Bits Bucket For December 13, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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How Cleveland aggravated its foreclosure crisis The city of Cleveland has aggravated its vexing foreclosure problems and has lost millions in tax dollars by helping people buy homes they could not afford, a Plain Dealer investigation has found.
The city provided mostly low-income buyers with down payment loans of up to $20,000 through the federally funded Afford-A-Home program, but did little to determine whether the people could actually afford to keep their homes.
That lack of oversight persisted for years, even as hundreds of loan recipients defaulted on mortgages, many within two years, the newspaper found by analyzing property and loan records covering the period between 2000 and 2007.
I do not understand the impulse to give people *loans* for downpayments when owning is more expensive than renting. The intellectual origins of these programs in general (though not all the specific ones) was to help groups that were caught in a capital trap which meant they would never be able to buy a house. These groups were poor enough to be living on the edge and the fact that rent was *more* expensive than ownership costs meant that they would never be able to save enough to get out of that situation. And they were not likely to receive the needed capital as a gift.
My parents didn’t have two nickels to rub together when my dad got out of the Airforce and soon thereafter I was born. We lived in an apartment in my mom’s hometown, walking distance to grandma’s house and downtown, with one car that my dad used to get to work. Grandma took my mother shopping to the less expensive supermarkets. My parents were eligible for a 5% down VA loan, but it would have been years and years before they could have managed to get together even that. So my grandparents gave it to them. Which meant they could go live in a small house at a cost they could still afford (barely). They never could have afforded the rent on a similar house, if they even could have found one. Owning allowed them to improve their lifestyle a lot on not that much more money.
The downpayment assistance is meant to help cover people from families that are never going to be able to provide that sort of support. But, if the cost of owning is more than the cost of renting the same place, what good is the assistance? You are helping people to become MORE squeezed, not less squeezed. They have an asset (really owned by the bank), but that asset is keeping them from saving money, not allowing them to save money.
Math. It all comes down to math. Word problems in particular. And recognizing that correlation and causation are not the same thing.
+1 *I spy* critical thinking in this comment. It is about math. There is the recognition that very few relationships are linear over the entire range. The first task is to recognize that there is an optimum (maximum), the second task is to set your derivative equal to 0, find that optimum, and set the limits of your program around that.
Generally, the first task is beyond most governments. They simply think: hey we need to “help” the “disadvantaged.” If we do, we look good, if we don’t, they’ll think we’re racist.
Slightly different method, but yeah, exactly the same thing. Help from your family to get into a house so you can save money over renting the same space.
Downpayment assistance can be justified for people whose family has never managed to set up that sort of system. But it is not a good idea for people who would be paying MORE for less by buying.
This may be math, but it sure isn’t rocket science.
Oops, this is meant to be under NYCdj’s comment below.
Polly:
Where I grew up, most people bought or built 2 fam houses to have rental income and when the kids got married to live over parents/
grandmas house for a few years to save up for the down payment on their own home…
Yup. My grandmother owned a smaller house next door and also had a room and bath with separate entrance she rented out when one of the kids wasn’t staying there.
“I do not understand the impulse to give people ‘loans’ for downpayments when owning is more expensive than renting.”
I do, because:
1) It’s not their money that’s being loaned, it’s the taxpayer’s.
2) Owning is not more expensive than renting if one lives in a world of forever rising real estate prices.
‘it’s the taxpayer’s’
Oh really? The taxes I pay hardly cover what is spent “on my behalf.” As a tax “payer”, I am really a net borrower and any money spent by the government on just about anything is coming from someone else.
There is a fundamental issue that explains the matter. I am not the government/Fed and they are not me. These pieces of paper in my wallet are Federal Reserve notes, not Dollars. Are you not free to convert these notes to gold or other currencies at will?
How this will all end is anyone’s guess. But I don’t worry about what the system does because I don’t identify myself with it. The united States of America became The UNITED STATES OF AMERICA, (Incorporated). I don’t consider myself a part of the latter. This Federal Reserve bank system/USA Inc., can run up whatever debt it wants, and go pound sand for all I care; I’m not capable of paying their bills and I wouldn’t if I could. IMO, let it collapse under it’s own weight, and maybe we’ll get our country and currency back someday
Well, Ben, what word do you suggest I use to describe where federal dollars come from if not “taxpayers”.
“The united States of America became The UNITED STATES OF AMERICA, (Incorporated). I don’t consider myself a part of the latter. This Federal Reserve bank system/USA Inc., can run up whatever debt it wants, and go pound sand for all I care; I’m not capable of paying their bills and I wouldn’t if I could. IMO, let it collapse under it’s own weight, and maybe we’ll get our country and currency back someday”
Amen, Brothah! You said everything I wanted to say.
I like your anger!
Taxpayers are part of it.
Would the other part would be whoever loans money to the Government,
and the money supply that is created?
‘what word do you suggest’
Creditors
‘what word do you suggest’
suckers
Bloomberg
In an appearance on CNN, Summers said job creation is the administration’s top priority, followed by deficit reduction in the “medium run.”
Summers wouldn’t say whether Obama would get behind a possible bipartisan deficit-cutting commission to identify government spending reductions.
“The president is open to any approach that offers the prospect of controlling the budget deficit,” Summers said.
Senator Mark Warner, a Virginia Democrat and former governor, said on CNN he backs the commission idea.
A group of Senate Democrats threatened to oppose a boost in the U.S. debt limit by up to $1.9 trillion unless lawmakers agree to create a special commission to address the government debt. That is opposed by fellow Democrats such as Finance Committee Chairman Max Baucus, a Montana Democrat whose panel handles tax and spending matters.
Baucus called the idea “truly dangerous” last week because “if we were to cede all of our responsibilities to this commission” without allowing its recommendations to be amended, “we would risk setting in motion some truly terrible policy.”
“The united States of America became The UNITED STATES OF AMERICA, (Incorporated). I don’t consider myself a part of the latter.”
Ben, while I understand the sentiment, I would argue that the reality is quite different.
You may not consider yourself a part of the latter, but the latter definitely considers you a part of it.
As I explained to someone else recently, the public debt is backed by “the full faith and credit of the US government”. The more accurate translation of that is “full faith and TAXING AUTHORITY of the US government”. The future ability to pay on that debt is entirely based upon the government’s authority to levy property taxes on everything you own and income taxes on everything you earn for the rest of your life.
So you are part of it, whether you like it or not, unless you are actually willing to revoke your citizenship. If you are, then I agree that you are not a part of it—but I can’t see that happening en masse.
Testify, Brother Ben! Though you keep your politics off the site, for the most part, it isn’t hard to tell where your sentiments lie.
It will be poetic justice when the sheep and lemmings who have perpetuated the Republicrat hold on the levers of government wake up to one fine day to realize their “Federal Reserve Notes” are worthless paper, backed by nothing. The crash that ensues is going to separate the wheat from the chaff. When the sheeple have lost everything they might gain a small measure of wisdom, way too late. Then they might finally support those who are struggling to get back our lost Republic.
Baucus called the idea “truly dangerous” last week because “if we were to cede all of our responsibilities to this commission” without allowing its recommendations to be amended, “we would risk setting in motion some truly terrible policy.”
No, Sen. Baucus, the “truly terrible policy” has already been set in motion by you and your ilk. This same corrupt Republicrat hack gave a $14,000 pay raise to a female staffer in 2008, at the time he was “romantically involved” with her (read: banging her like a cheap gong), and later that year took her on a taxpayer-funded trip to Southeast Asia and the Middle East, though foreign policy was not her specialty. Nice going, voters of Montana.
-Are not the dominant parties managed by the ruling classes, that is, the propertied classes, soley for the profit and privilege of the few? They use us millions to help them into power. They tell us, like so many children, that our safety lies in voting for them. They toss us crumbs of concession to make us believe that they are working in our interest. Then they exploit the resources of the nation not for us, but for the interests which they represent and uphold. We, the people, are not free. Our democracy is but a name. We vote? What does that mean? It means that we choose between two bodies of real, though not avowed, autocrats. We choose between Tweedledum and Tweedledee. We elect expensive masters to do our work ofr us, and then blame them because they work for themselves and for their class.-
You know that and I know that, but the sheeple fall for the same tricks every election. That I can’t understand.
IMO, let it collapse under it’s own weight, and maybe we’ll get our country and currency back someday ??
Hear, Hear Ben….+1…My Father and my Grandparents that are long gone would want no part of the America of today…My 85 year old mother is disgusted with it also…
It’s funny how “patriots” get angry when I tell them that I believe that USA Inc’s days are numbered. I’m invariably told that the USA will last forever because its the greatest country in the world, blah, blah, blah.
Too many “patriots” equate mindless bumper stickers and voting straight Republican with doing their bit for the country. True patriotism means educating oneself as to the causes and effects of our current problems, then throwing yourself into the struggle to turn things around. Empty-headed flag-waving isn’t helpful in the current situation.
Well stated SS. Find one of those flag waiving emptied skull retards who’ve actually done their patriotic duty and served their country.
Hint: You won’t find one.
In addition to the stupidity you just outlined, programs to assist low income people to pay rent were cut and new money to enable them to buy was made available. In some cities, there is over a 5-year wait for low income rental assistance.
Well, the whole thing was premised on the idea that rich and middle class people own houses and poor people don’t, therefore owning houses must make people rich and middle class. Again, correlation vs. causation issues. I know it was more complicated than that. There was all sorts of reseach about crime in renting nabes vs. ownership nables, quality of schools in the two types of nabes, etc. But the stupidity of thinking that the one vecotor of ownership could somehow fix things without looking at the underlying cost relationships? Profound.
Never mind the issue of job mobility necessary for people at the lower end of the economic ladder to get ahead. I don’t think my dad’s parents owned a house until he was nearly a teenager. Grandpa was a produce buyer for grocery stores. The moved all the time when a better job opportunity came up, until he got a nice stable position as a manager in a city with multiple stores. That was when they knew that they would not have to keep moving all the time for Grandpa to progress. Oh and giving up a lease to move in with relatives when grandpa went off to WWII was a better option than grandma and 5 year old dad dealing with a house too.
Just not smart.
Hi All ! Probably still correlation vs. causation problem but some of the thinking was that owners have a stake in the community and ownership would help reduce crime broken families and other ills.
Home sales, whether new or existing are major revenue sources for the community even if they default. Much of the direct and indirect cash flow in a home sale is up front in the first few months/first year.
Up until default, community at least gets some property taxes paid too.
It’s all good.
ProperBostonian-
Ad hominem does not play well here, as in “in addition to the stupidity you just outlined”.
Your tone is incongruent with the handle that you selected for yourself. I expect that a true and proper Bostonian would conduct himself with a much higher level of decorum in a public forum.
Is it really more expensive to own than rent in Cleveland?
You see Polly, the “active ingredient” in this near recent DEBACLE, was the element of math, called multiplication (slow vs fast):
Mouse #1 (slow):
very skitish, very nervous…looks around alot…saves $5,000 per year for 24 years, earns small amount of passbook savings rate…net result: $150,000+ (just sitting there, “a lazy assert” = a “foolish” mouse)
Mouse #2 (fast):
very brave, even reckless…goes about willy nilly…buys a house in 1994 for $290,000..withdraws partial accumulated equity via HELOC…hangs out with the pigs for several years, sells house in 2005 for $650,000…net result: $350,000 (minus HELOC) = $175,000
The politicians & Gov’t are very concerned about the continued behavior of Mouse #2, they ignore Mouse #1 except for x1 day of the year: April 15th …on this day all mices money must be accounted…(note: mices #2 have learned how to lie & deceive to the gov’t from the pigs, therefore we get this saying: “mices & pig make for strange bedfellows”)
HWY …thank you HWY for clearing up just what happens in your humorous way .
I agree with polly that giving people loans they can’t really afford doesn’t work . This housing bubble had a lot to do with giving the unqualified leverage ,rather than giving them home ownership . That leverage would create a group who had purchasing power by the creation of money …fake money from fake housing values .
The fact that Wall Street was giving 5 loan, 10 loans, to unqualified investors speaks volumes on what this flow of money was all
about from the Market Makers . Its the creation of money by whatever means that Wall Street conjures up ,Corporations like it and the Pawns liked it to ,at the time .
Exactly. The cashflow, revenue generated during the upfront home sale, plus the near term follow-on indirect revenue of a home sale is all they’ve ever been after. There is plenty of money to be made on the front-end and nobody really cares about the longer term outcomes. Heck, plenty of money is generated from the foreclosure process as well.
“The downpayment assistance is meant to help cover people from families that are never going to be able to provide that sort of support.”
What happens to these families when the roof leaks? The furnace dies? etc.?
If a family can’t save any sort of down payment (and are now in a house they can “barely” afford) the first moderate problem with the house is going to be devastating to their finances. These people should still be renters because as we have seen on this blog for years, the cost of owning a house is much more than the payment.
the cost of owning a house is much more than the payment ??
Almost always overlooked in the decision process…
The only type of government program that would of worked to increase home ownership for the lower classes was
if they actually built affordable homes . The net result of
making it easy for all classes to purchase was you get a 15K a year Cherry picker buying a 700k home ,going for the leverage game .
You have to look at how they sold real estate during the Boom .
Home ownership was the least of the objectives . It was either buy
or you will never be able to get into the Ponzi scheme ,or use your house as leverage to get the life style you deserve . Use your house to fund retirement ,use you house to pay for college ,use your house to have a income ,use your house to go on that vacation or buy the car you always wanted . They even made it so easy that you didn’t even need to come up with a down payment and and you had teaser rate payments that would keep you in the game .
You can’t save people from foreclosures when the objective was to use real estate as a money generating entity ,rather than a
house to live in you could afford long term .
Look at how they lured stupid Baby Boomer into buying a retirement house 10 years ahead of time ,calling it a second residence ,while they keep the house they live in where they work that they leveraged to buy the so-called retirement house . This was stupid because you can’t perceive of what your needs will be 10 years ahead of time anyway . So that retirement house is going to set vacant for 10 years until they are ready to move into it ?
They build tracts to sell to flippers to sell to flipper to sell to rich people who didn’t exist .
What gives the government the right to take money from me or any other productive person, to build “affordable housing”?
Who will think of the children?
Brother, if that doesn’t cut right to the point, I don’t know what does.
The intellectual origins of these programs in general (though not all the specific ones) was to help groups that were caught in a capital trap which meant they would never be able to buy a house.
Translation: Politicians, mostly Democrats, seek to buy the “loyalty” of certain voting blocs, i.e. “disadvantaged minorities,” by votes-for-entitlements schemes. Of course, these will be paid for by the productive sectors of society, i.e. taxpayers, or passed on the future generations. Rather than raise holy hell, the Republican “opposition” goes along with the scheme, since their Wall Street patrons get to rake in taxpayer-funded payola for making these bad loans, besides getting taxpayer-funded bonuses.
And yet the sheeple keep these whores and swindlers in office, election after election.
What I see locally is a lot of nonprofits built around “helping the poor,” getting grant funding and govt go-aheads for their grand schemes, but running way ahead of the needs and desires of the actual groups they’re trying to help. I’m seeing “affordable” condos and new rentals going begging while the poor double up or opt for a rented trailer at the edge of town.
Obviously they just don’t know what is in their best interests.
analyzing property and loan records covering the period between 2000 and 2007.
I wanted to comment on this separately. Here is another telling snippet from the article:
—-
“Afford-A-Home has been around since the mid-1990s.
…Through 2004, the first-lien mortgages for Afford-A-Home buyers typically came from local banks fulfilling federal requirements to lend money in poorer neighborhoods. The loans carried low interest rates.
After 2004, however, an increasing number of Afford-A-Home buyers received higher-cost, subprime mortgages from lenders that have since gone out of business.”
—-
In other words, the reporters didn’t bother to see how the program fared in the late 90’s, when it actually would have being going well. It also seems as if the Afford-a-Home program was doing just fine until 2004. Right about then, it seems some subprime scheisters saw low-hanging fruit in the form of “federally funded,” and went to work wooing the city of Cleveland.
You mean, a feel-good gub’mint program had UNINTENDED CONSEQUENCES?! Quick, someone bring me smelling salts before I swoon from shock.
Sounds like it worked well (as Oxide points out above) until Wall Street’s unregulated vampires got involved.
No, it didn’t work well. Government should stop meddling in the housing market or serving as the Nanny State for stupid, irresponsible people, using money extorted from the productive sectors of the populace. In fact, let’s just go a step further and take warning labels off everything, so nature and Darwin can take their course.
Hello, did you even read the article? The people pre-2004 were NOT stupid or irresponsible. They were paying back their loans — ie, being responsible. It’s the post 2004 when the problems started. And your precious “producers” were the most irresponsible of all.
And what’s up with this new “producers” conceit? Is that Rush’s newest talking point? And if so, would somebody please tell me what Rush “produces” for society?
Good thread! I noticed the champions of the nanny state (force insurance companies to insure pre-existing conditions did not join in).
Since all we have is a sham FIRE economy, who exactly are these producers, and what do they produce?
who exactly are these producers, and what do they produce?
I would argue that I’m one of them…I’m sure there are many on this board. You know, those of us who don’t just shuffle papers/money, but create products for sale that presumably provide some value.
Don’t get me wrong, I respect innovators and entrepreneurs way more than Wall Street vampires. But I still want to know who these harried few are, who are trying to be productive while ’society’ or the ‘gov’ holds them down. It all sounds like something from an Ayn Rand novel, romanticized poobah about creative types being held back from working their magic. It’s a load of crap. The current tax system favors business ownership and capital gains over income earned from employment. It’s the (once) middle-class worker who is being screwed by the system. Not some picked-upon entrepreneurial genius. (Who of course we all like to identify with. Hey, the ’system’ kept me from being a rock and roll star.)
Let me note that I wasn’t claiming to be an entrepreneur…simply a productive member in our economy. One who actually adds value.
The current tax system favors business ownership and capital gains over income earned from employment.
I agree regarding capital gains vs earned income. I’m not sure about business ownership. I imagine someone else here can probably comment on that. However, ignoring those who aren’t middle class, it’s certainly true that those of us who “produce”, ie work, pay income, sales, property, cap gains, etc etc taxes, and don’t receive any gov’t handouts, are continually shafted, while those who are unwilling to work, have kids, etc, sure do get a lot of not just tax benefits, but handouts…
Now that Wall Street’s giant mortgage factory is pretty much shuttered, details are emerging about how its assembly lines actually operated. And as a dispute between two European banks and Bank of America indicates, the revelations aren’t pretty. O. Max Gardner III, a lawyer in Shelby, N.C., who represents financially troubled consumers says “When you see so many problems across the country with the total inability to produce the documents, then it really makes you wonder: did they really do this?”
I keep hoping Wall Street’s subprime mortgage lending kingpins will finally enjoye their comeuppance before this financial crisis is a fading memory.
I’m not seein’ hope’n'change on that front.
Those folks collected those juicy fees for a reason.* We’ve seen some stories of Wal*Street buffoons going broke just like sam and sally subprime, but the smart guys in the room surely packed something away.
——-
*And for you combo-heads, those fees really were fake money turned into concrete money. Deflation and default can destroy the remainder of the toxic loan, but the commission % on each one was created into real salary. (except for those who used salary to take on more debt.)
“And for you combo-heads…”
Lol. Sounds like a mental condition. Or a navy toilet. Or maybe just a way of looking at the world.
I vote for mental condition.
Lol. Thanks for not choosing navy toilet.
The biggest comeuppance they are going to get is early retirement with fabulous wealth.
Sorry. That is as good as it is going to get.
Hopefully Polly You and you peers will seek to run up their legal bills and that wealth will not be so much fun to have anymore.
Yeah. Let’s at least make them fear for their wealth for the rest of their lives. Give them a little taste of the uncertainty they’ve provided the rest of us.
“When you see so many problems across the country with the total inability to produce the documents, then it really makes you wonder: did they really do this?”
Sounds to me like Wall Street’s financial innovation made the mortgage lending process far more efficient than before. How much more efficient can you get than eliminating all that pesky paperwork that documents a borrower’s ability to repay a loan?
I am very curious as to how much of the increased productivity of the last decade in our economy has come from giving up the proper underwriting loans. The magic mathematicians told people that securitization could make 99.999…% of the loan pool AAA bonds even if the loans in the pool were not underwritten, so why bother to do it?
It isn’t all of it, because they also call a doubling of computer processor power an increase in productivity, even if it doesn’t allow you to get double the use out of it, but it could be quite an interesting chunk of it.
because they also call a doubling of computer processor power an increase in productivity
They DO? Who came up with that metric? Silly me, I thought that productivity was measured on a people scale, like how many people you could pay off while still doing the same amount of work. No wonder people are overworked.
All the BS that securities or CDO’s spread out the risk . The market makers just made that one up /
Wall street rode the wave of taking advantage of years of a somewhat stable real estate market that was under different rules . Of course the foreclosures wouldn’t start coming in until
the mania crashed ,therefore until then Wall Street could show that default rates were low . Wall Street rode off of past steam and fake models . With the repeal of major laws and acts that were created during the 30’s (so this could never happen again ),sure enough ,it happened again ,and it didn’t take that long to happen either .
“In any event, Ocala says mortgages worth more than half a billion dollars are missing.”
No wonder they’re having trouble modifying mortgages; they can’t even find them.
Proper Bostonian.. How does 1/2 billion in mortgages turn up missing ?
I’m telling you these crooks were doing all kinds of things without any cops on the beat . I think that it’s going to be shocking if it ever comes out just how many laws were violated and just how many leverage games were being played by these crooks going all the way up .
So much for saving the corrupt systems that hide fraud and criminal activity sometimes for years .
Again I say ,a lot of what the bail outs did was prevent the discovery of
just what was going on and just how much corruption and fraud was
going on . Maybe they sold the same loan packages more than once . That’s why it was very important to bust the whole darn Ponzi scheme .
A new Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth in complex business entities is rapidly taking shape with the hiring of hundreds of employees. If the unit performs well, that will have been taxpayers’ money very well spent.
Will they have a Wall Street office? And will top Treasury Department officials receive a blanket exemption?
Globalization at its finest.
Not so sure it’s such an incredibly great idea, tresho.
Hard to believe I even said that, right? I agree. Why limit it solely to tax cheats of the business world? The possible retort, “well, you gotta start somewhere” that any of us might hear doesn’t wash.
Only until those who make the laws are forced to abide by the same are problems actually addressed. This development has more to do with Big Brother than solving any problems.
No, it is NOT an incredibly great idea. And it will not be limited to tax cheats. A global Big Brother is what comes out of this. Of course, there will be idiots who will cheer this with gusto, without realizing what the implications are.
Going after “the rich” is a mantra for idiots. Not all rich folks are cheats and scum. Some of “the rich” actually got that way by working hard, producing something and providing jobs. These people should be protected and rewarded, not harrassed. It’s the “extractive rich”, as opposed to the “productive rich” that should be taken to task in a big way.
+1000
Why should anyone who doesn’t break the law be taken to task?
Why, indeed? But they do! And then they have to prove that they didn’t. Which takes time, money, etc.
Geez, even I don’t understand my own post there.
MORE COFFEE!
What difference does it make if the person is “productive” or “extractive?” If he hid his by wealth illegal means, then he should be punished. If you’re a “producer” are you suddenly exempt from the law? I also don’t get the global big brother. If the crooks are using sophisticated technology to cheat, then why can’t the IRS use the same technology to chase them?
And will they prosecute members of Congress if they find anything illegal? I hope so.
As for TurboTax Timmy, well he clearly made some tax errors (intentional or not I don’t really know), but at least it’s out in the open and appears to be resolved.
“What difference does it make if the person is “productive” or “extractive?” If he hid his by wealth illegal means, then he should be punished.”
oxide, you have to read my entire post, very carefully.
However, your post illustrates perfectly why an “income tax” is totally effed.
I’m all for eliminating it and replacing it with sales taxes, etc. But it looks like the US is gearing up to Eurify and get a VAT. ON TOP OF income tax.
There’s nothing wrong with “hiding wealth”. Back in the day, people of means learned not to be ostentatious and rub it in to those less fortunate. That was “hiding wealth”, if you will. But an “income” tax makes it illegal to “hide wealth”, which is kind of screwy.
Hiding wealth from the IRS is an entirely different story than hiding it from the IRS. And you know it.
A national sales tax would punish the poor.
“Hiding wealth from the IRS is an entirely different story than hiding it from the IRS.”
Uh, OTAY!
“A national sales tax would punish the poor.”
Not if food and shelter are exempted, and you are entirely aware of this.
Hiding wealth from the IRS is an entirely different story than hiding it from the IRS
I’m not at the top of my game this morning (long night), but I think I could pretty solidly refute this statement
Refuting that statement is not the same as refuting that statement.
Sorry, I mean that hiding money from the NEIGHBORS is different from hiding it from the IRS.
It’s the “extractive rich”, as opposed to the “productive rich” that should be taken to task in a big way.
That’s a good and important distinction you’ve made.
Unfortunately — and perhaps cynically — a majority of the super-rich are “extractive,” though they may be “productive” as well. I was going to say “large and growing majority …” above, but it takes only a moments reflection to note that this particular problem is as old as wealth itself; it merely ebbs and flows with larger trends in socio-economics.
The “productive rich” should be allowed to cheat on their taxes?
And what do they need protection from? Their lower tax rates?
It targets certain types of ‘businesses’ that are often used as tax dodges. It’s not limited to somehow only going after ‘business’ as opposed to, say, gov employees or college professors or whatever. If a community activist is using one of these ‘businesses’ as a tax dodge, they’ll get busted as well.
Sounds good to me.
“It targets certain types of ‘businesses’ that are often used as tax dodges.”
A nail salon would be a good example I think.
A nail salon would be a good example I think ??
Likely close to 80% all cash business…They are not reporting half of it if that…Thats why the VAT is coming…The underground economy will not be able to avoid a VAT if I understand it correctly…..
“Thats why the VAT is coming…The underground economy will not be able to avoid a VAT if I understand it correcty”
Yea…Here comes the VAT Tax!! Let’s get this party started!!
BOHICA
Tax cheat = someone who makes a lot of money and doesn’t give it all to the IRS.
Eddie = (fill in the blank)
Are you talking about hiding income from the IRS?
EddieTard is still too young or dumb to understand that the revenues that aren’t paid by the wealthy elite will come out of his hide.
You guys have to learn to read government speak. This looks a lot like a reorg of people to put folks who are already working on this stuff under the same manager.
This is just a guess, but most really large agencies are organized by location, so getting people from a bunch of different locations working under a manager who specializes in a market segment, will make it easier to share information. Like this:
Hey, everyone look out for the super secret “we value your business” accounts from Bank X. They were selling a cheating scheme for 5 years where armpit bacteria were counted as dependents.
Polly, since Oly and Shorty don’t love me anymore, will you be my girl?
Polly is a dude, I think.
Definitely not a dude.
Why on earth would you think that?
Oh, good. I was gonna have to seriously redo my mental image if polly was a dude.
I miss Oly.
I miss Oly too Sammy.
If the unit performs well, that will have been taxpayers’ money very well spent.
Dream on. The biggest thieves of all are above the law, because they own the Republicrat lawmakers.
Arizona Slim, Bill in Tucson, or any of you AZ folks….what do you make of Oro Valley?
We are planning a trip there soon to look around and consider moving there. Thoughts, opinions on this area? Don’t forget of course, the bar hasn’t been set very high, I live in NJ!!
I personally have never been there.Looks like it is not to far from casa grande on the map.You might check out maricopa.It is a nice little town about 15 minutes south of phx.They have some new developments and new shopping.I have driven through there several times and seems like a nice place.Casa grande is a little larger town but not to familliar with it.Drove through there and seem like an influx of older communities mixed with new developments.I think that whole corridor between tuscon and phx will be built up one day.
thanks - I appreciate your thoughts.
Englishman in NJ,
IMO you will love almost everything about it. The views, the weather, the sunsets and the homes. If I were you I would start my search from the mountain and work westward to the eastern tip of Marana.
I am familiar with this particularly development that I hear went belly up, but the land is awesome if you can afford to live there.
http://www.saguaroranch.net/index2.php
Lip
I like Oro Valley. It’s on the edge of Tucson and not too rural. I prefer the part of Oro Valley that is as close as possible to the Catalina Mountains. The views are great. That’s near the Catalina Highway. I used to road bike the Catalina Highway in the late 1990s. Awesome scenery.
I would recommend doing some research on crime in Oro Valley. In the early part of this decade, Tucson crime increased while the national crime rate decreased. I heard about some FBI stats on crime in Oro Valley increasing. And I guess it was notable because Oro Valley is one of the safest areas in the Tucson area.
Matt Taibbi hits it out of the park again in Rolling Stone with his take on Obama’s Wall Street Boyz. Good stuff. The last sentence says it all. Caution: some explicit language.
http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout
That was a nauseating read. Here’s hoping Obama is keeping his friends close, and his enemies closer….
Time will tell.
From the article -
“Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place.”
This about sums it up for Paul Volcker.
“This about sums it up for Paul Volcker.”
Yeah, I bought the Volcker kool-aid for a while on this blog. I finally spat it out. Volcker is now reduced to sitting in a corner rocking chair with an ear-horn, chirping “VAT VAT VAT, sonny!”
I’m glad he never gained any traction, at the end of the day.
The VAT idea leaves much to be desired, however, is it worse than let’s say unregulated derivatives?
Ex-Fed chief Paul Volcker’s ‘telling’ words on derivatives industry
telegraph.co.uk
By Louise Armitstead
Published: 9:41PM GMT 08 Dec 2009
Paul Volcker, the chairman of President Obama’s Economic Recovery Advisory Board, stunned a business conference in Sussex yesterday, saying there is “little evidence innovation in financial markets has had a visible effect on the productivities of the economy”.
The former US Federal Reserve chairman told an audience that included some of the world’s most senior financiers that their industry’s “single most important” contribution in the last 25 years has been automatic telling machines, which he said had at least proved “useful”.
Echoing FSA chairman Lord Turner’s comments that banks are “socially useless”, Mr Volcker told delegates who had been discussing how to rebuild the financial system to “wake up”. He said credit default swaps and collateralised debt obligations had taken the economy “right to the brink of disaster” and added that the economy had grown at “greater rates of speed” during the 1960s without such products.
“This about sums it up for Paul volker.”
Ain’t it da truth!
Promising to have Paul Volker and Waren Buffett on his team was one of the major selling points he used to get elected.
Oh, but he DID have Buffett on his team. Buffett took a stake in Goldman Sucks. He did his bit for the economy.
Who could possibly be more knowledgeable about the crisis than those who helped perpetrate it?
You actually have to get inside the heads of some of these masters of the universe, and their lackeys. You’d think that they have so much, they wouldn’t care if some schmoe on Main Street actually got a hold of two nickles to rub together. But they do, they really do. I’ve known a couple of these types in my lifetime. It’s difficult to fathom, but it is a form of insanity. When Joe Schmoe actually starts to flourish, or gets ahold of something they think he shouldn’t have according to their twisted logic, their minds and faces contort into a rictus of rage and they get down and gnaw the rug.
The current CEO of ebay, when he took over, just about had a stroke over small sellers making a living through a system he had nothing to do with building. So he’s come up with a myriad of ways to punish them and make life more difficult, while sucking them off for more profits for Ebay and Paypal. I know a hedge-fund trader that went ballistic when he saw some older Post-Office employee delivering the mail and he just about went around the bend with anger about the pay and benefits the guy was probably getting and how he should be fired in favor of some younger person who would work for less and no benefits. There was the developer here in Sarasota County who bought out a trailer park on the Myakka River and threw out all the residents very unceremoniously with the statement that “people like that shouldn’t be living on water-front property”.
Mister Potter was not a fictional character. Welcome to Pottersville, population “YOU”!
NYC, you said, in fewer words, what I was trying to express.
The only way in which people err, is in thinking the Potters of the world exist only in fiction.
No kidding between the two its 10% or more to sell records cd’s and then people gripe if you charge them a few bucks extra for postage….I tell them i have to pay $2 to park at the PO so i wont get a $55 OT ticket…
The current CEO of ebay, when he took over, just about had a stroke over small sellers making a living through a system he had nothing to do with building. So he’s come up with a myriad of ways to punish them and make life more difficult,
“When Joe Schmoe actually starts to flourish, or gets ahold of something they think he shouldn’t have according to their twisted logic, their minds and faces contort into a rictus of rage and they get down and gnaw the rug.”
Are you suggesting our economic leaders are a bunch of Teppich Fressers?
Yup, have worked for some Marxists with Maserati’s who fashion themselves as advocates “for the people” and then scream at you for taking your 1/2 hour lunch or using a Post-it note (costs money). They bellyache about how they’re making only 2 million that year rather than 3 million, and how the staff needs to make sacrifices, and in their next breath brag about the $50,000 piece of artwork they just purchased. It’s sick.
I had a former co-worker that would rant about the working guy getting screwed. He would do this over lunch and then leave without tipping the waitress. I made sure to point out this piece of irony to him. The rest of our crowd had great fun with that. I love when I can lend my services.
You nailed it palmetto. I’ve met the very same. And they are quite numerous. It’s the same mindset that won’t pay people a living wage and then complain how lazy they are.
Few things are more amusing to me than watching the progressive disillusionment of the bright-eyed innocents who voted for “change” and actually believed Obama’s pie-in-the-sky campaign promises. One look at his major donors told me and any thinking person exactly how this was going to play out.
George Soros was a big Obama backer, and is also a big proponent of legalizing drugs. Look for Obama to start testing the waters about legalizing marijuana (for starters) as a way of generating much-needed revenue for states like California.
George Soros was a big Obama backer, and is also a big proponent of legalizing drugs. Look for Obama to start testing the waters about legalizing marijuana (for starters) as a way of generating much-needed revenue for states like California.
Well, at least not ALL of their policies would be insane then, which would be an improvement over W.
And no, I’m not a Republicrat of either wing of the party.
Penny Pritzker was featured in Bloomberg Mag in 2008. She is a multibilllionaire socialist type who wants the rich to pay higher taxes, although her family has part of its money in tax havens overseas (do as I say, not as I do).
According to Bloomberg, Obama would still be a southside community organizer if it was not for socialist Pritzker.
I boycott The Parking Spot because her family owns it. They own hotels too.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6804899/Barack-Obama-slams-fat-cat-Wall-Street-bankers.html
Talk about the height of hypocrisy - after Obama packs his administration with Wall Street sharks and gives them free rein to loot the taxpayers blind, he “slams fat cats” for the benefit of yahoos.
I love when people blather on about “growth” without providing any statistical evidence. I was in downtown La Jolla yesterday, and saw signs reading “For Rent — Ocean View Apartments,” which sounded a bit tawdry for what is normally thought of as high end luxury housing. Judging from all the “For Rent” and “For Lease” signs I see wherever I go, I would judge the “growth” around San Diego has recently been negative. But then I am not a journalist with ready access to the facts.
I will say that adding additional new housing to the extant glut should be good for housing affordability, though.
Waking from a slumber: local housing
Return to home development is good news for builders and a host of other industries
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Sunday, December 13, 2009 at midnight
Arturo Rincon painted some detail work on the outside of a model home under construction on Black Opal Road in 4S Ranch. Carpet layers, landscapers and decorators were finishing up the model home complex.
John Gastaldo / Union-Tribune
San Diego County’s new-home market seems poised to make a small but welcome comeback next year as builders awaken from a three-year hibernation during the worst construction downturn since World War II.
Up from a historic low of about 3,200 houses and apartments authorized this year, about 4,000 units will be authorized by the county and 18 cities in the region over the next 12 months, University of San Diego economist Alan Gin projects. Several new developments expect to open sales next month, and if demand grows and lenders agree, builders are likely to open more and perhaps larger phases.
More development will mean more construction jobs, which have dropped about 30 percent from the peak of about 100,000 three years ago. It also will provide spinoff business at furniture stores, home improvement centers, realty offices, and planning, architecture, landscape and marketing companies — all of which cut staff and expenses drastically to stay afloat during the recession. Now, some companies say they’re rehiring.
But while building may be on the mend in 2010, it’s far short of the days of the booms in the 1980s, ’90s and 2000s. The record for permitted units was 44,315 in 1986, according to the Construction Industry Research Board. In this decade, the peak was 18,314 in 2003.
Another set of numbers puts the state of housing production in starker terms. Real estate consultant Sharon Hanley said there were only 337 single-family homes for sale in 79 new-home tracts last week — a four-month supply at current sales rates and half the number of projects that were selling just two years ago.
Her latest list of housing projects includes two dozen with start dates in 2010, but many are likely to slip into 2011 or 2012, she said.
“I think we’ll see some pickup after the first of year,” Hanley said. “But I don’t look for anything to write home about.”
There are two roadblocks to a more rapid upturn, industry experts say: a lack of construction financing, because banks are coping with defaults and foreclosures of homes bought during the boom, and consumer concerns that prices might go down rather than up in 2010, or that the economy won’t improve as expected.
“Everybody’s walking on eggs, and there’s just no definitive indication that we’re out of it,” Hanley said.
Of course, without an increase in housing, the expected continuation of San Diego growth would put pressure on supply and inevitably drive up prices.
“We can’t sustain San Diego’s population growth” at such low levels of production, said Borre Winckel, chief executive of the San Diego County Building Industry Association.
…
Some of the people I know in the development business are tempted to start again not because of the strong market but because of how cheap they can get the buildings built…
“…how cheap they can get the buildings built…”
More evidence there that affordable housing is in the future for the truly patient…
Yesterday I have a few beers watching basketball with a painting contractor friend of mine..A few years ago he was riding around supervising 10 painters or so…Now he is painting along side his only two employees…He said the competition for work is horrendous…The competing bids are so low he has to take no pay himself just to hold on to his last two quality painters…
I guess it’s different here. I closely track the listings and sales of SF, non-waterfront homes in our community. Some of those failed specuvestor new home flips (built in 2006 and 2007 and since foreclosed) have sold. And owner-occupied homes, primarily below $300K, are also selling. Inventory is trending down. Our monthly community newspaper’s “New Resident” listing has had a healthy number of names each of the last three months.
And once again there’s a Saturday real estate section in the local newspaper. It’s smaller than it was in ‘05 and ‘06, but there was no section at all from late 2007 until just recently.
“And owner-occupied homes, primarily below $300K, are also selling.”
Definitely different. We basically have no SF homes below $300K in our community, not to mention below $500K, and I bet our incomes are not proportionally very different from the areas you describe.
Another anecdote about the depression. I made the groggy pre-2nd cup of coffee mistake of saying “yes” to my wife’s question “Do you want to go to Ikea today”? yesterday morning. Now in general I kinda dig Ikea. I was a devotee in college, all my stuff was from Ikea. It’s still a good place to go for a rug, a chair, pots, what have you. And the meatballs.
Yesterday around 12:45 we pull up to the parking lot. I had never seen this in the 4+ years since the Atlanta store has been opened. Police directing traffic in and out of the parking lot. The parking lot is a double decker. Usually the bottom deck is not even open. Yesterday, not only was it open, it was so full that the police was letting one car in each time a car went out.
Yesterday I mentioned the 1.3% increase in retail sales. That was met with the predictable “fake data” and “only the rich are buying”. Sure, IKEA is a bastion of high end goods that are purchased by only the elite. Right?
Never been to Ikea, although I’ve seen some of its Asian-produced pseudo-Scando furniture. Oh, and the Swedish Dala horses made in China.
They have meatballs?
Ikea sells a bunch of low grade crap for college students decorating their dorms.Walmart has better funiture imo.I think the best thing they might have is a breakfast for 1.99.
I spent some time in IKEA buying stuff for my son’s college apartment awhile back. I suggested Walmart to him, but he seemed to think IKEA was a step up. The food reminded me of the stuff you get when you fly KLM.
Craigslist has the best furniture deals of all.
swedish meatballs and cheap norwegian wood
(so, I lit a fire, isn’t it good? norwegian wood;)
She asked me to stay and she told me to sit anywhere.
So I looked around and I noticed there wasn’t a chair.
but there were ergonomic stools
Everybody knows eddie Ikea is not resellable after you use it…so people give it away for FREE on craigslist everyday
——————————
Sure, IKEA is a bastion of high end goods that are purchased by only the elite. Right?
Uh, Eddie, isn’t Christmas less than two weeks away? Wouldn’t this help explain the crowds?
Sure, but I thought we were in a depression or something with 25% unemployment (or whatever the “real” number is). So how is it that with all these people out of work every retail joint is overflowing with people, every restaurant is packed.
Did the depression take a break for December?
If things are as bad as you all say, doesn’t it stand to reason that even at Christmas people will be spending less and parking lots wouldn’t be filled to capacity?
You can’t have it both ways and say we’re in the worst economy ever, *BUT* at Christmas time everything’s back to normal.
Ikea, disposable furniture. The icon of a superficial age. Eddie’s taste in furniture matches the depth of his economic analysis. Apparently his position is crowded.
At the beginning of the Civil War generals would march their men in formations that were reminiscent of earlier wars, such as the American Revolution. These were formations that were predicated on inexact weapons such as the muzzle-loading musket. Not understanding the accuracy of the new weapons that were on the battlefield these generals led their men to slaughter.
At the beginning of World War I there were many stories of cavalry charges against entrenched soldiers manning machine guns. The cavalry units were slaughtered as they rode atop their horses.
In response to the trench warfare of World War I the French built a massive grouping of fortifications that would become known as the Maginot Line. In the spring of 1940 the forces of the German Wehrmacht went over and around the Maginot Line. Its relevance to the mobile war of 1940 render it all but worthless.
The people on the HBB have already fought The First Battle of the Housing Bulge. Many of us won it with spectacular success. If I had chosen differently I would now be in a condo in Brooklyn that is worth $200,000 - $300,000 less than I paid for it. My wife and I would have a fraction of what we have in our retirement accounts. Our short-term cash position would make me want to gargle Drain-O in the morning. We may be joining the many people that want to “cancel the holidays” this year.
And here we have this moronic General Eddie mocking us. Eddie, we won a huge battle. We are now looking at the next battle. Like the French general you are you are looking at the last war and confidently building your Maginot Line. You are mocking those that are cautiously preparing for the next major encounter. Good luck to you General Eduoard. Fighting the last war is always a recipe for disaster and it looks like your kitchen is working at full speed to make sure that recipe is done to perfection.
I, for one, will continue to monitor the situation and change my tactics as needed. I will be blinded neither by dogma or fools. The battlefield is a dangerous place right now, especially with so many governments looking to throw their citizens into the crucible. Good luck to all that are trying to prepare for the next war. To hell with those that are trying to get us to prepare for the last one.
Well said.
In response to the trench warfare of World War I the French built a massive grouping of fortifications that would become known as the Maginot Line. In the spring of 1940 the forces of the German Wehrmacht went over and around the Maginot Line. Its relevance to the mobile war of 1940 render it all but worthless.
The Maginot Line worked pretty well. It did force the German’s to attack neutral Belgium as planned. France and England very poorly planned how to handle the Germans.
Of course, the Belgians did mange to capture a German major with the latest copy of the invasion plans in January 1940 (Aufmarschanweisung N°2.). The Belgians promptly did absolutely nothing.
The Maginot Line worked pretty well.
The Maginot Line was built to repulse a German invasion. Therefore it failed miserably.
The people on the HBB have already fought The First Battle of the Housing Bulge. Many of us won it with spectacular success.
We haven’t won, yet. We merely avoided a financial Waterloo, unlike the fools who swilled the NAR Kool-aid during the Bubble Years. But the final capitulation still hasn’t occurred. Thanks to the ill-conceived government intervention and bailouts, the final reckoning has been delayed by maybe a year, if that. When we emerge from under that rubble, THEN we will have won. Not until.
Sammy, that would be The Second Battle of the Housing Bulge. The second one began when the government decided to throw all of its weight behind an attempt to keep house prices propped up.
City Boy, I don’t know about you, but I feel like victory was torn from our grasp by the government intervention. Even though the results will be illusory, the $700 billion bailout staved off the day of reckoning for another year or two.
While prices have fallen from their peak, they still haven’t reached rational levels, i.e. three times median income. Knife-catchers and speculators are even perpetrating mini-bubbles in some markets. These will end badly, but in the meantime, fools will be encouraged to think that we’ve hit bottom and the NAR-promised rebound must surely be in the cards.
But our day is coming. In the words of Mark Knopfler, “Don’t you love the sound/Of the last laugh going down.”
Eddietard wants Ikea for the rest of the world because he hasn’t the class or cash for Kroehler or PennsylvaniaHouse, etc.
Nothing wrong with IKEA.
You guys are as snobby as the people who bought several houses and looked down their noses at renters. Good grief!
Jeez… these strawmen must stop.
Nobody said their was anything wrong with IKEA. There is something seriously wrong with a twentysomething know-nothing saying IKEA is the standard to measure all else by.
“If things are as bad as you all say, doesn’t it stand to reason that even at Christmas people will be spending less and parking lots wouldn’t be filled to capacity?”
Filled parking lots doesn’t mean people aren’t spending less. We’ll have to wait until January to see just how much action is going on at the cash registers.
The way I see it, people are still addicted to shopping, so they fill the malls but buy much less.
Shoot! I hate crowded malls. I do as much as I can in the off days. Rarely travel for the holidays anymore (both parents gone, so why bother?). Can shop on internet and avoid getting the flu.
Wonder how many cases of the flue H1N1 or not, have been contacted in malls on black Friday sales or whatever?
Here we go again ..
“If things are as bad as you all say .. “
Do. Not. Feed. It.
Well, as someone pointed out yesterday, if people like the squatters down the street from me are living in their home rent/mortgage free they do have some disposable income to afford Ikea’s cheap fiberboard/laminated furniture. Ikea stuff is useful in terms of storage/shelving but certainly nothing I’d make the focal point of a room. That’s like having a futon as your sofa, which works when you’re 25, but not so much when you’re 40.
I had a gift card to spend at Bed Bath and Beyond. I’ve had the card for 6 years now and use it only at Christmas to buy one gift. Last night (Saturday) at around 5:15pm it was very light traffic in the store. I was surprised, in years past the store was bursting at the seams.
THis is in S. California.
Fecaltime!
“Wouldn’t this help explain the crowds?”
Bloviating yokel: Gee, uh, duh, y’know, I dint thinka that. DOOWAHOO! Whaddya know?
“Bloviating yokel: Gee, uh, duh, y’know, I dint thinka that. DOOWAHOO! Whaddya know?”
Now THAT is EddieTard.
Amazing how Eddie gets under Exeter’s skin. Would love to see how purple with rage his face gets as he composes one of his thoughtful, erudite responses to an Eddie post.
If you define calling a spade a spade as rage you’re unquestionably dumber than we ever imagined.
Er, Eddie, you see, there is this thing called Christmas. You might have heard of it, people tend to go out a lot and buy things.
Now, what would be useful information will be the same-store sales numbers for this Ikea for the same period last year. That might tell us something. Not your one-off visit to a store you admit to not going to often.
Keep trying though, I quite enjoy your posts.
What’s with all the gratuitous Eddie-bashing? The guy is accused of being a troll, but every utterance he makes in here is greeted with frenzied condemnations from every side. We don’t need to be an echo chamber. If you don’t like what Eddie has to say, simply ignore him.
Eddie, I just want to say that, troll or not, I like that you’re becoming somewhat comfortable in the blog, with some personal-ish stories.
Anyway, I myself went to the IKEA near Cincinnati last fall. It was the same as you describe. Very busy parking lot. Very busy cafeteria (I don’t like warm sour cream, so Swedish meatballs are a no-no.) The “showroom” was crowded, and the “marketplace”…wow! People were just chucking things into their cars.
That doesn’t mean the economy is in good shape, however. IKEA is probably doing well for the same reason Wal-Mart is doing well. People can’t afford to get furniture better places, so they go for the crap at IKEA. And yes, it’s crap; the only reason I went was because they had a lamp I really liked (orgel vreten).
Meanwhile, my local Thomasville is closing. IKEA stole their business.
Meanwhile, my local Thomasville is closing ??
Exactly….Eddie see’s a packed IKEA store as a sign of strength when in fact its a sign of weakness in the purchasing power of the average person…They are stretching their dollars every way they can…Just look at the popularity of the dollar menu at every fast food restaurant as another example…
I bought a bureau at IKEA 9 years ago. It continues to function just fine, even after a move. I wouldn’t call it all crap. It’s inexpensive and you have to assemble it, but it seems to work okay. I wouldn’t want to decorate my dream home with it, but it’s done all right by me.
The real wonder are the engineers of their packaging. They absolutely use every last square inch of space in that package to minimize shipping costs.
I bought a bureau at IKEA 9 years ago. It continues to function just fine, even after a move. I wouldn’t call it all crap. It’s inexpensive and you have to assemble it, but it seems to work okay.
Some of their products are crap, and some are quite well designed, especially for the price point.
We tend avoid the furniture, but there are some items that seem well-constructed. I’m a fan of some of their kitchen items and area rugs. Their rugs are great for those of us with pets and children — we had several very nice rugs, but have either sold them off or put them in storage indefinitely.
People are moving out of their foreclosed houses over the holidays and into smaller rentals. New, cheap, space-appropriate furnishings are required.
Did you buy any furniture?
Not all is well in the Atlanta area. Appears one of Eddie’s favorite newspaper publishers is closing its doors.
http://www.google.com/hostednews/ap/article/ALeqM5hsALw5N4M17AmWbFMGXH9Qb5I0oAD9C0STU00
“Another anecdote about the depression.”
Can anyone find another post within the past several months besides Eddie’s which discuss ‘the depression’? Because if not, it is my solemn duty to point out yet another strawman…
PBear, isn’t Eddie the same one always telling “us people” (as if we are some kind of monolithic crowd, duh) not to extrapolate the whole of our notions regarding the state of the economy from something as isolated as a single visit to a single maul or store?
Strawman alert indeed.
Lots of energy here to refute Eddie’s anecdotal stories of growth.
I find this quite ironic given the # of posts from 12 months back or so of how HBB’ers went to their mall and “no one was there” or nobody was at Olive Garden, or some other useless tripe about how people saw an empty home depot so therefore we were in recession.
Agree with NJEnglishman–show me same store sales #’s. Its also an astute statement SCdave makes in observing that if Ikea is full, it is because we are all so broke we cant shop elsewhere
“single maul”
Was that an intentional typo?
No typo .. “shopping maul” seems to describe the experience/place well enough.
Word count score on the use of ‘depression’ on this thread:
Eddie 3
All other posters 0
Stop being such a gloomster, Eddie!
Eddie ir right. The recession is over. Ben needs to close this blog and start a new one for greedy flippers to brag about their success. Can Eddie moderate the new blog, Ben? Please?
I’m a big IKEA fan because I like low cost, good-appearing furniture. They are modern looking instead of trying to appear like something from the year 1790 (yuck! - of course I hate antiques too).
Proposal: Trade tax break for jobs
Catch: Incentives sought for million-dollar homes
By David Slade
The Post and Courier
Sunday, December 13, 2009
Is a proposed development of million-dollar homes on Johns Island an economic boost for the area that should be supported with potentially tens of millions of dollars in government tax incentives?
Charleston County Council and the Charleston County School Board are being asked to consider just such a possibility by the developers of Kiawah River Plantation.
The school board already has said it has no initial objection, but several County Council members have said they are uncomfortable with the idea.
The proposed tax increment financing district would be the first of its kind in Charleston County if approved — a TIF district proposed by a developer for its own development.
“Putting it out there makes me nervous because every developer will want one,” County Councilman Dickie Schweers said.
Previous stories
http://www.postandcourier.com/news/2009/dec/13/proposal-trade-tax-break-for-jobs/
“Tax breaks for jobs” are always a scam and benefit nobody but the already wealthy. So are “tax free investments zones.”
The contingency penalties mean nothing.
Best bubble song parody for the liar loans, lenders, appraisers, insurers who got theirs:
“It’s a nice scam if you can get it, and you can get it if you lie”
2009 rejiggered home loans for borrowers at risk of foreclosure:
800,000+ (taxpayers to take the hit with increased US deficit spending)
Reward for American borrowers who acted responsibly:
“0″
Another commission scheme for those who gamed the system during the bubble borrowing:
reverse mortgages
Number of people serving prison time for their illegal banking, insurance, appraisal, real estate activities:
..about as many as have been launched into space orbit
I have been checking out the Phoenix market, and there are literally thousands of homes for sale in the 20,000 to 30,000 dollar range. It seems to me that you would be able to find a home for 50,000 that would be in a tollerable neighborhood where a person like me could retire. It would also seem a landlord could pencil out a profit. Am I missing something? Are these areas so gang infested that they’re unliveable? Is this pointing to a low-end bottom swiftly approaching since subprime was the first crack in the dam? A student told me on Friday that his uncle could sell his house in Phoenix for 300,000 in ‘05, and now he couln’t get 25,000.
Surprise!
Some relatives of mine bought out there about a year and a half ago. Nice neighborhood. Prices couldn’t go any lower. It’s not working out for them very well.
The primary industry of Phoenix has left. Note the fate of Detroit and Buffalo.
By the time I get to Phoenix, she’ll be risin’….
… from her ashes.
The primary industry of Phoenix has left ??
And what would that primary industry be ??
Illegal immigrants. Sheriff Joe done chased them away.
Actually, construction and real estate. Construction is totally dead with many companies that used to have 200-300 employees down to a skeleton crew. My real estate agent used to call her own cell phone to make sure it was still working but I hear there are a few investors (aka knife catchers) buying up “bargains”.
Most of us thank Sheriff Joe for doing his job. Putting thieves and their ilk in tents, taking away their cable TV, their girlie magazines and their coffee seems to cause the felons to take their business elsewhere.
As far as buying a home for $30k, go there late at night on a weekend to see what the areas really like. Most of the time you’re getting what you paid for when you go that low.
Actually, construction and real estate ??
Thats what I would have suspected although retiree disposable income is likely a powerful force also…
Most of us thank Sheriff Joe for doing his job.
Who’s “us”?
Seems like there’s quite a few rumbles of discontent there — and the sheriff has quite the reputation for “investigating” people who disagree with him.
Phoenix (metro) has
Honeywell, Motorola, General Dynamics, Intel, Locheed, Orbital Sciences, headquarters of Dial, Headquarters of US Airways, a lot of small high tech companies (some of who subcontract to the big ones, but some independent ones).
Also has a lot of non-defense software companies.
Even so, the big gorilla in the room is development and construction.
The attractions of Phoenix that drove Honeywell and the rest to Phoenix are not going away soon.
Well I think Bill answered the question…
Little Al: If you see these houses on web sites, you can post the addresses here. There are a bunch of Phoenix-area folks who should be able what kind of neighborhood you’re talking about.
The rest of the nation may be in a recession, but Phoenix is in a depression. Born here in the 1940’s; never seen things this bad.
Neighborhoods are changing rapidly, i’d wait ’til the dust settles.
I drove through parts of Ahwatukee on Saturday (the Elliot-Warner loop). The houses are ordinary, not much different than other parts of Phoenix. Closer to South Mountain though, the houses are more expensive, more modern, and unique. I also noticed the further west along Ray Road and Chandler blvds, the better. At least west of 42nd street.
The 202 freeway extension will ruin it all for everyone when they build that. It will be the I-10 bypass. It will sacrifice the few (Ahwatukee residents) for the many, as it will cut overall pollution in the Valley, but increase the pollution in Ahwatukee.
Now that will make Maricopa attractive!
One of my buddies in Phoenix says our favorite strip club is dead of customers. Lots of people in construction and RE used to throw money around in topless joints in Phoenix.
ITEM: WASHINGTON (AP) — A top House Democratic leader said Friday Congress will have to permit at least $1.8 trillion in additional federal borrowing next year in order to avoid a default on the U.S. debt.
Majority Leader Steny Hoyer, D-Md., said that an increase in the debt limit would have to be in the neighborhood of $1.8 to $1.9 trillion in order to allow the government to borrow enough money to keep the government running through December of next year.
< We have sent a gang of fiscally inept people to Washington to represent us.
Democrats in Congress want to raise the federal debt limit from $12.1 trillion to $14 trillion!! They want this done NOW so it’ll be forgotten by the time elections take place in November, 2010.
The issue won’t be easily “forgotten” because the massive debt is reaching the tipping level in which the dollar will be crushed.
“There’s no other way,” howl the big spenders in Congress. “We must borrow heavily and pump the money into the economy to rescue it.”
Borrow? From whom and at what rate? And who will pay it back?
Frank Miele, Montana newspaper editor, writes: “The world is watching warily as Uncle Sam looks more and more like a doddering fool who needs to have a guardian appointed to manage his affairs.”
Miele points out that it’s not only we Chicken Littles who are worried about the disaster the massive federal debt is about to cause, but devout liberal journals like the New York Times and Washington Post are nervous, too.
Miele points out that it’s not only we Chicken Littles who are worried about the disaster the massive federal debt is about to cause, but devout liberal journals like the New York Times and Washington Post are nervous, too.
What would liberal or conservative possibly have to do with it? An incapacitating debt load should not be a partisan issue.
Neither should an over-priced, under-performing healthcare system, or any number of other issues that require nuance, long-term planning, a new approach, and/or tough prioritizing. The chasm between the ideal and real will always be there, but hopefully we’ll see some critical reasoning on some of these issues.
What would liberal or conservative possibly have to do with it? An incapacitating debt load should not be a partisan issue. Lots of things that should not be partisan issues continue to be flogged by partisans. Sigh.
Consider the source.
Vegas $8.5 Billion CityCenter Has Classy Casino, Empty Rooms
Dec. 12 (Bloomberg) — With its crescent of intersecting wings and oval glass tower, the Aria casino hotel is the crown jewel of CityCenter, the Dubai-scale, $8.5 billion, celebrity- architect mega-development by MGM Mirage that’s dumping a casino and 6,000 unwanted hotel rooms on Las Vegas.
Locals hope it will save their foreclosure-hobbled city.
Over two days, I covered a good percentage of this 18 million-square-foot complex spread over 67 acres, dodging ever- shifting construction barriers as workers frantically rush to make the gala-opening deadline of Dec. 16.
CityCenter dwarfs anything built along the Strip and cost about three times as much as the 2005 Wynn Las Vegas.
“World-class architects raise the bar in Las Vegas,” James Murren, the chairman and chief executive officer of MGM Mirage, said in an interview.
The complex was supposed to invent an exuberantly cosmopolitan future, drawing sophisticates with sleek contemporary architecture and a $40 million art installation program (lovely Henry Moore, stunning Frank Stella, ingratiating Claes Oldenburg).
Yet CityCenter struggles to find its tone. Manhattan architects Kohn Pedersen Fox produced a stiff 47-story Mandarin Oriental hotel trimmed in desert-red panels. Stats: 392 Asian- inflected Art Deco-style rooms, $228 to $4,000; 227 condos; Twist restaurant under chef Pierre Gagnaire.
http://www.bloomberg.com/apps/news?pid=20601088&sid=agIBmhmdcJd0
I saw a Bald Eagle today for the first time here in Pinellas County. It was awesome. It also would have made Oly Gal proud, as it was ripping up dead grass in a vacant lot to build a nest.
Sweet! Palmster, did you know about this? Awesome, I am going to take my littleman to view the nest.
http://myfwc.com/eagle/eaglenests/nestlocator.aspx
I’ve got one nesting here. I love to see it. He’s not old enough to have a white crown yet, probably next year.
Good news Muggy. Not counting visits to a zoo, I’ve seen three now, all in the last 10 years. First one was perched near the top of a mostly dead tree that overlooked the South River in Annapolis. Then I saw one perched on top of a concrete utility pole in my neighborhood in Sarasota. Last one was here, flying over the lake while being cautiously pursued by a few crows. They are a magnificent sight.
Thats pretty cool…I just think its a little risky identifying all their locations…
Back in 2003, a lot of the ’smart’ people were using interest only loans to buy property here in Florida. For a while, as the trend built momentum, they rewarded themselves with Hummers, pools, and flat screen televisions.
Today, the really smart people are the first to walk away and start the rebuilding process. Despite efforts by many to thwart and slow down this trend, it is gaining momentum. People are realizing it is cheaper to walk away. You are considered a ’sucker’ if you stay and pay.
“People are realizing it is cheaper to walk away. You are considered a ’sucker’ if you stay and pay.”
I, for one (probably the only one), hope this trend reverses.
With incomes going down and negative equity growing, how can it not continue? Voluntary or not.
“… how can it not continue? Voluntary or not.”
It probably can’t continue; It’s the voluntary part that is troubling.
I don’t want this to be easy for the FBs. I want all their money to go into the bank’s till before they get tossed out into the cold Christmassy snow.
A wee bit of exaggeration here in case anyone wonders.
combo, why do you want the banksters to get every last pound of flesh and drop of blood?
Think of the children.
“combo, why do you want the banksters to get every last pound of flesh and drop of blood?”
I’d prefer that banksters GIVE UP every last pound of flesh and drop of blood.
But before that happens I want them to collect as much FB money as possible.
Are the ones who are walking away smarter than us renters who did not get on the bubble train?
Wonder what working people will make of this, an Indian Outsource company wants to get American jobs for India.
http://www.reuters.com/article/idAFBOM43974720091211?rpc=44
Infosys sets up U.S. unit to bid for govt deals
BANGALORE, Dec 11 (Reuters) - Infosys Technologies (INFY.BO), India’s second-largest software services exporter, has set up a wholly owned unit in the United States to win outsourcing deals from government departments, a senior official said.
“The subsidiary in the U.S. has been formally set up and now we have to commit a business plan and hire people there,” Chief Financial Officer V. Balakrishnan told Reuters on Friday. “It’s too early to talk about its business plan.”
Outsourcers such as Infosys and Wipro (WIPR.BO) are focusing on winning contracts from new sectors such as government departments, healthcare and retail on the back of increased technology investments in these areas.
The export-driven software firms get bulk of their revenue from banking and financial services and manufacturing clients — the sectors that were badly hit by the largest economic downturn since the Great Depression.
Wipro (WIT.N), India’s third-largest software exporter, is looking to win more contracts from the government and healthcare sectors as countries across the world look to trim costs, its co-CEO Suresh Vaswani said on Tuesday. [ID:nBOM317865] (Reporting by Sumeet Chatterjee; Editing by Ranjit Gangadharan)
This is not news for software types.
A colleague gave me a newspaper clipping to read back in the early 1990s about the software expertise in India. GE outsourcing software work, CMM level 5 organizations.
Fourteen years later I’m still doing software and my income is several times higher than in 1993. But that article taught me a lesson to ditch real estate and stay as footloose as I can.
Here how it works:
They set up a branch here for basically PR reasons.
They hire just enough token locals to fool the rubes.
The branch really acts a funnel for bringing in their own people from overseas. This means they end up taking away American jobs and doing it right here.
Pretty slick, huh?
Adding insult to injury, an Indian outsourcer wants to do US government work:
http://www.reuters.com/article/idAFBOM43974720091211?rpc=44
Infosys sets up U.S. unit to bid for govt deals
BANGALORE, Dec 11 (Reuters) - Infosys Technologies (INFY.BO), India’s second-largest software services exporter, has set up a wholly owned unit in the United States to win outsourcing deals from government departments, a senior official said.
“The subsidiary in the U.S. has been formally set up and now we have to commit a business plan and hire people there,” Chief Financial Officer V. Balakrishnan told Reuters on Friday. “It’s too early to talk about its business plan.”
Outsourcers such as Infosys and Wipro (WIPR.BO) are focusing on winning contracts from new sectors such as government departments, healthcare and retail on the back of increased technology investments in these areas.
The export-driven software firms get bulk of their revenue from banking and financial services and manufacturing clients — the sectors that were badly hit by the largest economic downturn since the Great Depression.
Wipro (WIT.N), India’s third-largest software exporter, is looking to win more contracts from the government and healthcare sectors as countries across the world look to trim costs, its co-CEO Suresh Vaswani said on Tuesday.
The one door that is closed to outsourcing is the government work requiring security clearances. Sarcastically, lots of luck to the Indians.
The client company I work for has offices in India, Hong Kong, and China, as well as Israel. But none of those jobs require security clearances.
Third attempt at posting link. Indian outsorce company wants Indians to do US Government jobs
http://www.reuters.com/article/idAFBOM43974720091211?rpc=44
The Wash Post has an article (from Kiplinger) advising not to buy a house at this time.
Their timeliness is really something!
link?
http://thehill.com/blogs/blog-briefing-room/news/71935-biden-says-dodd-geting-the-living-hell-beat-out-of-him
Joe Biden whines that Senator Chris Dodd - the poster boy of government malfeasance in promoting the housing bubble - “is getting the living hell beat out of him” in his re-election bid. Note that this article can’t bring itself to mention Dodd’s upstart challenger, the non-Republicrat and REAL maverick, Peter Schiff, who was dead on in calling the housing bubble and denouncing ill-concieved government bailouts.
I’m supporting Peter Schiff and hope you will, too.
right on Sammy. i’ll support schiff in every way i can. he’s the most knowledgeable about economics and he’s the most honest guy out there.
Honest? He’s pushing the gold bubble to make a quick buck.
http://www.cnbc.com/id/34238687
He was pushing it four or five years ago. Why didn’t you join and profit?
He’s not “pushing the gold bubble.” He sees what disastrous fiscal policies we have and has positioned himself accordingly, to protect his wealth and the wealth of his clients. If you’d rather listen to a shill like Cramer, be my guest.
I sent my $200 to Schiff’s campaign.
Uhhh…You guys do realize it’s not Schiff who’s ahead in the polls, but some ‘republicrat’ named David Simmons. So it’s a wash, right?
http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout
The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway
Even Rolling Stone magazine has finally caught on that The Messiah pulled the wool over the adoring but vacant eyes of his supporters. The Presidential candidate who pocketed $4 million dollars from financial services sharks is, surprise surprise, serving Wall Street’s interests, not Main Street’s. Which comes as no surprise to the non-deluded Ron Paul supporters who warned you in vain that both Republicrat front men - Obama and McCain - were beholden to the corporate cartels and Wall Street banksters.
So how’s that “change” working out for you?
Still far, FAR better than “Mission accomplished.”
Since the cynics among us will say all politicians are alike, it still is rather refreshing to have a President that isn’t a WASP and doesn’t mangle English. That’s pretty Change-like. That said, it’s hugely disappointing that Obama doesn’t have the wherewithall to throw the Wall Street bums out. Hopefully tomorrow’s meeting with the bankers isn’t more lip service. I’m sick of smooth talking financiers. They need to get it through their greedy skulls, they OWE the American taxpayers.
Interesting that we are now being given instructions on how not to buy.
http://www.comcast.net/finance/forwhatitsworth/4287/howtotrimholidaygiftgiving/
There was an article in today’s Chicago Tribune about how a lot fewer people are sending Christmas and holiday cards this year. Its due to the bad economy, but also with everyone posting every detail of their life on Facebook and Twitter, its no longer necessary to spend money on stamps to “keep in touch”.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6804156/Greece-defies-Europe-as-EMU-crisis-turns-deadly-serious.html
Greece set to default on it’s sovereign debt? Better start drafting a new bailout package.
don’t worry, greece is contained. (dubai is too)
Futurist Predicts Doom for Microsoft, Platform Wars (and trouble with China, Oil)
Mark Anderson also spent a good bit of time talking about the world economy in general, and China and Japan specifically.
Anderson said that he’s particularly down on China, noting that the country is far from being a market economy. The country’s banks, he said, are simply “tubes through which government feeds money to selective industries”, and warned that “the toothpaste is starting to come out of the tube.”
That led Anderson to conclude that “something bad is going to happen”. Although he said he thinks the Chinese government is smart, and will react quickly, their deep stumble will hurt not just themselves, but their trading partners, and will have a huge impact on the world economy.
Part of the problem with China, Anderson explained, was that by pegging the Yuan to the dollar, all kinds of devastating devaluation occurs around the world. And that will end up pitting not just Obama against China, but the rest of the world against China as well. It’s simply an unsustainable situation , he said, and “that pressure will be unable (for the world) to ignore.”
He also accused Japan of cooking the books, falsifying a decade-long recession while actually thriving at the expense of the US. Why? Because the U.S. threatened trade retribution, and the Japanese got smart. Realizing that a 15 percent tariff across the board would kill their country, they’ve taken on a public poor, poor me stance, while Panasonic, Toyota and Canon built world-domination using technology mostly invented in the US.
Finally, Anderson said he thinks that technology stocks will continue to recover next year, but the rest of the market will lag. He also thinks the price of oil will climb to $120 dollars in six months before the speculators start jumping back in and really driving the price skyward. And he thinks that the world will begin to look much more favorably on the Nordic countries, Canada and Australia, as “OK places where they don’t shoot anyone, mind their own business, and make good returns on investments.”
http://www.pcmag.com/article2/0,2817,2357064,00.asp
Here’s an interesting statement.
“He also accused Japan of cooking the books, falsifying a decade-long recession while actually thriving at the expense of the U.S.”
I was aware of the rest, but not this.
Very interesting indeed.
GOOD NEWS, from the best and the brightest:
“Today, everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be,” Summers said. Summers also insisted that job growth will be seen beginning this spring. — ABC: This Week, today.
I don’t agree, therefore Summers is wrong. But I don’t matter to him and his ilk.
If you’re part of the wealthiest 10%, the recession probably is over… for you.
Has there been any discussion about what caused the housing bubble, in Congress, at the Fed or the Treasury?
It seems the policies adopted by the government assumes that skyrocketing home prices are normal, and they’re trying to recreate that phenomenon. But have any of those folks considered why that happened, and if in fact it’s normal? Even a cursory investigation would reveal that bad lending caused the housing bubble. I’ve read that the Fed will purchase 1.25 trillion of mortgage backed securities (MBS’s), providing a market for these things, irrespective of their quality or likelihood that the underlying mortgages will be paid back.
From the New York Fed, http://www.newyorkfed.org/markets/mbs_faq.html, “What is the policy objective of the Federal Reserve’s program to purchase agency mortgage-backed securities?
The goal of the program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally.”
Should the Fed be providing “support to the mortgage and housing markets” as a policy goal? And if they do, should be supporting more questionable lending practices, which are what allowed prices to rise to stratospheric levels? And keeping prices high continues to drive people to take out risky loans?
There doesn’t seem to have been any discussion of this in the halls of power, or in the main stream media.
The government’s role in this fiasco is relevant only to the extent they helped to facilitate GS, Bears & Sterns, et al to create and sell CDOs, and other smoke and mirror products.
It was their demand for material to create these financial time bombs that motivated the downstream industry of lenders, builders, speculators, etc.
Blaming the government is just another distraction from the real cause of this mess, the bankers.
The government suffered what is euphemistically called “regulatory capture”, meaning the financial industry bribed them to look the other way, and create laws which allowed the financial industry to wreak this havoc. The government’s job is to regulate. Their venality allowed them to be “captured”. I know corporations will run amok if they are allowed. The government allowed them to run amok. I lay the primary blame at the feet of the government, the regulating body. Of course, both venal politicians and amoral financial industry executives were needed for the resulting mess.
I don’t know though… we know corporations will run amok if unregulated, but the watchmen are themselves eminently corruptible.
Quite a Catch-22.
Oh Goodie!
“Abu Dhabi gives Dubai $10 billion in surprise bailout”
The POTUS is starting to speak up for the people who elected him. I am glad I voted for him.
* The Wall Street Jouirnal
* DECEMBER 14, 2009
Obama Slams ‘Fat Cat’ Bankers
President Voices Frustration, Escalating Tensions With Wall Street on Eve of Meeting
By ELIZABETH WILLIAMSON
WASHINGTON — President Barack Obama lashed out at Wall Street, calling bankers “fat cats” who don’t get it, in an escalation of tensions with the industry.
Mr. Obama, speaking on the eve of Monday’s meeting with the heads of major banks at the White House, said he would try to persuade bankers to free up more credit to businesses, with the aim of boosting job growth. But the president also expressed frustration with banks that the government has assisted.
“I did not run for office to be helping out a bunch of fat cat bankers on Wall Street,” Mr. Obama said in an interview on CBS’s “60 Minutes” program on Sunday.
“They’re still puzzled why is it that people are mad at the banks. Well, let’s see,” he said. “You guys are drawing down $10, $20 million bonuses after America went through the worst economic year that it’s gone through in — in decades, and you guys caused the problem. And we’ve got 10% unemployment.”
Relations between the banking industry and the White House were frosty from the start and have deteriorated in recent weeks, with large banks lobbying against portions of legislation that would toughen financial-market regulations and administration officials angered by some banks’ continued payment of high bonuses and their reluctance to lend.
Mr. Obama is scheduled on Monday morning to meet with bankers to exchange ideas on ways to increase lending; to review the financial-industry regulatory bill moving through Congress; and to discuss bankers’ compensation, the White House and industry representatives said.
Mr. Obama will meet with some of the country’s top bankers, including Goldman Sachs Group Inc.’s Lloyd Blankfein, J.P. Morgan Chase & Co.’s Jamie Dimon, and Bank of America Corp.’s Ken Lewis. The meeting had been expected to be cordial, but recent rhetoric out of the White House suggested that the administration could take a tough stance.
American Bankers Association head Ed Yingling, who has been working with bankers attending the meeting, said the banks planned to present new ideas on lending. These include setting up “second look” programs for small businesses that are rejected for loans, to see whether they might qualify under different terms.
“They will also talk about the fact that all bankers are getting mixed messages from the government, Congress and regulators,” Mr. Yingling said. “They are told to lend more, but on the other hand here are existing policies and proposed policies that will inhibit lending.”
At the White House, deputy press secretary Jennifer Psaki said of the meeting: “The financial industry received extraordinary assistance from the government during the height of this crisis. They now have an extraordinary responsibility to help the economy. The president wants to have a productive conversation about ways we can work together.”
White House economic adviser Larry Summers also criticized Wall Street Sunday. “Here is what I think they don’t get…It was their irresponsible risk-taking in many cases that brought the economy to collapse,” Mr. Summers, who chairs the National Economic Council, said on CNN’s “State of the Union.”
Mr. Summers knocked big banks for opposing the bill in Congress that would tighten regulatory controls over the financial industry. The House passed a version of the measure on Friday.
Bankers said they supported regulatory changes for the financial industry, but they disagreed with some provisions in the legislation. Those include a Senate proposal for a single bank regulator and measures that stripped the Federal Reserve of its authority to regulate banks.
Large banks, from J.P. Morgan Chase to Citigroup Inc., lobbied against parts of the measure. They said the bill would penalize them for being large, through tougher capital requirements and higher fees, and would give the government greater authority to either seize large companies or order them to decrease their size.
…
Sticks and stones my break my bones, but words will never hurt me.
Yawn!