Bits Bucket For December 4, 2009
Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
May 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Three years ago, we almost to a person wished for a major adjustment to the insanity of the market. The average family could not afford the average home. Wannabees were seemingly swimming in new bling from their new-equity financed HELOCs. The American Dream was either on steroids or about to disappear.
So, where are we now? Did we get our wish? Did the greedy get punished? Can the average worker, if he/she indeed has a job, afford decent housing?
I am worse off than 3 years ago, but my wife and I are surviving OK. What a long, strange trip it’s been!
And we’re right back to where we started.
The bubble is officially back, IMHO, and the only lesson we’ve learned from the whole “crisis” is that specuvestors of all stripes will be bailed out at the expense of those who were trying to be responsible.
Viva la bubble!!!!
Sorry, but I don’t agree that we are right back where we were. I think we may have a case of amnesia.
In 2006 our landlord was going to raise our rent by 7%, even after we had paid promptly all year. We tried to negotiate and were told there was no negotiating. We moved out. In 2009 we received a 15% decrease in rent and expect another decrease this year. This will take us back to the rents of 2005 or 2006.
In 2006 I was tracking houses in my hometown. The prices were ridiculous. Three years later the prices are still slightly too high but they have fallen 30 - 40 percent. Many have been foreclosed. Many have been trapped. Many feel like their future plans have been tossed into the bin.
In early 2006 I was asked when my wife and I were going to buy in New York. I stated, “I wouldn’t buy in this market if you put a gun to my head”. A collective gasp went out over my sacrilege. The talk behind my back was that I was crazy. There was much laughter. In 2009 nobody asks me when we are going to buy. Nobody looks back to my thoughts of those days and uses the word “crazy”. The economic situation, even here in Fantasyland, is tenuous. There is still fear for everybody’s job. Nobody discusses real estate as if it were a stock.
Commercial rents in NYC continue to plummet. Businesses are closing. Some new businesses are stepping into the void, realizing that lower rents may allow them to be profitable. Perhaps the little neighborhoods that got overrun by boutiques just may go back to have local businesses that server the local people. Gasp. What a horror that would be!
Our government is a mess. The Fed is a diabolical organization wrapped tightly with the money powers like peppers and onions in a chicken fajita wrap. They are nearly indistinguishable from each other. The Congress is filled with rotten creatures that are causing the decay of a great nation. The electorate is mostly mindless drones that do not understand that “consumer” should not be a term of pride and joy. From this mess it will be hard to reform this nation.
Even with all of the negatives and stupidity we are not back to square one. Many attitudes have changed. When I hear Jim Bunning say to Ben Bernanke that The Fed has become, “the creature from Jekyll Island” then I know this is not 2006. We are bordering on 2010. The road looks to be rocky. The trip is going to be fraught with perils but in some dark way it feels like we are moving forward.
Bravo NYCboy:
This is the best part of this blog we all are telling our stories and observations of our little corner of the world, and its amazing how similar our experiences are.
Here across the river in Queens, about the only businesses that open up are Spanish oriented, a new lounge is opening on queens blvd(not Spanish) so today i will see if they need some music. It used to be a nice fish type restaurant that failed after less then 6 months.
Lots of for rent for lease signs on the warehouse buildings in Hunterspoint. and the 2 luxurie conodozes are virtually empty at night. Yet they are still building more high rises in Queens West that have a view of Manhattan.
Not to mention they still want to build 5000 apartments with 3000 supposedly “affordable” at the tip of hunterspoint which could be a toxic superfund site:
http://www.liqcity.com/real-estate/hunters-point-souths-controversial-astroturf-waterfront-park
One of my favorite performers is El Vez, a Mexican Elvis impersonator. He does parodies of other acts as well, including Three Dog Night’s “Never Been To Spain.” ‘Well, I’ve never been to Spain, so don’t call me a Hispanic.’
I am in apartment seach mode right now. I will submit a proposal for a market rate rent, but I sincerely doubt my current landlord will agree. They have strangely 2005 attitude about rent without even having brought the prices down to that level.
I talked to a realtor last night about looking at a condo to rent. It is just a smidge smaller than my current place, which isn’t great, but could be a great motivator for getting rid of more stuff - tempting. The rent is more than my current place, but includes heat, electricity, and water so the price is essentially a wash. A few differences:
4 Metro stops closer to work and a shorter walk to that Metro stop (saving15 minutes each way at least).
3rd floor not first.
Looks out into trees, not a moderately busy street and a parking lot.
Easy walking to downtown Bethesda (library, restaurants, regular and art movie houses) not steps to suburban Rockville. Right on top of Capital Crescent walking/biking trail.
Way better amenities in the building.
If I were willing to let go of 100 more square feet, I could cut rent by a third by moving one block further back and giving up washer/dryer in the apartment.
It is a good time to be a renter.
Easy walking to downtown Bethesda (library, restaurants, regular and art movie houses) not steps to suburban Rockville. Right on top of Capital Crescent walking/biking trail.
That would be a pretty big draw for me right there, especially when coupled with the decreased commute time.
Yeah. I’ve only seen some photos, but it looks like the layout isn’t quite as nice as my current one. Or just different. I’m going to have to see it and think a bit. Not like I can’t figure out how to rearrange furniture. The location is very, very tempting. Maybe a smaller sofa would be enough to fix the problems…
I just moved to Rockville from No. VA. It is funny to hear Marylanders consider Rockville “Suburban” by No. VA standards it is still very much urban! Maryland is cool… I’ll be happier when I start my job downtown so I dont have to commute on the beltway and toll road.
Good luck on the rental hunt!
“If I were willing to let go of 100 more square feet, I could cut rent by a third by moving one block further back and giving up washer/dryer in the apartment.”
That would be a no-brainer for me! One block further to walk is good exercise, and not having your own washer/dryer can be an advantage, in that you can use two or three washers at once in the complexes facility—assuming it is safe enough / access-controlled enough that you don’t have to sit and watch your clothes go round and round.
Let me specify - lose 100 square feet and walk an extra block from where I am now which is suburban strip mall land and I’m pretty sick of it. Not the other place.
Extra walking is good when you pick the time and place. Extra standing around waiting to cross a really busy street in hot humid or wet cold weather followed by an extra block of walking isn’t so nice. And my impression is that the neighbors are noisier in that place too. However, if I were at all worried about my job, I’d be in the cheaper place in a split second.
Welcome to Rockville Jbb. It isn’t bad. I’m just kind of ready for a change. Also have lots of vacation in which to move.
“Let me specify - lose 100 square feet and walk an extra block from where I am now which is suburban strip mall land and I’m pretty sick of it. Not the other place.”
Oh, bummer—I thought you meant that was also in the new/better place… Sorry.
Since it’s just you living there, it might be easy to downsize.
Still, I really hope your landlord has some sense and gives you a discount from your current rent. They would if they were smart! Otherwise, they’d have to lower anyway to market rent, then fix everything up and advertise again. With you, they know what they’re getting: a good tenant!
Best of luck, Polly.
I’d be leery of giving up the washer and dryer in unit. It’s nice not having to think about washing clothes, just being able to do it on demand. Also, not lugging them to the laundromat is a bonus. One less time drain.
Yeah, but there could have been Armageddon if the irresponsible had not been bailed out. You know that.
Wall Street to Main Street, “we had to destroy your village to save our village”.
I am lmao at this jobs report floating around this morning.There is no way that is remotely close to being true and accurate.PPT at work again.
The propaganda-driven fake recovery is in full swing. To the fraudsters (American banks), it is sink or swim.
“Real” Numbers Don’t Support the MSM-Hyped “Recovery”, again:
SAN FRANCISCO (KGO) — BART ridership to San Francisco’s Union Square shopping district was down nearly 18 percent on Black Friday. Nearly 49,000 riders took the train to Union Square last year, as compared with only about 40,000 this year — the lowest number in four years.
BART doesn’t rely on Black Friday to get in the black like retailers, but there is more at stake than fares alone.
“Think about it this way, when people aren’t spending money it hurts us two ways: one, obviously is the ridership revenue that we receive. And two is the sales tax they would spend here, we don’t get that either so it’s a double-whammy,” said BART spokesman Linton Johnson.
And it’s not as if the shoppers came in cars instead.
The Union Square Merchant’s Association says parking was down 10 percent at the Sutter-Stockton and Union Square garages.
Retailers aren’t revealing sales results, but when the association asked merchants if they agreed with the prediction that this year’s sales would be down one percent from a year ago and 55 percent agreed.
Gumps CEO Marta Benson was in the 45 percent who disagreed.
“We were really pleased with Black Friday and the whole weekend,” she said.
Benson says nothing is on sale, but they have offered more merchandise in the lower price ranges, and it seems to be working.
“Even though consumers have been very cautious and frankly, freaked out by the recessionary environment, the opportunity to come to Gumps and buy a small ornament or a beautiful wrapped gift for under $50,” said Benson.
Shreve and Company Jewelers also saw an improvement over last year.
“I don’t know whether it is hope or observation, but I see a lot more people are coming back into Union Square to shop,” said Shreve and Co. president Richard Horne.
There are 22 shopping days until Christmas for him to gather evidence and sales receipts.
Obviously BART numbers were down due to the success of “Cash for Clunkerz”. No need for public tranz when everybody is cruising to the mall in a new ride. Another success story for gov programs. Let the good times roll!
I agree with CA renter that is can FEEL like we are back in the bubble, at least inside the beltway of DC.
Last night I watched Real Estate Intervention where a couple sold a crappy, bars-on-the-windows row house in Columbia Heights for $699K!!! I almost puked. I turned to my hubs and said we will never be able to afford to buy here.
If rowhouses in a part of the city where 9-year-old children get shot inside their own homes by psychos, gang violence is the norm and there’s nary a public school you’d dare send your kids to are going for $699K, what does that say?
To me it says — still too much easy money and credit floating around.
I turned to my hubs and said we will never be able to afford to buy here.
Depends what you mean when you say “afford” …
Exactly.
We could buy a house tomorrow if we wanted to a) way overpay b) spend a massive amount of our take home i.e. be house poor and c) believed prices only go up, up, up.
My sense follows much of what most of you are saying - the press says affordability is vastly improved. Salaries and job opportunities negate that unless couples or relatives pair up or team up to buy a low-end foreclosure. IMHO.
Not only is the bubble back, but the Fed still cannot see it. The more things change, the more they stay the same.
market pulse
Dec. 3, 2009, 10:54 a.m. EST
Bernanke: No asset bubbles apparent in U.S.
Ben “Bubbles Я Us” Bernanke: “We do not see, at this point, any extreme mis-evaluation of assets in the United States,” Bernanke said in testimony to the Senate Banking Committee.
Wikipedia: “Plausible deniability refers to the denial of blame in loose and informal chains of command where upper rungs quarantine the blame to the lower rungs. In the case that illegal or otherwise disreputable and unpopular activities become public, high-ranking officials may deny any awareness of such act or any connection to the agents used to carry out such act.”
Did Bernanke ever admit there was a housing bubble?
Bernanke: There’s No Housing Bubble to Go Bust
Fed Nominee Has Said ‘Cooling’ Won’t Hurt
…
By Nell Henderson
Washington Post Staff Writer
Some are betting that 2010 will (once again) be bubble poppin’ time at the Fed:
market pulse
Dec. 4, 2009, 9:45 a.m. EST
Fed futures raise bets on rate hike by August
At least rents are dropping fast everywhere.
Did we get our wish? Did the greedy get punished?
I think the better question is, did the system work as it was supposed to in a capitalistic market? If it did, then the greedy (or as I see it, opportunistic) people would have gotten “punished”.
It’s hard to define what you mean by “capitalistic,” step. It Seems To Me that capitalism, when taken to its logical conclusion, leads to monopoly, or at least oligopoly. In terms of the banks, oligopoly means Too Big To Fail. The SWAT team is poised outside ready to kill them, but rather than surrendering, they are killing off hostages one by one to keep the situation going.
capitalismcorporatism, when taken to its logical conclusion, leads to monopoly, or at least oligopoly.+1
I don’t understand this comment. Are you saying that monopolies or oligopolies cannot be formed in the absence of corporations? Do you suggest we abolish fictitious entities?
Chili,
Monopolies and oligopolies cannot be formed in the absence of charters and special favors from the government.
I suggest we abolish corporation laws, and give up the idea of granting business licenses and privileges to politically connected individuals.
“Three years ago, we almost to a person wished for a major adjustment to the insanity of the market.”
Our wishes are coming true.
“The average family could not afford an average home.”
They still can’t in many places, but stay tuned…
“Did the greedy get punished?”
The greedy will inflict onto themselves their own punishment. What goes around comes around, karma, etc.
“What a long, strange trip it’s been!”
The Chinese call it “Interesting Times”.
“Did the greedy get punished?”
Did the leadership do a perp walk yet?
Ken Lewis/Vic Pandit and the rest of the big money pirates and thugs are still free to oppress the last time I checked.
I watched on TV yesterday when Senator Bunning ripped Bernanke a new one as he stated fact after fact about how the Fed failed to do its job correctly. When he was done everybody laughed nervously and basically he was ignored. The stability of known corruption seems to trump the unkown.
Of course, the Senate and the House also failed to do their job correctly. Everyone was complicit. They are looking for a Fall Guy, when all they have to do is look in the mirror.
Bunning is right on this particular issue, but he’s generally regarded as a clown even within his own party. So part of the reaction (I think) was because of the messenger himself.
True. Jim could use some public-speaking lessons from Obama. What if Obama had said all of those things about Bernanke instead of Bunning? Everything he said was statement of fact/truth. It was not a personal attack. Lame speaker or not, at leas Bunning had the balls to say what needed to be said and he will get credit for that.
So, where are we now?
America Without a Middle Class
by Elizabeth Warren, Chair of the Congressional Oversight Panel created to oversee the banking bailouts 12/03/09
Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can’t make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month.
The contrast with the big banks could not be sharper. While the middle class has been caught in an economic vise, the financial industry that was supposed to serve them has prospered at their expense. Consumer banking — selling debt to middle class families — has been a gold mine.
And when various forms of this creative banking triggered economic crisis, the banks went to Washington for a handout. All the while, top executives kept their jobs and retained their bonuses. Even though the tax dollars that supported the bailout came largely from middle class families — from people already working hard to make ends meet — the beneficiaries of those tax dollars are now lobbying Congress to preserve the rules that had let those huge banks feast off the middle class
http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html
“America without a middle class”
This is the goal. Hordes of dirt poor debt-slaves and a few at the top with all the power, money, and resources. And they are getting closer every day.
This will be another “jobless recovery” which is no recovery at all, followed by another, deeper recession, which will really be a depression from which there will be no return.
Oh come now mr gloomy. It’s pretty easy to stop the bankers in their tracks. Quit spending and using credit.
Poof. Done. Fin.
The more thrift we have the easier this will be.
You and I can do that, but Joe 6 Pack lives and dies by his credit rating.
Plus how will that stop the hollowing out of our national economy?
Not really. If you want to live decently, you have to live in debt to the house car health insurance. If you want to live without debt, then you DO live dirt poor — in a shack taking the bus to the 7-11 where you live hand to mouth. It’s not impossible to live half-decently in a good shack in semi-podunk and driving the clunker to Wal-mart, but that out the window when the jobs went over seas.
The only way to live decently without debt is to take over your parents’ paid-for house from the 50’s, or have a very secure well-paying job, which are becoming scarce.
I think Oxide you would be amazed at how far down you can really squash your expenses and on a wide scale this will cause deflation.
You go from eating out to eating in and you cut expenses by <75%
Buy a small efficient used car and you have minimal insurance and costs. Sell off that expensive SUV.
Get a less expensive but still expensive health care package and only go to your doctor when you really have to. Plus live a bit healthier and avoid high risk activities like rock climbing or skiing exc.
Rent a smaller place and have the kids share a room.
Shop at the thrift store for clothes for the kids and yourself if you can.
Get rid of cable and expensive Iphone and Ipod for the 30$ per month walmart phone.
Work on what kind of food you buy and you can save a bundle as well. aprticularly stay away from prepackaged junk like cereal.
Don’t have big fancy birthday parties or weddings. Give gifts to only a few close friends.
Take less expensive trips. Me, I like to hike so other than transport and Ramen noodles, it is free.
Do this for a meere five years. Will probably be able to buy a house with the money saved. If you are really agressive you can put the money into a safe deposit box. If you want returns… buy stocks or something.
Merican’s do this for a decade and it will be one heck of a different situation.
Don’t think of it as living poor. Think of it as saving for a better future.
You do know that your credit score is checked for employment, right? That if you drive a car, you MUST have insurance in almost every single state and the rates are determined by your driving record and credit score? That without some ability to get your hands on cash for emergencies, that problem turns into a life changing (for the worse) crisis? That almost nobody but the very wealthy have $15,000 plus to spend on education per year?
Sure, there are plenty of fools out there. But there are also millions who played by the rules and got screwed anyway.
I’ve tried living without credit. I don’t recommend it.
This will be another “jobless recovery”
When was the last time we had a true recovery that wasn’t based on some kind of bubble?
http://www.markfiore.com/user/1/animation/408
“America Without a Middle Class
by Elizabeth Warren, Chair of the Congressional Oversight Panel created to oversee the banking bailouts 12/03/09″
She forgot to mention the middle-class burden of LBJ’s Great Society.
You obviously aren’t old enough to remember the riots and violent racism on both sides. Along with the burning cities.
Why don’t you bring me up to speed with the napkin version?
During the 60s, racism was still at the Klu Klux Klan level. Deadly and violent. And this was against ALL minorities. At the same time, minorities were organizing and beginning to respond in kind.
Hardly a week went by without some town or city burning on the nightly news and riots involving thousands of people. Which were actually just mass demonstrations until the police showed up and began harassing the demonstrators although some of the riots were absolutely in response to police brutality.
While there were plenty of well educated and well off white racists and well off white progressives, the majority of the problem was caused by the poor of all races.
It was finally realized that people with nothing and nothing to lose were going to act accordingly. It was also realized that poor populations were great areas for disease initiation and growth and that the “free market” wasn’t about to offer any help in fixing the problem.
The “Great Society” was not done out of the goodness of LBJ’s heart. He was forced by extreme circumstances to so. And its only real claim to success was that it managed to hold the nation together long enough for the insanity to subside and progress to be made.
It was nowhere near perfect, but it did its job and was almost completely dismantled by the end of the 1980s thanks to the boogieman of the “Cadillac driving welfare queen.” This forced the poor to increase their level of black market activity, mostly drugs and guns, (with a little help from the CIA) as each preceding recession left fewer jobs that paid a decent living and created more McJobs that paid squat.
This is not from Wikipedia. I lived through it. I was a kid, but TV was just beginning to really take off and the nightly news was bigger than anything you can imagine. I also lived all across the country at the time.
But recent event have shown who the real welfare queens are, haven’t they?
If my post will show…
I grew up in California, so I didn’t see the Jim Crow south. I do remember the riots on TV though including those closer to home in Watts in Los Angeles, CA. I did spend lots of time in the south while a member of the military, but I didn’t get out much–too busy. FWIW, I actually did see Robert Kennedy at a speech in San Jose, CA; I knew the liberal movement was dead in the water after listening to him. I always figured that the breakdown of the two parent family was the source of many problems; who knows? Anyway, LBJ’s Great Society wasn’t a safety net, as advertised, but a way of life that has become very costly. “We shall overcome!” is still a clear memory; “Lead by Example” is my favorite motto.
“Did we get our wish?”
That would depend on what everyone’s individual wish was/is.
If that wish was to have a front row seat to watch the greatest event in many a peep’s lifetime play-by-play, then yes. And best of all, it ain’t over and the annual holiday distraction is a great time to take a pee break and get some snacks (popcorn for most of you, nachos for me).
OTOH, if the wish was to get something for nothing, then probably not. (ex. an insanely cheap dream house with no risk whatsoever involved)
I feel very fortunate at this time. Prior to even understanding the bubble I had my illusions knocked from me. In 2003 we bought what I thought was my dream house. Coming from such a modest background the thought of a huge house made me feel important. After buying my McMansion I realized that it had nothing to do with my happiness. I ditched it in 2005 and never looked back.
Even on the HBB the urge to buy runs very high. I am in the minority. I don’t care to ever buy again. Of course I don’t have kids. My ideal, if we left NYC, would be to rent part of a house from somebody I know and let them do the work.
The past four years has indeed been a strange trip. I didn’t think in 2009 I would be fixated on the world economy. I didn’t think I would be making uncomfortable financial posts on FaceBook. I didn’t think that I would look at the American government, military and corporate world with such bottomless skepticism. But hear we are. We are healthy. We have a place to live. We live relatively frugally but still have more than we need. In short, I’ve never been happier. Go figure!
“We are healthy.”
Something money can’t buy.
“We have a place to live.”
Something money can buy, if you have money, that is.”
“We live relatively frugally but still have more than we need. In short, I’ve never been happier.”
In other words, you have it made.
I would disagree that health is something you can’t buy.
Oh? How much does it cost to cure terminal cancer?
Just because you can’t buy New York City, doesn’t mean some people can ‘t buy some real estate.
My Dad for instance bought a cure - surgery - for his skin cancer 20 years ago, and is still going strong at 78.
Health is a cheap investment like a 401k if you start when you are young.
I started at 17. By 30, I was amazed to see 30-year olds who were obese and obviously sedentary. I haven’t seen those people for 20 years. But like a 401k your good health does not take a great deal of more investing to put yourself in great shape - if you started early and regularly.
If you did not start early enough, by 50 a lot of health problems creep up and you may have pre-existing conditions that make insurance too expensive, so you are asking the thugs to point a gun at companies to provide you cheap insurance. Most pre-existing conditions are self-inflicted by poor diet, too much drinking, smoking, and not exercising. You can’t ever blame someone else for forcing you to do those bad habits and not exercise.
I wish I started my financial discipline as early as my workouts.
Health is a cheap investment like a 401k if you start when you are young.
I know far too many people who did all the right things: stayed lean, exercised, ate right, etc. and who died in their 40’s anyway.
Then there’s my FIL. he’s 85, weighs 240 lbs (6′ tall), never exercised, drank, etc. He did quit smoking in his 40’s though.
But then there’s always the notable exception that disproves the “healthy lifestyle leads to long life” theory.
We had a local radio personality, he was on air for at least a dozen years, Dr. Jim Corea. He had his own gym and physical therapy practice, he was the vitamin/mineral/supplement go-to guy. He dropped dead at age 60, I think it was a heart attack.
It never ceases to amaze me how so many HBBers are unaware of the concept of “statistical outliers”.
Do you folks really believe that the reams of proof showing correlation of healthy lifestyle (no smoking, eating well, exercise) and longer life and better health are just false?
It never ceases to amaze me how so many HBBers are unaware of the concept of “statistical outliers”.
Well that’s a rather impressive leap to a false conclusion.
I’ve eschewed pharmaceuticals and been active in some kind of exercise program since my teens. I can count on one hand the times I’ve been to an M.D. or D.O. in the last ten years.
Do I believe that because I use common sense: keep my weight down, don’t drink, don’t use any kind of drug, and don’t smoke that I’m guaranteed a long life?
No. When it’s time for my ticket to be punched, that’s it - I’m outta here. So maybe you can factor fate or destiny into statistical data and correlations and outliers, or maybe not.
x-philly …But we don’t know if Dr. Jim Corea might of died at 40 instead of 60 had he not had a healthy lifestyle .
Genetics come in to play ,psychology comes into play ,and all that jazz . I can’t help but think that you can extend you life span by not being 200 pounds over weight .
My next door neighbor is as healthy as a horse but stresses out because she thinks she is getting this or that disease .Sometimes I wonder about the medication cures that the
Medical profession has come up with . Who said that the modern day cures don’t weaken you overall ,but people are living longer ,so what explains that ? What if all these diseases are caused by the food industry tampering with foods ,and medical science just comes up with pills to deal
with the side effects of tampered foods that create side effects . What if the reason why people are living longer is because the junk in food that make it last longer makes humans last longer to (strange theory ).
Never said it was guaranteed. The point is though that your chances of living a longer life are definitely are better than someone who eats poorly, doesn’t exercise, smokes, etc.
To the original subject - many of these cost extra money. Gym equipment/memberships, healthier food, preventative medicine, etc. So yes - there are ways to buy health.
“…there are ways to buy health.”
Well, then this guy goes in the HHB Hall of Fame for keeping costs low.
http://www.sptimes.com/2007/10/04/Life/Catching_up_with_the_.shtml
Good GOD people, when I said you could buy “health,” I mean basic primary health care that poor people can’t afford [obviously because they don't "work hard enough."]
Like neglected dental work, or simple blood tests to look for infections, or diabetes treatment, or other small things that can blow up into something much worse if not treated.
ha!
Now THAT is the Florida we know and love…
What about lightning?
“When it’s your time to die, you will die.”
I’m with you, flip-flop guy.
“Well, then this guy goes in the HHB Hall of Fame for keeping costs low.”
I wonder what his flip-flop budget runs per year??
Not really fair to say that he survives by keeping costs low, though—he has a sugar-momma! Where do I get one of those?
Google Jack LaLanne. His father died of heart disease in his 50s. Jack LaLanne is 95.
Health problems are mainly preventable. It seems Jack LaLanne was likely to die in his 50s because heart disease runs in his family.
Personally I do not know anyone who is as serious into health as I am. I met a lot of people. I have doubts of posters who say they “know a lot of people who did the right thing” yet died at 60 or whatever. That’s made up unless they died in an auto accident or plane wreck - nothing associated with disease.
Well put, it’s impossible to put a price on being a part of this, as it so offers so many opportunities to learn about our world and ourselves.
What’s so enlightening, and admittedly also exciting, is to see and hear so many things one would have never imagined experiencing as a child. I’m starting to lose track of the illusions that have been shattered.
Genetics come in to play with health also . I was reading a theory a while back about different ethic groups being able to
stand certain types of foods, but not others .
For instance , Germans apparently can consume more fat without it affecting them ,Native Indians have a problem with
alcohol . The Swedish seem to be able to absorb more dairy products without problems and the Asians can get by on a lower protein count than the Whites can .
So ,the theory is that we have not evolved fast enough to not get genetic reactions from certain foods that might not agree with our genetic background . I mean I eat everything ,but
maybe the theory has merits ,or it determines what foods your
body doesn’t absorb properly .I don’t know, I have read a lot of theories since I have been around .
“I was reading a theory a while back about different ethic groups being able to stand certain types of foods, but not others.”
Well I’m a complete mutt (sorry Ol’Bubba, I meant mystery breed :D) so does that mean I get to eat everything or nothing?
San Diego Bear …Maybe mutts are better off ,it certainly holds true for dogs .
How about an decent, affordable house near a job that isn’t in a ghetto?
In a good chunk of the nation, that is still a dream.
Denver, Idaho, WA, texas, Lots of FL, the mid-west all have affordable housing and not in a ghetto.
Some version of this post pops up here and there. It’s usually along the lines of, “why aren’t all the people I dislike in jail, why don’t I have all the things I want?” This should be called the ‘perfect ending’ desire.
I’ve never understood how anyone could expect a story-book ending to the largest mania in history. Along with the endless stream of people losing all their money and careers ruined and companies going under, we also have the occasional suicide, lawsuit, etc. While I don’t mind hearing that gamblers lose their bets, it’s no pleasure to see the inevitable disappearance of jobs, or people taking their own lives. Recall a few months or years ago when posters here started talking about getting let go? Now, just about everyone at least knows someone who is out of work or underemployed. But this is how “corrections” work; it’s painful.
The other day people were complaining that rents in LA “still” hadn’t dropped enough. What does that tell you? IMO, rents are going a lot lower. But what will cause that? Job loss, incomes shrinking, people moving in with relatives or leaving the state looking for work. None of this is joyful, but it’s what a “correction” to an imbalance looks like.
Some people want to make money on this thing. But guess what? That takes action and risk. It isn’t reasonable to think that a fortune is going to drop in your lap because you “knew” there was a housing bubble. For example, did you short the right stocks at the right time? Some I know did, but for most of us, just getting through this disaster is the most we can hope for.
As for greed, I’ve always felt there is good greed and not-so-good greed. How the different players in this end up hasn’t been decided yet. Some CEOs, for example, are facing lawsuits and maybe even organizations like the central bank won’t get out of this in one piece. We’ll see. One thing that I find curious is the media and many people think this is all over. Where I live, the median price of a house is above $300k and the median income is $25k. Sales tax revenue is dropping fast and they are trying to decide which schools to close. IMO, a lot of people around here are about to get their financial ass kicked. And I don’t take joy from that. I say, hold onto your hat, because this is going to be a big one.
I say, hold onto your hat, because this is going to be a big one.
I said that to my wife the other night.
I agree with this Ben. I don’t know if anybody’s noticed but every once in a while I can make a biting comment or two. But that doesn’t mean that I am swamped in a sea of negativity. For the most part I have a lot of fun with my life. That is the key to this whole mess. Those of us that face the truth head on are able to deal with it much better. We face the truth, discuss it, try to make plans based upon reality and then set about living our lives. It works pretty well. I don’t expect anything to be handed to me.
I had an interesting occurrence this past June. We went to Wisconsin for a little reunion with the boys. We flew in to Milwaukee and then went to my buddy’s house. Right away he turned on the TV. I think he turned on Fox Noose or something like that. I said, “how about if we leave the TV turned off for the weekend?” His wife was shocked. She has heard the tales of my rants and ramblings. She said, “you can do that?” I said, “sure. I don’t let this stuff run my entire life.” She was amazed.
Deal with the truth and then move on to your life. The bad stuff is going to happen whether you lose weight or sleep over it or not. Life is still great. There are still great sights, sounds, tastes, experiences and beverages out there to be enjoyed. If you fail to enjoy any of them then it is most likely your own fault. It doesn’t cost anything to listen to the birds sing.
“The bad stuff is going to happen whether you lose weight or sleep over it or not”.
Luckily I learned years ago not to lose any sleep over things of which I have no control.
Would you be so sanguine if you lost your job?
That is one of those realities that we must do our best to prepare for. When the sun is shining plan for the rain. I know a lot of people, including friends, that would immediately be in trouble if they lost their job. Is that because they couldn’t have done anything to prepare for such an event? No. It is because they didn’t want to make the tough decisions necessary to plan for such an event. They didn’t want to save money because it would mean denying themselves of those pleasures that they were owed. They didn’t want to let The Jones’ pass them by.
I have seen many people that have made themselves obsolete. They allowed themselves to get fat and lazy. They looked upon jobs as if they were beneath them. I am at a point now where I would work at McDonalds if I had to. I know a lot of people that would never stoop to that. I am in my current position because I was willing to get my hands dirty and elevate jobs that had previously been looked down upon.
I think health problems are the one thing that almost nobody can plan for. Who could plan for MS or MD or ALS? Most of the rest of life’s pitfalls do allow some ability to plan for them.
As far as I can remember, I was counseled by every busness pundit to put six months of living expenses in the bank. But what if the job hunt is 12 months or more?
That’s a good point. Six months reserves doesn’t cut it for me. But then, I don’t have children, consequently I haven’t had the necessary expenditures that parents face, and it’s been easier for me to save.
“But what if the job hunt is 12 months or more?”
Too true; personally, I’m not comfortable with 6 months of safety margin. How much you need depends on a variety of factors, such as: how willing and able are you to slash your spending if you had to? how marketable are your skills?
The six months of “savings” advice seems irelevant in a major upheaval. It is only enough to get over the shock of loosing your job and jumping back on the merry-go-round that is called “normal”.
I’ve been fortunate in the last six years to reduce said living expenses to a small fraction of my income and get out of debt. Now my income is falling but I am ahead of it. A fortunate outcome spawned of an unfortunate life event (hyperspendthrift spousal unit dismissal).
This is the best fun I have had in decades. I spent the summer drifting all over the map while working part time from my boat. I am spending most of my afternoons doing things I have wanted to do for many years. Last week I went to Corning museum and did some glass blowing for dummies. Current project is a monster set of hardwood building blocks for my 2 yr old grandson. This stuff is priceless.
I wasn’t planning on doomsday, I just wanted freedom. I’ll hold onto my hat alright, but I’m not going to sit down.
“This is the best fun I have had in decades. I spent the summer drifting all over the map while working part time from my boat.”
I am both happy for you, and jealous at the same time, Blue Skye!
“I wasn’t planning on doomsday, I just wanted freedom.”
+1zillion.
That museum in Corning is outstanding. Perhaps the highest ratio of “stuff I want to look at” to “stuff they have out on display” I have ever experienced. Hope you had fun.
Blocks are the best toys ever. I’ve bought them for several children. They are always delighted. Got a slightly better immediate reaction with a big yellow Tonka dumptruck for a two year old, but he didn’t play with it as much as the blocks I got his older brother at about the same age.
I don’t know if anybody’s noticed but every once in a while I can make a biting comment or two. LOL
OK NYCityBoy, either you have a temp subbing for you today or you are a very different person than you’ve been revealing for the past several years.
But I like both guys.
I’m glad you’re doing well, but nothing makes me laugh harder than one of your snide comments.
So true. Plus, you can’t change anything or anyone except yourself. If everyone concentrated on that, we’d all be better off.
We’ve been given a dose of “economic ipecac”, the purge takes time and is not pleasant but maybe it will get the poison out.
Well said, Ben. I’ve taught in the same impoverished school for 23.3 years. Maybe, my personal finances have never been better because of my reading of the bubble, but my job forces me to catch the evil and insanity of the knuckleheads who didn’t know better so conditions at work have never been worse. I’m not wealthy or brave or stupid enough to just ditch my job in this environment.
Do we need a “No Teacher Left Behind” policy?
The thing that impresses me is just how long many of the regional real estate markets remain irrational.
In Salt Lake, there are condo buildings sitting completed and vacant, yet units are still for sale in these empty buildings starting at about $200/sq. ft. And these are in extremely mediocre to downright undesirable neighborhoods, not close to any urban/hip center of commerce. Nicer areas? Try $300/sq. ft. and up, and yet these mostly sit vacant as well.
Obviously the various Fed and congressional backstops are enabling this to continue. It’s a giant game of chicken, and a lot is at stake.
“Obviously the various Fed and congressional backstops are enabling this to continue. It’s a giant game of chicken, and a lot is at stake.”
You’re right, a lot is at stake. I’m not sure that the average Joe on the street has any idea just how many people around him live in social dependency. Soup lines and garbage can fires are not going to cut it for these folks when the floor gives way.
“For example, did you short the right stocks at the right time?”
Nope. I shorted the right stocks a couple of years too early.
I think our frustration comes from three factors.
1) A storybook ending may be expecting too much, but it would at least be nice to see the rule of law followed and some progress made vs. the endless “extend and pretend” and blantant breaking of the law that we’re seeing (Turbo taxcheat Timmy, etc.)
2) We don’t have infinite time. If it takes decades for this to resolve, those are decades of lost wages, decades stuck renting, etc.
3) Sick of the idiot Bubbleheads who just keep nodding about how wonderful everything is, how housing “only goes up,” how the “green shoots” are everywhere, and so on. It get so tiring putting up with these people who can’t do simple math and who really think that “this time it is different” and the laws of economics will be suspended just for them.
But you’re right - this isn’t over. I just hope that the crooks that got us here end up paying for this in the end.
I don’t think these guys are breaking the law. The government willing gave the tarp money.
They didn’t specify on bonuses.
They changed the accounting rules.
They didn’t regulate derivatives.
They didn’t look askew at the ML buyout and bailout.
They didn’t make a harder deal on the AIG derivatives problem. As far as I know, they are still writing the damnable things.
No crimes there.
What perp walk would these guys have to do? Best bet would be to proceed with civil suits to get financial recovery. Lower burden of proof, you can force people on to the stand and cross all sorts of personal finance barriers.
If we are lucky we could recover .1c on the $.
I do believe they broke the laws ,and this was part of the reason for the rescue bail outs . At the very least they would of faced
civil lawsuits ,and some are facing those lawsuits .
Can’t say that the mortgage brokers who would micky loans weren’t breaking the law and kickbacks are still illegal . The lenders breach of their duty to underwrite loans is a form of
neglect . They have laws actually against Ponzi-schemes and collusion and fraud . They have a investigation going on Mozillo of CountryWide regarding his pump and dump of his stocks while he was telling the
public that his Company was doing great .
Their biggest problem I think is that they had so many people breaking the intent of the law that you wouldn’t have enough courthouses to handle it .
The Politicians and the regulators neglect should get them fired ,and it’s painful seeing the same clowns running the circus . You can obstruct a lot of Justice with bail-outs and
hide the sins under a rock . The bad part is that if you don’t bust corruption ,it lives another day to bite you again . Look at how much hanky-panky is still taking place and the greed machine is just flaunting their robbery as well as borrowers and investors and the whole real estate chain .
The moral hazard of it all is alive and kicking and it’s creating more destruction and waste and programs that aren’t successful . The Politicians have changed rules and laws after the fact and when you do things like that confidence in the entire system is shattered.
Neglect? In most cases, the White House admin of he who should be given a pass and not blamed (Mission Accomplished!) ORDERED the agencies, including the FBI to look the other way.
The SEC, FBI, FAA, FHA, FDA, FTC, FCC, et all, had no choice. Between direct orders and deliberate under-staffing (smaller government is good right?) we got screwed.
You can Google it. From reputable news sources.
I’ve been long saying we are all going to get a bite of a big giant turd burger.
Deflationary spiral is a continuing default and contraction enviroment. Painful. Same with an out of control inflationary spiral. Falling ever further behind and never able to get out of debt while quality of life degrades. Painful.
It is everywhere. Government spending. Healthcare. Oil. Cars. Electronics.
Your turd sandwhich sir? Would you like cheese?
These banker guys though. I suspect someone is going to go off the deep end and there will be vigillante justice delivered. Personally, I will not feel bad about it.
Course I’ll probably get killed in a riot here in LA eventually.
I think you will be fine. Not many people were killed in the early 1990s riots, and I doubt many will be this time around, either. Just stay clear of trouble when and where it arises, and you are good…
Three years ago, we almost to a person wished for a major adjustment to the insanity of the market. The average family could not afford the average home. Wannabees were seemingly swimming in new bling from their new-equity financed HELOCs. The American Dream was either on steroids or about to disappear.
So, where are we now? Did we get our wish? Did the greedy get punished? Can the average worker, if he/she indeed has a job, afford decent housing?
I am worse off than 3 years ago, but my wife and I are surviving OK. What a long, strange trip it’s been!
Price-wise at least we were making darn good progress until recently.
As a side note - one thing I’d watch out for is the trap of “am I better off?”. This principle was a fallacy I believe first started by Reagan in the 1980 election, though maybe it predates that not sure.
Generally even in bad times, and certainly in stagnant economic times, the majority of people will be better of than they were a few years ago. It’s the nature of life - you build wealth over the course of your life. Everybody starts with zero money - they’re not born owning a house, a savings account, retirement savings, etc. But almost nobody dies with zero money.
So most people are generally better off than they were a few years ago… except dead people. They’ve instantly gone from having N amount of savings/house/etc. to having nothing. The problem is you can’t ask dead people the question “are you better off now”, and dead people don’t vote. Well… usually they don’t anyhow.
In other words - every individual person (still alive) could actually be better off now than they were N years ago, however the sum total of economic wealth of the country may be lower.
A few years ago I was talking about the political and financial situation in the country. An older co-worker said, “I’m better off than I was five years ago.”
I responded, “but is our country better off than it was five years ago?”
None of us lives in a vacuum. It is one thing to work to make your personal situation better. We should all be doing that. But unlike Wall Street we should also think of the good of the whole. That is the difference between people. Some think only of their own self-interest and say, “to hell with everybody else”. Others realize that there is more to life than just “me”.
No man is an island, entire of itself…any man’s death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee.
-John Donne (1572-1631)
No house is an island, entire of itself…any home’s foreclosure diminishes the value of my home, because it is part of the market; and therefore never send to know for whom the repo man cometh; he cometh for thee.
Yeah, I learned that lesson yesterday when I threw out the phrase “look out the window” and was given a lecture on a poster’s specific view from his window. geesh…. His argument was basically that since he couldn’t personally see something it didn’t exist.
I remember us talking about this and thinking… yeah I’d like a price decrease but its unlikely that it will be an atractive enviroment for us non-rich people to make a long term purchase.
Either things collapsed to where I could buy cash, and I could at this point in flyover country. However, in that scenario we have so many other problems… well having a house will not be enough.
Again, it’s beyond just having money for a house. Its money for the house and to live for a long time. Also plenty of potential for massive changes in employment.
Damage was already catastrophic by 2005/06.
You also have to feel under seige at this point with more loans going out. However, I’d like to point a few things out.
We are seeing per Eddie: lots of no skin in the game loans at low rates to marginal buyers in a poor income enviroment.
This means we will see an elevated default enviroment for an extended period resulting in more bank losses. That will further cause banks to contract credit and deleverage.
So, unless we see a major turn around in wages then deflation will continue its course. The government will eventually have to raise taxes to handle the debt load. Might not be on middle class might be on business. That will also be deflationary and further pressure things.
We all know that it will not be long till the FHA, which is the market, goes kaput and needs another bailout.
Perhaps there will be enough money creation that we will see major inflation. Unless it shows up in wages it will not show up permanently in the housing market. We will also see increases in interest rates. At some point the banks poor interest rates are going to drive depositiors away. Hence a lot of you are throwing your money at the stock market. I think this might end up deflationary as the banks will have capital shortages.
Meanwhile the demographic trends are saying we need less housing.
So, remember this is a seige mentality. Still early in the seige.
Wait. Save. Conserve. It will be a few more years.
“We are seeing per Eddie: lots of no skin in the game loans at low rates to marginal buyers in a poor income enviroment. This means we will see an elevated default enviroment for an extended period resulting in more bank losses.”
I disagree that this will reslut in more bank losses, james.
Note that pretty much the _entire_ mortgage market now is government-guaranteed. FHA is close to 40% of the market. Phonie/Fraudy make up the rest of the market.
So future losses are already written into the script, yes; but the future losses will be borne by the taxpayers.
Great point, packman. I selfishly pointed out that I am not better off, having lost some 401k money and having been unemployed over 4 years, but my wife and I are probably better off as a whole. She still has a full-time job with good benefits.
Life without a significant other for me at this juncture would be extremely painful. Population density will be fascinating to watch, especially in the immediate future.
Hmmmmm…………..
I agree: the evil doers and idiots have won.
At the rate things are going, there will never be a meaningful housing price correction. In places where one wants to live (decent jobs, non-ghettos, etc.), housing prices are still way too high. Factor in declining wages as unemployment continues to rise and there will be no victory for the honest in this war.
Eventually, housing prices may drop far enough, but I suspect that will be “overtaken by events” such as a dollar collapse, etc. long before we’re able to finally afford a decent house.
The government (read: banks) is doing everything they can to prop up the Bubble while rewarding crooks and punishing the prudent. Nothing except an “unforseen event” will change this.
I can’t forget about the BEE HIVE ,in spite of me being able to survive myself . I get calls weekly from nephews and even some friends in bad shape needing help .In addition of course I have gotten hit by the
bail-outs personally myself by a reduction in income . I also had medical bills this year in spite of having pretty good insurance .
The thing is I could be OK myself and I could tiptoe through the tulips
for the rest of my life maybe ,but it’s no fun watching the pain of the BEE HIVE ,especially when the thieves are getting money that could of gone to a better purpose . It’s really painful thinking about future generations and what they might have to endure.
To me this Ship is headed for some really stormy waters .
I am able to enjoy moments and I’m grateful for any blessings I have,
believe me .In fact ,living in the now is even more enhanced with
me than it has ever been . But,I’m part of the Ship ,and I can’t forget that .
Open Letter to Senator Judd Gregg.
Lawrence Lepard
Dec 4, 2009
To:
Senator Judd Gregg
US Senator - New Hampshire (R)
201 Russell Senate Office Building
Washington, DC 20510
(202) 224-3324
Dear Senator Gregg:
I saw your recent comments on CNBC calling Ron Paul’s Audit The Fed bill an outrage. No, sir, you are an outrage. I cannot believe you are a Senator. I cannot believe you are a Republican. (I used to be a Republican, now I am an Independent). You are a disgrace. The disdain dripping from your Senate enriched lips makes me want to puke. You criticize Congressmen for supporting this bill as an election ploy. Yes, Congressmen want to be re-elected by the people they represent. They do so by actually “representing the people”, who are overwhelmingly in favor of this bill. You have a problem with that?
I am completely disgusted with you and other politicians like you. Sir, you are a national joke - a disgrace really, and you should resign before the intelligent voters in New Hampshire throw you out, as I am sure they will do in the next election.
I believe you are a disgrace because you blatantly lied in your statement on CNBC. To wit, you misrepresented the HR 1207 Audit the Fed bill. Your statement that this bill is an attempt by Congress to manage monetary affairs is a blatant lie. The bill calls for transparency. The monetary affairs of the U.S. are already being managed by Goldman Sachs, at the expense of the people. ALL THIS BILL CALLS FOR IS TOTAL TRANSPARENCY. The only parties who will be hurt by this disclosure are those who have benefited at the expense of the tax payer. Do you have a problem with that? Who elected you, taxpayers or financial interests? Oh, I see.
Here is what amazes me. It amazes me how inexpensive you are to buy. According to http://www.opensecrets.org you recently received $8,000 from Goldman Sachs, and $7,000 from Citigroup. If I give you more than $15,000 can I get you to support the Audit the Fed bill? It seems very inexpensive to me, and I would be willing to send you the money.
You sir, are just another corrupt, stupid politician who has been complicit in ruining this country. How can you live with that? I know I could not. Why don’t you do one honorable thing in your life and resign. We the American people at least deserve that. It would not fully atone for your sins, but it would be a start.
http://www.321gold.com/editorials/guest/lepard120409.html
isn’t managing monetary affairs the congress’ constitutional charge?
China Says Dollar, Not Yuan, Needs Global Attention.
(Bloomberg) — The world should pay more attention to the stability of the dollar rather than the value of China’s yuan, as the two currencies’ effect on the global economy is incomparable, China’s Commerce Minister Chen Deming said.
“The focus of global attention shouldn’t be on the yuan’s exchange rate, but the dollar’s stability,” Chen said, according to the transcript of an interview he gave to the International Herald Tribune and Reuters that was posted on the ministry’s Web site today. An unstable yuan “would have a very bad impact on the global economy,” the minister said.
Yuan forwards were little changed today on speculation China will resist international pressure to resume appreciation in the currency until exports fully recover. Premier Wen Jiabao rebuffed calls from European leaders to make the currency more flexible to offset global trade imbalances after a meeting on the mainland on Nov. 30.
The People’s Bank of China has kept the yuan rate at about 6.83 per dollar since July 2008, after letting it strengthen 21 percent in the three years since a dollar peg was scrapped.
If you build it, they will come, approach.
Development gets first approvals
High-end subdivision on fast track for final adoption
The Post and Courier (Charleston,S.C.)
December 4, 2009
A high-end development that could become the largest subdivision on Johns Island cruised through a first round of approvals at a special meeting Thursday of Charleston County Council.
The votes put the development on a fast track toward final approval before the end of this year.
Kiawah River Plantation is a plan by The Beach Co. to build 1,285 homes with an average price of around $1 million, plus a hotel and villas with 450 guest rooms, a golf course and 80,000 square feet of retail and office space.
The site is a 1,428-acre tract located across the Kiawah River from Kiawah Island, abutting the county Park and Recreation Commission’s Mullet Hall Equestrian Center.
At a public hearing immediately preceding the special council meeting, one person spoke in opposition to the development, and none spoke in favor.
This just wont quit will it Wmbz? Well hopefully it will all be private money that will go bankrupt.
And Charleston will at least break even with impact fees to cover the cost of roads lighting sewer and water connections.
“This just wont quit will it Wmbz”?
Nope, builders gotta build, but did you notice it said 1285 homes priced around $1 million? WTH? the Beach Co. has deep pockets, but that deep? There are plenty of houses all over the Kiawah area for sale.
Oh well, party on!
But but but…..we are an EXCLUSIVE conclave….We don’t allow any riff raff or trash in here….like they do in the open parts of kiawah….
High & Low Finance (NYT)
Why Many Home Loan Modifications Fail.
“Save the Dream” Loan modifications hinge on borrowers providing proof of income.
One reason may be the same one that a lot of bad loans were made in the first place. Borrowers can declare their income, and the banks are willing to grant temporary modifications based on those figures, without any evidence to confirm them.
But to make a modification permanent, the banks have to see proof of income, and the borrower has to make three monthly payments of the new lower amount. In most cases, those requirements are not being met.
The banks, and the government, are soon going to have to decide what to do about borrowers who are making the modified payments but have not provided the documents after repeated efforts to obtain them. Should the banks just take the money and let the preliminary modification turn permanent? Or should they foreclose?
Those decisions will affect just how fair the program is seen to be. If the banks allow those who do not submit documents to get by without doing so, it will appear unfair to those who told the truth about their income, and paid more than they might otherwise have been required to pay. If they do not, the wave of foreclosures could devastate more neighborhoods.
“The banks, and the government, are soon going to have to decide what to do about borrowers who are making the modified payments but have not provided the documents…”
Umm, if these people have INCOME then they must be filing INCOME TAXES. Has an impenetrable wall suddenly sprung up around the IRS?
The have to cut out the act, it’s getting old.
+1
Actually, I am reasonably sure that the IRS is not allowed to disclose taxpayer information even to other parts of government without some special exception to the applicable laws (somewhere in the 6000’s of the code?). I’m pretty sure they can pass information on to state tax authorities, but I don’t think there is much else that is allowed.
Seriously. Do you want any agency in government who wants to know something about your life to be able to call up your tax records? SS numbers of you, your spouse, your kids, info about your donations to charity, how much you spent on health care or miscellaneous business expenses, your allimony payments (paid or received), whether you replaced your windows last year, how much your student loan payments are, how much you paid for daycare, etc.?
Now, the people who are required to provide the information can hand over their tax records pretty easily, or at least that is the idea. They do recommend that you keep a photocopy around for a few years.
I think the implication is the people who claim they need a modification and then actually can make the new payments were lying about needing the help. The ones that really need the help can’t make the new payments even for 3 months. I think it is set at 36% of gross or something like that. Not sustainable for most people.
They provide data to Social Security and Medicare. That’s how they know which seniors will pay more for Medicare coverage.
When people apply for government aid or programs they should be expected to furnish their tax records - or allow access to same. If they don’t want other agencies to see that tax information then they have the option of not applying for the aid/program.
Wasn’t aware of that.
In any case, it is limited. As it should be.
Thanks for the advice yesterday. My wife and I checked out a few neighborhoods and decided to stop driving ourselves nuts. I had her read all of your replies, and they were very helpful. We made a 16 month lowball rental offer on a 3/2. This will at least buy us 1.33 years in a bigger place if they accept.
When we sit down and compare Florida to New York, it’s oranges and apples, har har. But seriously, they are such different places it’s almost impossible for us to get a clear picture. And for the record, Blue (I don’t know if you saw my follow-up), we aren’t flip-flopping; we both 100% would prefer to raise our kids upstate over Florida, but neither of our ed. certificates translate directly, which means A LOT of additional schooling, and that is not realistic for us right now. Please, when you leave a district you lose your job seniority, would given the current situation is a massive concern.
Anyhoowhats, hopefully we can find a decent 3/2 at a reasonable price and buy ourselves some extra time. It’s amazing how fast the kiddos take up space (and we’re minimal).
“Please, when you leave a district you lose your job seniority, would given the current situation is a massive concern. ”
Haha, odd typos. That should read:
Plus, when you leave a district you lose your job seniority, which given the current situation, is a massive concern.
a secure blogger is cool with his typos. everyone should relax and expect a few typos. Its a blog, not a term-paper.
I give you post a D-. Bwahahaha.
pressboardbox …of course I’m going to agree with you on your post because I’m one that violates perfect posts all the time ,I don’t even edit like I should . I’m a bad boy .
“a secure blogger is cool with his typos”
Per Aerosmith, I am F.I.N.E. fine.
“It is a damn poor mind indeed which can’t think of at least two ways to spell any word.”
Andrew Jackson
Loosing seniority in your school may be an even better argument against moving than being tempted to buy when you get there. If you want to be safe in a seniority system, you have to get the job just as the tide is turning so there will be lots of new hires in the system after you by the time there is another downturn. In other words, get hired when they are down to skin and bones. Being a little underwater on a house is sustainable if you keep your job.
From what you’ve said, I don’t think your wife would want to move “home” and then keep renting just in case your jobs get cut as NYS spirals into a financial crisis.
+1, polly.
To me, that statement argues for moving _just_ after the tide turns. Or at least, weigh moving at that point.
Muggy, when you really believe things are improving, and hiring will increase to pull in lots of hirees after you, then consider a move. Until that point, you are taking extra risk by giving up your existing seniority and becoming low-man on the totem pole.
Hello everyone,
I have secretly been at home here at Bragg for the last week. The boss sent me back for a temporary task. It has been NICE!
A couple of thoughts…..
Not as many for sale signs as I thought there would be. In the country side, there are a few for raw parcels of land and I even saw one farm of 67 acres for sale somewhere around Siler City. I may check on the price today. Some traffic in the mall in fayetteville, but not alot of people carrying bags. DW throws all my mail in a box while I’m gone, and I would say 75% of it is credit card or mortgage “refinance” offers.
APMEX has received my coins and should be sending me a check soon. I just bought about 5 one ounce Silver coins from the U.S. Mint. The gold selling ads are everywhere! Considering the small amount I made off physical gold, I still think it’s a racket. You have to have money to make it in the interest bearing world, in which I include stocks. When my money disappears from stocks, it feels like a bank to me, where I just sat my money and someone came an withdrew it, and I let them…When was the last time someone put money in your account? I’m going to keep away from stocks for a while sans my gold fund….
Well, Dear Daughter has to go to school…I doubt I have to lecture this blog’s patrons of the simple pleasures of taking a child to school..Well, she’s a teenager and she text’s more than anything..
Since I am home, I can check this blog quicker…
Welcome back to stateside!
Thanks…it’s good to be home, if for only a few days…
Definitely right on the gold market. Ads and signs everywhere. They even have gold-buying stores in the mall.
Actually my stock account have gone up a little bit…
“Actually my stock account have gone up a little bit…”
Greedy capitalist pig!
Welcome back and thank you for your service!
Ben Bernanke’s Hyperinflation And Economic Collapse.
4 December 2009 ~ Weimar Germany By Greg Hunter
Yesterday, Federal Reserve Chief Ben Bernanke was in front of the Senate Banking Committee trying to hold on to his job. Some Senators were complimentary on Bernanke’s job. Republican Senator Judd Gregg from New Hampshire gave the Fed Chairman a warm welcome. Judd said, “If you hadn’t been there, and hadn’t been willing to take extraordinary action last fall, last winter, and even early spring … it’s very likely we would be experiencing a depression…” I look at Bernanke’s performance during the financial crisis the same way I would look at a drunken bus driver who crashes and then stumbles around pulling a few children out of the wreckage. In my eyes, Bernanke is hardly a hero.
Republican Jim Bunning from Kentucky, on the other hand, couldn’t have given a colder reception if he greeted Bernanke in the North Pole. Bunning said, in part, “Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.” Bunning, a former Major League pitcher, hurled another fast ball at Bernanke’s head when he said, “Because you bowed to pressure from the banks and refused to resolve them or force them to clean up their balance sheets and clean out the management, you have created zombie banks that are only enriching their traders and executives.” Senator Bunning vowed to do everything possible to stop Bernanke’s nomination and to “end the Fed’s failures.”
http://usawatchdog.com/ben-bernanke%E2%80%99s-hyperinflation-and-economic-collapse/
You know, I am SO sick of hearing people talking about the Fed’s wonderful “extraordinary action”. They act like the Fed just invented the cure for cancer, or something that’s actually useful. What they really did is akin to being in a crappy bar that’s got 3 losers sitting there. They brought in 20 strippers and started “making it rain” throwing money into the air. And then, suddenly, the party is on and that bar is hopping! Of COURSE, when you throw trillions of dollars around the “party is on”. It’s not “hard” to do, especially when you’ve got a printing press.
I just can’t get over the reverence shown for these guys, their job is basically to figure out how much vodka to put in the punchbowl. They filled the bowl up with vodka and didn’t put in any juice! And we’re surprised that the economy is drunk out of it’s mind?
It was easy for that d-bag Bernanke to be a bigshot with money that he just conjured out of thin air. He did not take one action that was visionary or difficult. He just dumped money from a helicopter, directly to his buddies, just the way he said he would. Rot in hell, you rotten m—-fer.
I agree. Any problem can be solved with enough money. Who coulndn’t have done what Bernanke did? No particular finesse was required, no skill. He is just the guy standing next to the valve on the garden-hose while the banks are at the other end yelling “can you turn it up some more”.
Remember at one point a Newsman called Bernanke ,
“Wall Streets Bitch .”
Paulson and Bernanke never proved that they saved the
financial systems ,or that another less costly remedy wouldn’t of worked better ,or at least wouldn’t of been unjust and simply kept the corrupt institutions there to be able to fleece for
another day . I think the Fed and Treasury actions are going to be viewed in the future as the biggest Obstruction of Justice
transfer of wealth to the rich and corrupt in American History .
It’s been 5 years and the gambling casinos are still operational
and reform has not come about . I guess they will stall this forever because they don’t want their games to be shut down .
This even goes beyond moral hazard ,but the Politicians let the dream team of Paulson and Bernanke do it . In the final analysis ,the pain of Main Street was not a consideration in the bail outs and the victim is never considered when thieves rob them .
“It’s been 5 years and the gambling casinos are still operational and reform has not come about.”
It’s been only two years, by my counting. In early 2007, most people were still in deep denial that there was a problem. By late 2007, people were starting to realize that it was not just a sub-prime hiccup.
My forecast originally was for a 3-5yr downturn. IMHO, the Fed’s actions have extended that more ably than I had expected. Now I expect it to be a 5-10yr ride.
I’m basing my 5 years on the Powers knew a meltdown was coming that far back . In 2006 is when they first started to do the additional spike the punchbowl actions to keep the party going .This is when they were getting foreclosures within 3 months of a Sale and it was starting to become apparent that
they also had a fraudulent market on their hands .
You have to also look at when the Feds first started allowing
Discount Window loans to anybody and how Paulson and the Feds spent a good year getting things set up for the bail-outs .
Countrywide was staring to cry the blues way back in 2006 ,while at the same time was telling the public that everything was great so Mozillo could sell his stocks at a high and fake retirement .
“It’s been 5 years and the gambling casinos are still operational and reform has not come about .”
and only two…count ‘em…two arrests. the two bear sterns DBs.
how many were prosecuted during the S&L debacle?
it’s unfrickenbelievable to me.
Congrats to Senator Bunning!
The good thing is that at least not everybody is fooled by the FED. The sad thing is that a filibuster proof majority seems to be fooled. …and so the biggest heist in human history is bound to continue.
LOL - I remember 8 months ago when he went to a baseball convention in Detroit to charge people $$$ to sign autographs and was shocked that the people in Detroit were angry about him being against a bailout for the auto industry.
“If you hadn’t been there, and hadn’t been willing to take extraordinary action last fall, last winter, and even early spring … it’s very likely we would be experiencing a depression…”
We ARE experiencing a depression. Judd Gregg knows it.
The government releases false and misleading economic numbers every single day, like some pathological liar on drugs. The puppy-dog press wags its tail and wimpers, to try to convince a dumbed-down population to think, OK, it’s back to the races again, everything’s getting better.
The government spends all its time now trying to manage public perception of the economy, because there is nothing it can do with the economy, except increasingly debase and inflate the currency, to try to keep the lights on and the unemployed public from revolting.
What`s the difference between a golf ball and an Escalade?
Tiger can drive a golf ball.
What do Tiger and a seal have in common? They both been beaten by a Norwegian.
She’s not Norwegian. She’s Swiss cuz she’s from Sweden. gosh
They are all blondes. That’s as far as I care about it.
Yes,
They are the ones in the danish military walking around a combat zone in Afghan in flip flops and bikini’s..
But they do make good eye candy..
As do Scandinavian men. I worked at a corner store in a port town, when the merchant marines would debark to go shopping, etc. it was always the Nordics that got the ladies’ heads turning. The Brits held their own as well.
Thanks guys, your killing me.
Why did Phil Mickelson call Tiger Woods wife?
Because she is the only one who knows how to beat him.
New Jersey Losing $22,000-a-Day With Swap for Bonds Never Sold.
Dec. 4 (Bloomberg) — New Jersey taxpayers are being saddled with a bill of about $657,000 a month from Bank of Montreal for an interest-rate swap approved by state officials and linked to bonds that were never sold.
The 11th-largest U.S. state by population, which is cutting expenses to close a $1 billion budget deficit, will pay Canada’s oldest lender $23.5 million. The sum, about the same as the salaries for 113 teachers over three years, will allow it to avoid a $50 million penalty for canceling the contract, which was tied to planned sales of school-construction bonds.
The interest rate swap, an agreement between borrowers to exchange fixed and variable-rate payments on a set amount of debt, was arranged in 2004 to protect taxpayers against rising borrowing costs. The strategy backfired after officials decided against issuing the securities.
“This is a classic case of a strategic error,” said Robert Brooks, a finance professor at the University of Alabama- Tuscaloosa and author of a book on derivatives. “It’s arrogant to believe that you have such a command of the future that you know with certainty what is going to happen.”
The payments, which work out to $21,892 a day for three years, show how elected and appointed officials failed taxpayers by agreeing to financial strategies they didn’t fully understand. New Jersey spent $21.3 million in 2008 to exit three contracts signed when James Florio and James McGreevey were governors. The state’s transportation trust fund is giving almost $1 million a month to a Goldman Sachs Group Inc. partnership in an agreement linked to bonds that were redeemed.
New Jersey: Come for the pollution, stay for the corruption!
Glad to see Goldman Sachs involved in this, too!
“Come for the pollution, stay for the corruption!”
LOL.
Some of my best memories are Jersey ones… like my 80+ year old landlord threatening me, the PATH announcer that says, “next stop, Hoooobooooooken,” and the pizza guy who really was just like the Soup Nazi (”YOU GET NO PIZZA!”). Also, the only town I could get around in by telling the driver which bar my destination was near/above.
And… the beginning of my housing neurosis.
$67K is a lot for a teacher.
While I am generally not anti-union, the New York State United Teachers union is the best example of why people hate unions. But then they have to defend themselves against a bunch of corrupt and incompetent thugs. A no-win deal, there.
Now 67K might depend on how long you’ve been teaching and the cost of living of where you live. 15+ years in New York? That’s in the ballpark.
“In my many years I have come to a conclusion that one useless man is a shame, two is a law firm, and three or more is a congress”.
~John Adams
US diplomat & politician (1735-1826)
Lol. Sounds like something Mark Twain would have said.
Tom Delay, one of the former most powerful Republicans in Congress, was a pest exterminator in a previous life. From Texas. Where hazardous protection of any kind is often considered “sissy.”
Think “Dale” from King of the Hill.
Et Tu NASA?
Well it looks like NASA has been dragging their feet for the last 3 years on a Freedom of Information Act request.
http://www.examiner.com/x-11224-Baltimore-Weather-Examiner~y2009m11d25-Climategate-CEI-to-sue-NASA-Goddard-for-Climate-Change-fraud
When this is all over will climate scientists be viewed to have the same integrity as real estate agents?
I’ve distrusted NASA since before the Challenger disaster. I can tell when someone is trying to sell me something.
George Carlin’s term “nassholes” always cracked me up.
The entire shuttle program was a bill of goods sold to the taxpayers.
NASA promised something like a 2-week turn around between missions - maybe 100 fleet missions per year with cost per pound into orbit plumeting in comparison to using expendible boosters.
Needless to say, this didn’t happen.
I have developed a skepticism of government agencies promising gifts to the taxpayers…..
Incidentally I’m still reading the Goebbels Diaries. I strongly recommend these volumes, expecially if you have an outline knowlege of WWII history prior to reading them.
Here is where i strongly disagree Dennis:
I am fascinated by space, by astronomy, by the wonders of the universe….and the pittance we give nasa to open our eyes is a shame
I would Double/Triple Nasa’s budget yesterday if i could why not?
We are too bogged down with negative minutia today, so why not look up and wonder…..
Do you really think Adam Lambert and Lady Ga Ga think about what is in space?
At least Lou Dobbs and Walter Cronkite did!
Nothing will make me happier than to see Al Gore and his ilk fade into obscurity. His Nobel prize should be taken back. Obama’s too.
Thats kinda sad in a way…
What I love is how after all these GloBULL Warming crooks lied, cheated, and destroyed the original data, a good chunk of the lapdog media stil refuses to even discuss the issue. I haven’t seen anything on CNN about it, for example.
Oh, but some idiots want to hunt down the hackers that found the emails that exposed the fraud, but nobody wants to actually do anything about the fraud itself! Amazing, and yet so typical in Bubbleland!
No one’s seen it on CNN because no one is watching CNN
http://edition.cnn.com/2009/TECH/11/23/hacker.climate/index.html
Payrolls in U.S. Decline 11,000; Unemployment at 10%
Dec. 4 (Bloomberg) — Employers in the U.S. cut the fewest jobs in November since the recession began and the unemployment rate unexpectedly fell, signaling the recovery is lifting the labor market out of the worst employment slump in the post-World War II era.
Payrolls fell by 11,000 workers, less than the median estimate of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The jobless rate declined to 10 percent.
The Obama administration, under pressure after almost half of the 7.2 million jobs lost during the recession occurred since the president’s inauguration, is considering additional measures to boost job growth. Ben S. Bernanke, chairman of the Federal Reserve, has pledged to maintain record-low interest rates until joblessness subsides, even as a recovery takes hold.
“We’re getting closer to the point where companies will need to hire back workers,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said before the report. “We’re going to see an improvement in hiring just because firms have cut so much.”
And what happens when The Fed doesn’t buy up every bad asset and the federal government doesn’t run deficits of $1 trillion or more? They are still acting like a teenager that has found mom and dad’s credit cards.
Bingo. Amazing how good one’s “economy” can look if it’s based on built-up debt.
It’s morning in America.
I predicted 10.1% yesterday. Not bad.
(blows on fingernails, rubs them on shirt)
So the real unemployment rate, which has been 17%, is likely 16.8%.
It’s a step in the right direction.
This could be a sign that unemployment may have peaked a few weeks ago. I did not expect this. I was thinking the peak would be in 2010.
So…maybe the official unemployment this time next year will be be 8.8% and the real unemployment rate will be 15.6%.
Seasonal hiring is largely part time, so the U6 number may have fallen more than the U3 one. Can anyone check?
U6 = 17.2% - down .3%
Ok, a little more. Not much.
I also wonder if one or more of the U numbers is down because regular job hunting in the holiday season is so discouraging what with vacations and stuff? Or maybe with “good” jobs so hard to get the people who were discouraged decided to apply for seasonal jobs so the discouraged number went down? Not sure if there is an easy way to check how many people went from “actively looking” to “not actively looking.”
I still think the sharp drop off in new illegal workers is making the employment numbers look better. I wonder how I could verify this?
Here is another thought, I am positive any new health care laws will cut off almost all public health care for undocumented aliens. That makes the US a even less desirable destination for S. American workers. At least that’s my hope.
Blue:
Happened to me last year, took a $10hr job, they came in to explain health insurance and i made too much to qualify for the NYS plan, but lo and behold if you had a baby momma even though she/kid is illegal you could get family coverage.
Not all that surprised by the less-bad-than-expected #’s today. I have been seeing and heard hiring of people first hand in the NY/NJ area, in devastated areas like structured finance even. The train station where I park, which used to have plenty of empty spots earlier in the year is now difficult to find. We are definitely in the leg up of the W after the initial drop. This will last a few more months I think.
If or when we take another big drop down it is going to be psychologically shattering for a lot of people. They have bought into the debt-induced recovery. It is hard to imagine that we can have a true recovery based upon taking on more mountains of debt but it does seem like things have stabilized quite a bit. We cured the vodka hangover with a bottle of scotch. Speaking from experience that doesn’t generally end well.
Are you saying that debt feudalism is a bad idea?
Just look at the great deal the Treasury got on these bailout warrants from Capitol one:
http://finance.yahoo.com/news/Treasury-gets-1465M-for-apf-1925671595.html?x=0&sec=topStories&pos=7&asset=&ccode=
$3.6 billion paid. Sold for $140 million. How is that for a great investment!
I think the 3.6 billion was a loan that still has to be paid, but I may be wrong on that.
“All three companies have paid back the original support from the government and the only remaining issue was the disposition of the warrants.”
To recap:
- pending home sales rise by the biggest YOY amount ever last month
- unemployment is down .2% and the number of job losses is lowest in almost 2 years
- Dow is at 10,500
Conclusion on HBB: The depression is about to get worse. Makes sense
Eddie, there is an oasis for guys like you. It is called CNBC. You and Steve Liesman were made for each other.
The HBB is the crowd that filtered out all the noise in 2005 and 2006 to hear what was really going on. That is what we are trying to do as we embark on 2010. And all you are is just part of the noise, a very obnoxious sound like some kind of pecker pecking at the door.
Wait. Did Eddie just say we are in a depression? Am I hearing this correctly?
No you’re not. Eddie says that WE say we’re in a depression. He thinks we’re wrong.
“Cognitive dissonance is a psychological phenomenon which refers to the discomfort felt at a discrepancy between what you already know or believe, and new information or interpretation.”
From www dot learningandteaching dot info.
Cognitive dissonance can be minimized by shooting the messenger (an extreme response), sticking fingers in ears and singing “La la la la la…” loudly, or making disparaging remarks to posts that don’t fit the generally-accepted “template.”
Bill, I don’t understand your post. Who are you addressing?
Cognitive dissonance? Isn’t that where taxpayers pay for a sports stadium for some rich guys so they can keep another group of rich guys employed and then pay higher ticket and concession prices for the “privilege?”
Got two graphs and a word for you Eddie:
one
two
Artificial.
Got two graphs
Graph 2 is unbelievable. Good gold graph from yesterday too.
I’m a big fan of data collect, mining, and analysis. It’s part of my job in fact.
Side note - you commented yesterday that Brasil only has mortgage debt of only 2% GDP. I find that… amazing. Can you say why that is? Are we talking strictly private residential (i.e. not including commercial debt for residences), and therefore it’s skewed some by how Brasil has less SFH and more apartments (I would guess - correct?) than the U.S. has?
Latinos aren’t generally known for their frugality - e.g. Spain is one of the two bubbliest areas in Europe, and having huge debt problems (the other being UK). So your statement really surprised me.
that Brasil only has mortgage debt of only 2% GDP. I find that… amazing. Can you say why that is?
Banco do Brasil puts Brazilian mortgage debt at 2% of GDP. Here follows sources putting it between 2%-5% and discussing why mortgages are so new in Brazil.
I don’t know the ratio of the loans but a source below cites only 25% of Brazilians are renters. In the cities they own condos.
Decades of recurring turmoil, arcane lending laws, and high inflation have kept Brazil’s economy underleveraged. Mortgage debt in Brazil is equal to only 2.5% of GDP, compared to 80% in the US. There is huge pent-up demand waiting to be unlocked in the housing sector. Mexico, which has 60% of the population of Brazil, builds four times as many homes.
Lower interest rates and changes to lending laws are likely to unlock Brazil’s pent-up demand for housing over the coming decade. Falling interest rates have already begun to unlock credit growth in consumer loans—65% of car purchases are now made on credit,
http://www.moneyshow.com/investing/articles.asp?aid=tptp111909-18257&iid=tptp111909
‘Brazil sidestepped credit crunch problems because there was no real mortgage market in the first place, let alone a subprime market.’ said Flavio Serrano, economist, BES Investimento fund in Sao Paulo. Dow Jones Wire.
Brazil’s mortgage debt is currently just 2% of its GDP, in comparison US mortgage debt was a whopping 73% of its GDP in 2008. This starkly highlights the infancy of Brazil’s mortgage market and the massive potential for growth when combined with a growing young population (50% of Brazil’s population is under 25) and a bourgeoning middle class.
https://www.ipglobal-ltd.com/news_detail.php?type=4&id=46
Here’s a source with mortgage stats from MANY countries, citing the outlying 5% of GDP figure and that 75% of Brazilians are homeowners compared to 70% of Americans.
http://www.globalpropertyguide.com/real-estate-school/Mortgage-markets
That’s amazing too, a very high rate of home ownership with almost no history of mortgages. Interesting.
Wow. Thanks a bunch!
It’s interesting that the less “advanced” countries (financially at least) have the lowest amount of mortgage debt. I would be that’s directly because of the financial “sophistication” of the banks in the more advanced countries. Switzerland - wow - 130%. Pakistan at 0.7%. Mexico at 11%. Most third-world African countries at 1% or below. Netherlands (another big banking country) at 100%.
Very, very interesting.
Thanks a bunch!
Your welcome. I thought it was a mother load of global mortgage stats too. I wonder if your observation above could mean many of the less sophisticated countries have a competitive advantage going forward.
For example, even in the bad times of years past, Brazilians ate out a lot, traveled a bit, and had a little money for fun.
Maybe it’s because their house was paid for. (even though many adult children and extended families shared the same space for lack of housing)
Visually speaking, graph 2 certainly does bring to mind a tsunami.
Are you suggesting that one month’s data is a perfect predictor for the future direction of the economy?
Let us review what we currently have.
- The Federal deficit is over $12 trillion
- The annual budget deficit is $1.5 trillion
- The unemployment, even as calculated by the goofy birth/life model, or whatever the f— they call it, is still at a 25 year high
- We have a Federal Reserve with a balance sheet so loaded with crap that if anybody ever pulls the butt-plug we will all be covered in sheisse
- House prices are still too high for income
- Rent prices are falling
- Home balance sheets for a large swath of American families look like the toilet bowl at Little Acapulco restaurant on 2 for 1 burrito night
- The federal government IS the mortgage market
But hey the liquidity driven Dow is at 10,500, still down over 3,500 points from its high. Throw your brain out the window and rock on. Realists look negative when reality is negative.
Unemployment could be 2% and you all would still be talking nothing but doom and gloom. No positive news will ever convince you that things are improving. You’ve invested so much into seeing the next great depression that you have the blinders on to anything that goes against that.
The straw man is ba-a-a-ck!
His pointlessness is exceeded only by his pointlessness.
How many of us knew guys like Eddie that talked people into financial death back in 2004 or 2005? It looks like they are begging to perform an encore in 2009 or 2010.
Uh, Eddie, if it were not for more bad debt and balance-sheet games, nothing would be “improving.” In reality, nothing is improving.
But this reality gets in the way of your dreams of returning to the Bubbleworld of “housing only goes up!” so just ignore it. I’m sure that’ll work out great for you.
“doom and gloom. No positive news will ever convince you that things are improving”
I don’t see our present situation as ‘doom&gloom’ never have,it could have been avoided long ago though. Facts are facts however, government intervention and gross deficit spending is not “fixing” anything, period. No surprise there has been a curtailment of job-loss in Nov/Dec. People will and do dig down deeper during the holidays to spend more.
January will come along, and hangovers will kick in, not doom, not gloom, just a fact.
The US reminds me of the Bay Area couple roundly crucified here back in ‘06 methinks. This couple puchased four single family residences at no cash flow (why rent them out when they were just going to flip them in five years, IIRC) and considered their “net worth” at $2.7m - exactly what they paid for each of the four residences using interest only mortgages.
Never mind that the four residences had mortgages against them for $2.8m (using cashback at closing to cover closing costs), making their real net worth a cool negative $100,000.
That, in a short story, is the US.
“Unemployment could be 2% and you all would still be talking nothing but doom and gloom. No positive news will ever convince you that things are improving.”
Eddie, I will be the first to admit that I underestimated the effect of the Fed’s pumping this year. It has definitely generated the appearance of more improvement than I would have expected.
Of course, the elephant in the corner is that that everyone in the entire country has taken a roughly a 10% pay cut this year, if you look at the value of what they are paid in terms of other currencies. That will eventually be demonstrated in their purchasing power.
That doesn’t seem like a particularly bullish thing to me.
Hi Eddie. I knew you’d show up to gloat! Cheers!
I’m not gloating. I showed up because I knew you’d all throw water on this as usual.
Eddie, once you can make a case for viable economic recovery without deleveraging then I will be on your side. Until then, blah blah blah.
Deleveraging is less painful when you can pay the losses in dollars that are worth less and less.
So killing the dollar and sending commodity prices to the stratosphere would be a great solution. That’s not good for savers or retirees.
Plus, if your debt is financed by external parties they are less likely to continue if the dollar is being made more and more worthless. Can we continue to have The Fed buy our own debt until The Rapture? You also risk creating dangerous new bubbles via carry trades that develop.
We are learning all of these lessons now. Please name one country that has ever devalued itself to prosperity. We have a long way to go in this disaster.
Let’s see if he shows up for the unemployment recasts next month.
ADP’s figures were forecasting a loss of 175,000 jobs - how much do we trust the Labor Department’s figures here?
How to think like Eddie:
- Trust everything the government/media tells you because they clearly have no vested interests.
- Believe that every short-term trend can be extrapolated into the future forever; in reality, a couple of “less bad then before” months does nothing to balance out nearly 2 years of depression/recession.
- Believe that papering over too much bad debt with more bad debt is a perfectly logical strategy.
- Trumpet that anyone who doesn’t buy into the Bubble is “priced out forever” or not believing the “green shoots” or some other BS.
Whatever, Eddie… whatever.
“Trust everything the government/media tells you…”
Give him some credit, and don’t take his posts that suggest he thinks this way at face value.
Eddie:
I am still not getting any serious responses to resumes unless you call the 30-40 unlimited income job offers i get a week as a recovery.
Even intern jobs they just want kids….no green shoots here
No, it’s just that Eddie thinks if hes doing OK the rest of the World must be doing OK .
Whazzup w/ Georgia banks? Now that the recovery is here, can we expect these bank failures to end soon?
Capitol Report
Dec. 2, 2009, 3:02 p.m. EST
Georgia has bankruptcy, foreclosure and failure on its mind
State with 4% of banks has experienced 17% of the nation’s bank failures
Big banks will have incentives to get smaller
Sanders puts hold on Bernanke nomination
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — Marc Green, president of Mountain Valley Community Bank in Cleveland, Ga., is part of an endangered species: Georgia bankers.
So far this year, 21 Georgia banks have failed, more than in any other state. Georgia — with 3% of the nation’s population and 4% of its banks — has been home to 17% of the 124 U.S. bank failures so far this year. Georgia also had more than its shares of bank failures last year.
United Security Bank in Sparta, Ga., was the latest addition to the list with its failure Nov. 13.
The Federal Deposit Insurance Corp. reported last week that the number of distressed banks in the U.S. rose to 552, the highest level in sixteen years. In Georgia and other states, more bank failures are expected. See story on banks in peril.
Green and 311 other Georgian bankers are struggling to survive. Along with 25 other community banks in the state, Green’s bank has raised more capital, including some from the government. Today, Mountain Valley has $24 million in capital.
But he says the prospects for the real-estate market are dismal in his town of 2,200 that sits 100 miles north of once-booming Atlanta.
“Real estate in Georgia is not moving at any price unless it’s an absolute give-away,” Green said. “The business cycle has absolutely stopped.”
…
The “Jobs Summit” Nonsense
“Today, the White House holds its ‘Jobs Summit’ stunt. It’s typical Washington-think: Assemble interest groups and concoct special tax credits and handouts to the politically connected. What conceit. The political class think that economies revolve around them, that Washington makes things happen, that politicians are the most important players.”
John Stossel clearly understands the con game being staged in the nation’s capitol.
Who Creates Jobs?
Who Creates Jobs
The real question is, who prevents jobs from being created?
In a state of nature, job opportunities are infinite, because there is no limit to people’s desires for goods and services. Only public and “private” cartels can disrupt this state of affairs.
Here we go…Plunging into the ice age!
Houston braces for about 2 inches of snow
Some in Houston area may even see half a foot of the white stuff
HOUSTON CHRONICLE
Dec. 4, 2009, 9:04AM
Houston this morning broke a record with the earliest snowfall ever recorded in the city’s history.
Forecasters are still hedging their bets on the amount, but say the most likely scenario is 1 to 2 inches of widespread snowfall through the day. Some areas could get up to a half a foot.
Light snow already was falling downtown and in other areas before 8:30 a.m. Other forms of precipitation — such as rain, freezing, rain, sleet and hail — also have been reported. Houston’s main weather recording station at Bush Intercontinental Airport reported at trace of snow at 8 a.m., meaning Dec. 4 will go down as the new record.
But emergency management officials say snow isn’t the biggest concern — it’s icy roads. A 12-hour freeze period is expected to begin after sundown today, continuing into Saturday, which could cause hazardous driving conditions.
Thank you for that! And here’s Tegucigalpa’s weather forecast for tomorrow!
Saturday
Chance of a Thunderstorm. Scattered Clouds. High: 80 °F . Wind NNW 8 mph . Chance of precipitation 20% (water equivalent of 0.01 in). Heat Index: 80 °F .
Where’s Al Gore when we need him!
I would start your search at Olde Country Buffet. Look for Tipper. Big Al will be the one behind her but not visible.
“I would start your search at Olde Country Buffet. Look for Tipper. Big Al will be the one behind her but not visible”
I was thinking more like the Golden Corral,
with Tipper blockading the potato salad and mac ‘n’ cheese vats, while Big Al took over the ice cream line, elbowing the little kids out of the way.
A view from the top of the worlds tallest building…
http://www.breitbart.tv/check-out-the-view-from-the-highest-point-in-the-world-top-of-burj-dubais-spire/
We ain’t seen nothing yet!
Taxes, taxes everywhere.
Strapped states hike taxes and fees by $24 billion for fiscal 2010. Residents pay more for speeding, entering horses in races and digital downloads.
NEW YORK (CNNMoney.com) — Speeders doing more than 85 miles per hour in Georgia will soon pay an additional $200 in fines. Racehorse owners in New York now must fork over $10 to enter their steeds in events. And Massachusetts started charging a 5% tax on broadcast satellite service.
These measures are part of a record $23.9 billion in tax and fee hikes and $7.7 billion in other revenue increases enacted by states in fiscal 2010, according to a report released this week. This is a massive jump over the $8.1 billion in revenue hikes instituted the previous year.
“These are the highest tax increases ever,” said Scott Pattison, executive director of the National Association of State Budget Officers, which co-produced the semi-annual report with the National Governors Association.
And more taxes increases are likely on the way, experts said.
Wealthy elite get TARP, dividend and capital gains tax cuts.
Middle class gets taxes and fees and unemployment and fewer services.
You have problem with Corporate Communist Capitalism©®™, comrade?
Developments
Real estate news and analysis from The Wall Street Journal
* Wealthy Investors: Renewed Hunger for Real Estate
* Coldwell Banker Wants to Ship Me to Aruba
* December 3, 2009, 4:21 PM ET
Lawmakers Want to Make Higher FHA Loan Limits Permanent
By Nick Timiraos
As the Federal Housing Administration begins considering how to pull back from its expanded share of the U.S. mortgage market, the agency could face pressure from some lawmakers and those in the real-estate industry who don’t want the FHA to do anything too dramatic.
Lawmakers from high-cost housing districts, for example, want to ensure that the FHA doesn’t disappear from their neighborhoods. They’ve introduced a bill that would make permanent the higher loan limits that Congress temporarily expanded last year. That allowed the agency to insure loans as large as $729,750 in the nation’s most expensive housing markets, up from a $362,000 national cap. California now accounts for around 13% of FHA-backed loans, up from less than 2% during the housing boom, partly because of the higher limits.
Without the higher county-by-county adjustments, “many areas of the country will not get the benefit of the FHA,” said Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee. “We didn’t think it was fair for California to be frozen out of the program.” Mr. Frank said he thinks limits should be increased to around $800,000.
Shaun Donovan, the secretary of the U.S. Department of Housing and Urban Development, said the agency believes the expanded loan limits should be temporary. The larger loans account for less than 2% of all FHA-backed loans. While default rates are slightly lower than on all FHA-backed loans, the loans have little seasoning, because the FHA only began insuring larger loans last year.
Other lawmakers, meanwhile, want to bring back programs that allowed borrowers to receive FHA-backed loans without making down payments. Congress last year ended widely-used programs that had allowed sellers to fund down payments to borrowers through non-profit charities, and the FHA says that those programs have eroded the net worth of the agency’s reserves by $10.5 billion. At Wednesday’s hearing, Reps. Al Green (D., Texas) and Gary Miller (R., Calif.) pressed for the FHA to find new ways that would let buyers qualify for FHA backed loans without making down payments.
“Let’s develop a program for persons who can pay for a home but who are without the necessary down payment,” said Mr. Green, who said he nonetheless understood why there was “a great deal of consternation” over the seller-funded down payment programs.
…
Other lawmakers, meanwhile, want to bring back programs that allowed borrowers to receive FHA-backed loans without making down payments. Congress last year ended widely-used programs that had allowed sellers to fund down payments to borrowers through non-profit charities, and the FHA says that those programs have eroded the net worth of the agency’s reserves by $10.5 billion. At Wednesday’s hearing, Reps. Al Green (D., Texas) and Gary Miller (R., Calif.) pressed for the FHA to find new ways that would let buyers qualify for FHA backed loans without making down payments.
“Let’s develop a program for persons who can pay for a home but who are without the necessary down payment,” said Mr. Green, who said he nonetheless understood why there was “a great deal of consternation” over the seller-funded down payment programs.
Being that one of the catch phrases of Obama’s campaign was “responsibility”, I’m looking forward to him nipping this proposal in the bud.
packman ,Years ago this blog predicted that the Powers would come up with a way to get people in houses with no down-payments .
Yes - it was in fact started years ago. Being that it was an obvious contributor to the current crisis, one would expect we would learn from that experience - no?
My point of course that Obama’s statement was merely lip service. However I don’t fault him alone - it’s the nature of the beast, and has been common with almost every politician since the beginning of time.
One ongoing feature of this crisis: Many high-level policy makers seem persistently determined to prove they meet Einstein’s definition of insanity.
Insanity: doing the same thing over and over again and expecting different results.
–Albert Einstein–
“Let’s develop a program for persons who can pay for a home but who are without the necessary down payment,”
I love it: people who can pay for a home but who don’t have a down payment - talk about insane!
So, they have money, but just none on hand… sure… whatever! Back to Bubbleland!
Why not develop a program that pays peadbeats 10% cash on closing so they can stuff their house with useless crap. This is just surreal. I mean that’s stuff you read on The Onion and laugh about.
Wait a minute. You mean the The Onion isn’t real news?!
I guess this means I can’t get a Brawndo either?
“Being that one of the catch phrases of Obama’s campaign was “responsibility”, I’m looking forward to him nipping this proposal in the bud.”
At least he hasn’t introduced a Contract with America.
You mean the one that actually caused us to have a budget surplus (supposedly) for a while? You see that as a bad thing?
Apparently, enough computer algorithms believe that all those losing their unemployment benefits and thus falling off the unemployment rolls and thus causing the unemployment rate to ‘contract’ is positive news that trumps the negative of the real contraction in services.
By next year this time many millions more will have lost their unemployment benefits so it should get really, really ‘good.’ Yeeha! Casinos are fun!!
Clipped from : MaxKeiser.com
The participation in the labor market (those actually working plus those actively seeking work) is currently at a low. 65%, IIRC.
Interesting day in the markets (obviously)
- Dollar up huge
- Gold down huge
- Treasury yields up huge
All retrenching from recent peaks/valleys (some records).
Looks like everyone’s banking on recovery. Good luck with that.
Oh my, three attempts this week to bust out on the upside have now been foiled. What happened in the past hour?
“What happened in the past hour”?
That’s what I’m wondering.
“Stronger dollar erases gains on Wall Street”
The dollar is indeed going through the roof. Question is - what made it so? I had assumed it was the recovery itself, and thus we’d have a paradoxical reverse-feedback loop:
Unemployment down -> Economy strenthening
Economy strengthening -> market up
Economy strengthening -> lessened anticipation of future stimulus
Lessened anticipation of future stimulus -> dollar up
Dollar up -> market down
??? Doesn’t make sense, if they’re all based on a singular root cause of a strong employment report. Must be something else in the mix.
I think the clubbing that Bernanke is taking also has something to do with it. Plus Fed funds futures indicate a spike in expectations that the Fed will raise interest rates in the next year. The Fed may feel pressured to do just that. Bailout sickness is taking hold.
Anything that threatens the pumping of cheap money into the economy threatens that vaunted miracle in the stock market. A true economic recovery involves deleveraging. Deleveraging involves a lot of pain. We can have it now or in 2012.
“The dollar is indeed going through the roof. Question is - what made it so?”
Uh, scarcity perhaps? Demand overcoming supply? The return of sunspots?
“A true economic recovery involves deleveraging. Deleveraging involves a lot of pain. We can have it now or in 2012″.
Exactly!
LOL - OK maybe I should rephrase. After falling through the sub-basement into the ground the last few months, the dollar has quickly risen back out of the ground into the sub-basement.
I never realized until recently just how much of the value of the dollar is based on speculation of future value (i.e. inflation/deflation expectations), not upon current value. It’s pretty amazing.
“I never realized until recently just how much of the value of the dollar is based on speculation of future value (i.e.inflation/deflation expectations), not upon current value.”
“… value based on speculation of future value …”
That’s how I feel about gold.
For gold, price = value. I cannot think of anything else where this equation holds true (except maybe jewelry).
“A true economic recovery involves deleveraging. Deleveraging involves a lot of pain. We can have it now or in 2012.”
Please, sir, may I have it both times?
“A true economic recovery involves deleveraging. Deleveraging involves a lot of pain. We can have it now or in 2012.”
…or in 2013; or in 2014; or in 2015…
The Fed’s delay tactics are working way better than I had anticipated. The only question now is whether the delay leads to more total pain or less total pain.
I do believe that a “recession” that drags on for four or five years is going to leave a long-term mark on consumer sentiment, expectations of future employment, savings rate, etc.
The dollar is soaring because of positive unemployment numbers. As soon as the market sees an employment turnaround, the dollar will soar and the DOW will drop. It’s the old DON”T FIGHT THE FED scenario. They fear an interest rate hike. Remember, investors try to look 6 months ahead. IMO, this is the first of many head fakes.
Goldman Sachs?
I wonder what Prof. Bear would say about this….
http://finance.yahoo.com/news/El-Centro-holds-position-for-cnnm-793017960.html?x=0
El Centro, Calif., held its position of having the highest unemployment rate among the nation’s metropolitan areas, with the jobless rate at 30%, according to government figures released Wednesday.
While the figure fell from a revised 32.2% in September, it climbed from 26.8% a year ago and it is staggering even against the nation’s 10.2% unemployment rate, which is at a 26-year high….
California’s Inland Empire, including Riverside, San Bernardino and Ontario, ranked second to Detroit among larger areas with an unemployment rate of 14.6% in October.
As in El Centro, the agricultural workforce in Yuma, Ariz., is impacted by the extreme heat, and the city has the second-highest rate overall at 23.5%, a slight drop from 24.3% in September….
Sounds like Inland Empire housing is going to continue to become increasingly affordable for a while (especially for renters).
Coincidentally I was reading about El Centro, Ca a couple day ago. Part of the high unemployment is inaccurate due to people working in Mexico while collecting unemployment in the US. They are right on the border and mostly Mexican. Also, in the past the agricultural workers would migrate seasonally for work. Now they stay put for a few months a year and collect unemployment..free money!
“Part of the high unemployment is inaccurate due to people working in Mexico while collecting unemployment in the US.”
I guess that part of high unemployment doesn’t do much for propping up housing values or rents in El Centro?
Or did I miss your point — are you talking about El Centro residents working across the border?
yes, us citizens or residence working in mexico. you can read about it in the el centro, ca wikipedia article. baseline unemployment is 12%.
Irish Confession
An Irishman goes into the confessional box after years of being away from the Church. There’s a fully equipped bar with Guinness on tap. On the other wall is a dazzling array of the finest cigars and chocolates.
Then the priest comes in. “Father, forgive me, for it’s been a very long time since I’ve been to confession, but I must first admit that the confessional box is much more inviting than it used to be.”
The priest replies: “Get out. You’re on my side.”
Danish Prostitutes Offer Free Sex to Climate Conference Delegates.
December 04, 2009 ~ FoxNews
Things are getting hot and heavy in Copenhagen ahead of the city’s massive climate change conference.
The city’s mayor warned hotels against patronizing Danish prostitutes during the upcoming U.N. summit — but the Copenhagen hookers are reportedly striking back by offering free sex to anyone who ignores the warnings.
Mayor Ritt Bjerregaard sent postcards to 160 Copenhagen hotels, urging guests and delegates to refrain from buying sex, Spiegel Online reported.
The city’s prostitutes have retaliated by offering free sex to anyone who brings one of the cards to an assignation.
The response is being organized by the Sex Workers Interest Group (SIO), which says the mayor’s move is “sheer discrimination.”
“Ritt Bjerregaard is abusing her position as Lord Mayor in using her power to prevent us carrying out our perfectly legal job,” SIO Spokeswoman Susanne Moller told the Danish Web site Avisen.dk. “I don’t understand how she can be allowed to contact people in this way,” .
“The city’s prostitutes have retaliated by offering free sex to anyone who brings one of the cards to an assignation.”
Lol. I smell a business opportunity in the printing up of cards.
Lol. I smell a business opportunity in the printing up of cards.
At Kinko’s
LOL
(Though as of last month Kinko’s no longer exists, even in name. It’s now just FedEx Office.)
Kinko’s no longer exists
I didn’t know that. There are none here either.
“The city’s mayor warned hotels against patronizing Danish prostitutes during the upcoming U.N. summit”
Well OK, but even summitteers might appreciate a tasty little danish with their juice and coffee for breakfast.
Anybody know why the Europeans have become such prudes in the last 10 years?
No smoking. No sex. Cutting back on drinking. Please tell me it isn’t the Muslim immigrants!
How long did the dollar and stocks stay coupled? About two hours?
Dec. 4, 2009, 1:15 p.m. EST
Jobs report triggers reunion of stocks and U.S. dollar
* Dollar makes biggest rise since June on jobs data (11:08a)
* Europe stocks stage sharp turnaround after data (12:04p)
* Jobs report bolsters shares of staffing firms (12:41p)
* U.S. stocks turn negative; investors take profits (11:49a)
By Steve Goldstein & Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — It’s become an axiom in markets: When stocks go up, the U.S. dollar goes down and vice versa.
Data running back three years, compiled by Bank of America Merrill Lynch, shows that global equities have a -0.5 correlation with the trade-weighted dollar. So for every 1% rise in stocks, the dollar drops by 0.5%.
But not after Friday’s job report. See story on jobs report.
Job Losses Slow, Employment Outlook Turning
The U.S. economy lost the fewest jobs since December 2007 in November and the unemployment report dropped to 10%. The report suggests recessions’s worst job losses may be in the past. (Dec. 4)
The data sparked a break in the recent carry trade that had investors borrowing the low-yielding dollar to purchase equities and dollar-denominated commodities.
“We actually saw the dollar strengthen, money going into equities, oil and energy rallying for fundamental reasons, and gold going down. We haven’t seen that on any given day in the last three months,” said Art Hogan, chief market strategist, Jefferies & Co.
…
The Precious™ is taking a beating today. I wonder if gold investors ever feel like Charlie Brown when Lucy tempts him into another field goal attempt, only to pull the ball away at the last instant and leave him flat on his back?
The only thing that will kill the gold rally is higher interest rates - today the whole rate curve jumped!! Remember this is just 3 months till the FED has to convert 1.4 trillion (I think) from short term (6 mo. - 2 yr.) to long term of 7, 10 & 20 yr. bonds. Double hit just when the bulk of the Comm. RE market needs to roll over. Did I forget the Alt-A loans peak in 2010? It’s like 11 dimensional chess.
I’d love to see a chart showing expiration of treasuries. This is a big unknown right now - and IMO will be very big news going forward.
Recently the cost of servicing the debt has been flat, or even down last year, because interest rates have sunk so low. Here’s a nifty graph.
However since the debt principle is now skyrocketing - when interest rates go up the cost to service the debt will rapidly grow as a percentage of total government expenditures. Currently it’s only about 12% - I’ll bet it’ll be 30% before long! Think about it - even if interest only goes back up to 5%; on $15T of debt that’s $750 billion per year. That’s over 25% of the anticipated $3.6T budget for FY2012. By 2019 if we really do have a $20T debt as projected, and if interest rates are back up to 6% (still somewhat low historically) - then we’re talking $1.8 Trillion per year of the federal budget just to service the debt.
This is why gold is so high. We’re flirting with a downward spiral of debt in the not-too-distant future. At some point it costs so much to service the debt that we won’t have enough money left over for other expenses - like health care plans, wars, etc. Basically it’s akin to a credit card junkie with no limit, and who eventually just doesn’t have the income to make interest payments, let alone attempt to pay down the principle.
P.S. (my other post will show up at some point) - do you have a link to the source of your numbers?
I know I heard something like that on C-SPAN yesterday from some guest on their morning segment. The FED announced the roll over a few days ago. I’ll keep looking for some actual numbers but the roll over has been known for awhile. A huge amount of debt over the last 12-18 months was done in short term notes at all time low rates. The big bet was rates would stay low long enough to refinance the bulk of it at 7 through 20 year bonds. I’m betting the FED gets caught in a squeeze next year from external pressures i.e. the rest of the world raises rates and the FED can’t stop it.
“FED has to convert 1.4 trillion (I think) from short term (6 mo. - 2 yr.) to long term of 7, 10 & 20 yr. bonds.”
The US Treasury issues debt, not the Fed. And who says they ahve to roll it to longer-term debt? They could conceivably continue to roll it as short-term bills.
Yes of course they don’t *have* to, but they want to. It makes sense, to try and lock in the historically-low rates.
Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.
With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.
$700B per year in 2019 is definitely very low. The projected debt by then is $20 Trillion, so that’s only paying 3.5% interest. That’s a record low value. That would only happen if the Fed keeps rates near zero for 10 more years. If that happens - uncontrolled inflation is baked into the cake.
“That would only happen if the Fed keeps rates near zero for 10 more years.”
That would suit me fine. I expect my inflation hedges to all be built up to high levels by then.
You are 100% correct - Forgive me if I sometimes get to two confused (they both remind me of snakes). The Treasury issues the debt.
Many yes but there are many gold investors who are looking at a $300-$400 cost basis too.
‘Tis a mere flesh wound!
Metals Stocks
Dec. 4, 2009, 2:15 p.m. EST
Gold tumbles as dollar surges after positive data
Related stories
* Oil falls as strong dollar outweighs jobs data (3:03p)
* Gold extends record above $1,226 (Dec. 3)
* Gold tumbles as dollar surges after positive data (1:51p)
* Gold hits new record above $1,217 an ounce (Dec. 2)
By Moming Zhou & Polya Lesova, MarketWatch
NEW YORK (MarketWatch) — Gold futures tumbled 4% Friday, sustaining their first major loss in a run that began early in November, as the U.S. dollar rose sharply after an upbeat U.S. jobs report.
On the Comex division of the New York Mercantile Exchange, gold for December delivery fell $48.60 to end at $1,168.80 an ounce.
…
I can’t imagine why.
Gold was past due for a correction, the dollar rally also was past due. It’s really not a big deal, the thing I can’t understand is why folks that don’t own gold, don’t like gold, pay any attention to it at all, why would they care.They don’t understand it’s function. Besides everyone knows the only thing and investor should own is the DOW it always goes up.
You cannot eat it, drink it, live in it, make love in it, go to school in it, drive to work in it, entertain yourself with it (unless you are strange) or treat medical problems with it.
Since you brought it up, what exactly is gold’s function?
the thing I can’t understand is why folks that don’t own gold, don’t like gold,
Part of it is natural. Missing a boat sometimes makes people resentful of the boat.
Gold shooting to the moon can portend very bad times.
25 years of the PTB and the media disparaging gold has an effect too.
“Gold shooting to the moon can portend very bad times.”
Bad times giving way to good times can portend gold dropping to the ground. At what point is the bad news fully priced in, and then some? (I guess if you or I knew the answer to that, we could make ourselves richer than Croesus…)
we could make ourselves richer than Croesus
I’m more interested in silver now. I sold 50% of my long held paper silver 2 days ago because it’s due for a correction as is gold. However, today gold dropped 4% and silver fell 2%. That’s unusual as silver usually falls harder than gold.
If there’s a “recovery” silver might do better than gold because it is an industrial metal too.
Jim Rogers just said he’s more apt to buy silver now than gold.
Silver can drop to about $14 before breaking its one year uptrend and gold can drop to about $1000.
Gold can drop to about $800 before breaking it’s multi-year uptrend. Silver, well who knows what rules the “restless metal” follows.
Never invest in silver unless one is able to suffer a substantial loss.
Never invest in
silverany one special asset class unless one is able to suffer a substantial loss.Here’s to hoping for a global regulatory push in 2010 to break up the too-big-to-fail members of the Megabank, Inc banking cartel which currently use bankmail to hold the world economy hostage in perpetuity.
The Financial Times
A season not to be jolly with bankers
Published: December 4 2009 19:39 | Last updated: December 4 2009 19:39
While most consumers hesitate with their Christmas shopping, bankers at least can look forward to a season of bulging pay packets. As the year draws to a close after the worst financial crisis in generations, banks flush with near record profits seem set to grant equally record-breaking bonuses.
Just as predictable as tinsel and carols, the inevitable furore over bankers’ pay has already broken out. After its directors allegedly pondered mass resignations in response to government pressure to limit bonuses, Royal Bank of Scotland, 70 per cent owned by the UK public, is backing down from confrontation. Meanwhile Lloyd Blankfein, chief executive of Goldman Sachs, has been on a listening tour with investors, regulators and politicians before the company sets employee pay for 2009.
Banks’ growing realisation of the public outrage that large year-end payouts will provoke comes not a day too soon. They must, however, understand that more is at stake than a simple media exercise. Any plans to hunker down and wait for the public’s ire to pass miss the very real basis for its anger.
We have no objection to people making big gains (or losses) by risking their own money. But that is not what bankers do, as the last year has made blindingly clear. Some banks, such as RBS, are still standing only with the help of taxpayer-provided capital crutches. Those that escaped governments’ golden fetters, such as Goldman, or eluded them altogether are nonetheless subsidised by ultra-loose central bank money. As their failure would bring us all down, they are implicitly insured against bank-breaking losses. This year’s bonuses are the bankers’ reward for risks taken with public wealth.
…
We have no objection to people making big gains (or losses) by risking their own money. But that is not what bankers do, as the last year has made blindingly clear. Some banks, such as RBS, are still standing only with the help of taxpayer-provided capital crutches.
Hear, hear!
Let’s also remember that many bankers get exorbitant bonuses regardless of performance, and that tends to infuriate non-financial types as well.
Here is a link I found about the decline in immigration. Note the fall in funds being transferred to Mexico from 2007 through 2009.
“In 2007, Mexicans living in the U.S. sent about $26 billion to relatives living in Mexico. The amount of remittances dropped to $25 billion in 2008, the first decline since the Central Bank of Mexico started keeping track 14 years ago. In the first nine months of 2009, the Bank reports that only $16.4 billion has been sent south, a 13 percent decline from 2008.”
Here is another interesting data point:
“Apprehensions at the U.S.-Mexico border are down.
If arrests at the U.S.-Mexico border are an indication of illegal crossing activity, the fact that the number has dropped by more than 23 percent during the past year probably indicates a reduction in persons attempting to make the trip.
Precipitously declining economic opportunity combined with beefed-up enforcement have been factors in the recent drop in the number of immigration arrests at the border over the past few years. The number recorded for FY 2009 represents a 34-year low point. At the same time the border patrol budget has risen to nearly $11 billion, up from $6 billion in 2004.”
http :// thegovmonitor com /world_news/united_states/recession-causing-major-shifts-in-u-s-immigration-trends-16095.html
So,if the rumor is true that about a third is sent to the homeland than
in 2007 about 75 to 100 billion was made under the table by at least illegals that send money home .
And divide that by (say) $30,000 (to be generous), to estimate the number of illegals (assuming that they are all actually working).
Seven-five-nought nought-nought…….divided by 30 thousand equals…….2.5 million illegals drawing paychecks, and sending money home
Then multiply this by…..
- times two for spouses/significant others, then
- times two for a pair of grandparents/relatives, and finally
- times six for little Juan, Esteban, Miguel, Bonita, Gabriella and Juanita
Equals……..60 million illegal aliens.
From what I’ve seen around here, that number looks about right.
At least my numbers are based on logical estimates/data, not some half-ass SWAG the Feds have been putting out.
Construction industry unemployment approaches 20%
Baltimore Business Journal
Nearly one in five of the nation’s construction workers are unemployed, according to federal data released Friday.
The U.S. Bureau of Labor Statistics reported another 27,000 construction workers lost their jobs in November, giving the industry a 19.4 percent unemployment rate. The construction industry has the highest unemployment rate in the country when compared with all sectors.
But November’s data marked an improvement from October, when 56,000 construction workers lost their jobs.
“The fact fewer people lost their job in construction this month is little solace for the one in five construction workers out of a job today,” Ken Simonson, chief economist for the Association of General Contractors, said in a statement. “This is yet another reminder that our economy will not be able to fully recover until we find new ways to drive demand for construction services.”
The majority — 86 percent — of the 27,000 people who lost their job worked in nonresidential construction. Since January 2007, construction employment has dropped by more than 1.7 million, according to Simonson.
Economy 101: Long-term unemployment worsens
By CHRISTOPHER S. RUGABER (AP) – 58 minutes ago
WASHINGTON — Within the vast pool of 15.4 million unemployed workers, a split is emerging: The number of long-term jobless — those out of work six months or longer — is growing, while the number of short-term unemployed is declining.
The trend highlights a considerable challenge for the economy and policymakers: finding a way for the millions of Americans laid off last fall and early this year to get back to work.
The data, buried in Friday’s unemployment report, are stark: The number of Americans out of work for 27 weeks or more reached 5.9 million last month, the most on records dating from 1948. That’s 18 percent more than just three months ago, when the total was just below 5 million.
The tally of those out of work for 14 weeks or less, however, has dropped to 6.3 million from 7.1 million in August, a decline of about 11 percent.
Looking at it another way, the long-term jobless now make up 38.3 percent of the unemployed population, not that far from the 41.1 percent accounted for by those out of work for 14 weeks or less. (The rest are in the 15-to-26 weeks bracket.)
That’s a sharp change from August, when the short-term unemployed made up nearly half the total, while the longer-term jobless were only a third.
…
UniCare to shed 500 jobs before Ill. exit
Crain’s — UniCare Inc. plans to lay off more than 500 people from its Chicago office as the health insurer prepares to pull out of the Illinois market, according to a state filing made public Friday.
As many as 568 employees, who all work at UniCare’s headquarters in the Willis Tower, will be let go gradually as the insurer’s 180,000 Illinois customers leave to sign up with other carriers, a company spokesman said.
UniCare, the state’s sixth-largest health insurer by number of enrollees, announced its decision in October to leave the Illinois and Texas markets, citing competitive pressures. It struck a deal with Blue Cross & Blue Shield of Illinois to guarantee coverage for UniCare members at similar rates and benefits.
UniCare, a subsidiary of Wellpoint Inc., the nation’s largest health insurer by membership, will keep a small presence in Chicago to serve its Illinois customers enrolled in stand-alone products, such as dental, vision and disability plans and Medicare-related products.
The layoffs will be done in phases starting early next year, the spokesman said.
MORTGAGES
Few mortgages have been permanently modified
Lenders have temporarily restructured hundreds of thousands of loans, but long-term changes have proved elusive, raising the specter of a new wave of foreclosures.
Rick Mullen of Valencia has waited more than a year for his lender, JPMorgan Chase, to finalize a loan modification. (Anne Cusack / Los Angeles Times / November 17, 2009)
* Related
* Mortgage rates drop to record low
* Fannie Mae tightens lending rules Fannie Mae tightens lending rules
* New home sales jump 6.2% in October
By E. Scott Reckard
November 26, 2009
…
Loan-modification limbo is of high concern these days, not only to borrowers like Mullen but also to economists, consumer advocates and government officials pondering the fact that 1 in 7 U.S. mortgages is in foreclosure or past due.
Responding to an Obama administration initiative, lenders have temporarily restructured hundreds of thousands of mortgages, with hundreds of thousands more modified under the banks’ own programs.
But achieving longer-term changes in the terms of mortgages has proved elusive, raising the prospect of a bigger wave of home repossessions that could cause a fresh decline in home prices only months after they appeared to hit bottom.
…
LANSING (AP) — Michigan is facing the prospect of more cities in receivership and school districts running out of money as state and local tax revenues plummet in the year ahead, House Fiscal Agency director Mitch Bean warned Thursday…”It’s not all doom and gloom,” said Hollister, of the Prima Civitas Foundation. Despite a 15.1 percent unemployment rate and falling tax revenues..Medicaid and corrections now account for half of general fund spending, crowding out “a lot of other things,” Ballard said Michigan could solve some of its budget woes … through a graduated income tax..With its 4.35 percent flat-rate tax, Michigan has one of the nation’s highest tax rates on the working poor and one of the lowest on the wealthy, Ballard said.
Lots of axe-shun by the FDIC this afternoon. See FDIC DOT GOV for the details. I clicked on that 30 minutes ago, there were 2 banks that went TU by that time. Just clicked again, 4 banks on the list. One of the 2 added is a bank of mine, Amtrust. 2nd bank of mine that has failed in the last 6 months, what I get for pursuing higher interest on my savings.
I could see Amtrust’s failure coming for a very long time. The most recent tip-off was the bankruptcy of its holding company, filed 4 days ago. From an Ohio DOT com story on that: AmTrust is one of the top 15 home-loan originators in the U.S., according to its Web site. The bank invested heavily in single-family home loans, land acquisition, development and construction loans, court papers show.
3 of the 4 banks were from Georgia.
We’re number 1, We’re number 1!
And the hits just keep on coming. Just checked FDIC dot GOV, now there’s a 5th bank on the list.
Foreclosures and bank failure on Georgia’s mind
Georgia should get to play in the SEC championship game tomorrow !!!
NEW YORK (AP)—For the second straight season the Southeastern Conference championship game will be a No. 1 vs. No. 2 matchup.
Again, it’ll be Florida against Alabama, but this time the Gators will be top-ranked.
And now 6!
Cool! Even the writers at The Economist have figured out that ‘Making Home Affordable’ mainly serves to keep owners in homes they cannot afford and they will never be able to pay off. It’s time to chuck this program into the dustbin of failed housing policies and move forward.
United States
Mortgage repayments
Time to fold
Dec 3rd 2009 | WASHINGTON, DC
From The Economist print edition
Don’t reinforce failure
…
Making Home Affordable was based on the idea that only minor obstacles were preventing lenders and borrowers from arriving at a mutually beneficial arrangement—a reduction in payments that would prevent a default and allow the bank to get a higher return from a property than it could expect from foreclosure and resale into a weak market. So the administration thought it needed to offer nothing more than a nudge to get the parties interested. Under the scheme, lenders get $1,000 for modifying a loan and $1,000 for each of the three years following the modification in which the borrower keeps his payments up to date. The borrower is also eligible for financial help, and both get added benefits if struggling borrowers are identified before loans go delinquent.
This formulation has failed to deliver the hoped-for results. So the administration has opted to try a shove instead of a nudge. As part of the new conversion drive, lenders may have their incentive money withheld until temporary modifications are made permanent. Poor performers will be publicly named, and those insufficiently committed to the programme may be subject to as-yet undefined “monetary penalties and sanctions”.
But this effort may be doomed. The latest foreclosures are no longer the result of loans that were unaffordable from the outset or payments rising from resets. Rather, they are a product of negative equity and rising unemployment. Nor is it clear that loan modification was ever likely to achieve very much. As economists from the Boston Federal Reserve have argued in early July, a large fraction of delinquent borrowers (perhaps as many as 30%) will catch up on their payments with or without help; an even larger share will default anyway after receiving a modification.
Meanwhile, depressed housing markets are having little trouble making home affordable all by themselves. Rents have been flat to declining in recent months, and in “bubble” areas—those experiencing the highest levels of foreclosure activity—they have dropped precipitously. At some point the administration may be forced to conclude that the best option for all involved is to make foreclosure as painless as possible, and to help turn struggling borrowers into relieved renters.
Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
“Relax,” said the night man,
“We are programmed to receive.
You can checkout any time you like,
But you just can never leave!”
Welcome to the Hotel California
Such a lovely place
Such a lovely face
Plenty of room at the Hotel California
Any time of year, you can find it here.
United States
State finances
Keynes in reverse
Dec 3rd 2009 | LOS ANGELES
From The Economist print edition
As more states resemble California, they threaten economic recovery
IF THE world’s eighth-largest economy were a company, it would have been on the edge of bankruptcy all year. California’s legislature and its governor have already plugged more than $60 billion-worth of holes in the state budget, either by raising taxes or cutting spending. But as soon as one hole is filled, the economy—still bad, even if no longer technically in recession—digs another. Mac Taylor, the state’s non-partisan legislative analyst, now expects to see a deficit of $6.3 billion for the current fiscal year, which ends next June, rising to $14.4 billion next year.
This means that California’s legislature, having already made cuts that exceed the entire budget of many smaller states, must deal with another gap of $21 billion in the coming months. This is larger than, for example, California’s entire spending on prisons and higher education combined. Lest legislators be tempted to resort to temporary accounting tricks, Mr Taylor also warns that revenues are likely to fall below expenditures by about $20 billion a year for the foreseeable future.
The problem, as in other states, is tax revenues that are coming in below even pessimistic estimates and spending requirements that are rising with welfare claims and other legal requirements, such as Medicaid, the health system for America’s poorest. Money from the federal stimulus this year has proved a decidedly mixed blessing, since much of it has come with requirements on the states to maintain school, health-care and other spending which is now exacerbating their deficits. Other cuts that were planned are proving elusive as the people who are losing funding sue the state.
The answer, suggests Mr Taylor, must be a mix of additional cuts and extended temporary taxes, although Republicans, a minority in the legislature large enough to block any tax or budget deal if they wish, are already saying no to more taxes as they prepare for an election year. But whatever the mix, taxing more and spending less is “the opposite of what we should be doing” in a weak economy, says William Lockyer, California’s treasurer, who is a Democrat. State finances are thus imposing a “reverse Keynesianism” on policymakers, he says, which counteracts the federal stimulus and might even jeopardise the recovery.
California’s problems may be in a league of their own, as the Pew Centre on the States puts it, but about nine other states face similar difficulties relative to their size. They include California’s neighbours, Arizona, Nevada and Oregon; that other burst housing bubble, Florida; the rust belt of Michigan, Wisconsin and Illinois; and the eastern basket-cases of New Jersey and Rhode Island. Altogether the ten states represent more than a third of America’s economy and population.
…
“IF THE world’s eighth-largest economy were a company, it would have been on the edge of bankruptcy all year.”
Wasn’t it but a couple of years back that California was the world’s fifth largest economy? It seems like the place has only gone downhill since we moved here.
“The edge of”???!!!??? LOL. Right.
This doesn’t sound good. Maybe we need to make divorce illegal.
Books & Arts
Books of the Year
Page-turners
Dec 3rd 2009
From The Economist print edition
The best books of 2009 covered the financial crisis, climate change and the war in Afghanistan, as well as justice, corruption, cooking and the power of literature
…
Economics and business
Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial Systems—and Themselves. By Andrew Ross Sorkin. Viking; 624 pages; $32.95. Allen Lane; £14.99
A riveting fly-on-the-wall account of the collapse of Lehman Brothers and what came afterwards.
Lords of Finance: The Bankers Who Broke the World. By Liaquat Ahamed. Penguin Press; 564 pages; $32.95. Heinemann; £20
A history of the generation that invented the modern central banker. Winner of this year’s Financial Times/Goldman Sachs business book of the year award.
How Markets Fail: The Logic of Economic Calamities. By John Cassidy. Farrar, Straus and Giroux; 416 pages; $28. Allen Lane; £25
A sharp look at the roots of the financial crisis that turns into an excellent history of economic thought, by a British writer at the New Yorker.
Poorly Made in China: An Insider’s Account of the Tactics Behind China’s Production Game. By Paul Midler. Wiley; 256 pages; $24.95 and £16.99
A useful analysis by a consultant who advises Western companies on what to do about China’s manufacturing problems. Many laboratories protect their reputation by hiding, rather than revealing, what they test and whistle-blowing is punished rather than rewarded.