Bits Bucket For November 19, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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U.S. Cities With The Most Underwater Mortgages ~ CNBC
For individual homeowners, being “underwater” on a mortgage – when a home is worth less than outstanding debt, or has “negative equity” – is one of the worst positions to be in, short of foreclosure.
Zillow.com - a firm that compiles US real estate and mortgage information - has put together a list of the 156 largest metro areas that includes statistics on median home values.
http://www.cnbc.com/id/33962953?slide=1
is one of the worst positions to be in, short of foreclosure.
Not if you plan on retiring in that home..er, house. That first sentence should be instead of individual homeowners, it should read, speculative investors or flippers…
Step, you are forgetting that the person who wants to or has been living there long term has Heloc-ed the place to the gills and will not be able to afford the payments. Possibly he lost or will be losing his job, too. Underwater = No Options.
right, that all goes without saying!
“That first sentence should be instead of individual homeowners, it should read, speculative investors or flippers…”
Disagree, Step. There are plenty of legitimate non-flipper homedebtors who find that life throws them a curve-ball, and the place they thought would suit them for a long time no longer does.
And being underwater means being stuck. You don’t have to be a specuvestor to find out that being underwater is a bad position to be in.
+1
Your company downsizes and you need a new job - and it’s in another state. You get a divorce. You get sick. Not everyone is a house flipper and to imply that everyone should retire in their house is unrealistic and a little holier than thou.
I’d hardly dub it holier-than-thou! My hope is to “buy where I die”. I don’t understand anyone who buys a house “for a couple of years”. I get the starter home and upgrade to a bigger home 7-10 years later, and then downsizing in retirement after the move-up home has probably been paid off. But to buy houses every couple of years? To me that’s pretentious. Buying a house should be a well-earned priviledge, not an entitlement. IMO.
Here we go with another case of parsing and profiling people (buyer/debtors in this case) as opposed to looking at the price.
I feel bad for the military people who bought and wind up facing a transfer as happens every few years. I’ve never understood why they would do this except that I suppose they have been led to believe that appreciation will cover the selling costs in a few years.
You would think that the military financial affairs office would warn them about the dangers of short term home ownership.
My area is nuked by the military doing this. Housing allowances and stuff have the rents really high. Many .mil buy homes then rent them out once they get transferred. Rented from someone like this, nightmare. Never had money to fix issues, never fixed issues, etc.
Spokaneman,
Often the base legal officer will put out regular ( and largely unheeded ) warnings. In… a normal world, even middle enlisted guys could just turn -right- around and rent to another G.I!
In so doing, the base legal officer would be notified if the new renter was stiffing the guy that transferred out! So it ‘was’ pretty iron clad. In time, they would accrue several rentals in the various places they were stationed ( geographic diversification ) and it worked for about 60 years.
One young guy transferred from one base to another ( all in OR ) and is pretty sure he’ll be facing a short sale. Just another example where we’ve screwed up a good thing for the younger crowd. No WAY he can rent it out and cover the nut!
being underwater is a bad position to be in.
Without an oxygen tank that is full and works and attached= emergency fund.
Of course, the MSM shouldn’t call people that have no equity in a home “homeowners”. My one share of Disney that’s framed and hanging on my wall makes me a bigger % owner of the Walt Disney Company than these homedebtors are of their homes.
I have a framed share too! Lots of fun to look at.
Parents retired to #13 or so, and are unfortunately stuck.
True…
I just love how most people round here in the nutty land of Maryland ignore this idea. In their version of reality, things go like this:
1) Buy an overpriced house. It doesn’t matter what you pay because “housing always goes up.”
2) Get lots of raises at work because everyone’s income always goes up.
3) Sell house at a huge profit
4) Repeat all previous steps with larger house.
Despite reality, this is still the belief here. It amazes me that nobody asks “what if” with regard to these perfect scenarios (housing always going up, income always going up, etc.)
If you have to pay off the mortgage and it stays underwater forever, that means you end up paying the bank more than you (or your heirs) will ever recover in a sale. For getting suckered into buying at the peak, you get to enjoy the lifelong pleasure of paying off loan which is not covered by the value of the underlying collateral.
Not a pretty picture, and a key motivating factor for the PTB to restart real estate inflation when and if they are able to do so…
“…you end up paying the bank more than you (or your heirs) will ever recover in a sale.”
I should be a bit more specific. Even in a non-underwater mortgage situation (say with a thirty-year-fixed loan), the home debtor might pay, say, twice as much back in interest to the bank for the pleasure of eventually paying off the principle. But at least if the home is sold at that point, the principle paid in will be recovered in the sales proceeds.
In case of an underwater loan, the principle repaid will not be recoverable by the sales proceeds. If you ever needed to sell the home before the note was paid off, the sales proceeds would come up short of what was needed to pay off the loan. A plan to use the sale of your current home to raise a downpayment for a subsequent purchase does not work out too well in this circumstance, which helps explain the “need” to provide $6,500 in “move-up buyer” tax credit to keep the party going.
I think the party is just about over. The unemployment situation will prove to be too much for these silly little tax credits and such. Of course, the next trick up their sleeve will probably have to do with ignoring end users, and offering cash for investors to jump into the market in a last ditch attempt at keeping the cart in front of the horse. Do these chowderheads ever think about jobs?
PB, does it have to be a move-up buyer? Or is it for any purchase? If the FB’s bring the $6500 to downsize from an underwater mortgage to a smaller mortgage, then that’s probably not a bad use of gov money. (compared to say, a spa trip for AIG)
“….the principle repaid will not be recoverable by the sales proceeds.”
You’ll know this fact has sunk in when you start hearing people say “I’m renting………I dont want to throw my money away on buying a house……”
Nope….jobs are the last thing on their minds even after hookers and jack Daniels
—————————————
Do these chowderheads ever think about jobs?
“Of course, the next trick up their sleeve will probably have to do with ignoring end users, and offering cash for investors to jump into the market in a last ditch attempt at keeping the cart in front of the horse. Do these chowderheads ever think about jobs?”
I strongly suspect this will be the case: various connected cronies will be able to buy up huge tracts of houses cheap with a “wink wink” to the banks as the “value” of the houses will still be at Bubble-level while the price (only available to insiders) will be much lower.
These greedy infestors will then become slum lords or new flippers. Most will crash at some point, and their losses will be offloaded to the taxpayer.
By the time all this is done, the taxpayers will probably end up paying Bubble prices for the same houses multiple times as it passes through the hands of various banks and infestor crooks.
“Not a pretty picture, and a key motivating factor for the PTB to restart real estate inflation when and if they are able to do so…”
I would go a step further to say that this motivation is for their own personal gain. Just click on that link above, and after you’re finished with the US cities with the most underwater homeowners, check out the richest congresscritters. Much of their money is tied up in, you guessed it, real estate. Plenty of investments in financial institutions as well. Is there any question why we’re getting bank bailouts and manic attempts at propping up real estate? The whole political system needs one G I A N T enema.
“Much of their money is tied up in, you guessed it, real estate.”
For that matter, the Treasury Secretary also has an underwater house he cannot sell. Got conflict of interest?
With approx 20-25% of the workforce unemployed, I’d suggest that they work that problem first, and some of these other things will take care of themselves.
Given the Congressional calls for Geithner’s resignation, I can see why he’s unable to sell his house. He’s probably not trying very hard because he’ll be back in that house before too long.
Just like buying a car! Its the new paradigm.
Sarcasm off.
Seriously, just like the bailout, couldn’t we all just been given a voucher to get a car etc and then they still would be making cars, and we would have the $ to buy more ’stuff’ ala George Carlin!
Like when I was in the wamu now chase banks and they have all new furnishings, tile, wood flooring and 52″ tvs. I just go visit my new furniture.
I think the word needs to get out that foreclosure isn’t the end of the world. Nor does it put an end to one’s financial affairs. In many cases, walking away is the most rational thing that can be done.
I think the word needs to get out that foreclosure isn’t the end of the world. Nor does it put an end to one’s financial affairs. In many cases, walking away is the most rational thing that can be done.
I agree.
I agree whole-heartedly with the strategic walk away.
My advice to those upside-down is do not put anything on a credit card, don’t burn through savings, retirement, etc in hopes of saving the house. Either way, you lose the house and have a ding on your credit. However, with no debt, savings and retirement, you have a chance to recover and not be a burden on your kids or society for the rest of your life.
If a person is a pastor as well as a financial advisor, do you have to tell folks to pay your house payment on Sunday and then tell them to walk away the rest of the week?
How dishonest is it to quit making the payment to the bank? The contract states that if you don’t make the payment, the house is taken away. The contract doesn’t state that you will empty out every account, rack up every credit card, borrow from friends and family, you will pay whether you have a job or not, - i.e do everything possbile to make the payment short of giving your life.
Obviously, dishonesty comes if you lied on the application for the loan. (Job, income, primary residence, etc). If the banks or investors are stupid enough to give a loan with the terms that the house is taken away if the payment is not made or don’t verify the information given on the application, let them suffer the consequences.
Amazing Stats:
Here is a breakdown of location of cities:
FL 6
CA 6
NV 2
AZ 1
The city list starts at 48% underwater and goes to 81% underwater for #1 Las Vegas.
81% of your city underwater. That is amazing. That means nearly no one can move or sell in a city without:
1. Bring lots of cash to the table
2. Foreclosure/Walkaway/Shortsale
Renters exempt.
At what point does your city just breakdown and stop to function?
And what happens when the cash-for-home-clunker money giveaway ends?
The city list starts at 48% underwater and goes to 81% underwater for #1 Las Vegas.
Yes! We’re Number One!
Yes! We’re Number One!
lavi- Post a photo of you and your pompoms in LV! on your blog!
Gooooooooo team! Rah!
Post a photo of you and your pompoms in LV!
Hey!
Who told you about the pom-poms?
Remember that night you had too much to drink?…..
We do!
Wow, Fla and Cali represent!
I’m curious how well commercial real estate is fairing by comparison in these lucky cities.
curious how well commercial real estate is fairing ??
Just as bad…The correct data is not readily available like residential and transactions are easily masked to prevent disclosure of the true value of the deals…
Commercial is bad everywhere. I know that just from driving around, and I live in a wealthy suburb of a city that’s doing comparatively well.
You forgot “arson” on your list.
A big problem is that many people who bought at or near the height of the bubble NEVER COULD AFFORD to pay their mortgages. They either got negative ammortizing loans, or they ReFi’d frequently to make ends meet.
I’m curious about how the percentages would be for various degrees of underwater. There’s a big difference between being 5k underwater and 100k. And it’s likely that borrower behavior will differ. But no matter, these number are bad enough that cities like Las Vegas are TOAST.
When driving through a lot of brand new neighborhoods with large, expensive homes 4 years ago, I marveled at all of the expensive cars, toys, and apparent wealth. I was scratching my head quite a bit then, not understanding where all the high paid jobs were coming from. But now it couldn’t be more apparent that the entire situation was one giant facade. A lot of those FB’s just packed up the toy hauler, motorcycles, cars, and headed out. Their credit got dinged, but they got a bunch of free toys care of Megabank, Inc.™
I recall the rather humorous television ad that aired about three years ago that depicted a sort of dufus guy with a big house nice car and riding lawn mower who said “How do I afford all of this, I’m in debt up to my eyeballs; someone help me please.” It was an ad for a debt workout agency. At the time I kind of wondered if the problem were really that bad, I guess it was.
Spokaneman,
Actually it was an ad for Lending Tree, they guy’s name was “Stanley Johnson” and he used to post here!
Like my car? It’s new!
I belong to a country club.
“Why I can barely pay my finance charges”
Do we need any further… proof the avg. American was using his home as an ATM to finance his lifestyle? Remember, those commercials were from 2003-2005.
Actually it was an ad for Lending Tree, they guy’s name was “Stanley Johnson” and he used to post here!
Who he - the actor? Really?
Yep, I remember now, got lots of stuff you can’t pay for?
Simple, take cash out of the ol’ homestead and pay for it for the next 30 years. Guess that didn’t work out so well
What was the jist of Mr. Johnson’s posts? Did he see the lunacy in the lifestyle he was portraying?
For a laugh go read Bogleheads…they’re still thinking that way. Only now, it’s cash-our refi to “invest” in a rental or just have the money sitting there making 2%.
A lot of those FB’s just packed up the toy hauler, motorcycles, cars, and headed out.
It’s been a long time coming.
On Thanksgiving In 1987 I was stranded for a while in Kramer Junction, CA after the water pump blew on my ‘78 Monte Carlo.
During that time, I watched millions of dollars worth of motorhomes and SUVs pulling boats, skidoos, dirtbikes and sand buggies.
At the time, I had a mortgage on an 1100 sqft house in Tucson and a couple of 10-year-old cars. I couldn’t understand how so many people could afford so many expensive toys.
I thought to myself, “Man, we are a rich country”
The funny thing is, the numbers paint too rosy a picture of Metro Phoenix (#5 on the list) and probably most of the others. Zillow bashing aside, July 2003 pricing would simply be too high to sell the average Phoenix area house.
“% of Homes with negative equity: 63.5%
Homes with negative equity: 470,923
Zillow Home Value Index: $148,501
Year-over-year change: -22.2%
Last time market was at current levels: Jul 2003
Change from market peak: -47.2%”
Right. 2003 prices are much too high. Given the economic situation, and factoring in mass offshoring of jobs, and onshoring of cheap labor- both legal and illegal, we can keep rolling prices back to the 80’s, nominally. It’s all about jobs, now.
“Right. 2003 prices are much too high. Given the economic situation, and factoring in mass offshoring of jobs, and onshoring of cheap labor- both legal and illegal, we can keep rolling prices back to the 80’s, nominally. It’s all about jobs, now.”
Yep, a house that I lived in for a bit years ago in North Phoenix, modest 3 bedroom, 1,100 sq ft ranch house on a 7,000 sq ft lot is a good example. It was originally purchased new in the early 80s for around $55K. At the 2005 peak, it sold in good condition (but no major improvements) by the original owner for $230K. It was for sale for several months in early 2009 as a lender-owned, asking $90K. No takers, eventually price listed at $75K and sold. It was not heavily damaged or missing stuff like sinks, doors, etc. So, $55K around 1982-83, $75K in 2009. That is the tale of PHX.
Sweet post wnbz….
We already knew that almost every city in Florida and California are drowning in underwater mortgages. Someone needs to put together one of these lists for ‘Top Ten Cities with Underwater Mortgages NOT in Florida and California’ as that would be much more useful.
For individual homeowners, being “underwater” on a mortgage – when a home is worth less than outstanding debt, or has “negative equity” – is one of the worst positions to be in, short of foreclosure.
This is the dumbest sentence I’ve ever read.
You buy a house for $X dollars. You think $X is a fair price, you can afford the payments. You ignore all the news, continue paying your mortgage payment each month, and after 15 or 30 years the house is yours. How is that a bad position to be in?
Because if you have a life event (divorce, ill child or untimley death of a spouse, exc) then you don’t have any equity to draw against to handle the payment shock or reduced income.
Normally considered an unstable situation.
Additionally if you are far enough under water you lose a lot of money every month compared to renting.
It’s a bad situation from the banks postion as well because odds of a default skyrocketed.
Just a pet peeve of mine, but the whole “drawing out equity” thing really gets to me.
It’s collateralized DEBT, pure and simple. It’s not “equity” to be spent until you sell it.
1 million jobless face benefits loss in January
Extended benefits will expire unless Congress acts. Recent extension only covers workers through Dec. 31.
NEW YORK (CNNMoney.com) — One million people could lose unemployment benefits in January if Congress doesn’t extend federal aid, according to a report released Wednesday.
The report is likely to turn up pressure on lawmakers and the president, who earlier this month enacted a record-long extension of federally paid benefits. But the law only helps those who exhaust their lifelines by year’s end.
As it stands now, the deadline to apply for federally paid benefits is Dec. 31. So while unemployment benefits now run as long as 99 weeks, depending on the state, not everyone will receive checks for that long a stretch.
“Congress has less than four weeks left on its schedule to legislate this year, and unless it acts to renew the unemployment provisions during this period, the clock will run out for a million workers,” said Christine Owens, executive director for the National Employment Law Project.
Do we lower the minimum wage to increase employment or reduce benifits at some point?
I’ve paid into this system for a long long time and collected 1 unemployment check in 24 yrs.
I’m guessing all that money is going to be long gone by the time I get creamed.
Unemployment compensation premiums are paid by the business; not by the employee. Here in Florida the unemployment insurance premiums paid by business are taking a gigantic leap.
Cracker:
Technically you are correct, but the employee pays in the end by a lower starting wage. Its a benefit like the difference between getting 1 week or 3 of vacation time.
People making minimum wage cannot afford houses, cars, new appliances, TVs, vacations, eating out, expensive car repairs, new furniture, etc.
In other words, everything that drives our economy.
They mean the clock will run out for a million non-workers, don’t they?
People falling off the Unemployment lists will actually “improve” the unemployment numbers.
I can easily imagine a future where the real unemployment rate is 25%+ and forever rising but the “official” UE never gets higher than 11% or so thanks to games with the numbers.
If we’re all out of a job and everyone is out of benefits, UE is 0% - yeah!
Cap&Tax… This will thrill the half-wit worshipers of big gubmint!
“Beginning 1 year after enactment of the Cap and Trade Act, you won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the “Cap & Trade” bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced”.
“The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year. No one is excluded. However, once the lower classes feel the pinch in their wallets, you can be sure these voters get a tax refund (even if they pay no taxes at all) to offset this new cost. Thus, you Mr. and Mrs. Middle Class America will have to pay even more since additional tax dollars will be needed to bail out everyone else”.
“But wait. This awful bill has many more surprises in it. Probably the worst one is this: A year from now you won’t be able to sell your house. Yes, you read that right. The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes (”mobile homes”) are included. In effect, this bill prevents you from selling your home without the permission of the EPA administrator. To get this permission, you will have to have the energy efficiency of your home measured. Then the government will tell you what your new energy efficiency requirement is and you will be forced to make modifications to your home under the retrofit provisions of this Act to comply with the new energy and water efficiency requirements”.
http://www.google.com/search?hl=en&source=hp&ie=ISO-8859-1&q=A+License+required+for+your+home-+Cap+and+Trade&btnG=Google+Search
so what will this do to all those POS stucko boxes builders have, and banks own?
I see a bright future for insulation contractors.
And the people who do the original energy assessments.
“Beginning 1 year after enactment of the Cap and Trade Act, you won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act”
I am sure that will work wonders for the real estate market. So basically most people won’t be able to sell their home anymore. How ’bout foreclosures? Will the banks have to bring their REO up to spec?
“Beginning 1 year after enactment of the Cap and Trade Act, you won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act”
I don’t see a problem here folks. The electorate voted for hope and change and that’s what they will get. Big O said that he would create jobs and this will surely create jobs.
I’ve heard about these rumblings, and seriously, I wonder how this would be carried out.
On one hand I can imagine these provisions being fought tooth and nail by the NAR, probably with great success. On the other hand, I can also see NAR working with the bill’s writers, to insure that if these provisions did make it through to law, only an NAR-licensed UHS could sign-off on the “energy improvements”, meaning no more sale of homes by owner. Think of the low-level bribery that would ensue, among the other more obvious side effects.
Think this can’t happen? This is America, my friend!
The NAR is on it. I guess their government relations arm is more honest than its consumer relations arm.
only an NAR-licensed UHS could sign-off on the “energy improvements”
That would be an amazing coup-de-gras if they could pull that off. Doubt it though. There’s no way UHS could remotely claim themselves as energy experts.
A more likely thing would be back-scratching partnerships with HVAC companies.
Lobbyist Death Match.
In this corner, wearing the white trunks with the brown stripe in the back, the NAR/Used House Sellers……
In the opposite corner, wearing stucco stained bib overalls, the developers/new house builders……
Let’s get it on!!!!!!!
Assuming this bill is true, I see it as a way to justify eternally high housing prices via bribes and forcing people to spend a fortune “upgrading” their house to meet the absurd requirements. I could also see it being used to blacklist people… if they find out you are not a True Believer, suddenly your house needs more “upgrades” unless you pay people off, etc.
The goal is keep the wealthy rich and impoverish and lock-down everyone else, and they are making great progress on that goal.
How about some facts, from, of all people, the NAR. I’ll post the source in a second.
—–
Fact: The bill does not create a federal energy audit or labeling requirement. As introduced, the original bill would have required energy audits and labeling at the time of sale. However, Realtors succeeded in making many positive changes before the bill passed. Many published reports are not based on the version of the bill that was considered by the House. As approved, the bill:
• Does not create energy audit requirement for real property at time of sale.
• Exempts existing homes, multifamily and commercial buildings from any federal energy labeling guidelines such as the existing federal Energy Star label program (section 204(m)), and
• Leaves the decision entirely to state governments whether to pass a law to require labels, but expressly prohibits labeling during a transaction (Section 204(h)).
——–
The Realtors would like to think that they alone got rid of some of the outrageous parts of the original bill, but it’s common to put an outrageous privision in a bill with the full intent of letting somebody take the provision out. Typical bargaining strategy.
Here’s the source for the NAR.
http://www.realtor.org/wps/wcm/connect/865087004eadb900a294fab684cb314f/government_affairs_clean_energy_myths_facts.pdf?MOD=AJPERES&CACHEID=865087004eadb900a294fab684cb314f&LID=RONav0019
It lists contact information in case you want to fact-check them.
If this plays out as you suggest, it just might knock loose a whole bunch of shadow inventory.
Of all the ponderous political agendas in motion these days, there doesn’t seem to be even one without horrific consequences for the average American. Am I missing something? Thousand page bills, more and more taxes, mountains of debt piling up, less and less jobs, legislated science and parasitic favoritism. We are doing this stupid stuff to ourselves! There is no external enemy.
Is it possible that the housing bubble was just an early symptom of a whole nation gone manic, an unstoppable mob psychosis which will find ever larger expressions of insanity until there is a nova?
Maybe it is just that I am reading more news these past few years, trying to understand what is going on. I’d be better off to just go fishing.
Yeah, it’s a tricky balance - trying to learn enough to be prepared, but still having some fun along the way too.
Has the nation gone manic? I’d venture to say the symptoms are showing. So knock yourself out people - happiness is just one more purchase, one more piece of legislation, one more stock pick away - I promise, and so do Madison Ave, Wall St and DC!
We are doing this stupid stuff to ourselves!
Correction. “We” DID (past tense) this stupid stuff to ourselves in the past 25 years. And by “we,” I don’t mean me.
Over the past generation or so, regulations were dismantled to the point where businesses were allowed to become to big to fail. Jobs were allowed to go overseas and come in from across the border, and companies were rewarded handsomely for it. Banks were allowed to book profit on mortgage payments they never received. Brokers were allowed to sell risk up the food chain, living off the juicy skim. Ratings agencies were paid by the manufacturers of financial products — a huge conflict of interest. The R&D pipeline was allowed to dry up, to where innovation stagnated. People had to create their own infationary credit to stay alive. Health insurance companies were allowed to profit off the sick. Credit Card companies were allowed to charge usury rates because poor states (ND, DE) needed clerical jobs. Banks were allowed to create $100K of leverage (fake dollars) for every ONE dollar of labor done by J6P, and make that fake money into real money — just long enough to get their skim and buy off the Senate. Then, just as J6P reached for their share, the fake money disappeared again. Shall I get started on the wars?
What’s happening now? You’re just reading more bad news. The bill for that nationwide HELOC is coming due. All the spending is a last-ditch effort to clean up after all this irresponsibility, before this country goes down for good.
Over the past generation or so, regulations were dismantled
For the 8,000th time, regulations were not dismantled over the past generation.
Red Tape Rising: Regulatory Trends in the Bush Years
www dot heritage dot org/research/regulation/bg2116.cfm
I call BS.
Your source — The Heritage Foundation, hardly a neutral entity — only details the number of pages and staff members and overall cost of all regulation. But there is no mention of which regulations. And there is some inherent hypocrisy.
Yeah fine, there are more regulations, IF you count Customs, or animal and plant inspections, or how many birds or you’re allowed to shoot. But what about the dismantling of Glass-Steagal, or the relaxation of reserve requirements? What about offshore tax-evasion, either in the Caymans or in Zurich? The SEC allowed companies merge left-right and sideways — every day PBS was reporting a merger or a hedge fund takeover. It doesn’t matter if you created a hundred plum jobs at the SEC if they were all asleep while Madoff was running his operation. Who passed the tax break to where profit from a house flip is near tax-free? Who allowed these monopolies to form?
So, you pass a bunch of small regulations and let the big ones go.
LehighValleyGuy,
No call to doubt you. I would point out that several instances have been brought to light ( the Sago Mine Disaster and numerous aviation ‘mishaps’ ) were Regs. were perfectly allowed to be BLOWN OFF! but no, we’re not lacking for regulation.
You just have to wonder, what is the purpose of re-hashing these ancient history slights ( be they real or imaginary ) when you’re fighting off so many things on a local or street level?
Right now the most important thing to anyone that’s already underwater on their home is, will the guy next door just send in his jingle mail? Whether or not there’s been some Grand Scheme perpetrated over the PAST 25 years ( or not ) really isn’t helping his cause “today”.
You just have to wonder, what is the purpose of re-hashing these ancient history slights
Hi D! The reason I can’t let it go is because those ancient history slights aren’t ancient yet. They are what got us into this mess. And those who got us into this mess are now bashing Obama for trying to get us out, every hour it seems.
As to what all this means on the street level, I agree with you. The gov is not helping Main Street, at least not yet. If it’s any help, Jon Stewart grilled Biden on this too, accusing the Obama Admin of initiating a “trickle-down bailout.” Biden and Obama are well aware of main street. I know they have plans; but will it be enough, and will it come in time? I don’t know yet.
oxide,
Agreed. Another enormous obstacle the current administration was left to confront was.., what are we supposed to DO w/ all the “REIC Unemployed”?
It’s hardly their fault everyone ( that could ) ditched their job to “strike Real Estate Riches!” They have legions of MB’s, contractors, “builders” and ex-title company employees that have let their former skills go fallow.
If you’ve been out of tech. for a year, it’s a tough road back. TEN!? ( Forget it ) I don’t think “ancient history” was my best choice of words.., but considering how the scenario is deteriorating by-the-hour?
there is no mention of which regulations.
Exactly. And your fixation with Glass-Steagall and a handful of other regs is strictly 20-20 hindsight.
If you were telling us (preferably in advance of a disaster) that these 5-10 regulations are critical, and these other 5000 regulations are pointless and ineffective, then you might have some credibility.
If we could get rid of the endless pettifogging micromanagement and harassment by the government in every area of life, then we could have an intelligent debate about the handful of regs that you think are important.
But there is no way you can say that, on the whole, regulation was dismantled in the past generation.
I call BS.
Your source — The Heritage Foundation, hardly a neutral entity
Bingo.
That group alone is financier of so many one sided, made up facts/causes and ‘teabaggers’ groups.
Yep. Don’t walk in front of this group, they will stab you with made up ‘facts’.
Hi Lehigh,
If you were telling us (preferably in advance of a disaster) that these 5-10 regulations are critical, and these other 5000 regulations are pointless and ineffective.
No, this is not an either/or choice as you make it out to be. Those other 5000 regulations are irrelevant to the present banking crisis, no matter how much the Heritage Foundation likes to quote them to muddy the real issue, which is the present banking crisis.
However, 5-10 regulations were critical to the BANKING crises. Glass-Steagal itself, along with other regulations, was a 20/20 hindsight regulation after the Great Depression, so this isn’t exactly uncharted territory. Somebody took OFF the 20/20 hindsight when that was repealed. (Congress forced Clinton’s hand.) And what about the relaxation of reserve requirements? I think that may have been a much larger problem.
Now, was *I* warning about it years ago? Of course not. I was not up on affairs when all this was going down — I was still in school for a lot of it. I came to HBB only withstreet-level housing knowledge, and learned about the larger banking picture here. I guess my personal cred is shot. Oopsie, I guess I’ll never make it at the Heritage Foundation.
Oopsie, I guess I’ll never make it at the Heritage Foundation.
Your insight and learned balance knowledge does hbb’ers good!
The Heritage Foundation, hardly a neutral entity
Ad hominem alert. If you can’t argue the facts, shoot the messenger.
If we could get rid of the endless pettifogging micromanagement and harassment by the government in every area of life, then we could have an intelligent debate about the handful of regs that you think are important.
You have just dusted off the straw man of ‘government meddling’. All these strawmen, hobgoblins, and other partisan talking points are generating a huge cloud of confusion that prevents any intelligent debate and/or discovery of the causes and remedies of the current crisis. The US government has played a key role in making this crisis, and it was not micromanagement or harassment that did us in.
On what to do with REIC guys.
I suggest that we send them to China and have them build houses there.
Sounds like a plan and it is something we are good at.
can’t argue the facts, shoot the messenger.
Unicycler alert.
Glass-Steagal itself, along with other regulations, was a 20/20 hindsight regulation after the Great Depression,
You can’t even SPELL Glass-Steagall, yet you’re so sure that it was a key linchpin holding everything together and preventing financial crises. Amazing.
You can’t even SPELL Glass-Steagall
Yep. that is a whopper of a come-back.
You can’t even SPELL Glass-Steagall, yet you’re so sure that it was a key linchpin holding everything together and preventing financial crises. And you don’t even try to refute the gist of the original poster’s statement, and instead pick at nonessentials. Par for the course.
and it was not micromanagement or harassment that did us in.
Micromanagement and harassment however were a very large part of it. E.g.:
- Harassment of Fannie and Freddie and the banks to continually loosen their lending requirements, to meet ever-higher CRA goals
- Setting up new agencies (CDFI) to fund just such endeavors
- Continually changing tax law to encourage more mortgage debt (1997 tax relief act, etc.)
- SEC pushing banks to lessen their loan loss reserves
- SEC’s monopolistic management of the ratings agencies
And let’s not forget that big pseudo-federal agency’s role - the Federal Reserve; with their loose money policy, pushing ARMs, etc.
Let’s not pretend it was just a case of the government doing a big “hands off - now you guys behave!”.
Yes the government took their hands off the big dogs to some extent - but not until after placing a big old hunk of steak right in front of them. Did we somehow expect the dogs to not go after it?
Those other 5000 regulations are irrelevant to the present banking crisis
No, the whole point is that those other regs dilute the effectiveness and enforceability of the important ones– assuming, for the sake of argument, that you have correctly identified the “more important” regs.
When you pass so many regulations that no human being or legal system can possibly keep track of them and administer them, of course there are going to be corners cut and backroom deals struck. If you really believe in your core set of regs, you should be arguing with equal force for the repeal of the useless ones.
DD,
For the love of GOD please just stop it w/ the whole disgusting teab@gger thing. It’s crude, disgusting and has NO PLACE in civil discourse.
Can we stop w/ the coy sexual ref’s and move on w/ something of substance? We all know what it means, those that use the term are extremely clever and can talk above our heads with our being none-the-wiser. O.K?
O.K?
Didn’t type it with those ‘terms’ in mind.. That is what they are called isn’t it?
Ok?
You’re right, D. “Teabagger” does sound a bit inelegant. How about we just use the term “misplaced nuts?”
Oh. I forgot.
*I’m* one a them there “teabaggers….”
I did argue some facts. I spent most of the post entry on it.
And, other regs dilute the important ones? I guess that’s how Wall Street gets away with things. “Hey, let’s move our taxes to the Cayman Islands. The gov won’t notice because they’re too busy counting how birds you’re allowed to hunt.”
sound a bit inelegant
I guess it does.
But what strikes me as “a bit inelegant” is the financial devastation and disaster facing millions of people without jobs.
Inelegant is what people here and far that have no medical insurance so they can live or get fixed.
Inelegant is what we see when those idiots that get voted in or those on WS or in GS get to do to us and we let it go.
Inelegant is when people suggest violence against an elected person, or an md and so on.
Just saying, we could all add to that list.
Thanks for pointing this out to me, Ahansen. I do not see you as those inelegant ones of which you claim to belong.
I see you more as an elegant humanitarian that is smart and financially savvy.
BREATHE BENNIE BREATHE!
Calm down. It’s nothing that printing a couple trillion, and I mean printing, can’t fix.
It has occurred to me, that the government “printing money” may not be such a bad thing.
The main protest is that it “dilutes” the value of printed money……since I don’t have much money to “dilute”, whats the problem?
At some point, if the inflation gets too high, money has no value and most economic activity stops.
It is the inverse of the deflationary collapse, where everyone is broke and everything has to be liquidated.
In general, it’s easier to liquidate and still have a currency that to start over with no confidence in the currency. IMHO.
Either one is a disaster.
Hopefully, we will figure a way to balance trade out with China and cut oil consumption. Then dollars will flow back to the US and help balance this, with out either doomsday scenario playing out.
Good luck with that.
Is it possible that the housing bubble was just an early symptom of a whole nation gone manic, an unstoppable mob psychosis which will find ever larger expressions of insanity until there is a nova?
Yes.
Blue Skye,
I was thinking the very same thing -walking- to the office this morning. Couldn’t think of a single proposal on the table that won’t affect ‘me’ any less than staring down the barrel of a loaded shotgun?
Not to totally discount *oxide’s contribution ( below ) but “I” can’t do a single stinkin’ thing about the transgressions on the past. No one has the power to do that. All the finger pointing in the world, isn’t going to help ‘me’. ( I’d have expressed more concern for ‘others’ but in the pitch darkness of the pre-dawn hours, it was just ‘me’ there, and well, the dog )
We had to destroy the village, to “save it”.
Yep.
Kind of opposite of the things that got the housing bubble going - CRA, Ownership Society, etc. They had to save the village to destroy it.
It’d be really nice if the government stopped trying to save things. The more they attempt to save, the more they destroy.
a whole nation gone manic, an unstoppable mob psychosis which will find ever larger expressions of insanity until there is a nova
I blame television and its unceasing, insidious, subliminal reinforcement of the message that your life is incomplete and all problems can be solved simply.
Which makes my television-free household all the happier.
Wow, did this thread go off the rails.
But it seems the “can’t sell until retrofitted” is just disinformation after all.
“Transcript of remarks made by Leo Carrington (who doesn’t exist) to a mandatory meeting of all employees of Carrington Automotive Enterprises, Inc (which doesn’t exist either) on August 17th, 2009 in the Royal Payne Hotel (a purely imaginary place) in Norfolk, Virginia (which, does in fact, exist).”
http://startrekguide.com/community/viewtopic.php?f=19&t=11852
This should rile up some interesting discussion.
Didn’t Joan Collins play his wife on Dynasty?
“Royal Payne” Hotel? That’s a good one.
I live in Norfolk, VA. So odd he picked here.
“This should rile up some interesting discussion.”
Lol. I guess I misread you folks.
Surprised me too, Combo. BTW, it’s good to see you’re posting more often, I always look for your comments.
Wow, Krisdad, that’s certainly nice to hear, or rather, read.
I stopped posting because I really don’t have much new to say; The “cash is king” mantra has already been beaten to death.
Also, I can no longer post from work; I can read posts, but I cannot respond. All my posting has to be done from home, either before I go to work or after I come home.
New word order..businesses are scared of employees with a mind.
The easily riled don’t read much.
Only the stupid rich pay their full taxes.
Two words. “Deductions” and “accountants.”
Right.
I like they way he thinks **he’s** the only one who built the business. He wouldn’t have anything without those employees.
Also, who does he think his customers are? If the employees get their pay docked, the customers are getting their pay docked, too. They will want discounts.
Perhaps he’s the one who doesn’t understand how things work…
My friend I told you guys about said when he bought his house, he got a no interest mortagage to serve as the downpayment, something like 90K. He says he has paid it off as it was for a short term, I think 6 years before a balloon payment cuts in.
Doesnt make sense to me. If you have to take out a loan to get approved for a loan, isnt that defeating some purpose?
you left out the loan you need to make the payments on the other two loans. That is how we do it in this country.
“If you have to take out a loan to get approved for a loan, isn’t that defeating some purpose?”
Some purpose as in having “skin in the game”? A person who has nothing to lose if a financial deal doesn’t work out has…
Well, he has nothing to lose.
Oh you mean the “No Fault Housing ‘Option’ ”
If it doesn’t pan out, no big, you were only doing it as a sideline ‘anyway’?
Same purpose as getting a second loan to avoid PMI, if you don’t have 20% cash to make a downpayment. There are easy workarounds to such arbitrary rules that are supposed to protect us.
“If you have to take out a loan to get approved for a loan, isnt that defeating some purpose?”
You would think a prudent lender could see through that ploy for a loan applicant to falsely appear credit-worthy, wouldn’t you?
Problem is - the rules (e.g. the 80% PMI rule) aren’t driven by the lenders, they’re driven by the government.
Once again - a case of the lender relying on the government to protect them. They figure if the government allows for workarounds to these rules than the workarounds must be OK.
Kind of like a parent not bothering to teach the kids not to stick stuff into outlets, because they’re using outlet protectors. However one day the parent forgets to cover one outlet, and…. zzzzaaappp.
Well, driven by the rules of what the GSEs will buy. Of course the “lenders” discoverd that by pooling, tranching and selling the bonds themselves, they didn’t “need” to worry about that 20%. As dominated by fraudulent accounting as they were, for the most part the GSEs maintained reasonable underwriting on most of their loan portfolio. Compare this to the cr@p that Contrywide was writing…
Yeah - well I pretty much equate F/F with “government requirements”. Seems to me the GSE’s have really been an arm of the government all along, just officially “privatized” in order to do the government’s dirty work at arm’s length - e.g. without having to worry about little things like congressional oversight.
Oh I wasn’t quibbling with the GSEs being regarded as part of the government. But 20% down wasn’t REQUIRED if you weren’t selling the loan to them. And it was the gullibility of those buying non GSE MBSs that allowed banks to pretty much ignore downpayments, except as a chance to get an even higher rate for 20% of the total loan amount.
True. The GSEs were not the problem — Wall Street was the source of the problem.
When things started to go sour in 2006/2007, the PTB used the GSEs to lighten up the books of the private institutions.
Heads up, Congress! Your credit line is about to run out!
As of Monday the national debt was $12.031 trillion. only $69 billion from the statutory limit Congress set earlier this year.
Members of congress have a chance to act like statesmen and put the brakes on their runaway borrowing. But they won’t. Congress is about to raise the debt ceiling to well over $13 trillion and borrow and spend their way past the next election…if they can. There is little interest among voters in stopping them, although the pain of a continuing economic depression may change the political dynamics by November, 2010. “Throw the rascals out” may, at last, take on real meaning.
“As of Monday the national debt was $12.031 trillion, only $69 billion from the statuatory limit Congress set earlier this year.”
Only $69 billion away from the statuatory limit?
OMG, that’s only ten minutes away!
Tough day yesterday for the pore lil’ jug-eared feller, he really got quite a bashing around. First, China laid down the law about our debt. Then, Israel says “screw you, settlements 4-ever!”. And to cap it off, Der Speigel bloviates about how Obama “betrayed” Europe on climate change. One gets the feeling that the lil’ feller is seen as something of a non-entity.
Or that Americans are seen as non-entities.
Actually, we’re not seen as non-entities, not yet. Otherwise TPTB, nationally and internationally, wouldn’t be trying so mightily to destroy us and squeeze every last nut they can find. It just looks like the lil’ feller’s desperate attempt to take the lead on the world stage is being rebuffed.
China’s finger-wagging was what started it. I think there’s a sense that the US is just about out of money. It’s kind of like the wealthy celebrity all coked up with lots of hangers-on. When the parasites start to sense that the money’s just about run out, they move on, leaving the celeb passed out in his own vomit.
Some poor jamoke wearing a loincloth and wielding a machete in the Amazon, that’s a non-entity.
Nice analogy, Palmy.
Don’t forget India, they blatantly told him to
“Bugger off”.
Do you have a link for that? I don’t disagree, I’m just interested.
http://www.zeenews.com/news580042.html
snip
New Delhi: Angered by US President Barack Obama’s attempt to envisage a role for China in South Asia, India on Wednesday made it clear that it objects any move to give a wider footprint to China in the region.
The Ministry of External Affairs said that it had objections to Obama giving China a greater role in South Asian affairs, adding a third country’s role cannot be envisaged in the bilateral relationships between countries of the region.
The MEA further said a role for a third country in the region was not necessary and India was committed to resolving all issues with Pakistan bilaterally.
A ha, thank you. Some interesting comments too. The news has been focused on China, but I wonder, how dependent is India on the US? How hard would it be to shut off the H1-B spigot?
“H1-B spigot”
More of a pipeline or a ‘conduit’ really. And the subsequent “remittances” that find their way back ‘home’?
That or we could elect Duke Nuke’m for our next Prez? Sheesh.
We never heard of the HBB laying off 1/3 of its employees!
What does Ben know that the Big Boyz don’t???
Quite a bit, evidently:
AOL to lay off a third of staff
AOL plans to lay off a third of staff after split with Time Warner
On 8:46 am EST, Thursday November 19, 2009
NEW YORK (AP) — AOL says it plans to cut about a third of its work force once it is spun off from the media conglomerate Time Warner Inc.
That would amount to nearly 2,300 of the roughly 6,900 workers at the struggling Internet company.
AOL said in a securities filing Thursday it will impose the cuts on a voluntary and involuntary basis.
The company hopes the move will trim annual costs by about $300 million.
The job cuts still need approval from the new AOL board.
Time Warner said this week that it will spin AOL off to investors Dec. 9.
AOL = The Goggle of the late 1980s/early 1990s
Nah, Google is different. Just ask any shareholder.
Nah, Google is different. Just ask any shareholder.
Well, Google to AOL is hardly a fair comparison, even if one doesn’t approve of The Google Behemoth. AOL’s biggest innovation was sending every American household 6.35 CDs per annum in direct mail promotions.
And those CDs are absolutely wonderful when it comes to keeping woodpeckers away from your house.
Just hang some of them off the rafters or the fascia. Woodpeckers will do a 180 away from your casa.
That is a GREAT idea, Slim!
Nothing like awakening to a dawn army of the little beasts trying to insert bug-ridden acorns into your compressed-concrete siding to bring one to the brink of mayhem.
A MUCH better idea than attempting to unload a round into their idiot brains when you’re all bleary-eyed.
But what kind of interest do those CD’s pay?
They were for your computer. I always thought they were coasters….
And those CDs are absolutely wonderful when it comes to keeping woodpeckers away from your house.
Hold on to a few. They’ll probably be worth a few bucks as “mementos” on EBay in ten years.
AOL has divisions that make money. They did do some cool stuff for the community. They bought and carried WinAmp, the media player. I think they beat google when it comes to web ads as well.
I didnt know aol was still in business.Never hear much about them anymore.i guess they have a booming dial up business.
They’re popular with 75+ yo computer users, from what I see.
Yep. Only so far that revenue model can get you, as AOL found out. Turns out the technology least-common-denominator isn’t willing to shell out big $$ for all the latest stuff. All they want is two things:
- Email - for pictures from family and endless forwarding of misinformation from 3 years ago
- A link to The Weather Channel website
LOL, that’s harsh, packman.
Personal observation - coming from a big family with lots of parents, in-laws, and aunts and uncles.
(I generalize of course - but the generalization is true)
“endless forwarding of misinformation from 3 years ago”
LMAO
“that’s harsh…”
But true.
BTW actually I’d say more the 65+ users. My MIL is case in point, but she’s only 72; she used AOL for a few years.
(Although even she switched to Verizon a year ago)
If you’re in an area where high-speed or DSL is not available (yes, gasp, there are some places like that) AOL is your best choice, in my experience. Used AOL dial-up for many a year, it was actually quite good. Of course, you need a good modem. But if you had a decent modem, then an average DSL service is only somewhat of an improvement in certain areas.
I’m not 75+, but I sort of have that mind-set. Hence, AOL for years.
My aunt lives in an area where high-speed is too pricey for her budget. So, she creaks along on dialup via a local ISP.
Please tell all the dial-up people how to shut off pictures so that their pages load faster. Websites now load a ton of ad pix and ad banners before any text appears, as if we all have T-3 lines. It’s very annoying if you’re on dial-up.
Please tell all the dial-up people how to shut off pictures so that their pages load faster. Browsers like Firefox typically have options where pictures are not automatically displayed and ads are suppressed. I did this all the time when I used dial-up.
T-3 lines
How quaint! I didn’t know anyone still used that terminology.
Do you remember their early formating days? Used to drive me nuts. How anyone wanted an AOL account beat the sh*t out of me.
Main Street is expected to take it in the chin so Companies can make more profit during these recession times. I remember the Company I worked for years ago would put workers in different positions so they could keep them and weather a
recession storm ,even if the profits were lower .
By laying off people that Industry could actually keep ,it sets a chain reaction of
more people not being able to pay their bills and buy products and pay taxes. The social costs of lay offs are transfered to the government ,while the government collects less in taxes from the employed . The social and economical costs of outsourcing jobs has the same effect .
So again ,the priority of our society today is not jobs for people ,but rather rah rah the Stock Market . Again I say ,the entire Society turns around Wall Street /Banks /Insurance Companies /Corporations .
As I see it ,in 10 to 15 short years the Power Brokers sought to change the entire financial systems and priorities of the USA without any regard as to what the consequences would be ,as if you could change how the World turns (or how the USA World turns ),without a cause and effect reaction of extreme proportion .
The American People didn’t pay attention because the take-over was done slowly ,but when the effect of it started it was like a KATRINA .
When the meltdown started ,this was the perfect opportunity to overhaul the system that catered to absurd business models of a SINK THE SHIP nature so a small percentage could get all the gold.
I am convinced that the Politicians are so stupid and bribed that these self-interest groups sold their faulty concepts in a BS way .For instance ,it sounds good when you talk about trickle down economics ,but in practice if it ends up just producing trickle up ,than it was a con job .
Take Health Care . Any system that wants to take a quarter of the average income for a decent health care policy ,better have amble justification for taking that high of a percentage of a families monthly nut . But no ,it was simply that the monopoly needed to make more money . Banks use to be happy making a 2% spread on their money and somehow it changed to profits that fleeced the World.
My point is that there was no justification for what different prices went to and it was fake when credit was provided so the USA could afford the artificial prices . Everything is really at a contorted price because the POWER BROKERS actually sought to control pure capitalism by getting rigged advantage and monopolies by favorable
laws by the lobbying game . A overhaul is in order or the Power Brokers will take the ship down ,or people will be fleeced so bad that
even getting a low-level existence will be a hardship .
Housing Wizard,
Excellent post. What I think “I” am seeing is a reversion back toward people working, thinking ( and most importantly, SPENDING! ) on a local level. The last time I’d even heard of evidence of this was in the mid-90’s when I would cold call in the midwest.
We’re going to become much more insulat as people openly elect to shun anything they see as being manipulated by the PTB.
One of my earliest lessons in “getting fleeced” was as a young sailor visiting overseas ports. They’d be lined up right outside the main gate w/ everything from fake Rolex’s to h**kers making sure you spent your check before you got to the next block. When I got out, I’d look at my gross pay and then my net, then my net after all the health ins. etc. was paid and… it didn’t seem to ‘me’ that “keeping” any portion of your check was part of their plan?
Ding ding ding. They don’t WANT us to save. That’s why they send us direct checks. They know we’ll spend it. All of it.
DinOR
In that income wasn’t going up ,and if anything benefits were going down for employees ,what was the justification for prices rising between 2000 and 2008 ,including real estate . If anything ,stagnant wages should of produced stagnant prices overall .
For example ,if the price of real estate went up because they discovered they had less trees ,thus raising the price of lumber
so cost went up ,than why would that have a bearing on a unrelated item going up in price ?
Anyway ,the credit bubble produced the increase in prices and
they used real estate fake wealth to achieve the inflated prices.
The health care industry likewise increased prices based on the
overall inflation that was based on the credit bubble . All prices
currently are incorrect because it was not based on wage increases . The insurance industry increased prices during the fake price decade ,but they are resisting lowering prices . Banks have lowered the yields on savings accounts , yet they are increasing the yields on credit card interest ,
So, pricing on many items doesn’t make any sense what-so-ever and the Power Brokers will stall anything that interferes with the windfalls they are getting .
I got a notice from my car insurance company that they were going to decrease my car insurance price . I wrote them back and I said ,”While your at it you better reduce my home insurance also because your price is based on the fake home prices of 2005 .”
Many people think that you can’t correct anything and your stuck with whatever the power brokers created because you can’t go backwards or go back to better balanced systems .I just don’t think we have to be stuck with the fate that the
current Power Brokers will lead this Country to . The Majority knows that something is really wrong ,but they just don’t get it exactly what needs to be done . The PR campaigns that go out that attempt to confuse the public are alive and kicking .In short, the answer lies in us having a future if we go back to the past ,
prior to the current and recent POWERS reeking their madness and actually interfering with capitalism with their stacked decks
and fraudulent and bad faith business practices .
Many people think that you can’t correct anything and your stuck with whatever This is the essence of the mental habit “We do it this way because we’ve always done it that way.”
Wizard, your home insurance coverage should be based on what it would cost to completely rebuild the house and replace all its contents, NOT what you could sell it for in the current market.
Prices are below replacement value in many previously bubbly areas.
But another monopoly is that they base Home Insurance on the amount that the lender requires ,which is always over
insurance . Are you getting a pattern here in how the different industries pad each others pockets . The health care Insurance monopoly that is tied to your employer is another example of
of how these Industries actually create monopolies /price fixing .
Employers are more and more being priced out of being able to afford the expensive health care coverage that for years they provided for employees ,yet nobody talks about how this factor
forced Companies to seek cheaper costs in foreign Countries .
The point is that industries use to operate on smaller profit margins and work more on a volume basis until all hell broke loose and Wall Street and their Casino games and short term profits became the name of the game .
How did Wall Street /Banks/Insurance Companies go from simply being a long term investment opportunity and possible yield on stocks of the Nations Companies for people who had extra money to invest , to the Entity that is behind creating the policies and prices in every area of life in America .
So based on the current power brokers ,this is how your budget should go .
60% of your income should go to housing
20% of your income should go to the stock
market .
25% of your income should go to health care
OK we are already over 100 % so I guess you
borrow to make ends meet .
This is how budgets use to be .
25% to housing
10% to savings
10% to food and clothing .
5-10% on recreation and mis.
5-10% to health care
5-10% to various insurance
5-10% on installment purchases like a car .
And the rest gets eaten up somehow .
The health care industry likewise increased prices based on the
overall inflation that was based on the credit bubble .
Health care costs have gotten so high because almost everyone gets whatever they want in whatever quantity they want for as long as they would like, and for most folks, its free, or so it appears. So, guess what, big medicine sprang up to provide this.
If employers or the governmnet provided whatever kind of car everyone wanted, how many folks would be driving a Ford Focus. Nope, I think Lexus would be the order of the day, hence, cars would be super-expensive, expecially if you happened to be one of the few that were not on an employer or government program.
Great points Spokaneman . I’m sorry but the medical industry has got everyone brainwashed that they are going to die unless
they visit their doctor for every little sniffle and get one of their new fangled drugs that most likely have side effects . Having a healthy lifestyle goes a long way toward keeping you healthy .
I wonder what would happen if all of a sudden the employers refused to insure people for health care any more and gave them the money instead to spend as they wish ,and lets say the Government didn’t cover costs either . Behavior would chance so fast that it would be interesting .
So again ,the priority of our society today is not jobs for people ,but rather rah rah the Stock Market .
Ever notice that there are no national cable TV channels dedicated to jobs and employment?
In Colorado,
Hmm? Good point, shouldn’t that BE the focus? Oh sure there’s occasional ads for Monster, but they’re so obscure they make beer commercials look ’sensible’.
Just to follow up on Housing Wiz’s comments, what I’ve found lately.., is that a lot of my old tactics to chew ( chew *not jew damn it! ) are utterly failing!
And my wife doesn’t get it. Whether it’s talking your way out a parking ticket, late fee or over draft? Evidently so many people have reconnected w/ the lost art of ‘haggling’ it’s become totally ineffective! ( Music to my ears ) Keep it gang, and challenge everything. Even the $1.12 “fuel surcharge” on my Sierra Springs water account!
Bravo!!
Encore
Bravo, Wiz!
Great posts, yet again.
Thank you Ca renter . I always hesitate before I make a post because I think why would anybody want to hear what I have to
say ,but than I just blast it anyway .
Okay, show of hands. Who among us is a former AOL member? I know I was. Ditched that outfit after six months.
A related question is, how many diskettes and CD-ROMs did you get from them over the years?
I’m still the original mindspring — probably to Earthlink’s disgust!
Always have been…and still am!
(hiding behind my rock now). 
Couldn’t happen to a more deserving company.
Phantom districts in Texas receive millions in ’stimulus’
According to the Obama administration’s latest count, the President’s economic stimulus package has created 45 jobs in Texas’ 58th congressional district and 30 jobs in the state’s 91st district.
The White House’s recovery.gov web site declares that Texas’ 52nd district received exactly $8,937,289 in stimulus funds, while the 68th district has had precisely $310,963 funneled into it.
Trouble is, none of these congressional districts exist.
In its latest computer glitch, the Obama administration’s much-ballyhooed accounting system for the $1.2 trillion stimulus law detailed government spending in 39 congressional districts in Texas — a state that, in reality, has 32 congressional districts. More than $14 million in mystery money is attributed to seven phantom congressional districts, including the mysterious and fictional District 00.
“These White House stimulus claims are past embarrassing,” said Rep. Kevin Brady. “They are approaching the bizarre.”
It’s those pesky black helicopters again.
Biden addressed this on The Daily Show. Out of 130,000 reports on recover DOT gov, there were 70 examples of wrong claims.
They are batting 0.9995, AND immediately identifying and fixing the 0.05% mistakes. For a new government program that’s damn good.
Here’s the link to the Daily Show video. The topic starts at 2:45.
http://www.thedailyshow.com/watch/tue-november-17-2009/joe-biden-pt–1
You’re assuming the 70 wrong claims that were found are the extent of the false claims.
If there are more bad claims, I’m sure some source will find them, and wmbz will post the article here tomorrow.
abc news was on it Monday:
nonexistent districts in CT, OK, AZ, and US territories
Great. Is that beyond the original 70 that Biden mentioned? If so, the recovery . gov people will thank ABC for helping with the fact-checking.
And to add to that, the “false” claims were not necessarily intentional fraud. In a couple states the employers didn’t know their congressional district, so they just put some fudge number in the blank on the form, thinking they could get away with it. The gov was in the process of fact-checking it when the media found out. This is directly in the ABC link. Really folks, it’s a non issue.
employers didn’t know their congressional district, so they just put some fudge number in the blank on the form, thinking they could get away with it.
Ding ding ding!
Now let’s compare this to the 10’s of billions that went missing in Iraq with no accounting. There is accounting here and we can be sure it will be looked at.
In a couple states the employers didn’t know their congressional district, so they just put some fudge number in the blank on the form, thinking they could get away with it.
Shouldn’t it have been fact-checked before they published it on the web?
This just doesn’t ring true. Any information that our company is required to report to the Feds is handled by our division’s Controller - and you’d better believe he dots all the i’s and crosses all the t’s before he sends any documentation to Uncle. It’s commendable that you are loyal to your political party, but honestly, you’re having to jump through hoops to justify a pretty egregious foul-up.
X-Philly,
Government workers would love to be able to check everything twice (or even thrice) before putting out numbers, but it just isn’t always possible. People set up the deadlines for putting out the reports before you even know when you will have the data for compilation, never mind before you have had a chance to fact check it or at least figure out how long it will take to fact check it.
If Congress demands their report by a certain date, you provide it. If that means you haven’t had a chance to dot the i’s and cross the t’s, then you announce that when you release it and fix it as soon as you can, but you don’t just tell the lawmakers that you will get back to them in a few weeks. They get angry and call the head of your agency in for a grilling on the Hill and he or she gets all grumpy about being chewed out on TV.
This is exactly what you should expect in a government report. Less important ones can sometimes slip, but not this type. It is the way the system works.
Well then I don’t know why David Obey has his knickers in a twist:
Rep. David Obey, D-Wisc, who chairs the powerful House appropriations Committee, issued a paper statement demanding that the recovery.gov Web site be updated.
“The inaccuracies on recovery.gov that have come to light are outrageous and the Administration owes itself, the Congress, and every American a commitment to work night and day to correct the ludicrous mistakes.”
He’s been in office since 1969 and presumably knows how the beltway game is played.
Because it gets his name in the newspaper.
Because it gets his name in the newspaper.
+1
We’ll all have to pay attention to either r/d to note that they primarily want to get seen/quoted otherwise they end up looking over the long term as dispensable.
Thx Polly!
“For a new government program that’s damn good.”
Yellow flag for oxide.
You’re never allowed to say anything by the government is good.
Having lived the great of T for along, long time, I can tell you that this was a deliberate scam by the state.
“..in the great state of T…”
Blasted cold. Flu. Allergies. Whatever…
Feel better soon.
Warren Winning Means You Won’t Sell It If You Can’t Explain It.
Nov. 19 (Bloomberg) — In Elizabeth Warren’s world, credit card contracts would be so simple a teenager could read and understand them in four minutes. Loans would be as easy to compare as toasters, and online credit scores would be free.
“We need a new model: If you can’t explain it, you can’t sell it,” said Warren, 60, a Harvard University law professor who is head of the Congressional Oversight Panel for the Troubled Asset Relief Program, in an interview.
The 1966 high school debate champion of Oklahoma may get what she wants. The House of Representatives will vote in December on her idea. She suggested a Financial Product Safety Commission in a 2007 article in the magazine Democracy. President Barack Obama proposed it to Congress in June as the Consumer Financial Protection Agency.
Warren won’t discuss whether she may be a candidate to lead the authority, which would have the power to regulate $13.7 trillion of debt products. A Warren nomination would tell banks that Obama is determined to force reduced checking-account fees and limit lender claims in mortgage advertising, among other measures the industry opposes, said Thomas Cooley, dean of New York University’s Stern School of Business.
“She is an ideological crusader,” Cooley said in an interview. “She is a person who will stir up a lot of trouble.” In a column in Forbes magazine, Cooley accused her of “waging a self-righteous holy war.”
The criticism doesn’t bother her, Warren said. She learned to shake things off growing up in Norman, Oklahoma, with three older brothers “in a family of car parts and fist fights,” she said. “It was get tough or die, and I decided to get tough.
These idiot lawmakers totally screwed up the credit card business.i am getting constant mailings about my cards rates going up and various other fees.What this has done is created more fees for people who pay their bills.the deadbeats are getting helped out by fee regulation and it is being passed on to people with good credit.It really pisses me off.
Deadbeats are the ones who use their credit cards and pay them off every month. I’m a deadbeat and my Chase card just notified me that my interest rate is going up to 30%. They then “forgot” to send me my statement.
Then find one that doesn’t charge fees and switch. There are plenty of orgs that will be satisfied with the intercharge fee from the merchant if you meet their standards.
Let’s hope the other scumbags on the team don’t corrupt her. My fingers are crossed.
mrktMaven,
Evidently you don’t know anybody from Oklahoma Do you!
You will have better luck getting Castro to see things ‘your’ way. JK, I think she’s the ideal ideological ‘crusader’. You go girl!
GO MS WARREN!
” “If you can’t explain it, you can’t sell it,” said Warren”
Well that pretty much leaves nothing for Wallstreet to sell. CDs maybe?
I’ll never forget the look of disappointment on the face of a ‘financial advisor’ at the bank. I asked him what the management expense ratio (MER) was on a mutual fund he was recommending. We have trailing fees here in Canada.
We need a new model: If you can’t explain it, you can’t sell it.
Hopefully this is extended to congress as well…..
There goes Obamacare!
The current system is a mystery too. They can’t even explain how much an MRI costs. The only explainable plan is full-on tax-funded single payer.
Be careful what you wish for, you just might get it.
““We need a new model: If you can’t explain it, you can’t sell it,” said Warren, 60, a Harvard University law professor who is head of the Congressional Oversight Panel for the Troubled Asset Relief Program, in an interview.”
I think I’m in love.
Warren for President!
Why put the onus on the seller only, and not the buyer? The seller’s not the one with things at stake - the buyer is.
So I’d like to see “If it can’t be explained to you, then don’t buy it”.
Unfortunately this does not seem to apply to most congresscritters.
Because you are in a situation of hugely assymetric information. Not everyone can be an expert in banking products. Not everyone should need to be one.
Nor law or medicine or chemistry, etc. Yet for some odd reason our society expects everyone to be so.
Although for some other odd reason, most people seem have slept through high school and don’t even understand the basics. 2nd Law of Thermodynamics anyone?
Caveat emptor and laissez-faire have been proven to be very, VERY bad models for society.
I would absolutely vote for Elizabeth Warren if she were to run for president. She’s awesome!!!!
Obama mortgage rescue: Only a few get lasting help
Only a handful of homeowners are receiving permanent loan modifications under the Obama administration’s foreclosure prevention plan.
NEW YORK (CNNMoney.com) — Only a tiny percentage of troubled homeowners have received permanent modifications under President Obama’s foreclosure prevention plan, raising concerns about the effectiveness of the $75 billion effort.
Fewer than 5% of the trial modifications on loans owned or guaranteed by Freddie Mac were converted to long-term adjustments as of Sept. 30, according to the mortgage finance giant.
Looking more broadly, the figures are even lower. As of Sept. 1, only 1.26% of all trial adjustments were made permanent after three months, reported the Congressional Oversight Panel, which monitors the government’s use of bailout funds.
The Treasury Department is set to release within coming weeks the first comprehensive look at the number of permanent modifications issued so far.
The preliminary data, which has not been widely reported, underscores the next big problem facing the government’s effort: Officials have leaned on banks to offer more homeowners trial modifications, but the real test will be whether homeowners will receive lasting help.
“No one is really sure why the conversion rate is so low,” said Mike Zoller, assistant economist at Moody’s Economy.com. “We’re concerned these loans will eventually become foreclosures.”
“…but the real test will be whether homeowners will receive lasting help.”
No, the real test will be whether the houseowners will even want to stay in their houses at all.
“No, the real test will be whether the houseowners will even want to stay in their houses at all.”
I, for one (perhaps the only one here at HBB), am hoping that they DO stay in their houses (or the bank’s houses or whatever) and dutifully keep up with their mortgage payments, cause the banks really really REALLY do need the money, much much MUCH more than they need the houses.
Keep the hope alive. Keep the money flowing. And learn to love the NAR (the taxpayer’s new best friend).
Your rationality is a good foil to my animal spirits.
All the same, better them than me!
‘No one is really sure why the conversion rate is so low,’ said Mike Zoller, assistant economist at Moody’s’
You know, this type of dishonestly shouldn’t fly with the media. How could something of a financial nature, that is occurring on such a large scale be unexplainable? It’s not like this is the Marfa Lights or something.
Here’s a tip for Moodys: they don’t want the damn house. (At the price they paid or anywhere near it, or the thrill is gone cuz they won’t make any money on it). Or the vaunted securitization that Moody’s sold everyone on is making it too difficult to work out deals.
Or maybe it’s some combination of factors, etc, etc, but don’t even try to act like “no one knows.” Hell, if you’re so perplexed, why don’t you just ask a few of them?
“Here’s a tip for Moodys: they don’t want the damn house.”
Are you trying to suggest that home owners some times behave like intelligent human beings instead of dumb sheep? I guess the economists at Moody’s (or in Uncle Sam’s Economics shop, for that matter) never considered the possibility…
Hell, if you’re so perplexed, why don’t you just ask a few of them?
Dollars to donuts they’d get a bucketful of lame excuses, and probably accept most of them.
“I knew I couldn’t afford even a modification, because my car (20 years old) unexpectedly had a transmission breakdown that cost me $3,000″.
“My (80-year-old) mother got cancer, and it was either lose the house or her.”
(Not that that’s a lame excuse; just the fact that high health care costs for an 80-year-old would be “unexpected”)
etc. etc.
In reality - like you say - people walk because it’s a prudent financial decision. Most however I’ll bet won’t admit it.
Three modification stories:
The good- A co-worker has had all his OT cut and with two in college he couldn’t afford his mortgage ( 15 year fixed w/ 9 yrs. left) wells fargo did a mod where he went back to a 15 yr fixed ( same rate) saving him 500/mo.
The bad- Another co-worker re-mortgaged into a 15 yr fixed 2 years ago with Wamu. His OT is gone and is mortgaged to the max.( $3,500/mo) He applied for a mod with Chase 9 months ago. He’s only asking for a rewrite to a 30 year fixed. So far no go.
The ugly- A co-workers friend lives in Ocala FL., UHS by trade, bought his house in 1999, lost 70% of his income and couldn’t pay his mortgage. HELOC’d $120,000 to put in a pool, buy a motorcycle and a new car. I don’t know the bank, but he was refused a mod., so he wrote dozens of politicians. Outcome, 40 yr mortgage at 3% with a $180,000 balloon payment after 40 ( $ 575/mo payment) . He’s 51 yo.
That sounds pretty smart - have the balloon payment due after your gone.
Skip,
LOL! Right, at 91 y.o the only thing you’ll be concerned w/ is when the girl comes around w/ your meds. God, to think some UHS got a deal like that makes me ill!
Again, what was the ‘problem’? He didn’t understand the loan doc’s? People, how did we let this happen? It plays hand in glove w/ what I said earlier about getting a bit more focused on what the impacts are at street level.
Now “I” have a few letters I need to write.
I don’t believe this. Does anyone know a similar story? A balloon payment after 40 years?
Come to think of it, maybe this could be true. People have posted here of Japan’s policies of indebting your heirs if you die, back in their 1980s bubble. Maybe the financiers are getting their foot in the door to bring that idea here…
Still, the HAMP plan has been a considerable success by some measures. It has given the banks an excuse to hold off foreclosing houses and thus booking losses. It’s created more confusion about what is really happening in the housing market. It created the illusion that something was being done, if only briefly. Given that $75B is chump change by today’s standards, I say money well spent.
A Congressman With a Solution: Stop Complaining So Much!
Capitol Confidential
Sure, the economy sucks. Unemployment is at least 10.2% and, yes, if you include part-time workers who would rather have full-time jobs it may be over 17%. The government is showering our cash on Wall Street and burning through piles of our children and grandchildren’s money “saving” phantom jobs in Congressional Districts that don’t exist.
Oh yeah, and Congress is planning for a government take-over of our health care system, legislating higher energy prices and raising taxes. Sheesh, no wonder we’re feeling blue.
Well, not to worry, three-term Congressman Emanuel Cleaver (D-MO) has found a solution: Stop Complaining So Much. Rep. Cleaver is currently circulating a “Dear Colleague” letter, seeking co-sponsors for House Concurrent Resolution 155, designating the day before Thanksgiving as the official “Complaint Free Wednesday.”
You see, as the Congressman explains:
“From time to time, we all experience anxiety, frustration, stress, and regret. And often, we respond to these feelings with a criticism or a complaint. Regrettably, complaining keeps people stuck on current problems, inhibiting them from thinking constructively to find solutions. Research has also shown that complaining can be harmful to one’s emotional and physical health; relationships; and can limit professional career success”.
That’s a gimmie! That Wednesday is Black Wednesday - the peeps will be too schnockered to complain.
I wonder how that would fly in New York, where the biggest asshole gets the right of way.
For every person who is complaining too much, there is another type of person who should be complaining a hell of a lot more.
You callin us New Yorkers rude you jerk?
Yet another excellent example of THE GREAT DISCONNECT.
Al,
My thoughts exactly. Just what the people ‘need’, New Age gobbledegook from a truly, truly clueless dude.
wmbz,
you never ever post anything against any R’s.
I hold both parties in equal contempt, happily not connected to either party. Problem is your people happen to be at the helm now, they run the show, so naturally there is much more democrap claptrap in the news!
your people
A-s-s-u-m-e.
Straight from the McCain playbook.
Morning all,
On way earlier here, due to not sleeping well—which is thankfully a very rare event for me. Real insomniacs have my sympathies…
Anyway, a thought for the day: shouldn’t FHA be raising their insurance premiums to compensate for their shrinking reserves? Why aren’t they? Do they set the rates, or are they set by statute?
If they were to raise rates, can they do so only on newly-written business, or can they raise rates on all existing FHA loans? In other words, are they contractually-bound to the rates in effect when a loan was written for the life of that loan, or not?
My guesses (without verification):
1) They are not subject to the same insurance laws that set reserve requirements on private companies. Thus they can “wing it” on reserve requirements when necessary.
2) They are backstopped by the US Treasury when push comes to shove (just as the GSEs apparently are backstopped).
Good luck with the insomnia. My grandma would recommend no coffee after noon for you…
I was able to answer the “how much are premiums” question easily, but still have not been able to find out whether the premiums are set by statute or by HUD policy.
——————
Mortgage insurance is charged to the homeowner each month at the rate of .5 percent per year of the total loan amount. FHA also charges an upfront mortgage insurance premium of 1.5 percent.
FHA’s monthly mortgage insurance payments will be automatically terminated when these conditions occur:
•For mortgages with terms 15 years and less and with Loan to Value ratios 90 percent and greater, annual premiums will be canceled when the Loan to Value ratio reaches 78 percent regardless of the amount of time the mortgagor has paid the premiums.
•For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the Loan to Value ratio reaches 78 percent, provided the mortgagor has paid the annual premium for at least 5 years.
•Mortgages with terms 15 years and less and with loan to value ratios of 89.99 percent and less will not be charged annual mortgage insurance premiums.
BiLA, congrats on the raise you got with your contract extension! That’s pretty impressive in this environment. I don’t know _anyone_ else who got raises this year…
Thanks Prime!
I did not get any increase for three years, so this is not a gravy train deal.
On the downside, a consultant friend of mine e-mailed me last night and said he was fired. he was on the job one month. His pay rate was normal for consulting.
We consultants always have to live well below our means. My lifestyle is lower middle class and this is normal among contract engineers. Lapses of employment for several months is common. I have been lucky, but luck runs out at some point.
This is not whining or pessimism. Just an acceptance of a lifestyle that many people could not handle (they’d rather be “normal” and have spouses, children, and a house and that means be anchored to a place). In a recession, my lifestyle is the envy of most people. In boom times I still save like a squirrel while the spenders point and laugh! I’m laughing because I have a corner office with my Toyota economy car (paid off 2003 model) with 52,000 miles on it parked outside and it runs like new!
I have to say, this is the best post I’ve seen you write.
Yes, what you do is difficult. Very few people have the strength (or insanity?) to move constantly and live alone. You’re not abnormal, you’re just at 2.7 σ.
What I don’t like — and this is not pointed at you — is that our capitalistic system beginning to require that everyone live as you do to survive. Most people in general simply aren’t made that way.
See we let our government add dozens and dozens of spending programs costing trillions of dollars, yet those programs are not constitutional. There is an incredible amount of waste in them. Much of them would not be demanded in the private sector anyway. As a result, taxes, which were 1% of the average income in 1914 (a year after the 16th amendment) are now enormously high.
This is the middle class squeeze by big government, not by capitalism. It is the squeeze in spite of capitalism.
oxide,
It’s not that I’m disagreeing w/ you, but this “squeeze” has been comin’ on for a long, long time! I saw it myself in the banking industry where the motto became: “Get yo’ “s” into mgmt. or suffer like the rest!”
I’m no genius, but I know enough to realize when I’m getting sh!t on. With -zero- savings and no capital to fight my ( IRON CLAD ) non-compete agreement, I struck out on my own. At an age where most people have given up on the notion?
It-has-sucked! With a capital “S”. True, there have been times where it was tolerable and thankfully my wife’s employer ( at least at present ) provides us w/ a lot of our benefits. This explains why I don’t necessarily view legions of uninvolved and frankly… indifferent laid off employees as either the Administration’s OR… private industry’s “problem”.
And as a friend pointed out, they don’t normally start hiring consultants until the project is so F’d that the best thing to do is to start throwing money at it. “We a year behind schedule, hire an expensive consultant! We need somebody-to-blame/to-show-that-we’re-trying-everything.” seems to be the thinking.
Yeah, but are you happy??
I’m always hopeful but discontent. You know, because I know changes aren’t permanent. But change is.
OK, Tom Sawyer :-).
Yes, but do you know your place in life is where you want to be? You need to hold your head above the ground, so they won’t bring you down.
Last time I checked my AZ driver’s license, it indicated I’m 50. Last time I checked the “official” unemployment rate it was 10.2%.
In a few years sitting across the desk from a 32 year old hiring manager at Raytheon may be a waste of my time so I gotta stay lean (and never appear mean).
Packman, I don’t know any better. Been on the road a long time. I’m so much the odd man out (no house/spouse/kid, very few belongings) that I don’t know what I’m missing.
I have a young relative much like that except he does not earn a living. He’s a burden to his mom.
My thrills in life are a week in my timeshare each year, working out, enjoying nature (weather, parks) and investing. Very inexpensive.
Although I have a Lexus LFA image on my office’s desktop PC for the background. It’s cheap!
Guess you didn’t get my reference. Think early Rush.
I’m amazed I missed it. “Fly By Night?”
Yep - “Anthem”.
(For true Rush fans)
I’ll admit to being a fan o the song “freewill,” of course that may be due to the fact that I was 16 when it came out.
DH got best raise and best bonus of his career. He was expecting a promotion that was supposedly a done deal and it didn’t happen. I think what he got was his consolation. I don’t think this will go on forever but the company did maintain decent numbers last year.
Congrats to you and DH!
Fantastic news, CarrieAnn!
Congressman Kevin Brady just asked Geithner if he would resign in televised hearings. The questioning really got under his skin. Nice.
“At a Joint Economic Committee hearing in Congress, in which House and Senate lawmakers sit on a panel, Mr. Brady opened up his questioning by telling Mr. Geithner Republicans, Democrats, and the American people had lost confidence in the Treasury Secretary and asked him to resign.
“It is a great privilege to serve this president,” Mr. Geithner responded. “I agree with almost nothing you said.”
Mr. Geithner then took it a step further: “You gave this president an economy falling off the cliff.”
Mr. Brady wasn’t done: “Remind me, Mr. Secretary, what post were you holding when President Obama took office?”
Geithner: “I was the President of the Federal Reserve Bank of New York.”
http://blogs.wsj.com/economics/2009/11/19/geithner-says-he-wont-step-down-takes-a-few-swings-at-republican/
That was an AWESOME exchange!
I enjoyed it too. Methinks that Mr. Geithner’s “can’t sell it so I’m renting it” house will soon revert to being his residence.
In defense of the Treasury Secretary, he is being unfairly held accountable for an economic mess in whose creation many players had a role over a period of decades. The notion that the President or a few of his top advisers pull levers that control the tides in the global economic ocean is completely ludicrous, but that is the paradigm which dominates political blame gamers’ thinking.
I would like to see a replacement that is a little less biased tword the banks.
Wouldn’t you agree?
Yes.
Actually, I wouldn’t mind a replacement who was biased in favor of the banking system — specifically, a competitive one which did not have a dominant fringe with blanket exemption from the Sherman Antitrust Act.
Whoh, some swagger from Timmeh. Eric Holder took a swing the other day too. The O-man must have their backs big time.
I’m just paranoid enuf to wonder if Geithner’s appointment was dicktated by China.
I’m just paranoid enuf to wonder if
yes, and that several folks from previous admins were kept because of same Dicktation by other powers.
Which is another reason why haters slamming Obama rub me the wrong way.
Not China
GS and MS
Does anyone remember when BB was appointed all the press about how he was a scholar of the Great Depression.
These criminals have been preparing for this event for a long time.
Decades.
Absolutely, measton. This was very much planned from the very beginning, IMHO.
I know, multiple replies to oneself is uncouth:
The video:
http://www.youtube.com/watch?v=O2i7cxUEOXc
DD asked about my situation, so here ‘ya go: I have a $50k down, $75k 30yr fixed 5.50% APR mortgage at $425/month. Bought an almost new 1550-sqft 3/2 spec for $125k in Washington’s Columbia Basin; the five month long freezing winters are included in the price. I have been keeping the mortgage paid ahead six months, so if something bad happens I have a time buffer. During the last year I also sent in hefty additional principal payments every month, so it’ll be paid in full in 18 to 24-months provided our high mileage cars continue operating. We have no other debt. In my fifties now, and hauling in $85k/yr in an area where the median income is $42k/yr. I have about $320k in total assets, but not bad considering I returned to college at thirty two, and completed my engineering degree at forty with $22k in student loan debt. We rented for five years before buying. And mom doesn’t have to work either.
Excellent rms. Congrats!
Took me awhile to remember what I had asked you!
You definitely are one to mirror in your financial vigor.
I really miss the California coast, but that’s life. I would rather rule in hell than to serve in heaven, or something like that. I won’t live under the yolk of excessive debt.
I won’t live under the yolk of excessive debt. Remember, you have to break a few eggs to make an omelet.
I found the source of that “seven million homes … soon facing foreclosure” figure mentioned in the Telegraph article of a couple of day’s back — in the headline story in today’s Wall Street Journal
Now I will try my hand at some Used Home Seller’s math:
If 3.63m homes represents about 8 months supply at current, artificially stimulated rates, wouldn’t seven million homes represent
(7/3.63*8) = over 15 months supply that is currently held off the market in hopes of getting a higher price when the economy is recovering? How does that supply overhang square with the “predicted” recovery in the building sector next year?
* The Wall Street Journal
* REAL ESTATE
* NOVEMBER 19, 2009
Fear of Double Dip in Housing
Home Starts Tumble and Mortgage Delinquencies Rise, Casting Cloud Over Recovery
By JAMES R. HAGERTY and SARA MURRAY
The U.S. housing market is sputtering again, adding to doubts about the vigor of the economic recovery.
Just a few months after housing showed signs of leveling off, bad weather and uncertainty over the extension of a home-buyer tax credit sent new-home starts in October tumbling 10.6% from the previous month. They fell to the lowest level since April, the Commerce Department said Wednesday. Starts of single-family houses fell 6.8%.
Industry consultant John Burns talks to reporter Nick Timiraos about where the market is headed and the significance of low mortgage rates, the home buyer tax credit and the FHA, which he calls the “new subprime.”
Earlier this month, Congress expanded the tax credit and extended it through April, so building should improve. Still, the latest data portend poorly for the economy overall, and for fourth-quarter growth.
On Wednesday Pulte Homes Inc., the nation’s largest home builder, warned investors of a grim outlook. “As we look out to 2010, we are expecting difficult conditions to continue,” said chief executive Richard Dugas.
Meanwhile, more Americans who bought homes during the boom are falling into mortgage limbo. About 3.4% of U.S. households — or about 1.9 million homeowners — are 120 days or more overdue on their payments, but not yet in foreclosure, according to LPS Applied Analytics, a research firm in Denver. That is up from 1.5% a year earlier.
Many of these people are likely to lose their homes over the next few years. That means more bank-owned homes will hit a market already suffering from oversupply.
An unfinished home in Raleigh, N.C. Construction slowed in October amid concerns over the end of a homebuyer tax credit.
The housing-supply picture is tricky to read. The number of homes listed for sale was 3.63 million in September, down 15% from a year earlier, according to the National Association of Realtors. That is enough to last about eight months at the current rate of sales. Anything above about six months is considered a buyer’s market, in which prices may come under downward pressure.
But those numbers don’t reflect the millions of homes expected to go through foreclosure over the next few years, adding to supply. Amherst Securities Group in September estimated seven million homes are headed for foreclosure in the next few years — more than a year’s home sales at the current rate.
“Housing faces important problems, including continuing high foreclosure rates,” Federal Reserve Chairman Ben Bernanke said in a speech Monday. “But residential investment should become a small positive for growth next year rather than a significant drag, as has been the case for the past several years.”
…
I guess we are back to supply side economics … I do not see where this is confusing to anyone, given the state of the job market right now. There is always a delay between cause of failure and actual point of failure, and there is still plenty of cause going about.
Let’s see how the supply side of the housing market is looking about now:
- 8 months supply of used homes currently on the market assuming current (hyperstimulated) rate of sales;
- 15 months latent supply of used homes taking into consideration likely foreclosures over the near-term time horizon;
- Unknown additional months of used home supply overhang due to owners who don’t have to sell (not facing foreclosure) but who would like to sell, due to relocation, retirement, or just not really seeing a need to hang on to that second, third or fourth home they thought would go up in value forever.
Let’s guess that last category adds seven more months of supply.
Then there is 2 1/2 years of supply without even needing to build a single additional house. The builders can throw in the trowel for 2 1/2 years and the market would not run out of houses.
On the demand side, good luck keeping the party going, given that almost every greater fool who could be lured into buying in exchange for $8K in free money already has been lured in…
The other thing not taken into consideration is the ever dwindling supply of people with good enough credit scores and incomes to think about qualifying for a loan. - See “jobless recovery” for details …
Yep
household creating will continue to fall as people move back in with mom and dad or share houses/rooms. 2.5 years is optomistic especially if they keep prices up and or interest rates start to rise.
From MSNBC this AM :
WASHINGTON - More than 14 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of September, a record-high for the ninth straight quarter and a problem that could threaten the economic recovery.
UGGGH …. That would be the “jobless recovery” right?
Odd thought for the day:
Rememeber way back when this ball crested the rise and started rolling downhill, and Paulsen suggested the “super-SIV” as a possible solution to the banks’ balance-sheet issues?
It just occurred to me that the Fed _is_ the super-SIV.
Yes.
The Fed = toxic asset Superfund SIV of last resort…
Fear that this rather obvious fact might come to light is one possible reason for such extreme opposition to a free-wheeling Congressional audit.
Rabid extreme opposition is always suspect for motivation.
Usually Fear.
SOL time for Fed audit obstructionists…
market pulse
Nov. 19, 2009, 2:37 p.m. EST
Fed balance sheet can be audited, panel says
By Ronald D. Orol
WASHINGTON (MarketWatch) - A key congressional committee approved legislation on Thursday that would allow for government audits of Federal Reserve monetary policy as well as how much the central bank has lent and will lend to specific banks in response to the financial crisis, despite major opposition from the central bank. The measure, introduced by Rep. Ron Paul, R-Texas, has the support of 309 members of Congress.
…
Given that there are 435 members of the House and 100 members of the Senate, I’d say this legislation’s off to a strong start.
If indeed…. WOW!
Some are still advocating the one-fox-in-the-chicken-coop approach to regulatory reform. If Committees cannot regulate anything, perhaps the FOMC should be disbanded?
Nov. 19, 2009, 12:08 p.m. EST
Geithner walks into Hill buzz-saw
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Treasury Secretary Timothy Geithner ran into a buzz-saw on Capitol Hill Thursday as Republicans tried to pin the weak labor market on him and even asked him to resign.
Geithner rejected the request that he step down.
He engaged in sharp back-and-forth debate with several Republican lawmakers and a few Democrats.
The hearing showed that the sluggish recovery is fraying nerves on Capitol Hill. And some Republicans appear to view Geithner as the weakest link and fattest target in the Obama administration.
Geithner appeared before the Joint Economic Committee of Congress, one of the rare panels with both House and Senate members.
Geithner went before the panel to try to breathe new urgency into efforts to overhaul federal oversight of the financial sector by telling Congress that the reform effort was essential for the health of the economy.
But Rep. Kevin Brady, Republican of Texas and the top House Republican on the panel, electrified the hearing by presenting a litany of what he said were Geithner’s failures to steward the economy.
“Will you step down from your post?” Brady asked.
Geithner replied that he served at the pleasure of President Obama. Geithner said he agreed “with almost nothing” that Brady had said.
On financial regulatory reform, Geithner said that lawmakers must meet “our obligation to the next generation” by reforming the outdated regulatory system.
He asked lawmakers to complete the work “as soon as possible.”
Geithner mostly stuck to general principles rather than debating controversial bits and pieces of the reform plan.
He did say that the biggest financial firms should be covered by a single regulator.
“This is no place for regulation by council or by committee,” Geithner said.
…
So is Geithner basically proposing to appoint a regulator Czar then?
Dougan Jones is gone from[Park City,UT] Prudential
Steve Roney from MarketLinx will take over
by Andrew Kirk, OF THE RECORD STAFF
Posted: 11/13/2009 04:20:21 PM MST
http://www.parkrecord.com/ci_13782733?IADID=Search-www.parkrecord.com-www.parkrecord.com
From the commentslol:
Mumbo jumbo
Salt Lake City, UT
“…What the real estate industry doesn’t want to talk about (but many bank executives know) is that the market is basically imploding. PC as a town is in deep trouble. The RE market is on life support. Whatever shred of price stability that is left is there only because the banks won’t fully follow through on foreclosures because for now it will force them to mark their assets to market which will in turn make them the banks insolvent. In industry lingo its called “extend and pretend” or “delay and pray”.
As a realtor you might want to explore other “employment opportunites” or “career revisions” because my guess is things are about to get far worse….”
Also found vie ChrisMartenson about ski vacation property:
Ski Homes Feel the Real Estate Chill
http://abcnews.go.com/Business/ski-homes-feel-real-estate-chill/story?id=9067789
Deer Valley isn’t a ski resort, it’s a real estate venture with snow groomers. Even Stein Eriksen moved on.
On CNN money:
Mortgage payments: Record number are late
…
The combined percentage of loans in foreclosure or at least one payment past due was 14.41% non-seasonally adjusted, the highest ever recorded in the MBA delinquency survey.
Looks like the recoery is taking hold, green shoots all over the place.
/sarcasm off
I have a question for fellow bloggers: how’s your property tax bill hanging? Mine has gone down substantially due in part to A) decreased assessed value and B) increased homeowner’s exemption.
This year: $1,186.
Last year: $1,671.
I’m wondering if this is typical in other parts of the country.
From $8600 down to $5600…what a bargain! The sunshine tax, gotta love it!
DennisN —
Mahler “Das Lied von Der Erde” at Copley Symphony Hall this weekend.
However, I don’t know that I would trust a Chinese pianist to know how to properly conduct Mahler…
He might do well. The lyrics for Das Lied were originally Chinese poetry later translated into German.
Aber er hat nicht genug Gemütlichkeit.
Aber Herr Mahler hat keine Gemutlichkeit - er ist ein “21st Century Schizoid Man”.
Sehr schon. Der Crimson…
Gents –
I have been listening to Pimsleur German while biking so I got everything but the last word. Dictionary says “comfort”. So did you mean, “but he doesn’t have enough comfort?”
And what’s with the King Crimson ref?
And what’s with the King Crimson ref?
“but he doesn’t have enough comfort?”
Rule No. 1 of translating German to English:
Don’t get too literal about it…
“but he doesn’t have enough comfort?”
Mann müss viel Sprachgefühl benutzen.
“I have been listening to Pimsleur German while biking so I got everything but the last word.”
Obtain an old recording of Fritz Kreisler playing Viennese Ländler, and you will get it. Top Chinese musicians are generally very technically proficient, much more so than Fritz Kreisler, in fact, but they rarely match his Gemütlichkeit.
“Gemutlichkeit” translates poorly into English. I’d say it’s a state of well-being, sort of like sitting around on a lazy Saturday in a sunny German beer garden with a full stein listening to oompah band music.
Mahler’s music sounds like cries from a psychiatric ward - personally I’m a big fan.
‘“Gemutlichkeit” translates poorly into English.’
Listen to Kreisler play the violin.
Or the middle section of the second movement of Mahler’s Symphony No. 1, if you want a contrary example to DennisN’s damning judgment of Mahler.
Am totally envious, Prof. Live symphonic music and the smell of the sea are two cherished things I had to put aside in order to live where I do.
Fortunately, I have B and O to offset the first and the wind off the scum pond to remind me of the second.
I mainly fantasize any more about live symphonic music, anyway…
So I have to ask…what gives? Are your local gov’ts cutting jobs and services to keep pace with those reductions? Are they sweeping their deficits under the rug? My curiosity is piqued.
FYI - our taxes went up while our local gov’t is also raiding reserves and kicking the can down the road. So naturally I’m dying to know what strategy your boyz are following.
Are your local gov’ts cutting jobs and services to keep pace with those reductions? My town cuts services by stealth. The town used to be known for its excellent street-scraping operations during ice & snow storms. This has definitely gone downhill over the last 2 years. For many years it also was known for excellent fallen-leaf pickups, this year the first two pickups were not done ‘because of the unusually large amount of leaves and rain,’ but the amount of leaves is no different than it ever has been, and there’s been little rain for weeks. My city utility bill has been artificially elevated by months of estimated readings (while the city’s electric & water meters report their real readings every 24 hours to the city’s computer network). My elderly next door neighbor never reads her bills, she just pays them. There are probably other cunning revenue enhancements I haven’t yet detected.
Well in MD they only do assesments once every three years, and then phase in the increase over those three years, up to a limit of 10% per year for the state taxes. (the county taxes may have a smaller limit). This year is the last one that I’m paying based on the 2007 assesment. I’m very curious to see what my assesment for next year will be.
Going up. Since the early 1980s, when large parts of the city had been abandoned, NYC has had a limitation on home much the assessed value of 1-4 family homes could go up each year. As a result, assessed values for such homes are way below fair value, and so continue rising at the allowable rate.
The city also raised the rate by 7.0%. The state increased sales and income taxes. Services have been cut, and this is ongoing.
No “shared sacrifice” for pensioners, seniors, government contractors, and public employees with seniority, however. Public employee retirement income, along with social security, is exempt from state and local income taxes here, so it doesn’t matter how much taxes on working people rise. Services are being cut, but spending on services is going up, with the money diverted to pensions and retiree health care.
And there is lots of extend and pretend going on.
Following up, my property taxes are approaching $4,000. But we have a local income tax on top of the state income tax.
Flat.
To offset the falling assessments, they pumped the milling rate up to record levels - by far.
Nice.
Valuation stayed the same but the tax went up about $80 total.
You have the “green shoots” crowd, and you have the “pesky facts” crowd.
As unemployment spreads like cancer across this country and the world, the inability to service debt, especially cumbersome debt as in mortgages, is what cements a depression in place.
Another in a string of pesky facts:
WASHINGTON (AP) –” A rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure, adding to concerns about the strength of the economic recovery.
Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter. That compares with just 21 percent a year ago, when high-risk subprime loans made during the housing boom were the main reason for default.
At the same time, the proportion of homeowners with a mortgage who were either behind on their payments or in foreclosure hit a RECORD HIGH FOR NINTH STRAIGHT QUARTER.”
That’s the kind of record high they don’t mention much on the pump-monkey MSM business shows.
I recall there was a “green shoots” crowd in control of the message for the former Soviet Union, up until the point when they were overwhelmed by “pesky facts” around 1989 or so.
Deep question of the day:
Is it best to lead an economy by “green shoots” of fantasy, or “pesky facts” of reality?
I don’t claim to know the answer…
Perhaps it is due to my viewing the world through the jaundiced lens of an ursine eye, but I tend to miss the distinction between overly optimistic green shoots of economic fantasy and their seamy underbelly of fraud, grift and scam artistry.
PB, ahhh you do wax poetic!
Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter.
My claim would be that it’s not just driven by rising unemployment, but also by falling housing costs.
There was an article about strategic walkaways a few months ago, though can’t find it now.
“…but also by falling housing costs.”
They do go down when multiple families begin sharing the same domicile…
An Oasis out in the desert.
I thought this article about Lake Las Vegas was a good read.
http://www.msnbc.msn.com/id/31112551/ns/business-local_business/
A friend of mine has a wife who has a family member who wanted so badly to buy out there as he was looking for a place to “retire and bask in the beauty” of it all.
It turned out he never could afford to buy and so moved away from the area. I guess his idea was that he would rent out the place when he wasn’t living there. Even with the lake I imagine it gets mega hot out there during the summers.
He mentioned the fact that Celine Dion had bought a place close by and just how great the views were on the huge lake. This was back about 2 years ago and I know that he is counting his blessings that he didn’t get in.
“It’s insane! I’m like, what do you want people? You want this house for a penny? I have to pay the bank,” she said.
It’s insanity to think any potential buyer actually cares about how much some airhead Realtwhore owes on their failed flip.
“…b-b-but it’s DIFFERENT here!…BWA HAHAHAH”
‘Scuse me while I find my meds
Hey Marshall,
Loved the band you and Tucker had.
Thought I would throw in a musical addendum for SF Gal who also has a fine ear for music:
Purple haze all in my brain
Lately things just don’t seem the same
Actin’ funny, but I don’t know why
‘Scuse me while I kiss the sky
Check out the (SF resident) Kronus Quartet version of Purple Haze for an alternative listening experience…
I am right there with you with the Marshall Tucker band reference.
So you must have heard our new song.
“Heard it in a Real Estate … Office” which coincidentally is sung to the tune of “Heard it in a Love Song”
I ain’t never been with a house long enough, for my boots to get old.
We’ve been together so short now my boots don’t need resoling.
If I ever settle down a bigger hous’d be my kind and it’s a good time for me to head on down the line.
Chorus:
Heard it in a Real Estate …office
Heard it in a Real Estate …office
Heard it in a Real Estate …office
Can’t be wrong.
I’m the kinda man likes to get away, like to start dreamin about tomorrow today.
House I Never said that I love you, even though it’s so
Where’s that Alt-M loan of mine it’s time to go.
Chorus
Heard it in a Real Estate …office
Heard it in a Real Estate …office
Heard it in a Real Estate …office
Can’t be wrong.
I’m gona be leavin at the break of dawn. Wish you could come but I don’t need no foreclusure taggin’ along.
So I’ll sneak out that door couldn’t stand to see you cry.
I’d stay another year if I thought you would sign my refi.
Chorus
Heard it in a Real Estate …office
Heard it in a Real Estate …office
Heard it in a Real Estate …office
Can’t be wrong.
I never had a damn thing but what I had I had to leave it behind.
You’re the hardest thing I ever tried to get off my mind.
Always something greener on the other side of that hill.
I was born a wrangler and a rambler and I guess I always will
Chorus
Heard it in a Real Estate …office
Heard it in a Real Estate …office
Heard it in a Real Estate …office
Can’t be wrong.
Right on! Your current version is better!
Thank you cobalt. Took another look at the lyrics by Jimi.
630sq.ft. for $359,000. Yep Mr.Santacruz was certainly a savvy infestor.He should have snapped up two.
“Santacruz, who now lives in Chicago, laughed a pained chuckle when told the current listing price for the condominium he let go to foreclosure. He paid $359,000 for the 630-square-foot unit in 2004. It’s listed for $76,900″.
He thought for a minute and said, “At that price, someone could make some money.”
There always is a bright side in a green shooter’s world…
Special Report The Rescue
$4.8 trillion - Interest on U.S. debt
Unless lawmakers make big changes, the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels.
By Jeanne Sahadi, CNNMoney dot com senior writer
November 19, 2009: 11:58 AM ET
The government is engaged in a far-reaching - and expensive - effort to rescue the economy. Here’s how you can keep tabs on the bailouts.
NEW YORK (CNNMoney.com) — Here’s a new way to think about the U.S. government’s epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.
More than half. In fact, $4.8 trillion.
If that’s hard to grasp, here’s another way to look at why that’s a problem.
In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a deficit watchdog group.
On the bright side - such as it is - the record levels of debt issued lately have paid for stimulus and other rescue programs that prevented the economy from falling off a cliff. And the money was borrowed at very low rates.
…
Other CNN features:
Quick Vote
How much would you contribute to pay down the nation’s debt?
* Less than $100
* More than $100
* My estate, when I die
* You’ve got to be kidding
Bailout tracker
Follow the money: Bailout tracker
And the money was borrowed at very low rates.
For now.
An ever-increasing portion of that borrowing is short-term - meaning when it comes due if rates are higher (can’t get much lower) it’ll have to be refinanced at the higher rates.
I’ll never understand why we aren’t issuing more 30-year Treasuries. It only makes sense when rates are so low that we should try to lock in those rates as best as possible (knowing that issuing only 30-years would drive up rates on the long end a bit).
Vista’s electric carmaker forced to adjust
Aptera has funding troubles, alters production plans.
Vista electric-vehicle maker Aptera said yesterday that funding problems have led to layoffs and production delays and caused its founders to leave day-to-day management roles.
The company had planned to begin building an innovative three-wheeler it calls the Aptera 2e this fall, and has taken $500 deposits from about 4,000 people looking to be among the first to own the vehicle.
But money from investors — including Google — hasn’t kept up with costs, and the company has to ensure its viability while awaiting private or federal funding despite making progress on engineering and design, Chief Executive Paul Wilbur said in a statement yesterday.
“We now have to adjust our production schedule to align with financing realities,” he said. “Properly managing the resources of the company means we’ll complete our first vehicles in 2010, not by the end of 2009 as previously projected.”
The delay has meant that about 10 of the company’s 40 or so workers have been laid off.
The refundable deposits from prospective buyers remain in an escrow account, the company said.
Aptera says it has designed a lightweight, safe vehicle capable of traveling 100 miles on a single charge by focusing on efficiency. It hopes to sell the two-seaters, which look like wingless planes, for $25,000 to $40,000.
Ho Ho No: Postal Service Drops Santa Letters Program.
ANCHORAGE, Alaska — Thousands of starry-eyed children all over the world are writing letters to the jolly man at the North Pole this holiday season, but they will not likely get a response from Santa Claus or his helpers.
The U.S. Postal Service is dropping a popular effort begun in 1954 in the small Alaska town of North Pole, where volunteers open and respond to thousands of letters addressed to Santa each year. Replies come with North Pole postmarks.
Postal Service officials said they are tightening rules in such programs nationwide after a postal worker in Maryland recognized a volunteer in the agency’s Operation Santa program as a registered sex offender. The postal worker interceded before the individual could answer a child’s letter, but the Postal Service viewed the episode as a big enough scare to make changes to the program.
People in North Pole are incensed by the change, likening the Postal Service to the Grinch trying to steal Christmas.
As I’ve often said, a society that puts a price on everything values nothing.
Just ordered my first book for the holiday reading season:
This Time is Different:
Eight Centuries of Financial Folly
Carmen M. Reinhart & Kenneth S. Rogoff
Cloth | 2009 | $35.00 / £19.95
496 pp. | 6 x 9 | 62 line illus. 30 tables.
ISBN: 978-1-4008-3172-2
I got a new hardcover copy for $25 on Barnes and Noble’s web site…
It’s a little early, but Michael Brush has come up with a good label for the decade 00-09. The decade of hubris. Points of lots of scandals, though not many convictions.
http://articles.moneycentral.msn.com/Investing/CompanyFocus/farewell-to-wall-streets-decade-of-hubris.aspx
That decade mirrors the Roaring 20’s in many ways.
Anyone remember what came after the Roaring 20’s?
Ummm, lemme guess. Would it be…
…the Great Depression?
The old bugeyed moonbat spreads her kookiness world wide…
Wall Street tax must be international: Pelosi.
WASHINGTON (Reuters) - Any tax imposed on financial transactions would have to take effect internationally to prevent Wall Street jobs and related business moving overseas, U.S. House Speaker Nancy Pelosi said on Thursday.
“It would have to be an international rule, not just a U.S. rule,” Pelosi said at a news conference. “We couldn’t do it alone, we’d have to do it as an international initiative.”
The top Democrat’s comments seemed to spell longer odds for the Wall Street tax, which some Democrats in the House of Representatives are proposing as a way to pay for job-creating legislation.
The tax, which could raise $150 billion per year, would tap into widespread public outrage at Wall Street in the wake of the financial crisis, but support is lackluster among key legislators.
“This is just something that is on the table, it hasn’t been developed to a high priority. but it has substantial currency in our caucus,” Pelosi said.
Treasury Secretary Timothy Geithner said on Thursday that he has “not seen a version of that tax that I think would be appropriate for our country.”
Democrats in the House aim to pass legislation designed to create more jobs before the end of the year to ease double-digit unemployment levels that threaten an economic recovery. The Senate is expected to act early next year.
“Have you guys realized yet that we were right?”
Sincerely
- The John Birch Society
When I was in high school, some friends and I used to go to meetings at the JBS’s local coven as an exercise in Sartreian surrealism. A more rabid, mean-spirited, paranoid gang of Bible-thumpers ne’re lived. It was one of those things that absolutely REQUIRED getting seriously loaded for….
Alas, a couple of them, one of whom is now a senior US Congressman,
took the whole “domino theory” thingy seriously and converted. Guard your children well, people. Guard your children well.
A more rabid, mean-spirited, paranoid gang of Bible-thumpers ne’re lived. It was one of those things that absolutely REQUIRED getting seriously loaded for….
Oh, dang. I thought I was the only one who’d do this sort of thing while seriously loaded.
ahansen, so you have seen my father. JBS’er
“same as he ever was..same as he ever was”..
Pelosi needs to be put in an orange jumpsuit and spend six months picking up trash from the side of a freeway during the day, IMHO.
Being drunk with power and driving the country over a cliff should be a crime, is what I’m sayin’.
A night of forced servitude in a Mexican brothel would straighten her out.
Well as long as you include Bush, Cheney, Gingrich, Hastert etc.. dressed in orange, I would enjoy watching all of them picking up trash.
“Well as long as you include Bush, Cheney, Gingrich, Hastert etc.. dressed in orange, I would enjoy watching all of them picking up trash.”
I’m a equal opportunity judge, jury, warden type.
Aren’t we all for term limits -1 in office and 1 in prison???
From the article:
WASHINGTON (Reuters) - Any tax imposed on financial transactions would have to take effect internationally to prevent Wall Street jobs and related business moving overseas, U.S. House Speaker Nancy Pelosi said on Thursday.
Hillarious! When J6’s job is being exported, we’re told that it’s “good for us” because we can get cheaper goods. Doesn’t that mean that “financial services” will become cheaper for us if these jobs are moved overseas?
This nutty broad thinks we’re now supposed to care about jobs on Wall Street???? Waaaay too late for that one, Ms. Pelosi!
Back to the Future……X-GSfixr’s Cynical Plan to Save the Economy
History tells us that the United States did not recover from the Great Depression until 1938-1941, when the world started stocking up on military hardware, due to all the war clouds popping up in Europe and Asia.
After 1945, we had the world’s dominant economy…..but in my view, this was offset by the fact that we got stuck with the title of “World’s Policeman”.
This worked for a while, when we were “protecting” our export markets (and make no mistake, our foreign policy was driven by protecting out markets and sources of raw materials, as it was by promoting “freedom”)
Now, we find ourselves committed to various military adventures, wasting blood and treasure, to maintain a relatively stable world security situation, which is being exploited by countries and multi-national corporations, to the detriment of the US citizen/taxpayer/working stiff. And all the time, having to listen to all these fuzzy furriners complain about our “imperialist ambitions”.
My answer………”Give war a chance”
Give the world our “two week notice”, then begin withdrawing from all of these open-ended commitments. All the players (China, India, Russia, Japan, Iran, Al Queda, etc.) who feel that they don’t get enough “respect” will try to rush in and fill the power vacuum…….it’s won’t take long for these guys to start butting heads.
Nothing like a little conflict to trash the “Made in China/Outsource to India” plan, with “Just in Time” supply chains and infrastructures stuck together with gum and duct tape exposed to high explosives and smart bombs.
At this point, we start selling our aerospace and military gear worldwide, while offering a safe haven for all the world’s scientist’s and engineers that would rather not participate. That, and a “safe haven” for business/manufacturing in general.
I admit my plan needs some refinement………but a perfect plan executed NOW, is better than a perfect plan six months from now.
At this point, we start selling our aerospace and military gear worldwide, while offering a safe haven for all the world’s scientist’s and engineers that would rather not participate. Some weaknesses in your proposal.
— Some of the world’s scientists & engineers who came / will come here as refugees are still liable to be spies for other countries.
— Letting all those yahoos with money buy (and then use) our aerospace & military gear would get a lot of US killed one way or the other. There was once, after all, a good reason for the US being the world’s policeman.
At this point, we start selling our aerospace and military gear worldwide
Quite a bit is outsourced to China/Taiwan/etc now a days, so we would have to get their OK first(can you even build a PC with parts made only in the US??).
We’ve been selling our aerospace and military technology worldwide for decades. Some of it even new. But stripped down of course.
“Give the world our “two week notice”, then begin withdrawing from all of these open-ended commitments”.
I am all in favor of shutting down world wide and brings our guys&gals home. We are the big ‘evil’ so why not? Not only would it create a huge vacuum it would bankrupt some places.
The howl would be heard around the world.
While I’m no big fan of our world presence and policies, I would like to remind everyone that China and Russia ain’t no saints either.
So I’ll pick US every time.
create a huge vacuum
Just imagining that, wmbz, sounds really cool. Home for Christmas and Holidays soldiers- and everyone else will be stunned.
Like I mentioned to Measton yesterday. The easy answer for us is to take over Saudi Arabia, Iraq and Iran… at least the oil fields.
Cancels about half the sovereign debt and plenty of oil for us.
We can use the oil position to control everyone else and further leverage our position of strength. Draft the unemployed to go work in the oil fields and army of occupation.
Anyhow. It’s a plan.
Why don’t we do this right now? Maybe because we aren’t evil?
Think of how quickly our budget would be balanced.
$4,800,000,000,000.00 Rarely does anyone in D.C. mention that pesky thing called interest…
$4.8 trillion - Interest on U.S. debt
Unless lawmakers make big changes, the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels.
NEW YORK (CNNMoney.com) — Here’s a new way to think about the U.S. government’s epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.
More than half. In fact, $4.8 trillion.
If that’s hard to grasp, here’s another way to look at why that’s a problem.
In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a deficit watchdog group.
On the bright side - such as it is - the record levels of debt issued lately have paid for stimulus and other rescue programs that prevented the economy from falling off a cliff. And the money was borrowed at very low rates.
But accumulating any more interest on what the United States owes at this point is like extreme sport: dangerous.
All the more so because interest rates will rise when private sector borrowers return to the debt market and compete with the government for capital. At that point, the country’s interest payments could jack up very fast.
“When interest rates rise even a small amount, the interest payments go up a lot because of the size of the debt,” Konigsberg said.
The Congressional Budget Office, which made the $4.8 trillion forecast, already baked some increase in rates into the cake. But there is always a chance those estimates may prove too conservative.
Gubmint Motors…
Report: GM bailout costs each taxpayer $12,200
South Florida Business Journal.
You may not have purchased a GM or Chrysler car, but you’re still paying for one, according to a new report by the National Taxpayer’s Union.
According to the report, every American taxpayer has put up $12,200 for every General Motors car sold through the beginning of 2011 and $7,600 for every Chrysler sold.
The study, which is based on a November report released by the Government Accountability Office, found that the average American taxpaying family has invested about $800 in the auto bailouts so far. It notes that government funding provided to General Motors, Chrysler and GMAC – the financing subsidiary that supports sales at both – now stands at a $78.9 billion.
Titled “The Auto Bailout – A Taxpayer Quagmire,” the report was authored by Thomas D. Hopkins, professor of economics at the University of Rochester.
“Between this and GM’s plan to payback their bailout debt with other taxpayer funds, I wonder if all those Americans without work right now could think of any better ways to spend that money,” said Pete Sepp, NTU vice president for policy and communications.
Wow — it would almost have been cheaper and more stimulative to just have GM deliver a shiny new free auto to every American’s door step…
You would have to PAY ME to take a GM.
Sara-speak from the frozen tundra:
“I always remind people from outside our state that there’s plenty of room for all Alaska’s animals — right next to the mashed potatoes.”
I think she really enjoys pissing off PITA people.
I saw her on the boob tube with Shawn Innanity last night when I was working out. This led to thoughts about whether it would be best to leave the country if a 2016 presidential race pits the Rogue against Hillbilly.
Either would be better than what we have now.
I think you mean PETA, but your way works too.
PETA is correct. People Eating Tasty Animals
LOL, Cow. Good one.
My bad. Acronym-challenged am I. Maybe I’m not getting enough meat in my diet?
Climatologists Baffled by Global Warming Time-Out ~ Der Spiegel
Global warming appears to have stalled.
Climatologists are puzzled as to why average global temperatures have stopped rising over the last 10 years. Some attribute the trend to a lack of sunspots, while others explain it through ocean currents.
At least the weather in Copenhagen is likely to be cooperating. The Danish Meteorological Institute predicts that temperatures in December, when the city will host the United Nations Climate Change Conference, will be one degree above the long-term average.
Otherwise, however, not much is happening with global warming at the moment. The Earth’s average temperatures have stopped climbing since the beginning of the millennium, and it even looks as though global warming could come to a standstill this year.
Ironically, climate change appears to have stalled in the run-up to the upcoming world summit in the Danish capital, where thousands of politicians, bureaucrats, scientists, business leaders and environmental activists/kooks plan to negotiate a reduction in greenhouse gas emissions. Billions of euros are at stake in the negotiations.
We need the genius Al Gore to fly around in his jet more often to spew more carbon in the atmosphere. That should cause global warming to resume.
Al Gore - that’d be the guy who thinks the earth core’s temperature is “several million degrees”?
Dats da one!
If you go by Al’s numbers we’d all be flash fired.
What is it really? 8-9000 degrees?
It ranges depending on how deep, but generally it’s about 10k.
(What’re a few zeros among scientists?)
not much is happening with global warming at the moment.
Except there seems to be massive swarms of jellyfish ruining fish catches thus harming the fishing industry. The kind of jellyfish that normally only thrive in the more southern waters are now found in massive counts in the northern Japanese waters.
We need more sea turtles.
Do they eat large jellyfish?
I guess a 1000 lb leatherback turtle could eat some large ones…
PB
You must have youngins. I never heard of leatherbacks, but my curiousity lead me to look them up. Wow, they can grow up to 6′6″ in length and weigh up to 1,400 lbs. Jellyfish is their main diet stable. They are now on the endangered list. Let me guess, one of your kids did a report on them?
“Let me guess, one of your kids did a report on them?”
I myself know just enough about them to be dangerous… come to think of it, I have a dangerously low level of knowledge of myriad subjects.
“Climatologists Baffled by Global Warming Time-Out ~ Der Spiegel
Global warming appears to have stalled.”
Don’t ya just hate it when the facts don’t align with your hare-brained theory?
The rest of the quote:
“…Psychologically, that is of critical significance,” Schellnhuber says.
“Admittedly, any half-way informed politician will know that the stagnation in global warming that is currently being observed can only be temporary.”
Not global warming, climate change. We have to stay on message to avert this cataclysm.
remember “global warming” is the excuse to get us to cut back on oil, as we cant handle the truth that we are running out of oil.
Oil production has peaked, that you cant argue even if you are a RepubliKKKan.
“Oil production has peaked, that you cant argue even if you are a RepubliKKKan”.
So I have read, what’s the best guess now? 1 to 3000 years? I can’t keep up, with all the guesstimations.
Also seems to me the last and longest standing former member of the KKK is the one and only Grand Cyclops Bobbie Byrd (democrap) Virgina.
Oops later in the same article in Der Spiegle
Despite their current findings, scientists agree that temperatures will continue to rise in the long term. The big question is: When will it start getting warmer again?
If the deep waters of the Pacific are, in fact, the most important factor holding up global warming, climate change will remain at a standstill until the middle of the next decade, says Latif. But if the cooling trend is the result of reduced solar activity, things could start getting warmer again much sooner. Based on past experience, solar activity will likely increase again in the next few years.
Betting on Warmer Temperatures
The Hadley Center group expects warming to resume in the coming years. “That resumption could come as a bit of a jolt,”
You forgot to post that part of the article wmbz
“You forgot to post that part of the article wmbz”
Nope didn’t forget, it’s hanging out there on the internet for the world to read, just a few clicks away.
“Billions of euros are at stake in the negotiations”.
$$ That’s what the whole things about period! Has been from the start, and the money grubbers trying to scare all of the thumb suckers know it. They are damn good at it, I must say.
and exactly what gives you so much conviction that the vast majority ofclimate scientists are wrong???
Do you deny evolution as well?
So the thousands upon thousands of scientists and climatologists that call BS on the global warming scam are just wrong, right? Way to go, closed minds are a very common occurrence. If something doesn’t line up to your way of thinking then they must be idiots.
It’s about power money and control period.
As to evolution, I can’t imagine why anyone would deny it.
Global warming or not, reducing pollution is always a winner.
Amen,eco.
So, who is going to get that massive island of plastic and trash outa the oceans?
That massive island of plastic is our new store of petrofuel….
The Illinois Department of Employment Security said the unemployment rate for October was 11.0 percent, up from 10.5 percent in September, and up from 6.8 percent in October of last year.
Kinda funny how the UE rate and the markets shared the same trajectory in 2009, isn’t it?
Just like the Great Depression.
And shouldn’t that be the Department of Employment INsecurity?
Obama Treasury Nominee Has Tax Problems!
WASHINGTON – President Barack Obama’s choice for a top job with the Treasury Department is having tax problems.
A congressional report says Obama’s nominee for undersecretary of the Treasury for international affairs, Lael Brainard, was late in paying real estate taxes in 2005, 2006 and 2007.
The report by the Senate Finance Committee staff also challenges the accuracy of a deduction Brainard claimed for running an office from her home. The challenge led Brainard to reduce the deduction on her 2008 return.
The committee’s top Republican is unhappy that the committee staff had to submit 10 sets of questions to Brainard before getting complete information about the discrepancies.
Brainard is the fifth Obama nominee to have tax problems.
“President Barack Obama’s choice for a top job with the Treasury Department is having tax problems.”
He sounds well qualified for the position.
“He sounds well qualified for the position”.
Absolutely, I was under the impression that was prerequisite for employment at the treasury!
I think “he” is a “she”. Still well qualified though.
Even better qualified, then :-).
What is with the people who have so much money (on both sides), that have tax problems. Get a good cpa furrcrisakes.
There is no excuse for those who hire illegals, hold back taxes or offshore their incomes to avoid taxes and don’t claim these things.
furrcrisakes.
We used to have a professional tax accountant prepare our taxes, but we let him go when his boss (and firm CEO) went to jail for tax law violation
My oh my. Well then. Yes, you make a good point!
To badly paraphrase Gandhi, “It is difficult but not impossible to make a very good living as an honest businessman. It is almost impossible to become very rich without dishonesty.”
Don’t forget that Gandhi was a lawyer.
U.K. Royal Mint Quadruples Production of Gold Coins.
Nov. 19 (Bloomberg) — The U.K.’s Royal Mint, established in the 13th century, more than quadrupled production of gold coins in the third quarter after demand for the metal increased as investors sought to hedge against a weakening dollar.
Output rose to 32,735.8 ounces from 7,500.2 ounces a year before, according to data obtained by Bloomberg News under a Freedom of Information Act request. Production in the first nine months more than tripled to 100,391.3 ounces, the data show.
Gold is set for a ninth annual gain as countries have cut interest rates to near zero percent and spent $2 trillion to pull the global economy out of the worst recession since World War II. The metal reached a record in London yesterday and has gained about 29 percent this year, while the dollar has dropped 7.3 percent against a basket of six currencies.
“There’s still a total lack of confidence in the financial system,” David Russell, a director at Dublin-based brokerage and bullion dealer GoldCore Ltd., said in an interview. “Investors are seeing the benefits of diversifying into gold. Smaller investors are clued into the fact that inflation possibilities are a worry for the future.”
Sales of American Eagle gold coins by the U.S. Mint more than doubled in the first nine months to 954,000 ounces, its Web site showed. Harrods Ltd., the London department store, began selling gold bars and coins for the first time in October.
The ‘Real’ Jobless Rate: 17.5% Of Workers Are Unemployed.
19 Nov 2009 ~ CNBC
The difference is that what is traditionally referred to as the “unemployment rate” only measures those out of work who are still looking for jobs. Discouraged workers who have quit trying to find a job, as well as those working part-time but looking for full-time work or who are otherwise underemployed, count in the U-6 rate.
With such a large portion of Americans experiencing employment struggles, economists worry that an extended period of slow or flat growth lies ahead.
What is “flat growth.”
Florida mortgage delinquencies hit 25%
South Florida Business Journal
While there have been signs of a recovery in the housing market, the number of people falling behind in payments remains high.
As of the end of September, one-quarter of the mortgages in Florida were at least one payment past due or in foreclosure, according to statistics from the Mortgage Bankers Association.
Out of the 3.4 million loans serviced in Florida in the third quarter, 12 percent were past due, an increase of 138 basis points. Of them, 4 percent were thirty days past due, 2 percent were 60 days or more past due and 6 percent were 90 days or more late.
The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure, according to the MBA.
The Dec Atlantic mag has its’ feature article:
“Did Christianity Cause The Crash”…. How preachers are spreading a gospel of debt.
I have already heard an earful on the topic from LDS “General Authorities.”
Best comment I have heard so far by a General Authority:
“Them that understands interest gets it.
Them that don’t understand it pays it.”
Awesome article. Here’s the linkie-link.
And to think I grew up in a church that kept telling us to let our light so shine before all men so that they can see our good works and glorify our Father, who is in heaven.
They have been building huge cathedrals since the dark ages.
Many financed by the Medicis… the greatest banking family of that era.
That title is incredibly insulting. Don’t get me wrong, there were probably a fair amount of “Get Rich” preacher out there, but to impugn a whole religion is a big harsh. What if somebody were to write, the Jewish Bankers caused the crash. Do you think that title would cause an outcry?
Looks like you folks on the left coast will have to go back to watching those 3″ belly tellies…
Power-hogging TVs banned in California.
Silicon Valley / San Jose Business Journal
New power consumption rules for big screen televisions were unanimously approved Wednesday by the California Energy Commission.
Televisions sold in California up to 58 inches must now use third less power by 2011 and a half less by 2013; about 1,000 television models are already on sale which meet the 2011 rules.
The standards were supported by PG&E Corp. and other power companies, as well as environmental groups.
Many consumers, however, didn’t like the idea. In a Silicon Valley/San Jose Business Journal poll, 69 percent of those responding were opposed to the ban.
I checked the LCD’s at newegg, must meat the standards already. this is a non issue. it will have zero effect.
You can only buy so many lies before they eventually catch up with you.
Economists Opposing Fed Audit Have Undisclosed Fed Ties
First Posted: 11-18-09 12:48 PM | Updated: 11-18-09 05:01 PM
As the debate over an audit of the Federal Reserve intensifies in the House, one camp is trotting out eight academics that it calls a “political cross section of prominent economists.”
A review of their backgrounds shows they are anything but.
In a letter to the House Financial Services Committee earlier this month, all eight wrote that they support the type of amendment now being introduced by Rep. Mel Watt (D-N.C.). Watt’s approach purports to increase Fed transparency while it actually would tighten restrictions on any audits that could go forward.
The letter was sent around Wednesday by Watt’s staff to members of the committee in advance of a vote scheduled for Thursday.
Watt’s measure is in competition with an amendment cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), which would repeal the restrictions that Watt leaves in place.
But far from a broad cross-section, the “prominent economists” lobbying on behalf of the Watt bill are in fact deeply involved with the Federal Reserve. Seven of the eight are either currently on the Fed’s payroll or have been in the past.
The Fed connections are not outlined in the letter sent around to committee members on Wednesday, but are publicly discernible through a review of their resumes, which are all posted online.
In September, Huffington Post reported that the Federal Reserve has accomplished a soft form of effective control over the field of monetary economics simply by employing — and being the means for career advance — for an overwhelming proportion of the discipline.
…
Oh good — another title for the holiday reading list!
“Deception and Abuse at the Fed”
Alan Auerbach
Ryan Grim | HuffPost Reporting
Economists Opposing Fed Audit Have Undisclosed Fed Ties
First Posted: 11-18-09 12:48 PM | Updated: 11-18-09 05:01 PM
…
Let’s run the traps:
Frederic Mishkin is a former board member, having served from 2006-2008. His career at the Fed stretches back to 1977 and he currently holds two positions: one as a member of the Center for Latin American Economics at the Federal Reserve Bank of Dallas, where he’s been since 1996; and another as an academic consultant to the Federal Reserve Bank of New York, where he’s been since 1997.
Anil K. Kashyap is currently a consultant with the Federal Reserve Bank of Chicago, a position he’s held since 1991. He’s also on the economic advisory panel of the New York branch and was a consultant there in 2003. He was a visiting scholar at the division of monetary affairs at the Board of Governors of in1994, 2001 and 2005 and at the division of international finance in 1997.
Pete Klenow was a visiting scholar at the Federal Reserve Bank of Minneapolis from 1994-1999, 2003-2004, 2006 and again this year. From 2000-2003 he was also a senior economist at that branch. He’s currently a visiting scholar at the Federal Reserve Bank of San Francisco, a position he’s held since 2005. He was a visiting scholar at the Federal Reserve Bank of Kansas City from 2004-2006.
Ricardo J. Caballero was a visiting scholar at Federal Reserve Bank of Boston from 2004-2005 and a visiting scholar at the Federal Reserve Board on multiple occasions.
Robert Hall was a research assistant at the Board of Governors of the Federal Reserve System from 1982-1984 and an economist there from 1988-1991.
Thomas Sargent was an adviser to the Federal Reserve Bank of Minneapolis from 1981 to 1987 and continues to write frequently for Fed-sponsored journals.
Michael Woodford is currently on the Monetary Policy Advisory Committee of Federal Reserve Bank of New York, a position he’s held since 2004. He’s also listed as a consultant to the research department there dating back to 2005. In the past, he’s been a visiting scholar at the Board of Governors and various regional branches in 1987, 1993-1998 and 2000-present, often at multiple banks in the same year.
Economists with Fed connections strongly reject the notion that being paid by the bank influences their thinking. But Robert Auerbach, who spent years investigating the institution and is the author of “Deception and Abuse at the Fed”, says that those economists are simply in denial. “If you’re on the Fed payroll there’s a conflict of interest,” says Auerbach.
…
Not a woman among them.
Please Ms Warren, please take over.
Chrysler May Lose 145 Dealers on Lack of Financing (Update1)
Nov. 19 (Bloomberg) — Chrysler Group LLC may lose as many as 145 more U.S. dealers unless the retailers can find lenders to finance their new-vehicle inventory.
GMAC Inc., which replaced Chrysler Financial as the preferred lender for the Auburn Hills, Michigan-based automaker’s dealers, has been negotiating with Chrysler retailers, said Sue Mallino, a GMAC spokeswoman.
Chrysler is optimistic it can resolve most if not all the issues, said Kathy Graham, a company spokeswoman. If dealers can’t get the financing from GMAC or another lender, they may have a “difficult decision” about whether to close, she said.
The outcome may mean fewer dealerships for Chrysler, which has about 2,400 U.S. outlets after terminating 789 as part of a government-aided bankruptcy reorganization. Chrysler exited court protection after six weeks on June 10 under the control of Fiat SpA. GMAC took over preferred financing duties for Chrysler dealers as part of the reorganization.
Of about 1,500 dealers that applied to Detroit-based GMAC to finance their vehicle inventory, about 90 percent will qualify, Mallino said. She said 85 dealers have been refused such financing and 50 to 60 others are still in negotiations.
GMAC said it has asked some dealers for more collateral as a condition for financing.
Obese SC man dies after 8 months in home recliner.
Nov 19
COLUMBIA, S.C. (AP) - Authorities say a severely overweight South Carolina man stayed in his recliner without moving for eight months until shortly before his death.
Firefighters had to cut Tillmon Webb from the chair after his mother called paramedics because he was in pain. Greenwood County deputies say the 33-year-old weighed about 800 pounds when he died Wednesday at a hospital.
Webb’s wife, Ada, says he died of a heart attack. She says the former preacher injured his knee in March and then stayed in his power recliner at home 70 miles west of Columbia. She says she cleaned the chair daily.
Deputies say Webb had sores on his body and a “very bad odor.”
Webb’s wife says he didn’t want help because he was ready to go to heaven and see Jebus. She says he weighed closer to 500 pounds.
I smell an Aesop Fable in that story.
Société Générale tells clients how to prepare for potential ‘global collapse’
Société Générale has advised clients to be ready for a possible “global economic collapse” over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.~ UK
In a report entitled “Worst-case debt scenario”, the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.
Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of “deleveraging”, for years.
“As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse,” said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.
Under the French bank’s “Bear Case” scenario (the gloomiest of three possible outcomes), the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.
Those who are licking their chops in anticipation of a hyperinflationary near term future for the $US may find themselves sorely disappointed.
Of course, there is nothing to stop the Fed from letting inflation get out of control, then using the standard “no-one could have seen it coming” defense…
The Fed
Nov. 18, 2009, 12:13 p.m. EST
Slow rate hikes of ‘04 may haunt Fed: Bullard
Talk of no rate hikes until 2012 causes market flutter
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve’s slow quarter-percentage point rate hikes of 2004 and 2005 “may weigh heavily” on central bankers pondering the next tightening cycle, said James Bullard, the president of the St. Louis Federal Reserve Bank on Wednesday.
Although Fed officials deny it, many economists believe the Fed kept rates too low for too long in these two years and that the easy monetary policy was a major factor in creating the housing market bubble.
In the past two recessions of 2001 and 1990-1991, the Fed didn’t start hiking rates until roughly three years after the downturn had ended, Bullard noted.
St. Louis Federal Reserve Bank President James Bullard
“If you look at the last two recessions, in each case the FOMC waited two and a half to three years before we started our tightening campaign,” Bullard said.
“If we took that as a benchmark, that would put us in the first half of 2012,” Bullard said in his remarks according to Bloomberg News.
But the central bank may factor in the arguments about 2004 in the current situation, he said.
“The ‘too-low-for-too-long’ argument may weigh heavily on the FOMC this time.”
“The ‘too-low-for-too-long’ argument may weigh heavily on the FOMC this time,” Bullard said.
…
Things are different this time.
(really)
We have a lot less headroom to be raising rates this time. The 2004-2006 rate rise is partly what triggered the housing collapse. If rates are raised in any significant way any time soon, we’re looking at at best a double-dip recession.
Rock and a hard place.
My guess would be they’ll start to raise rates late in 2010, but it’ll be a very, very gradual climb - like something that’ll take 5-7 years to get back up to 5% even; if it ever gets there.
Bullard has already dropped hints to expect the Fed start out by unwinding its quantitative ease into asset purchases, long before any FFR increases are brought into play.
Of course, the Fed’s unwinding $1t+ worth of MBS purchases could also suffice to kick the housing collapse back into high gear… no FFR increase is needed.
Did the MarketWatchers miss the “r” on “routing”?
Market Snapshot
Nov. 19, 2009, 3:34 p.m. EST
Wall Street faces worst outing of the month
Investors, prompted by economic worries, scale back risk in portfolios
Maybe the stock market is about to tell us something about its orientation.
Funny catch!, she/he says as he sashays out.
Big banks would pay more into deposit fund.
WASHINGTON (MarketWatch) - Big banks would be required to pay more into a Federal Deposit Insurance Corp. fund than smaller institutions, according to a provision that was approved by a key congressional committee on Thursday. The FDIC currently collects fees from banks to make payments to depositors of a failed community bank. The fund payments are used to cover losses to depositors of a failed bank. “By basing the assessment on assets instead of deposits this amendment takes into the true risk,” said Rep. Luis Gutierrez, D-Ill., the measure’s author. “It would reduce the assessemnets on 98% of banks, assuring that $4.5 billion will be kept in community banks to lend to manufacturers, the service sector and consumers.”
LOS ANGELES – As hundreds of students demonstrated outside, University of California leaders on Thursday voted to approve a 32 percent hike in undergraduate fees, arguing the increase is crucial because of the state’s budget crisis.
The UC Board of Regents, meeting at UCLA, approved a two-phase increase that will boost the average undergraduate fee $2,500 by next fall. That would bring the average annual cost to about $10,300 — a threefold increase in a decade.
After a series of deep cuts in state aid, and with state government facing a nearly $21 billion budget gap over the next year and a half, regents said there was no option to higher fees.
Outside the meeting hall, hundreds of demonstrators chanted, beat drums and hoisted signs opposing the fee increase while UC campus police in face shields and California Highway Patrol officers with beanbag-shooting guns stood watch.
Get ready for more of this.
You’ll see it at the grocery store when food prices rise.
You’ll see it as unemployment rises and benefits end.
You’ll see it as gov services get cut and local taxes rise.
You’ll see it as crime rates increase.
UC campus police in face shields and California Highway Patrol officers with beanbag-shooting guns stood watch.
They have a pension to protect!
No they are protecting the raises the UC Regents gave themselves.
Want to live in JR’s home? Dallas star Larry Hagman to sell his $11m green mansion.
It’s not exactly the home you would expect from a man best known for his portrayal of an amoral oil magnate.
In his role as JR Ewing in the 80s soap Dallas, actor Larry Hagman lived in a Texas mansion called Southfork where he devoted his life to malice, bad deeds and despoiling the environment.
Now the 78-year-old and his wife Maj are selling the California home where they have lived for the past 16 years and it turns out to be the largest ethical ‘off-grid’ home ever marketed.
http://www.dailymail.co.uk/tvshowbiz/article-1229362/Want-live-JRs-home-Dallas-Larry-Hagman-selling-11million-green-mansion.html
Southfork was turned into a flea market that last time I was out that way.
SAN FRANCISCO (MarketWatch) — Dell Inc. on Thursday reported a fiscal third-quarter profit that fell 54% from a year ago as sales across all of its major business areas, adding fuel to analysts’ reports that the PC giant is losing market share to its rivals.
Analysts surveyed by Thomson Reuters had forecast Dell to earn 28 cents a share on revenue of $13.2 billion.
Initial reaction to the report was negative, as Dell’s shares fell $1.22, or almost 8%, to $14.65 in after-hours trading.
Dell said its unit shipments were down 5% from a year ago, with consumer sales off by 10% and large-enterprise revenue falling 7% to $3.4 billion. Revenue from sales of desktop PCs slid by 26% compared to the same period last year.
For its fourth quarter, Dell didn’t give an exact earnings or revenue outlook, but said that it expects sales to improve.
Here at the Arizona Slim Ranch, my 4-year-old Dell just keeps on keepin’ on.
Here at the DennisN Ranch, my 8 year old Dell just keeps on keepin’ on. I’ve had to replace the DVD burner and upgrade the memory to 1 GB.
Long live XP!
Dell needs to take a play out of the GM play book and learn to build computers that break faster (he types from the keyboard of his 5-year-old Dell desktop…).
Here comes the layoff machine!
Had two great Dells. On the third one, two hard drives and a motherboard failed within the first four years.
I’ve also had three hard drive failures on Dells at work, on two different jobs.
I’ve got a Mac now.
Maybe they did take a page out of GM’s book — from the 1970s.
Maybe now we can start getting to the bottom of the mysterious housing bubble resurrection against the backdrop of the worst recession since the 1930s…
Nov. 19, 2009, 5:46 p.m. EST
Panel votes to audit the Fed; cap its spending at $4 trillion
Measure would audit the Fed’s monetary policies such as interest rates
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — Rep. Ron Paul, who has sought to audit the Federal Reserve for 26 years, has inched ever so much closer to his goal.
A key congressional panel on Thursday approved legislation introduced by the Texas congressman that - for the first time in the central bank’s 95-year-history — would require government audits of Federal Reserve monetary policy, as well as how much the central bank has lent and will lend to specific banks.
Fed Chief Ben Bernanke and other key members of the Obama administration, including Treasury Secretary Tim Geithner, had vigorously opposed the move.
AM Report: Ron Paul vs. the Fed
The News Hub panel discusses Ron Paul’s Opinion piece in today’s Journal, which argues for a more transparent Federal Reserve.
The measure was approved by the House Financial Services Committee as it considered broad bank regulatory reform legislation, and included a package of other measures weakening the Fed’s power and capping how much it can lend or guarantee.
The committee is now poised to pass the entire bill and has scheduled its final vote on the legislation for December 1.
Lawmakers also agreed to provisions that would require the Fed to work with other regulators before acting as a lender-of-last-resort.
“If you care about transparency of the Fed, you would allow a look at monetary policy,” Paul said. “We’re dealing with trillions of dollars that doesn’t get audited. There is no reason why the world can’t know, eventually, what the Fed is doing.”
Paul’s measure, which was approved by a vote of 43 to 26, would require the Government Accountability Office to audit the central bank’s interest rate policy, agreements with foreign governments, foreign central banks and the International Monetary Fund. It also would permit audits of a roughly $800 billion Fed mortgage-backed securities purchase program, which could grow to $1.25 trillion, Paul said.
The GAO would be instructed to complete a Fed audit within 12 months of passage of the bill.
…
SWEEEEEEEEEET!!!!!!
For a very interesting explanation of the dollar/yuan relationship and the possible outcomes, check this out:
http://tinyurl.com/yzqnw8w
This was aired on CNBC but it is not the usual pump-monkey stockpicking claptrap.
Some hard money analysis that will gladden some and confound many, I’ll wager.
I wish I had time to read through all the posts! 10 days I am done with my masters… I am a complete freaking zombie with the two kids, but I wouldn’t trade it for anything. There is mass collusion between the banks/mls/REIC here. There are very few ‘foreclosure’ listings… rigggghhht. Palmy, after your comment about Safety Harbor the other day I took the family up there for dinner. There was one dude bathing, fully clothed in the fountain, and another dude asking teenage girls if he could photograph them. We also saw a large bird drop a squirrel that bounced off the top of the car in front of us on the way there.
Just another day in Flawda.
“There is mass collusion between the banks/mls/REIC here.”
I am hoping a Fed audit might shed some light on how high up the system the collusion between the banks and the REIC goes.
Hey, Muggy, way to go. Congrats with finishing the masters.
Way cool.
Only ten, now nine days left?! Two gorgeous little ones, a working a spouse and your masters degree? YOU DID IT, Muggy! What an amazing Thanksgiving you guys should have.
You didn’t go whack. And your brain is back. And we’re all as proud as punch of your determination here at HBB.
Well done, Son!
You be the Man.
“You didn’t go whack.”
I came close a few times. I can’t say enough how this blog has kept me sane. Actually, I think in the course of my bubblesit I’ve gone Zen and the Art of Motorcycle Maintenance twice.
“Two gorgeous little ones… Well done, Son!”
Thanks!
NEW YORK (Dow Jones)–U.S. gasoline demand, hammered by the recession, will never return to 2007’s peak, as greater use of biofuels and increased engine efficiency cut consumption of the fossil fuel, BP PLC (BP) Chief Executive Tony Hayward said Thursday.
“We will never sell more gasoline in the U.S. than we sold in 2007,” Hayward said in an interview with Dow Jones and The Wall Street Journal.
U.S. Department of Energy data show consumption of motor gasoline fell 3.2% in 2008, from a peak average of 9.3 million barrels a day in 2007, though a slight uptick from 2008 is expected this year.
In 2007, BP sold an average of 1.57 million barrels a day of its gasoline products worldwide, with sales slipping 4.6% in 2008, according to the company’s annual reports.
Hayward’s comments reinforce a widely held view that demand for gasoline in rich countries has entered a secular state of decline, even as overall gasoline consumption is expected to grow as middle classes in China, India and Brazil, among developing countries, buy more cars.
Daniel Yergin of IHS Cambridge Energy Research Associates–author of “The Prize,” a history of the oil business–has said U.S. gasoline demand peaked in 2007. Chevron Corp.’s (CVX) Chief Executive Dave O’Reilly said in an earnings call last month that the company has chosen to focus investment on the Pacific Rim, where economies are expected to grow.
The use of fossil fuels to power vehicles has been declining in the U.S. as a result of the economic downturn, greater engine efficiency, increased use of gasoline-electric hybrids, and requirements to include larger amounts of ethanol and other biofuels. As fossil fuel’s share of the mix diminishes over time, “we’re going to be in the biofuels business,” Hayward said.
I’d also throw in the fact that we won’t be seeing a building boom like we have just gone through, and poor people don’t fly to Vegas for a weekend.
Come to think of it, didn’t Timmay push hard for the TARP? And wasn’t the TARP supposed to be a panaceac cure for all woes economic? And weren’t the green shoots supposed to have sprouted into a mighty forest by now?
MarketWatch First Take
Nov. 19, 2009, 4:34 p.m. EST
Capitol Hill cat fight
Commentary: Geithner, Brady made a good circus, but where is the bread?
By MarketWatch
WASHINGTON (MarketWatch) — Justified or not, Treasury Secretary Timothy Geithner has become the whipping boy for everything that’s wrong with the economy.
Texas Republican Rep. Kevin Brady backed Geithner into a corner during a hearing on Capitol Hill on Thursday. Brady recited a list of economic problems starting with unemployment and ending with the federal deficit, and concluded: “For the sake of our jobs, will you step down from your post?” See our full story on Geithner’s complete testimony.
Mixed Sentiment on Obama and Business
Rahm Emanuel and others spoke at the Journal’s CEO Council about concerns that the Obama administration is anti-business. But for many CEOs, the jury is out on President Obama’s attitude toward big business. WSJ’s Lee Hawkins report.
Geithner, to no one’s surprise, said he wouldn’t resign, and fired back at Brady: “You gave this president an economy falling off the cliff.” (Presumably, he meant Brady as representative of the Republican Party, and not Brady himself, because Brady really hasn’t done much to affect the economy one way or the other in his 12 years as a backbench congressman, or in his 18 years as an executive at a local chamber of commerce.)
Then it got ugly. Neither man acquitted himself very well during the ensuing cat fight, but then few have over the past two or three years.
No, Mr. Geithner, this financial crisis was not caused by “eight years of basic neglect of basic public goods” such as health care, education and infrastructure. The government has neglected those things, but they didn’t cause Wall Street to destroy the economy in a frenzy of greed, nor did it force American consumers to join in the gluttony by spending beyond their means.
No, Mr. Brady, no one has claimed that “the stimulus created several quadrillion new jobs.” Gee, you’d think someone who is gloating about all the inaccurate information on the Recovery.gov Web site would try a little harder: The actual claim is that the stimulus has created 1 million jobs, not a quadrillion (which really isn’t even a number).
No, Mr. Geithner, you don’t really take “great honor and pleasure” in accepting full responsibility for the bailout. It may have been necessary, but it wasn’t honorable or pleasurable.
…
* REAL ESTATE
* NOVEMBER 20, 2009
More Homeowners Fall Behind on Mortgages
By JAMES R. HAGERTY
About one in seven American households with mortgages is behind on payments or in foreclosure, according to new data from the Mortgage Bankers Association. That is up from about one in 10 a year ago.
The group reported Thursday that 14.4% of first-lien mortgages on one-to-four-family homes in the third quarter were 30 days or more overdue or in the foreclosure process. That is the highest rate since the MBA began reporting such data in 1972, and works out to about 7.5 million households at risk of losing homes. The percentage is up from 10% a year earlier and 7.3% two years ago.
…
* Earlier: Fear of Double Dip in Housing
* Developments: More Americans in Mortgage ‘Limbo’
Journal Community
* Vote: Are you having trouble making mortgage payments?
Dang — as much as I hate staying up past my bedtime, I simply have to watch the Daily Show tonight to see what Jon Stewart did with the gifts Geithner left him today.
BTW, has the House figured out yet about how the Fed and the Treasury are in cahoots, thanks to them both being run by central bankers, not to mention the formal collusive relationship embodied in Executive Order 12631? Thanks again, Ronald Raygun.
* The Wall Street Journal
* NOVEMBER 20, 2009
House Attacks Fed, Treasury
Panel Votes for Tighter Political Rein on Central Bank; Some Call for Geithner to Quit
By SUDEEP REDDY and DAMIAN PALETTA
WASHINGTON — Political frustration over the rescue of Wall Street and high unemployment erupted in the House Thursday, with one committee threatening to impose tighter scrutiny on the Federal Reserve and another trading verbal insults with Treasury Secretary Timothy Geithner.
The House Financial Services Committee voted, 43-26, to approve a measure sponsored by Texas Republican Ron Paul, vociferously opposed by the Fed, that would direct the congressional Government Accountability Office to expand its audits of the Fed to include decisions about interest rates and lending to individual banks. The Fed says the provision threatens its ability to make monetary policy without political interference.
Treasury chief Geithner faced a House Republican who told him, ‘The public has lost all confidence in your ability to do the job.’ He shot back: ‘What I can’t take responsibility is for the legacy of crises you’ve bequeathed this country.’
The vote was the latest blow to the central bank, which has been become a lightning rod for politicians responding to popular anger that Wall Street was bailed out while the public wasn’t. The Fed faces a stinging backlash from legislators from both parties who argue that has too much power and too little oversight. On Thursday, the Senate Banking Committee began debating legislation that would largely remove the Fed from bank supervision over the objections of the Fed and the Obama administration.
The Fed audit provision was added to pending legislation on financial regulation that the committee’s chairman, Barney Frank, a Massachusetts Democrat, had planned to put to a vote Thursday. But he abruptly announced late in the afternoon that the bill wouldn’t move ahead until after Thanksgiving. The reason: Ten members of the Congressional Black Caucus on the committee said they would oppose the bill to protest a lack of action to address the economic pain borne by their constituents. Although the economy appears to be growing again, lawmakers face increasing pressure in their districts to do more to boost growth and address an unemployment rate now at 10.2% and expected to rise.
Glum views on the economy sparked a retreat from stocks and some commodities, as investors moved to the safety of government debt. The Dow Jones Industrial Average fell 93.87 points to 10332.44.
At the Joint Economic Committee, a couple of House Republicans called for the resignation of Mr. Geithner, who, as president of the Federal Reserve Bank of New York, played a major role in last fall’s moves to prevent the collapse of the financial system. “The public has lost all confidence in your ability to do the job,” said Rep. Kevin Brady, Republican of Texas.
Mr. Geithner, in an unusual public display of pique, fired back. “What I can’t take responsibility is for the legacy of crises you’ve bequeathed this country,” he told Mr. Brady.
…
Just who is Mr. Brady? Was he Treasury Secretary before Geithner or something? Or was he an FOMC member? I can’t say I recognized his name until seeing it in print today…
I have a monetary policy secret I would like to share with all the readers here: The Fed is highly unlikely to even think about raising interest rates until at least 2012.
Now that we have that fascinating topic behind us, could we please move on to the subjects of collusion with the Treasury and with Megabank, Inc, asset price fixing, currency debasement, Sherman Antitrust Act violations, banking system competitiveness, and political influence?
…
Mr. Paul maintained that his amendment wouldn’t hinder monetary policy, but instead remove a veil of secrecy at the central bank that’s unique within U.S. government. At the Fed, “there’s plenty of political influence going on now — presidential politics, influence by Goldman Sachs and the banking industry,” he said. “It’s all done in secret.”
…
What could possibly be politically sweeter than getting christened as King Obama’s Bailout Czar?
* The Wall Street Journal
* REVIEW & OUTLOOK
* NOVEMBER 20, 2009
AIG and Systemic Risk
Geithner says credit-default swaps weren’t the problem, after all.
…
In remarks Tuesday that were interpreted as a veiled response to Mr. Barofsky’s report, Mr. Geithner said, “It’s a great strength of our country, that you’re going to have the chance for a range of people to look back at every decision made in every stage in this crisis, and look at the quality of judgments made and evaluate them with the benefit of hindsight.” He added, “Now, you’re going to see a lot of conviction in this, a lot of strong views—a lot of it untainted by experience.”
Mr. Geithner has a point about Monday-morning quarterbacking. He and others had to make difficult choices in the autumn of 2008 with incomplete information and often with little time to think, much less to reflect. But that was last year. The task now is to learn the lessons of that crisis and minimize the moral hazard so we can reduce the chances that the panic and bailout happen again.
This means a more complete explanation from Mr. Geithner of what really drove his decisions last year, how he now defines systemic risk, and why he wants unlimited power to bail out creditors—before Congress grants the executive branch unlimited resolution authority that could lead to bailouts ad infinitum.
How does window dressing help greed pigs grease the skids leading to their year-end bonus troughs? And doesn’t piling into short term Treasurys normally precipitate a stock market sell-off?
Short-term US interest rates turn negative
By Michael Mackenzie in New York
Published: November 20 2009 01:40 | Last updated: November 20 2009 01:40
Short-term US interest rates turned negative on Thursday as banks frantically stockpiled government securities in order to polish their balance sheets for the end of the year.
The development highlighted the continuing distortions in the financial system more than a year after Lehman Brothers’ failure triggered a global crisis.
The growing appetite for short-term government debt reflects an effort by banks to present pristine year-end balance sheets to regulators and investors – an effort known as “window dressing” on Wall Street, analysts said.
With the Federal Reserve maintaining an overnight target rate of zero to 0.25 per cent, investors are demonstrating a willingness to completely forgo interest income – or even to take a small loss – to own securities that are seen as safe.
Ted Wieseman, economist at Morgan Stanley, said there was a “squeeze in the [Treasury] bill sector” that was “intensifying as investors stash money over year-end”.
The scramble has been exacerbated by the fact that all leading US banks, many sitting on big trading profits, will this year close their books at the same time – at the end of December. In past years, investment banks such as Goldman Sachs and Morgan Stanley reported annual results in November.
“People are setting up for year-end early, and once you see bill rates going down quickly, it pulls in more buying,” said Gerald Lucas, senior investment adviser at Deutsche Bank.
…
Cyprus’s economy takes a literal “nosedive” this year. Real estate transactions have come close to zero and there are very few tourists showing compared to the last few years. The funny thing is that a survey I saw the other day claimed that the residents of Sweden, Norway, Cyprus and Portugal were the only 4 countries in the Eurozone who expect the region to come out of recession this year. So sorry!
http://www.financialmirror.com/News/Cyprus_and_World_News/18259
http://www.financialmirror.com/News/Cyprus_and_World_News/18260
http://www.financialmirror.com/News/Cyprus_and_World_News/18236