Bits Bucket For January 21, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Canada’s “Conservative” government, which insures mortgages (like FHA), says it will take action “if” there is evidence of a housing bubble.
Look at this house in Calgary Alberta (prairies, empty land in all directions):
Asking price: $569,900
http://www.realtor.ca/propertyDetails.aspx?propertyId=8862249
For rent: $1550.00/month
http://www.rentfaster.ca/Calgary-Apartments-For-Rent/3-BED-ROOM-BUNGALOW-44480
Hmmm. A 45 year old brick bunaglow with a double attached garage. Should be worth about $250-300K in a decent sized city like Calgary. Buuuuuut, this place has granite and stainless steel, so half a mil is fair. It’s so fun to walk down a well tread path (to destruction.)
Man, gotta look things over more closely. ‘Cuzzi bath = $550K.
“Man, gotta look things over more closely. ‘Cuzzi bath = $550K.”
Everyone wants to live in Canada = $629,000
And they’re running out of land, too!
“…Everyone wants to live in Canada = $629,000″
Especially in Winter = $719,000
“Did I mention, NEW SOD front and back”
Which will thaw for a couple of weeks in August = $809,000
Go flames! = $859,000
Everyone wants to live in Canada = Health Insurance
In an “Up and Coming Neighborhood” where you can “walk to Starbucks”
$849,000
Flat Screen TV and Stainless Steel appliances convey, can close fast
Go flames! = $859,000
Flames, hell. Go Royals!
Junior League Hockey is why the housing in Calgary is so valuable …
Wow, I just got priced out forever!
Not Yet press:
I will give you $100k cash back toward the down payment….you can afford it…i know you can stretch a little more.
Wow. In Michigan, with a warmer climate, you could get that beauty for $ 59,900 without the jacuzzi if you played your cards right. Maybe $ 79,900 if you didn’t negotiate very well.
In Michigan, you have stuff like hills and lakes and trees, right?
And those hills and lakes and trees get in the way of driving your Assault Vehicle all over the flat plains of desolation, so they actually count against the house’s price.
There is a huge land shortage in Canada! Soon, we’ll be building condoze near the north pole (now that the ice cap is gone, sort of) and we’ll all be priced out forever!
Amazing that the Bubble continues, even today.
Hell, that’s nothing. I live in Vancouver. House assessed: $750K. Rent paid: $1800. The average sales price last week was $1.1 million. The city’s average household wages - 68K or so.
NO BUBBLE HERE. Only hysteria and credit. psh.
But wait! There’s more! Did I mention, NEW SOD front and back
Damn, 569K for a cappy mid 60s ranch is about the price you’d pay for that kind of turd in Miami just before the bottom dropped out.
When I lived in Durham, NC that kind of house would sell (and still does) for about $120K.
Well, 120 * $1550 (the rent they are asking for the same place) = $186k. So you are only off by a little bit.
I’m real surpised that you can rent anything in Calgary for $1550. The bottom must have fallen out of the oil patch. I was up there on vacation in ‘05 and the waitress at the local eatery was saying that there was nothing for rent at any price. She rolled her eyes and sighed “oil patch”. The Mickey D’s in Edmonton had signs in the windows advertising jobs at $14.00/hour.
Still doesn’t justify $569K for a 60’s rancher.
The oil industry took a hit when the price crashed in late 2008, but the real reason for the weakening rental market is that the population inflow into Calgary has come to a halt. The city had become so expensive that every industry not tied down there (i.e. except oil and RE) packed up and left. But the construction backlog has kept coming, so the supply of housing has now outpaced demand and rental vacancies are rising. But the buyers haven’t gotten the message.
Imagine, for example, how much industry Dallas would lose if houses ever got that expensive there.
The median rental price (SFH) in Calgary is currently $1550.
I keep track of it using a standardized database query from Rentfaster…
http://tinyurl.com/ygt7uj2
It’s been falling at an average of about 1% a month since spring of 2009.
Median for 2 bedroom apt is $1100.
‘…says it will take action “if” there is evidence of a housing bubble.‘
Are Canadian Conservatives as good at bubble sighting as top Fed officials are?
You can’t blame them for not being able to see a housing bubble here. It’s not as if there is some recent example for them to use as a model.
Indeed.
And, as we all know, housing “only goes up” at rates far faster than wages, so clearly there’s no sign of a Bubble.
569K? that sucker must have instant equity!
(instant equity is my favorite used house line).
Well the Canadian snowbirds aren’t buying up too much so far, high season ya know. And with all the flooding, they better look around closely. Lots of flooding where the sand doesn’t soak so well.
A little HOA issue coming up..with all the rain, my flat rented roof seems to have a back up and nothing is going gutter- just spilling over and backing up to the end 3/2 with pitched roof..methinks they are going to be having some seepage issues. But for those who are the gardeners here, I have 2 huge rain barrels filled for usage on plants. May go out and get more. Question, how long can you let the water sit before you get polliwogs? I forget.
It’s even worse when you consider the “wealth distribution” among Canada’s provinces.
In the US, states like AK and WY (and to a lesser extent TX) make out like gangbusters on mineral extraction fees. AB is the TX of Canada, but “rich” provinces have to “share funds” with the “poor” provinces. Basically AB has to send its money to Quebec instead of using it to reduce taxes in AB.
Coming to a state near you … Equalization Payments!
Yahoo - another wonderful Canada program your socialist lovin President will use to bail out your broke States.
I’m waiting for “mortage equality payments” where they average up the mortgages remaining on every house in the nation, and then force everyone to contribute, even those who don’t have a house or mortgage.
We have barely begun to tap the well of bad ideas!
Phew! That was close, I was thinking the D.C. dingle-berry’s may hike it 2 trillion. Thank goodness they’re only going up 1.9 trillion. Other wise we may go broke!
Senate Proposes Increasing U.S. Debt Limit to $14.3 Trillion.
Jan. 21 (Bloomberg) — The U.S. debt limit would be raised by $1.9 trillion to $14.29 trillion under an amendment proposed in the Senate.
The chamber began debate yesterday on raising the debt ceiling for the fifth time in two years after lower tax revenue from the recession and higher stimulus spending boosted the calendar-year budget deficit to an all-time high last year.
“If Congress does not enact this legislation, and soon, then the Treasury would default on its debt for the first time in history,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.
Hi, Citicard, this is Joe Six Pack. I take home around $30,000 a year, and I know that while I currently have a balance of $28,000 on my credit card that has a credit limit of $28,000, I’ve decided to increase my credit limit to $31,000 so I can go spend more.
Thanks. What’s that you say about a barn door, your horse and me having the key? I don’t get it.
If they’re comfortable moving it whenever they want, why not just abolish the debt ceiling. “We can’t control our spending” is a lot more honest than “no really, this is the last time I’ll do it” junky-type talk.
Yeah, it’s one of those “stop me before I vote again,” things.
DC is all about the optics, having a debt ceilling allows “deficit hawks” to get a whole bunch of soundbytes in before the next election.
National debt increases by $1.9 Trillion (15k per household), I get a cup of coffee.
My Cable bill came back with a $5 charge that was unwarranted. I spend 45 minutes on the phone reeming out someone and threatening to move to Comcast.
Whatever.
“…My Cable bill came back with a $5 charge that was unwarranted. I spend 45 minutes on the phone reeming out someone and threatening to move to Comcast.”
5 x 20 Million = $100,000,000 …that will buy quite a few Indian workers who can politely fake American English while “resolving” your complaint.
Asparagus!
God love you for saying that! It seems like that’s where I spend half my life. We just had an HOA mtg. ( emergency mtg. as our 5 yr. old bldg. has gutters falling down around our ears ) and The Prez wanted to quickly rubber stamp a 50% increase simply by all those in favor signify by saying Yea.
I said, wait a minute, why aren’t we even at least calling the CCB and get some of these subs to at least try to step up and take accountability? Why aren’t we looking into the relationships of several of the former infestors and their ties to the local failed bank? Why? Why? Why?
All I hear is “It’s time to move on”, we need to address these issues NOW, and “the lawsuit would cost more than it’s worth…” blah, blah, blah.
Indeed, time to move on before somebody discovers who was looting, who was being bribed, etc. Can’t have that - time to pony up more loot for the crooks!
Unreal… good luck DinOR.
reinforces my no cable policy.
“My Cable bill came back with a $5 charge that was unwarranted. I spend 45 minutes on the phone reeming out someone and threatening to move to Comcast.”
That’s the gig with all cable companies, cell phone companies, etc. Get your customer in a contract, then try to rip them off for the length of it. These businesses are despicable.
Get your customer in a contract, then try to rip them off for the length of it.
that’s why i refuse to enter into a new cell contract. I’ll stick with t-mobile and not get an iphone or anything fancy. If I have a problem, I just call, ask for customer retention, and tell them to fix it or I’m gone. Has worked well so far.
Asparagus, you’ve just described everyday corporate business.
Asparagus,
Good for you for fighting the $5.00 charge. They count on people not fighting it because it takes too much time, and they’ve made it too difficult with their phone trees and poor customer service.
Yesterday, I spent about 45 minutes on the phone fighting unautorized “magazine subscription” charges — subscriptions I never ordered. Apparently, if you go to Bizrate.com, they “give you a gift” of a subscription that you have to pay for unless you cancel it.
Fraud is everywhere.
Worse: Fraud IS the eCONomy!
Senate Proposes Increasing U.S. Debt Limit to $14.3 Trillion.
“To the moon, Alice!”
To Infinity and BEEEEYONDDDDDDDDD!
My fav guy!
pS. it is my birthday tomorrow and I want to see ya’ll in singing form!
So what would you have us stop paying? National defense? Health care for seniors? Social security? Interest on debts?
The rest is peanuts, albeit frequently wasteful peanuts.
Cut now or cut even more later. Or wait for it all to collapse.
National defense?
The US needs to spend more than the rest of the world put together on its military to defend against what, exactly?
I can think of a couple of things.
Not that we’re necessarily going about it the right way, but to propose that we have nothing to defend against is just… foolish.
What a crock packman!
The strongest army in the world didn’t stop the first 9/11, and it won’t stop the next one either.
In fact, issuing weapons with christian psalms printed on them (heard about those Michigan gunsights?) will likely inspire it.
Nothing like wheeeling out a new hobgoblin every 7 years to keep the dummies afraid and the military industrial complex rolling in $$$$.
Plenty of people throughout history have thought that they didn’t have any need to defend themselves since they had no real enemies.
I’d ask to you talk to them about this idea, but since they’ve all be exterminated by those same “non-existant” threats, it would be difficult.
Fed Debt as % of revenue:
Dec. 2007: 361%
Dec. 2009: 559%
Not a pretty picture.
Ignore the debt, and focus on how profitable the Fed’s operation has recently been, and you will feel much happier…
Maybe they should stop taxing us entirely, and make money the new-fashioned way: Fed as hedge-fund!
Fed Debt as % of revenue:
Dec. 2007: 361%
Dec. 2009: 559%
Wow - who controlled congress and the house in that timeframe?
Goldman Sachs?
Shoots….score!!! +1
Gotta look at that a little differently. There was a big revenue surge while the bubble built up. Sadly, the (R) religion blew any potential savings.
“If Congress does not enact this legislation, and soon, then the Treasury would default on its debt for the first time in history,”
You know it’s bad when you can’t even pay the interest on your debt without taking on more debt.
Obama to Nationalize Student Lending with Pending Budget Bill.
January 20, 2010
(CNSNews.com) – A bill currently before the Senate would empower the Obama administration to nationalize the student lending industry, eliminating the federally subsidized private loans millions of university students rely on to finance their educations.
The Student Aid and Fiscal Responsibility Act – currently being considered by the Senate Health, Education, Labor, and Pensions (HELP) Committee – would eliminate the Federal Family Education Loan (FFEL) program. FFEL loans are federally subsidized and make up approximately 80 percent of the student lending industry.
You know, it was insane that private lenders were allowing [homeowners/students] take out hundreds of thousands of dollars [homeowners/students] had no hope to ever repay. But since ever-increasing [home/education] prices are the only way the Ponzi scheme of [Real Estate/Higher Education] doesn’t come tumbling down…
Gotta indenture them early with student loans.
I have a 17 year old god-daughter who is in the middle of college application anxiety.
I keep telling her that 1) go into as little debt as possible and
2) since you’re not that committed to a path to a particular vocation/profession, why not take a year or two off school, work a few months to save some money and travel the world for a while, get a better sense of where you want to go with your life.
But no, somehow she’s on this conveyor belt with her friends that is going to deliver her into the education factories.
“But no, somehow she’s on this conveyor belt with her friends that is going to deliver her into the education factories.”
education factories = party scene
“Gotta indenture them early with student loans.”
Bingo! Think of Washington DC lawmakers’ lending programs as serving the primary purpose of entrapping Main Street Americans into a life of indentured servitude to Wall Street Megabanks (and DC, through the backdoor).
Very slick on the part of the politicians. Yet another stealth tax. The fact that people are going into debt to finance education jacks up education costs even more. So, an increasing spiral of costs and debt for young people. Unbelievable. And the government gets the revenue.
How did the government get into the lending business? This is just nuts. Government doesn’t care about defaults - it doesn’t affect the bottom line in any compelling way.
My niece is graduating high school a year early to get to college and she’s already looking at the big loan path. She will go to college no doubt but I’m trying to convince her and my sister that Community College is the way to go for the first 2 years. My niece has no idea about money. She worked last summer to buy a $500 cellphone. Here’s part of an email I am working on to send them. Any other advice will be considered..
“Here are some facts regarding today’s value of a college education and some links supporting them.
1. College IS very important but a college (liberal arts) education is not worth what it used to be. The value of it is less in our new economy. There is a glut of college grads and less jobs to go around and what jobs there are pay less.
2. The price college has skyrocketed. It is way more expensive than it used to be, and in some cases not worth it IF one takes on to much debt.
3. Student loans are the most OPPRESSIVE debt one can have and can ruin lives.
Because of the above 3 facts, it is ESSENTIAL that anyone going to college drastically MINIMIZE the costs. Unless they are rich, I would advise any student to attend their first 2 years in community college because of the huge cost savings.
Two books every parent and college-bound student should read are:
1. “THE STUDENT LOAN SCAM”
Part of a review:
“College is the riskiest and perhaps the most foolhardy investment anybody can make, as student loan debts can NEVER be erased with bankruptcy. Warning to parents: NEVER cosign on a student loan. Many parents are facing financial ruin because they cosigned on a student loan for a child. This 150 page book examines the huge student loan industry and how it derives colossal profits by destroying peoples’ lives. ”
2. “COLLEGE IS FOR SUCKERS”: The FIRST College Guide You Should Read
Despite the title it is not anti-college. It just explains the financial reality and it especially says BEWARE OF PAYING TOO MUCH and STAY AWAY from student loans as much as possible.
THE COLLEGE “EXPERIENCE”
The “college experience” for me was great but it’s over-rated conceptually in the USA. The reason most people look back so fondly on their college days is because their life in their older years is kind of a bummer. Part of the reason it’s kind of a bummer is because they spend their lives as a debt slave. Part of that debt is student debt. My life has been mostly debt free and I can say that most of my life has been as good as my “college experience.” The good life does not end after college if one is debt free in fact it can be better than college.
Grad School:
Now, most good jobs require a graduate degree therefore a student who begins with 2 years in community college will still have 4-5 years of the “college experience” at a major college. 4-5 years at a major college will be VERY EXPENSIVE but 6-7 years of major college expense would be a fool’s choice since the community college is available.”
All excellent advice, Rio. I counsel all my friends the very same way, and plan to have our children attend junior college, then a local state college/university. Of course, if they they think they’re good enough to go to an expensive, private university, they need to do something exceptionally well so they can get grants and/or scholarships.
It’s a shame that our high schools fool many students and parents into thinking they need to send their kids off to out of state or private universities. It just isn’t true.
Oh, one more thing: I don’t know if it’s still the case, but back when I transferred from JC to a university, transfer students actually got priority registration — even before students who already attended the university for the first two years. That’s a big deal, IMHO.
Go the community college route. Save a lot of $ and then transfer into a good program to take up a spot from all the washouts from the hard majors.
I’d go chem engineering, biochem, mechanical eng, electrical eng, pre-medicine, physical chemistry or accounting. Take a minor in art or dance.
Check with the local school about transfer agreements. Some large percentage of people drop out in the first 2-3 years in the tough majors. So, most of the big programs have these back door entry points.
Staying at home saves you a lot of stupidity and grief. Miss out on a lot of overeating, excess drinking, bad relationships, wasting time at football games.
If you want an incentive, the money you save on room and board would probably pay for a new car. You are talking about 8Gs-13Gs at UCLA. Hence you could probably work that in as an incentive.
ahansen, that is breathtakingly insightful.
At this point, I’d advise her to go all-in on the loans. Obama announced that the federal government will be overseeing student loans again, and let’s face it, they’re going to be forgiven –at least in good part. Loan forgiveness programs are already becoming a lot more expansive for recent graduates and those who work in designated sectors.
Additionally, the rules that require grads to start repaying loans within X number of months of beginning to work will be revised. Kids are simply not taking entry-level, cruddy-paying jobs, because they don’t want to start the repayment schedule on such onerous terms. Unemployment is bad enough as it is, and let’s face it–they’re the ones who’ll have to pick up the SS Ponzi scheme on our behalf. I’m guessing things will change, and there will be a lot more outright subsidies made available as the education initiative kicks in.
Good luck on the apps!
Orewellian college plan.
1) Pay for it with student loans.
2) Upon graduation, buy house with 0 down in non-recourse state.
3) Take out HELOC, pay off student loans.
4) Walk away from house.
My new SIL has taken out student loans at 0% until graduation, placed that money in CDs earning a couple of percent. He doesn’t need the money as Pell grants cover his costs. If Ahansen is correct about loan forgiveness his may be the best move since my successful 14 month squat!
Or wait a few years after graduation until your credit card limit exceeds your student loan balance. Use one of the handy “checks” that come in the mail every month to pay off the student loan. Default on the credit card (optionally changing your phone number first if you don’t like hearing from bill collectors).
Credit card company will “charge off” the unpaid debt after a year or two; credit will be clean seven years after that. You save a bundle!
I worked with a few people who actually did the above.
Dude, there is no such thing as a 0% student loan. Federally subsidized loans have an interest rate of 6.8% for which $8000 can be deferred until after graduation. Federal unsubsidized loans have a limit of $12,000 and begin accruing interest immediately. And private loans are 9% and accrue from day one. That, combined with the fact that tuitions even at state schools are $10,000/year, is the new student loan crisis. In my day student loans were 8%, but you only had to borrow $1000 per year to afford school. More recently they were down to 3%, but about five years ago all of that changed. I think that Obama is trying to reduce the interest rate, but he won’t lower the outrageous tuition costs.
So does deferral in this case mean it accrues like a neg-am loan? If so I’ll make a discreet inquiry so as not to bruise his pride too badly.
Peace Corp, Vista, volunteer with Docs without walls.
2 yrs and she would be a world ahead of her counterparts.
Peace Corps won’t take a young person without a degree or significant work experience. The new college grads are piling in to Peace Corps, Americorps, TeachAmerica, and the like.
I thought that student loans started out as “nationalized,” back when they were Stafford loans, and that they were only privatized in the last ten years. Going back is not that far of a stretch.
I vaguely remember that my Sallie Mae loans had been bought and were “serviced” by some other entity. At the time I didn’t care, because I saved up and paid that thing off ASAP. I hate having chunks of debt.
Nor do I like the use of the word “nationalize,” which has a connotation of contempt for government. If the sacred Private Industry wants to charge fees for servicing a loan, then they can bloody well back up the loans with their own bonus dollars. Otherwise, they’re just skimming off the taxpayer like the “socialists” they claim to hate.
“If the sacred Private Industry wants to…”
Indemnify Corporations so that..they can “privatize” the “care & distribution” of South Carolina’s & the “other 49 states following inefficient Gov’t operations:
Manufacture pharmaceuticals with no oversight
Purify the municipal water systems
Maintain the municipal sewer systems
Provide free market electricity costs & distribution
Deliver the mail including over-seas
Deliver citizen “protection” from themselves in case of riots
Maintain the prisons
Build the Highways
Manage the “care” of the States natural resources
Well he!!, I don’t think there is one single thing that Indemnified Corporations couldn’t do and not make a “profit”
“Obama to Nationalize Student Lending with Pending Budget Bill”
Get ready for tuition to up, way up!
No, Obama isn’t going to increase any of the loan amounts (not yet anyway), or suddenly start subsidizing them; they’re already guaranteed. He’s just taking out the private servicer middleman. Shouldn’t make much difference in tuition prices. They’ve already gone way way up.
Thank god the 22% increase in tuition EVERY YEAR had nothing to do with private lending.
If only we could securitize student loans and invest in them somehow… since “tuition only goes up!”
Argh!
The Student Aid and Fiscal Responsibility Act
Is it me - or has the name of all our bills recently become extremely Orwellian?
If one had to put 20% down when buying a house or had to pay for his own education without govt assistance we would be a lot better off. Ponzi scheme is just another way of saying govt assistance.
Recently?
Well - relatively speaking. At least ones before the last few decades were generally just named after the authors, or had very simple and direct names like “Sherman Antitrust Act”, or “Homestead Act” etc.
Seems like now the names of the acts themselves are intended as some kind of a “please vote for me” advertisement, e.g. “Financial Services Modernization Act” or “Federal Housing Enterprises Financial Safety and Soundness Act” etc.
WPA CCC just to name a couple…lots more where that came from… RECENTLY???
“…has the name of all our bills recently become extremely Orwellian?”
Recently!?
There’s a reason they call them Orwellian. Hint: E.A. Blair was a satirist.
When I was going to college in the early 70s, there were no lending programs. The tuition was low enough that I could afford to pay for it, along with rent on a tiny apartment and food expenses, utilizing only the wages from my low-paying job as a keypunch operator. It was a hand to mouth existence, but I got through school with no debt and was able to move on in the world as planned. Now, with the “making education affordable” programs, young people get out of school with a crushing debt burden.Even the state university is well up in the five-figure range per year. I remember scraping together ~ $300 each quarter for tuition plus usually less than $100 for books. Many of the books could be used for an entire year. Today, the cost is between 2000% and 3000% higher.
it wasn’t much more than that for me in the mid-80’s, maybe $400 per quarter, $100 for books
Daughter just got her books for her second semester of college. $600 bucks. What a racket.
Seems like our economy is set up to:
-Promote monopolies
-The give carte blance for those monopolies to rip people off in every way the legal department can devise.
Renewed your cellphone contract lately? My first mortgage had a shorter contract. All of it designed to screw their customers and maximize their profits/minimize their losses, in case of a billing dispute.
Now you’re getting it… (not saying you didn’t, but yes, our whole “captialist” society is set up to screw you)
When I went to a state school in 1995, it was about $4,500 per semester for tuition ($1500) and residence hall/food ($3000).
Now the same school is $8000 per semester. But they do have a bigger football stadium and a outdoor water park for students for that extra $7k per year.
Good thing there is a football stadium, when 80% of students don’t use, don’t care, and would be better served by teachers, equipment, lower book costs etc.
At $7k extra per yr, wouldn’t you just love to say, give it to me, I will save, invest, or take a great vacation? Use it how “I” see fit?
That is a great simile for the goverment taxing me for items that are not constitutionally mandated.
In the late 60’s I recall that $150.00 was enough for a full load semester’s tuition, books, and enough left over for a handy six pack to celebrate. Living expenses were a shared room in a rooming house. (No money for the frat scene)
I just finished putting Kid 1 through a second tier State University. She made it through in four years and a summer, andf the tab (including relatively inexpensive off campus housing) was a touch over $80K. We had saved enough to cash out the education, with just about $5.00 to spare, but at least there is no student debt.
Kid 2 joined the Navy and is working on the college basics compliments of the Navy. Hopefully she can finish the degree before she gets out, but even if she doesn’t she has gotten a huge financial head start. Kid 2 will get what is left of the college fund when (if) she graduates, or when she is 30 and showing clear signs of leading a responsible life.
I know people who graduated from a rather expensive local university (the one with the good BB team) with a general business degree or a marking degree who have $100K+ of student loan debt. Insanity, pure insanity.
Horrible… how horrible… You were able to AFFORD to go to college! Somewhere, out there, there are bankers who could have gotten rich off of you. But no, things just weren’t like that back then. They had to settle with just being extremely wealthy vs. being absurdly wealthy.
Thank heavens we’ve progressed so far as a society that now no bankster will be left behind!
Home construction falls; wholesale prices edge up.
New home construction dips 4 percent in December; wholesale prices up 0.2 percent.
WASHINGTON (AP) — The housing market remains a significant risk to the economy, data Wednesday showed, as bad weather across much of the country hammered the construction industry.
Along with icy storms, the real estate recovery is facing man-made headwinds. On Wednesday, the government said buyers will face higher fees and tougher standards for home loans backed by the Federal Housing Administration, a popular source of loans for first-time buyers.
Unemployment is expected to remain high throughout the year, which will drive the foreclosure rate to new records.
“If we don’t get some jobs, it’s not going to make a difference,” said Rick Jenkins, owner of R.J. Builders in Terre Haute, Ind
“Along with icy storms, the real estate recovery is facing man-made headwinds.”
Properly put, the real estate correction is finally getting some footing now that the storm of government meddling is showing signs of subsiding*.
* In a freudian type move, my insightful fingers initially typed subsidizing.
More like, the real estate industry is no longer being propelled by man-made tailwinds.
Tailwinds are still very much there until April.
- Fed MBS purchases until March
- $8k tax credit expires in Aprili
We’ll see after that.
Government should stop meddling in retirement accounts!
The Detroit News ~ 1-21-10
Would you turn over your retirement account to an outfit that has squandered its own financial reserves, spends twice as much money as it takes in and has a debt load of seven times annual revenues?
Not likely. But that’s what the Obama administration is proposing Americans do with their 401(k) and Individual Retirement savings accounts.
The U.S. Treasury and Labor departments are asking for public comment on a plan to require individuals to convert some of their retirement portfolios into annuities backed by U.S. Treasury bonds.
“… backed by U.S. treasury bonds.”
Which means “expand the market for U.S. Treasury bonds”.
Which in turn means Treasuries will carry a lower interest rate than it would otherwise, which helps lower the budget deficit.
There’s method to this madness.
Right. This is little different in principle than W’s Social Security privatization scheme. The practical difference is that W’s scheme would have diverted the Social Security retirement contribution flow to Wall Street, while this new plan will diverted the 401(K) contribution flow to the US Treasury. In both plans, the goal is to concentrate a flow of retirement contributions in a direction that serves some special purpose, at the likely cost down the road of a lower return on investment to those whose retirement contributions were hijacked.
Same third rail, different direction. J6P will (rightly) interpret this as a way to grab middle-class cash up front to feed more bailouts to Wall Street. Whose bright idea was this? I refuse to believe Obama thought this up.
+1
I think the Banks are the CULPRITS.
Originators of ideas to skroo people out of their money.
My guess is that it came out of the Fed. They must know that they have to stop buying Treasuries at this pace eventually. Someone figured out that with China easing off, being beholden to oil countries too risky and Europe just as broke or even more broke than we are, 401k’s are the last pool of money out there.
My guess is that it came out of the Fed.
Sounds like the start of a ’50’s sci-fi horror flick.
This is OLD news, folks. If I remember correctly, the proposal to confiscate 401K assets was first made by the California senator late in 2007.
I mentioned it on this board maybe 10-14 months ago.
WHAT!?!?! Link please?
meant to reply to wmbz above.
I don’t actually see any stated initiative to “force” people to invest in treasuries. That bit from Detroit news with the “force” terminology is an opinion piece.
What I do see is this (from Jan. 8th):
That was from a BusinessWeek article that has since been taken down - but still exists in Google cache.
Here’s a link
Well it’s obvious nothing will happen with this scheme until Wall Street has figured out how to take their cut.
WHAT!?!?! Link please?
wmbz = “I post… you find”
Wow, required purchases of US treasury bonds. It’s just evil on so many levels. Where do I comment?
It’s almost like going back to a defined benefit plan, except the definition is a bit hazy and the benefit very small.
Sounds like a date I once had.
It sounds like the Fed is trying to outsource its Treasury Bond purchase program to Main Street American savers? Stay the course in the War on Savers!
That’s the Ticket. They see all those $$$ sitting in our 401Ks and IRAs and they just can’t help themselves.
I have been wanting to ask this question for a long time.
Does anyone know of a book or have a plan that converts our retirement funds into cash (fungible assets)? If not, there are a few people on this blog that could write that book and make a few extra $$$.
IMO, once they figure out how to get their hands on these funds, the wealth of the savers will be theirs as well.
“They see all those $$$ sitting in our 401Ks and IRAs and they just can’t help themselves.”
And Roths, don’t forget Roths.
I’ve been hanging out here too long and am starting to put the tinfoil on my head as well–a Roth conversion is likely one of the smarter things I can do financially, but I just fear that they’re going to change the rules of the game within 30 years…
I guess I stay put in the old 401k. Which will likely be turned into T bonds.
ick
I have worried the same, so I went with the moderate approach. Half in Roth and half in traditional 401ks. And save as much as I can outside retirement plans. In five years I can take everything I put in my Roths as of today tax free. So if we are severely threatened by “takings” after five years I may be able to get most of my assets to safety from the politicians.
I’ve never been a gold bug, but it’s making more sense all the time. Great way to work around future means testing as well.
I could imagine if the alarmist extremists are right and the government controls our 401ks/Roths, that precious metals bullion would be a very safe haven and increase in value multi-fold. Say, 900%. In that scenario, having 10% of your net worth in gold would just about cover the takings of the 401k/Roth.
How would you do if you had 70% of your net worth in gold? Even better, I would think.
I would not want 70% of my net worth in gold. I remember the darkest days of Jimmy Carter’s reign of malaise. Gold went from $35 per ounce to over $800. Then shortly after Reagan came into office to fix the damage Carter did, gold tumbled and did not stop until 20 years later.
Fortunately I did not have money to buy gold back in 1979/1980. I was only 20 years old and had no job.
Lip,
Good question, without dispensing “investment advice” look into Self-Directed IRA’s. You can invest in any thing but Sub Chapter S Corp’s, collectibles and life policy contracts. Other than those select few, it’s pretty much open.
We’ve had people start their own wineries, apt. buildings ( that cash flowed! ) laundry mats, you name it. End the cycle of abuse, avoid early withdrawal penalties and get control of your life fer’ cryin’ out loud.
www dot penscotrust dot com
It’s just one of several custodians that are only too happy to help get you off the Enron-go-round. Great edu. resource as well. They’ll cover all the do’s & don’ts. Pretty basic really.
DinOR,
Thanks, I need it to be basic. I just don’t want to sit around, watch it happen and then in 10 years say I should have done something.
Kind of like my house. I discovered HBB while trying to sell my house in 2005. I wanted to lower the price and dump it ($450k) but the fetching Mrs Lip didn’t want to “give it away”. I didn’t press because I like the house and the area.
Four years later its worth about $250k and I can only blame myself.
Thanks again.
Lip
Lip,
Thanks for your refreshing brand of candor as well. And just so you don’t kick yourself ‘too’ hard. I was able to talk the wife into selling our home of 10 years to “wait it out on the sidelines” and got porked all the same.
Went thru a series of flaky and weak handed landlords and wound up getting painted into a corner to Buy all the same. It shouldn’t have been a big deal ( we’re only talking about 200k here ) but like all BoomTime construction, it’s already “structurally challenged”!
I never intended… to ‘buy’ a damned condo ( only to rent the b@stard ) and now we have a grandchild and -zero- lawn for my wife to play with here in? In short, for long time homeowners that didn’t leverage the HELL out of their home, staying PUT was the right call!
“Went thru a series of flaky and weak handed landlords and wound up getting painted into a corner to Buy all the same.”
Vet your LLs carefully.
Seriously, you should be checking out your LLs the way LLs traditionally have checked out tenants.
I’m about to move to a new rental, and this will be the second long-term LL with no mortgage that I have managed to find.
How long ago did you teach her to fetch?
I COULD see requiring 401k plans to have a treasury OPTION for members, but a treasury requirement is a very very bad thing.
Let’s call a spade a spade here, folks! If they go to a Treasury bond contribution requirement, this will just be a back door tax increase, of the stealthy financially engineered variety; it won’t show up until many years later, in the form of a very low return on retirement savings (kinda like Social Security).
At any rate, so long as 401(K) contributions remain optional, anyone who doesn’t like a mandatory rerouting into Tim Geithner’s bailout treasure chest can just stop making 401(K) contributions if they don’t like paying higher (back door) taxes.
I really, really hate this. 401(k)’s have essentially supplanted pensions in the private sector. With the company-matching funds it’s really difficult to *not* contribute to them - you take in essence a 33% - 50% hit on your retirement savings right off the bat if you don’t contribute to 401(k) (depending on whether your company matches 50% or 100%).
many more corps do Not match, never have vs those who did/do.
Wish HBB were around say 20+ yrs ago with advice from each other. But we all learned.
many more corps do Not match, never have vs those who did/do.
Got a source for that info?
I’ve worked for 4 companies in my life - all of them matched 401k. I’m pretty sure it’s the nature of tax law - that they can write off 401k match, and thus provide it as a reduced-cost benefit to attract employees.
There’s really no point in even participating in a 401k if you don’t get matching funds. So it seems stupid for a company to offer one as such - there’s no benefit there, and thus it only costs the company money with no benefit.
Major corp I work for does Not. And I will look around, but it has been written about in many articles, that something like 15% +/- of companies match. Forgive me if I am off a few percentage points. Will research.
There’s really no point in even participating in a 401k if you don’t get matching funds.
Of course there is, assuming the government doesn’t change the rules too drastically. The tax savings is huge, both at the time of deposit and over the years as the monies (hopefully) compound tax-free.
Many start-up companies don’t provide a 401(k) match; none of the ones I’ve worked at did.
In planning for retirement one should ALWAYS assume that government will change the rules, and that said change will ALWAYS be bad for the taxpayer.
Of the 4 firms that I worked for that had 401k the most they matched was $1,500 a year. Almost like not matching.
The tax savings is huge, both at the time of deposit and over the years as the monies (hopefully) compound tax-free.
Eh? No - you still have to pay taxes at withdrawal time - both for the initial principle, and for the earnings. It’s tax *deferred*, not tax *free*.
Same as IRA, which also uses pre-tax dollars (in essence, since you can claim it as deduction).
One advantage I suppose is if you max out IRA contributions - 401k would be additional tax deferred.
Eh? No - you still have to pay taxes at withdrawal time - both for the initial principle, and for the earnings. It’s tax *deferred*, not tax *free*.
Well, let’s compare the two scenarios.
Say I start with $100k and earn 5% per year in both a taxable and a tax-deferred account. In the taxable account I have to pay (say) 25% tax each year on those earnings, so I’m really only getting 3.75% per year.
After 30 years, the taxable account contains
$100k x (1.0375)^30 = $301k
and the tax-deferred account contains
$100k x (1.05)^30 = $432k
Granted, I have to pay 25% on the gain for the latter account when I withdraw. Let’s say I take pull it all out in one year. Then I pay 0.25 x (432k - 100k) = $83k in tax, leaving me with $349k. Still way better than the non-tax-deferred account.
The spread widens if you assume higher annual return or a longer time interval.
Agree. But you’re comparing tax-deferred with non-tax deferred. I was referring to IRA’s as the non-401k option. IRAs are also tax deferred.
Otherwise I agree - tax-deferred is a no-brainer over non-tax-deferred (which is why I can’t understand why so many people think Roth is a good idea)
Hi Packman. We’re able to do a Roth conversion this year for the first time. And the only reason to do it is for estate purposes. We don’t have enough years left in us to successfully invest it, but our kids/grandkids will be around a long time. It’s much nicer to inherit a Roth IRA than a regular IRA.
But 401k contributions ARE tax deferred. People who simply invest elsewhere are not able to take advantage of the tax deferral advantages.
Funny you should state this, since the exact opposite reasoning is used to promote Roth IRA’s. Pay your taxes now so you won’t be taxed on the gains later - i.e. tax deferral is promoted as a bad thing.
All things being equal actually - if tax rates remained constant - then tax deferral is best, due to graduated brackets. I have to always point this out to those who promote Roth. The only advantage of Roth is if tax rates go up significantly later (which may well happen actually)
Well certainly I think that deficit and SS difficulties WILL mean that taxes have to be higher when I want to retire. So far my 401k is tax deferred and I also have a Roth IRA so.. We’ll just have to see.
As a child of baby boomers I have come to the belief that my entire adult life will be paying higher and higher tax rates to pay for social programs my parents generation has selfishly mandated for themselves.
There are regular IRAs as well that have no tax deffered status. Different strokes for different folks.
social programs my parents generation has selfishly mandated for themselves.
It would appear to me that they(we) actually mandated them for people older than us.
With of course the implicit understanding that we would be able to take advantage of them as well, when “the time came”
Speaking from personal experience, the possibility of growing old rarely entered the Boomer’s calculations.
I agree lavi. My folks paid in seeing their folks get the benefits. My grandmother never paid into SS but she collected until she was 104. My mother collects what I pay in now. I never complained and figured since 1970 that the system would never pay me.
We’ll see soon. I’ve been paying in for over 45 years. if the miserable stipend doesn’t come, I still will not complain, having made backup arrangements. We didn’t do this to make ourselves rich off the little ones.
P.S. if something like this happens - expect a big jump in unemployment, as a wave of people voluntarily quit their jobs in order to convert their 401(k) to IRA.
Though I’m not sure the rules for this - there may be a way to convert without quitting your job.
Though I’m not sure the rules for this - there may be a way to convert without quitting your job.
Would like to know. Would prefer to put into ’self directed’ - as it would be 6 of one, 1/2 doz of the other in Results.
At any rate, so long as 401(K) contributions remain optional, anyone who doesn’t like a mandatory rerouting into Tim Geithner’s bailout treasure chest can just stop making 401(K) contributions if they don’t like paying higher (back door) taxes.
What about those of us who already have several hundred thousand in existing accounts? Sounds like we either pay the back door taxes or withdraw the funds and pay through the front door (plus penalties).
I guess that makes you and me the buyer of last resort for their junk. Seems a pretty desperate measure to me. Things are probably in as bad a shape (or worse) than I think they are if they resort to forcing their worth less paper on the unsuspecting public. If that passes I will quit contributing to this Ponzi scheme and investing in you know what…
Future deficits won’t matter because we will in effect be owing money to ourselves.
/sarcasm alert
Wow. Backdoor taxation on the ususpecting masses.
Argentina, here we come. It hath been foretold!
“Government should stop meddling in retirement accounts!”
Obama must be dating Argentina’s Cristina Fernandez.
Guys, it’s not an entirely bad idea. Sure, I agree, the ‘way’ we arrived there is totally perverted but there ‘was’ a time when people had 60% of their port. in cash and cash substitutes.
If it helps get people’s minds off of endlessly obsessing over retiring at age 45 ( or even 40!? ) then it’s a good thing. Putting an end to the infatuation that’s become a “right” is an important first step toward ending the Bubble Mentality.
Maybe then they’d give a rip about the work force.
This is a sign instead that government bonds are no longer safe. If they consider forcing retirement accounts to buy them, we can only suspect they fear no one else will.
Cash - when based on Gold - was a safe way to both transmit wealth and save it as well overtime. Fiat money is not a safe way to save it due to the hidden tax of inflation. The government then convinced it’s debt obligations were the safest form of savings. This appears to no longer be the case. Now nothing is safe.
Agree completely, crander.
If it helps get people’s minds off of endlessly obsessing over retiring at age 45 ( or even 40!? ) then it’s a good thing. Putting an end to the infatuation that’s become a “right” is an important first step toward ending the Bubble Mentality.
Well, there is that thing about the pursuit of happiness in the Declaration of Independence.
endlessly obsessing over retiring at age 45 ( or even 40!? )
Well, if age discrimination is as real as the anecdotes suggest, many of us may end up being involuntarily retired when not much older than that, so it’s crazy not to aim for some measure of self-sufficiency by then.
Not that I’m too crazy about investing in Wall Street’s scam of a stock market, either…
It’ll never happen - but just the act of floating the balloon without it being complete political suicide says a lot about how far we’ve sunk.
This issue is yet another case where an inappropriate solution is being offered as a palliative for an unrelated problem. Break up the too-big-to-fail Megabank, Inc trusts, and the stock market can start properly pricing in the value of companies again. In the meanwhile, expect low returns on your retirement investments, coupled with massive bonuses to Megabank, Inc managers. And the DC market meddlers have served up a fix which furthers their interests and does not remedy the problem of paltry retirement savings.
Americans Oppose Proposals to Limit 401(k)s, ICI Says (Update2)
By Jeff Plungis
Jan. 8 (Bloomberg) — U.S. investors oppose federal initiatives that would force them to give up control over their 401(k) accounts, the Investment Company Institute said.
Seven in 10 U.S. households object to the idea of the government requiring retirees to convert part of their savings into annuities guaranteeing lifetime payments, according to an institute-funded report today. The Washington-based institute represents the mutual-fund industry.
“People value the tool of the 401(k),” Paul Schott Stevens, chief executive officer of the institute, said at a news conference in Washington. “They do not want government to take it away from them. They think the structure works very effectively.”
…
If this makes it through and O starts talking about reperations for slavery then I’m batting 1000 on this administration.
Not that all this matters… Where is all that SS money anyway? Probably doesn’t exist except on some computer balance sheet.
When do they start means testing for SS? We can feel it headed our way.
Same thing with Medicare.
Our 401K money doesn’t exist either. Those accounts are just as leveraged as everything else. They only exist as much as they are funny money stocks or something on a computer screen. Will be available if the FDIC is continued.
Where are we at with bondholders? O and friends seem to have gotten away with burning some of them.
Just looking at this and not sure how to move forward. Do we except the alpha-stupid, meathead, exturd version of the universe with ultraspending goverment giving away everything free to the non-productive masses. You can just look at these policies and see how they are trying to move the bar for poverty up, hence eating away the middle class.
Increasing think we need a really hard line on cutting military spending and cut that snot out of medicare. Say 20% on the military and 40% of medicare. Plenty of other things to do. Let the GSEs die. They deserve it.
Further go after the banks and make hard reserve requirements. No more off balance sheet vehicles.
Will be tough for a few years otherwise we continue to move down hill.
Like I mentioned before the election. The liberal think tanks have been talking about seizing the 401K accounts, means testing and occasionally reperations. Hopefully the survey mentioning the widespread disdain pushes that back down.
I think means testing is the most likely way the Feds will relieve me of SS bebefits. The best path to avoid this, at the risk of running afoul of the law, is PM ownership. Carl Morris aluded tot his upthread.
BTW, it’s alpha-sloth, not alpha-stupid. Ben, I thought we weren’t allowed to call names?
Gotta love all the Capitalism going on:
Govt buying GM and AIG plus stakes in other companies.
Govt chosing which companies survive or fail.
Govt being the primary source of job growth.
Govt being the primary source for lending to students and homedebtors.
And now contemplating seizing retirement accounts.
Al,
Agreed on nearly all fronts, hard to argue. But the reason so many folks now in their 30’s and 40’s are finding themselves starting over ( where ret. accts. are concerned ) is they were “all in!” for the Tech run-up in the 90’s.
Employers are distancing themselves from “giving investment advice” and rank & file employees are left to their own devices. I see nothing wrong w/ saying, “You just became eligible to participate in the plan, why don’t we at least get your acct. up to… $5k and THEN we can talk about going w/ the Aggressive Growth Fund?”
And I think it says something about the worker’s intentions and sense of longevity. If they have no interest in even -looking- at lower yielding ( but less volatile ) inv. vehicles, doesn’t that tell us something about their longevity at the company? Just curious.
No, not really, because you can roll 401k’s into IRAs and other accounts when you quit which have the same risk profile and growth model, OR you can leave them be.
IE, the 401k choices you make are not tied at all to your future at the company, or at least they shouldn’t be.
In other words, your 401k choices have no more impact than saying when you are young, “I plan on living a long time, so I’m only going to invest my personal savings in a money market account”.
I had a thirty-something patient last week who worked in in tech in the 1990s and worked as a mortgage banker in the 2000s. He told me that he has lost two fortunes. He wants to get his surgery because he’ll lose his health insurance in a few months.
I don’t know if I agree with calling it “lost two fortunes”. I’d say it was more like “had two fortunes dangled in front of him like a carrot so he’d pull the cart really hard, and then snatched away at the last moment”. Which is impossible to foresee if you’re the donkey, but easy to predict if you’re the farmer.
Hello Argentina
Ecuador, Uruguay, Argentina, Chile..Hola!
I told you all this was comming. They are going to go after our retirement savings.
I think I disagree with Bear on this one. W plan to have you SS go to a private account seemed like a better idea than this. Not sure that is a good idea because letting WS get a hold of it would be bad.
Again this is sounding similar to the Japan plan. Savers in Japan were also forced to hold treasuries to finance their debt.
This was floating around too many liberal think tanks for it not to float to the surface. Seize the 401Ks.
I’d prefer if they would allow additional money to be put into retirement accounts. Why is my company 401K limit 16.5K while I can only put 5K in on behalf of the better half? Why not make it a bit higher with treasuries, perhaps raise this to 30K? Then make it similar to a Roth?
Savers in Japan were also forced to hold treasuries to finance their debt.
Really? I hadn’t heard that. Link?
james,
Your retirement savings went to finance a couple wars in Iraq et al and the amusements of the financial/energy aristocracy. Domestic programs were/are just bread and circuses to enable the siphoning— your money is already gone.
This administration is simply confronting that reality and trying to cut the carnage.
And I guess by “cut the carnage” you mean put the pedal to the metal and spend more?
Exactly ahansen. Yet the rest of you blame Obama? Put down the wingnut propaganda and pay attention. This has been going since Reagan and it’s all about the FIRE sector controlling everything. It the game plan they’ve been working on since the 70s. Overseen by the Business Roundtable.
It’s nothing less than Corporate Communism.
Maybe you are better off than you think. I am not allowed to put that much into my 401K. Since I make more than most other employees at my company, my contributions are limited by what they contribute to theirs. How much sense does that make?
This was floating around too many
liberalBankers/WS think tanks for it not to float to the surface. Seize the 401Ks.Funny how that works out eh? Seriously think the liberal think tanks would start off with some kind of socialist do gooder intention that would be an easy mark for the banksters.
Lots of us hit with the highly compensated thing Skye. Odd aint it.
“Would you turn over your retirement account to an outfit that has squandered its own financial reserves, spends twice as much money as it takes in and has a debt load of seven times annual revenues?”
Of course not! Wall St is a scam.
Didn’t Argentina pull some stunt like this? Force people to funnel their money into a dying system and then watch as hyperinflation destroys the system and their money?
The end goal is the same: make certain that NOBODY (aside from the connected rich) can save ANYTHING. Make everyone depenent upon their masters for everything and absolute power is achieved.
Goldman Subprime Fallout Hits Home in South Carolina. ~WSJ~
FORT MILL, S.C.—Tony Redman used to earn $100,000 a year from his sales and technology job at a Goldman Sachs Group Inc. subprime-loan unit called Senderra Funding LLC. But he hasn’t had a steady paycheck since being laid off in June, and a shrinking savings account will force him to swallow his pride if he doesn’t land a new job soon.
“You enter this job market and you get slapped upside the head,” says Mr. Redman, 37 years old. Earlier this month, he drove to an unemployment office from the townhouse where he lives with his wife and two children, but couldn’t bring himself to collect benefits from the government. “In a month, I’ll stand in line,” he says.
“But he hasn’t had a steady paycheck since being laid off in June, and a shrinking savings account will force him to swallow his pride if he doesn’t land a new job soon.”
This recession/depression thingy is really going to set in hard when these millions of “shrinking savings accounts” disappear altogether and money flow slows to a trickle.
“…used to earn $100,000 a year from his sales and technology job at a Goldman Sachs Group Inc.”
No worries, he’s gotta have a good resume, Boeing will hire him for sure.
Unfortunately it doesn’t sound like he has a PHd, so no census job for this guy.
“…used to earn $100,000 a year from his sales and technology job
—————————————————————————
I understand the sales part but have a hard time understanding the technology component.
You know, like ‘Velvet Jones School of Technology’, where you can learn to be a ho.
Ah, man. Now I have to hit youtube.
“You enter this job market and you get slapped upside the head,” says Mr. Redman, 37 years old. Earlier this month, he drove to an unemployment office from the townhouse where he lives with his wife and two children, but couldn’t bring himself to collect benefits from the government. “In a month, I’ll stand in line,” he says.
Dude, you prefer to burn through all of your savings just because you can’t “bring [your]self to collect benefits from the government”?!?!?!
Gov= taxpayers $
really he should collect his money back.
I wonder if he also refuses medical care because he cannot bring himself to collect benefits from his insurance company (and hence from its other customers).
Jobless Claims in U.S. Unexpectedly Rise on Holiday Backlog.
Jan. 21 (Bloomberg) — More Americans than anticipated filed claims for unemployment benefits last week, reflecting a backlog of applications from the year-end holidays.
Initial jobless claims rose by 36,000 to 482,000 in the week ended Jan. 16, the highest level in two months, from 446,000 the prior week, Labor Department figures showed today in Washington. The jump was due to an “administrative” accumulation from late December and early January holidays, and did not reflect “economic” reasons, a Labor Department spokesman said.
The biggest increase in sales in two decades and an expanding economy may be prompting companies to retain remaining staff after cutting 7.2 million workers from payrolls since the recession began in December 2007. A rebound in hiring may take longer to develop, one reason why unemployment is forecast to average 10 percent this year.
Economist: No Florida recovery soon, 12 percent unemployment looming
By Dara Kam
Palm Beach Post Staff Writer
Posted: 8:36 p.m. Wednesday, Jan. 20, 2010
TALLAHASSEE — Florida may have hit its economic rock-bottom but that doesn’t mean it’s on the road to recovery, a state economist told the Senate Wednesday, as the state’s unemployment rate probably will climb to 12 percent within a few months.
Although the nation as a whole is on the upswing, Amy Baker, the legislature’s chief economist, strongly cautioned that Florida’s fiscal woes are not in remission.
“Even though we recognize that the national recession has ended, we cannot stress enough that Florida’s economy is on a different path,” Baker told the Senate Ways and Means Committee. On a positive note, Baker said economists “think we’ve hit bottom and we’re going to hover around the bottom for a while before we start picking up.”
But, she said, the turnaround will be very slow and lag behind the rest of the nation and it could take until 2015 “before you’re going to be out of the hole on a lot of measures.”
Senate President Jeff Atwater made an unusual request of all 40 senators to attend Wednesday’s budget briefing as they begin to craft a budget for 2010-11. All but about 10 showed up to hear the grim forecast that the state will take in $3.2 billion less next year than the $66.5 billion budgeted for 2009-10.
A drop in housing prices, tight credit markets, 1.1 unemployed Floridians and recent events like the crop freeze and a possible influx of Haitians could make that forecast even bleaker, Baker warned.
“Senate President Jeff Atwater made an unusual request of all 40 senators to attend Wednesday’s budget briefing”
Hate when that happens. My boss made the unusual request that I show up for work on Wednesday.
I’d pay every state and federal legislator in America $2 million a year never to show up to work at all.
Cheap at the price.
Correction: Cheap at *twice* the price.
What happened to “green shoots”?
Well, it’s green alright. And it’s shooting alright. It’s just not what you think it is.
“more than expected”
I’ve heard if a person says a thing often enough she’ll eventually come to believe it. If it’s due to an administrative backlog why isn’t it expected?
Nice catch. They weren’t expecting that pile of files to get processed?
I guess this means banks can be surprised by all the houses on the market when they start selling the houses they foreclosed on a year or two ago.
Of course it is a “surprise”. It isn’t like we have the holidays every year.
Words from Amy Baker, the legislature’s chief economist mixed with todays national headline.
Although the nation as a whole is on the upswing
Jobless Claims in U.S. Unexpectedly Rise
On a positive note
the turnaround will be very slow
recent events like the crop freeze and a possible influx of Haitians could make that forecast even bleaker, Baker warned.
and it could take until 2015 before you’re going to
hover around the bottom
but that doesn’t mean it’s on the road to recovery,
fiscal woes are not in remission.
Wait a tick! Remember a few weeks back when claims declined a bit more than expected? At that time they tried to spin the decline as being part of an ongoing recovery and made no mention of the possibility of a “holiday backlog”.
I remember, because I commented on it. Pay attention folks, clip and save the jobless claim stories for a month - and you too will see that we are being sold a complete and utter heap of BS for the PTB’s journalist stooges. On this topic and on far, far more.
I had the same exact thought, edgewater! They mention the backlog now, but make no mention of the backlog when it causes the numbers to be “better than expected.”
There’s that “unexpectedly” word again. Can’t they outlaw that to make it better reading?
More Americans than anticipated
“More … than anticipated…”
There’s that phrase again.
As we continue to loose half a million jobs a month, the unemployment rate is forecast to remain flat.
Statistics!
For every worker that loses a job and starts looking, another worker gives up the search. This won’t be advertised heavily.
On the other hand, when more jobs (eventually) start being created unemployment will stay high as more workers begin searching.
It’s a built in statistic smoother.
Sort of like fabric softener. Same old shirt, just softer….for awhile.
They won’t be “unemployed” if they are not collecting initial claims.
From last week’s Economist:
Of paramount concern is the growth in long-term unemployment. Around four in every ten of the unemployed—some 6m Americans—have been out of work for 27 weeks or more. That is the highest rate since this particular record began, in 1948. These workers may forget their skills; and many began with few skills anyway. Just as troubling is a drop of 1.5m in the civilian labour force (which excludes unemployed workers who have stopped looking for work). That is unprecedented in the post-war period. If those who have stopped looking were counted, the unemployment rate would be much higher. These discouraged workers represent a reservoir of labour-market slack that will dry up only with strong economic growth.
Yep. The elephant in the room.
Mean duration of unemployment
Not just the highest rate since counting began in 1948 - but the highest rate by far.
Wow. That’s a great chart, packman!
“Great” as in magnitude, not as in good.
It’s surprising to see it like that.
In most states, claimants now file electronically. I think the excuse that there is a “backlog” of applications is a flat-out lie. It’s an attempt to buy time for TPTB to exit the stock market before reality sets in and the markets implode.
Even electronically, there is a 2-4 week wait for approval.
NYT Editorial - The Massachusetts Election
“There are many theories about the import of Scott Brown’s upset victory in the race for Edward Kennedy’s former Senate seat. To our minds, it is “not remotely” a verdict on Mr. Obama’s presidency, nor does it amount to a national referendum on health care reform — even though it has upended the effort to pass a reform bill, which Mr. Obama made the centerpiece of his first year.”
http://www.nytimes.com/2010/01/21/opinion/21thur1.html?ref=opinion
Here’s to your “Talking Pts” my liberal/progressive friends. Just keep spouting “it’s not about Obama, it’s not about healthcare reform” Hmmmmmmmmmmmm. I wonder if they really believe this stuff or if they’re just trying some public relations tack.
Do you honestly think that the people of Mass give one rats butt about the health care issue? We got our plan stuck to us a few years ago. This was a popularity contest. Martha stunk. I really dislike republicans and I didn’t even want to vote for Martha.
Why is impossible for a candidate to just run a poor campaign and lose? Why does it have to be a mandate on X, Y, or Z? This like Ann Richards becoming Governor of Texas.
That editorial is amazing.
It starts with “not a verdict on Mr. Obama’s presidency”, then goes to criticize him in each subsequent paragraph.
Not exactly a ringing endorsement…
Sounds to me like it may have been “a verdict” on the Wall Street bailouts:
Scott Brown Successfully Capitalized on the Bailout Blues
Submitted by Mary Bottari on January 20, 2010 - 1:54pm
Let’s see how Brown votes when the bills to curb Wall Street come up.
The unexpired portion of Kennedy’s term is only 3 years, so Brown will be up for re-election in 2012. I wonder what the Repugs will say when he’s voted out of office 2-1/2 years from now.
They’ll say “It’s MA, whaddya expect? Hey, but did you see the look on their faces when we took the seat?”.
Hitler Finds Out Scott Brown Won Massachusetts Senate Seat
Too funny!
PB sharing on facebook!
Mr. Bear a tributary to:
“TrueBeliever’s™ / TrueDeceiver’s ™” “TrueInstigator’s ™” “TrueProvoker’s ™”
Who would have thunk, …not even Eeyore.
not bad…
still prefer the hitler and the RE bubble….
that one must have circulated here a couple years ago (maybe it was here that i saw it)
Any readers here from south FL? We were there over a few weeks back looking at a place along A1A/Ocean Drive and couldn’t believe the asking prices for these places. We did see a handful that were not just priced to ridiculous levels, but most of the HOA fees were $600/mo or more. Do people really pay that much in HOA fees down there now? Looking between Deerfield Beach, and Delray Beach.
Along the ocean stuff is expensive. The further inland you go the cheaper and more dangerous the n’hoods tend to get.
Yes and it’s ridiculous. That’s one of the reasons the condo market crashed.
Well, I keep reading and hearing about the market being terrible, but these prices are still too rich for my blood. When I do the math, it makes more sense just to rent a place as needed. Hell, we could stay at the Boca Resort all summer and not pay what we would have paid in condo dues alone.
We were in Sarasota the first half of January (brrrr!) and seriously looked at buying a condo or maybe a patio home. Anything remotely nice was too rich for us.
I assume if you are looking along A1A in that area you are looking at condos and not single family homes. Condo fees are always higher than HOA fees, but they are rediculously high along the beach. Most have to keep high reserve funds for concrete restoration, painting, and paving. I rented a 2BR condo on the beach in Deerfield for the last couple of years. We paid 1,400/mo which barely covered the owner’s condo fees and taxes. The salt water and sand blasting from the constant winds does a number on those buildings. They had just finished concrete restoration on all of the balconys the year before we moved in. In the two years we were there they painted twice and paved/sealcoated the parking lot three times.
500 hoa is about norm, nowadays. It Sux. Will be looking for a SFR not a hoa sfr.
Hmm. Vanilla Ice - Ice Ice Baby. A1A .. BEACHFRONT Avenue!
Don’t forget condo fees often help fund insurance, and insurance in FL is high.
Our Poor Govorner Sanford , here in SC , gave his final ”State of the State ‘ speech last night . It was too Shameful to watch , or listen to . The guy has the credibility , and morals , of a porch dog . We’re a great and historic State , it’s just that we’re stuck with him for now . And we’re also out of money for projects .
At least he told a good tale…
“…Ric did the mental calculation and figured he would be dying in about 40 to 45 seconds and his whole life went rolling by. He said though he had previously had the natural fears of death, he was not afraid of death as it was so near. What he did think about was the time he had wasted – the time he had spent arguing about petty things, about things that didn’t matter with people who did, the times he had let little things get to him. He said it was the most amazing process of letting go of all these things in those 45 seconds. In essence, he died to himself and to those previous aggravations in the short window of time that he had left on earth.”
Is it reasonable to assume the NY Fed will eagerly turn over these documents, as Bernanke said he would welcome an AIG-related Fed audit?
GOP Lawmaker: NY Fed Must Turn Over AIG Documents
GOP lawmaker says New York Fed must share more documents on AIG bailouts
By DANIEL WAGNER AP Business Writer
WASHINGTON January 20, 2010 (AP)
The Associated Press
The top Republican on a House committee investigating financial bailout decisions says the Federal Reserve Bank of New York is withholding documents it’s required to supply under a committee subpoena.
Rep. Darrell Issa., R-Calif., said Wednesday that the New York Fed refused to provide documents related to the bailout of American International Group Inc. from before September 2008 or after May 2009. The committee already has received 250,000 documents from the period between those dates, said a spokeswoman for Rep. Edolphus Towns, D-N.Y., chairman of the House Committee on Oversight and Government Reform.
“We expect the Fed will supplement with more documents as they identify them,” said Towns spokeswoman Jenny Rosenberg.
The committee wants details on the AIG bailout, which was managed by the New York Fed under Treasury Secretary Timothy Geithner. Lawmakers want to know more about Geithner’s decision to funnel billions from AIG to other big banks to satisfy AIG’s debts to them. An earlier watchdog report said Geithner’s decision not to negotiate might have cost taxpayers billions.
The committee subpoenaed the New York Fed last week for documents including Geithner’s phone logs and notes. It demanded all New York Fed documents related to the deals that paid off AIG’s debts to banks including Goldman Sachs Group Inc. Geithner is scheduled to testify at a committee hearing next Wednesday.
Towns also has asked former Treasury Secretary Henry Paulson and former New York Fed chairman Stephen Friedman to appear at the hearing. Neither has yet confirmed he will attend, the Towns spokeswoman said.
Issa called on Towns to hold New York Fed officials in contempt if they do not provide the additional documents. He said documents from before September 2008 might show the New York Fed knew well before the bailouts which banks would suffer most from AIG’s collapse. And he said documents from after May 2009 would reveal the New York Fed’s secrecy in response to congressional and news media inquiries in the matter.
…
We Need a Special Prosecutor! Audit the Fed!
How can the Obama Admin attack the banks when the banks own him? Oh well, I find it hard to believe anything they (all politicians) say anyway.
What a joke. These guys are too smart to put anything that would put them in jail on paper.
If they did, it’s evidence that they are too stupid to be running our Financial Industry.
“What a joke. These guys are too smart to put anything that would put them in jail on paper.”
Maybe not in jail, but enough to force a few to have to resign? You would be surprised. Arrogance beats out prudence more times than you expect in those circles. Having spent too much time with them at the financial printers (it was just twice, but that was two times too many), I know. Only the government appointees would have to resign. The bankers get a bonus for it - oops, they already did.
Smells like a cover-up.
AIG, New York Fed Pay Banks in Full, Limit Disclosure: Timeline
January 21, 2010, 06:39 AM EST
More From Businessweek
By Michael J. Moore
Jan. 21 (Bloomberg) — American International Group Inc., the bailed-out insurer, included the word “redacted” more than 1,000 times in regulatory filings tied to agreements for paying banks that bought credit-default swaps from the company.
The insurer, asked by the Federal Reserve Bank of New York to limit disclosure, excluded a list of banks and collateral postings from a pair of 2008 filings, and then sought confidential treatment for the document in 2009 before making redacted versions available to the public.
The House Oversight and Government Reform Committee has ordered the New York Fed to turn over e-mails and phone logs from Timothy F. Geithner tied to AIG’s rescue in 2008, when he led the regulator. Lawmakers have criticized AIG’s rescue, which swelled to $182.3 billion, as a “backdoor bailout” of banks including Goldman Sachs Group Inc., and Geithner, now Treasury secretary, agreed to testify before the panel.
Below is a timeline outlining New York-based AIG’s disclosures along with comments from the New York Fed and the Securities and Exchange Commission to the insurer.
…
Stupid question: why would the gov need to bail out AIG and the banks MBS at the same time? Presumbly the banks bought AIG insurance so that AIG would bail them out if MBS went bad. So if a bank gambled and lost, they get paid twice?
They were trying to get ahead of the “crisis”.
The AIG bailout was for credit default swaps. You can use them to hedge bonds you actually own, but you don’t have to. You can also just use them to make a bet against bonds you don’t own. The “backdoor bailout” may have covered some CDS that hedged bonds owned by the banks, but they also covered the ones that were general gambling/speculating contracts.
Also, please note that a few of the big banks had plenty of money to pay back TARP once the AIG bailout happened.
I really really hope that Timmy tells the truth, all of it, even if he loses his job and has to go on the Oil City Plan.* I would respect him a lot more for that than if he sat there and “didn’t recall” anything.
——-
*that’s my code for leaving a job and using your savings to buy a home in podunk and live a low-level homesteaderish lifestyle.
“…buy a home in podunk…”
No need for that — he already owns in NYC.
Well, I mean own outright…and on more than 0.2 acres. You can barely grow a skinny carrot on 0.2 acres. I doubt that TTTimmy had $1.63M lying around gathering dust.
You can barely grow a skinny carrot on 0.2 acres.
LOL that line is going to be used in future !
Smells like a cover-up.
X 1 bazillion.
The government isn’t just bailing out Wall Street. By bidding up asset prices, it is attempting to bail out Wall Street’s bad bets.
Have any voter polls suggested the Democrats’ Massachussetts swan song may have been related to Wall Street issues (e.g. Treasury Secretary Timothy Geithner’s involvement in the AIG bailout)?
Just askin’ — not trying to start any rumors or anything…
Investment Banking
Obama to Propose New Limits for Banks
January 21, 2010, 2:26 am
President Obama on Thursday will publicly propose giving bank regulators the power to limit the size of the nation’s largest banks and the scope of their risk-taking activities, an administration official said late Wednesday.
The president, for the first time, will throw his weight behind an approach long championed by Paul A. Volcker, former chairman of the Federal Reserve and an adviser to the Obama administration, Jackie Calmes and Louis Uchitelle write in The New York Times. The proposal will put limits on bank size and prohibit commercial banks from trading for their own accounts — known as proprietary trading.
The White House intends to work closely with the House and Senate to include these proposals in whatever bill dealing with financial regulation finally emerges from Congress.
Mr. Volcker flew to Washington for the announcement on Thursday. His chief goal has been to prohibit proprietary trading of financial securities, including mortgage-backed securities, by commercial banks using deposits in their commercial banking sectors. Big losses in the trading of those securities precipitated the credit crisis in 2008 and the federal bailout.
The president will speak at an appearance on Thursday at the White House with Treasury Secretary Timothy F. Geithner, an administration official said, speaking on the condition of anonymity because the talks were private. It will come after a meeting with Mr. Volcker.
A similar discussion is percolating in Europe, led by Mervyn King, head of the Bank of England.
The president’s announcement comes as his popularity in public opinion polls is falling because of stubborn unemployment and the stagnant economy, and just days after he suffered a stinging loss when the Republicans won the Senate seat from Massachusetts.
…
The timing of this was rather coincidental, no?
This is a good thing. If Obama finally decides to give Volcker the respect and consideration he deserves, we will all be better for it, IMHO.
“The government can inflate the currency. But it’s neither government spending nor inflation of the currency that makes an economy healthy. If inflating the currency could make an economy prosper, where did Zimbabwe go wrong? And if government spending could boost an economy, what did Cuba do wrong? Or Venezuela?”
~Bill Bonner.
Where did Zimbabwe go wrong? Does Bonner not know anything about that hell hole except that their currency was inflated? Let me help the guy out..
wikipedia excerpt..
…The government of Zimbabwe faces a variety of economic problems after having abandoned earlier efforts to develop a market-oriented economy. Problems include a shortage of foreign exchange, soaring inflation, and supply shortages. Zimbabwe’s involvement from 1998 to 2002 in the war in the Democratic Republic of the Congo drained hundreds of millions of dollars from the economy.[80]
The downward spiral of the economy has been attributed mainly to mismanagement and corruption of the Mugabe regime and the eviction of more than 4,000 white farmers in the controversial land redistribution of 2000.[81][82][83][84] This has also resulted in Zimbabwe, previously an exporter of maize, becoming a net importer. <——- There ya go..
All the platinum on earth won’t save you from a corrupt government.. Welcome to Africa.
Hey Bill Bonehead, let’s try something novel in America…let’s create the next generation of children to be “consumers” of stuff, what do we have to lose?
Too late to change?
Jan. 21 (Bloomberg) — President Barack Obama will offer proposals to limit financial institutions’ size and trading activities as a way to reduce risk-taking, an administration official said.
Obama will announce the rules today at 11:40 a.m. in Washington after meeting with former Federal Reserve Chairman Paul Volcker at the White House. The proposals will be part of an overhaul of regulations and will specifically address firms’ proprietary trading, the official said yesterday on the condition of anonymity.
It is never too late for a good politician to change his alliances.
“Obama will announce the rules today at 11:40 a.m. in
Washington after meeting with former Federal Reserve Chairman Paul Volcker at the White House.”
Why do I get the feeling that “meeting with former Federal Reserve Chairman Paul Volcker” is mere window dressing?
Maybe because it was loudly announced through a MSM megaphone?
I always smell the hand of PR operatives whenever I read something like this… you know the type.
Exactly
“Why do I get the feeling that “meeting with former Federal Reserve Chairman Paul Volcker” is mere window dressing?”
Exactly. After sidelining and ignoring the guy entirely for a year, public outrage has grown to the point where he is once-again useful as a PR mannequin. Quick, stand him up in the window!
I wish it weren’t so, because I have a lot of respect for the guy. I only wish his ideas would get real play and support, instead of window-dressing CYA-action.
Geithner is used goods so they pour some Ensure into Paul and push him out there.
Conan gets 32 million freakin bucks to QUIT a job. Is this a great country or what?
Your free market in action, m’dear.
Oh wait, were you being serious?
weird how this comment ended up here..
well, rather than be accused of hijacking the thread, i will predict the following:
After working harder than he’s ever worked in his life, Obama’s proposals to change the banking industry are ignored by Congress and fail miserably. The Market rejoices.
Obama gets credit for trying.
Gonad was/is about as bad as it gets IMO, it doesn’t take much to entertain people. He made a deal had a contract, so good for him, nice payday.
My very sweet neighbors are about to walk away from their very much inside-the-beltway house because they bought at the peak and their value has fallen and they were counting on refinancing due to rising home values.
They are “strategically defaulting” and have already signed a lease on a house for ONE-HALF of what they are paying in mortgage alone. They did 100% percent financing so they are not losing a down-payment.
They have decided they are sick of being house-poor and will be able to ride out the hit to their credit.
I, as a renter, have no objections at all to this rational decision, but I wonder how the other “homeowners” on our street are going to feel.
So maybe DC’s not so different after all?
Fools. They could have lived in that house for 1-2 years rent/mortgage free until the NOD finally came.
Maybe, maybe not. Things are moving more quickly here than in some other areas.
The bank agreed to a temporary (6 month) loan mod, and at the end rejected them saying they owed the full amount plus the difference from the last 6 months. They said they just found a notice on their door from the bank. That was the day they went to find a lease. Also their credit report now reads that they have missed 6 months of mortgage payments in full.
I have a feeling they weren’t going to get a free ride.
The big question they have is whether the bank will come after them since Md. is a recourse state.
“Also their credit report now reads that they have missed 6 months of mortgage payments in full”
Interesting the LL wasn’t bothered by this. More than enough rental inventory out there?
With regard to recourse notes, in those states people just do the default/BK two step.
Inside the beltway? Are you serious?
Why not Short sale it?
Ya know, DC is great, RE still selling, no inventory, all the jobs are here while the rest of the Country melts down, blah, blah, blah
Guess not.!
They have one thing really going for them, the house is in only one spouse’s name.
Carrie Ann — the bad credit only showed up on that one spouse’s report, so the other rented the new house right quick.
dude — yes the one spouse is considering BK so they won’t be on the hook.
shelby — They don’t want to short sale it b/c they don’t want to pay taxes on the difference — which might be as much as $80K.
And yes, this is WAY inside the beltway, near a metro. Neighbors don’t know yet.
I posted this in the bucket from a few days ago, but I saw that some had been looking for the Joshua Tree Extension. I’ve now got the site re-hosted, though the extension isn’t as straight-forward to install (I need to get Verizon to fix their web servers - good luck with that
http://mysite.verizon.net/drumminj_tx/joshuatree.html
To install you’ll have to right-click on the file link and save it to your computer. Then drag the file onto the Firefox application window.
thanks for this. I need to install firefox. Any issues off hand anybody knows about if I use IE too?
I use both regularly with no problem.
ok
Appreciate the work, druminj.
Now, what about a smartphone ap?
I saw that some had been looking for the Joshua Tree Extension.
Drumminj
I posted a version on my HBB Comment site - would you like me to take it down and provide a link to yours instead?
Lavi - I saw that. Like the disclaimer
It’s probably best to link to my site. I’m not sure what version that is on your site - that’d be my concern. Feel free to link directly to the downloads page, or to a specific XPI file.
I don’t care if you re-host the XPI, but then there’s a chance of it being out of date.
You’re also welcome to host the web page if you want
Thanks so much, drumminj!
Although the Fall 2008 bailouts happened on W’s watch, the political fallout is landing on the Democrats. Somewhere behind the scenes, a Democratic political strategist must have made a tremendous blunder to enable this political albatross to change party affiliations.
I expect Republican strategists to continue letting the Democrats enjoy the blame for their close Wall Street ties. I, for one plan, to vote in the next presidential election for whichever candidate shows the most promise of breaking up the systemically risky, too-big-to-fail Megabank, Inc cartel members, whose risky gambles wrecked the U.S. economy.
Scott Brown Successfully Capitalized on the Bailout Blues
Submitted by Mary Bottari on January 20, 2010 - 1:54pm.
* banking
* BanksterUSA
* economy
* politics
* Real Economy Project
* U.S. Congress
Massachusetts Attorney General Martha Coakley lost her special election for the Senate seat vacated by the untimely passing of U.S. Senator Edward Kennedy. Much has been said about the role of health care reform in the race. Apparently everyone in Massachusetts has health care, and reasonable doubts about an expensive national plan that might not improve their services.
But in the final days — lagging in the polls — the race was less about health care and more about the Wall Street bailout and the state of the economy. Coakley’ opponent, Scott Brown, successfully capitalized on the bailout blues, and Coakley pulled out the big guns and resorted to a theme she perhaps should have emphasized throughout, bashing the big banks.
…
There will be bold promises made, that is for sure.
Maybe we should vote for someone who has actually done something for a change?
If one can be found.
So we’ve had the President and now a senator with really short political resumes push out old guard candidates. (Martha’s been around around a while. I remember her from when we lived in MA.) I expect this phenomenon to continue regardless of party affiliation until we start seeing changes needed.
Australian-owned U.S. REIT files for bankruptcy.
WILMINGTON, Del., Jan 20 (Reuters) - Rubicon US REIT Inc filed for bankruptcy on Wednesday, according to court documents, five months after administrators found its Australian owner likely to be insolvent.
Property investment fund Rubicon US REIT is a subsidiary of Rubicon America Trust of Edgecliff, New South Wales in Australia. The fund suffered from soured investments in U.S. real estate.
The company listed assets and liabilities of between $100 million and $500 million in its bankruptcy filing.
Rubicon? Do people NOT pay attention to names?
Letter reveals L.A.’s plans for more layoffs.
A decline in revenues may mean that at least 1,000 jobs are eliminated, according to the letter, which is being circulated among city leaders.
Los Angeles officials consider a ballot measure to scale back pensions
Los Angeles Mayor Antonio Villaraigosa and City Council leaders have begun laying the groundwork for the elimination of 1,000 more jobs by July 1 in an attempt to eradicate a budget shortfall that has now ballooned to nearly $200 million.
Only one month after 2,400 city employees were offered early retirement to help patch a budget gap, the mayor and five council members are scheduled to instruct their budget analysts as early as today to prepare for layoffs and look at privatizing city-owned parking garages, golf courses and airports in Van Nuys and Ontario.
Nearly 90 Percent of Contractors Say Industry Will Not Recover in 2010
WASHINGTON, D.C.—Nearly nine-in-ten contractors say there will be no recovery in 2010 as part of a new national construction hiring and business outlook forecast released by the Associated General Contractors of America. As a result, fewer contractors plan to purchase construction equipment and after a year of near-record industry layoffs, many doubt they’ll be able to hire new staff this year.
“Unfortunately for the industry and for our economy this year’s construction outlook is far from positive,” said Stephen E. Sandherr, the association’s chief executive officer. “As long as the construction industry remains mired in its own depression, broader economic and employment growth will continue to lag.”
The outlook, which is based in part on survey responses from nearly 700 construction firms submitted in late December and earlier this month, shows that privately-funded construction activity is likely to decline even further this year. Indeed, 64 percent of responding contractors expect demand for new manufacturing facilities will decline, while 71 percent expect demand for new retail, warehouse and lodging facilities will drop.
Private residential construction is toast for decades. Trying to envision where all those construction workers will go? Maybe I should buy stock in the trade school biz. Medical technician, medical bookkeeping, paralegal…
Health care = The new bubble. As soon as someone can figure out how to funnel the money.
Who’s going to repair all the shoddily constructed houses that were erected during the bubble years?
“As long as the construction industry remains mired in its own depression, broader economic and employment growth will continue to lag.”
Well aren’t we full our ourselves.
+1
Perhaps we need to move away from the housing, banking, insurance model then? It’s high time we get back to what made this country great: real work! Let’s innovate and produce great things that give us healthier, more efficient, more enjoyable lives. There is much to be done but we’re sitting here wallowing around in the REIC quagmire. The world will not end if these industries shrink.
Obama Will Travel to Nevada for Reid Next Month.
Roll Call
President Barack Obama will appear with politically embattled Senate Majority Leader Harry Reid (D-Nev.) in Las Vegas next month, according to a White House official.
Bye, bye whining Harry!
A visit from Opie does seem to have acquired a “kiss of death” ring to it. Just ask my mayor, or Coakley, or those losing gubernatorial candidates in NJ and VA.
I set up residency in Reno before I moved overseas just so I could vote against Mr. Reid.
Now that year-end bonus season is over, it looks like stocks aren’t always going up so much any more…
The German dead-tree media Der Spiegel seems to have little love for The One. Here’s another negative piece from them.
“US President Barack Obama suffered a painful defeat in Massachusetts on Tuesday. With mid-term elections looming, it means that Obama will have to fundamentally re-think his political course. German commentators say it is the end of hope.”
www dot spiegel dot de/international/world/0,1518,673192,00.html
The people of Massachussetts have spoken and it is the end of hope, and the time for change.
German commentators say it is the end of hope.
Personally I saw my hope index go up a lot Tuesday night. E.g. I figure we roughly went from about a 80% of defaulting on our debt in the next 25 years to about a 60% chance, in part due to just that one election.
Personally I saw my hope index go up a lot Tuesday night. E.g. I figure we roughly went from about a 80% of defaulting on our debt in the next 25 years to about a 60% chance, in part due to just that one election.
Yes. Let’s hope the Republicans can turn things around this time.
Like they did so many X before..Not.
I’m not hoping a shift in the majority party in Congress would do anything. I’m hoping machine breaks down, the herd in Congress rejects their lemming masters or get thrown out, and that our President finds his voice. It’s a stretch, but fear can do amazing things.
Old Europe.
The German dead-tree media Der Spiegel seems to have little love
DerSpiegel does not speak for the common leute in Deutschland.
Ask around, the common person in europe are supporters of Obama.
In a stunning reversal of the nation’s federal campaign finance laws, the Supreme Court ruled 5-4 Thursday that as an exercise of free speech, corporations, labor unions and other groups can directly spend on political campaigns.
Siding with filmmakers of “Hillary: The Movie,” who were challenged by the Federal Election Commission on their sources of cash to pay for the film, the court overturned a 20-year-old ruling that banned corporate and labor money. The decision threatens similar limits imposed by 24 states.
The justices also struck down part of the landmark McCain-Feingold campaign finance bill that barred union- and corporate-paid issue ads in the closing days of election campaigns.
Justice Anthony Kennedy wrote the main opinion, which reads in part that there is “no basis for allowing the government to limit corporate independent expenditures.”
We now officially have a government of the corporations, by the corporations and for the corporations.
No, this ruling just means that anti-corporate activists are going to have to dig deeper to find the roots of the problem. They need to ask whether the very concept of corporate law– unlimited rewards, limited individual responsibility– inevitably leads to the abuses we are seeing.
On this, I agree 100% with you, Lehigh.
“We now officially have a government of the corporations, by the corporations and for the corporations.”
O.K., being the King & ““TruePatriotCEO™” that I am,…I’m “Amending it”:
“We the People, Judicially have a government of the Corporations & Peoples, by the Corporations and for the Corporations.”
“Our nation’s speech dynamic is changing, and informative voices should not have to circumvent onerous restrictions to exercise their First Amendment rights,” Justice Anthony Kennedy wrote for the majority.
informative voices = fat campaign contributions
Really, what can you do in a system where buying political influence is perfectly legal? This used to be called bribe. Why even keep on pretending this is a democracy, just auction off political postions on Ebay to the highest bidder.
+1 million
Good thing the Supreme court once again sided with money. I picture Goldman Sach’s standing in front of the candy bins with a fist full of cash, but instead of candy there are politicians.
Money = Free speach and
Corporations are individuals
Nice work Supreme Court.
there is no basis for allowing the government to limit corporate independent expenditures.
Notice he did not say that government could not revoke corporate charters, or amend or repeal corporation laws.
Which the supremes will never do
Because it is, almost universally, a matter of state law.
Why should they (the corps) when you have Delaware?
In a stunning reversal of the nation’s federal campaign finance laws, the Supreme Court ruled 5-4 Thursday that as an exercise of free speech, corporations, labor unions and other groups can directly spend on political campaigns.
Let the feeding begin anew!
Thank You “Supreme Court” for reaffirming Hwy’s 2010 wishful thinking!
My motto for 2010: “Keep Americans safe…protect CORPORATIONS!”
affirm - to declare or affirm solemnly and formally as true; “Before God I swear I am innocent”
avowal: a statement asserting the existence or the truth of something
So why aren’t the Republicans shouting and complaining about activist judges with this decision?
From the opinion:
“When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he may or she may not hear, it uses censorship to control thought. This is unlawful.”
Are some here actually advocating censorship?
Yes, the poor corporations have suffered so, so much because of the “censorship” they have endured the past 100 years…
Despite the legal fiction, companies are NOT a human being and therefore NOT entitled to ANY human rights.
Period.
That’s how I see it, too.
Do our politicians need to be informed that non-executive workers who are not in large labor unions need to have their pay and benefits cut and their prices increased? Aren’t they already told that all the time?
Didn’t I tell you all? The CORPORATIONS control the government, not the other way around.
And now the coup is complete.
Dems ‘Hysterical’ as Obama Retreats on Health.
The Wall Street Journal
WASHINGTON — President Barack Obama suggested he’s open to Congress passing a scaled-back health-care bill, potentially sacrificing much of his signature policy initiative as chaos engulfed Capitol Hill Wednesday.
Top Democrats said they would press ahead despite growing doubts among rank-and-file members that they can pass a bill they’ve been laboring over for nearly a year. A host of ideas offered in recent days have lost favor.
One day after losing their filibuster-proof Senate majority in a Massachusetts special election, exhausted Senate Democrats looked downtrodden as they filed into their weekly lunch in a second-floor room at the Capitol. “People are hysterical right now,” said one Senate aide.
nothing ticks them politicians off more than the cancellation of a shopping spree..
Wait until they find out about ammo dipped in pigs blood.
Muslims Angry Over U.S. Military ‘Jesus’ Rifles.
January 21, 2010 ~ AP/Defense Dept.
Combat rifle sights used by U.S. forces in Iraq and Afghanistan carry secret references to Bible verses.
Muslim groups reacted angrily Wednesday after it emerged that the U.S. military is using combat rifle sights inscribed with coded Biblical references.
Army officials have said they will investigate whether a Michigan defense contractor violated federal procurement rules by stamping references to Bible verses on the gun sights used by American forces to kill enemy fighters in Iraq and Afghanistan.
The Washington-based Council on American-Islamic Relations on Wednesday said the continued use of the sights with the religious references would send a negative message to the Muslim world.
Combat rifle sights used by U.S. forces in Iraq and Afghanistan carry secret references to Bible verses.
How about: “He who lives by the sword dies by the sword” ?
The Washington-based Council on American-Islamic Relations on Wednesday said the continued use of the sights with the religious references would send a negative message to the Muslim world.
At 2,750 feet per second, that sounds about right.
Thank God those Muslims don’t have any AK-47’s inscribed with koranic verses to make jihad or anything like that. Oh wait…
Links plz?
“At 2,750 feet per second, that sounds about right.”
LOL!
I was hoping a Jesus believer from South Carolina would make a post about this.
“The sights are used by U.S. troops in Iraq and Afghanistan and in the training of Iraqi and Afghan soldiers. The maker of the sights, Trijicon, has a $660 million multi-year contract to provide up to 800,000 sights to the Marine Corps, and additional contracts to provide sights to the U.S. Army.”
“U.S. military rules specifically prohibit the proselytizing of any religion in Iraq or Afghanistan and were drawn up in order to prevent criticism that the U.S. was embarked on a religious “Crusade” in its war against al Qaeda and Iraqi insurgents”
Jesus to Trijicon CORPORATION: “Thanks for “delivering my message”
Maybe it’s just me, but why did Trijicon take it upon themselves to supply the Army with scopes engraved with this. Sorta like the dip$hits @ Abu Graib taking all those pictures of themselves abusing prisoners.
The Taliban/Al Queda are telling people that they are engaged in a religious war. Doesn’t help our case when we supply evidence to confirm it.
Well, now that I think about it, American Jewish tax-payers are the Jesus “message” hook as well. Not to mention the scattering of (dare I say it) tax-payer non-believers.
Nope X-GSfixr, this American Patriot has your back!
“…“It is disturbing,” the U.S. Central Command leader said in Washington on Thursday.”
Contractor relents as Petraeus slams Biblical markings on rifle sights:
By Kevin Baron, Stars and Stripes Online edition, Thursday, January 21, 2010
IIRC, the belt buckles of the Wermacht’s soldiers were engraved with “Gott geht mit uns”. So there might be a precedent for this behavior.
I’ve heard that the border patrol berets and perhaps other clothing is made in Mexico.
Who cares about the Jesus/Islam stuff. It’s all made up anyways.
Shame on the company that makes the scopes for believing in it. Shows that they are weak.
“specifically prohibit the proselytizing”
Does shooting them actually count as a conversion?
WASHINGTON (Reuters) – The Supreme Court struck down on Thursday long-standing limits on corporate spending in U.S. political campaigns, such as this year’s congressional races and the 2012 presidential contest.
The 5-4 ruling was a defeat for the Obama administration and the campaign finance law’s supporters who said that ending the limits would unleash a flood of corporate money into the political system to promote or defeat candidates.
The ruling by the conservative majority transformed the political landscape and the rules on how money can be spent in future presidential and congressional elections, which already have broken new spending records with each political cycle.
GS must be picking out who they will buy as we speak. I wonder if there are volume discounts?
To bad there isn’t another Court to appeal to . The sheep are brainwashed enough ,the Politicians are bought off enough ,how much
more power do these entities need ?
Another small triumph.
UN abandons climate change deadline
Washington ~ January 20 2010
The timetable to reach a global deal to tackle climate change lay in tatters on Wednesday after the United Nations waived the first deadline of the process laid out at last month’s fractious Copenhagen summit.
Nations agreed then to declare their emissions reduction targets by the end of this month. Developed countries would state their intended cuts by 2020: developing countries would outline how they would curb emissions growth.
But Yvo de Boer, the UN’s senior climate change official, admitted the deadline had in effect been shelved.
Hurry, lets Eff k up the world faster. Oh goody.
The end does not justify the means.
OBAMA is coming down hard on Wall Street/Banks right now regarding reform …hope it isn’t lip service . The five minute speech the President just made tells me that he does get it .
1. Won’t believe anything that is not followed by action.
Exactly.
Sticks and stones may break banks’ bones, but words will never hurt them - or their profits!
You gotta wonder if Obama actually got the message with the Mass. vote and will start paying attention to Main street. I guess the odds are against it, but we’ll see. Seeing his health care plan go down in flames may be enough to open his eyes. Lets hope he’s more flexible than Bush was who wouldn’t change course in the face of an oncoming semi.
Exactly.
You go lil’ Opie, get them kanuckles bloody, Barney Fife has your back!
(Hwy hopes that lil’ Opie fights honorably, otherwise Auntie “B” will be quite disappointed, even if he manages to be up the “High Class” bully…)
“When you see more and more of the financial sector basically churning transactions and engaging in reckless speculation and obscuring underlying risks in a way that makes a few people obscene amounts of money but doesn’t add value to the economy — and in fact puts the entire economy at enormous risk — then something’s got to change,” Obama said in an interview released Thursday by Time magazine.
Obama has branded bank executives as “fat cats” and proposed a fee on large banks to cover shortfalls in the government’s $700 billion financial rescue fund.
Expanding on earlier measures, Obama endorsed Volcker’s proposal to restrict proprietary trading by commercial banks. That would separate commercial banks from investment banks, a line blurred a decade ago by the repeal of the Depression-era Glass-Steagall Act.
This restriction would affect some of the biggest banks, including Bank of America Corp., Goldman Sachs and Citigroup Inc.”
He says that he is relying on congress to produce legislation. Game over. Nothing has changed in the past year and nothing will.
The stock market was down about 200 points when Obama made his speech and now stocks are going down more ,than going up again . The cheerleaders are confused because the details were not there in the Presidents speech .
Down because the thieves might get punished. Up because they are now free to lie at will.
We don’t need no stink’n consumers…
Who needs consumer spending?
NEW YORK (CNNMoney.com) — American consumers are unlikely to ride to the economy’s rescue the way they did following the 2001 recession.
The unemployment rate is still high. People are saving more and spending less. Credit remains tight. And nearly $7 trillion in household wealth evaporated during the recession.
But even though consumer spending accounts for more than two thirds of the nation’s economic activity, there is a growing sense that the economy can enjoy a solid recovery without significant help from consumers.
Economists surveyed by the Blue Chip Economic Indicators expect modest growth of about 2% a year in disposable incomes and consumer spending this year and next. But they still expect overall economic growth of about 3% each of those years — and those estimates have been rising.
“The consumers don’t necessarily have to be in the lead,” said Brian Bethune, chief U.S. financial economist for IHS Global Insight. “I would say that a balanced recovery is more desirable.”
The only reason I didn’t trash my keyboard with coffee spray is because the punchline to that joke of a theory was so long.
Actually I believe it. There is a very good chance we’ll see steady growth the next few years.
However that growth will be:
- In nominal terms, not inflation-adjusted
- Fueled by ever-increasing debt
I can make an oak tree grow in a glass jar for quite a while, given the proper artificial stimulus (fertilizer etc.). Eventually though that sucker’s got to go into fertile soil to maintain proper growth.
There’s not much fertile economic soil left. It’s been pneumatically mined to debt.
The Soil of our country, has been stripped of it’s natural nutrients so it will be a paradigm shift for true fiscal/soil natural replenishment before we see anything good or sustainable.
hydroponic economy?
“It looks like the recovery momentum is still very much in place”
Who pays these guys????
Jobless claims up and regional factory activity dipsJanuary 21, 2010 10:57 AM ET
All Thomson Reuters news WASHINGTON (Reuters) - The number of U.S. workers filing new applications for jobless insurance unexpectedly rose last week, but a jump to a record high in a gauge of economic prospects eased concerns about the recovery.
The Labor Department said on Thursday initial claims for state unemployment benefits rose 36,000 to a seasonally adjusted 482,000 last week as a backlog of applications from the holidays were processed.
It was the third straight week that claims rose. Analysts had expected new claims to slip to 440,000.
Separately, a gauge of the economy’s prospects rose for the ninth straight month to a record high in December, a private research group said, indicating the recovery was set to pick up.
“It looks like the recovery momentum is still very much in place and it suggests that we should have good growth going through the first half of the year,” said Alan Gayle, senior investment strategist at Ridgeworth Investments in Richmond, Virginia.
I’ve figured it out.
There are two economies. One for them (the insider) and one for the rest of us.
Guess which is which.
This is a crazy World . The Supreme Court gives Wall Street more power
and Obama threaten to fight Wall Street all on the same day .
Cash-strapped Arlie files for bankruptcy | The move will shelter the developer from creditors while it reorganizes.
The Register-Guard ~~ Thursday, Jan 21, 2010
The nationwide credit crunch proved too much for the man who has been Eugene’s most audacious and successful large-scale developer, John Musumeci.
On Wednesday, he shepherded Arlie & Company, which he runs with his wife, Suzanne Arlie, into Chapter 11 bankruptcy. The filing gives the company protection from creditors while it reorganizes, which Musumeci said he is hoping will take only a few months.
Arlie & Company has assets aplenty — with vast landholdings in Lane County and its Crescent Village development in north Eugene — but it doesn’t have sufficient cash.
“Five of our six banking partners have been willing to work with us on a restructuring plan,” Musumeci said Wednesday evening. “However, despite many discussions over the last several months, we have been unable to reach agreement with Umpqua Bank. Sadly, this is the only course of action left for us.”
Umpqua Bank is Arlie & Company’s biggest lender on Lane County properties and projects. Over the past eight months, the Oregon-based bank renegotiated company loans and lines of credit worth $11 million, county land records show.
I have to wonder why Eugene (the small college town in Oregon, right?) needs even one “audacious large-scale developer.”
Could the Credit Card Act Ruin You Financially?
Yahoo Finance ~ January 20, 2010
When the Credit Card Act goes into effect on Feb. 22, it will do more than eliminate sudden interest rate hikes, hefty fees and double-cycle billing. The law is also intended to end the practice of giving a credit card to anyone with a pulse.
So before extending credit, companies must consider an applicant’s “ability to pay” — or their income and debt load. That means they’ll be verifying what consumers say they earn on credit card applications.
It’s a consequence of the law that few advocates have talked about: What will happen to the millions of financially strapped consumers and small business owners who’ve become dependent on credit cards in times of crisis?
“We’re headed down the road where if you can’t verify your income, you can’t get a credit card,” says John Ulzheimer, president of consumer education for Credit.com, a card-comparison Web site.
Sounds like it might get tougher to get a credit card than to get a house!
“So before extending credit, companies must consider an applicant’s “ability to pay” — or their income and debt load. That means they’ll be verifying what consumers say they earn on credit card applications.”
Amazing. What a concept! I can’t believe I just read that.
I can’t wait to see what year we travel back in time to once this all gets wrung out.
Baby steps. It appears we are indeed moving back towards some financial sanity.
It’s a shame the MSM is fighting this all the way with headlines like this though. Yes - a return to proper risk standards will of course “ruin you financially”.
Anyone whose finances are ruined by not being able to get a credit card if they don’t have a job - really needs to have their finances ruined.
Amen.
I like this legislation so far.
By THE CANADIAN PRESS, cp.org, Updated: January 20, 2010 7:31 PM
VANCOUVER, B.C. - Lenders have moved to auction off the assets of Intrawest ULC, including the Whistler ski resort that will be home to the Olympic downhill races next month.
Intrawest said it will be “business as usual,” despite the possibility the high-end B.C. resort could be on the auction block even as Olympic athletes grace its slopes.
Heard on NPR this morning that they also haven’t got any snow up there, which could prove quite a problem for hosting winter games. A cheerful Canadian official was quoted saying that they were prepared to transport “spare” snow from elsewhere in the country to the appropriate sites, by truck or even by helicopter(!) Sometimes the human race sickens me.
There’s plenty of snow. I was up at Whistler last weekend. 70cm on Friday and another 10+ on Sunday.
I did hear someone saying they’re storing the snow, though, so that they can transfer it where they need it for the games.
Texas Wildcatter Moncrief Hits Latest Gusher Beneath Old Fields
(Bloomberg) — William “Tex” Moncrief, the billionaire wildcatter and scion of one of the founding families of the Texas oil industry, is betting the key to finding new gushers is to go deeper than anyone has gone before.
Moncrief agreed in September to help finance McMoRan Exploration Co.’s $70 million Davy Jones well off the Louisiana coast in exchange for a 10 percent stake in the prospect. The gamble paid off last week, when New Orleans-based McMoRan said the well hit what may be one of the biggest Gulf of Mexico oil and gas discoveries in decades.
Moncrief bought a piece of Davy Jones after being impressed by McMoRan’s success with a former Exxon Mobil Corp. well known as Blackbeard at a then-record depth of 32,997 feet (10,057 meters). He said he’s eager to invest in more projects with McMoRan Co-Chairman James “Jim Bob” Moffett, a friend of 50 years and a pioneer in finding oil miles beneath old fields.
“I knew Jim Bob took in that old Exxon Blackbeard well and went deeper with it to make it work,” Moncrief, 89, said in a telephone interview from the headquarters of closely held Moncrief Oil in Fort Worth, Texas. “I’ve drilled lots of deep wells. Sometimes when you don’t find what you’re looking for, you have to just keep on going.”
Eighty-nine years old and still wildcatting. Too cool.
Another dash of hope…
Pelosi Says House Lacks Votes for Senate Health Plan (Update1)
Jan. 21 (Bloomberg) — House Speaker Nancy Pelosi said her chamber lacks the votes to pass the Senate’s health-care legislation, dashing hopes of a quick resolution for President Barack Obama’s top domestic priority.
“In its present form, without change, I don’t think it’s possible to pass the Senate bill in the House,” Pelosi told reporters today in Washington.
“Jan. 21 (Bloomberg) — House Speaker Nancy Pelosi said her chamber lacks the votes to pass the Senate’s health-care legislation,”
Can`t blame them, it`s tough to get a job out there.
I like the idea of ditching this pork-laden bill and starting from scratch on new legislation containing only the items that both parties (and pretty much everyone else, even the insurance companies) agree are necessary in a reform package.
Namely, end the practice of dropping people’s coverage once they become ill, and stop declining people or charging usurious premiums on the basis of trivial existing conditions, aka cherry-picking.
Then get to work on how to reduce health care costs, which everyone agrees are way out of line. I personally am a fan of more competition, so allowing insurance to extend beyond state boundaries would be a good start. Encouraging or forcing the handful of big insurers to split into a multitude of smaller ones (but without giving them regional monopolies as with AT&T) also seems well worth a look.
You know, I’m thinking who fricking cares.
How about this…www dot washingtonpost dot com/wp-dyn/content/article/2005/07/23/AR2005072300382 dot html
Perhaps the larger problem and where the costs come from are stupid things like this. Medicare incentivizes bad behavior and is wasting money and increasing costs.
Just another example of how these semi-socialized medicine programs can go really bad.
This is a larger problem than the insurance costs.
Anyhow, good riddance to bad legislation. Dems want to help out on healthcare. Get to work on fixing medicare.
Louisiana Legislature Floating Bill. Making Obamacare Illegal in State
Louisiana State Senator A.G. Crowe (R, Slidell) is introducing a bill for the 2010 legislative session in Baton Rouge that would make Obamacare illegal if it violates state laws, effectively making Obamacare null and void in the Pelican State. Senator Crowe states that his bill “provides that no law or rule shall compel, directly or indirectly, any person, employer or health care provider to participate in any health care system or health insurance.”
It’s easy enough for the federal government to strongarm a state in situations like that — if you don’t follow the healthcare bill’s stipulations, you don’t get funding for X,Y,Z. And as you know from the antics of Gov. “Bolero In My Pants” Sanford, it’s all political posturing anyway.
We needs Mo’ Money!
Millions needed for city pensions. Payment likely to be funded by more cuts. ~ UNION-TRIBUNE
Just when San Diego city officials thought they had closed a $179 million budget gap, another has opened up because more money will be needed to pay for employee pensions.
The city will have to contribute $231.7 million to the retirement fund in the fiscal year that starts in July. That’s up $19 million from the forecast used when the last budget gap was closed in December.
The increase is a result of the fund’s investment losses and more employees signing up for pension benefits because of fears they will be cut.
Yep -the reason for existence of city/state and federal governments. To FUND public union pensions.
All that other stuff - fixing streets, building bridges, repairing street lights, cleaning parks, traffic enforcement, running libraries, etc. is all for fluff.
Gold plated public union pensions are a constitutional right. We fought a revolution for it, ya know…
… The increase is a result of the fund’s investment losses..
Investment losses? Call it what it was. Gambling.
With other people’s retirement savings, no less…
The return of rickets: Victorian disease on the rise due to poor diet and lack of exercise ~ 21st January 2010 ~ UK Mail
Rickets is normally associated with children in poverty or starvation but it is becoming more common in Britain
Modern children’s lifestyles are putting them at growing risk of rickets, doctors warned today.
The disease which was the scourge of Victorian Britain is making a comeback because poor diets and the decline in outdoor play have led to a vitamin D deficiency.
Youngsters are spending more ’screen’ time indoors on computers compared with previous generations who spent time playing outside with their friends, getting exposure to sunlight that boosts vitamin D levels.
In addition, children are not taking cod liver oil - a rich source of the vitamin - in the same amounts as they did 50 years ago.
Factories in Philadelphia Fed Region Grew in January (Update2)
Jan. 21 (Bloomberg) — Manufacturing in the Philadelphia region expanded in January for a fifth straight month, pointing to a factory rebound that is helping lead the economy out of the recession.
The Federal Reserve Bank of Philadelphia’s general economic index fell to 15.2, lower than anticipated, from 22.5 in December. Readings greater than zero signal growth.
“…helping lead the economy out of the recession.”
From Newsweek:
“You might have noticed, government has trouble saying ‘No’ to much of anything. This inherent bias toward generosity has been slowly eroding the financial footing of Social Security. It’s also just hard to anticipate the future. For example, this recession alone will wind up paring years off the program’s self-sufficient lifespan. Payments into the system are way off because of high unemployment but benefit expenses are higher. That’s because many older employees who suffered job losses were forced to begin taking Social Security as soon as they became eligible at age 62. The soundness of the program is also adversely affected by longevity, and people are living much longer than the experts anticipated even as recently as 1983.”
Crammer is already doing a PR campaign to stop any reform and is suggesting that regulators do it per their discretion . Some cheerleaders are also pushing for any reform or break-ups to be delayed for 5 years when its already has been delayed for 4 or 5 years .
They combined mergers of Investment Banks with Regulated Lenders during the crisis ,
no doubt so the thieves could qualify for the bail-outs ,as if the two different worlds weren’t engaging in the same activities during boom times
anyway .
“Crammer”
Very apropos alternative spelling of the Mad Money dufus’s name!
Darn ,Wall Street screwed up a functioning market with reasonable risk so bad to be rigged in the favor of the elite 10%
and I don’t think there should be any concessions what-so-ever on reform .Its a joke anyway because they have gotten 4 years of bail-outs and a rigged market so they could recoup . So what if there is pain with putting them back in the box called “reasonable regulations,reserve requirements ,lower leverage , transparency demands “, that they broke free from,thanks to stupid Politicians .It was a big mistake ,simple as that .
All this BS that regulation stand in the way of innovation is BS talk .
Oh ,great innovation ,coming up with a highly leveraged Ponzi Scheme regarding lending while breaching the duty to underwrite the loans or
require reasonable down payments and leveraging beyond what any reasonable person would do .
Amen, Wiz.
Craigslist rental asking for 3 year lease:
http://syracuse.craigslist.org/apa/1562785852.html
“Currently under construction ready for May 1, 2010. Three (3) year lease and security deposit required. ”
Can’t say I’ve seen that one before.
Three year lease… wow. At least they’re timing the market right, I suppose.
Ha, out in the boonies of upstate New York too, but they want $2200/month? If you look hard enough, you can find a comparably sized place in freaking Silicon Valley for that.
Welcome Back Glass-Steagall
“The cowboys on Wall Street are always one step ahead of regulators. When banks make idiotically leveraged investments, they need to be stopped,” Sabino said.
While I’d like Glass-Steagall to come back, I’d like them to define the word “stopped.” If the free market had its way they’d be stopped because they’d no longer be in business.
There’s the rub! Abandoning Glass-Steagall but continuing TBTF is a perfect recipe for frequent Wall Street bailouts in the wake of manmade hurricanes.
Why are we calling Wall Street Investment firms “Banks”.
The fact that they used the prospect of the merger of Citi Bank with a Insurance Company as the grounds to repeal Glass–Steagall originally in 1999 is pretty weak grounds for repealing a major law
that would prevent this intermingling of the different financial
sectors . It only took them less then 7 years to screw up the entire
financial markets ,create the mother of all real estate bubbles by
faulty lending and end up taking trillions from the public.
One cheerleader today was saying that if they rein in the Banks than the Foreign banks will have a unfair advantage . There we go again
using Globalism as ground to not regulate . Another cheerleader for de-regulation in essence said that the banks should have 3 to 5 years before these reforms go into effect . Wall Street/Banks have already gotten 4 or 5 years since the real meltdown ,so adding another 5 years to put these regulations or break-ups into effect would
give them almost a decade of free rein ,or 15 years total from the 1999 repeal of Glass-Steagall . Isn’t that a little absurd . Don’t you think that trying to postpone regulations is just a ploy to get into
the next election while these entities enjoy a stacked deck playing field .
Another cheerleader talked about de-regulation being good for innovation ,but it appears that the innovation that it created was
Ponzi-schemes and improper mixing of conflict of interest
financial sectors . Rating f paper as AAA was a great innovation for being able to get money you should not of been able to risk and go to the gambling casinos and leverage it up even more .
And than the final argument that breaking up TBTF entities would create a fire sale of these entities . Mark to market is a bitch if you have to include your bad loans in you value and your Fed outstanding loans still not paid .
One cheerleader today was saying that if they rein in the Banks than the Foreign banks will have a unfair advantage . There we go again
using Globalism as ground to not regulate .
——————–
I heard someone on CNBC make this statement, and had to laugh.
Weren’t the bankers/financiers behind the big push for the deregulation and “globalization” that off-shored J6’s job and caused wage decline/stagnation for pretty much anyone who did **real** work?
So, now that everyone else’s job is gone, thanks to their actions; they think we should have mercy for them? Arrogant ba#terds, every one of them.
Perhaps if we offshore the “financing” jobs, we might finally be able to focus on doing what’s right for our country and its citizens: real jobs that produce useful goods and services and enable working people to make a decent living and some job stability.
misspelling noted…
It’s late.
Rates on 30-year home loans fall to 4.99 pct ~ Thursday January 21
WASHINGTON (AP) — Rates for 30-year home loans fell to a shade below 5 percent this week but remained above last month’s record lows.
The average rate on a 30-year fixed mortgage was 4.99 percent, down from 5.06 percent a week earlier, mortgage company Freddie Mac said Thursday.
It was the third-straight weekly decline. The drop comes after interest rates fell in the bond market this week as concerns about the economy increased demand for the safety of government debt, which is closely tied to mortgage rates.
This kook cracks me up!
Russia Today ~ 1-20-10
Venezuelan leader Hugo Chavez has once again accused the United States of playing God. But this time it’s Haiti’s disastrous earthquake that he thinks the U.S. was behind. Spanish newspaper ABC quotes Chavez as saying that the U.S. navy launched a weapon capable of inducing a powerful earthquake off the shore of Haiti. He adds that this time it was only a drill and the final target is … destroying and taking over Iran.
I’d luv to try that joshua tree extension,
but my download yields hieroglyphics…like this
PK �����¬få:�����������
but my download yields hieroglyphics…like this
Read my post more closely and right click and “save as…” rather than click the link directly.
Right drummer,
and as you explained… i have to drop the daved file into the application
voila!
I just want to give a lesson on loan making verses investment . A loan is a amount of money given based on a real estate assets present value as well as based on the borrowers ability to pay and credit rating .
A investment is venture capital put forth based usually on a projection of future value . Some investments can be in stocks that are based on current income or future projected income and value of a Company .
High risk investments are based on risking capital on a unknown and projected performance of a investment for future gain .
Lending is different than investment in that its based on the current value of the asset (or should be ) and the protection of the borrowers having a stake in the asset ,or skin in the game, and ability to pay the debt into the future based on the current value of the asset at the time of the loan and a analysis of the borrowers ability to pay for the term of the loan .
Investment is the act of putting up funds for the purpose of the asset invested in growing in value or increasing yields on the money invested based on growth ,or maybe even static yields .
So when you confuse lending with investment ,just as you could confuse the purpose of insurance verses investment you can make major mistakes in risk taking . When Wall Street wanted to use investment funds to fund lending ,rather than lending made based on the principals of lending ,they created a world of faulty lending that created the bubble and fake rise in value of real estate . The requirement of investment is you have the money to invest and risk . The requirement of lending is that you have the ability to pay a loan based on the current value of a real estate asset .
Complicate everything with Wall Streets high risk leverage games so they can make more money as well as the risk games they play without anything backing up the bets ,you can see that it was making a gambling casino out of the financial markets rather than prudent risk taking .
They discovered in the 30’s that mixing investment with lending was the cause of the stock market crash . Wall Street made faulty margin loans on stocks just so they could get people to make that investment . All this loaned money coming in flooded the stock market and drove the market up beyond it’s true value . Like all bubbles ,the stock market crashed because people were just investing short term based on the false values and the lure of quick or easy money . When the stock margin loans were called a run on the banks occurred and wiped out many banks .They didn’t have FDIC insurance in those days so the run on the banks
wipe out people who didn’t even invest in the stock market . So that is a example of how one parties investment can affect another parties investment .
So ,the lawmakers at the time created Glass-Steagall in the early 30’s to
combat the natural conflict of interest between investment and lending principals . I have talked about this before ,but the issue is heating up right now so I wanted to go over it again .
Thanks, Wiz. Good post.
Health bill may impose ‘marriage penalty’
http://articles.moneycentral.msn.com/Insurance/InsureYourHealth/health-bill-may-impose-marriage-penalty.aspx?GT1=33004
Talk about the law of unintended consequences.
Anybody like what the Supreme Court did today ? I wish that the lawmakers would stop treating Corporations like they with individual parties with the same rights under the Constitution .
We, the CORPORATIONS & the People, in order to make a more “profitable” Union…
Hwy’s motto for 2010: “Keep Americans safe…protect CORPORATIONS!”
O.K., being the King & ““TruePatriotCEO™” that I am,…I’m “Amending it”:
Hwy’s motto for 2010: “Keep Americans safe…Indemnify CORPORATIONS!”
Anybody like what the Supreme Court did today ?
I’m especially curious to hear what our local conservatives think of this ruling.
Good or bad?
Principled or calculated?
It might do something to offset the public employees unions that currently run California.
Bush-whacked in the back of the neck!!!
If you ask me the ruling is completely irrelevant, and is neither principled nor calculated. It’s just an interpretation of existing law.
—-
Are we voters so simple minded that television ads have a powerful influence on how we direct our vote? Yes.
Is our being influenced by advertising a good thing for us? No.
Have we shown any willingness to be more careful about who vote for? No.
We The Sheeple sell our votes to the highest bidder, illustrating yet again that you get the government you deserve..
Did anyone who is not a major corporation just lose any semblance of a shard of political influence, or does it just appear that way?
Imagine this deal:
(Year 1) Here is a ginormous campaign contribution. Now you pass bill XYZ, which will make our profits go up by godzillion dollars.
(Years 2, 3, 4, …) Here is your cut of godzillion dollars; thanks for your ongoing support.
Have the Supremes never heard of MORAL HAZARD???
That was lost decades ago. Now it’s legal.
Hey I wonder if the supreme court thinks it’s legal for foreign companies to give unlimited cash to our so called representatives. What about foreign government owned corporations? What about Hedge Funds and foreign hedge funds? If so I imagine we’ll be seeing quite a few chinese owned corporations and hedgefunds over the next few years.
No matter. I am quite sure our corporate thieves are perfectly adept in the art of laundering foreign money flows into the black boxes of their fraudential reports.
As the screw turns…
Good News: We’re Getting Glass-Steagall Back, Now Here’s How To Make It Work For The 21st Century
Mike Konczal | Jan. 21, 2010, 11:39 AM
Tags: Regulation, Wall Street, Barack Obama
So there’s good news for financial reform. Before we talk about it, we need to get in the time machine and travel back to the 20th century for a few paragraphs.
Some developers STILL think it’s a good idea to build huge condo complexes.
http://www.latimes.com/news/local/la-me-grove21-2010jan21,0,7245627.story
Nearly four years after the community beat back a proposal to build a 300-unit condo project near the Grove shopping center, complaining it was too dense and would generate too much traffic, the developer has come up with a new plan: Another 300-unit condo project, this one with taller buildings and about three times as many units set aside for senior citizens.
I used to live a few blocks north of where the Grove is now. Let’s just say that for me, the neighborhood jumped the shark when they built it. Sorry to hear of yet more junk being built, further wrecking the character of the neighborhood, although I guess if it’s on the Ross Dress for Less site then it will be abutting Park La Brea, which already has a number of high-rises. Of course, building it in this market is insane.
I’ve been listening to all the political sound and fury today. The Democrats had a year with a super majority, and they didn’t get squat done. They want to the blame the Republicans. A pox on both their houses. Obama wanting government control of everything (although talking a good game), McCain wondering what the fuss is all about with the economy, his primary advisor saying that everything is fine.
Both parties were complicit in the bubble, the deregulation, and the meltdown, and the subsequent bailouts and the massive wealth transfer to Wall Street. Both parties are responsible for zero interest rates on your savings.
Both parties are utterly in the pocket of the various deep-pocketed industries, especially, Finance, Insurance and Real Estate.
The choice between Republican and Democrat is the choice between getting punched in the head or getting kicked in the stomach. They’re going to give us more elaborate kabuki theater, but precious little corrective action because they’re not going to turn on their money suppliers.
Despite it all, I am not tuning out. That’s what the powers that be want you to do. Don’t do it. Make them pay. Make sure to vote them all out this November. Both parties have made it very difficult for third parties. Both parties will field candidates who pretend to be “outsiders”.
Be aware of the BS. Don’t fall for it. Don’t get apathetic, that’s what the powers that be want. Make your voice heard this November.
Time to ramp up the propaganda campaign. You had better leave us thieves alone or the whole economy will blow, and you better give us more money.
Jan. 21 (Bloomberg) — Investors say Congress would undermine the U.S. economy by clamping down on the Federal Reserve and predict that taxes on bank bonuses would persuade companies to move to friendlier jurisdictions.
More than half the respondents in a quarterly poll of investors and analysts who are Bloomberg subscribers said that increased congressional oversight would open the U.S. central bank to political influence and hurt the Fed’s ability to conduct monetary policy.
The House of Representatives has approved a proposal to submit the Fed to monetary policy audits, while the Senate is considering legislation that would remove the Fed’s authority to supervise banks.
“God forbid further political meddling with one of the few institutions that functioned during the crisis,” said poll respondent Giovanni Conti, a treasury officer for the International Fund for Agricultural Development, a United Nations agency based in Rome. “This crisis has proven the need of a central control over both monetary policy and monitoring of the structure of the financial system.”
Time to ramp up the propaganda campaign. You had better leave us thieves alone or the whole economy will blow, and you better give us more money.
Jan. 21 (Bloomberg) — Investors say Congress would undermine the U.S. economy by clamping down on the Federal Reserve and predict that taxes on bank bonuses would persuade companies to move to friendlier jurisdictions.
More than half the respondents in a quarterly poll of investors and analysts who are Bloomberg subscribers said that increased congressional oversight would open the U.S. central bank to political influence and hurt the Fed’s ability to conduct monetary policy.
The House of Representatives has approved a proposal to submit the Fed to monetary policy audits, while the Senate is considering legislation that would remove the Fed’s authority to supervise banks.
“God forbid further political meddling with one of the few institutions that functioned during the crisis,” said poll respondent Giovanni Conti, a treasury officer for the International Fund for Agricultural Development, a United Nations agency based in Rome. “This crisis has proven the need of a central control over both monetary policy and monitoring of the structure of the financial system.”
Man I hope we see pitchfork sales rise.
Megabank, Inc’s threat point: “Take away our gambling rights, and we will rip the stock market to shreds…”
* JANUARY 21, 2010
New Bank Rules Sink Stocks
Obama Proposal Would Restrict Risk-Taking by Biggest Firms as Battle Looms
By JONATHAN WEISMAN, DAMIAN PALETTA And ROBIN SIDEL
How about a walk down memory lane?
* SEPTEMBER 30, 2008
How Voter Fury Stopped Bailout
Left-Right Combo By Opponents Put Plan on the Ropes
By STEPHEN POWER and GARY FIELDS
The defeat in Congress of a proposed $700 billion economic-rescue package followed an intense outpouring of voter anger, fanned by politicians, interest groups and media on the left and right, that overwhelmed calls from the president and top lawmakers to pass the deal.
Fierce resistance from both ends of the political spectrum drove lawmakers to vote against the economic-rescue plan.
Voters opposed to the deal deluged Capitol Hill with letters, emails, phone calls and faxes over the past week. Some 23,000 signatures were collected over two days by Sen. Bernie Sanders, a Vermont Independent, calling for a five-year, 10% surtax on the wealthiest Americans to help fund the bailout. Some prominent conservatives and bloggers criticized the deal as an unwarranted intervention in the free market.
“The vast majority of my voters looked at this as a bailout for Wall Street,” said Rep. Darrell Issa of California, one of the most outspoken Republican critics of the proposal.
On his Web site in recent days, Rep. Issa has posted letters and emails from some of the more than 2,000 constituents he said had contacted him about the proposal, including one from “Greg” in Temecula, Calif., who called the proposal “poorly thought out and rushed to the floor.”
“I am 45 and a husband and father of 4. I am outraged and appalled at the arrogance of my President and the lack of regard for what is right,” the message said.
…
“… calling for a five-year, 10% surtax on the wealthiest Americans to help fund the bailout.”
Is this surtax to be levied on accumulated wealth or is it to be levied on income? There is a big difference.
Either way, the money will go underground and out of reach of the tax man.
NEVER FORGET!!!
The Financial Times
Don’t bank on voters forgetting
By Christopher Caldwell
Published: January 15 2010 22:14 | Last updated: January 15 2010 22:14
The furore over record bonuses paid to bailed-out investment bankers was building even before JPMorgan Chase announced soaring fourth-quarter profits ($3.3bn) on Friday. Goldman Sachs announces its executive compensation next week. Industry-wide, bonus pay will be well over $100bn (€69.5bn, £61.5bn) in the year, with $50bn of it paid at the top five banks alone. Many bankers will receive theirs in the form of stock – including the top 30 executives at Goldman and everyone getting over $100,000 at Citigroup. Still, compensation levels have blown past where they were in the autumn of 2008, when banking practices brought the western economy to the brink of collapse. The public is unimpressed, and it is right to be unimpressed.
As a matter of common sense, it is an outrage that thousands of employees should collect millions of dollars apiece from companies that owe their continued existence to the largesse of US and European taxpayers. Barack Obama, the US president, sought to pre-empt accusations of laxity by announcing a levy on banks on Thursday. (This levy appears more likely to fall on bank customers than on the well-heeled bankers, who back both US political parties.) As a legal matter, though, the grounds for blocking big payouts are murky, at least for those banks – including Goldman, Citi and JPMorgan – that have returned the money advanced to them as part of the Troubled Asset Relief Programme (Tarp). The principles driving the public outcry have a tendency to shift.
But this does not mean that middle-class fury at bonuses is mere envy. The main grievance is that the bonuses are not a reward for competence, effort, or any other quantifiable benchmark. In the aftermath of Tarp, they can even be likened to a corporate dole. As Andrew Cuomo, attorney-general of the state of New York, put it in a report last summer, the financial crisis provided a “virtual laboratory in which to test the hypothesis that compensation in the financial industry was performance-based”. Bankers’ compensation rose along with a bull market for a decade and then stayed at bull-market levels even as the bankers’ practices brought the economy to the brink of ruin. Mr Cuomo described the bonus culture as “heads I win, tails you lose”.
…