January 6, 2010

Bits Bucket For January 6, 2010

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Comment by wmbz
2010-01-06 03:46:00

Construction Employment Declines in 324 out of 337 Cities; Construction Spending Hits 6-Year Low. USGNN ~~ January 5, 2010

Construction employment declined in 324 out of 337 metropolitan areas over the past year as spending on construction projects dropped by over $137 billion in November to a 6-year low of $900 billion, according to a new analysis of federal figures released by the Associated General Contractors of America.

“Private nonresidential construction is in freefall, with every category except private power construction down sharply compared to a year ago,” says Ken Simonson, the association’s chief economist. “Those cuts are causing layoffs in virtually every part of the country for tens of thousands of skilled construction workers.”

Simonson says new Census Bureau figures show developer-financed construction suffered the largest decline in spending between November 2008 and November 2009. He adds that private lodging investments were down 46 percent; retail, warehouse and farm spending were down 41 percent and private office construction investments were down 39 percent. A recovery in homebuilding may spark some improvement in retail construction later this year, and higher education and hospital construction may come back in the second half of 2010, he suggested.

Comment by Professor Bear
2010-01-06 07:45:32

Is this a green shoot, or something else?

Comment by measton
2010-01-06 08:07:59

well when you consider the massive oversupply, I’ll call this a green shoot.

Comment by Professor Bear
2010-01-06 12:19:49

Good point. After all, affordable housing is a key policy goal, and the GSE mission…

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Comment by wmbz
2010-01-06 03:47:44

GMAC May Post $10 Billion Annual Loss After U.S. Takes Control.

Jan. 6 (Bloomberg) — GMAC Inc., the auto and home lender that became majority-owned by the U.S. government last week after a third bailout, may post a loss of more than $10 billion for 2009 as more borrowers defaulted on mortgages.

GMAC, based in Detroit, said yesterday that it expects to report a fourth-quarter loss of about $5 billion. Both the quarterly and annual losses would be records for the primary lender for General Motors Co. and Chrysler Group LLC dealers.

The company received a $3.79 billion infusion from the Treasury Department on Dec. 30. The U.S. earmarked about $13.5 billion for GMAC in two previous capital infusions and now controls a 56 percent stake. If the government converts preferred shares to common equity, it would own more than 70 percent of GMAC, the lender said during a conference call.

“I think for the taxpayer it’s going to be a loss,” said Christopher Whalen, managing director of Torrance, California- based Institutional Risk Analytics. “Who is going to buy this? What is the compelling business model that wants us to have this company continue to exist?”

Comment by Professor Bear
2010-01-06 07:49:23

Aren’t perpetual losses pretty much ‘in the bag’ once Uncle Sam takes over? Conversely, so long as a TBTF corporation is raking in big profits, its private owners are happy to capture the private profit flow and keep it private. Heads we win, tails you’re screwed…

 
Comment by Elanor
2010-01-06 08:51:08

GMAC’s offshoot, Ally Bank, has been advertising heavily. Ally has some pretty attractive (at least in a climate where checking accounts earn 0.1%) interest rates on savings and CDs. Is this online bank owned by us the taxpayers?

Why should the gov’t bail out GMAC any further? A just question. Because we’ve bailed out everybody else and it’s only fair? Nobody ever guaranteed life would be fair, except it seems for the banks.

Comment by GrizzlyBear
2010-01-06 12:24:29

Hi, Elanor! Hey, my stomach ache FINALLY subsided. It must have been some virus or something, because it lasted around two weeks. But, I rode it out and the best thing about that- NO doctor bills. Hurray! Thank you so much for the kindness. I’ll never forget it. You’re a great lady.

Comment by Elanor
2010-01-06 13:33:27

Glad you’re feeling better, Griz. And I didn’t do anything, so please don’t thank me!

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Comment by jane
2010-01-06 18:21:02

grizzbear, so glad you are feeling better! There is nothing quite like being free of pain if you have experienced it in its chronic form for awhile. Bet your dog is glad, too.

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Comment by CA renter
2010-01-07 02:50:03

Yay, Grizzly! :)

Glad you’re feeling better.

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Comment by GrizzlyBear
2010-01-06 12:21:55

“GMAC Inc., the auto and home lender that became majority-owned by the U.S. government last week after a third bailout, may post a loss of more than $10 billion for 2009 as more borrowers defaulted on mortgages.”

The GMAC call center is in the Philippines. Guess all that savings on labor was in vain as far as the company is concerned, though I’m sure the execs enjoyed some nice bonuses. Think the government is interested in bringing some of these jobs back?

Comment by Spokaneman
2010-01-06 14:58:37

I had an interesting experience with a Phillipines call center just before Thanksgiving. I bought a Lexmark wireless printer from Ecost for around $50 bucks. I installed it on both my (Win7) and my wife’s Vista laptops. Both worked fine. But then, I upgraded the Vista to 7 and the printer would no longer work on that computer. I fiddlefarted with it for a couple of days and finally called customer support. A very nice lady answered, asked me where I was from, Spokane, I said, how about you? The Phillipines she said. Manila? I asked. Yes, she said, you know the Phillipines? Anyway she took control of my computer and very quickly got the printer working (needed some new drivers), then asked my about my upcoming weekend. I explained to her about Thanksgiving, and she seemed genuinely interested. A few more plesantries, and we parted ways. Overall a satisfying experience.

I suppose if I am going to pay $50.00 for a wireless multifunction printer, getting my customer service from the Phillipines shouldn’t come as a big surprise.

Comment by ecofeco
2010-01-06 16:33:35

The Philippines are practically an American territory. :lol:

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Comment by wmbz
2010-01-06 04:34:01

Good to see this turd is flushing himself, to bad no orange jumpsuit awaits him.

Senator Dodd Said to Not Seek Re-election in November (Update2)

Jan. 6 (Bloomberg) — Senator Christopher Dodd, a five-term Connecticut Democrat trailing in the polls, will not run for re-election in November, according to a Congressional aide familiar with the matter.

Dodd, 65, will hold a press conference today to announce his decision, the aide said, speaking on condition of anonymity. Dodd spokeswoman Justine Sessions was unavailable for comment. The Washington Post reported the retirement plan earlier.

As chairman of the Senate Banking Committee, Dodd has a leading role in crafting an overhaul of U.S. financial rules and last month supported Federal Reserve Chairman Ben S. Bernanke for a second term. He is also a top Senate negotiator on legislation that would expand U.S. health-care coverage.

Dodd’s announcement would come a day after North Dakota Democratic Senator Byron Dorgan said he won’t seek re-election. The party is bidding to maintain its control of 60 votes in the 100-member chamber to cut off stalling tactics that can be used to thwart legislation.

Comment by Steve W
2010-01-06 06:42:39

What’t the over/under on the salary Dodd’s going to make when he gets hired by some big financial firm?

Comment by wmbz
2010-01-06 07:00:48

No doubt, he likely has already signed on with some group. Perhaps, shittygroup as mortgage dept. chairman/consultant/czar.

 
Comment by Sammy Schadenfreude
2010-01-06 07:17:07

Who cares. The point is, like most bought-and-paid-for Republicrat politicians, he was for all intents and purposes on the payroll of Bear Stearns, Freddie Mac, etc. and doing their bidding while he was supposed to be serving the public interest. Connecticut voters have finally started to wise up - not a minute too soon. Let’s hope that other voters start throwing the bums out as well. Buh-bye, Republicrat whores!

Comment by WT Economist
2010-01-06 08:01:03

I think Dodd was a Demican.

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Comment by potential buyer
2010-01-06 12:26:50

Definitely a democrat.

IMO, all senators should be made to retire at 65. Judges too!

 
Comment by Carl Morris
2010-01-06 13:47:45

I wouldn’t want to force them out until they’d had an opportunity for two full terms just like everyone else, at which point I’d boot them all.

 
Comment by Spokaneman
2010-01-06 15:01:16

We would have lost the best 30 years of Robert Byrd’s life.

 
 
 
Comment by Rental Watch
2010-01-06 09:24:41

I doubt he’ll be the employee of a firm directly. More likely a lobbyist for them, so he can get paid by ALL the financial firms.

Comment by GrizzlyBear
2010-01-06 13:04:14

Exactly. This scum of the earth will become a lobbyist, and actively write the special interest legislation which he so actively promoted while in office. Guy should be in prison. There was no way he was going to be re-elected, and he knew it.

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Comment by CA renter
2010-01-07 02:52:16

Comment by Steve W
2010-01-06 06:42:39
What’t the over/under on the salary Dodd’s going to make when he gets hired by some big financial firm?

——————–

Ding, ding, ding!!! We have a winner!

 
 
Comment by REhobbyist
2010-01-06 06:46:12

This is good news on many levels, not the least of which is that voters are now more aware of the corrupt behaviors of politicians. It never used to matter. Will it discourage future deals like the one Dodd had with Mozilla? Maybe.

Comment by Sammy Schadenfreude
2010-01-06 07:31:49

Amen to that. The sheeple, especially in the Eastern states, never cared how corrupt and venal their elected officials were as long as J6P had a steady paycheck and his 401(k) was growing. Now that something wicked called “logical consequences” has entered the equation, the scales are falling away from at least some voters’ eyes.

 
 
Comment by jess
2010-01-06 07:32:31

Dodd is a lifetime politician , His Daddy was one too . Has he ever worked a real day’s work in his life ?? Possibly the most corrupt Politician in power now , except for Barny Frankie boy .
And he is only 65 ?? he looks more like 80 .. A real day’s work may have helped him to look younger .

Comment by ET-Chicago
2010-01-06 09:21:41

Possibly the most corrupt Politician in power now , except for Barny Frankie boy .

Uh, that particular race has a lot of contenders. I’d say Dodd is only slightly above average.

Comment by packman
2010-01-06 10:03:09

Yeah I think that honor would go to Charlie Rangel.

Dodd’s more than barely above average though, IMO. You don’t make it to be chairman of the banking committee without leaving a few bodies in your wake. And don’t for get his undeclared “free” gift of a summer cottage.

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Comment by Pondering the Mess
2010-01-06 10:11:26

Was Dodd on the “Friends of Mozillo” list?

I can’t recall… so much corruption in DC that it is easy to lose track. But I *do* know that we haven’t seen the last of him, and when he returns, he’ll be on the payroll of even more banking and REIC scum.

 
Comment by ET-Chicago
2010-01-06 11:40:01

Dodd’s more than barely above average though, IMO.

I guess the key is “still in power.”

I’m not apologizing for him, but Dodd’s antics look anemic when compared to recent luminaries such as Duke Cunningham ($2.4 million in bribes that we know about) William Jefferson (of $90K cash in the freezer fame), Ted Stevens (a federal conviction, lots o’ bribes), and Tom Delay (dirty fingers in every pie).

Throw in current members Rangel, Ensign, Mitch McConnell, etc., and you have quite a rogue’s gallery.

 
 
 
 
Comment by michael
2010-01-06 07:39:06

HA!

ragequit!!!!

 
Comment by Spokaneman
2010-01-06 15:00:03

One arrogant, pompus, prick down, 95 to go. (There must be 4 that are OK).

 
 
Comment by robin
2010-01-06 04:35:41

One of my best friends and I have an annual bet for lunch at the winner’s choice of restaurants. Last year I lost because I bet BRKB (Berkshire Hathaway Junior Shares) would increase by over 10% in 2009. It did not, but lunch was great.

At one point, I bragged on this blog that my shares of BRKB were up over 24% for the year! Nobody slapped me or even questioned my celebration. It is now back to even, and I am very pleased. Or lucky. Or grateful. But I bought more BRKB and am now up slightly, though I never wanted to own a railroad. I am slightly risky, slightly pleased, or slightly insane. Or a combination of all of the above.

This year’s bet will allow individual stocks, bond funds, ETFs, mutual funds, and comodities. Deadline is the 15th of January. Investment is $100k (on paper). Advice? I want my free lunch!!

Comment by Professor Bear
2010-01-06 07:51:59

“Advice?”

There is no such thing as a free lunch.

 
 
Comment by Mugsy
2010-01-06 04:45:03

WMBZ where are you? I’ve canceled my WSJ subscription because of you! I need my news!!!!!! :)

Comment by Al
2010-01-06 05:44:59

You couldn’t wait 15 more seconds?????? :)

Comment by Mugsy
2010-01-06 06:31:12

Sorry. Need more meds…

Comment by Mugsy
2010-01-06 06:39:15

WMBZ: Please post earlier for the poor unfortunates of us here in Europe. If the news is not ready, please feel free to concoct stories that sound plausible. Thank you.

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Comment by CarrieAnn
2010-01-06 09:17:08

I’ll save you the waiting:

http://www.dailyjobcuts.com/

I always wondered if this was his site cuz he posted so many stories from there.

 
Comment by ecofeco
2010-01-06 16:39:34

Good find CarrieAnn. Thanks.

 
 
 
 
 
Comment by wmbz
2010-01-06 04:45:18

U.S. Office, Shopping Center Construction Spending May Fall 13%

Jan. 6 (Bloomberg) — Construction spending on hotels, office buildings and retail centers may fall 13 percent this year, the second straight annual decline amid a drop in property prices, the American Institute of Architects said.

The Washington-based group’s forecast is more severe than an estimate it made in July, when it predicted a 12 percent decrease. Spending will turn “marginally” higher in 2011, the group said today.

“The magnitude of the downturn has set in,” Kermit Baker, the group’s chief economist, said in an interview. This year’s expected drop compares with a decline of about 20 percent in 2009. “Another bad year is the bottom line, but there are some prospects of recovery as we get into 2011.”

U.S. commercial real estate values sank to the lowest level in seven years in October as job losses cut demand for apartments, offices and retail space, Moody’s Investors Service Inc. said last month. Office vacancies may approach 20 percent in 2010, according to Jones Lang LaSalle Inc. and Grubb & Ellis Co. Unemployment was 10 percent in November after a 26-year high of 10.2 percent the prior month, the Labor Department said.

Comment by Asparagus
2010-01-06 05:31:40

From Rueters:
US shopping center vacancies hit records - report
Wed Jan 6, 2010 12:01am EST

* U.S. mall vacancy rate highest in at least 10 years

NEW YORK, Jan 6 (Reuters) - Vacancies at U.S. strip malls hit an 18-year high in the fourth quarter and the vacancy rate for large regional malls reached the highest in at least 10 years, according to real estate research firm Reis Inc.

Strip malls — neighborhood and community shopping centers typically anchored by grocery or drug stores — had a vacancy rate of 10.6 percent in the fourth quarter, surpassing the high set in 1991, Reis economist Ryan Severino said in a report released on Wednesday. The early 1990s is a period often referred to as the commercial real estate depression.

“Our outlook for retail properties as a whole is bleak,” Severino said in a statement. “Until we see stabilization and recovery take root in both consumer spending and business spending and employment, we do not foresee a recovery in the retail sector until late 2012 at the earliest.

…”

Comment by Mugsy
2010-01-06 06:40:49

Think of all those junior colleges and beauty schools licking their chops over all that vacant space!

 
Comment by Sammy Schadenfreude
2010-01-06 07:33:21

It’s not just the strip malls that are vacant. Have you ever seen their customers?!

Comment by aNYCdj
2010-01-06 07:59:27

Do not read HBB with mouthful of coffee..good one sammy

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Comment by Pondering the Mess
2010-01-06 10:14:16

This is terrible news as it sets back the timeline for the sheeple to consume the entire planet.

The horror!

 
Comment by james
2010-01-06 10:22:33

Do you or PB have any idea on typical absorption rates for all the CRE? I’m thinking a large portion of this is worth zero.

I don’t understand the predicition for a rebound in 2011 unless a lot of stuff burns down between now and then.

I’m also not seeing a clear driver for jobs that would make mall space required. In fact, if trends continue, we could probably use a lot less. We did have a post that talked amount of retail space per person a while back.

Thanks

 
Comment by SanFranciscoBayAreaGal
2010-01-06 11:26:18

Ugly, ugly, ugly pieces of cr*p. Along with scaffolds covering ancient buildings, strip malls are part of the bane of society.

 
 
Comment by Asparagus
2010-01-06 06:18:35

Who is increasing their shopping? I would expect a bigger fall than 13%.

Comment by wolfgirl
2010-01-06 08:26:22

Not me. Husband and I are losing weight, so there goes junk food and takeout. I know it’s less than a week into the new year, but so far discretionary spending is $7–for a knitting needle than I am currently using to make a scarf. I expect discretionary stay very low since there is literally nothing we need/want right now.

Comment by wolfgirl
2010-01-06 08:49:15

And once son goes back to college on Sunday, grocery spending will decrease by about 50%. He eats a lot more than we do.

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Comment by mikey
2010-01-06 09:57:03

“And once son goes back to college on Sunday, grocery spending will decrease by about 50%. He eats a lot more than we do.”

Yeah..growing boys eat a lot. My poor dad had two and now I have one 6′ 4″, 198 lbs working outdoors and he’s one heck of a eating machine.

I should do what my dad did while my brother and I were doing our time in the US Army. He was in the USAF and moved the family clear across the country to an undisclosed location and “forgot” to tell me the freakin’ new address.

Sheesh…I was on a med-evac half way to Walter Reed Army Hospital on the east coast when the Gov’t found them hidding at some USAF base in Taxas !
:)

 
Comment by jane
2010-01-06 19:27:33

Mikey, as a parent, I am apalled. And I’m not one of the wussy ones, either.

 
 
 
 
Comment by Professor Bear
2010-01-06 07:53:05

Another green shoot? Or is it too early in winter to see any yet?

Comment by GrizzlyBear
2010-01-06 13:21:05

I’m starting to wonder if there really are some green shoots out there. The jobs report surprised me.

Comment by packman
2010-01-06 14:37:38

$2-3 Trillion of new money can buy quite a greenhouse, that can work even in the coldest of winters. I personally have no doubt that they are indeed real.

However:

Luke 8:6 -

“Other seed fell among rocks. It began to grow, but the plant soon wilted and died for lack of moisture.”

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Comment by wmbz
2010-01-06 05:05:17

Businesses Feel Pain of Higher Unemployment Tax.
January 5th, 2010

Businesses across Florida are bracing for five hundred and even one thousand percent increases in the cost of their unemployment compensation taxes. Notices of the hike went out in December, and as Mike Vasilinda tells us, a small business association says the jump in taxes could hurt an economic recovery.

Florida ran out of money to pay unemployment claims in August. Since then it has been borrowing from the federal government and owes about a billion dollars. Forms like this one went out in late December informing businesses they would have to pay more for unemployment compensation. The minimum rate for employees is going from just over 8 dollars to just over a hundred dollars per employees. Randy Martin calculates his bill will go up from 41 hundred last year, to over 21 thousand this year.

“I realize there is a tax because the state has gone bust,” Martin said. “However, my tax has gone up 545 percent. I think that is a bit exorbitant.”

In 2009, unemployment taxes were paid on the first 7 thousand dollars of wages. In 2010, it will be on the first 85 hundred.

The tax is due March 1st, but it isn’t late until April 30th. Small business lobbyists are pushing lawmakers to delay the increases this year.

“We need that money so that we can go back to some of those employees we had to lay off last year and say, please come back in 2010,” Bill Herrle with the National Federation of Independent Businesses said. “It’s a real jobs killer.”

Martin says he will delay purchasing new vehicles and other items to avoid layoffs, but he says the tax payment is going to hurt.

“it’s affecting our profit margin by 20 percent,” Martin said.

Meanwhile, Florida continues to borrow about 300 million dollars a month to pay unemployment claims.

Florida’s unemployment rate continues to climb and isn’t expected to level out until April.

Comment by REhobbyist
2010-01-06 06:26:00

That’s ridiculous. To me it makes more sense to have a reasonable state income tax rather than expecting businesses to shoulder the whole bill. I don’t know what Mr. Martin’s business is, but it might be worthwhile to just hire a bunch of parttime minimum wage employees to avoid paying the tax.

Comment by Blue Skye
2010-01-06 06:41:29

Temp Agency might be a growth business.

Comment by Blue Skye
2010-01-06 06:47:10

Remember this one, “The Job”:

youtube.com/watch?v=VOapLkmhYG4

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Comment by Sammy Schadenfreude
2010-01-06 07:19:23

Private security will enjoy boom times as well.

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Comment by scdave
2010-01-06 07:36:23

Good point Sammy…The well healed are scared $hittle$$…The Indians are mad as hell and will take what they need at some point…

 
 
Comment by ecofeco
2010-01-06 16:49:32

Temp agencies have been a growth industry since the 1980s. Many, MANY companies laid of their rank and file only to bring them back through temp agencies with reduced pay and no benefits.

Big time.

Now combine that with millions of jobs going offshore and you begin to get the real picture.

Never forget: Why do the PTB think that a 75% consumer economy doesn’t need consumers?

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Comment by DinOR
2010-01-06 07:53:13

“a reasonable state income tax”

WHAT “income”? LOL, well you just knew at some point the states wouldn’t be able to borrow to cover Unenjoyment indefinitely?

Who was it that said 2010 will be the year we see state gov’s fail at an alarming rate?

Comment by edgewaterjohn
2010-01-06 08:12:27

Quite a few here have, and I’m one of them. Here in IL the situation is unreal. The FY10 budget has more holes in it than the Titanic and just mentioning FY11 seems to turn heads white. All the pols can do is focus on the upcoming primaries and fall election. This state is literally on autopilot!

Yesterday the U of I system announced furloughs for faculty and staff - and those apply to FY10. Reports say they are mulling sending out layoff notices soon to leave that option open for FY11. Also reported is that so far for FY10 the U of I system has only received - get this - 7 % of it’s state funds.

Under no circumstances do the actions, and inactions, of today’s political leadership strengthen the argument to buy anything more than fuel and groceries!

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Comment by SanFranciscoBayAreaGal
2010-01-06 11:28:17

21 billion in the hole here and counting.

 
Comment by Jon
2010-01-06 14:43:35

Florida’s only about $3 bills in the hole & counting. This year looks like the year of reckoning. Over the last 2, the Repubs who run everything have “swept” all the special funds for the general fund and have jacked up every “fee” they can find. Just got my bill for auto registration. Last year it was $38. This year: $108.

The poor folks have been cutoff. This year, they may actually have to cut off developers. I’d expect they’d raise taxes first.

 
Comment by Spokaneman
2010-01-06 15:12:46

Yeah, but CA is still paying massive amounts of retirement bene’s for Public Service Employees who retire at 50.

Some day they are going to take a real look at the numbers and conclude that you can’t stretch one dollar into two. Alchemy has never worked.

 
 
 
 
Comment by alpha-sloth
2010-01-06 07:58:49

The minimum rate for employees is going from just over 8 dollars to just over a hundred dollars per employees.

Sounds like it used to be ridiculously underfunded. That makes even reasonable increases look huge. A hundred dollars per employee doesn’t seem like an exorbitant minimum to me, even though it’s a huge percentage increase from the absurdly low previous minimum.

Comment by ecofeco
2010-01-06 16:58:35

The article isn’t very clear on the detail. Is that $8 per year? How does the wage rate figure in?

The formula is about as clear as mud. Can someone clarify?

 
 
Comment by aNYCdj
2010-01-06 08:01:59

Has it ever occurred to you that maybe if you ran your business better and didn’t have to lay off your employees your taxes would be lower too???
—————————
However, my tax has gone up 545 percent. I think that is a bit exorbitant.”

Comment by Chris M
2010-01-06 12:03:44

I run a small metal stamping plant, and our sales are down about 50% from ‘08. We had to lay off 3 out of 25 employees last fall. I guess I must not be running the business well enough. It can’t possibly be that mercantilist China is eating our lunch in manufacturing.

 
 
Comment by measton
2010-01-06 08:16:44

Test time

Which creates or saves more jobs
Wall Street Bail out or cutting unemployment taxes for small business?
Which creates or saves more jobs cutting dividend and capital gain taxes or cutting unemployment taxes for small business?

Despite the ever going wage and wealth inequality in this country the US gov over the last 10 years has continued to pile on the middle and upper middle class while bailing out and slashing taxes for the elite. They continue to prop up the unemployed and poor to prevent rioting.

Comment by ecofeco
2010-01-06 17:01:29

10 years? Try more like 30. Reaganomics ring any bells? (how funny, my spell checker actually sees that as a legit word :lol: )

 
 
Comment by Mike in Miami
2010-01-06 08:30:21

Easy solution, just lay off some more people to cover the cost of the unemployment tax. Soon we’ll have everybody on unemployment.

Comment by Pondering the Mess
2010-01-06 10:22:27

And once they all fall off unemployment benefits, they will no longer count, so we can say we have 100% employment even though nobody has a job!

Comment by Jay_Hihman
2010-01-06 11:14:47

Collection of unemployment benefits - extended or regular - is not a criteria for being counted as unemployed. It is being jobless, looking for, and being available for work.

More detailed information on the collection of the data is at http://www.bls.gov/cps/cps_htgm.htm#unemployed

An interesting paper on unemployment rates is at http://www.bls.gov/opub/mlr/1995/10/art3full.pdf

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Comment by ecofeco
2010-01-06 17:05:59

If you are no longer in the UE system, and are never contacted for a survey, how do they know who really is and isn’t unemployed?

Rhetorical question. They don’t.

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Comment by Jay_Hihman
2010-01-07 08:07:36

The unemployemnt survey is much bigger that the usual national political surveys - 60,000 households (100,000 or so persons available for work) vs. 3,000 individuals or so. This is a great sample size.

Again, collection of unemployment benefits - extended or regular - is not a criteria for being counted as unemployed. It is being jobless, looking for, and being available for work

 
 
 
 
 
Comment by wmbz
2010-01-06 05:07:48

Economic Scene
If Fed Missed This Bubble, Will It See a New One? ~~January 5, 2010

Ben Bernanke, the Fed chairman, has said it is difficult “to know in real time if an asset price is appropriate or not.”

That has been the position of Ben Bernanke, the Federal Reserve chairman, and other regulators. It explains why Mr. Bernanke and the Obama administration are pushing Congress to give the Fed more authority over financial firms.

So let’s consider what an empowered Fed might have done during the housing bubble, based on the words of the people who were running it.

In 2004, Alan Greenspan, then the chairman, said the rise in home values was “not enough in our judgment to raise major concerns.” In 2005, Mr. Bernanke — then a Bush administration official — said a housing bubble was “a pretty unlikely possibility.” As late as May 2007, he said that Fed officials “do not expect significant spillovers from the subprime market to the rest of the economy.”

The fact that Mr. Bernanke and other regulators still have not explained why they failed to recognize the last bubble is the weakest link in the Fed’s push for more power. It raises the question: Why should Congress, or anyone else, have faith that future Fed officials will recognize the next bubble?

Comment by combotechie
2010-01-06 06:14:01

“Ben Bernanke, the Fed chariman, said it is difficult to know, “in real terms if an asset price is appropriate or not”.

On this I agree IF the asset price in question is not based on fundamentals of some sort. Such is the case with gold.

Comment by Blue Skye
2010-01-06 07:13:58

Combo, you focused right where he wanted you to. He isn’t even mentioning any of the real issues, only throwing sand in your eyes.

What if he said: “Gentlemen, we are in the midst of the biggest wealth transfer in history. Do you think I care about your freaking tiny bubbles? I don’t have time for this.”

Comment by combotechie
2010-01-06 07:38:59

“Combo, you focused right where he wanted you to.”

Curses, duped once again!

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Comment by Professor Bear
2010-01-06 07:56:09

Good observation. All this bubble babble about whether and why the Fed can see them tends to obscure the much larger issue of TBTF rescues, which serve to show unmeasurable riches on Wall Street firms, just at the point when they should be shut down for malfeasance.

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Comment by CA renter
2010-01-07 03:07:17

Amen.

 
 
Comment by DinOR
2010-01-06 08:00:31

“throwing sand in your eyes”

Ah… the oldest trick in the book!

No, I think where the ’sand’ lies is in the fact that ( now that every Ethiopian cab driver SAW the HB coming? ) is bubble bloggers ( via the MSM lurkers ) have now made the entire country Bubble Awareness Experts.

The PTB love the fact that we’re leaving no stone unturned scouting out the ‘next’ bubble.

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Comment by gal
2010-01-06 08:35:04

It seems most of us were right that this economy is going to take “japones” root, prolonged deflation… and gold is going to decline…

http://www.washingtonsblog.com/2010/01/krugman-american-economy-will-not.html

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Comment by packman
2010-01-06 10:12:46

Japan’s “prolonged deflation” is a myth. Their CPI has been flat for 17 years now - right at 100.

 
Comment by Blue Skye
2010-01-06 11:28:38

That does make one wonder Packman. The CPI in japan excludes real property, which we know has tanked. The price of rice in Japan is on par with 1980 and about 30% off from 1995 peak. CPI is flat. At the same time the energy and raw material inputs (which are all imported) have gone up like a factor of four. How can CPI stay so flat against rising input costs? Could it be lower wages and fewer jobs?

The CPI says nothing about how much money is available, or about family income or net worth or about standard of living. Is it possible to have signicant deflation without the price of goods dropping? I think so. Even more so in the openest economy in the world during the biggest global inflation of the age.

 
Comment by gal
2010-01-06 15:03:05

I remember the time in the beginning of 90’s on Rodeo drive store buyers were predominantly “japones” , now days seems no buyers at all… not until coming of GODO…
Those hose cash buyers will stuck with their houses after the $8000.00 Santa Claus gifts ends … ?

 
 
 
Comment by packman
2010-01-06 08:26:15

“Ben Bernanke, the Fed chariman, said it is difficult to know, “in real terms if an asset price is appropriate or not”.

On this I agree IF the asset price in question is not based on fundamentals of some sort. Such is the case with gold.

+1

The fact that he missed* the housing bubble, which is indeed based on real and easily-measurable fundamentals, speaks volumes about his ability to detect other bubbles.

*I say “missed” but that implies ignorance rather than malice. In reality I suspect the latter not the former is true. I suspect he knew full well there was a housing bubble, and that it really would spill over violently into the general economy. He just chose not to announce it because then he would have been required to do something about it, and would then have opened himself up to be the fall guy to causing the crash.

Comment by Prime_Is_Contained
2010-01-06 10:29:58

“He just chose not to announce it because then he would have been required to do something about it, and would then have opened himself up to be the fall guy to causing the crash.”

+1million.

We talked about this at length back in 2005. There’s no upside in publicly pricking the bubble and being blamed for the resulting massive fallout; far wiser to wait for it to burst under its own weight, ride in to the rescue, and be lauded for having saved the world as we know it.

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Comment by CA renter
2010-01-07 03:09:39

Absolutely true.

 
 
 
 
Comment by Mugsy
2010-01-06 06:44:46

Ben Bernanke, the Fed chairman, has said it is difficult “to know in real time if an asset price is appropriate or not.”

Note to all Princeton grads sequestered in the federal reserve building: If an Ethiopian cab driver in Herndon, VA tells you that you should buy all the house you can afford then there’s a bubble. You’re welcome.

Comment by Nycityboy
2010-01-06 07:20:51

Krugman, Bernanke and Woodrow Wilson all have close ties to Princeton. Burn the damn place down and salt the earth upon which it stood. The Poison Ivy League is destroying this country.

 
Comment by Sammy Schadenfreude
2010-01-06 07:21:48

But what if that Ethiopian cab driver was the Finance Minister under a former regime that got overthrown?

Comment by Englishman In NJ
2010-01-06 07:32:00

Not plausible Sammy. In that case he would have squirreled away hundreds of millions of US-funded $ in a Swiss bank account and would not need to drive a cab in Herndon….or anywhere else for that matter.

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Comment by aNYCdj
2010-01-06 08:30:12

Wmbz:

It is still my contention that most corporate screw ups (fed too) happen because there is no one like me anywhere close to the top people.

We would all love it, if we found out that Grennies adm. assistant, oh heck the summer Intern… informed him of this blog back in 05 and he refused to read it.

Comment by Elanor
2010-01-06 08:59:50

Perhaps all the PTB would benefit from having a court jester always at their side.

Comment by aNYCdj
2010-01-06 09:06:45

Yes and there would be NO WAY for them to ever say…I didn’t see it coming.

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Comment by shizo
2010-01-06 11:36:40

Biden?

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Comment by Sammy Schadenfreude
2010-01-06 05:47:50

Senator Chris Dodd, the poster boy for government meddling that gave us the housing bubble, will not be running for re-election. Goodbye and good riddance, Senator Dodd.

Jan. 6 (Bloomberg) — Senator Christopher Dodd, a five-term Connecticut Democrat trailing in the polls, will not run for re-election in November, according to a Congressional aide familiar with the matter.

Dodd, 65, will hold a press conference today to announce his decision, the aide said, speaking on condition of anonymity. Dodd spokeswoman Justine Sessions was unavailable for comment. The Washington Post reported the retirement plan earlier.

As chairman of the Senate Banking Committee, Dodd has a leading role in crafting an overhaul of U.S. financial rules and last month supported Federal Reserve Chairman Ben S. Bernanke for a second term. He is also a top Senate negotiator on legislation that would expand U.S. health-care coverage.

Dodd’s announcement would come a day after North Dakota Democratic Senator Byron Dorgan said he won’t seek re-election. The party is bidding to maintain its control of 60 votes in the 100-member chamber to cut off stalling tactics that can be used to thwart legislation.

A Nov. 3-8 Quinnipiac University survey showed Dodd trailing former Connecticut Republican Congressman Rob Simmons by 11 percentage points in a hypothetical contest for the November Senate race. The poll of 1,236 registered Connecticut voters had a margin of error of plus or minus 2.8 percentage points.

Home Loan

Dodd’s popularity waned after Portfolio magazine reported in 2008 that he and Senator Kent Conrad, a North Dakota Democrat, received discounts on home loans from Countrywide Financial Corp., now part of Bank of America Corp. Both senators said they were unaware they were receiving preferential treatment.

Dodd made a failed bid for his party’s nomination in the 2008 presidential election, moving his family to Iowa, where the first balloting was held.

Dodd didn’t offer support last month for a proposal by Senator John McCain, an Arizona Republican, and Maria Cantwell, a Washington Democrat, to reinstate the Depression-era Glass- Steagall Act that split commercial and investment banking. The plan, which would require New York-based JPMorgan to split from Chase and would require Bank of America and Merrill Lynch & Co. to separate, was proposed to rein in Wall Street firms in response to the financial crisis.

Glass-Steagall

“There are other things we can do to break them up, but I’m not sure that’s the right answer,” Dodd said in a Dec. 16 interview.

During his last re-election contest in 2004, Dodd counted employees of Bear Stearns Cos. and Citigroup Inc. as his top donors, according to the Washington-based Center for Responsive Politics, which tracks political donations. For his 2008 presidential bid, executives at the hedge fund SAC Capital Advisors LP, based in Stamford, Connecticut, were Dodd’s biggest backers, donating a combined $248,200, according to the center’s figures.

Comment by RioAmericanInBrasil
2010-01-06 06:26:26

North Dakota Democratic Senator Byron Dorgan said he won’t seek re-election.

Good Riddance Dodd! He stood for all I despise about our corrupt system.

But I’m sad to see Byron Dorgan go. He stood up for American jobs consistently in every important vote he ever cast and broke with his party many times.

His book: “Take This Job and Ship It: How Corporate Greed and Brain-Dead Politics Are Selling Out America” was spot on.

And his book, “Reckless!: How Debt, Deregulation and Dark Money Nearly Bankrupted America.” could have come from this blog.

He is working on a new book which I will read too. He was one of the few who put America before politics when it mattered.

Comment by pressboardbox
2010-01-06 09:11:21

Dodd, shmodd. When is Barney Fwank packin’ it in? That’s what I want to know!

Comment by San Diego RE Bear
2010-01-06 16:06:21

“Dodd, shmodd. When is Barney Fwank packin’ it in? That’s what I want to know!”

Nightly. :D

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Comment by Blue Skye
2010-01-06 06:57:29

IMO we won’t get reform by changing out a Dodd or two. Only when the system is reformed to stop legislators from taking bribe monies from the banks.

Any bets on what Dodd’s next job will be?

Comment by Nycityboy
2010-01-06 07:22:48

The Republicans committed suicide. The only thing that will bring them back to power is the stupidity of the Democrats. It looks as if that is happening before our eyes. The party of Dodd, Frank, Schumer, Clinton, Reid, Pelosi and Obama has a difficult time pretending they are for the little guy. They are for corruption for all Americans, rich and poor alike.

Comment by Sammy Schadenfreude
2010-01-06 07:37:03

Seriously. The GOP has been hijacked by big business, the military-industrial complex, and the neo-cons with their vision of Pax Americana and Democracy imposed by American bayonets. They are the epitome of greed, arrogance, and deceit. And now the Democrats have succeeded in making the GOP look like pillars of virtue and competence. We the People are so screwed.

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Comment by Englishman In NJ
2010-01-06 08:04:12

An excellent summation of the situation, Sammy.

 
Comment by james
2010-01-06 10:51:53

I was going to post that our budgets are not that big. So, went and did some research.

Wow. Things are pretty out of control.

The only plus note about spending on the military is all that money pumps back into US citizens.

I think trade with China and oil expenditures are a bigger detriment to the country than us M/I people.

Still. This is getting pretty out of hand. Probably should have an across the board price cuts pushed on to us. Maybe 20%. Ouch. It’s going to sting.

Proposing that for us private contractors only. Think our soldiers pay is OK. Should shift more money into housing for them though.

Of course, you look at these numbers and can see that Medicaid/medicare is the big tamale.

 
Comment by exeter
2010-01-06 11:03:28

No truer words have been spoken Sammy. And I might add that when it comes to hypocrisy, repukes will *always* deliver before the deadline and in excess.

 
Comment by Nycityboy
2010-01-06 11:09:48

Ex, you may want to reread Sammy’s post. I don’t think it meshes with your take on the world. He is saying the Dems are worse than the Pubs.

 
Comment by Hwy50ina49Dodge
2010-01-06 11:55:20

“…a bigger detriment to the country than us M/I people.”

I’m 100% for the US soldiers.

636 Billion $$$$$$$$$$$$$$$$$$$$$$$ per year trying to ferret out a Mad Islamic I-B-Hidin’-in-a-cave seems pretty detrimental to me.

 
Comment by james
2010-01-06 12:55:19

Hwy,

That is the entire budget, not just the hunt for OBL. To me it seems like we are not spending enough on border security, the FBI (SEC) or the CIA.

From a weapons standpoint I think we are fine. Personally think the MDA and efforts there are worthwhile and would like that to continue. ABAL, SBL are such big game changers.

Still, I’d be shifting some priorities around. Changing efforts too.

My comment on detriment is the money is spent on low level shumcks like me and goes right back into the economy.

Also, it would be very foolish to believe that things would be this safe with out our military. I believe all sorts of countires would be getting ideas. Russia, China and India all might get funny ideas.

Like I said, 20% cramdown on prices and contracts along with, gulp, wages. Getting too fat, dumb and happy.

Also note that we of the libertarian sect are very divided on national defense. Most of the current “republican” thinking reflects more of a cold war democrat mindset.

 
Comment by NYCityBoy
2010-01-06 13:10:12

To me it seems like we are not spending enough on border security, the FBI (SEC) or the CIA.

You are right. If only we spent more all of the problems would be fixed.

Mary Schapiro runs the SEC. No amount of money can make her competent.

How many more messes could the CIA create, if only we would give them a bigger budget?

 
 
Comment by Xenos
2010-01-06 08:27:58

“The Republicans committed suicide. The only thing that will bring them back to power is the stupidity of the Democrats”

Be assured there is at least one natural resource for which there is an inexhaustible supply.

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Comment by ET-Chicago
2010-01-06 09:52:37

The Republicans committed suicide. The only thing that will bring them back to power is the stupidity of the Democrats. It looks as if that is happening before our eyes.

True, sadly true.

The Dems are like a potentially good running back who fumbles the ball in every high-pressure situation.

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Comment by Hwy50ina49Dodge
2010-01-06 11:48:30

Hwy’s edit:

“…who fumbles the ball in every red-zone scoring situation.”

Ha, Democraps… their “Achilles Heel” is what 3M uses for “sticky notes”: weak glue :-)

 
 
 
Comment by Sammy Schadenfreude
2010-01-06 07:24:45

Dodd will probably be well rewarded for his years of service to the financial services sector while he was a “public servant.”

 
Comment by rms
2010-01-06 07:48:58

“Dodd didn’t offer support last month for a proposal by Senator John McCain, an Arizona Republican, and Maria Cantwell, a Washington Democrat, to reinstate the Depression-era Glass- Steagall Act that split commercial and investment banking. The plan, which would require New York-based JPMorgan to split from Chase and would require Bank of America and Merrill Lynch & Co. to separate, was proposed to rein in Wall Street firms in response to the financial crisis.”

Senator Dodd has been an effective shill for the NeoCon financial empire.

 
Comment by ahansen
2010-01-06 07:59:25

“…Any bets on what Dodd’s next job will be?”

CEO of FNMA?

Comment by measton
2010-01-06 08:30:24

ceo too much work
My guess is lobbiest or advisor or board member w a big f’n salary.

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Comment by Prime_Is_Contained
2010-01-06 10:36:37

“My guess is lobbiest or advisor or board member w a big f’n salary.”

Lobbying is too visible. My money is on “consultant” or “advisor”, cause that way you can justify him big bucks without saying much about what he is doing—which is probably nothing, just on the payroll to collect all of his “back pay” from when he was in office.

 
 
Comment by REhobbyist
2010-01-06 12:41:40

In 2007 both houses of congress passed legislation that bars members from becoming lobbyists for two years after leaving office. I think the legislation was signed by Bush, but am not sure.

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Comment by DennisN
2010-01-06 16:54:30

EXTRA! EXTRA! EXTRA!

Chris Dodd may replace Turbo Tax Timmy as Treasury Secretary!

This story comes originally from Roll Call and The Atlantic.

http://thinkprogress.org/2010/01/06/dodd-treasury/

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Comment by Professor Bear
2010-01-06 07:57:19

Is he retiring to gird for a presidential run?

Comment by Nycityboy
2010-01-06 08:07:34

I will put $10,000 on “no”.

 
Comment by REhobbyist
2010-01-06 12:45:34

He moved to Iowa in 2007 (one reason why Connecticans were so pissed off at him) and still came in dead last in the Democratic polling. If he tries to run for president again, he is even more pompous and stupid than we all think he is.

 
 
 
Comment by Mugsy
2010-01-06 06:29:57
 
Comment by Mugsy
2010-01-06 06:35:25

BTW, weren’t quite a few people here saying that the green shoots talk would start to die off after the holidays? Seems that that’s what’s happening. This is only one example but I’ve seen many the last week and lots of gloom/doom popping up on Bloomberg Europe:

http://www.businessinsider.com/phew-were-doing-way-better-than-japan-2010-1

 
Comment by wmbz
2010-01-06 06:36:15

IS FREEDOM OVERRATED?

John McLaughlin, host of The McLaughlin Group, thinks so. On a recent panel asking what was the “most overrated” political issue of 2009, McLaughlin said: “The most overrated is freedom … When faced with economic uncertainty, people don’t want freedom. When they can’t see their economic future, they want the nanny state.”

Comment by drumminj
2010-01-06 08:00:34

When they can’t see their economic future, they want the nanny state.

To me that says it’s under-appreciated, not overrated.

Comment by cereal
2010-01-06 10:49:24

those who chase security over freedom get neither.

 
 
Comment by edgewaterjohn
2010-01-06 08:25:02

For a decade now we’ve watched as people first clamored for protection from overseas meanies and then switched to clamoring for protection against economic hardship and sacrifice. Currently they are clamoring for both.

The golden handcuffs of the materialist/consumer society are working aboslutely superbly. Fear of losing all the bright shiny things has created legions of little piggies for the insurance companies, politicians, military-industrial complex, big pharma, and all the other fear merchants to feast upon.

After all, what is really holding up the installation of the full body scanners at the airports? Is it really a concern over privacy and constitutional rights - or is it just the widespread shame that accompanies the American obesity epidemic?

Comment by CarrieAnn
2010-01-06 10:48:50

Just wondering what part of obesity isn’t obvious before the scan?

I’m thinking George Clooney and Angelina Jolie scans will soon be going viral when the $12/hr crowd now has access to the vision of everything God gave you. Loads of laughter to now ensue over PBR talls. Gheesh, and we thought the yearly reproductive check in the privacy of the doctor’s office sucked.

And no edgewater, I’m not obese. The CarrieAnn moniker’s a nod of respect to Carrie-Anne Moss’s physical work in The Matrix. And though not moved to those extremes, I do enjoy the benefits of a similar lifestyle.

 
 
Comment by polly
2010-01-06 08:59:20

The best economics book I ever read was “The Moral Economy of the Peasant: Rebellion and Subsitence in Southeast Asia.” The actual text was a bit of a slog (not surprising in an academic work), but the clarity of the observations and conclusions was excellent. For example, if people have no reliable way to store excess value, they aren’t going to switch to a new kind of rice that provides a 20% higher yield most years but fails to yield enough to feed the family twice as often even if the average yeild is much higher. In the good years, the vermin get fat and in the bad years, young children and elderly relatives die. Sticking with the lower yield, more reliable crop is not just stubborness, it is the only logical choice.

From the Yale Press description:

James C. Scott places the critical problem of the peasant household—subsistence—at the center of this study. The fear of food shortages, he argues persuasively, explains many otherwise puzzling technical, social, and moral arrangements in peasant society, such as resistance to innovation, the desire to own land even at some cost in terms of income, relationships with other people, and relationships with institutions, including the state….

Question is, are people in the US with no job and no visible path to one starting to adopt the mental attitudes of a Southeast Asian subsistance farmers?

Comment by Spokaneman
2010-01-06 16:33:13

I watched a great documentary on net flix the other day. It was called Killer at Large: Why Obesity is America’s Greatest Threat

According to the video, one of the key causes of Obesity is the availablity of 1700 calories of intake for less than $5.00 without ever getting out of your car within 5 miles of anywhere in the US. (Fast Food).

This did not exist 30 years ago. Lots of other interesting information, but this one really stuck with me.

Its well worth watching if you can get past the opening shot of a 12 year old girl having full body liposuction. Egad.

 
 
Comment by DennisN
2010-01-06 09:31:01

When faced with economic uncertainty, people don’t want freedom. When they can’t see their economic future, they want the nanny state.

See Germany circa 1933.

Comment by Nycityboy
2010-01-06 09:42:12

Those that would trade liberty for security deserve neither.

Or something like that. Thank you Mr. Franklin for giving us this pearl. Our problems weren’t caused by too much freedom and a lack of government action. They were caused by too little freedom and excessive government action.

 
Comment by RioAmericanInBrasil
2010-01-06 10:06:44

When they can’t see their economic future, they want the nanny state.

Is this statement referring to the Banksters right before the bailouts?

Is this statement referring to our mighty Wall Street “capitalists” just before the bailouts?

You know, the ones who preached for years of how the “market” should be the decider? The ones who preached how Americans need to constantly upgrade our “skills” to be able to “COMPETE” in the globalized “FREE MARKETS”??

Comment by rms
2010-01-06 23:21:53

+1 Great questions, Rio.

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Comment by CA renter
2010-01-07 03:20:04

Ditto that.

Great post, Rio!

 
 
 
 
 
Comment by Englishman In NJ
2010-01-06 06:42:11

Another f*cking terrible piece of “journalism” by the NYT. Usual stuff, complete lack of details, no understanding of the mortgage market, “victims”. It’s got it all.

Natually they gloss over the bit about the US taxpayer paying for these people to buy homes through the subprime lender FHA.

I might be being a tad cranky, but I can’t help feeling it might be interesting if ICE paid a visit to this shitty little street full of fraudsters, over-breeders and state-reliant non-productive leeches.

Gee, better go get that second cup of coffee and calm down a bit:

http://www.nytimes.com/2010/01/06/us/06bethcourt.html?pagewanted=1&hp

Comment by Nycityboy
2010-01-06 07:25:43

I like your anger!

 
Comment by scdave
2010-01-06 07:44:55

over-breeders ??

+ 1 Englishman…

 
Comment by Rancher
2010-01-06 08:11:11

Agree. Am on my second now.

 
Comment by SDGreg
2010-01-06 10:02:20

“Things are pretty much better around here,” said Eladio Soto, a landscaper, who is among the unemployed fathers who has found work again. “I am thinking about a little minivan. That’s my life goal right now.”

Somebody please shoot me if I ever have a goal to have a minivan.

“The balloons have since floated back to earth, and the way houses are paid for has, too.”

The balloon didn’t float back down. It burst. It’s gone. Current lending standards are still loose historically, though not as egregiously so as during the peak of the bubble.

Lots of interesting comments:

“I wish I could share the optimism in this article, but I have a sinking feeling that this is only the eye of the hurricane. The bleeding of our economy has been stopped but the patient is still on a respirator. How can we return to prosperity in the US when the economic fundamentals that caused this crash remain in place? How can we sustain long term prosperity in an economy that is based on retail consumption of goods and not production? How do we avoid a collapse of the middle class when all the good jobs continue to move overseas?”

Comment by Pondering the Mess
2010-01-06 10:31:18

Since the goal is an endless Recession and the destruction of the middle class, there’s not much that can be done to stop it. But until that fateful day, the sheeple can still get their subprime loans through the FHA thanks to the taxpayer and dream of “appreciation” and “green shoots!”

 
Comment by edgewaterjohn
2010-01-06 10:32:38

“I am thinking about a little minivan. That’s my life goal right now.”

Politicians and debt pushers of all stripes salivate when they hear people say things like this. Give this dude his minivan and some cable teevee and he’s yours, and you can throw in his kids to boot.

Comment by Chris M
2010-01-06 12:24:46

I love my minivan - an ‘06 Chrysler bought with cash. It’s great for road trips. No way in hell I’m putting my family on a plane these days.

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Comment by ecofeco
2010-01-06 18:02:31

“Somebody please shoot me if I ever have a goal to have a minivan.”

You might want to reconsider that SDGreg. In this country, you could easily become a pauper in the blink of an eye through no fault of your own. A working and useful vehicle then becomes more important than a place to live. It’s the tool that gets you everything else.

For those of you who don’t know, outside of the NE megaplex and certain areas on the west coast, there are NO decent mass transit systems in the rest of the country. Without a car, you’re screwed.

 
 
Comment by rms
2010-01-06 23:28:59

I like the photo; blue skies, flip-flops, no snow on the driveway.

 
Comment by knockwurst
2010-01-07 00:57:36

A guy who makes 300K a year as a banker is furious that these folks are overbreeding and dumb.

There’s more of us than there are of you, angry rich guy in new jersey.

 
 
Comment by wmbz
2010-01-06 06:45:51

WTH The queen moombat takes a pot shot at Barry. That will not sit well, with the WH.

Nancy Pelosi takes swipe at President Obama’s campaign promises

House Speaker Nancy Pelosi, piqued with White House pressure to accept the Senate health reform bill, threw a rare rhetorical elbow at President Barack Obama Tuesday, questioning his commitment to his 2008 campaign promises.

A leadership aide said it was no accident.

Pelosi emerged from a meeting with her leadership team and committee chairs in the Capitol to face an aggressive throng of reporters who immediately hit her with C-SPAN’s request that she permit closed-door final talks on the bill to be televised.

A reporter reminded the San Francisco Democrat that in 2008, then-candidate Obama opined that all such negotiations be open to C-SPAN cameras.

“There are a number of things he was for on the campaign trail,” quipped Pelosi, who has no intention of making the deliberations public.

 
Comment by james
2010-01-06 14:50:50

I’d really like to be able to dig into all 2000 pages of this monstrosity and then mesh it with the monstrosity of medicare and try and figure out what the hell we are looking at.

Sounds like a full time job for the next 4 months.

I don’t know who wrote this bill. Was this a lib think tank or did the banks write this one too?

Anyone remember Frank/Dodd and the BOA bill?

Comment by ecofeco
2010-01-06 18:04:07

The insurance companies wrote it.

 
 
 
Comment by stpn2me
2010-01-06 06:50:43

Watching the “Today” show, where they are taking now is the time to buy stocks. Ron Insana is talking buy, buy. No talk of risk, only buy. I hear words like, “investment”, “bottom prices”…

Comment by Mugsy
2010-01-06 06:52:46

You can trust Ron Insana right down to the roots of the hair on his head. Oh, wait a minute…

Comment by Englishman In NJ
2010-01-06 07:01:10

Hold on, Ron Insana?

I thought he left to start a hedge fund then went BK. No?

Comment by cougar91
2010-01-06 07:48:31

That venture failed and now he is back on the tube pushing his investment ideas. Cramer has some kind of deal with him for you to paid a feed to read his market commentaries.

Any takers?

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Comment by milkcrate
2010-01-06 13:42:47

I’d pay to throw peanuts at Cramer’s head, if I could get them betwen the bars.

 
 
 
 
Comment by Sammy Schadenfreude
2010-01-06 07:27:56

A personality on a corporate-owned financial news show telling the rubes to buy, buy, buy?! I am shocked! Meanwhile, I bet the insiders of those firms are selling as fast as they can find media-manipulated rubes willing to buy their overvalued shares.

Comment by arizonadude
2010-01-06 07:42:38

Ron insana is a shrill for cnbc.Trying to sell you overpriced pieces of paper.Dont listen to this tool.

 
 
Comment by Michael Fink
2010-01-06 07:30:46

Bottom prices? They are aware that prices were down 30-50% just 6 months ago, right? These people have the attention span/memory of a drunken gnat.

I’m not sure if I feel now is a good time to buy or not. But, telling people this is some kind of historic bottom? Yeah.. It’s a bottom only if you can’t remember last year.

idiotz. :)

Comment by REhobbyist
2010-01-06 13:00:46

I’d rather buy at the real bottom.

http://www.multpl.com/

Comment by CA renter
2010-01-07 03:50:07

Interesting chart. Thanks for posting it.

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Comment by Mike in Miami
2010-01-06 08:39:32

If inflation comes roaring out the gates then just about anything will be a good buy, even a condo in Miami.

Timothy Geithner Meets Vladimir Lenin

The Federal Reserve has expanded the U.S. monetary base by more than 150% since the beginning of the recession. That is not a typo. The monetary base has soared from $800 billion to over $2 trillion. Much of this has been accomplished through outright purchases of mortgage-backed securities (not repurchases) and an equivalent creation of base money. Unless these securities can be sold back out into private hands for the same value that was paid to acquire them, the Fed will have effectively forced the U.S. government to make its implicit guarantee of these agency securities explicit, without the authorization of Congress. To the extent that the underlying mortgages default, the U.S. government will be forced to issue additional Treasuries to retire the mortgage backed securities now held by the Fed. Alternatively, if the U.S. does not explicitly bail out Fannie Mae and Freddie Mac to the full extent, the Fed will have created money, with no recourse, and without the equivalent backing of assets or securities on its books. In short, the Fed is now engaging in unlegislated, back-door fiscal policy

see hussmanfunds dot com

Comment by james
2010-01-06 14:38:20

Meh, the government doesn’t have to do any such thing with the securities. They can play all sorts of games with the Fed and reserve requirements.

Not saying they will either. Just saying it is possible depending on the dirrection who ever takes over timmays job goes.

 
 
 
Comment by wmbz
2010-01-06 06:52:19

What, I thought everyone wanted to live in a shopping center.

Adidas to close Pearl District store ~~ Portland Business Journal

German athletic apparel giant Adidas AG will close its store in Portland’s Pearl District on Jan. 17 after deciding not to renew its lease.

Adidas opened the 4,352-square-foot store in 2004 at 1039 N.W. Couch St., in the Pearl District’s upscale Henry condominiums in Block 3 of the Brewery Blocks.

It was one of the first retailers to open at the Henry, a 123-unit luxury condominium project in the heart of the Pearl District.

Recently, a nearby Puma store also closed.

Comment by DinOR
2010-01-06 08:19:45

“I thought everyone wanted to live in a shopping center”

LOL! Yeah, if you’ve ever been there you’d know that is -exactly- what that place was designed for from inception. Why it’s a metrosexual haven!

“The Pearl” is a joke.

Comment by wmbz
2010-01-06 08:42:58

DinOR,

Developers, calling themselves “lifestyle scientists” tried the shopping center living ‘plan’ in our little burg a few years back. It went over like a lead balloon, did not sell one single unit.

Fast forward to today… They’re back trying it again!

Comment by aNYCdj
2010-01-06 09:13:26

Right DinOR:

Its Friday night and just got paid….lemme slip down to the Exclusive lounge were us tenants don’t have to stand behind those velvet ropes to get past the doorman like those common folks do, and sip on a few $18 mimosas, then maybe stop by the gicci store and get the little lady a new $599 bag to put on the new credit card that came in the mail today….ahhh livin the life …

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Comment by DinOR
2010-01-06 09:18:02

wmbz,

Right, The Pearl used to be Portland’s warehouse district and given stabbings and strong arm robbery were staples, it ‘has’ been something of an improvement.

My objections center around the notion that in order to reclaim an area “You have to go BIG!” think big, act big and get big loans. In order to attract the affluent you have to have all kinds of shopping, rest’s etc. Culture, the arts!

Now that the entire area has been “made over” there’s no employers left in the area and there certainly isn’t any room left for parking. So now it’s become unworkable in the ‘other’ direction.

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Comment by shizo
2010-01-06 12:14:46

Cities very seldom have a parking problem. It is almost always a management problem. A great book on the subject is Shoup’s The High Cost of Free Parking.

 
 
Comment by DennisN
2010-01-06 09:35:22

There once was a very nice shopping center in San Jose called “Town & Country”. They tore it down to build “Santana Row” which is one of those “condos over the strip mall” development.

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Comment by DinOR
2010-01-06 09:45:08

DennisN,

Oh… ‘that’ is the place posters over at Patrick’s often referred to! Portland fell in love with this whole idea of “multi-purpose development” ( and after awhile, every proposal looked the same! )

Retail/Rest. on the street level. Work/loft spaces on the second and pricey “view” units on the towering floors above. AFAIK from the local PDX blog, most have been either halted or “repartmented”.

 
Comment by DennisN
2010-01-06 11:01:25

At least their website is sexy….

http://www.santanarow.com

Even a free “santana row” app for your iPhone. :roll:

 
 
 
 
 
Comment by stpn2me
2010-01-06 06:56:14

Has anyone seen this show called “Million Dollar Listing” on Bravo? What the hell has happened to TV since I went to Afghanistan? WTF is going on? My wife showed me this and it made me sick. I’m looking at these young, gay men talking about selling million dollar homes….

They talk about the economy being bad almost as an afterthought. The ego’s are HUGE. One even referred to himself as a “strong” realtor. I dont know if I have ever seen you guys talk about this show..

Thoughts?

Comment by combotechie
2010-01-06 07:06:22

“Thoughts?”

There are many more TV channels than good TV programming to fill all the time slots all that these channels offer, therefore the price of these TV time slots are sold off cheap and thus we get lot of TV junk.

Comment by michael
2010-01-06 07:54:04

it’s armageddon week on the history channel…and it’s awesome!

 
 
Comment by Englishman In NJ
2010-01-06 07:11:59

Happy New Year Stpn…..glad to see you are well.

Yes, I’ve stumbled on this show a couple of times….it’s really quite brilliant. Gay guys (not that there is anything wrong with that, of course. Some of my best frien….oh, whatever), college-age and with no experience of anything in the business world at all being left in charge of selling multi-million $ properties at the beach in Malibu.

My main question, among many, was this: who on earth would allow these people to sell these high-end properties? The “owners” (I know, I know) must be mentally deficient to turn over these houses to these know-nothings?

Slightly-related topic: Did anyone see on Bloomberg this morning that Obama is the first US President in history to appoint a transgender person to a department position? The BB presenters really wanted to crack up laughing, but they did hold it together, top pros that they are.

Now, THAT’S change I can believe in!!

Comment by Blue Skye
2010-01-06 07:19:16

Bama and Bailey Circus.

 
Comment by stpn2me
2010-01-06 07:21:19

It’s crazy to me that they are trying to sell these houses like they are in the $200,000 range. It’s crazy..

Comment by combotechie
2010-01-06 07:24:28

“It’s crazy..”

It’s TV. It’s Hollywood. It’s not real.

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Comment by Xenos
2010-01-06 07:26:18

These pups playing businessmen are kids who grew up in these communities and have personal connections with the ex-wives of plutocrats who do things like rent Malibu beach houses for six months at $30,000 per month. It is a strange and incestuous little circle, but it at least pencils out as a profitable business, and has more going for it than most traditional realtors and developers that you run across.

Comment by arizonadude
2010-01-06 07:45:41

Do they shag each other at open houses?Chad is a bizarre dude.

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Comment by cassiopeia
2010-01-06 07:23:22

I’ve seen a couple of episodes. I’m just fascinated by the stupidity and the inanity, I can’t help it. Deep down I think I watch it just to feel a little better about myself. If you’ve been to Afghanistan, I don’t blame you for feeling the whole think is an insult. It’s not an insult, it’s just decadent…

Comment by Silverback1011
2010-01-06 07:54:28

I saw the show a couple of times. Yuck, dudes…..the creepiest realtor-boy is Chad Rogers with his dutch-boy paint bowl haircut and his icky “smile”. Yikes. I wouldn’t trust him to deliver groceries, but he evidently can move overpriced real estate, so there you go.

 
Comment by DinOR
2010-01-06 08:23:36

“it’s just decadent”

Well they don’t call it housing p0rn for nothing? I thought one of the big cable providers was dropping HGTV and one of the many all cooking all the time channels?

 
 
Comment by cactus
2010-01-06 09:43:16

“Million Dollar Listing” on Bravo?

I think its supposed to piss us off so we watch more of it ?

Kind of a shock show ? Anyway I watched it while in Phoenix I liked the views of the Ocean. The realtors were terrible only the 2 old ones even seemed like realtors the others esp. the kid was a joke.

 
Comment by Hwy50ina49Dodge
2010-01-06 10:19:48

“…What the hell has happened to TV since I went to Afghanistan?”

Last I checked I still had x3 tools readily at hand and free to use: ;-)
1. on/off switch
2. mute
3. channel up/down

Comment by X-GSfixr
2010-01-06 11:50:55

4. Heavy object (hammer, big crescent wrench)

 
 
Comment by MommyK
2010-01-06 12:32:15

I am guilty of watching it a couple times. I thought a recent episode was interesting in which one of the guys’ grandmothers, a holocaust survivor, took him back to Amsterdam. Clearly (in the contructed world of “reality” TV anyway) this grand dame now has a LOT of money. (A side story is that she was going to cut this grandson out of her estate.) I was curious to know how she went from Point A to Point B, but never got that explanation.

 
Comment by SaladSD
2010-01-06 21:36:35

I watched this show about 10 minutes. The realtors looked like they were 12 and dressed for air guitar. I kept thinking the homeowners would laugh in their faces, but they just lapped up the RE swill. A narcissist pajama party.

 
 
Comment by wmbz
2010-01-06 07:09:13

A word from slobbering Barney Fwank…

Rep. Barney Frank: Lenders Fannie and Freddie now a ‘public policy instrument’ - 01/05/10

Mortgage giants Fannie Mae and Freddie Mac are now basically a “public policy instrument” of the government, Rep. Barney Frank (D-Mass.) suggested Tuesday.

Frank, the chairman of the House Financial Services Committee, asserted that the companies, which were taken over by the U.S. in September 2008, have become an extension of the government’s policy-making tools.

“Remember now that Fannie and Freddie have been converted,” Frank said during an appearance on CNBC. “Part of the losses of Fannie and Freddie are that since the housing collapse, Fannie Mae and Freddie Mac have become a kind of public utility.”

Frank made that claim in response to reports that the government may lose as much as $400 billion from its conservatorship of Fannie and Freddie, assistance that was made available when the home loan companies were put on the brink of collapse due to the subprime mortgage crisis.

Comment by Xenos
2010-01-06 07:33:13

Is he wrong? We might as well admit the fact and flush out the senior management and put civil servants in charge. GSE are revealed to be a mistake from inception, so let’s just move on and either run them or shut them down.

Comment by Nycityboy
2010-01-06 07:54:19

Barney will not shut them down. Are these monsters still allowed to make political contributions? If not, Barney and his brethren just lost a huge campaign financing money spigot.

Comment by Professor Bear
2010-01-06 07:59:46

Right. “Public policy investment” = campaign finance cookie jar

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Comment by wmbz
2010-01-06 08:02:15

“Are these monsters still allowed to make political contributions”?

Good question! I have not heard a word about that yet.

It’s such a twisted marriage I’m sure everyone at the top and in between are skimming as much as possible. Since they don’t have to ever balance their books.

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Comment by Xenos
2010-01-06 08:16:26

All I can find in terms of public info on FNMA contributions to Frank is this article revealing a total of $40,000 over a ten year period.

http://www.businessandmedia.org/articles/2008/20080924145932.aspx

Do you think Frank is on the take for $4,000 per year?

I lived in Frank’s district throughout the whole of the real estate boom. 90% of his contributors have losses of six figures or more. When someone goes underwater in Brookline, Newton, Needham or Weston that one person is losing several times more than Frank is accused of taking improperly over a decade. Multiply that by 150,000 upper middle-class homeowners and you can get a sense of the pressure on Frank to reinflate the bubble at any cost.

It is stupid policy, it is bad politics, but it is not corruption.

 
Comment by polly
2010-01-06 09:58:16

I’m not going to go through the whole explanation of why MA’s prop 2 1/2 prevents MA local governments from raising the mil rate indefinitely to make up for lost property tax income. I’ve done that before. Please, just trust me that this avenue is not available to them. It is restricted.

Now, as popular as Barney is in the area, the only thing that is going to get him thrown out of office is if all the local mayors and selectmen come out against him. The only way for the that to happen is for him to throw them under the bus. Slowing down the crash so they can adjust to the smaller income stream is the only way to help them in MA. Do I think those local officials are actually making the changes that are needed to adjust to less property tax revenue? No. I don’t. I think they are waiting for the bubble revenue to come back because “MA is different.” Is Barney’s staff promising them that? Doubt it. Are they going out of their way to tell them the party is over? Doubt that too.

Barney is not a senator who has to run a state wide race, and he is popular in his disctrict. He just doesn’t need that much money to run for reelection. Accusing him of being on the take for reelection funds is silly. More than that, it is stupid.

 
Comment by Nycityboy
2010-01-06 10:05:20

I think your post is completely out of line with what was being stated.

 
Comment by Nycityboy
2010-01-06 10:10:08

“If Barney Frank is a capitalist, as he proudly proclaims, he has become one thanks to his political career in the Democratic Party. His most recent financial disclosure forms indicate a net worth in financial assets of well over $1 million, with an extensive portfolio of investments.

His relations with Wall Street’s largest banks and finance houses have stood him in good stead. According to the Center for Responsive Politics, he pulled in $1.8 million in campaign contributions in the run-up to the 2006 election. He is well on his way to substantially topping that figure in the present campaign season, recording $1.2 million in contributions by the end of March. Securities and Investment firms were responsible for $164,600 of that money, real estate interests for $156,401, law firms for $130,768, insurance companies for $117,674 and commercial banks for $74,350.”

Let us all offer Polly an apology for hinting that Barney, or any other Democrat, would use Fannie and Freddie to fund their campaigns, line their pockets or buy votes. I don’t know what I was thinking. Please accept my most humble apology. Sometimes I am just “stupid” in that way. I hope these facts don’t get in the way.

 
Comment by Nycityboy
2010-01-06 10:24:28

During his congressional career Barney’s top contributor has been the real estate industry. They have kicked in $667,208 to his campaigns. To what industry do Fannie and Freddie belong?

 
Comment by polly
2010-01-06 11:36:15

Over a million dollars? Isn’t the man well into his 50’s? And he has been making better than a 6 figure salary as a congressman since 1980 at least? That is 30 years. And he just put out an autobiography for which he certainly received a substantial advance? I should darn well hope he has over a million bucks.

And I didn’t say he didn’t get campaign contribuitions. I said he didn’t need them. He is the chairman of a powerful financial committee. Of course he gets contributions. But since he doen’t actually NEED the money to get elected (you don’t need TV time if you don’t have a viable opponent), he doesn’t have scramble after it. He certainly doesn’t have to promise anyone special favors to get it. It is more logical and much simpler to assume he is doing what he is doing because he thinks it is the best thing to do for his district. Are those decisions right? Well, a slow slog is better for MA because of prop 2 1/2. Would it be better for the whole country to let the whole thing crash and burn quickly? I don’t actually know. We may find out if the policies meant to slow things down fail. We may never find out. But you will have to provide a lot more evidence of corruption than financial assets “well over a million dollars” before I jump on that bandwagon.

 
Comment by Nycityboy
2010-01-06 13:07:39

He certainly doesn’t have to promise anyone special favors to get it.

So he is just f—ing over succeeding generations of Americans with the monstrous debt of Fannie and Freddie out of the kindness of his heart. What a guy.

Polly, do you really believe Barney isn’t corrupt?

Where does all of that campaign money go? He has to spend it somehow. I’m sure there are many ways to funnel it into his own pockets, hidden from the government, of course.

I don’t care what financial assets he has declared. How much is undeclared? These guys are like financial icebergs. We probably only get to see a sliver of what they actually have.

 
Comment by lavi d
2010-01-06 13:30:43

Polly, do you really believe Barney isn’t corrupt?

Wednesday! Wednesday! Wednesday!

Only on the HBB!

Nycityboy vs Polly.

Sardonic wit meets objective intellectualism.

We’ll sell you the whole seat, but you’ll only need the edge!

 
Comment by polly
2010-01-06 13:55:47

I believe that campaign contributions that are not used on campaigns can be given to the campaigns of other congress critters (with limitations) or to the soft money slush funds of the representative’s party.

I do not believe that Barney is corrupt in general. He made a huge ethical mistake in getting a former boyfriend a job. I think he probably learned his lesson there.

And yeah, I think he is “screwing over” future generations of Americans because he thinks it is the right thing to do, especially for his constituents who would have to fire 3/4’s of the police force and cancel 5th through 8th grade to balance their town and city budgets if we actually had a hard crash.

 
Comment by Kirisdad
2010-01-06 14:40:44

A US congressman in 1986 made $75,100/year.

 
Comment by james
2010-01-06 14:45:48

Polly, you have to be fricking kidding? Right?

The guy is getting paid left, right and center to advocate for certain kinds of policy.

If he didn’t need the money, he could have returned it to at least cut some of the potential for a conflict of interest.

Or perhaps this campaign money goes to his boy friends exc through the campaign and is slushed on out.

Really dude.

 
Comment by polly
2010-01-06 15:17:19

Congressmen don’t return money unless it was provided by Nazi child pornographers or their local equivalent. Just not the way this town works.

You guys can assert that he was paid to advocate for a particular position if you like. Your opinions are your own. But you won’t convince me until you can prove that he doesn’t believe that the slow crash is better than the quick one. That is what all of his moves have aimed at since the beginning of this thing. He even said once that his aim was to slow the crash (which I never thought would be admitted when press was around). And he is right about the slow crash being better than the quick one for MA because of the aforementioned quirck in MA’s property tax system.

And you can assert that he has siphoned off campaign funds for personal gains and not declared all his personal wealth on the required forms all you want too. But no one should believe you until you can prove that. Just saying it doesn’t make it so.

Barney is smart, very impressed with himself and a bit of a jerk. And in the early 80’s he was telling southeast MA voters that Social Security and Medicare needed to be reformed soon or they would eventually bankrupt the country. That took guts. Wish he had actually succeeded in getting that on the table in the 80’s.

Kirisdad - Thanks for the correction on the Congressional salaries. Still quite a bit of money for the time. I think my dad made $38K in 1983 and we were managing just fine in a 3/2 house in a town with excellent schools in Barney’s district.

 
 
 
Comment by measton
2010-01-06 08:50:35

Is he wrong? We might as well admit the fact and flush out the senior management and put civil servants in charge. GSE are revealed to be a mistake from inception, so let’s just move on and either run them or shut them down

BINGO - Why is it that the president of the US makes so much less than the CEO’s of these essentially gov run entitities. It’s pure BS to be supplementing these bastards. Given that the gov is OK with the GSE’s loosing money and buying anytrash they can find from Wall Street and large banks how hard a job is being a ceo of a GSE. Why should they make any more than the president or congress.

Comment by DinOR
2010-01-06 09:49:14

measton,

Well said, or a state legislator for that matter? But moreover, I think we’re dismissing the fact that what we’re seeing is The Beginning of the End for the REIC.

He’s hardly stepping down solely for a plush job as some consultant etc. ( folks Dodd was already -assured- of that much! ) He’s stepping down cuzz’ it’s game over.

We need to get onboard w/ that.

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Comment by Professor Bear
2010-01-06 08:08:45

More sovereign debt defaults on the way from here?

Jan. 5, 2010, 4:58 p.m. EST
Iceland’s ratings cut as president vetoes repayment bill
By John Letzing, MarketWatch

SAN FRANCISCO (MarketWatch) — Ratings agencies cut their views for Iceland Tuesday, after the country’s president vetoed legislation that would have repaid the U.K. and Netherlands for bailing out depositors of a failed Icelandic bank, potentially imperiling rescue loans for the embattled country.

President Olafur Ragnar Grimsson on Tuesday cited the unpopularity of the legislation, which called for some $6 billion in repayment over 15 years. However, his decision may result in Iceland losing or seeing a delay in bailout money from the International Monetary Fund and Nordic countries.

Grimsson’s decision “will seriously endanger Iceland’s deal with the IMF and could hence further deepen the already grave economic and financial crisis in Iceland,” Danske Bank analysts said in a research note. “We would expect to see negative ratings actions as a result of the president’s decision.”

Fitch Ratings lowered Iceland’s long-term foreign currency issuer default rating to below investment grade of BB+ from BBB-.

Fitch also cut the country’s local currency IDR to BBB+ from A-. The outlooks on both ratings are negative, Fitch said.

The decision by Grimsson to veto the repayment bill “creates a renewed wave of domestic political, economic and financial uncertainty,” said Paul Rawkins, senior director of Fitch’s sovereigns team in London, in a statement. “It also represents a significant setback to Iceland’s efforts to restore normal financial relations with the rest of the world.”

Comment by measton
2010-01-06 08:54:02

Time for Iceland to really stick it to the banking oligarchy by declaring bankruptcy, and issueing new currency to it’s citizens only. Now that would be funny. They could then return to making money selling fish, minerals, tourism, etc. Rotten shark is back on the menue if they do this.

 
Comment by In Colorado
2010-01-06 08:56:30

Let the beating’s begin.

All the more reason for the USA to become self sufficient. When everything sold in KTargMart is imported they have us over a barrel.

Comment by RioAmericanInBrasil
2010-01-06 10:56:11

When everything sold in KTargMart is imported they have us over a barrel.

Which equates to a loss of sovereignty. Sovereignty has been an issue that the Right has defended admirably, except so far as it relates to outsourcing jobs and especially manufacturing.

My guess is because there are two conflicting issues; the profit motive is clashing with issues of sovereignty and patriotism. Thus far, the Right (with some exceptions such as Patrick Buchanan and Lou Dobbs) has sided with the “profit” issue.

However, 30 years of disastrous “free-trade” policies have now given us proof of their consequences. I believe the worm is turning. I believe more on the Right will begin to defend America’s manufacturing base as a national sovereignty issue and maybe even as a national security issue.

Comment by In Colorado
2010-01-06 13:43:37

I can only hope so. I lived in Mexico for 12 years and they also understood the importance of economic sovereignty. Yeah, prices were higher and selection was narrower but it was a much safer place back then than it is now that they have “liberalized” their economy.

And much as in Brazil they valued a good time more than acquiring “stuff”.

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Comment by Blue Skye
2010-01-06 09:38:57

It’s not really a default if the folks in Iceland do not cover the stupidity of the Brits in paying out to their own screwed speculators is it? I haven’t read anywhere that they had agreed to this reimbursement up front, only that they were being bullied to do it. Plus, the money the Brits want from them is less than the IMF money promised, so where is the incentive?

Comment by DinOR
2010-01-06 09:52:54

Blue Skye,

Right and if heard the calculations correctly The Debt would mount to somewhere in the vicinity of $600,000 for every man, woman, child and cod in the nation. Or is it haddock?

Comment by Blue Skye
2010-01-06 13:16:31

$6 Bil between 300,000 population is more like $20,000 per. Still, that a lot of Cod liver oil.

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Comment by polly
2010-01-06 10:36:59

Exactly. The amount of the “repayment” is measured by how much the Brits paid out to their people, but it isn’t a repayment of an actual loan that was made to them. It is like the time I “repaid” my brother the $4000 my parents gave to me for my first year of law school (the last time they paid for any of my schooling). I told them to keep it for my little brother who was still in college. They insisted I take it and that it was a gift. So I paid it “back” to my brother after I graduated and had the cash flow and he really needed the money. I wasn’t repaying a loan from him or even a loan from them. The obligation was entirely in my head. I did it because I could and I wanted to. It was neither a legal nor even a true moral obligation. If I had been deep in a financial hole (other than the $70K of real student loans that I could manage - barely - on my salary), I wouldn’t have done it.

 
 
Comment by Hwy50ina49Dodge
2010-01-06 10:30:25

“Ratings agencies cut their views for…” ;-)

“Fitch Ratings lowered Iceland’s long-term foreign currency issuer default rating to below investment grade of BB+ from BBB-.”

“Fitch also cut the country’s local currency IDR to BBB+ from A-. The outlooks on both ratings are negative, Fitch said.”

Yawn, I wonder what they would have rated Fred Smith’s graduate paper outlining the creation of FedEx… DDF- ?

Rating Agencies = CULT

Comment by polly
2010-01-06 11:39:29

Doesn’t repudiating this pretend obligation make it more likely they will repay their actual debts?

Comment by Prime_Is_Contained
2010-01-06 12:20:36

“Doesn’t repudiating this pretend obligation make it more likely they will repay their actual debts?”

I wondered the same thing, polly. Why would this reflect poorly on their debt-rating?

The only thing I could come up with is the idea that people may be less likely to lend them money in the future, given a mistaken interpretation of this event. Less availability of future lending to them may increase the probability of future liquidity events.

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Comment by Left LA
2010-01-06 12:25:22

If it weren’t colder there than it is here, I would take a quick vacation to Iceland to show my support of their display of real eista (Icelandic for testicles).

Comment by REhobbyist
2010-01-06 13:36:51

I’m with you, left. I’d love to visit Iceland someday. But not in early January - high temp there today is 32 degrees F and they’re only going to have four hours of daylight.

 
 
 
Comment by Professor Bear
2010-01-06 08:10:56

Not sure I would be pouring new money into bond funds at this point… Even short-term bond funds are subject to currency devaluation risk.

* JANUARY 6, 2010

FUND FIEND
‘09 May Have Been a Turning Point for Fund Industry

By TOM LAURICELLA

The world of mutual funds usually changes at a snail’s pace. But 2009 may turn out to have been a watershed year.

Among the most glaring trends: Despite the big rebound in U.S. stocks, investors largely shunned putting money back into traditional, open-end U.S.-stock funds.

In November—eight months after the bear market ended—investors pulled $2.1 billion out of U.S.-stock funds, and only three of the 20 best-selling funds were diversified U.S.-stock funds, according to Financial Research Corp. Those three winners were index funds, two of which were exchange-traded funds from Vanguard Group and State Street Global Advisors.

Instead, investors continued pouring money into bond funds. But also attracting new investors were funds with broad, go-anywhere mandates such as BlackRock Global Allocation and Ivy Asset Strategy.

Some of this is likely temporary performance chasing, and heavy flows into short-term-bond funds reflect investors shifting out of money-market funds with yields of nearly zero. But there are longer-term trends at work as well. Brian Reid, chief economist at the Investment Company Institute trade group, says money has been flowing into bond funds through target-date retirement funds. Baby boomers also are bulking up on bond funds as they approach retirement.

Comment by measton
2010-01-06 08:56:49

If bonds fail interest rates rise and the stock market will collapse as well.

Comment by Professor Bear
2010-01-06 09:55:35

Good point. But if things play out as they did in 1987, then there will be time between the bond market crash and the subsequent stock market crash to take chips off the stock market gambling table. (In 1987, the bond market crashed in the spring, while the stock market waited until October 19 for its spectacular 20 percent / 500 pt Black Monday selloff.)

 
 
 
Comment by Silverback1011
2010-01-06 08:12:08

Back from Disney World, the office, and the virus

We got back from our yearly hiatus at DW on Sunday. Business is down, down according to almost park employees and taxi drivers ( it was very cold and sometimes we took taxis instead of waiting for DW buses ). The parks were quite full from the 27th to the 31st, but then attendance dropped way off from Jan 1st on. It was like they were right after 9-11….not too many people and you could walk quite a way before bumping into someone ahead of you. They are discounting Disney Vacation Club points. We went to the Medieval Times in Kissiminee and there were tons of foreclosures along the route, including some sherbet color condos on a lake, and a big, big condo tower. Also, we were told that DW did not hire any part-time temp workers for the holiday season, preferring to use their fulltime staff instead. This had a lot of the locals upset, including our taxi driver.

We’re slowly making progress on readying the office for sale. Today, we’re having the plumbing and some of the electrical put back in order. The tradesmen (that we choose) are charging about 2/3 of what they were a couple of years ago, and are happy to get the work. Cash or checks only, please, is their request.

I got what is probably the novovirus the day after our return from DW, and haven’t been this sick since I was a little kid. Unbelievable nausea, vomiting, and enteritis. Of course, it’s nothing compared to some life-threatening diseases, but I had to get an IV last night because I’m so dehydrated. I called DW since I seem to have picked it up there due to the time between our being there and when it reared it’s ugly head, and they’re investigating the last 3 restaurants that we ate on DW property. I’m actually going to lie down now after writing this exhausting paragraph. I’m nowhere my usual vigorous self and will take several days to recover :( The doctor wrote me an open-ended note that could have me going back to work either on Friday or Monday I am so ill. But, I’m improving. Pedialite cut with Vernor’s ginger ale :)

Comment by DinOR
2010-01-06 08:30:39

Silver,

Sorry to hear that. Hope you’re feeling better soon. What I found out over this latest holiday season is that.., ( I’m not the drunk I ‘used’ to be? )

All that partying really left me feeling wiped out. I helped my SIL paint my daughter’s Chevy Tahoe over the New Year weekend and all the paint fumes, thinner, dust and God knows what all left me listless. I’m just not used to working as hard as a 26 y.o.

 
Comment by aNYCdj
2010-01-06 09:01:21

Ahh the new Motivational tool…Let your full time long term employees make some OT money and they will provide better customer service…who’d thought???

—————
Also, we were told that DW did not hire any part-time temp workers for the holiday season, preferring to use their fulltime staff instead. This had a lot of the locals upset, including our taxi driver.

Comment by polly
2010-01-06 10:07:50

Doesn’t Disney do an extensive training program for new “cast members”? Probably way cheaper to give folks overtime than train people in the Disney way for temp holiday jobs.

Plus, it might not even have required overtime pay. I bet the full time staff were just fine with it when asked to volunteer to not take any extra days off over the holidays. They could have just been using their regular schedule.

 
 
Comment by Hwy50ina49Dodge
2010-01-06 10:40:00

Hope you “recover” quickly!

 
Comment by CarrieAnn
2010-01-06 11:01:59

Hope you feel better Silver.

 
Comment by REhobbyist
2010-01-06 13:40:41

Feel better, Silver. Good that you got hydrated, too.

I’m disgustingly healthy. I got (was forced to) the swine flu shot, and declined the regular flu shot. My employer requires it, and will penalize me by forcing me to wear a mask when I see patients starting today. Should be entertaining.

 
Comment by SanFranciscoBayAreaGal
2010-01-06 15:13:53

Silverback, you take good care of yourself. I hope you feel better soon.

Happy New Year.

 
Comment by CA renter
2010-01-07 04:35:15

Sounds like a yucky virus, Silverback. :( Hope you feel better soon.

Thanks for your report about Disney World.

 
 
Comment by Professor Bear
2010-01-06 08:15:56

Suddenly big name economists see moral hazard problems right and left with the financial rescue. Where were these guys a couple of years ago when their warnings could have potentially have made a difference to protecting Main Street America from a massive wealth transfer to Wall Street bankers?

* JANUARY 6, 2010

Economists See Crisis Response as Risky

By MARK WHITEHOUSE

ATLANTA — Wall Street investors may be breathing a sigh of relief as the financial crisis fades, but academic economists gathered here for the annual meeting of the American Economic Association say we’re nowhere close to making sure it won’t happen again.

Over the past few days, economists here highlighted the many ways in which the lessons of the crisis have yet to sink in. Few think the U.S. and other governments have made needed repairs to the financial regulatory system. And some suggest governments’ response has increased the chances of a repeat, making the banking system more crisis-prone, putting new strains on institutions such as the Federal Reserve and stretching government finances closer to the breaking point.

“Our response has made us more vulnerable to a bigger crisis,” said Tom Sargent, a New York University economist. “It’s distressing.”

Banks present the most immediate worry. By providing massive bailouts to commercial banks and securities firms, the logic goes, governments have given bank executives a sort of catastrophe insurance — and an incentive to take even greater risks than they did before the crisis. But it could take years for policy makers to impose the controls, such as tougher capital requirements, that would prevent the pain from spreading to taxpayers and the broader economy next time the banks get into trouble.

“If the banks really feel that they are insured, then we have a dangerous situation,” said Stanford University’s Robert Hall, the association’s president. “The incentives are to take a very risky position. They get to pocket it if they win and it’s the federal government’s problem if they lose.”

Policy makers find themselves in a tough position. They can’t impose controls immediately, for fear they would curb the lending crucial to a sustainable economic recovery. But as the banks regain strength, the political opportunity to create a new financial architecture could slip away.

“You have only a small window in which you can really change things,” said Markus Brunnermeier, of Princeton University. “It’s closing already.”

Comment by measton
2010-01-06 09:01:13

“If the banks really feel they are insured???”

That made me laugh. I remember the story of that the ceo of Goldman Sach’s was present while Hank Paulson and other determined how AIG and those it insured would get bailed out. bail

The banks have demonstrated that they believe the gov will always be saved. Time to put it all on red.

 
Comment by Professor Bear
2010-01-06 09:49:21

More from the article posted above:

‘Others fretted about the lack of a game plan for Fannie Mae and Freddie Mac, the money-losing mortgage giants — known as government-sponsored enterprises — that are now absorbing huge sums of taxpayer money as part of the U.S. government’s efforts to keep the mortgage market functioning. When long-term interest rates rise, as they inevitably will, said Anthony Sanders, of George Mason University, “We’re going to see tremendous losses taken on the bank balance sheets and [those of the GSEs].”

“The GSE structure must be ended because it creates inevitable failure based on the incentives,” said Dwight Jaffee, of the University of California at Berkeley. But he and his peers differed on the best solution. Mr. Jaffee called for the government to buy mortgages and package them into securities, as Fannie and Freddie do, but only temporarily; eventually, that task should be turned over to the private sector.’

Comment by CA renter
2010-01-07 04:38:40

“…eventually, that task should be turned over to the private sector.”
————————–

How about right now? With all the green shoots and butterflies, it looks like a good time for the private market to step in, no?

 
 
Comment by DinOR
2010-01-06 09:56:18

Right in alignment w/ Stephen Roach’s call for the training wheels to be taken off the Wrecovery yesterday.

 
 
Comment by packman
2010-01-06 08:18:40

Wanted to discuss this post from late last night:

Comment by joeyinCalif
2010-01-05 22:14:21

While it’s not the only one, lending IS IN FACT a cornerstone of any economy.

How many bills do we pre-pay? Phone? Rent? Any of them? Nobody prepays anything. We’re all borrowing all the time. Transactions are either settled immediately by paying cash or we somehow borrow.. and we mostly borrow.
Borrowing is simply convenient. It usually does cost us some amount of interest, but it’s worth the convenience.

Businesses are much deeper into the borrowing game. They need large chunks of cash at times when they don’t have the cash, which is essentially all the time.

As long as we can trust each other to make good on our promises (to repay) everything runs smoothly. When we can’t or won’t repay or debts things go to hell.
The only weakness with this system, if there is one, is ourselves.

A very key distinction needs to be made here, and that is whether or not the borrowing being done is through a third party. That is, excluding the parties which are the banks actually performing the transactions, which may actually mean that a given financial transaction involves up to 5 parties:
1. Purchaser
2. Seller
3. Purchaser’s lender (e.g. credit card company)
4. Purchaser’s bank (e.g. their checking account)
5. Seller’s bank.

“Lending” is indeed the cornerstone of an economy if we’re talking about “accounts payable” kind of lending - where services have been rendered and not yet paid for. This may in fact include an extension of credit for some period of time, or some escrow kind of account, etc. That involves 4 of the 5 above parties; it excludes party #3.

However that’s not what most people, including me, consider to be “lending”. What most people consider lending is when party #3 must be used to complete the financial transaction, for a total of 5 parties. Party #3 is NOT a cornerstone to a healthy economy however, at least in terms of needing party #3 to be in large scale (e.g. 200+% of GDP), or involved in 99% of financial transactions.

A healthy economy can get along without party #3 just fine, in the vast majority of financial transactions. This is the way it was before the 1900’s, and even generally so up until the 1950’s or even the early 1980’s, in terms of scale. Before the early 80’s most retail transactions were done via check or cash, without needing borrowing at all. Mortgages existed and were somewhat prevalent before then, but to nowhere near the extent as now. In 1945 mortgage debt was 9% of GDP - now it is 75%. Business debt was 25% of GDP - now it is 80%. Etc. etc. - for all sectors.

Comment by LehighValleyGuy
2010-01-06 10:13:51

A healthy economy can get along without party #3 just fine, in the vast majority of financial transactions. This is the way it was before the 1900’s, and even generally so up until the 1950’s or even the early 1980’s

Quite right, packman. It’s like all these other recent legal and economic inventions that have become ingrained in people’s minds as being indispensable. Up until WWI we didn’t have the Federal Reserve, the SEC, EPA, HUD, or for that matter multi-national corps, zoning laws, interstate highways, and so on and so forth. But mention any prior period in our history and all some people can think of is slavery, cholera, and The Jungle, and they think gov’t and big corps have saved us from all this.

Comment by REhobbyist
2010-01-06 13:43:39

LOL, I don’t think that the people who believe in the government are the same as those who believe in the big corps.

Comment by LehighValleyGuy
2010-01-06 14:41:58

They should be, because big corps rely on government charters for their very existence, and amass their power primarily through lobbying, i.e. secret blandishments and requests for favors from their sire.

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Comment by ecofeco
2010-01-06 18:34:39

I think he means that it wasn’t corporations that gave us safe water, food and medicine and general safety laws and regulations.

Nor would they ever if they weren’t forced to.

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Comment by CA renter
2010-01-07 04:41:05

Right, eco.

 
 
 
 
Comment by Al
2010-01-06 10:25:18

“Borrowing is simply convenient. It usually does cost us some amount of interest, but it’s worth the convenience.”

This is a message that has been repeated over and over by the people that lend us the money, and make a profit doing so. I don’t buy their message nor do I pay for it. I find it just as convenient to pay cash, which I have more of because I don’t pay interest.

Comment by ecofeco
2010-01-06 18:44:41

Yep cash or debit. I really HATE getting behind anyone who doesn’t carry at least $10 in cash and is buying with a credit card anything less than $10.

 
 
Comment by joeyinCalif
2010-01-06 10:54:57

well damn.. i sure didn’t wanna see that particular post highlighted today.. It was on my mind. I even checked bits and buckets for responses before reading today’s. Oh well..

Yeah, we have come to accept credit cards (and mortgages) as normal and necessary conveniences, and their use is very costly to most people.

I use a card a quite a bit, and auto-pay it off every month out of a checking acct. It costs me nothing because I use the convenience responsibly. Many people do likewise.

I can afford to walk into just about any store and charge anything in there. But here’s the thing: I hate using it.
I don’t like “charging” stuff. I have an ingrained aversion to being in debt.
I need the card to check into a hotel, but sometimes when checking out, I’ll go to the desk and pay cash for no good reason other than I don’t want the charge on the card. It’s insane.. but I feel better for some reason.
—-

Now, if we’re gonna blame the card for people’s woes, tell me what is the excuse for running up a balance to the point where that person cannot pay it off? Is anyone forced to do so?
I’ll maintain that there is no good excuse for abusing a credit card.

I was taught that credit is a potentially dangerous tool which can make life easier as long as the tool is used properly and is given all the respect it deserves. The same person who taught me that also taught me how to drive safely, and how to sharpen a knife without losing any blood…
It’s unfortunate that some people weren’t taught to use credit properly, but that’s not my problem.. and when there’s trouble, it’s not the credit card’s fault.. not the car’s fault.. not the knife’s fault.

Comment by ecofeco
2010-01-06 18:48:28

Unexpected job layoff. Unexpected crisis. Unexpected medical emergency. All of unexpected duration.

That’s how it happens.

Not saying that there aren’t plenty of irresponsible idiots, but they aren’t all irresponsible.

Comment by joeyinCalif
2010-01-06 19:27:54

Unexpected job layoff. Unexpected crisis. Unexpected medical..

How did people deal with those things before there were credit cards?

There was a time in the USA when families were just closer.. it’s still true of many newer immigrants.. and family was where you went if things got bad.

Now the divorce rate is .. pushing 70%? The average kid has had 4 or 5 “parents”? Who’s your daddy? Where’s your daddy?

Times sure are different these days. Maybe we can look at credit cards as one example of our righteous reward for some of the social changes we’ve made. Make bed. Sleep in it.

I don’t get any pleasure from other people’s suffering. I know people who are deep in CC debt and will probably never escape. But the point of this thread is who’s or what’s to blame for the high price of CC borrowing. The tool or the person who wields it?
I’m open minded and can see both sides of it but I see no argument, emotional or otherwise, that will convince me the tool is to blame.

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Comment by Professor Bear
2010-01-06 12:38:30

“The only weakness with this system, if there is one, is ourselves.”

(Pogo): We have met the enemy, and he is us.

 
 
Comment by cougar91
2010-01-06 08:18:53

The best/worst job survey 2010:

http://online.wsj.com/public/resources/documents/st_BESTJOBS2010_20100105.html

I am #2/#3. Woo hoo!!!

Comment by In Colorado
2010-01-06 10:07:00

I’m seeing the “entry level” SW engineer salary being offered to midlevel folks, and the midrange to “senior” people. I don’t know any SW engineers paid over 100K.

Thanks Chindia!

 
Comment by REhobbyist
2010-01-06 13:47:38

That does it. I’m quitting my job as a surgeon and applying to be a parole officer.

Comment by Spokaneman
2010-01-06 15:44:07

I tried to click the “methodology” link and it did not work, I was very curious how this list was created. I’m a number 9, have been for perilously close 40 years, and would personally put it somewhere around 187. But I suppose most fee that way about thier jobs, otherwise Dilbert wouldn’t be as popular as it is.

 
Comment by CA renter
2010-01-07 04:46:34

Comment by REhobbyist
2010-01-06 13:47:38
That does it. I’m quitting my job as a surgeon and applying to be a parole officer.

—————–

Sort by highest top salary…YOU’RE #1! :)

Comment by CA renter
2010-01-07 04:48:22

Just checked all pay levels, and a surgeon is #1 in all pay categories.

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Comment by Professor Bear
2010-01-06 08:21:27

Does the title of this article leave others scratching their head the way I am? I suggest a more accurate alternative: “Home-Sale Gauge Fell Despite Renewal and Expansion of Tax Deal”

* JANUARY 6, 2010, 9:42 A.M. ET

Home-Sale Gauge Fell as Tax Deal Expired

By MEENA THIRUVENGADAM and JEFF BATER

A gauge of housing-market activity plunged in November, largely reflecting a surge of home buyers in October racing to beat a deadline for a tax credit.

Meanwhile, a separate report showed growing demand in November for a wide range of U.S. factory products, signaling the potential for stronger-than-expected growth in fourth-quarter gross domestic product.

The National Association of Realtors’ index for pending sales of previously owned homes slid 16% to 96 in November, from an upwardly revised 114.3 in October, the industry group said Tuesday. Pending home sales fell across all regions of the U.S.

“It is uncertain how much demand was pulled forward by the original expiration date of the [first-time home buyers'] tax incentive, but today’s report indicates that it was considerable,” MFR Inc. chief U.S. economist Joshua Shapiro wrote to clients.

Despite November’s steep drop, the pending home sales index for the month was 15.5% higher than it was a year earlier.

Comment by ecofeco
2010-01-06 18:53:40

A perfect example of bad journalism clouding the issue and making a mountain out of a molehill by trying to hype up the ordinary.

Residential RE sales are always up at the beginning of summer and down in the fall.

 
 
Comment by Professor Bear
2010-01-06 08:25:40

Are we finally nearing the point when housing is generally acknowledged to be the “Worst Investment”?

In case you have a wife like Muggy, who just doesn’t get it, try not to get stucco!

* January 5, 2010, 7:34 AM ET

Fed Economist: Housing Is a Lousy Investment

By Jon Hilsenrath

Before the housing bust, Americans tended to think their homes were their best and most important investments –- a view promoted by Washington policy makers who made home ownership a top priority. Karen Pence, who runs the Federal Reserve’s household and real estate finance research group, argues at the American Economic Association’s meetings this week that homes are actually a terrible investment.

Putting aside the fact that home prices have fallen dramatically, she says several factors make homes a lousy investments:

1. It is an indivisible asset. If you own stocks and bonds and suddenly need a little cash, you can sell some of your stocks or bonds but not all. With a home, on the other hand, “you can’t just slice off your bathroom and sell it on the market.”

2. It is undiversified. You can buy stocks or bonds in industries or countries all over the world. A home is a bet on one single neighborhood.

3. Transaction costs are very high when you buy or sell a home because of real estate agent fees, mortgage fees and moving costs.

4. It is asymmetrically liquid, meaning it’s easy to get money out when home prices are going up. (You just take out a bigger mortgage.) But it’s hard to take money out when prices are going down because refinancing becomes more difficult. Put another way, the leverage that you have in your house with a large mortgage means your investment does well in good times but could be lousy in bad times.

5. It is highly correlated to the job market, meaning that home prices in a neighborhood tend to rise when the job market is improving in the area and fall when the job market is worsening. This means that your main financial asset provides the smallest cushion to you when you might need it most.

Comment by Elanor
2010-01-06 09:03:36

Sacrilege! The NAR will put out a hit on this woman!

Comment by Professor Bear
2010-01-06 09:45:27

Though I wish physical harm on nobody, I wish the NAR would pull off some kind of outlandish stunt (not a contractual killing, but something illegal of similar magnitude) to bring attention to the pernicious nature of this organization. Perhaps if they did something sufficiently illegal and outlandish, this could be the basis for shutting them down. Don’t they generally run afoul of the Sherman Antitrust Act, anyway?

Comment by lavi d
2010-01-06 13:36:19

Perhaps if they did something sufficiently illegal and outlandish…

What if they got caught in a video sting telling people it’s okay to lie on loan applications?

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Comment by Hwy50ina49Dodge
2010-01-06 10:55:17

NAR backwards is RAN, as in:

“It was them, they RAN the scam.” ;-)

 
 
Comment by Rental Watch
2010-01-06 09:33:05

A house is a place to live. No more, no less.

If there is intangible value to you (knowing that you can improve the house as wanted, never have the house sold out from under you, peace of mind coming from a potential hedge against inflation for a portion of your wealth, etc.), then you might be willing to pay more than rental equivalent value.

In other cases it is hard to see why you shouldn’t keep on renting.

Comment by Professor Bear
2010-01-06 12:40:14

Mortgages work well as forced-savings programs, at least so long as home prices are not dropping by hundreds of thousands of dollars.

 
Comment by Spokaneman
2010-01-06 16:26:12

Mrs. Spokaneman and I had our annual state of the finances meeting January 3. We only do it once a year as it is probably the most uncomfortable of discussions we can have. Has been for the 30 years we’ve been married, but we’ve made it work.

At any rate, we were going through the investments, charitable contributions, earnings, spending patterns etc. all of which take on more importance as I will be retiring in the next three years or so.

We’ve been able to create a reasonably large nest-egg and paid off Casa-Spokaneman in about 13 years, and have been living mortgage free for the past 8. There’s lots of good and bad about homeownership but I will say a paid off home in good condition in a decent neighborhood gives tremendous peace of mind. If we were staring at $1800/month rent (and growing) in perpetuity, as opposed to $250/month property tax payments and maybe $250/month required maintenance, our financial picture would be substantially less rosy.

If you can stay long enough and avoid buying in a bubble, owning a house can be a good thing (as opposed to a good investment).

Comment by CA renter
2010-01-07 04:52:34

True, IF you can avoid buying in a bubble — something the PTB seem adamantly opposed to.

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Comment by Professor Bear
2010-01-06 09:47:20

“In case you have a wife like Muggy’s…”

Sorry about the “Eats, Shoots and Leaves” problem in my initial post, Muggy; we all know you are a married heterosexual male.

 
Comment by joeyinCalif
2010-01-06 12:16:56

2. It is undiversified.

Well of course. The reason is you’re looking at a single, solitary “investment”. Isolate ANY single investment and it is equally as undiversified as a house.

A fund might be considered diversified in a narrow sense, but still, it’s just one fund and you’re putting all your eggs into one basket..

Like any investment, houses are “good” when prices rise and “bad” when prices fall. I see no reason to brand them with a scarlet “B” for bad.

Transaction costs are very high..
And trading stocks is cheap? Sure it is.. ask any stock broker.

It is highly correlated to the job market..
Of course we all know that other investments are unaffected by the job market.. like.. um.. lemme think a bit.
Ahh.. Funeral parlors! Recession-proof.
————-

Come on people.. homes are great investments, as long as you handle them in a manner that is consistent with their nature.
Do not borrow money from your investment. It’s an investment!.
Do not try and day-trade (flip) homes.
Study the market thoroughly and choose the home wisely.
Buy to hold..
..etc…

Comment by Professor Bear
2010-01-06 12:42:05

“A fund might be considered diversified in a narrow sense, but still, it’s just one fund and you’re putting all your eggs into one basket.”

Sorry, but that comment makes no sense. To see why, consider a fund that tracks a broad index, like the Wilshire 5000. You get the average return on a bunch of narrowly diversified investments, instead of the much more volatile return on isolated undiversified investments. This is why dumb index investing tends to do better than stock picking over the long run.

Comment by Al
2010-01-06 12:53:18

To add, you can buy a wide variety of stocks for $250K, but probably no more than one or two houses.

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Comment by Professor Bear
2010-01-06 13:19:21

Probably no more than 1/2 a house in our zip code… (current median SFR list price = $1.1 m or so)

 
Comment by cactus
2010-01-06 13:51:36

Probably no more than 1/2 a house in our zip code… (current median SFR list price = $1.1 m or so)

4clousure Ranch are those expensive homes even selling ?

I know in my hood homes sell fast for about 400K 92064

 
Comment by Professor Bear
2010-01-06 15:25:14

“4clousure Ranch are those expensive homes even selling ?”

Not anywhere as fast as they used to. And the last time we discussed this, my appraiser friend (and fellow 92127 renter) said that ‘higher than expected’ foreclosures were in the cards for 4S Ranch over the next several years (hence the mean but fitting nickname…).

 
 
Comment by joeyinCalif
2010-01-06 13:44:39

There are no doubt lots of reasons to claim a fund is not diversified.. not difficult to imagine if one cared to mull it over.. but i don’t.
But for instance, it’ll have one manager (or one team). A single decision by one person will commonly affect the entire fund and could make it or break it.

——–
As for the large amount of money spent on a house as reason to demean it as an investment, price just two or three shares of BRK A and tell me that’s also a “bad” investment just because it’s expensive.

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Comment by joeyinCalif
2010-01-06 15:40:36

and another thing…

ya know the reason Buffett has deliberately restricted shares outstanding and thus keeps the price of BRK A so high? It’s to keep those freakin traders out of his company. It’s to discourage trades and reduce volatility.

So, a high entry price by itself can add some positive attributes to an investment..

Now im gonna go spend some money at Walmart and help my portfolio just a little bit..

 
 
 
Comment by Professor Bear
2010-01-06 12:43:08

“And trading stocks is cheap?”

No. That’s why I stick with my low-cost Vanguard mutual funds.

Comment by joeyinCalif
2010-01-06 13:58:35

Sure, there are ways.. and a person could trade homes for cheap too.. just get a RE broker’s license.

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Comment by Professor Bear
2010-01-06 12:44:47

“Ahh.. Funeral parlors! Recession-proof.”

Not sure about whether they are recession-proof, but definitely a growth industry (along with hospice, long-term care insurance, etc) with the aging of baby boomers. Of course, if the market is rational, this is already reflected in the share prices of companies working in these areas…

 
Comment by Al
2010-01-06 12:58:34

“Of course we all know that other investments are unaffected by the job market.. ”

Apparently there’s a negative correlation between the job market and stocks, if you go by the last couple of years. Lose your job and watch your stocks sooooar.

Comment by joeyinCalif
2010-01-06 14:36:45

5. It is highly correlated to the job market, meaning that home prices in a neighborhood tend to rise when the job market is improving…

The above statement is so lame I’m tempted to say it’s absolutely false.

In the last couple years, it was falling home prices that destroyed the job market. Loss of jobs is just one of many trailing indicators of the housing bubble’s collapse.

You cannot say that a poor job market was the cause, and lower home prices were the effect. It’s just not true. The job market is the thing that’s affected. Home prices are the cause.
———-

Home prices rise as wages rise. It’s that simple. The $25,000 1950 home is valued at $500,000 today because wages rose, and for no other reason. Conditions in the “job market” are immaterial.

The economist who wrote the article above is drawing conclusions out of his butt in order to force a particularly narrow point of view…… imho.

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Comment by Professor Bear
2010-01-06 15:18:54

As usual, I have a different perspective than Joey:

…it was falling irrationally exuberantly rising home prices that destroyed the job market.

 
Comment by CA renter
2010-01-07 04:58:16

Bingo, PB.

The job market was destroyed because people didn’t have access to all that debt/credit (collateralized by “their” houses).

 
 
 
Comment by Professor Bear
2010-01-06 13:23:17

“Come on people.. homes are great investments, as long as you handle them in a manner that is consistent with their nature.”

If homes are great investments, then perhaps the usual rules of thumb for investments are applicable?

1. Buy low, sell high.

2. Buy when everyone else is selling; sell when everyone else is buying.

- The best chance to do the latter was 2004-2007; anyone who did not get out of their ‘investment’ by year-end 2007 got stucco.

- The best chance to buy still awaits at some indeterminable future point in time, as the market has not yet bottomed out, and would-be sellers are holding out hope for a recovery before putting their homes on the market.

Comment by joeyinCalif
2010-01-06 14:44:21

Is it consistent with the nature of a house to apply the same “rules of thumb” as are applicable to trading stocks and bonds and commodities? NO!

A house is not nearly as flexible an investment as are those other vehicles. For one thing, the time factor is on a completely different scale.

If you wanna trade “houses” just like you trade other stuff, then trade shares in an REIT. Do not try and trade brick and mortar houses.

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Comment by Professor Bear
2010-01-06 15:21:43

I think we are in agreement here, especially as regards the wisdom of REIT investments versus buying and selling individual homes as investments. The latter only makes sense if you have truly deep pockets, or lots of other people’s money to gamble (e.g., if you are a REIT manager).

 
Comment by Professor Bear
2010-01-06 15:23:03

I nonetheless still think buying low and selling high, and buying when everyone else is selling, are both very good suggestions for anyone who does not want to get stucco in a falling-knife home purchase…

 
Comment by measton
2010-01-06 18:33:30

You can’t live in a reit. At some point buying a home will be a good investment. My guess is that if you are going borrow the money and then live in it for 30 year we will see that point in the next several years. If you are going to pay cash or want to sell in a short period of time you’ll probably want to wait.

 
Comment by joeyinCalif
2010-01-06 18:42:38

I don’t want to be picky about the wording, but is now really the time to buy houses just because prices are falling?

If you finally find your dream home, is it best to refrain from buying it until the price is low?

Homes are just a different sort of investment. Like someone noted above, they are places to live.. which applies to probably 95% of home buyers.
People eat, sleep, beat their kids and party hearty right inside their investment. That fact alone has huge implications and should put homes in their own, unique investment category.

I think that buying a house with investment in mind deserves it’s own unique rules of thumb (and those rules probably do exist).

 
 
 
 
Comment by CarrieAnn
2010-01-06 12:43:06

“In case you have a wife like Muggy, who just doesn’t get it”

I’m feeling very forgiving toward Muggy’s wife seeing as she’s probably experiencing crazy post partum hormone changes and even her husband is reporting the apartments they’re looking at are dumps. Is it possible while there is still unreleased shadow inventory, increasing foreclosure numbers have made FL rental opportunities less of a good deal?

I listened to the “I’m so sick of…..” routine from DH all summer too. At least I have the advantage of arguing this area hasn’t experienced it’s drop yet and we don’t want to be bagholders should there be any necessary career changes in the next decade or two. I’m wishing them luck in this confusing time.

Comment by Professor Bear
2010-01-06 13:18:19

“I’m feeling very forgiving toward Muggy’s wife seeing as she’s probably experiencing crazy post partum hormone changes and even her husband is reporting the apartments they’re looking at are dumps.”

Sorry to hear that post partum hormone changes are so devastating to rational thinking.

Comment by packman
2010-01-06 13:49:42

Sorry to hear that post partum hormone changes are so devastating to rational thinking.

I can vouch personally (secondhand) that they are - or can be at least.

I thought you had kids. Guess not? Or were the brought by the stork?

:-)

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Comment by Professor Bear
2010-01-06 15:16:50

I have kids, but my housing bubble brainwashing program was nonetheless wildly successful. She was a lot less excited about the money I lost on my expired homebuilder puts and our early entry into FOREX than the hundreds of thousands of dollars we saved by avoiding home purchase at the market top. Now if I can only learn to time the execution of my investing insights to match the dull response of the sheeple, I, too will be able to get rich quickly!

Perhaps I should give seminars to help the Muggy wives of the world the see the light?

 
Comment by Muggy
2010-01-06 17:25:55

“Perhaps I should give seminars to help the Muggy wives of the world the see the light?”

Dick.

 
 
 
 
Comment by lavi d
2010-01-06 13:16:20

Karen Pence, who runs the Federal Reserve’s household and real estate finance research group, argues at the American Economic Association’s meetings this week that homes are actually a terrible investment.

Sounds like she’s been reading Patrick.net.

Comment by SanFranciscoBayAreaGal
2010-01-06 15:20:46

Sounds like it’s getting closer to buying a house.

 
 
Comment by Muggy
2010-01-06 17:20:33

“In case you have a wife like Muggy, who just doesn’t get it”

She gets it, asshole.

Comment by aNYCdj
2010-01-06 23:40:35

OOH OOH cat fight hissy fit….ya cant rank out on muggys wife and get away with it…

I guess its all perspective muggy you have a huge apartment compared to a NYC one.

 
Comment by CA renter
2010-01-07 05:08:37

Muggy,

I don’t think PB meant to offend you or your wife. Sometimes, he just likes to get spunky, and I think he’s a bit frustrated with the way our housing market is behaving out here in San Diego. It really is exceedingly frustrating in some areas, and I imagine that might come out in some people’s posts.

You’re in a different situation than we are, from what I can tell. If prices are significantly lower where you are, and you can easily afford your mortgage, and your job(s) are steady (hopefully, you’ll be able to live on one income), and rents on comparable places are higher than/equal to your PITI payments, I say you should do what is right for you guys.

Best of luck to you and your lovely family, Muggy!

 
 
 
Comment by Professor Bear
2010-01-06 08:31:07

Sovereign Debt, Hither and Yon – You Know, Like Japan
By Paul Kedrosky · Tuesday, January 5, 2010

Useful graphic showing government debt as a percentage of GDP over time across various countries around the world. The Japanese continue to really ring the bell in this particular contest, but the U.S. looks set to give Italy a rival for second spot.

Comment by packman
2010-01-06 10:22:17

Now let’s talk “external” vs. “internal”.

Japan’s case is kind of like borrowing heavily from your 401k. There’s a big difference between:

- Having a $500k 401k, and borrowing $400k from it (Japan’s case)
- Having no 401k, and borrowing $200k from your neighbor (US’s case)

 
 
Comment by wmbz
2010-01-06 08:36:42

I don’t have cable, but do have R.Runner, which is bound to rise also. Wonder if more people will forgo cable TV?

Why cable is going to cost you even more.

NEW YORK (CNNMoney.com) — Your cable bill is going up this year — and next year, and the year after that — with no end in sight.

The average digital cable customer already pays almost $75 a month, according to research firm Centris. And many subscribers pay more than $100 to tune in to everything from “The Daily Show” to “Jersey Shore.”

Customers see an average annual price hike of 5%, analysts say — which means that in five years they’ll be shelling out more than $95 a month for TV.

“There will always be an increase in cable bills,” said Miller Tabak & Co. media analyst David Joyce. “Times are changing and providers have to make up losses somewhere, so consumers bear the brunt of it.”

Comment by Nycityboy
2010-01-06 08:41:06

I would gladly get rid of CNBC, Fox News, CNN and the rest of the propaganda channels if it would save me a few bucks. They should pay me to pump that $hit into my TV set.

 
Comment by In Colorado
2010-01-06 08:58:05

And many subscribers pay more than $100 to tune in to everything from “The Daily Show” to “Jersey Shore.”

Wow! I don’t pay anthing close to that and I’m thinking of cutting back!

 
Comment by Elanor
2010-01-06 09:01:58

When are the cable providers going to let customers choose which channels they want?

Comment by Captain Credit Crunch
2010-01-06 09:36:34

Never. Bundled deals extract maximum consumer surplus.

 
Comment by DinOR
2010-01-06 10:24:27

Elanor,

Well, they ‘do’ ( you just have to buy one of the old fashioned 10′ dishes to get it? ) No seriously, when we lived in the country we had a 10 footer and it was fantastic. You could even get the Montreal Philharmonic Orchestra on CBC.

If you couldn’t get the White Sox game ( for free btw ) on WGN, just switch over to whatever Sat. was covering the game locally. The tech’s that really knew their stuff -promised- me we’d all regret the mini dishes, they’re just like cable now.

Comment by Elanor
2010-01-06 11:17:11

I could live with a 10 ft. dish on my roof. Not sure what the neighbors would say, here in suburbia.

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Comment by lavi d
2010-01-06 13:40:40

when we lived in the country we had a 10 footer and it was fantastic

I thought all that stuff was encrypted/scrambled now.

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Comment by Hwy50ina49Dodge
2010-01-06 11:03:54

À la CULT… will not allow… À la carte Carte ;-)

Are cable companies CORPORATIONS?

Current score:

CORPORATIONS = 666,666
Connedsumers = 86

 
 
Comment by Blue Skye
2010-01-06 09:10:47

I got off the umbilical cord (cable) six years ago after the wifey escaped. I survived and so did the kids. Back then the tab was $50 per month. Living in a small backwater town where most folks are on some kind of Public Assistance or pension, I can attest that cable is considered a necessity ranking with food, shelter and heat. This from the cable salesman who couldn’t understand why I wasn’t on the $100 package like most everybody else in town.

Double that to $200 and it is my monthly food tab (barring extravagant outings with the gf du jour). No thanks.

I do remeber a day when a movie was a special Saturday social event.

Comment by rms
2010-01-06 14:27:35

Satellite TV service is where the real money is found. Every trailer in every trailer park around my rural area sports a dish. Little wonder that the satellite dish is called the state flower of West Virginia.

FWIW, I haven’t watched a TV show in over ten years.

 
 
Comment by measton
2010-01-06 09:45:50

I refuse to buy cable. It is an out of control oligopoly. You have to buy a bunch of crap you don’t want in order to get what you do. Some executive makes the decision about what you can watch based on what’s best for his company not what you are interested in. Every year they jack up rates.

McCAin at one point was pushing to break up cable.

The best system is similar to the internet.

Cable becomes a low profit, dividend paying, regulated company like a public utility. If they make excessive profits subscibers get a rebate. Job of CEO has pay cap.

Then content providers bid on using channels.

Subscribers pay a fee to the utility for hookup and then purchase the content they want.

Content providers who purchase over 10% of channels have to pay progressively more for additional channels to avoid monopolization.

This creates the greatest competion and the best content. It provides a real free market as opposed to the current system.

Comment by awaiting wipeout
2010-01-06 10:58:32

No TV in our home since 1995. Once in a while, we’ll HULU something or watch PBS online. A few HOA’s ago (a past life), the PUD developer owned the cable co for the community. What a racket.

 
Comment by Elanor
2010-01-06 11:18:33

In many areas the local cable company is effectively a monopoly. An oligopoly would be an improvement!

Comment by In Colorado
2010-01-06 11:48:49

There is always DirectTV and DishNetwork.

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Comment by DennisN
2010-01-06 12:16:34

OTA digital works great here in Boise. I put a $35 big antenna into the garage attic and get all the TV I want.

The transmission towers are up on a mountain top at about 7,500 feet so we all get line-of-sight here in Boise. That helps.

 
 
 
Comment by wmbz
2010-01-06 09:13:28

Recession Hits America’s Solar Industry ~~ January 6, 2010

The recession is having a glaring impact on America’s solar power industry.
Demand for solar products has dropped globally, prices have plummeted. Complicating efforts to expand, the industry in the United States faces intense competition from foreign governments making massive investments in what many see as the future of energy.

Facing the difficult economic reality of competing on the world stage, Massachusetts based Evergreen Solar, Inc is turning to China. Lauded as a leader among green energy businesses in the state, the company is taking advantage of the subsidies, cheap labor and production costs offered in Asia.

It’s a simple matter of dollars and sense.

“You have low labor costs and low overhead costs in China but, you also get enormous help from the government and so it’s difficult to compete in the United States if you have to contend with higher labor costs and lower government assistance,” said Rick Feldt, the CEO of Evergreen Solar.

Comment by aNYCdj
2010-01-06 09:46:37

UH wouldn’t this be the BEST time to use the stimulus $$$ when prices are Cheap???? ….Green jobs eh ObaHma

prices have plummeted

Comment by REhobbyist
2010-01-06 13:54:49

Hm, maybe I’ll look into the solar panels that I decided we couldn’t afford a few years ago. Thanks, wmbz.

 
 
Comment by ecofeco
2010-01-06 19:09:35

I would love to see the look on his face when he learns the truth of Chinese quality control, or lack thereof I should say and he’s locked into a long term contract he signed with the Chinese government. :lol:

 
 
Comment by aNYCdj
2010-01-06 09:28:13

Hey New Yorkers one of our old posters is having an art show opening next month ….. maybe we should all meet up at the Thursday night show him some love.

============================================
“Outlook: Small Paintings”

February 4th - March 13th, 2010
Opening Feb. 4th, 5-7 pm
One Man Show at the Fischbach Gallery

http://www.bradmarshallart.com/

Comment by Pondering the Mess
2010-01-06 10:45:21

Talk about a small world…

I just saw the post for this show on the WetCanvas art website… Hmmm… amazing how small the internet is, in a way!

 
Comment by Hwy50ina49Dodge
2010-01-06 11:08:46

Beautiful work! ;-)

 
Comment by CarrieAnn
2010-01-06 12:50:28

I love his New York state work. Wish I was local and could go.

 
Comment by Bronco
2010-01-06 15:39:07

that is some nice work!

 
 
Comment by DennisN
2010-01-06 09:48:42

CONVERTING STUDENT LOANS TO HELOC.

A few weeks ago there was a story about someone who took out a HELOC, used the funds to pay off their student loans, and then defaulted.

Student loans are not dischargeable in bankruptcy. But with a HELOC you may be able to just “walk away”. Converting a student loan to a HELOC sounds like a great scam to me.

Any thoughts on how prevalent this is becoming? Somehow reporters never ask the “victims” what they spent those huge piles of HELOC dollars on - I wonder what percentage went to otherwise non-dischargeable student loans?

Comment by aNYCdj
2010-01-06 09:56:08

Polly might answer this …If you run up big debts in the last 90days it could be disqualified from then BK. So if you paid off the student loan and waited 6 months or a year to walk away you are probably in the clear.

Comment by DennisN
2010-01-06 10:48:54

The point being with a HELOC you don’t have to declare BK.

 
 
Comment by Mike in Miami
2010-01-06 09:56:36

That’s just the kind of innovative financial engineering Wall Street is looking for. I would call it a student loan affordability product. :)

 
Comment by Blue Skye
2010-01-06 10:30:36

I imagine that there are a lot of potential cases of fraud out there, or tax evasion at least.

“What is the purpose of the loan Mr. Grad?”

“Uh, home improvement?”

“Excellent!”

 
Comment by Prime_Is_Contained
2010-01-06 11:32:30

“I wonder what percentage went to otherwise non-dischargeable student loans?”

I would guess that very few went this route. You give people way too much credit, Dennis—most people aren’t smart enough to think of this approach.

And assuming you did not lie on your HELOC app (and I don’t believe most even ask what you want the money for), there is nothing fraudulent about it.

It’s simply smart to pay off the non-dischargable debt first—just like it’s smart to pay off the high-rate debt first. That way you can actually benefit from the safety net of BK if you need it.

I have a brother in the exact opposite position: he paid off all of his CC debt, but has a ton of non-dischargable student-loan debt. Not good planning. If he had done the opposite, he would have been debt-free after his BK 5yrs back.

 
 
Comment by Professor Bear
2010-01-06 09:57:38

As usual on days when the U.S. headline indexes seem to want to sell off but don’t, the adjustment is going into the dollar today.

From Bloomberg:

CURRENCY VALUE CHANGE % CHANGE TIME
EUR-USD 1.4413 0.0048 0.3341% 11:54
GBP-USD 1.6021 0.0029 0.1810% 11:54
USD-CHF 1.0276 -0.0059 -0.5702% 11:54
USD-SEK 7.0697 -0.0385 -0.5411% 11:54
USD-DKK 5.1625 -0.0179 -0.3450% 11:53
USD-NOK 5.6801 -0.0366 -0.6402% 11:54
USD-CZK 18.2500 -0.0381 -0.2083% 11:53
USD-SKK 20.9030 -0.0675 -0.3219% 11:53
USD-PLN 2.8434 -0.0055 -0.1930% 11:53
USD-HUF 186.4020 -1.1775 -0.6277% 11:53
USD-RUB 29.7050 -0.1310 -0.4391% 11:54
USD-TRY 1.4718 -0.0009 -0.0645% 11:53
USD-ILS 3.7200 -0.0250 -0.6676% 11:53
USD-KES 75.7000 0.3000 0.3979% 09:45
USD-ZAR 7.3050 -0.0122 -0.1671% 11:54
USD-MAD 7.8575 -0.0264 -0.3345% 11:53

Comment by Professor Bear
2010-01-06 10:00:27

In case my point is obscured by the amount of data I just posted, note that the signs on all exchange rates starting with USD- are negative: these are the price of dollars in terms of the other currency.

Conversely, the two exchange rates that don’t start with USD- (EUR-USD and GBP-USD) are positive, signifying that the dollar prices of Euros and British pound sterling are increasing.

The upshot: The dollar is materially sliding against all of its Western European rival currencies.

Comment by Blue Skye
2010-01-06 10:33:44

A bunch of debt Euros got a Viking funeral yesterday?

 
Comment by packman
2010-01-06 10:46:47

Cash is sinking.

Comment by Blue Skye
2010-01-06 11:41:39

LOL.

My Delmonico steak tonight is a $6 steak instead of a $9 steak, and it’s a thicker cut. I think cash is fine for now.

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Comment by Professor Bear
2010-01-06 12:54:26

On the other hand, my $4 Trader Joe’s bottles of wine now cost $6 — 50 percent inflation :-(

 
Comment by Elanor
2010-01-06 13:57:08

Whaaaa? PB, say it ain’t so! In fact, I thought in California you still had Two-Buck Chuck. It’s been $3 for a while elsewhere in the country.

 
Comment by Blue Skye
2010-01-06 13:57:45

Bummer! California wine?

My scotch hasn’t gone up. The applejack is nearly free.

 
Comment by Professor Bear
2010-01-06 15:12:53

“I thought in California you still had Two-Buck Chuck.”

We do — and still at $2 a bottle. My tastes have become slightly more upscale since I bought it for $24/case while a grad student.

 
 
Comment by mrktMaven
2010-01-06 12:48:01

Cash is trash. How can anyone say otherwise when they have savers over a barrel, when they can print more reserves and then some at the push of a button, when their explicit intent is to increase asset prices? We’ll all be millionaires when these guys are finished.

Jan. 6 (Bloomberg) — Federal Reserve officials last month debated increasing and extending asset purchases should the economy weaken, with a few favoring the move and one seeking a reduction, minutes of their last meeting showed.

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Comment by Professor Bear
2010-01-06 13:16:37

“…when their explicit intent is to increase asset prices?”

I have been wondering whether that was the intent. How does this fit in with the Fed’s mandate to maintain a stable currency and to keep employment high? Is it even legal?

 
Comment by NYCityBoy
2010-01-06 13:27:36

Questions of legality are so 20th century.

 
Comment by Professor Bear
2010-01-06 13:44:23

“Questions of legality are so 20th century.”

Sorry — I keep forgetting the Fed exists in a rarefied atmosphere above the rule of Constitutional law.

 
Comment by packman
2010-01-06 13:53:35

Questions of legality are so 20th century.

Legality went out the window after the 19.13th century actually.

 
Comment by mrktMaven
2010-01-06 14:11:03

The Fed’s ‘legal status’ is purposely ambiguous, not unlike the GSEs, which are essentially off balance special purpose vehicles. This ambiguous status allows successive administrations to print money for their own narrow purposes. It provides cover. The hearings, confirmations, and minutes are all a dog and pony show.

 
Comment by Professor Bear
2010-01-06 15:11:39

“…which are essentially off balance special purpose vehicles.”

Damn! I hate some of the insights shared here…

 
 
 
 
Comment by RioAmericanInBrasil
2010-01-06 10:30:32

Awwww Man… Kenya? The Krone? Dirham????

17 currencies but never the currency from the 8th largest economy in the world? And in the New World ta boot.

You’re gonna give them a complex or something…

 
 
Comment by wmbz
2010-01-06 10:53:16

Phantom zip codes also found in Virginia
Local Opinion Editor ~~ 01/06/10

As much as $9.5 million in federal stimulus dollars went to 14 zip codes in Virginia that don’t exist or are in other states, Old Dominion Watchdog (http://virginia.watchdog.org) reports. The fake zip codes were listed on Recovery.gov, the federal Web site that is supposed to track how the stimulus money is being used.

The phony zip codes are a new wrinkle in Recovery.gov’s increasingly tattered credibility. In November, Ed Pound, director of communications for the Recovery Accountability and Transparency Board, said a rash of phantom congressional districts found on the website were the result of confusion by fund recipients, who apparently didn’t know who their congressman was.

But who would give millions of dollars to somebody who doesn’t even know their own zip code?

Comment by Hwy50ina49Dodge
2010-01-06 11:19:03

“Phantom zip codes also found in Virginia” ;-)

Geez, imagine if the Washington Post or the NYT finds out they’re all in Langley, VA?

Bugs: “eh Hwy, Pssst, Tom Cruise was seen on the lot, all I’s heard was something about, “3 blah, blah, Condor ll”…but you didn’t hear it from me.”

 
 
Comment by Hwy50ina49Dodge
2010-01-06 11:28:41

Listening live to NPR local station:

Terminator, Gropinator, Collectinator State of the State:

The Gov:

“The CA budget deficit is our Katrina, we knew it was coming…”

“…we spend more on prison uniforms than caps & gowns”

“…I’d still be in Austria yodeling”

BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)

The best Repubican in America!

 
Comment by wmbz
2010-01-06 11:42:40

LOL! Trim deficit! Go team Barry…

Promise to Trim Deficit Is Growing Harder to Keep.
The New York Times

WASHINGTON — President Obama is making final decisions on his budget for next year and is still promising to outline a path to substantially lower federal deficits. But on nearly every front, that goal has gotten harder since his first budget a year ago.

A deeper recession and slower recovery than the administration initially forecast have increased the tab for economic stimulus measures beyond the original $787 billion package, adding hundreds of billions of dollars for programs like unemployment relief and tax credits for homebuyers.

The savings Mr. Obama once projected from winding down the war in Iraq are being eroded by a bigger buildup in Afghanistan than he had initially contemplated. Congress has rejected or ignored his proposals to raise revenues by changing tax rules for multinational corporations and capping deductions by wealthy individuals; for Mr. Obama to reprise those proposals could raise questions about the credibility of the numbers in his budget.

Meanwhile, the biggest tool usually employed to chisel away at projected deficits — shaving Medicare payments to health care providers — is already being used to offset the costs of overhauling the health care system.

Comment by Nycityboy
2010-01-06 13:03:08

economic stimulus measures beyond the original $787 billion package, adding hundreds of billions of dollars for programs like unemployment relief and tax credits for homebuyers.

The savings Mr. Obama once projected from winding down the war in Iraq are being eroded by a bigger buildup in Afghanistan than he had initially contemplated.

I hope he wears proper attire when signing the budget. I would suggest floppy shoes and a clown nose.

The tax credits are to make housing “affordable”. Unquestioned support for Fannie and Freddie are to keep housing unaffordable. Or did I get this backwards? (Scratches head and looks confused) Oh hell, it is all about buying votes with money we don’t have. Why even kid myself?

 
 
Comment by wmbz
2010-01-06 11:59:58

IRS Lien Procedures Ineffective, Harmful, Report Says.

Jan. 6 (Bloomberg) — IRS agents are relying too heavily on property liens to collect delinquent taxes, harming financially struggling Americans and circumventing taxpayer protections ordered by Congress in 1998, a report said.

National Taxpayer Advocate Nina Olson, an independent ombudsman within the Internal Revenue Service, said the agency increased use of liens without evidence they boost tax collections. She said a 475 percent increase in liens filed between 1999 and 2009 coincided with a 7.4 percent decrease in collections.

Olson said the agency’s collection policies are the second most serious problem facing taxpayers behind a decline in telephone service. Three in 10 calls from taxpayers go unanswered, her report said.

Liens are claims against property such as homes or cars that must be satisfied before assets can be sold. The IRS filed 966,000 liens last year, up from 168,000 in 1999, according to the report.

“The IRS’s use of liens may not be furthering the agency’s revenue-collection objective,” Olson said in the 86-page report. She said her office studied 1.9 million accounts involving 277,000 taxpayers who had liens filed against them.

“The IRS overstates the effectiveness of liens and sends a message to its employees that the quantity, not the quality, of liens is what matters,” Olson said.

 
Comment by wmbz
2010-01-06 12:06:28

‘Batboat’ takes on the whalers… and loses: Hi-tech trimaran ‘Ady Gil’ sheared in half after being rammed by Japanese vessel
Mail Foreign Service ~ 06th January 2010

A conservation group’s boat had its bow sheared off and was taking on water this morning after it collided with a Japanese whaling ship in the frigid waters of Antarctica, the group said.

The boat’s six crew members have been rescued. Dramatic video of the incident appears to show the Japanese vessel deliberately rammed the tiny speedboat.

The clash was the most serious in years, during which the Sea Shepherd Conservation Society has sent vessels into far-southern waters to try to harass the Japanese fleet into ceasing its annual whale hunt.

Clashes using hand-thrown stink bombs, ropes meant to tangle propellers and high-tech sound equipment have been common and collisions between ships have sometimes occurred.

The society said its vessel Ady Gil - a high-tech speedboat that resembles a stealth bomber - was hit by the Japanese ship the Shonan Maru near Commonwealth Bay and had about 10 feet of its bow knocked off.

Locky Maclean, the first mate of the society’s lead ship, said one crewman from New Zealand appeared to have suffered two cracked ribs but the others were uninjured.

The crew was safely transferred to the group’s third vessel, though the Ady Gil’s captain remained on board to see what could be salvaged, he said.

‘The original prognostic was that it was sinking, but at this point it is flooded with water but it seems to still have a bit of buoyancy,’ Maclean told reporters by satellite phone from the ship, the Steve Irwin.

Comment by Left LA
2010-01-06 13:35:08

Search for video on this - there are two angles out there. One from the Japanese boat, and one from a third boat out front. The “Batboat” clearly is faster and more maneuverable than the Japanese boat. They steered right into the path of the Whaler (much bigger and slower to react). Not much different than parking your car on train tracks.

Comment by Professor Bear
2010-01-06 13:42:05

Just posted it… (patience)

And your comments about the idiots in the Batboat asking for exactly what they got are spot on.

 
Comment by wmbz
2010-01-06 13:52:14

“They steered right into the path of the Whaler”

Yep, don’t double dog dare a whaling ship, no right of way there.

 
 
Comment by Professor Bear
2010-01-06 13:38:54

That appears to be a clear cut case of coming to the nuisance. Obviously small speed boats are far more agile than large whaling ships. My kids pull the same sort of crap — one son will park himself right in his older brother’s face, just to see what kind of attack he can provoke, then turn around and cry to mom about the outcome.

I am quite curious about the water hoses shown in the video. It appears the whaling ship was hosing the Batboat with water before the collision…

 
Comment by Professor Bear
2010-01-06 13:46:34

“Clashes using hand-thrown stink bombs, ropes meant to tangle propellers and high-tech sound equipment have been common and collisions between ships have sometimes occurred.”

Given the international nature of the incidence, wouldn’t this constitute an act of war?

 
Comment by Elanor
2010-01-06 14:01:45

These whale-huggers are nuts, but a part of me admires their devotion and their guts.

Comment by X-GSfixr
2010-01-06 19:12:23

I’d admire them a lot more if they were actually risking their lives. They are counting on the cameras and the bad publicity they can generate to keep the whalers from doing what they would REALLY like to do……pump a few harpoons in their hull.

 
 
Comment by ecofeco
2010-01-06 19:23:32

While Japan and a few other countries will eventually make whales extinct, only an idiot plays chicken with something that weighs thousand of TONS.

Therefore I have no sympathy and they have no credibility. And martyrdom holds no weight with me.

 
 
Comment by wmbz
2010-01-06 12:15:20

Cold snap spurs power rationing in China ~ January 6, 2010.

BEIJING (Reuters) - Cities across eastern and central China are rationing power for industry and urging residents to limit gas use after a wave of icy weather sent energy demand soaring while straining supplies of coal that were already tight.

Much of China’s manufacturing and farming heartland shivered on Wednesday under snow, sleet and unusual cold that drove south after dumping big snowfalls on Beijing and much of the country’s north in past days.

Daytime temperatures in Shanghai and across the nearby coastal provinces of Jiangsu and Zhejiang skidded close to 0 degrees Celsius (32 F), and many areas inland were hit by snow or sleet, according to meteorological departments.

The harsh weather has pushed energy demand to new peaks, while transport snarls have slowed coal supplies, already low as power and coal companies haggle over prices.

“Conditions for thermal coal supply and shipment do not allow for optimism,” said the China Electric Power News, mouthpiece of the State Electricity Regulatory Commission.

 
Comment by Professor Bear
2010-01-06 12:53:18

U.S. jobs growth on the way; Fed removal of punch bowl to soon follow.

* The Wall Street Journal
* CAREERS
* JANUARY 6, 2010, 1:58 P.M. ET

ADP Reports Private Sector Shed Jobs
Services Industry Adds Positions for First Time Since March 2008
By KATHLEEN MADIGAN

Private-sector jobs in the U.S. fell by 84,000 in December, the smallest drop since March 2008, and service providers added jobs, according to a national employment report published Wednesday by payroll company Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.

Separately, the U.S. nonmanufacturing sector expanded in December, but barely, according to data released Wednesday by the Institute for Supply Management.

The ADP loss is slightly below the 90,000 drop projected by economists in a Dow Jones Newswires survey. The estimated change of employment from October to November was revised by 24,000, from a decline of 169,000 to a decline of 145,000.

“We’re clearly moving now in the right direction,” said Joel Prakken, chairman of Macroeconomic Advisers, which compiles the survey for ADP. He expects payrolls to turn positive in the first quarter and gain strength in second half.

Comment by wmbz
2010-01-06 13:14:21

“He expects payrolls to turn positive in the first quarter and gain strength in second half”.

Phew! That was close, good thing there are no more worries ahead. Soon it will be time to run out and pick up a new 3-D phlat screen.

Imagine job loss slowing in Dec.

 
Comment by ecofeco
2010-01-06 19:27:18

Every single recession in the last 15 years has not had lost jobs fully replaced.

This idiot’s statement is akin to thinking that because the bleeding has stopped, the patient is about to recover. :lol:

 
 
Comment by Professor Bear
2010-01-06 13:14:33

Can anyone who thinks they understand the justification and purpose of Fed asset purchases please explain?

1) Is this procedure a part of routine monetary policy operations, or something else?

2) What purpose do Fed asset purchases serve?

3) Doesn’t Fed intervention in asset markets create market distortions which redistribute wealth to owners of said assets?

4) Have asset purchases been used in past recessions, or is this a first?

5) How do asset purchases fit in with the Fed’s mandate to maintain a stable currency and to keep employment high?

FOMC Discussed Expanding Purchases If Economy Weakens (Update1)
By Scott Lanman

Jan. 6 (Bloomberg) — Federal Reserve officials last month debated increasing and extending asset purchases should the economy weaken, with a few favoring the move and one seeking a reduction, minutes of their last meeting showed.

Policy makers also differed over whether risks are greater that inflation will speed up or slow down too much, the Fed’s Open Market Committee said today in minutes of its Dec. 15-16 meeting in Washington. Some officials said “quite elevated” slack in the economy would damp prices, while others saw a risk of faster inflation from the Fed’s “extraordinary” stimulus, the central bank said.

Fed Chairman Ben S. Bernanke and his colleagues are trying to withdraw unprecedented stimulus and emergency lending programs without impeding efforts to sustain a recovery and reduce unemployment, which is now close to a 26-year high.

“To keep inflation expectations anchored, all participants agreed that monetary policy would need to be responsive to any significant improvement or worsening in the economic outlook and that the Federal Reserve would need to continue to clearly communicate its ability and intent to begin withdrawing monetary policy accommodation at the appropriate time and place,” the minutes said.

Comment by technovelist
2010-01-06 21:27:51

Eventually you will realize that the Fed has no intention of removing the punch bowl at any point, as that would sink the banking system without a trace. Of course they keep hinting they will, so as to postpone the tsunami of bond yield increases and currency depreciation that will ensue as soon as the market figures out their game. But they cannot actually follow through with action.

 
 
Comment by wmbz
2010-01-06 13:27:13

Fed minutes show lingering concern over housing.
January 6, 2010

WASHINGTON (Reuters) - Some Federal Reserve officials worried last month that waning government support could snuff out a fragile housing market recovery and a few believed it might be desirable to step up asset purchases.

“Some participants … noted the risk that improvements in the housing sector might be undercut next year as the Federal Reserve’s purchases of (mortgage-backed securities) wind down, the homebuyer tax credits expire, and foreclosures and distress sales continue,” minutes of the Fed’s December 15-16 policy-setting meeting said.

Labor market weakness remained an important concern for Fed officials, the minutes released on Wednesday showed, with officials saying they expect unemployment to remain high for “quite some time.”

Views about policy differed. Some officials said persistently high unemployment might make it desirable at some point to expand or extend large-scale purchases of assets.

However, one policy-maker said improvements in financial markets and in the economy may warrant scaling back the Fed’s purchases and reducing holdings over time.

Comment by Professor Bear
2010-01-06 13:40:10

Why do top economic policy makers equate high home prices with better economic performance? Haven’t they bought into the GSEs’ affordable housing mission by now?

Comment by Blue Skye
2010-01-06 13:59:15

Obviously they have. Making higher prices more affordable.

Comment by lavi d
2010-01-06 14:47:51

Making higher prices more affordable.

Quote of the year, so far.

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Comment by wmbz
2010-01-06 14:11:53

“Why do top economic policy makers equate high home prices with better economic performance”?

I have wondered that in the past. Since the housing market has long been a main buoy of the economy, they equate always rising prices as a positive. “Controlled inflation”

“Affordable” housing is BS in their ‘lofty’ thought process. That’s my guess anyway. To hell with the fact that the course they helped set caused a mania that is NOT coming back.

Millions think in a year or so it’s right back to phat city! Stimulation is causing plenty of fantasies in the minds of many, who think all ills can be printed and papered over.

Comment by Carl Morris
2010-01-06 14:26:11

Most humans are bad with trying to keep correlation and causation straight. My guess is that since there is a correlation between good economic growth and rising house prices it’s easy for some to start thinking that rising house prices CAUSE the good economic growth. My guess is there’s even a cargo cult out there that takes that to the next level and figures that if you let housing go down you are responsible for ruining the economy.

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Comment by CA renter
2010-01-07 05:31:32

Absolutely, Carl. How many times have we heard that “housing is the backbone of the economy,” or some such swill?

They have it backward, but they will never admit it. Better, higher-paying jobs lead to higher housing prices over time. High housing prices, in isolation, are a **negative,** IMHO.

 
Comment by aNYCdj
2010-01-07 05:50:10

That’s true CA………I grew up in Southern CT and if we wanted to move to Greenwich or New Canaan we had to Double our pay before the banks would talk to you.

 
 
 
 
 
Comment by wmbz
2010-01-06 13:29:13

99 metros lose jobs, Buffalo included.
Business First of Buffalo

Ninety-nine of the nation’s 100 biggest labor markets lost jobs during the past year — and the Buffalo area was part of the majority.

The two-county metro lost 13,800 jobs between November 2008 and November 2009, according to new data from the U.S. Bureau of Labor Statistics. Local employment stood at 545,400 jobs at the end of that 12-month period.

The Los Angeles area suffered the nation’s sharpest decline in raw numbers, with 194,900 jobs slipping away during the past year. The Chicago and New York metros were close behind with losses of 186,600 and 186,100 jobs, respectively.

The only major market to add jobs was McAllen-Edinburg, Texas, which is located along the Mexican border. Its employment increased by 2,700 since November 2008.

Youngstown, Ohio, registered the sharpest 12-month decline in percentage terms, dropping 7.2 percent. Detroit, Las Vegas, Boise and Phoenix all fell between 6 percent and 7 percent.

 
Comment by wmbz
2010-01-06 13:48:08

If you read the papers you’re likely to think that the recession is over…we’re in full recovery mode…with rising sales, rising production, and rising prices. This year is going to be a good one for stocks…and the US economy is coming back stronger than expected.

Is it true?

Well, it’s sort of true. The recession is over…the depression continues. As we keep saying, if you’re going to make a royal mess of things, you need taxpayer support. And with the unwitting and unwilling support of millions of American taxpayers, the federal authorities are busily making a bad situation worse.

Don’t believe us? No worries. Since everyone is so sure that the economy is hunky dory, the burden of proof is on us to show that it is not.

First, we point out that the evidence is mixed. Here’s David Rosenberg, on the ‘new normal:’

“…what was previously unthinkable suddenly becomes the ‘new normal’. From March 1983 (when the Reagan-led economic expansion took hold) through to September 2008 (when Lehman collapsed) we never once had a month where US vehicle sales came in as low as 11 million units at an annual rate. That is a span of 25 years.

“In yesterday’s WSJ, page B1, there is a huge article titled ‘Late Surge in Car Sales Raises Hopes for 2009.’ This ’surge’ seems to have taken sales up to 11 million units in December (data out later today), which would be up from 10.9 million in November. So here we are today, and it is apparently good news that we had virtually no growth in sales towards the end of the year even with dramatic incentives according to the article, GM gave its dealers $7,000 for some of its models and that we had 11 million units when the ‘old normal’ was 16 million units (not to mention that 12 million is the cutoff for replacement demand - autos are still being taken off the highways and driveways of America).”

“Personal Bankruptcy Filings Rising Fast,” says The Wall Street Journal. That’s the way depressions work. It takes time for people to run out of money and out of options. Then, they give up…admit defeat…and get on with their lives.

That’s true for the housing market too. People hold on. They wait. They hope prices will go up. And finally, they give up. That’s when prices really go down. That hasn’t happened yet. The depression is still young! David Rosenberg again:

“One would think that of all the sectors that should be benefiting from all the government largesse it would be housing - but at 355k in November, new home sales were down 11% MoM and the fifth lowest level in 3 decades. It is now taking the builders a record 14 months to locate a buyer upon completion of a unit. And the unsold inventory shot back up to 7.9 months’ supply from 7.2 in October. Sales of completed homes are still down 38% from what were already depressed levels of a year ago.”

~ Clipped from ~ TDR

Comment by AZtoORtoCOtoOR
2010-01-06 16:23:00

Yet another reminder continue having patience through 2010 - though it is not getting any easier. I just have to keep reminding myself how fortunate I am to have sold in 2006 (missed the peak by a few months) and to have been renting since.

Never in my lifetime of 44 years will there be that kind of money to be made on a house again. Like I tell a fellow bubble sitter, I don’t want to have been patiently waiting for almost 4 years only to blow it close to the finish line.

Comment by CA renter
2010-01-07 05:36:12

Totally concur with you, and really understand the feeling behind your last paragraph. It’s not easy being patient right now, but I really do believe the patient bubble-sitters will be rewarded.

Best of luck to you!

 
 
 
Comment by wmbz
2010-01-06 14:54:07

Crude Oil ~ 83.21 +1.44

Comment by NYCityBoy
2010-01-06 15:01:15

Is that a problemo?

Comment by wmbz
2010-01-06 15:24:02

Not that I know of.

Comment by packman
2010-01-06 15:34:48

It’s awesome for crudeoilowners. The higher the prices, the less underwater they’ll be, and the better citizens they’ll be (i.e. more likely to pump some of that untapped oil equity money out into the economy).

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Comment by ecofeco
2010-01-06 19:31:58

You do know that “trickle down” is bogus, right?

 
Comment by packman
2010-01-06 19:37:24

My post was firmly tongue-in-cheek.

 
Comment by ecofeco
2010-01-06 20:00:04

Ah! (no insult intended)

 
 
 
 
Comment by mrktMaven
2010-01-06 15:08:36

Can’t wait for $3 gas prices. It will give misguided policymakers a bloody nose.

Comment by ET-Chicago
2010-01-06 15:19:05

It’s back over $3 in most of Chicago now. And it was hovering just below $3 for most of December.

Comment by SanFranciscoBayAreaGal
2010-01-06 15:37:17

Above $3.00 here.

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Comment by wmbz
2010-01-06 15:22:43

Stealing from the poor…

Baltimore mayor to resign under plea deal ~ Jan 6

BALTIMORE (AP) - Mayor Sheila Dixon agreed to resign Wednesday as part of a deal with prosecutors, ending a three-year tenure that began with promise but unraveled amid embarrassing allegations that she stole from the poor.

Dixon, 56, was convicted last month of misappropriating about $500 in gift cards donated to the city for distribution to needy families during her time as City Council president. Had she not agreed to step down, she could have been thrown out of office.

On Wednesday, she entered an Alford plea to a charge of perjury, meaning she admits there is enough evidence to convict her on that charge but does not acknowledge guilt. It wasn’t immediately clear how the plea will affect her embezzlement conviction. Her resignation is effective Feb. 4.

Comment by ecofeco
2010-01-06 19:34:07

She must have REALLY pissed someone off. :lol:

 
 
Comment by james
2010-01-06 15:33:42

I’ve got an couple crackpot ideas here people.

How about we offer up a program to have govt employees and contractors have 1/2 hr per day set aside if they use public transportation to get to work?

Might be able to extend a tax credit for businesses that take this up as well?

It takes a bit longer to get to work with public transit so this might encourage use?

Also for healthcare, similar idea for an exercise plan. 1/2 hr per work day to exercise at a gym. Again with some tax credit system set up. I believe this would overall reduce the amount companies spend on healthcare.

I’d also like for their to be a healthy american tax break. You get less than an obese on your BMI test or some percent of bodyfat testing and you get another tax break. I think stuff like that would actually help.

My first two proposals would only cost 5 hrs per week. Probably a minimal efficiency change. Not sure about verification but for the gym it could be electronic IDs or scans to registered gyms.
Similar for the public transit, have them done electronically or turn in some kind of receipts.

Yeah, I realize there is potential to work the system here but…

This along with ending unemployment insurance (aka you go into a jobworks program).

I’d also like for more allowances for tax deduction for people who move closer to work. Even if it isn’t for a job change. Basically trying to improve energy efficiency.

Comment by combotechie
2010-01-06 17:42:31

The people who would cash in on the incentive to exercise and use public transportion are probably already exercising and using public transportation.

But I like the idea, especially since I ride a bike to work everyday.

 
 
Comment by wmbz
2010-01-06 15:37:22

A few D-bags are bailing early, more to follow. I look to hear the tried and true, “I want to spend more time with my family” claim more and more toward Nov. A fresh batch of self serving BS artists will replace them. To “serve” their country.

Dodd, Dorgan out; 5 other Senate Dems vulnerable ~ The Washington Times

While two Senate Democrats already have seen the handwriting on the wall and bailed out of re-election races, five others trail Republicans in states where President Obama and his trillion-dollar health-care-reform plan are increasingly unpopular.

From Nevada, where Senate Majority Leader Harry Reid trails badly, to Arkansas, where Sen. Blanche Lincoln is polling at just 40 percent in head-to-head matchups with four possible Republican challengers, opposition to the health-care bill is reverberating.

“An increasing number of voters, and particularly independents, have made clear they intend to hold Democrats accountable for recklessly spending their hard-earned taxpayer dollars and crafting this contentious legislation behind closed doors. Next November, we’re confident that voters will cast their ballots in favor of restoring the much-needed checks and balances in Washington.”

Dodd acknowledged that wining re-election in 2010 would be difficult but said his recent bout with cancer and the deaths of a sister and Senate colleague Ted Kennedy contributed to his decision, which he made on Christmas Eve.

“Those challenges gave me pause and made me take stock in why I am running,” Mr. Dodd said, adding he was in “the toughest political shape” of his career. “I’m proud of the job I’ve done and the results delivered.”

 
Comment by mrktMaven
2010-01-06 16:33:40

Cash is trash in Argentina, again.

Jan. 6 (Bloomberg) — Argentine President Cristina Fernandez de Kirchner tried to fire central bank chief Martin Redrado after he failed to back a plan to tap $6.6 billion in reserves to pay debt, setting off a constitutional clash with Congress.

 
Comment by Don't Know Nothin About Buyin No House
2010-01-06 17:05:20

Kept housing from collapsing way more than it has:

8K credit to homebuyers
Lower than low interest rates
Still way too lax lending standards from taxpayer funded cash rich banks that no longer need to fear consequences of default.

Buying a home, especially 150 - 250K range has become a free for all. Anyone with the hint of a job who is not already in default on another home is able to make a deal these days.

What are the consequences of non luxury homes becoming a commodity? Typically if demand begins falling - which maybe we are already seeing in the November numbers, prices race to the bottom.

Comment by james
2010-01-06 18:37:28

Houses have a holding cost. You have maintinance and taxes. If people want to buy them up, fine. They will find out where that rent to price multiple comes from.

I’m looking at advising my mom to buy a property in Fla. She is retired and will be able to buy the house cash. Holding cost and property taxes should not be an issue. I’m fairly certain that insurance will also not be an issue.

Also have to think about the tax implications. However, she is looking at buying a house with in walking distance of some very nice stretches of beach.

Seriously seeing some good bargins there and she is otherwise very well diversified. Oil, gold, stocks, cash, paid off house exc. SS, pension and 401k are all intact.

I’d like her to come to LA but our costs are still out of whack. I’d also say the beaches are a lot nicer in Fla than in LA if you like to swim.

It may not be the bottom down there but I think it is close. Love to hear why I should wait. I’m not looking at condos either.

Comment by aNYCdj
2010-01-07 00:00:05

james get all the numbers first how much is insurance $2000-4000 8000 a year? taxes water electricity FL is HOT….how about medigap or supplemental health insurance…..give us the monthly numbers .

Will she have a car and drive?

Comment by Don't Know Nothin About Buyin No House
2010-01-07 09:39:02

Upside of a declining or flat r/e market is ease of running numbers to evaluate buy vs. rent.

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Comment by Professor Bear
2010-01-06 18:03:22

Analysis: Dodd Retirement May Help Banking Bill

By THE ASSOCIATED PRESS
Published: January 6, 2010

Filed at 5:00 p.m. ET

WASHINGTON (AP) — Sen. Christopher Dodd’s decision to retire at the end of the year increases the chances of a Senate overhaul of Wall Street regulations that is bipartisan and friendlier to the financial sector than what President Barack Obama may want.

Political strategists from both parties and financial sector lobbyists say Dodd, the chairman of the Senate Banking Committee, is now free from re-election considerations and fundraising demands to cut a deal with Republicans without fear of alienating liberal voters.

”The political motivation associated with Chairman Dodd’s re-election are now gone from the regulatory process,” said Scott Talbott, senior lobbyist for the Financial Services Roundtable, which represents some of the nation’s largest financial institutions.

The decision also dilutes the influence of financial sector executives and hedge fund managers who have regularly filled Dodd’s campaign treasury with donations. That could make it easier for Dodd to insist on requirements that banks put more of their money at risk when they make loans and that regulators have more control over previously hidden financial transactions.

That prompted consumer activists on Wednesday to express hope that Dodd would continue to push for the creation of an independent consumer finance protection agency. While the agency is a central element of Obama’s regulatory scheme, it is strongly opposed by banks and congressional Republicans.

”We’re hopeful it clears his decks to focus like a laser beam on the real problem of helping Main Street get out from under the mess Wall Street left us in,” said Ed Mierzwinski, program director for the U.S. Public Interest Research Group.

 
Comment by combotechie
2010-01-06 18:03:38

“We have said repeatedly that this recession is really a depression because the depressions of the post-WII experience were merely small backward steps in an inventory cycle but in the contex of expanding credit. Whereas now, we are in a prolonged period of credit contraction, especially as it raelates to households and small businesses…”

Google-up “David rosenberg’s 2010 outlook” for more of this point of view.

Comment by ecofeco
2010-01-06 20:11:10

“…the facts on the ground show that the inflation rate for both consumers and producers has turned negative for the first time in six decades.”

Not where I live buddy. Try 25%. And just where are these “facts?”

This guy is out to lunch.

 
 
Comment by DD
2010-01-06 23:38:08

You get what you give. People skills is a two way street.

@joeyincal
It wasn’t me, this man and I were observing for over 1 hr.

********Hi DD-
You have to have a certain mindset to take a train. It has a very urban feel to it, and you mix with a lot of different types of folks. We’ve met people traveling in Los Angeles, from all over the world. We all learn from each other.

*Hi Awaiting. Big smile from me. I traveled as a child several times on trains from OR-Chicago return/ and LA- Chicago return. And as a 9 yr old took the Greyhound from LA - Portland all alone- 22hrs. I have seen it all. Thankfully in the good ole days, it wasn’t that dangerous to travel alone on a bus. And in NYC to Boston and back. And all across europe/Japan. I would love to see a competitive hi-speed train system, and a shift in the American’s experiences.

Jayhawk-land.

-
@X-GSfixr- Where is that?

Comment by aNYCdj
2010-01-07 00:05:18
 
 
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