for Rolling Stone. Got it.
Hey - he’s nailed it better than 90% of the Clowns that call themselves “Economists”…
He’s good in my book!
As is Maher. Thumbs up.
Shockah! You like Bill Maher? Never in a million years would I have guessed that. I have to give him kudos for at least somewhat starting to realize what a fraud Obama is. You on the other hand, still guzzling the kool-aid.
Take a valium Joyboy.
Give it a rest. We all know that the new boss is the same as the old boss.
Jon Stewart rippedJim Cramer and the entire fraudulent US financial media a new one on his Daily Show - something that was long overdue. It says something about the times we live in when the Comedy Channel, rather than the corporate-owned media, is where people turn to for the truth.
That’s beautiful.
“We’re in a place we haven’t been since the Depression: Our economy is so completely *ucked, the rich are running out of things to steal.”
Nonsense, this is when the rich turn on each other. Those in the top 0.5% will now concentrate on those in the top 0.5-1%. You are seeing a bunch of insider trading cases recently. My guess is these guys have been doing this for years. Now that food needs to go to the big fish.
Plus there’s no reason why stealing from the lower and middle classes need be a one-time thing. The rich can continue stealing from them, by making them work and then taking the proceeds, in the form of taxation and inflation.
Yesterday at the gym overheard to gals talking, the older one late twenties to early thirties. She said that she was a waitress at Red Lobster and was going to LV from Thurs-Sun and needed to convince a male worker who lived at home with mommy to give up his shifts for here so she could have some money to spend. Nothing changed here in Salinas, people spending as fast as they can get it.
Went to Carmel on Sunday morning to walk around. Went by a shop selling men and women’s shirts and tops. Was attacked by the sales clerk who was telling me that the designer was so great that people were buying the shirts as collector items. Gag me with a spoon please; cost $348 per shirt and two stupid tourists had just bought some. You can cover that huge gut with a $348 shirt but it does nothing to slim you down or alter your appearance!
I walk into a store at Fashion Island in Newport, Had the sales guy tell me the something to that effect on a$300 shirt. There was about 10 other guys in the store. I looked at him and said does that come with a blo#job for that price. It was great the silence in that store was deafening.
funny.
Fashion Island in Newport
For “non-locals” AKA:
Fascist Island in “The OC”
Toss in a pair of Oakley sunglasses, pants, shoes, belt, socks, and Jordan briefs…the guy is worth more $$$$ than the sales clerks new KIA!
Well, did it?
Roidy
I’d give her credit for knowing that she needed to earn a bit more money to have it to spend. It is better than taking a cash advance on your credit card….
Do men’s designer shirts come in “cover the gut” sizes? I though men’s designer stuff was all European cut and very narrow in the waist….
salinasron
“…Gag me with a spoon please; cost $348 per shirt and two stupid tourists had just bought some. You can cover that huge gut with a $348 shirt but it does nothing to slim you down or alter your appearance.”
I suspect that’s what exactly the long departed John Steinbeck, Doc, the little sardines and all the boys down on Cannery Row would have said !
One of my favorite books, Cannery Row.
Yeah…I loved the food and the fog coming in on the old Monterey Wharf.
A great book.
I recently got ‘Sweet Thursday’, which is a sequel to ‘Cannery Row’ and which I didn’t even know existed!
Have either of you read that?
I encountered it at the used bookstore downtown, out in the bargain book rack at 5/$1.00, and became excited. I cooked dinner that night whilst holding the book in my left hand and vaguely patting the spatula in the direction of the stove.
The reason I remember the circumstances so well is that I suddenly had to grab a can of Morton’s iodized salt and douse the stove and pan with it in order to quench the sudden fire. I was mad, because I had to stop reading for a few minutes until the flames subsided.
Kids—don’t read books and make quesadillas at the same time. No!
…I said NO.
“The reason I remember the circumstances so well is that I suddenly had to grab a can of Morton’s iodized salt and douse the stove and pan with it in order to quench the sudden fire’
Makes checkmark with notation in the mikey “black book”;
Girl can be trusted with fire….NOPE! …(-7 points).
Reminds me of the Calvin & Hobbes classic. Sign on their lemonade stand says “Lemonade $1000″, while Calvin comments “I need to sell only one glass”
The best comic strip of all time. I sure miss it at times.
One thing that is obvious with tourists is that labels still have a strong appeal. I think it’s time for a counter culture movement. For example, if you own a Chev go to a BMW or Benz dealer, pick up a few name plates and exchange them on your car’s exterior. That should frost a few elitists. Put fancy labels on that purse you carry women. My wife has friends who brag about spending $300 for a pair of sandals, who won’t buy Gucci purses because too many women have them so they buy a more expense brand. Please keep the recession going until there is a complete (AA) attitude adjustment.
a $1000 purse is a waste of money when a $100 purse will accomplish the same function. Comparing a BMW and a Chevy is silly.
Is this irony? Poking fun? Chat rooms can be a terrible medium for sarcasm.
“Chat rooms”?!?
My apologies to everyone.
“Chat rooms?”
This is the NORAD of the internet.
We’re the Pro’s from Denver.
We aren’t just tracking Santa and hustling chicks HERE fella !!
I think Eddie’s point is that a $1000 and $100 purse are likely functionally equivilent. A BMW and a Chevy are likely different in a number of ways beyond simply outward appearance.
(Yes, you could argue that both functionally get you from point A to point B)
Drumminj,
Ah but as a single man you should know that who sits next to you will be very different depending on whether it is a Chevy or a BMW you are driving from point A to point B.
Just saying.
3 series BMWs are a joke. I see some wannabe in one and think, “Strugglin’!” Just get a Corolla and stop pretending.
“Just get a Corolla and stop pretending.”
I’ve had the same type of thoughts about the Accent ‘Sport’ or the Cavalier ‘Sport’. Adding a plastic spoiler doesn’t make it a sports car, in fact, the added drag will limit your already limited top speed. I know my Corolla is a boring but practical sedan, and I won’t try to fool myself and others.
who sits next to you will be very different depending on whether it is a Chevy or a BMW
That’s right. With the Beemer you will attract plenty of gold-diggers.
Drumminj,
Yes that’s exactly what I meant.
Although I should have qualified that with “any BMW that is not a 1 or 3 series”. 1 and 3 are BMWs for people who want a BMW but can’t afford a BMW but are willing to pay $35K for a BMW nameplate nonetheless.
However there is no finer driving experience in a sedan than a BMW 5 or 7. If all you care about is getting from point A to B, buy a $8K Hyundai and be done with it. If you enjoy driving, get a BMW.
If you enjoy driving, join NASCAR. Wasting the money a 5 or 7 series BMW costs is stupid just for a driving experience. Unless, of course, you have money to burn. I’m beginning to think Eddie is a filthy rich troll.
If you enjoy driving, join NASCAR. Wasting the money a 5 or 7 series BMW costs is stupid just for a driving experience.
Unless you want to turn right, of course
I really loaded up on a friends late model BMW 530i late one night heading for northern MN border.
I love my little old Buick Reagal but that thing was a “Magic Carpet Ride” into the night.
3 series BMWs are a joke
Not any more. The new 335 is a very good car, and the M3 has been for a while now.
A few years ago I saw a chevy Astro “Sport” minivan. I guess it was a consolation to the dad that had been emasculated. It had pretty wheels though.
Oh, Ben, have you seen the Pinto Sport Wagon running around town? It’s got those cool moon windows in the back.
335…marginally a good car, but still in essence a 328 with some extras. The M3 is in a league all its own and can’t really be compared to the 3-series.
Buying a nice car is a waste of money if your only goal out of the car is A to B service. If however you want a little more out of life than than a simple utilitarian existence spent in a Hyundai econobox, you go out and “waste” the money.
Mostly I see people with some money and poor driving skills in the BMW.
You have to anticipate their over estimation of the acceleration and then give them extra room cause they assume they’ve passed you.
That and enjoying them tailgating you or sitting in the blind spot of my truck.
If you are driving a BMW of any stripe, you are not rich.
If you enjoy driving, get a motorcycle. That is the thrill ride.
Most of those stupid bemmers can’t pull over 0.6gs in a turn or hit under 13 seconds in the 1/4 mile.
Eddie. Shallow bytch. Impressed by a bmw. Go date a realtard.
If you enjoy driving, get a motorcycle. That is the thrill ride.
My buds who own BMWs do have motorcycles - beemers.
(they don’t really count - they have a shop that services BMWs and one of the brothers used to build his own to race them, before he settled down to the married life)
BMWs don’t get me too nervous when I see one coming up on my rear view. It’s the Mitsubishi Eclipses that get me to saying Hail Marys.
335…marginally a good car, but still in essence a 328 with some extras
Whatever. I’m a turbo guy. The 335 has the potential to be insanely fast…look what has been done with 90s Supras and the same potential is there. That’s what I judge cars by. I daily drive a winter beater that runs 12s at a mile high. I’d love to modify a 335, much more potential than an M3.
My next car might be a M3 . Friend says skip the M5, get a 540. Skip the m3 get a 3 series and hop it up. It’ll depend on what the job and home situation is then.
@Carl
The 5 and 7 series are too heavy and you’d really have to do a lot of work to make them something special.
Three series you can play around with and make a lot sportier. I pondered the M3 for a while as a purchase but girlfriend and dog wanted a back seat.
Anyhow, it’s a lot easier to modify a lot of the rice eaters. Plenty of aftermarket stuff floating around.
Lots of different styles in the cars. The smaller sportier versions vs the big sedans. I liked the 928S but my friends and other big time Porsche guys hated it. Felt too heavy for them. Part psychology there too. Put in a gravity bar and changed the tires and suspension (springs) and it would out handle his 911 or 944.
Again, most of the stock vehicles just are not that fast. And the people driving them often shouldn’t be.
I was in a Honda dealership and overheard this “I want to trade in my Porsche. The engine is too loud and the ride is rough”. And I thought… “So, your big into sports cars?”
Ah but as a single man you should know that who sits next to you will be very different depending on whether it is a Chevy or a BMW you are driving from point A to point B.
Yep, I’m well aware. That’s why I drive a beat up old 4WD 4runner. Keeps the gold diggers away, and attracts the women that find it “sexy” having a vehicle that can go fun and interesting places. Oh, and if you fold the back seats down, there’s plenty of room for….
…the dogs
“Mostly I see people with some money and poor driving skills in the BMW.”
LOL, EXACTLY!
Two years ago I was involved in the weekend warrior “amature motorsports” thing and used to spend a lot of time at Virginia International Raceway. It’s an excellent track, often compared to Laguna Seca or Watkins Glen (though I have never been to those legendary venues)
Anyway, at the track I drive a heavily modified 92 Honda Civic. You may laugh but for a front wheel drive ‘economy’ platform it’s an amazing car. On to the point of my story though.
One particular weekend I was at VIR with an entire herd of other Honda heads but we were sharing the weekend with a local BMW club. There was one notably obnoxious asshat who had a brand spanking new M3. He was there with his father, both doctors, both were driving the beemer.
Long story short, most of the civic drivers were running rings around this pair and before the weekend was out both daddy and his spoiled progeny had wreaked that poor BMW. Junior spun out at the bottom of a fun but deceptive series of turns we like to call “the rollersoaster” and went ass first into the inside guardrail. Daddy later stuffed the front end into a guardrail, taking the car out for good. The thing had to be trailered away.
LOL, I get a smile on my face just thinking about it.
“or hit under 13 seconds in the 1/4 mile.”
Funny you should mention that, this is one of the primary requirements of my 40th birthday present to myself.
I’m well aware. That’s why I drive a beat up old 4WD 4runner
way to separate the wheat from the chaff, drummin!
Designer clothes and high-end cars are really different items. Designer clothes serve no purpose beyond “normal” clothes than to tell other people that you can afford to spend 400 bucks on a shirt, or 4000 bucks on a Gucci purse. That’s why we get knock-offs of designer items at 1/100th the “real” price. It’s not a quality/functionality issue, it’s strictly to make other people realize that you can spend 4K on a purse and still continue to live.
Cars are different; a more expensive car does things that a less expensive car does not. A more apt comparison (between a Chevy and BMW) is really between something like a Lambo and a Z06 Corvette. The Z06 is likely faster/handles better/more comfortable to drive, etc. However, the Lambo says something about the owner that a Vette does not; much like a designer label, people recognize the fact that a Lambo is a “status symbol” and “the best”. The fact that a Z06 can out turn, out accelerate, out brake, and costs 1/3rd the price (to buy) and 1/10th the price to maintain (and is far more reliable) is not important. That’s the “car” comparison between a 1000 dollar purse and a 100 dollar purse (imho).
If there are no “knock-offs” of an item (for example a Vette knockoff that looks just like a Z06, is just as fast as a Z06, but costs 10K instead of 100K) that means that the item has an intrinsic value beyond just showing people that you can spend the money. Things like purses/watches/clothes/etc that are endlessly knocked off; they aren’t engineered better or a better product. They are selling status/price, it’s all about other people knowing that you spent 5K on a handbag, rather than what that handbag actually does. (And yes, for the record, this is very, very stupid).
“Cars are different; a more expensive car does things that a less expensive car does not.”
When measured for utility, a car with a grossly inflated price and undeserved reputation of quality does no more than a modestly priced car. In other words, you have to be a complete moron to pay 3x for Eurotrash when you get nothing in return for the price overage.
If what you were saying were fact, every single fleet and motor pool would be full of Vulvas and glorified volkswagens(bmw, audi and the rest of that tripe).
If you’re measuring it on a “can this get me from A to B” then, you’re right, car’s have no utility beyond their ability to transport. However, there’s much more to the equation then that. The simplest comparisons can be made on concrete terms; can this car go 0-60 in 4 seconds? Can it pull 1.0G? There are differences between an M3 and a Ford Escort, to claim otherwise is just not a well reasoned comparison.
Now, does a car NEED to do the things that a more expensive vehicle does? Absolutely not, no question about it. However, a more expensive car DOES do things that a less expensive car cannot. Is it worth the price differential? That’s a question that everyone must answer for themselves.
Does a 5K purse “do” anything that a 50 dollar purse doesn’t? The answer is clear, no; it holds things just as well (or better). The only difference is the perceived status that a 5K purse gives its owner, the “exclusivity” of being able to pay that much for something that offers nothing beyond what a 50 dollar item will do. The same can be said for jewelry/watches/etc. Does a Rolex do something that a Timex doesn’t? Nope. It probably doesn’t keep time as well either! But it costs 100-1000X what a Timex does, not because of what it can do, but because of what it “says” about the owner.
An M3 can do things that an Escort cannot. Does that justify a 4X increase in price? Probably not. But they are not the same thing, and do not provide the same utility.
“An M3 can do things that an Escort cannot.”
Yeah, status only. What does it say about the buyer that he pays 3x for transportation?
It says he’s an idiot. There’s your status.
Unfortunately for these guys, no car will make their penis larger.
Riding on the bus will also get you from point A to point B.
Go GREEN
Go buy a bus. A shortbus would be familiar?
I looked into short busses and armored trucks. I had the funny idea of taking an armored truck and turning it into a suv. Good thing I didn’t buy one (they are really hard to get).
I had a step van that I cut the side out and put a big projection screen in. It had 5 computers on board, RGB LED lighting under it, touchscreens. It was funny.
I had the funny idea of taking an armored truck and turning it into a suv. Good thing I didn’t buy one (they are really hard to get).
I had a step van that I cut the side out and put a big projection screen in. It had 5 computers on board, RGB LED lighting under it, touchscreens. It was funny.
Well.
VaBeyatch? I’ve said this already, but I’m gonna say it one more time: I really, really look forward to the CNN special edition of your life.
Oh, and another thing, don’t blow up Washington state, at least the western part of it. The east part would be okay.
Blow up…oh, I don’t know…how about North Dakota? We don’t have any HBBers there, right?
““An M3 can do things that an Escort cannot.”
Yeah, status only. What does it say about the buyer that he pays 3x for transportation? ”
I think you really need to go drive an M3, a Vette, a C63, or any other “fast” sports car out there if you really think that the only thing that they do better than a Escort is “status”.
I realize nobody will be reading this, but I do find it funny how this conversation went; it’s amazing that some people on here really believe that there isn’t a difference between a 60K car and a 20K car. Trust me, there’s a difference, and, if you can’t see/feel/hear it after 10 seconds in those 2 cars, you need to get your head examined.
Mike Fink-
A couple stores on South Street just got busted for selling knockoffs. Since that was the bulk of their inventory, I doubt they’ll regroup and start fresh with a new product.
The designers hired private investigators to shop these boutiques - and the rest is history.
Interesting how these comments are all from guys.
Beautifully-made rolling stock and beautifully-made apparel are of the same ilk. Clean functionality, fine design, meticulous construction, the aesthetic pleasure of having something that gives you pleasure every time you use it; this is what commands a premium over the mass-produced “luxury” brands.
Hermes, Maserati, Seki, Dansk. Perhaps not so flashy, but then that’s the whole point. To the aficionado, the intrinsic value is personal— It has nothing to do with how much it costs or how others perceive it. In fact, half the fun is that folks obsessed with “status” brands haven’t a clue.
The aficionado is probably about 1% of all luxury items sold. The other 99% are status symbols purchased only because other people know what they are, and know what they cost, thereby giving the owner financial status over others.
Finely made apparel, IMHO, doesn’t come from a store in the mall, it comes from a tailor who takes measurements, asks what fabric you want, and then puts together an outfit for you. And, it doesn’t cost 10K for a suit (it’s not cheap, but it’s not LV priced either, a good “made to measure” suit is 2-3K; a Gucci suit (that’s not made to measure) gets to 10K+).
I buy my purses at Marshall’s for $16.
It’s not silly to compare a chevy to a BMW. They are both cars, after all. Anybody who would shell out money to buy a BMW, not to mention the cost of servicing it, is either foolish or has plenty of disposable income. I think a low-priced house is a much better investment - provides some tax benefits.
Anybody who would shell out money to buy a BMW, not to mention the cost of servicing it, is either foolish or has plenty of disposable income.
It comes down to personal tastes, in my opinion. I have owned Fords and the wife owned a Hyundai when we were young. Both brands sucked. I vowed I would never buy a cheap car again. I am of the opinion that you get what you pay for. I cannot put into words how it felt when I first drove my first Mercedes. The ride, the sturdyness..I will never forget it. My Tundra is about the best truck I have ever owned. I drive alot being in the military. I like to actually enjoy my drive. Sitting in a plastic econobox just wont do it for me. I think it’s a matter of personal opinion. I dont think buying what you want is foolish. I would rather continue to have the choice. My loves the M-Class I bought after my last deployment. After this one I plan on looking at the E-class. They are just plain beautiful vehicles. I see it as a part of living life. Being in my line of work, you never want to say “what if I had bought this”.
BTW, what good is saving all this money if you die and someone else spends it for you anyway?
I am not against saving (which I do save), but I am against being so frugal that you cant enjoy the benefits of living in this nation….
“You get what you pay for”
Yes, as long as your not talking about designer items. That’s my point in the thread; it’s not that MB/BMW/etc isn’t overpriced (it probably is), it’s that there IS a difference between an E class and a Ford Taurus. Is that difference worth the 2-3X premium? I don’t know, its different for every person/situation; for some, it certainly is worth it. And yes, some people buy them ONLY for the status they impute upon the owner, but, regardless of the reason for purchase, the end result is that the guy owning a BMW has a different (and better, in most cases) then the guy with a Taurus.
The guy owning a LV shirt.. Is that shirt actually better than the one sold at Banana R for 1/10th the price? Does that shirt actually do anything, or perform better than the BR shirt? If it does exactly the same thing exactly as well, but costs 10X the amount, your buying a designer item that costs that much ONLY to show other people that you can afford it. A MB/BMW/Audi/etc does not fall into that category, it’s a luxury purchase; but it does do things better than the “knock off” versions. And costs a horrific amount more for those improvements!
“The guy owning a LV shirt.. Is that shirt actually better than the one sold at Banana R for 1/10th the price?”
The funny thing is, the LV shirt will probably last longer, but the buyer won’t know because they’ll refuse to wear it more than a few months.
I’ve had both Fords (3, actually) and a Hyundai. They were all perfectly good cars. The only way I might ever justify a luxury car is if I were in a job where I was on the road all the time. Otherwise, just elitist to me.
+1
I am on my 3rd BMW since the age of 16 (an old 2002 I restored). There is simply no comparison between Detroit junk and “Eurotrash” driving machines.
Life is too short to drive a crap car. And yes, I have the disposable income as well as a huge savings.
A flashy car is the emperors new clothes. People feel better about themselves and think they are driving quality and are more comfortable even if consumer reports suggests otherwise. The corvette comparison above is a perfect example.
A friend of mine tells a story, he is now in his mid 80’s.
He was cautious and frugal, saving for his retirement. He had a good job and made good money. When he was about 50, two of his co-workers, of similar age, died of heart attacks, both within a week.
The next week he bought his first Mercedes.
The next week he bought his first Mercedes.
and the following day he was still facing his mortality and his decaying body. Mercedes didn’t fix that. All it did was make him think he was a little better a little more comfortable ect. If you blindfolded the old guy before he bought the car and put him in lower priced luxury car with similar leather seats he probably couldn’t tell the diference.
I just bought a used car that I absolutely love. I paid only $11,500 for it. I smile when I drive it. And with the leftover money I paid for my niece’s room and board, so she won’t have to be a debt slave. There’s really no such thing as “disposable” income, when it comes down to it you can do something better with the money than buy an expensive car, or house for that matter.
That said, men just seem to have some strange attraction to cars that seems to overcome their common sense.
Stepn2me, you are our pride and joy. If you want a Mercedes, go for it. Just reassure me that you have enough savings and insurance so your children will be taken care of if anything happens to you.
A friend of mine tells a story, he is now in his mid 80’s.
He was cautious and frugal, saving for his retirement. He had a good job and made good money. When he was about 50, two of his co-workers, of similar age, died of heart attacks, both within a week.
The next week he bought his first Mercedes.
Now, I appreciate a bold gesture when confronted with uncomfortable reminders of a finite life-span. But his response was to buy a Mercedes?
*shakes head in wonderment *
He shoulda spent that money on strippers and interesting books, as he would have got WAYYYY more value.
He shoulda spent that money on strippers and interesting books, as he would have got WAYYYY more value.
And then he wouldn’t be 80 years old now, with the best story he has to tell you, Cassandra, being the one about ‘the time he bought a Mercedes on impulse back when he was 50′.
Although maybe he’s just not mentioning the strippers and books, lest that offend your delicate shell-like pink ears. That could be.
Personally, I’d shoot myself if buying a Mercedes was my best story of wild and impulsive living.
“Personally, I’d shoot myself if buying a Mercedes was my best story of wild and impulsive living.”
Totally with you on that, Oly! Spend on some interesting experiences, not a freakin ‘thing’.
Surely. And tell us more, primey…..
chevy i’d agree but i’d put my honda up against that BMW anyday for half the price and 1/5th the maintenance cost.
And you’d win, if the criteria was maintenance cost, no doubt about it. But if the criteria was 0-60 time, or size, or safety, or turning speed? You’d win some, the BMW would win others. They aren’t the same thing, they have differentiation beyond the badge on the hood.
I’m not trying to argue that high end cars aren’t overpriced, I think that they are. What I’m trying to say is that high end cars are not the same as a Honda Civic. You can’t put a Lambo badge on a Honda and sell it for 250K. You can put a LV badge on a purse and sell it for 100X what it was “worth” before it had that badge.
“I’m not trying to argue that high end cars aren’t overpriced, I think that they are. What I’m trying to say is that high end cars are not the same as a Honda Civic.”
No one is arguing quality here. But what is apparent is label chasing and has nothing to do with quality. In some cases a BMW could be better, or a Vette. However, if one lives in an area without a garage, has to shop where the car can get dinged, has to obey speed limits, etc then in most cases the high end car is not worth the price unless you have money to burn. My Nissan pickup bought used with 50K miles was still going at 300K when my son sold it for 2K. Only replace a clutch, plus usual maintenance.
“But what is apparent is label chasing and has nothing to do with quality.”
Exactly. I agree that quality is best determined by performance metrics (maintenance cost/mile, fuel efficiency). Also, the basis of the criteria in this case is getting from point A to point B safely. In the case of safety, all manufacturers are required to provide seat belts, airbags, etc so the safety point is moot.
I just read that VW is considering discontinuing the Passat model and replacing it with a new 4 door model that will sell for approx. $20,000 as opposed to $28,000 for the passat. Reason being, they can manufacture it much cheaper in a S. Carolina plant. I may be cynical, but think it also has something to do with steering column and A/C problems on the Passat.
but i’d put my honda up against that BMW anyday for half the price and 1/5th the maintenance cost.
Yea, for everyday driving in the U.S. Take that same BMW and Honda to the autobahn and watch that Honda blow up. Dont you know that BMW is made to run 120mph for four hours?
When I was stationed in belgium, a friend of mine took me on a trip to Amsterdam, (dont ask, that’s story is for the adult version of this blog), he had a chevy corvette. So up HWY 1 we went, full throttle at about 115 MPH. About 30 mins into the trip, we saw headlights behind us getting closer, so my friend stomped on the vette. That american muscle opened up and sounded good, but the lights kept coming closer. The vette pegged out at what I last remember was 145 MPH. A VW rabbit passed us like we were sitting still! I do not lie. Once we hit a hill, the torque on the vette took over and we passed the little car, but once on a straight away, it went right by us again. Ever since then, I have much respect for german cars…
“I have much respect for german cars…”
More misplaced loyalty.
When you mention one that is built in Germany then we’ll see. Why is it that everyone in Europe view german brands like we do Chevrolet?
MY old VW Rabbit/Golf was a dog and could never outrun a Corvette. The one that passed you on the autobahn was probably a special edition model with the W-8 engine.
My step fathers friend made Ford Pinto’s that could blow most high end cars out of the water.
I guess I should go buy a Ford Pinto.
When I was a kid my family had a rabbit that lost an engine mount bolt on the road at about 45 miles per hour. We all heard a metallic thunk. Dad was sufficiently worried to stop the car and walk back along the road until he found the metal. He was pretty sure he hadn’t just run over something in the road. Next day, a mechanic said it was one of only two bolts holding in the engine.
Plus it was baby poop orange.
“The vette pegged out at what I last remember was 145 MPH.”
Then you were either pulling a drag chute or 3 cylinders were misfiring. Give me a break!
There is a twin turbo Golf R32 out there that can blow the doors off just about anything. 700+ hp at the wheels if I remember correctly.
You can make just about anything fast if you throw a lot of money at it
Just yesterday I was reading about a 69 VW bus that someone had restored to pristine condition and installed a 320hp Subaru WRX engine in it
You can build anything if you have the desire and imagination.
“a $1000 purse is a waste of money when a $100 purse will accomplish the same function. Comparing a BMW and a Chevy is silly.”
You completely missed the point EDDie!!
No I didn’t. The comparison between purses and cars is apples and oranges.
$100 purse still ridiculous in my book. It’s a bag to carry your crap in.
And, frankly, I think expensive cars are just as silly. A Chevy would work just fine to be me from point A to point B. I’m just not impressed with BMWs or Mercedes, etc. Actually, I’m not impressed with anything costly. Not sure what the appeal is.
Remember when something was elitist because it had added utility or superior quality workmanship?
I miss those days. You paid a little more and it was like the item took care of you because it was always there when you needed it. Pre planned obsolescence days, of course.
Expensive name plate cars are the emperors new clothes. People feel better and think they are more cofortable adn driving quality and performance despite Consumer reports.
My step father had a friend who modified ford pinto’s that would blow the doors off most of the image is everything crowds fancy cars. It was fun to watch their disappointment.
Now the only performance metric I care about is mpg, (or now battery capacity), price and quality.
Yeah that’s the problem with whole car market these days. Who cares if you can go 180 mph if you’re stuck in a traffic jam whereever you go?
“Who cares if you can go 180 mph if you’re stuck in a traffic jam whereever you go?”
Now from what I’ve seen of car adds, that’s not really a problem. Doesn’t your commute take you through scenic mountains on a winding road without any other cars in sight?
“…Who cares if you can go 180 mph…”
Oil pan, meet jack rabbit… jack rabbit, meet oil pan
“Please keep the recession going until there is a complete (AA) attitude adjustment.”
Age: 17-22
Place: Baja Mexico
Vehicle: 55 Studebaker pickup truck… inline 6
Worries: manageable…money $ for: beer & gas & surf wax
Future plans: More Education, job, wife, kids, home-ownership…distant memories of age 17-22…
That’s my feeling: If this Great Recession ends too soon, the simps will not adjust their attitude, and it is there greedy, “more, More, MORE!!! - NOW!!!” attitude (combined with a healthy dose of stupidity) that is destroying this nation.
A Great Recession can be like being grounded for a few weeks: it’s no fun, but maybe, if we’re lucky, somebody will learn from it.
Sadly, even if the CONsumer adjusts his or her attitude, nothing is being done to adjust the attitudes of the crooks up top. That will take a more “delicate” form of adjustment… such as no-hold barred cage matches between F’d buyers and bankers!
One thing that is obvious .. is that labels still have a strong appeal… Put fancy labels on that purse you carry women. My wife has friends who brag about spending $300 for a pair of sandals, who won’t buy Gucci purses because too many women have them so they buy a more expense brand.
HAhahahah! Funny.
Labels, brands, and what is considered ‘cool’ and statusy are interesting to me. Firstly, I’m not very good with brand identification. I just cannot seem to retain them inside my head, possibly because my head is busy thinking about more important things such as putting gravel in the mailbox, or perhaps the price of barley in Nepal in July 1972.
I am the world’s strongest believer in: ‘It’s not what you wear, it’s how you wear it. I’m talking about clothes and bags and sunglasses and suchlike stuff, not objects like pens or cars or knives, that really do sometimes give the value for the extra money and because of who made it.
But fashion labels??
Those poor, earnest people who must be told how to seem cool. Buy this! Buy that!…look, if you have to be told how to look cool, then you’re not cool.
It’s just sad, really.
Although there was one time I bought some jeans just for the label. This was in Mexico. I got them at a grubby little stall in the central mercado of Petatlan. The large label read: ‘Tony Hilfiger’.
Oh, I just had to have them! So I overpaid grossly—30 pesos or something, about 3 bucks—and I wore them back in ‘Merika, and whenever anyone would read my bum with a puzzled expression ‘Tony…Hilfiger…?’ I would reply with lofty disdain, ‘Oh, yes, the MUCH more exclusive and elegant brother of Tommy…’
Those poor, earnest people who must be told how to seem cool. Buy this! Buy that!…look, if you have to be told how to look cool, then you’re not cool.
ditto, oly
“—and I wore them back in ‘Merika, and whenever anyone would read my bum with a puzzled expression..”
If I comment on this…I’m Dead !
And you haven’t even seen my precious Mexican knock-off t-shirt! (cost 70 cents, USD) It’s supposed to be a team logo of some sort, I suspect.
Pastel blue with a big grouchy cat head on the front and giant letters saying ‘Panthers’.
Alas, they forgot the ‘h’…
Hey, has anyone heard of the mighty ‘Panters’?
They win every single game they play!
In a little while, if I abandon my shame, I’m going to tell you about a dreadfully naughty but also hilarious thing I did once to a group of unsuspecting and innocent Mexican teenagers.
“In a little while, if I abandon my shame, I’m going to tell you about a dreadfully naughty but also hilarious thing I did once to a group of unsuspecting and innocent Mexican teenagers”
Oly, put the beer down, open one eye and SLOWLY look around.
We AREN’T exactly in a room …by ourselves !
ha ha ha
“In a little while, if I abandon my shame, I’m going to tell you about a dreadfully naughty but also hilarious thing I did once to a group of unsuspecting and innocent Mexican teenagers.”
Oh my. I bet Ben’s traffic just jumped appreciably, as everyone hits F5-refresh…
Oly, put the beer down, open one eye and SLOWLY look around.
We AREN’T exactly in a room …by ourselves !
What?! By ‘naughty’ I don’t mean the .99 cents per minute conversation YOU are thinking of.
MYYYY thoughts were pure.
Sigh. I suppose I must tell you, although now I feel ashamed thinking about it.
Okay, here it is, the short version:
One time in Mexico I convinced a simple teenaged boy that the fanny-pack I was wearing* was not a fanny-pack that my mom had given me and that she got at the ophthalmologists office for free. Heavens, no. I claimed that the fanny-pack IIIII was wearing was the official fanny-pack of a really super cool American soccer team that was named the ‘Eyecon-Lasiks’, or something like that, because the eyeball motif looked like a basketball. Can you see how this happened? I hope so.
To make a long story short, I graciously gave the happy teen my fanny-pack, and then, once I sobered up, I was nervous for at least 2 days as I wondered if a grumpy teenager wearing an eye-clinic fanny-pack was going to gun me down in the bakery because all his friends had laughed at him.
The moral of this story:
1. Don’t take your mom’s stupid fanny-pack on a trip with you! Nothing but trouble.
2. I don’t know. I wasn’t paying attention.
3. Play pranks in the next town over, that way you won’t have to be so anxious about getting shot.
*That’s a long story all by itself.
“What?! By ‘naughty’ I don’t mean the .99 cents per minute conversation YOU are thinking of.
MYYYY thoughts were pure.”
Test..Test.. Wow, the last thing I saw saw an Oly slap down, an email from Ben and then the Blue Screen of Death !.
j/k
Sometimes, it’s just hard to resist teasing you Olygal and I go too far, I am sorry.
Hello everyone….
Today, I am sad…
http://www.bostonherald.com/business/general/view/20091016dell_moving_work_at_closing_nc_plant_to_mexico/
Sad for my community of Winston-Salem N.C. Today I just found out the Dell computer maker plant is closing in Forsyth County. You see, W-S was where I grew up. I went to MT. Tabor H.S. I lived in Winston during my formative years. It’s a tobacco town. R.J. Reynolds has long gone. It used to be a town where a HS diploma meant you could get a good wage job. My Step dad used to work for Whitaker Park of RJR. He was a high school grad, yet he made upwards of $60k a year back in the late ’80s as a machine operator. My whole family worked for RJR. For some reason, I went to WSSU after school in 87. That’s when the economy tanked and I came into the military. I can almost say it’s what saved my life. In the time since we (me and DW) left, we have watched the triad area fall into an abyss of no creativity. It appears to be an area waiting on the manufacturing good ole days to come back. It’s like the people are waiting for the next big manufacturing company to come along and give them a living. What’s sad to me is, it looks like no one is preparing for the future, for a life away from manufacturing. While we have Wake Forest, A&T and WSSU, all the college grads seem to leave. Granted the two year tech schools are doing well. I personally feel unless you are going to be a plumber or carpenter, a two year degree is useless in this job market.
Winston is where I plan on retiring to.
I heard about that - sorry to hear about that. I’m from that area - Hickory. It’s sad to see central NC really going to seed as it is now.
Step:
It seems like a HS diploma meant something back then. You actually had to work to get one. Not just be socially promoted
——————-
My Step dad used to work for Whitaker Park of RJR. He was a high school grad, yet he made upwards of $60k a year back in the late ’80s as a machine operator.
That’s crazy only Bankers should make money, labor needs to stop crying and eat cake.
We lost the Gateway plant here in Hampton, VA some time ago. And a call center too. Stinks. But probably needed to build $200 laptops, while Apple sells the snot out of the same components wrapped in Aluminum for much more profit.
I guess everyone went out and bought iphones, and mac-books, and ipods with the money they saved by not paying the mortgage. We are experiencing a reality-less recovery, iguess:
http://finance.yahoo.com/tech-ticker/article/357223/Apples-Insanely-Great-Quarter%3A-3.05-Million-Macs%2C-7.4-Million-iPhones-Sold
if i had to choose between my iphone and the miracle of human aviation…i would pick my iphone.
i just love that thing…that’s why apple is doing well…not because the recession is over.
i actually call it my tricorder.
Nerd alert.
My phone contract will be up when I get home, so I am going to look at the IPhone…I have the IPOD touch, and I love that thing, having a phone attached to the touch would just put icing on the cake. I hate though, Apple is so proprietarity(sp?). It’s hard to get apps and put things on the phone you really want that Itunes doesnt have..
i will say one thing though…i love my iphone…but if my wife did not get a partial reimbursement from her employer for her family plan i would probably get rid of it and maybe just get the touch to work with my wifi at home. the unlimited usage plan is just too expensive IMHO.
with her reimbursement my iphone added $ 25 to our monthly bill. without it we would be over $ 100.
No, no, no packman it’s not nerd alert, it’s RED ALERT. You really need to get your Star Trek terms correct
Take a look at the android phones. Lot more flexible. Plus a minikeyboard.
i actually call it my tricorder.
And I bet you kiss and fondle it and murmur endearments to it when your wife isn’t looking. Admit it!
I’ve witnessed you iPod perverts in action before…
OT but I am looking for a really good recipe app if anyone knows one. i would like one that has a recipe database as well as a feature that allows you to store your on.
I don’t have an iphone, but when my current phone wears out I’ll buy one. They’re a lot cheaper than a flat screen TV and a whole lot more useful.
I want one, but don’t want AT&T’s service. I’m on (and like) Verizon Wireless. I’m holding out…
I must be the only person NOT important enough to have a cell or iphone attached to my bellybutton. Actually, I was given two cell phones and I believe they rot DEAD in one of my desk graveyards, were they belong.
You WANT to bother me, leave a recorded message on the land line Dial-A-Prayer machine or send me a letter.
“I must be the only person NOT important enough to have a cell or iphone attached to my bellybutton.”
I’m also surviving quite nicely without a wireless leash either work or personal. I don’t feel as though I’m suffering from it.
I don’t remember the days before cellphones fondly. I remember stopping at gas stations in bad neighborhoods at night to answer my pager. My first son didn’t have a cellphone, and there were lots of calls to other parents to figure out where he was after curfew.
I went without my phone on a recent trip to London. It was kind of nice, but I missed not being in touch with family and work. My sister was with me - she had her iphone - was texting her kids, talking to her husband, taking photos, reading the NYT, finding map directions for us. Iphone even has an app for navigating the Underground. It’s an amazing tool, and only cost her $99, plus $25 per month.
You WANT to bother me, leave a recorded message on the land line Dial-A-Prayer machine or send me a letter.
I’ll just bother you from here. That’s working out fine so far.
Hi Oly.
You don’t bother me at all, you know that you can call any old time and it’s straight through.
Although, I must admit that I was a little worried that you might have od’d on tater-tots yesterday.
Did you get your FIX and a beer at the greatest dive bar in Washington ?
I must admit that I was a little worried that you might have od’d on tater-tots yesterday.
Why, thanks.
But worry no more—my tater-tot tolerance level is simply amazing.
Alas, no. The Almost Greatest Dive Bar in Washington or Maybe the Whole Universe does not serve tater-tots. If it did, it would instantly become the Greatest Dive Bar in Washington or Maybe the Whole Universe.
Hmmm…Wait! Or maybe it would not!
Gosh, I have to think about this important subject now, because this is a real poser, philosophically speaking.
*crunch *
Hmmm… Now you’ve gotten me to wondering whether any of my favorite dive-bars server tater-tots; and it saddens me that I don’t know. 8-/
Hmmm… Now you’ve gotten me to wondering whether any of my favorite dive-bars server tater-tots; and it saddens me that I don’t know. 8-/
And rightly so! I’d be saddened as well.
…I’ve got a map of tater-totterness availability. I pasted it to the inside roof of my car so I’ll never lose it. I was also thinking of getting a map of tater-totterness tattooed on my thigh, but I thought that might be getting carried away.
“I was also thinking of getting a map of tater-totterness tattooed on my thigh, but I thought that might be getting carried away.”
Great idea, but too hard to keep it current…
Great idea, but too hard to keep it current…
Gosh! You’re right!
Thanks.
*hurriedly cancels appointment *
I was thinkin’ about building a ‘green’ house constructed completely out of iphones using them like bricks. Yes, I am that hip.
What’s an I phone?
LOL…
Were you poking fun at my house-building comment from the other day? Either way, too funny…
I have an iMac, iPhone & iPod. You’ll have to pry them from my cold, dead hands. They are that much better.
I have a relative ditching her IMac. The proprietary stuff is driving her nuts. In fact, it might end up being mine. It is a sweet machine.
The heart of the iMac is BSD Unix which is open and available to everyone. Tons of open source software has been ported. You can run Windows and associated apps in a virtual session.
If you know what you’re doing, it is probably the most non-proprietary system out there, if you know what you’re doing.
Kernel is based on MACH / NeXT / OpenStep, it has the userland utilities from BSD Unix (which has a license where you don’t have to give back to the community).
Computers are cheap, no reason not to have one of every platform.
a:/dir/file:peek:poke:byzatine-lost
Admit it, you miss DOS.
Oh God, the first IBM PC I worked on was using DOS, not MS-DOS, just DOS.
I got my first bite of the Apple when I was working for an architect firm. The firm was designing offices for Apple in Cupertino. Apple gave my firm a discount. We were using the Mac 512KE and the MAC SE.
When I only had to point and click I was in love with a computer. Love those Macs.
Below here the BB actually has worthwhile reading material.
More about the paragons of perfidy, compliments of the cobaltblue school of Economic Propaganda:
by Darren Weeks
October 18, 2009
NewsWithViews.com
Every time the media reports the unemployment numbers, it reminds me of George Orwell’s book, 1984. In the legendary book, a governmental organization referred to as the “Ministry of Truth” would report through the telescreens that the price of chocolate was going down. Winston Smith, the lead character of the book, knew good and well that the price of chocolate was not going down but was actually going up. We are certainly living in Orwell’s world! The difference between ours and the fictional world of Orwell, is that we are not being propagandized about chocolate, but rather unemployment statistics. The controlled news media always attempts to “butter up” the bad numbers, by putting a positive spin on the fact that we are losing our jobs, month after month.
The truth of the matter is that America is in deep, deep trouble and all the gutless globalist lapdogs in the media can do is lie to the people, trying to convince them that we are not in a depression — it’s only a “recession” — and it will soon be over. The deception is intended to get the American people, true to the failed Keynesian economic model, to spend money they don’t have, in a hopeless attempt to apply the defibrillation paddles to the dying patient which is the American economy. They will never tell you the patient is dying. They will never tell you why the patient is dying.
Link to article: http://tinyurl.com/yfemq9y
Here’s an opinion piece you may like:
That sound you hear is the social fabric about to snap
According to official statistics, the unemployment rate in the United States is now 9.8 percent. But those statistics understate the severity of the jobs crisis. The official statistics do not include the 875,000 Americans who have given up looking for work, even though they want jobs. When these “marginally attached” workers and part-time workers are added to the officially unemployed, the result, according to another, broader governement measure of unemployment known as “U-6,” is shocking. The United States has an unemployment rate of 17 percent.
And even this may understate the depth of the problem. By adding the 3.4 million Americans who want a job but have not looked for one in over a year, businessman, philanthropist and Obama advisor Leo Hindery Jr. infers an actual unemployment rate of 18.8 percent. In other words, nearly one in five Americans is unemployed or underemployed.
Rest of the article follow the link:
http://www.salon.com/opinion/feature/2009/10/19/jobs/
MSM: CNN.Com
Homes: About to get much cheaper
National home prices are forecast to shrink another 11%. Miami, Las Vegas and Phoenix will record steep declines, but a few cities will actually post gains.
CA, AZ, NY, FL have 25%+ drops forecasted in the next 12 months.
What about DC !!! ???
Can we have more drop here too PLEASE!!!
What about DC
Prices wont drop where people want to live…
Be careful Stpn2me - my son is Iraq, so I’ll pray for both of ya!
They will if the no and ultra low downpayment lending programs dry up. Same thing for interest rates going up.
If an asteroid landed in the Chesapeake Bay and washed DC and central Maryland out to sea, those dumpy little Post War Shoeboxes (with septic tanks, oil heat, etc.), lame condozes, and crumbling McMansions would still each be horribly overpriced even as they floated out to sea.
I would say that I’m joking, but considering how many flooded dumps were selling for absurd prices after Hurricane Isabel mangled them back in 2003, I am probably all too accurate.
Maryland, DC, and NoVa are the land of the Eternal Bubble; housing - at least the type worth buying - may never be affordable around here again.
Norfolk/Virginia Beach (and surrounding cities) is sharing it as well. No justification for the high prices of homes other than easy loans / military.
I saw that report. They also said some places would go up in price.
We’ve got a ribbon cutting on a new German firm in the area. 294 new manufacturing jobs in the area. Another large employer was rehiring some. Lots of changes going on in our local downtown area too. One specific item I can bring up is the number of companies abandoning the city of Syracuse and re-establishing themselves in the burbs. Retail establishments are moving to where the money is. Institutions are fleeing parking or landlord issues or perhaps even safety issues. In our burb, there are formerly abandoned properties on a well travelled strip that are being cleaned up and readied for something. Starbucks is looking for a larger location w/better parking. You don’t have to search long for positive sentiment to find it.
I don’t regret not buying what we’ve passed on but have started to wonder if we’re waiting for Godot. Prices in this specific town are up this year to date 3%. I think its fair to say the gains were more in the standard size homes vs the aspirational sized or designed homes. Huh, just what we’re shopping for. I’d have done better if I bought the month we sold our last home. I liked the choices then a lot better too. Realtors say people who would’ve moved up to the aspirational homes are now sitting pat on what they’ve got.
Carrie, I’m hearing the same BS from people all over upstate. It’s the same old “it’s different here” meme or variation of it. What is missing from the conversation perspective. For instance, 294 measly jobs will in what way impact the loss of hundreds of thousands of formerly high paying jobs???? It won’t. It’s nothing more than raindrops in the desert my friend.
CarrieAnn….What is the unemployment rate in your county ??
I think we’re at 7.8%. Flat from August. But this particular community is probably one of the highest income in the county and I don’t think our local hospitals or lawfirms have been laying off. Also there is a lot of old money here and wealthy from other areas parked here while they wait out the housing storm. I can’t believe how many people I run into that are ex-Wall St. or DC.
There you have it…= High housing costs…
Sounds like a locust problem.
Carrie, I don’t see the monied elite buying right now. Based on my observations, the bulk of buyers are Goobers and JimBob’s in Flyover Country.
I’m not trying to claim the entire county is experiencing the same. In fact I know other towns are not. But I’m saying this town is still hanging in there. I pulled up the NY Fed reserve site and now they’ve got this whole block of heat maps to indicate measurements of all types of credit health. Exeter, you can see that your area of the state and mine are not moving in sync, in any area for which info was provided on that site.
And take my county and break it down to individual towns. I think you’ll see there are still some barely feeling pain while others are experiencing real hurt.
I’d say Syracuse is AHEAD of the nation in it’s recovery.
Syracuse (and Central NY - not Hudson river valley) went through what the rest of the nation is going thru now back in the 1990s. The place lost jobs galore while the rest of the country was expanding (upstate NY went thru a deprecian in the 1990s, while the rest of the country had a boom). Home building came to a halt. Overall population flat out declined (during the 1990s, the US population went up 13% while central & western NY had an outright population contraction - including births).
Many Syracuse companies nearly collapsed but Pataki and the state government were running around handing out economic life-lines to the companies. It turned out to be enought to keep them alive during the decade and into this century.
As a result, what companies survived in Syracuse were exceptional lean, with salaries and other costs well in line. The area began a slow, but very measured recovery some years ago.
Is NVG closed yet? That place employed 4,000+ well paying jobs 10 years ago. It was down to under 2000 recently, with plans to shut down completely. That will cancel out the 281 new jobs. And Carrier? Is it expanding again? How long can LockeedMartin and Synsis ride the defense industry to prosperity? Did they ever expand the Carousel Mall? Are there any other private sector employers left?
Syracuse is a university town with some big companies, but being a university town/regional gov’t center means that it will be buffered a little more than most cities from the downturn. But still, there is a limit to its protection.
So, basically, Syracuse is some 10-15 years ahead of the rest of the country. The big difference is that a lot of people were able to leave Syracuse in 1995 for jobs elsewhere (like North Carolina). I don’t think the opposite will be true - most of America cannot leave their cities looking for work in Syracuse!
NVG still has people there. There was an end date mentioned on the forums but I don’t think a lot of them know for sure.
Carrier shut down another warehouse but still keeps its support staff here….for now.
Lockheed Martin in Salina has not lost any major contracts and in fact just was awarded one they were celebrating. Sensys is supposedly providing equipment to our nations air traffic control system.
We almost lost Crucible but someone came in and picked them up for cheap. Labor had to make some concessions but probably breathing sighs of relief they still have work.
University Hospital was growing….perhaps at the expense of other upstate hospital closures.
Enjoyed your insight Cincy Dad.
Man, I do hope that’s an accurate forecast. Another 25% and FL will be a reasonable area to live in again. I’ve been toying with the idea of moving to another part of the country to get away from the nutty home prices (and the tax system, don’t get me started); another 25-30% down from current levels and I probably won’t look elsewhere.
I love FL, but, even today, you can tell that things are really out of whack. The house a few down from mine just sold for about 300K. The people that live there look as if they stretched to the absolute limit, no furniture inside, 1 car (1990s), no landscaping/etc. It’s really sad, that house should probably sell for about 175K (they WAY overpaid even in the market that exists today); I just see another young family getting on a debt treadmill that they will never get off of.
I really do hope that the end result of this is affordable housing again. It seems that EVERYONE is doing EVERYTHING that they can to prevent that from happening, but, Mr. Market forces is working his magic..
$300K at 5%+ 15K just in interest a year…
I see another young family who graduated from a horribly poor FlorrRiddah HS and have no clue how to use a calculator and realize they are screwed.
———————–
I just see another young family getting on a debt treadmill that they will never get off of.
CA, AZ, NY, FL have 25%+ drops forecasted in the next 12 months.
No.
I wish it were true, but ain’t gonna happen. Too much pumping going on - e.g. see above article on HFA etc. These markets will likely go down *some*, but not anywhere close to 25% in 12 months. They’ve been there and done that, and prices are now low enough to see significant support from all this pumping.
From here on out it’s a very slow trickle down. Total may indeed be another 25%, but it’ll take years, not 12 months.
There are several shoes that could drop which might accelerate your timing:
1) The dollar may reach a sufficiently low level where higher interest rates are needed to support it.
2) The volume of walkaways may reach a critical mass which results in disorderly capitulation (aka housing market panic).
3) Unemployment may stay high for “longer than expected”, resulting in “more than expected” homes going into foreclosure.
4) Another leg down in the stock market gives would-be home buyers a collective case of cold feet.
Could be. The PPT seems intent on not allowing that to happen though.
And FWIW - there were signs of a spring/summer housing bounce back in in March, back when the markets were in the depths of despair. I posted as such (”cusp of a U” etc).
I think they were based largely on the homebuyer tax credit. A lot hinges on it’s continuance and/or expansion. That being the case - I think continuance/expansion is probably a done deal, in one form or another.
“The PPT seems intent on not allowing that (market crash) to happen though.”
I’ve always thought of the PPT as more of a timing mechanism. They can’t prevent a crash, but can put it off to a better time.
“The PPT seems intent on not allowing that to happen though.”
Were they intent on allowing the Fall 2008 stock market crash to happen?
My guess is yes
Outgoing administration and Paulson in a position to bailout GS and others. Politicians before election not wanting to be held accountable for a failing economy handed Paulson a huge check with no accountablity or rules.
I’ve always thought of the PPT as more of a timing mechanism. They can’t prevent a crash, but can put it off to a better time.
Yeah, it’ll be easier to deal with next year, once we get all this negativity behind us.
What measton said.
Add in stimulus II, and stir.
Disaster capitalism is quite a tool for the PTB. They’re more than willing to take occasional hits if it helps long-term profitability - taking out the competition, getting some bailout $$, sluffing off their bad debt to government enterprises, getting pieces of the stimulus pies, etc. Most of it in the name of getting back to “stability”.
“My guess is yes
Outgoing administration and Paulson in a position to bailout GS and others.”
Come to think of it, I vaguely recall reading how Big Hank was going really long in Treasurys towards the end of W’s time in the WH. It is nice to create opportunities like this for one’s self, then bring them to fruition by pushing the panic button on national TV.
5) End of quantitative sleazing turns out “worse than expected”:
Oct. 20, 2009, 12:25 p.m. EDT
Hedge manager Sprott sees trouble when easing ends
US government is new “dead man walking”, investor says
By Alistair Barr, MarketWatch
NEW YORK (MarketWatch) - When so-called quantitative easing by central banks ends, the world economy may slip back into trouble, Canadian hedge fund manager Eric Sprott warned on Tuesday.
Toronto-based Sprott called Citigroup, Fannie Mae, Freddie Mac, and General Motors “dead men walking” in late 2007. On Tuesday, he said the U.S. government is the new dead man walking, partly because it may struggle to keep borrowing enough money if the Federal Reserve stops buying Treasury bonds.
Sprott’s Canadian hedge fund, Sprott Hedge Fund LP, is up more than 400% since inception in 2000 as it rode a surge in gold prices and shares of gold miners and other raw materials companies.
Bank bailouts and other dramatic efforts by central banks have stopped the world “going into the abyss,” Sprott said during a presentation at the Value Investing Congress in New York.
The “granddaddy” of all those bailout efforts is quantitative easing, in which central banks in the U.S. and the U.K. especially buy government bonds to keep interest rates low, Sprott said.
The U.S. government has raised roughly 200% more by selling bonds this year, versus last year, Sprott noted. Through the end of the second quarter of 2009, he said the only major buyers of these government bonds were central banks.
“When quantitative easing ends, what’s going to happen?” he added, noting that there are already two clues to answer that question.
…
NEW YORK (MarketWatch) - When so-called quantitative easing by central banks ends, the world economy may slip back into trouble, Canadian hedge fund manager Eric Sprott warned on Tuesday.
I’d qualify that with an “if”, not a “when”.
There are several shoes that could drop which might accelerate your timing:
1) The dollar may reach a sufficiently low level where higher interest rates are needed to support it.
2) The volume of walkaways may reach a critical mass which results in disorderly capitulation (aka housing market panic).
3) Unemployment may stay high for “longer than expected”, resulting in “more than expected” homes going into foreclosure.
1) Yes could happen. That’s the most likely candidate. However the dollar sinking is in large part *because* of the pumping. If the dollar continues to sink that means the pumping is working (as perceived), which means prices won’t go down so much.
2) Nah - would have already happened last year when prices were truly plummeting at 25-40% annual rate in those markets. It did happen some, but the panic phase is done IMO.
3) I expect DC to do whatever it takes stimulus-wise to not allow unemployment to get high enough to be much more of a factor than it already is. Prices rose this summer despite unemployment being 9+%, which is where it still is. Even if unemployment reaches 12%, that still only takes another 3% of people off the market. Long-term if things continue melting yeah unemployment may reach 15-20% and be a much bigger factor - but like I say I think we’re looking at years, not 12 months.
In short - we’re now in “drag out” phase. Things are going to happen really s..l..o..w..l..y IMO for a long time to come.
Short of some truly unexpected event, that is - like geopolitical (new war or major terrorist act) or natural (major earthquake or hurricane). Then all bets are off.
P.S. Years ago in the early days of HBB, the question was often raised as to when we thought a real bottom would be in place, in place. Invariably the answer was “When everyone views real estate as a horrible investment.”
Seems we’re almost there.
“Seems we’re almost there.”
Not even close.
You have more leeches entering a market to divvy up a shrinking dollar volume. “Inspectors”, real estate salesmen, sellers, etc.
When these interests fold up shop and declare doom is when we’re finally *nearing* the bottom. Until the propaganda machine screeching into the ears of sellers is silenced, there will be no bottom.
Not close in my area. I’ve heard no one say that. Still the same ol’ “…now’s the best time to buy!…” rhetoric.
“Here’s the deal. The government is spending trillions to keep interest rates down to support the economy and prop up housing prices, and those low rates have inflicted collateral damage on savers’ incomes. ‘It’s a direct wealth transfer from savers and retirees to overly indebted borrowers,’ says Greg McBride, senior financial analyst at Bankrate.com.
“Wall Street will be chowing down on essentially free money, while fixed-income people living off their investments will have to eat into their capital, take more risk or reduce their standard of living. A nice reward from their government for a lifetime of saving. Thanks for nothing, guys.”
< If it’s the federal government’s plan to promote jealousy and envy toward Wall Street among senior citizens on fixed incomes, the plan is working fine! Every day we are hearing about the renewal of big bonuses to the well-fixed in Wall Street while oldsters, and much of middle-class America, struggle to hang on to what they’ve got.
The net effect of the present financial mess is a decrease in living standards. For some it’s little more than a minor inconvenience. For many it’s a nerve-wracking trauma.
“Wall Street will be chowing down on essentially free money, while fixed-income people living off their investments will have to eat into their capital, take more risk or reduce their standard of living. A nice reward from their government for a lifetime of saving. Thanks for nothing, guys.”
It happened this way in the 1970s, too. Fool me once, shame on you; fool me twice, shame on me. (Of course, a new generation of retirees is currently learning the the hard way at the moment…)
a new generation of retirees is currently learning the the hard way at the moment… ??
Of the retirees that I know which is many, I would say most if not all could live without much regular savings at all…Their Pensions & SS could sustain them quite nicely particularly with their Medicare coverage…
“Their Pensions…could sustain them…”
The moment of truth has not yet arrived. Eventually the Fed will have to choose whether to rein inflation in through higher interest rates (good for retirees, not so good for workers in a weak economy), or let inflation run for a while while jobs come back. In the latter scenario, retirees on fixed-income pensions get to involuntarily chip in some of their life savings to fund the economic recovery.
I still vividly remember shopping with my mom in the mid-1970s, hearing elderly ladies muttering about the astronomical increases in the price of bread. I expect the same scenario to ensue within the next decade, as the Fed will create the appearance that inflation turned out “higher than expected” before it could get it under control.
“…hearing elderly ladies muttering about the astronomical increases in the price of bread.”
Ha, I witnessed fist fights between adult men…in the gas station.
“Ha, I witnessed fist fights between adult men…in the gas station.”
The natural consequence of capping gas price increases during a period of rampant inflation is shortages, long lines at the gas pump and fist fights. Thanks a lot, Tricky Dick.
Luckily for Wall Street execs, most senior citizens are not strong or quick enough to exact much damage with a pitch fork.
Just wait until the Fed faces the tough choice between throwing the labor market under more buses than it is already under, or inflating away the value of senior citizens’ fixed-income pensions. You ain’t seen nothin’ yet (but I refer you all to the 1979-1982 episode in US monetary policy history for a sneak preview…).
refer you all to the 1979-1982 episode ??
Hell, I was in that episode..:)
I do agree with you Pbear…Its a rock and a hard place…Who is going to lose ??
It’s worse this time, because Americans have no savings. I think the Fed will backpeddle for a while before lowering the boom, while the savings rate goes up and those lucky enough to currently have jobs can build up a slight buffer. Good luck to all with surviving the next 1/2 decade!
I hate to think of the fallout effect of major rate increases with existing double digit unemployment…We may see Gfixr’s frustrated rant in his post above come to fruition…
“…Good luck to all with surviving the next 1/2 decade!”
Calling aladinsane in New Zealand…are you there alad?…
“The net effect of the present financial mess is a decrease in living standards.”
I expect that to outlive the rise in unemployment.
Hey NycDj you may want to try and hook up a job like this…
We always thought the person using the microphone made the most money in show biz, but at Carnegie Hall it may be the guy who plugs it in!
As an encouragement to young people who want to be stagehands, we offer this:
“Depending on wattage, a star pianist can receive $20,000 a night at the 118-year-old hall, meaning he or she would have to perform at least 27 times to match the income of Dennis O’Connell, who oversees props at the New York concert hall.
“O’Connell made $530,044 in salary and benefits during the fiscal year that ended in June 2008. The four other members of the full-time stage crew — two carpenters and two electricians — had an average income of $430,543 during the same period, according to Carnegie Hall’s tax return.
What? Is that the highest pay carpenter on earth? What the he** is going on there? That’s got to be a typo?
I don’t doubt it Mike (no typo), union labor my friend.
Outragious
and still they likely deserve the money more than say Wall Street.
Make that outrageous
Thanks, it union wages tons of OT, turnaround times i’ll bet they slept in a cot many a nights. Rush jobs…work 16-18 hrs a day…
Ah, the world of the aspirational urban blue collar worker.
The honest ones would sleep on a cot BETWEEN shifts. My experiences with these creatures showed me that more often than not they sleep through their regular shift so they’ll be up for the overtime. Straight time just isn’t worth the effort.
Overtime, side jobs, cash jobs - the hallmarks of the aspriational urban blue collar worker. Go to any marina on our lakefront and you’ll see plumbers rubbing elbows with lawyers.
“…you’ll see plumbers rubbing elbows with lawyers.”
Hey, that reminds me, where the heck is “Joe The Plumber?”
Joe the Plumber is busy sueing the Democratic operatives who accessed his supposedly private, confidential records on their government computer systems. While they were on government time, by the way. I hope he wins big.
Wall Street executives to Main Street: “Let them eat cake.”
Rescued banks keep spending
Perks, benefits up 4 percent for chief executives
By Tomoeh Murakami Tse
THE WASHINGTON POST
2:00 a.m. October 20, 2009
NEW YORK — Even as the nation’s biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives.
The firms, accounting for more than $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.
Some chief executives, such as Kenneth Lewis of Bank of America and Jeffrey Peek of CIT Group, the major small-business lender now on the brink of bankruptcy, each received about $100,000 more than a year earlier for personal use of corporate jets. Others saw an increase in the value of chauffeured services, parking or personal security.
Ralph Babb, chief executive of Comerica, was compensated for a new country club membership, with an initiation fee and dues of more than $200,000. Alvaro de Molina, chief executive of GMAC Financial Services, benefited from a $2.5 million payment from his company to help cover his personal tax bill.
“You would have thought that this would be the moment when everyone said, ‘OK, the perks have got to stop — at least while we’re indebted to the government,’ ” said Paul Hodgson, senior research associate at the Corporate Library. “But that didn’t happen.”
…
“…compensated for a new country club membership, with an initiation fee and dues of more than $200,000.”
That puts it pretty much into perspective, doesn’t it? The slice of his compensation to fund Babb’s country club membership exceeds the annual pay for over 99 percent of Americans.
But, but, but,…let me guess… he’s a “PROFESSIONAL” right?
I’m finally putting 2 and 2 together. The reason why bankers assume that the economy and housing prices can only go up, is because that’s the way it is for their pay.
I, for one, am glad they are making more money. This can only mean a strong, trickle-down effect raising all our boats. Oh man, I can hardly wait! If we cut their taxes, I bet it’ll be even better for us.
And the TARP sure did entice Megabank, Inc to open the lending spigot, didn’t it?
Well, you did bring up one perk for me as a NY state taxpayer. The state income tax receipts on those bonuses should take the pressure off the NY middle class to make up for the losses in the state budget.
Paterson catches a break on that one.
“Alvaro de Molina, chief executive of GMAC Financial Services, benefited from a $2.5 million payment from his company to help cover his personal tax bill.”
I assume they then had to pay him an additional $800k to pay the tax on the $2.5MM and that would, of course, require an additional $250k payment, etc.
Oops — another “worse than expected” data release, on builder’s confidence, which is still near record lows. I personally expect it to plummet this winter unless the $8K credit is renewed.
As to whether the failure to pass the $8K credit will derail the recovery, I doubt it. Certainly the creative minds on Washington and Wall Street can figure out some alternative scheme to funnel non-home-buyers’ money into a newfangled home purchase subsidy?
Economic Report
Oct. 19, 2009, 2:05 p.m. EDT
Home builders’ confidence slips in October
Expiration of tax credit threatens to derail recovery, trade group says
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — Faced with the imminent expiration of a government subsidy for new buyers, U.S. home builders’ mood turned more pessimistic again in October, a trade group reported Monday.
The National Association of Home Builders/Wells Fargo sentiment index fell to 18 in October from 19 in September. It was the first decline since June. The index bottomed at a record-low 8 in January; the index peaked at 72 more than four years ago.
The decline “will further boost worries about the sustainability of both the recent rise in housing investment and the rebound in prices we have witnessed,” according to Drew Matus, an economist for Bank of America’s Merrill Lynch
.
Economists surveyed by MarketWatch expected the index to rise to 20.
Tax cheaters are looking forward to the renewal of the $8K credit. Will TTT come through for them on sustaining this opportunity to scam the US government?
• U.S. NEWS
• OCTOBER 20, 2009
Home-Buyer Credit Is Focus of Inquiry
By JOHN D. MCKINNON
WASHINGTON — The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.
The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the moribund housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.
More than a million claims for the credit have been received so far, and housing-industry experts estimated that the credit has helped generate about 350,000 home sales that wouldn’t otherwise have occurred. But some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent.
“I am concerned about recent reports that there have been fraudulent schemes involving the credit,” Rep. John Lewis (D., Ga.), chairman of a House Ways and Means oversight subcommittee, said in a statement. The subcommittee is planning a hearing on the problems on Thursday.
…
100,000 out of 1M are fraudulent? Huh.. That’s like a success story for government spending!
Only 10% of the money was allocated incorrectly. Somebody call Guiness, that’s got to be a new record for government efficiency in raining cash from heaven. 
More than a million claims for the credit have been received so far, and housing-industry experts estimated that the credit has helped generate about 350,000 home sales that wouldn’t otherwise have occurred. But some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent.
People using government handouts as a basis for fraud? Who’d a thunk?
Pish posh…..is what Barney Frank would say. What’s a little fraud when you’re accomplishing so much “good”?
+1 Ejohn
“Tax cheaters are looking forward to the renewal of the $8K credit. Will TTT come through for them on sustaining this opportunity to scam the US government”?
Absoooolutely! 99.99% guaranteed, the 8k will be extended!
Politicians do seem to look upon criminals in the same manner that an older sibling looks upon its little brothers and sisters.
This is quite shocking: gov’t intending on propping up the housing market by dishing out free $ from taxpayers and some folks cook up schemes to scam the gov’t. Who would have thunk it?
Home-Buyer Credit Is Focus of Inquiry
WASHINGTON — The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.
The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the moribund housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.
More than a million claims for the credit have been received so far, and housing-industry experts estimated that the credit has helped generate about 350,000 home sales that wouldn’t otherwise have occurred. But some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent.
“I am concerned about recent reports that there have been fraudulent schemes involving the credit,” Rep. John Lewis (D., Ga.), chairman of a House Ways and Means oversight subcommittee, said in a statement. The subcommittee is planning a hearing on the problems on Thursday.
The IRS said it was investigating 167 “criminal schemes” involving the credit, according to the subcommittee. IRS officials on Monday declined to describe the suspected schemes or provide additional details.
At a recent hearing of a White House tax advisory panel, Bonnie Speedy, national director of AARP Tax-Aide, a volunteer service for low-income people, suggested that abuse of the home-purchase credit appeared to be widespread, in part because of relatively loose standards for claiming the credit.
The credit “has some fraud issues because it’s not being done at the time of the sale,” said Ms. Speedy. “People are filing for the home credit who don’t have a right to file for it.” Taxpayers don’t have to file their claims as part of a real-estate transaction and instead can file or amend their income-tax returns to claim the credit.
“Ms. Speedy”
Ya’ can’t make this up, can ya?
“Bonnie Speedy”, now that is a name any man could love. Too bad she works for the AARP so that takes all the sexy-ness out of it.
Boy I’d sure hate to be known as “Mr. Speedy”.
“…abuse of the home-purchase credit appeared to be widespread, in part because of relatively loose standards for claiming the credit.”
-Naawwwwww! Loose standards have been abolished by the Obama administration. I heard it in several of his speeches - he promised all of us. Remember the innauguration speech about rebuilding the system on a foundation of stone, instead of the sand foundation we had previously? Did the guy who was supposed to bring the load of rocks to the job get lost?
A 1-month drop of 0.6% occurs at an annualized rate of
((1-0.006)^12-1)*100 = 7%.
Economic Report
Oct. 20, 2009, 9:04 a.m. EDT
U.S. producer prices drop 0.6% in September
Core wholesale inflation rate’s 0.1%, both lower than expectations
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Lower costs for energy pushed the U.S. producer price index to drop 0.6% in September, the Labor Department reported Tuesday, in a result that was much lower than analysts’ expectations.
Analysts surveyed by MarketWatch had predicted a fall of 0.3% for the month.
Core producer prices, excluding volatile food and energy inputs, fell 0.1% — also lower than the 0.1% increase expected.
Wholesale prices have fallen in two of the past three months. In August, the headline PPI rate had risen 1.7% on a jump in energy prices, while the core rate had gained 0.2%.
Financial markets were not expected to pay much attention to the report.
…
The implication of a “larger than expected” drop in producer prices: The economy currently has more slack capacity than the green shooters realize.
We are at freezing temperatures now, so yesterday we had our underground sprinklers blown out. This was the first year that the boss, the guy who actually owns the company, was doing the job himself. Usually they have a couple of employees doing it. Naturally I commented that the General is now manning the front lines, so it must be bad. He replied that un-collectible accounts are killing him. He’s a really nice person too. I’m calling his office today to find out what I owe him and write a check.
HEY, I AGREE WITH SOMETHING OBAMA DID!
Neal Boortz ~ October 20, 2009
I’ve been arguing for years that our tax dollars are being flushed down the toilet fighting this ridiculous, asinine War on Drugs.
So the Obama administration issued new legal guidelines yesterday, and guess what? I actually agree with him! This is for all of you who give me this line about “You are against EVERYTHING Obama says or does.” Not true. I am against stupidity, and often times that comes cloaked under the guise of government.
But back to these guidelines … federal drug agents will no longer pursue pot-smoking patients or suppliers in states that allow medical marijuana. Justice Department officials say, ” … it is not a good use of their time to arrest people who use or provide medical marijuana in strict compliance with state law.” Ghee, ya think?? This should have been a no-brainer, folks.
So which are the lucky states? Alaska, California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington.
By the way, my hatred for our War on Drugs is not based purely on the fact that I like to stir the puddin’. There is evidence and studies to support the fact that legalizing or decriminalizing drugs can actually been a good thing.
Take Portugal, for example. Back in 2001 it decided to decriminialize all drugs, including cocaine and heroin. There was no spike in usage. There was no public health crisis. In fact, the rate of drug usage is less in Portugal than it is compared to other European nations. The CATO Institute can give you all the hairy details.
Up in smoke
That’s where
I want to be
‘Cause when I’m high
The world below
don’t bother me
When life begins to be
one long and dangerous road
I take a toke
And all my cares
go up in smoke…
I take a toke
And all my cares
Go up in smoke
Hey, what’s in
this sh t, man?
Mostly Maui-wowie,
man.
Yeah?
But it’s got
some Labrador in it.
What’s Labrador?
It’s dog sh t.
What?
Yeah, my dog ate
my stash, man.
Had it on the table,
and the little
mother f cker ate it, man.
Yeah?
I had to follow him around
with a little baggie
for three days
before I got it back.
Really blew
the dog’s mind.
You mean we’re smoking
dog sh t, man?
Gets you high,
don’t it?
“Gets you high,
don’t it?”
-got the Dow to 10k didn’t it?
Cheech and Chong?
“How’s my driving, man?”
“I don’t know man, I think we’re still parked!”
Haha! I remember watching that in a certain state of mind and being blown away that indeed: they were still parked! Good times. Good times.
“…So which are the lucky states? Alaska, California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington.”
What South Carolina can grow tobacco but not “maryjane”? Must be a “cultural” thing.
I’ve always said that when Generation Greed gets through bankrupting the country, following generations will not get Medicare, just medical marijuanna followed by legal assisted suicide. And then only in the Democrats are in; the Republicans won’t even allow that.
Looks like Obama has a back-up plan in case health care reform fails.
The GOP has the faith healing plan.
When you are sick you will go to a church. Empty your pockets and pray for recovery.
Both systems are free.
WT
whats wrong with that????
Do you really think people want to live the last 5-10 years of their lives in a nursing home in a wheel chair or bedridden?
Give them hope to end it when they want.
—————————–
just medical marijuanna followed by legal assisted suicide
Which generation is “Generation Greed?” Boomers? I lived well below my means for years, am single, did not bring extra people into the world. Gen-X? I can find very thrifty people in that group. Gen-Y? Same.
Don’t give me your bull. My cow already died.
I lived well below my means for years, am single, did not bring extra people into the world.
So being married and/or having kids means you’re greedy, but keeping all your money for yourself means you’re not. Amazing.
So being married and/or having kids means you’re greedy, but keeping all your money for yourself means you’re not.
If you notice, bill didn’t sling the word “greedy” around. He simply said argued that he was not - he hasn’t been looking for a free ride, and is a net contributor to the tax base.
Those who have kids generally are not. Your child’s education is subsidized by those without kids. You pay less in income taxes by being able to claim a dependent as well as head of household as well as getting the child tax credit.
I’m not saying it’s greedy to have a kid, nor to not have one. But single adults sure subsidize the cost of others’ children.
(note: I never argued that it still doesn’t cost a ton to raise a child..just that it’s subsidized by those without sprog).
HEY, I AGREE WITH SOMETHING WMBZ DID!
Now if we could just start taxing it and use the money to fund prisons for Wall Street elite, and those who commit violence or property crimes.
Enjoy!
DEA officer stops at a ranch in Texas , and talks with an old rancher. He tells the rancher, “I need to inspect your ranch for illegally grown drugs.” Gault says, “Okay , but do not go in that field over there,” as he points out the location.
The DEA officer verbally explodes saying, ” Mister, I have the authority of the Federal Government with me.” Reaching into his rear pants pocket, he removes his badge and proudly displays it to Gault. “See this badge? This badge means I am allowed to go wherever I wish…. On any land. No questions asked or answers given. Have I made myself clear? Do you understand? ”
Gault nods politely, apologizes, and goes about his chores.
A short time later, the old rancher hears loud screams and sees the DEA officer running for his life chased close behind by the rancher’s prize bull.
With every step the bull is gaining ground on the officer, and it seems likely that he’ll get ” Horned ” before he reaches safety. The officer is clearly terrified. Gault throws down his tools, runs to the fence and yells at the top of his lungs…..
” Your badge. Show him your BADGE!!!”
” Your badge. Show him your BADGE!!!”
lol..I love it.
Latest bank fee is for paying off credit card on time every month.
USA Today
You floss regularly, yield to oncoming traffic and use your credit cards judiciously, dutifully paying off your balance every month.
You may believe that your exemplary behavior shields you from unexpected credit card fees. Sadly, that is no longer the case.
Starting next year, Bank of America will charge a small number of customers an annual fee, ranging from $29 to $99. The bank has characterized the fee as experimental. But card holders who have never carried a balance or paid late fees could be among those affected.
Citigroup, meanwhile, has started charging annual fees to card holders who don’t put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don’t use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt.
These fees are the credit card industry’s response to credit card legislation that will, among other things, restrict credit card issuers’ ability to raise interest rates on existing balances. Credit card issuers are looking for ways to raise income before the new rules take effect in February. During the first quarter, 27% of credit card offers included annual fees, up from 18% a year earlier, according to Synovate Mail Monitor, a credit card direct-mail tracking service.
Curtis Arnold, founder of CardRatings.com, says he expected credit card issuers to raise annual fees after the legislation was enacted. What he didn’t expect, he says, “was that good customers were going to be hit.”
Time to cancel all of our credit cards. I recommend that any other American who can afford to fund their purchases in cash do the same. Let the debtbeats keep the pigmen of Megabank, Inc rolling in the bonus trough…
“Time to cancel all of our credit cards.”
Amish = 1
Marinfidels = 0
Here is a prime example where a little solidarity amongst normally fractious Americans will go a long way.
I already pay for most things in cash. Gas and purchases over a hundred or so are the only things that go on my credit card, with is normally a credit union card that i dont have a balance on, and gives me cash back. Oh, and reoccouring monthly subscriptions.
I have friends who ALWAYS pay with a credit card. I have thought about soing it for a month, just to track spending, but paying for a cup of coffee with a credit card is insane. I’ve done that once or twice in my life because I realized I didnt have any money on me, but I felt like an idiot for doing it.
I’ve already gone back to cash. F the banks. These guys are still pulling down huge salaries and now they are going to covertly milk credit card users who follow the rules. They already steal from the merchant. If I pay with cash the local merchant gets to keep a bigger slice of the money.
I got hit with identity theft a couple of weeks ago. Cancelled all of my credit cards. I keep a few hundred in cash around the house. I’m thinking of cancelling the new ones when they come in.
Actually, it might be nice to take my cash out of the bank.
My credit card is from Chase. But if they decide to charge a fee for paying off my balance every month, maybe I can skirt it by carrying a $1.00 balance. I think I can afford twelve cents a month.
Problem is that carrying *any* balance means that interest is charged on your whole daily balance - not just the $1.
If Amex does that to me, I’m dropping them like a hot potato.
If AmEx does that to me, I’ll move my AmEx card to USAA. I thought it was better to have more than one company, but if they insist on a fee or minimum activity, I’ll give ‘em the heave ho.
Man I hate BofA.
BofA neglected to send me a bill this month, so I sent in the balance by check in a plain business envelope. Sure enough, the day after the due date, I got a form letter informing me that the 0% interest for a year trial account was now subject to 19% interest because they had “received a late payment.” The next day after that, I got the paperwork and coupon for the bill I’d already paid.
Cheesiest outfit on the planet. I can’t believe they’re still trying to pull this one after all the publicity of late, but it’s way past time BofA and GMAC go out of business for good. GTE, BofA, BlueCross. When they’re all three gone for good, I’ll know the economy has a chance of recovery.
We always pay our CC balances off in full each month, before the due date.
The banks make fees off the merchant, so they still make revenue off of us “deadbeats”.
This guy is the ultimate MSM gloomster. You may call me a fan.
He will have a great time saying “I told you so” to Washington and Wall Street fat cats whose state of permanent denial prevented them from reading the handwriting on the wall and taking appropriate action before it was too late for the frog to jump out of the pot of boiling water.
Paul B. Farrell
Oct. 20, 2009, 8:08 a.m. EDT
Death of ‘Soul of Capitalism:’ Bogle, Faber, Moore
20 reasons America has lost its soul and collapse is inevitable
By Paul B. Farrell, MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) — Jack Bogle published “The Battle for the Soul of Capitalism” four years ago. The battle’s over. The sequel should be titled: “Capitalism Died a Lost Soul.” Worse, we’ve lost “America’s Soul.” And worldwide the consequences will be catastrophic.
That’s why a man like Hong Kong’s contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: “The future will be a total disaster, with a collapse of our capitalistic system as we know it today.”
…
“…Wall Street has lost its moral compass. They created the mess, now, like vultures, they’re capitalizing on the carcass. They have lost all sense of fiduciary duty, ethical responsibility and public obligation.”
I’m on one side of a deep canyon…aladinsane & Jas Jain are on the other side…this is what I hear:
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
“…Faber is uncertain about timing, we are not. There is a high probability of a crisis and collapse by 2012″
(Hwy checks his Mayan almanac…hmmm)
Since the housing market is weighing on Wall Street’s green shoots, it is imperative to renew the $8K tax credit giveaway to the REIC!
Market Snapshot
Oct. 20, 2009, 12:30 p.m. EDT
U.S. stock market focus shifts back to housing’s travails
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — With one U.S. stock market gauge of the housing sector up more than 20% so far this year, a fair amount of optimism has seeped into builder stocks. On Tuesday, that cheery outlook took a hit as housing starts came in flat for September, deflating builder stocks along with consumer discretionary shares.
…
One interpretation of the sudden shift in Wall Street’s focus away from green shoots, back to the housing market’s travails:
It is high time to ramp up the political pressure for renewing the $8K first-time home buyer credit.
Cancelled a card this month after they charged me $79 annual fee. They said ok but that I had to pay the fee because that charge was for the month before billing. I’ll fight it but even if they prevail that’s just a one time charge and one less account on their books.
Ha ha, make them spend more than $79 trying to collect it - they will and won’t think twice about it.
Kill the wabbit, kill the wabbit, kill the wabbit, da da-da daaa…
Rex Nutting
Oct. 20, 2009, 12:55 p.m. EDT
Kill the wasteful home-buyer tax credit
Commentary: Why subsidize the people who got us into this mess?
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — Real estate, the most coddled industry in America, is about to be handed another unearned gift from taxpayers: the extension of a misbegotten $8,000 subsidy for first-time home buyers.
Real-estate agents, home builders and mortgage bankers are all demanding that Congress extend the home-buyer tax credit, which expires Nov. 30. They say letting the subsidy expire would threaten to derail the economic recovery.
Congress almost certainly will cave under the pressure. After all, there are construction workers and real-estate agents in every congressional district. There’s nothing more American than home ownership, as proven by $150 billion in subsidies handed to homeowners every year.
…
as proven by $150 billion in subsidies handed to homeowners every year.
I venture it’s way, way more than that. The mortgage interest credit alone, roughly:
Mortgage debt = $11 Trillion
Interest on that, assuming ~5% (probably best case) = $550 billion.
Using a 25% tax bracket, that’d be $137 billion just for that.
Add in:
- Homebuyers tax credit - $75+ billion this year
- Rental maintenance tax credits
- Various rural utilities tax credits / subsidies
- Equity gains exemptions
- Probably other stuff I haven’t thought of
And we’re looking at a lot more, not including the indirect subsidies of things like the Fannie/Freddie/Ginnie MBS purchases, which amounts to well over $1 Trillion this year.
You forgot to mention the implicit subsidy in home equity gains (or perhaps more accurately, loss mitigation) due to the Fed’s mortgage interest buy down program. As noted several years back by FRBNY researchers Peach and McCarthy, the “fundamental factor” of interest rates has a very material effect on housing prices.
It’s pretty amazing to note that the housing bubble popped, despite every subsidy known to mankind that has been thrown at the US housing market!
It has already been years since I revisited this housing bubble classic (also posted a link to it in my response to packman’s comment):
Are Home Prices the Next “Bubble”?
Jonathan McCarthy and Richard W. Peach
FRBNY Economic Policy Review / December 2004
Home prices have been rising strongly since the
mid-1990s, prompting concerns that a bubble
exists in this asset class and that home prices
are vulnerable to a collapse that could harm the
U.S. economy.
• A close analysis of the U.S. housing market in
recent years, however, finds little basis for such
concerns. The marked upturn in home prices is
largely attributable to strong market
fundamentals: Home prices have essentially
moved in line with increases in family income
and declines in nominal mortgage interest rates.
• Moreover, weaker economic conditions are
unlikely to trigger a severe drop in home
prices. Historically, aggregate real home
prices have fallen only moderately in periods
of recession and high nominal interest rates.
• While such conditions could lead to lower home
prices in states along the east and west
coasts—areas where an inelastic supply of
housing has made home prices particularly
sensitive to changes in demand—regional price
declines in the past have not had devastating
effects on the broader economy.
“…declines in nominal mortgage interest rates.”
Are they still fundamental if the Fed has to sit on them to prevent them from exploding to market equilibrium?
They will mull it over as long as possible before announcing the renewal of the first-time home buyer tax credit, in order to maximize the psychological impact of the “surprise” on renewal.
Oct. 20, 2009, 12:52 p.m. EDT
Administration to decide on housing tax credit soon
HUD secretary doesn’t endorse extension of credit in testimony
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — Housing and Urban Development Secretary Shaun Donovan said Tuesday it will be a few weeks before the Obama administration has the data that will allow it to decide on extending a popular first-time homebuyer tax credit.
“We understand the urgency of this situation,” Donovan said at a Senate Banking Committee hearing, according to Congressional Quarterly. “And we believe that within the next few weeks, we will have additional data that will allow us to sit down with you” and discuss whether and how to extend the credit, said Donovan, according to CQ.
There is congressional support for the extension, but Donovan didn’t endorse it in his prepared testimony.
…
The renewed competition for REIC campaign contributions is underway:
Dodd Pushes to Extend and Expand Homebuyer Tax Credit (Update1)
By Dawn Kopecki
Oct. 20 (Bloomberg) — The $8,000 homebuyer tax-credit should be extended beyond next month’s expiration and expanded to more borrowers to buoy housing sales, Senate Banking Committee Chairman Christopher Dodd said.
Dodd, a Connecticut Democrat, and Senator Johnny Isakson, a Georgia Republican and former Realtor, urged colleagues to extend the credit through next June and to expand it to all couples earning $300,000 or less.
The Obama administration’s tax credit for first-time buyers helped stabilize sales this year after the worst housing slump since the Great Depression, Realtors and mortgage bankers said. Lawmakers are struggling to find ways to fuel real estate demand amid rising unemployment and a jump in foreclosures that may add to inventories of unsold homes.
“The work of stabilizing the housing market won’t be done” when the credit expires next month, Dodd said at a hearing of his panel today. “We still need to use every tool at our disposal to fix this problem.”
Purchases of existing homes in August were up 3.4 percent compared with a year earlier, the National Association of Realtors said. New home sales were up 30 percent from January’s record low, government figures show.
…
Short of a nuclear attack or meteor strike, you can be sure it will be extended. RE Johnny wanted it to be expanded to 15k, don’t see that happening….Yet!
In the event of the a fore mentioned it will be free houses for all survivors.
Calif sues bank, alleges more than $200M in fraud
Oct 20
SAN FRANCISCO (AP) - California Attorney General Jerry Brown is suing State Street Bank and Trust Co., claiming it bilked the state’s largest pension funds of more than $200 million.
The suit announced Tuesday alleges that Boston-based State Street has overcharged the California Public Employees Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) with fees for handling foreign currency trades.
Brown launched an independent investigation into the bank after a group of whistleblowers raised the claims in a 2008 lawsuit.
Brown’s office found that State Street charged the highest rates on trades despite being contractually obligated to charge a lower rate.
A spokesman for the bank’s attorney had no immediate comment.
College tuition cost rising again this fall.
AP Oct.20
Average tuition prices rose sharply again this fall as colleges passed much of the burden of their own financial problems on to recession-battered students and parents.
Average tuition at four-year public colleges rose 6.5 percent, or $429, to $7,020 this fall, according to the College Board’s annual “Trends in College Pricing” report, released Tuesday. At private colleges, the average list price for a year of coursework rose 4.4 percent to $26,273.
Those figures hide wide variations — public college students in California, Florida, New York and Washington have seen double-digit percentage increases, while the University of Maryland used federal stimulus funds to freeze tuition this year.
More importantly, the estimated net price — what the average student actually pays after accounting for financial aid — was much lower, at about $1,620 at public four-year colleges, and under $12,000 at private ones. Both figures are higher than last year but still lower than five years ago, thanks to recent increases in financial aid both from the government and from colleges themselves. The figures do not include room, board and other living expenses.
That’s one for our sister site: www dot edububble dot com.
Revised formula puts 1 in 6 Americans in poverty ~ AP~ Oct 20
WASHINGTON – The level of poverty in America is even worse than first believed.
A revised formula for calculating medical costs and geographic variations show that approximately 47.4 million Americans last year lived in poverty, 7 million more than the government’s official figure.
The disparity occurs because of differing formulas the Census Bureau and the National Academy of Science use for calculating the poverty rate. The NAS formula shows the poverty rate to be at 15.8 percent, or nearly 1 in 6 Americans, according to calculations released this week. That’s higher than the 13.2 percent, or 39.8 million, figure made available recently under the original government formula.
That measure, created in 1955, does not factor in rising medical care, transportation, child care or geographical variations in living costs. Nor does it consider non-cash government aid when calculating income. As a result, official figures released last month by Census may have overlooked millions of poor people, many of them 65 and older.
Megabank, inc tilted the country so all the money rolled out of the pockets of the 1/6 of Americans who are flat out broke straight towards Wall Street.
no wonder military recruits are at an all time high.
Apologize in advance if posted before. Here is an interesting RE auction item.
http://www.williamsauction.com/silverdome/?utm_source=NREIOnline&utm_medium=E-mail&utm_campaign=13682
As the ad state’s…”An excellent investment opportunity”!
For who, I’m not sure, but I am sure Pontiac would love for someone to buy it!
‘The dome established the largest indoor attendance record for a sporting event when Hulk Hogan met Andre the Giant in the World Wrestling Entertainment’s WrestleMania III.’
wife got charged a fee cause the credit card company did not post her payment timely. we are deadbeats…we pay in full every month.
man i feel bad for the rep that gets that phone call tonight…and i assure you…it will be reversed.
poor…poor…soul.
Oooh. Videotape it and post the episode on youtube, wouldja?
I must not be a good or kind person*, because I bet it would make me laugh my bum right off.
Plus, I might possibly even learn some new and exciting words! I love new and exciting words.
*I already knew I wasn’t. F* *ck you!
We needs mo money, the infrastructure is crumbling. India ahead in the game…
Murphy: U.S. needs billions for infrastructure
Jacksonville Business Journal
The nation’s infrastructure has decayed to the point that the country has no other choice but to fix and upgrade its grid so it can handle climate change, a growing population and globalization, said a leading national planning expert.
Tom Murphy, Urban Land Institute senior resident fellow, said the European Union, China and India have worked to bring their infrastructure systems up-to-date, while America’s hasn’t received a major boost since the 1950s. He spoke at the 2009 Global Trade & Transportation Symposium in Jacksonville. Murphy urged attendees to look at ways to cut down on gasoline use, pointing to the U.S.’s dependence of foreign oil, with much of it coming from unfriendly countries such as Venezuela and Russia.
Murphy, who served three terms as Pittsburgh’s mayor, said Northeast Florida needs to prepare for the 600,00 residents it will gain within the next decade. Developers most value property in the city and inner suburbs, not the outlying green areas, which require highways to connect them to the city.
“That turns everything around,” said Murphy. “There is a whole discussion that is going on in communities on how to compete in a new world.”
The nation will have to spend about $2.2 trillion within the next five years to get its transportation and water infrastructure up to par. He questioned why Florida was unable to get a passenger train line from Jacksonville to Orlando when the European Union’s diverse body could create a united rail system.
“Being world class community isn’t about money but having the community will to pull together the money,” said Murphy.
Hey I know, why not increase our deficit to 3-4-5 trillion a year for the next 20-30 years and build all new stuff for ‘free’. We aren’t gonna pay it back anyway. We can all have make work jobs that pay a minimum wage of 250k and the Mcshack of your choice. That way everyone is a winner baaaaby!
I’ll forward this idea on to the moonbat wing of the dimo-republicraps party. Look for it on the senate floor soon. Problem solved, next!
Um….didn’t we know our infrastructure needed sprucing up before applying stimulus money to all those more porklike projects?
What??
We can’t upgrade our infrastructure
We need to save that money for bankers and their bonuses.
We need ot pump up the housing bubble.
The people can do what other third world people do when the plumbing system collapses, dig a pit.
All she wanted to do was to pay off her mortgage and upgrade her jugs.
City lawyer swindled bank out of £7million then payed off her mortgage and had breast implants. Daily Mail Reporter ~ 20th October 2009
A crooked City lawyer who swindled millions of pounds from her bank bosses and then used her share to pay off a mortgage, buy £40,000 earings and fund breast surgery, is today facing jail.
Kate Johns, 39, deputy head of Tokyo Mitsubishi’s legal department, repeatedly cajoled colleagues into providing support for her friend’s ailing airline by approving multi-million pound letters of credit.
London’s Southwark Crown Court heard the massive transfers ended up in the coffers of struggling Indonesian carrier Air Efata which boasted just three planes.
In return Johns received pay-offs totalling £1.95 million, more than £1.1 million of which was promptly used to clear the mortgage on her luxury town house.
She also splashed out £40,000 of her ‘ill-gotten gains’ on a pair of earrings to go with the £35,000 ring grateful airline chief Frank Taira-Supit had bought her.
Investigators went on to find she had received another £1.05 million from him before the scam. She claimed it was for legal advice.
In any event, it apparently helped provide her with a lifestyle of shopping trips, personal grooming and breast surgery.
Unfortunately her massive betrayal of trust failed to rescue the Harvard law graduate’s airline and it was grounded.
The devastated 58-year-old former lawyer later hanged himself.
Married Johns, of Primrose Hill, north London, claimed that far from being a criminal she had simply been doing the bidding of one of her bosses to protect the bank’s interests.
The jury, however, took less than three hours to unanimously decide she was lying and convict her of 12 offences committed between May 11 and October 25, 2006.
Filed under: America…what a country!
“…The Denver paper, Westword, has already has gotten more than 120 applicants, many of them offering to do the reviews for free. When the newspaper settles on a permanent critic for its new “Mile Highs and Lows” column, industry watchers say, it will be the first professional newspaper critic of medical marijuana in the country.”
Colorado newspaper hiring marijuana critic:
http://www.google.com/hostednews/ap/article/ALeqM5hb_mCWQg0eqpIqxIAfPIe2fjnivwD9BF1BC80
Holy shnit!
My VISA has a $10,000,000,000.00 dollar limit! Should I cash advance it to myself, put in MM, and tell VISA I’ll pay them back in 28 days less interest?
I’m not making this up!!
LOL, I called the 800 number on the back to tell VISA it looks like they’d increased my limit to 10 Billion… the guy was like, “uh… we’ll call you back.”
i864.photobucket.com/albums/ab205/muggyflo/Lol.jpg
With that attitude you’ll never be a big fish Muggy.
Here’s what you should have done instead. Take the 10 billion, paid off a few congressmen, purchased your own island in the Carribean, moved all your money out and then declared bankrupcy.
28 days, money market, your vision is highly limited
I thought rather than run with the money, simply use the credit they extended me. With zero balance on my card I can do cash advances for 28 days, no interest. Seriously, 3 million for clicking a few buttons?
Is it bad that I really am running this through my head?
I’m sure that you are fine taking out the maximum available balance. After all, the banks are professionally-run and excellent in the risk-analysis and risk-management departments. You should trust them.
If they think you can afford it, I’m sure you can. Go for it.
Heck, with 10-billion, you could afford to buy the very best legal counsel for the ensuing fun. You could probably just buy the entire bank—which you might get on the cheap once the word hits the street that they are severely under-capitalized and likely to fold.
Yeah, that’s the ticket! Buy ‘em, appoint youself CEO, lobby Congress hard, and start raking in those fat-cat bonuses!
Yeah, that’s the ticket! Buy ‘em, appoint youself CEO, lobby Congress hard, and start raking in those fat-cat bonuses!
Yar! Do it! And then remember who your friends are, and that we want to see wombat-races in the streets of Florida, and parades and lots of cotton-candy and REtard heads marched around on sticks and things like that.
Oh, and nail salons. So I can get my nails did.
Dangit! Italics begone!
Can you buy me a designer handbag?
Good Lord! Get you hands on as much moo-lah as you can, buy stuff you can hide and will increase in value, then pull a FB and default… ASAP before then put the kabosh on it. When you get questioned, tell em’ some guy from a blog told me to do it. I’ll take the blame.
Lucky you, $10,000,000,000.00 limit…
I on the other hand just discovered someone stole $500 from my HSA account.
How does one steal from a health account? That’s so brazen… I only used this card in a very few places. One of those people is a crook. Amazing!
Watching Frontline’s story on Brooksley Born tonight. 9 EDT
Nice excerpts from the show are provided at this site:
http://www.pbs.org/wgbh/pages/frontline/warning/
Son of a Bubble
by Bill Bonner
London, England
What a great recovery!
No jobs…
No credit…
No sales…
But look at those stocks!
And oil! And gold! And even London property!
Real estate agents in London say they are sold out…as prices go to records. Well, asking prices…that is. As for sales prices, that is another story.
Still, London is driven by finance…and finance seems to have gotten out of rehab. It’s party time again.
The Wall Street Journal is talking about a “full recovery” in luxury goods sales by 2011. And Wall Street itself is pricing stocks as if the record profit margins of ‘05 and ‘06 were just around the corner.
In other words…investors’ expectations have not changed. They think things will return to the way they were in the Bubble Epoque.
How could that happen? A full recovery implies a number of things…
..that the ‘Son of Bubble’ will be as big as his dad…
..that all those people without money or jobs will somehow find the wherewithal to spend again…
..and that the baby boomers will stop saving for their retirements and begin to party like it was 2006 again…
Remember, Bubble Epoque spending, sales and profit figures were made possible by borrowing. People spent every penny they earned…and then “took out equity” from their houses in order to spend more.
What they really got was a house with a bigger mortgage - without moving!
At the height of the bubble period, if we recall correctly, Americans were taking out more than $500 billion per year. Now, they’re putting back nearly $500 billion a year in savings.
We don’t like to be party poopers here at The Daily Reckoning. But there is no way to get a rerun of the Bubble Epoque on those numbers.
What we see happening is a typical post-crisis bounce…powered by easy cash and credit from the feds. How long can it go on? How far can it go? No one knows. But if you want answers, we’ll go way out on a limb:
It won’t go on forever. And it won’t go to the moon.
I think it’s probably a “law of physics” that gold prices *AND* stock prices can’t rise simultaneously–at least not for long. One or the other is being driven up artificially….
- Expectations for high future dollar inflation support both gold and nominal US stock prices.
- Higher than expected realized dollar inflation supports both gold and US stock price increases.
- Both of these trends are consistent with a collapsing dollar (in which gold and US stock prices are denominated).
LONDON (Reuters) – Bumper payouts to bankers should be seen as part of a longer term investment in London’s economy, the vice chairman of Goldman Sachs International told a debate on ethics at St Paul’s Cathedral on Tuesday.
Defending lavish bonuses expected at the U.S. investment bank, Brian Griffiths said he was not “ashamed” of his bank’s compensation package, which has inflamed the bonuses debate.
The British public should “tolerate the inequality as a way to achieve greater prosperity for all” Griffiths said at the public meeting examining what role morality should play in the marketplace.
Man I love that last paragraph, “greater properity for all” Is that what we have now greater prosperity, gee I thought we had massive unemployment, massive deficits, declining wages and benefits, and soon rising costs of goods.
The Pimp has taken MBS gains off the table. Sounds like the Fed is planning to unwind its positions starting next spring. What will prop up housing prices after the Fed unwinds its MBS positions?
FundWatch
Oct. 20, 2009, 4:55 p.m. EDT
Pimco’s Gross unwinds mortgage positions
With end of buying program looming, money manager says it’s time to get out
By Sam Mamudi, MarketWatch
Correction: A previous version of this report incorrectly stated the fund’s mortgage holdings were at a six-and-a-half year low.
NEW YORK (MarketWatch) — The manager of the world’s largest bond fund has raised the pace at which he’s leaving mortgage-related securities.
Bill Gross, manager of Pimco Total Return Fund (PTTRX 10.93, +0.02, +0.18%) , has been busy reducing his exposure to mortgage-related securities, selling roughly $30 billion of assets in September and leaving his fund with its smallest portion of mortgage holdings in more than four and a half years.
Most of the securities were agency mortgage-backed securities — debt issued by the government-sponsored mortgage finance firms, Fannie Mae (FNM 1.10, -0.02, -1.79%) and Freddie Mac (FRE 1.25, +0.01, +0.81%) and also Ginnie Mae, which guarantees mortgage loans made to low-income borrowers.
‘By all measures, mortgages look really rich right now. Everyone knows it, and they’re trying to get out of their positions by the end of the Fed program.’
William Chepolis, Deutsche Bank
Total Return Fund’s holdings of mortgage-related securities fell from 38% of the portfolio on Aug. 31 to 22% on Sept. 30, the latest date for which figures are available. On July 31, 47% of the fund was in mortgages — the fund’s largest category holding at that time.
The fund’s assets under management on July 31, Aug. 31 and Sept. 30 were $169 billion, $177.5 billion and $185.7 billion, respectively.
The last time Total Return Fund had less allocated to mortgages was Feb. 28, 2005, when the level was 19%. The fund’s assets under management at that time were $75.8 billion.
The fund explained the sell-off in its Quarterly Investment Report. “Pimco’s significant overweight to high-quality, agency mortgage-backed securities has recently been strongly positive for returns,” it noted. “With MBS valuations having richened substantially, and the Federal Reserve’s mortgage-purchase program slated to end in March of next year, Pimco plans on moving to an underweight in an effort to benefit from an expected cheapening of agency MBS.”
http://www.nytimes.com/2009/10/21/business/21volcker.html?_r=1&hp
Volkers idea fails to change Washingtons idea of bank
Rising Debt a Threat to Japan’s Economy
http://www.nytimes.com/2009/10/21/business/global/21yen.html?hp
Asian markets Fall on weak US housing market.
http://www.nytimes.com/aponline/2009/10/21/business/AP-World-Markets.html