Bits Bucket For January 24, 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
Location:Northern Arizona, United States
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Good morning, Good morning, I’m #1 todayyyyy. Well, actually I was playing pogo because I couldn’t sleep
You have been granted 1 wish today by being FOIST….wadda it bee?
Ooooooo! OOOOOO!
Silverback, ask for sanity to return to the housing and financial markets!
Or would that be two wishes?
I ask, oh I ask for the obove wishes, but more so for rescue and rebuilding for the people of Haiti.
I just saw the picture of Lil Miss Muggy. Boy, is she cute !
Thanks
Muggy (aka Proud Papa),
Post the baby’s picture again, for those of us who missed it.
I posted a comment about Los Angeles in yeterday’s Bits Bucket this morning. I live in the area.
i864.photobucket.com/albums/ab205/muggyflo/taters.jpg
Cuteness!
Muggy, you and Mrs. Muggy genuinely have a talent for this kid stuff. Nice to witness civilization going on.
awaiting wipeout,
I responded to your post about illegal immigration, too.
We’re on the same page. I am **not** an advocate for illegal immigration. Having grown up in the Valley as well, I’ve seen the devastation that results from unchecked illegal immigration, and fault our govt for protecting other countries’ borders while not protecting ours. Something is very wrong with this picture.
I clicked on all of the ads on the HBB. I have been forgetting to do that lately. All of my freewill donations are either going to Detroit-area foodbanks or Haiti Red Cross or Catholic Social Services relief efforts. It’s horrible out there.
Speaking of Haiti, I saw one story where looters rummaging around in the rubble discovered a couple of survivors.
That got me thinking.. i dunno about what exactly, but something’s there..
I disagreed with their calling off the hunt for survivors so soon. It’s not cold there, and some people may be able to get at some food or water. But, the general population seems to be starving to death slowly even if they’re out of immediate danger. International efforts to feed the population seem to be woefully inadequate. I think we’re going to see terrible famine within a month.
..It is an impoverished country, one of the world’s poorest and least developed… (Wikipedia) Scan the page for some insight into how bad things are in Haiti, earthquakes or not.. Suffering starvation seems almost merciful.
——–
Your comment did solidify what was going on in my mind about the looters finding survivors. Why not allow or even encourage looting in these situations? (Within limits)
In addition to keeping what they find, reward any looter that finds a survivor.
Yeah.. sounds kinda dumb, but not if we value life above the crap that we collect in our homes.
Calling them looters seems a bit cold to me. In a situation where food and other supplies are scarce and nobody is around to take my money, I would take first and settle up later.
The buildings are destroyed and the whole structure will probably be bulldozed anyway along with everything inside it.
I prefer to think of them as unpaid salvagers.
Personally, in that kind of disaster, I’m inclined to give anyone looting food or water a free pass. Other property… I’m not so sure.
Brings up a good point….is it looting when you steal meat eggs cheese and perishable foods?
Katrina showed the vast difference in the upbringing of people….lots of the so called Caucasian people down the bayou were looting the food propane, bbq cookers and cooking it up for free to people in need. Sometimes right in front of the store…. Whereas the 9th ward people were never shown with food, always a tv or some gadget to sell.
Or pots or pans or clothes or shoes or shovels or picks or medical supplies or any one of a hundred other necessities that may have been lost in the disaster.
AS I recall, in New Orleans, in the flooded ares, folks looting/scavenging food got ignored, those trying to take electronics got busted when possible.
Underwater, but Will They Leave the Pool? January 23, 2010 ~NYT~
MUCH has been said about the high rate of home foreclosures, but the most interesting question may be this: Why is the mortgage default rate so low?
After all, millions of American homeowners are “underwater,” meaning that they owe more on their mortgages than their homes are worth. In Nevada, nearly two-thirds of homeowners are in this category. Yet most of them are dutifully continuing to pay their mortgages, despite substantial financial incentives for walking away from them.
A family that financed the entire purchase of a $600,000 home in 2006 could now find itself still owing most of that mortgage, even though the home is now worth only $300,000. The family could rent a similar home for much less than its monthly mortgage payment, saving thousands of dollars a year and hundreds of thousands over a decade.
Some homeowners may keep paying because they think it’s immoral to default. This view has been reinforced by government officials like former Treasury Secretary Henry M. Paulson Jr., who while in office said that anyone who walked away from a mortgage would be “simply a speculator — and one who is not honoring his obligation.” (The irony of a former investment banker denouncing speculation seems to have been lost on him.)
But does this really come down to a question of morality?
A provocative paper by Brent White, a law professor at the University of Arizona, makes the case that borrowers are actually suffering from a “norm asymmetry.” In other words, they think they are obligated to repay their loans even if it is not in their financial interest to do so, while their lenders are free to do whatever maximizes profits. It’s as if borrowers are playing in a poker game in which they are the only ones who think bluffing is unethical.
..(The irony of a former investment banker denouncing speculation seems to have been lost on him.)..
Irony, eh?
By the same token, it would be “ironic” for a lion tamer to warn people away from playing around with lions..
—–
I think people stay for many reasons. Because they like the house. It’s a huge PITA to move.. They do not want to admit defeat.. They have hope of somehow avoiding forfeiting whatever they’ve invested.. Everything else they purchase is worth a lot less than it was when they bought it, so what’s the big deal.
The morality (or immorality) might matter to some, but i doubt it’s the cause of widespread hardheadedness..
Some people also rode the nasdaq from 5000 to 1400 too.Sometimes it is smart to cut your losses.I think they say if your stock goes down 10% time to cut your losses.Knowing when to buy is essential but knowing when to sell is also of utmost importance.With a house I really cant give you a good number to know when to bail.I think > or=50% is definitely a time to cut your losses,it will be cheaper for you in the long run.
Occasionally I follow that advice and cash in on profits. Did well with Raytheon, AWA (before it became LCC), ORB, and NYB. Did badly with PFE. Win some, lose some.
I’m seeing things more and more Combo’s way: Cash is king!
Whatever happened to Jain, our Indian-American friend from Tehachapi? he claimed to have half a meg in cash. Wonder if he jumped off the fence and a falling knife struck him?
He could have made money last year. I stayed in cash and regret it now.
Montana,
The technical charts right now show that the stock market may be peaking. While I’m not a market timer and I sheepishly and meekly obey my dollar cost average religion (my only religion), cash is the best place to be now. Loading up on T-bills is great in this environment. I won’t have enough to do great in stock purchases when the buy signals return. But my stock screeners indicate most stocks are over valued.
If I cannot find an obviously good value stock within two hours of searching, it’s a strong indicator that I should be happy to keep buying T-bills. Last time I bought a good stock was EVEP in November. Now BBEP is an even better value!
They do not want to admit defeat..
“Pride cometh before the Foreclosure.”
Besides, how does one reconcile a cHummer & BMW, x2 jet ski’s, a RV trailer… whilest one is moving into a x1 bedroom apartment?
Cute, and oh-so-true. I think some of those hummers are as big as a 1-br apt.
Pride goeth over the falls!
a RV trailer… ??
Hey….Don’t be dis-en my RV Hwy…
Yeah, but you got a GPS showing every Wal-Fart parking lot in America! Cheater!
Wal-Fart parking lot ??
Gotta love that free parking and fresh hot pastries in the morning !!! I even put out a little weber to start a fire and sing songs so I can feel like we are really camping !!!!
I heard someone emptied their black water tank in the local wmart’s parking lot and that’s why they no longer permit RVers to park overnight.
Another thing.. no more Self Check-out booths.
I asked why and she says “Too much stuff was checking out”.
Thats news to me Joey but I have not tried to park in one recently…
scdave, near as i can tell, the parking permission is up to the individual store. I’m sure many, if not most, still allow it.
The one i speak of has a 24/7 guard driving around the lot in a pickup.. it’s not window dressing. They watch everyone.
dang.. i screwed up:
..”Another thing.. no more Self Check-out booths.
I asked why and she says “Too much stuff was checking itself out”.
I want to get that right cause it was especially funny coming from what had to be a 99 year old lady..
Parking at my Arizona apartment is very tight. The roadway through the complex is very narrow. There is no way that every apartment (some of which are 2 and 3 bedrooms) can have two vehicles per unit, let alone any RV.
A lot of people who stay probably figure their house will be back up in price very soon anyway… so they will simply wait out the dip.
I agree with Bungalow. Hope springs eternal among RE agents and sellers that prices will go up this spring.
Most homeowners I know tell me “yes, but prices are holding steady HERE”.
If you confront them with evidence to the contrary, “here” starts being reduced to county/city/side of town/neighborhood/my side of the street/this end of my side of the street.
Once you accept that people are, by and large, delusional morons, many things become clear.
If I bought a house that I could well afford, I may be inclined to keep making the payments I agreed to and live there, despite the fact that, if I were to sell it, I’d get less than I owe.
In fact, this was the normal case for the past 50 pre-bubble years! Given an effective transaction cost of 9% or so (brokers fees + moving cost + mortgage fees), when houses where just tracking wage inflation, it would take 7 years until you’d be able to sell and break even.
Because the New York Times is stupid. “Underwater” does not automatically mean “going to foreclose.” If you can still afford the payments, then it doesn’t matter what your home is worth, because you don’t have to sell it. And you still have to live somewhere.
Aren’t most people underwater on a car as soon as they drive it off the lot?
Being underwater only matters if you lose your job, or if your mortgage resets and you can’t afford the higher payment, both of which necessitate a sale. At the moment, mortgage resets are in a trough period (subprimes done, primes still waiting), and job losses have almost peaked. So the number of people who have to sell, or have to make the hard choice, is at a low point.
I have to disagree with both of your points in some fashion, Oxide. As a person who had an extremely “underwater” business in the 1980’s ( to the tune of total losses of $ 385,000 if you counted all of the mortgage payments we made on the buildings - that would be 1st husband & I - plus all of the payments we made to our creditors after the business closed down ), our refusal to go bankrupt and just get it over with cost us another $100K in payments to our not-so-patient creditors because it was the “honorable” thing to do was financial unwise. The creditor weren’t grateful that my entire paycheck went to pay them off, it put us financially behind for many years, and eventually contributed to the disintegration of our marriage. We should have just accepted reality, filed bankruptcy, and given up on paying off old business bills and bad business loans.
As for a house that a person can’t afford but still struggles to pay for, I have to believe that the good professor at U of A is correct. The deck is stacked against the common man when it comes to many financial products. Yes, if a maid gets a $ 600,000 house there is something wrong somewhere, and the loan should have never been made or accepted by the maid. But, many common, educated people get screwed up by not understanding the complications financial instruments “advisers” persuade them to sign. I’ve been fooled twice in the last 5 or 6 years, and I consider myself pretty careful. We got out of one mortgage which we did understand but our adviser wrongly predicted would have reset continuously downward, and we had to pay new closing costs to do it. He’s upset because we won’t buy anymore mortgages from him ever again. Tough drakh. ( See the Sten series ). The other mistake I made was investing part of an inheritance in an insurance policy put forth by the same financial adviser. We lost money. He wasn’t too happy and wanted us to put more money in. Nope. We took it out. I think people look on the sunny side financially and never figure on their nice jobs running out. I used to think that it was wrong to walk away, but not anymore. I think each person has to think carefully about the situation they find themselves in, and do what’s best for themselves and their family. Others may naysay and state that the walkers are being dishonorable, but no one will pick up their mortgage payments on their McPalaces. Save yourself and your money and walk away if you’ve tried your best and can’t make it work. I will never again pay for a failing, unneeded pile of bricks if it’s too much for me. Just my thoughts.
Ha, all this moral certitude from the financial Guru’s to the wee little people: “Don’t do as I do…Do as I say!”
Delphi “Corporation” Bankruptcy relationship to it’s suppliers: “Bidness is bidness” …we might pay you something like 17 cents on the dollar in roughly apprx 4-6 years
Hwy’s “sole proprietorship”relationship from his suppliers: “you can’t pay us net 30 days, you’re an azzhale”
I think some people just believe in honoring a contract . If someone makes a choice to walk than that is their choice and
in many cases they have no choice but to walk because they couldn’t even begin to make their payments on a long term basis ,thanks to the sloppy underwriting of the lenders at the time and the fact that many of these borrowers committed loan fraud (no doubt being helped by the REIC).
IMHO ,the dishonorable part was committing loan fraud to begin with if a borrower knowingly did that . The dishonorable part is
pulling out 100k in equity during the false boom value times just to buy toys and a higher life style by loan fraud .
The dishonorable part (or you could call it fraud part ) is
taking on debt that you had no intentions of paying back because you were a flipper who just wanted to make a flip
of a property and get easy money by loan fraud . The dishonorable part is
buying a 750k house when you make 60 thousand a year . The dishonorable part is doing anything fraudulent in a business
transaction for the purpose of ill-gotten gain . The lenders and their agents qualify for doing things like that as well as many borrowers .
I guess that is why they developed a law against fraud to begin with because it causes damage .
The unnerving part is now I have knowledge that this high of a percentage of borrowers are willing to roll the dice with loan fraud and lenders were willing to let them roll the dice and you can’t have a stable market when that is allowed .
Default is or can be considered honoring the contract, BTW. Little thing about putting up collateral, and being willing to give up that collateral should you stop paying. It is written right into the contract.
On another note, what do you think about appraisers working the same development, and appraising a unit for 200k in 2005, and 440k in 2006? Is that not an alarming rate of increase, with cost to the builder to put up the unit staying relatively in line with inflation?
What if a buyer actually believed that the appraiser’s opinion could be taken to the bank, so to speak. Without understanding macroeconomics or anything, just believing in the professionals you hire.
What about the loan officers who encouraged buyers to take out loans that were unsustainable, yet re-finance-able, so telling their clients that they could simply refi if trouble paying came a knocking?
When the SHTF, in most circles, you look for the deepest pockets for payment, as they are the only ones who could possibly pay for say, ongoing medical treatment. Health insurance companies provide a great example when they actually don’t try to weasel out of promises they have made.
I say if the deep pockets refuse to help the little guy, then what is the moral hazard of following in their footsteps and protecting your own bottom line?
Maybe the banks could be convinced that they are the deepest pockets and more than a wee bit responsible for the underwriting that has put the little guys out of business. They ought to capitulate or take the consequences of buyers exercising their contractually sound, corporation approved, walking rights.
Not you again Mike . So you think loan fraud is OK if the borrower knowingly did it ? I don’t want to get into our classic arguments again . I have repeatedly put down anything the industry did to create this debacle ,but that doesn’t excuse anything borrowers did of a fraudulent nature either .The appraisers assumed that the buyers were willing and able buyers and wouldn’t make a offer on a property and say they were making 200 thousand when they were making 50 thousand a year ,unless the appraiser was in on the fraud. Its a underwriting function to screen the borrower anyway . There is no question that the Industry put pressure to the appraisers
to hit the mark on purchases and equity extractions loans . You acting like two wrongs ,or dozens of wrongs ,make a right . Anybody that committed fraud was part of the problem . Its a sad testimony that so many people were willing too commit loan application fraud and buy some overpriced piece of junk for some easy money goal ,or whatever the reason was to go along with the people that influenced that decision . You don’t think in my long life that people haven’t tried to convince me to commit some form of fraud for some gain . So,go ahead and blame the other fraudulent guy instead of the person in the mirror .
The lure of easy money makes people do a lot of stupid things sometimes . Just because the loan officer said to a borrower they could refinance out of a fraudulent loan
application doesn’t excuse the fraudulent loan application to begin with .
People weren’t lying by minor amounts ,they were committing felonies and inflating their incomes by large amounts . That wasn’t a fair thing to do to you fellow competing borrowers either because a lot of honest people were priced out of the market because of borrowers willingness to do anything to get in on this mania bandwagon.
You are not conceding that a NODOC loan did not commit the borrower to any fraud because no income statements were given or asked for. I believe that is why they were called NODOC loans. They are no longer available, I believe, but you did not even need a job or an income statement to get a loan in 2006 if you agreed to go no doc. You paid a point and had to put money down, but nothing was asked re: income or job. This was indeed a product that you seem to believe did not exist.
Loan for fico PERIOD. No lying took place on our part because no inflated income assertations were made in our (my wife’s) case.
What is fraudulent about being naive and succombing to the lure of easy money, if it did not involve lying on the applicant’s part? I have conceded that it was stupid, you can stop being a jerk to me anytime now, you may feel better about yourself by looking in the mirror and asking why you are accusing me of fraud when none took place!
Oh, Wiz, BTW we are still paying the loan on our “overpriced piece of junk” cuz we love living here and don’t want to move, so if we can miraculously get our income in line with our obligations, we will not have to foreclose at all. But the realtors here are all talking about the flood of foreclosures hitting the market in 2010. Maybe I should become a realtor because I am an honest man. Really!
wading through the rampant short sale fraud is so frustrating that I am not sure what to do with our nest egg. give it to the bank, and let our kids starve, that’s the ticket.
Looking for advice from relative sages (mixed with some other types) does not make me a fraud or a bad guy
Whatever you think Mike . I do find it hard to believe that there wasn’t a line on the loan application that asked for income . You also told me you put your wife on so you could hide your lack of loan qualifications ,or something like that .
Just because it was a no-doc loan it doesn’t mean it didn’t ask for a income statement with a perjury statement at the bottom . One wonders why one would buy something so beyond being affordable unless they were a leverage speculator anyway . Face it ,borrowers contributed to
the debacle .Sometimes it hard to see ones own greed Mike .
It’s up to you Mike what you want to do . I’m paying my bills and that is my choice ,your choice is your own . And don’t give that BS about your kids starving ,why did you buy a house way beyond your income level if you were worried about your kids starving .People are starving out there and you have thousands of dollars in the bank from another flip and you just want to keep it ,it’s as simple as that . Maybe you had financial problems or needs that caused you to lose your head on a real estate transaction . People make mistakes Mike .
I don’t know exactly what your reasons were for taking the risks you did ,but you have to admit you were a winner at first and than you delved back in and double downed .
I just made a statement on a blog about some borrowers being fraudulent and contributing to the problem and you
come back at me like I wrote the post to attack you or something . If the shoe fits wear it I guess .
Ok Mike go on believing that default is honoring the contract as you stated in your first sentence .
Not you again wissard. well it is a contingency that is written into said contract, so that’s a delusion that I am “to” happy to believe . As for you calling me a loan liar. That I can not accept, as you seem to deny the existence of the nodoc loan.
we never lied, not one eensy iota, that is something the wife and I don’t do, so take it back meanie.
Show me a copy of your loan application in which in the entire bundle there was no statement as to income and no perjury statement you signed under and than I will still say they shouldn’t of given you the loan . This sounds like our last conservations .Why do you even care what I think? I’m entitled to think someone was a speculator ,especially if they bought flips before the last house like you did .You have to admit Mike that speculation caused a lot of the problems with the crash of the
real estate market . If you just want to read data on walking and how to keep the money you horded than go to a lawyer .
Silver: I hope that you are now your own financial advisor. Right?
More or less. We use him for our Roth IRA contributions but nothing else.
Let me clarify. I’m talking about people who aren’t struggling to pay their mortgage. You could have someone on fairly solid footing whose neighbor foreclosed. Or, you could have someone who hasn’t reset…yet.
I’m not sure if a small business is relevant. You don’t really need your own business (with its inconsistent cashflow, unlike a mortgage). You could join the rat race. But you do need to live somewhere.
Well, let me iterate that this business business was in the ’80’s, not in the 2000’s. And, being unwise and optimistic, we had sunk all of our savings into it, and lived in the clinic housing for awhile until we got our own unaffordable McMansion. We made ALL of the mistakes. ( Screw-ups). This was compounded by my then-usband signing my name to a large “business” loan and keeping it secret from me for two years. It was quite a dust-up when I found out about it. All-in-all, it was a terrible time of life, but I learned oh-so-much wisdom from the experiences.
A friend tried to interest me in the Sten books and somehow they didn’t take. May i reccomend the Exordium series by Sherwood Smith and David Trowbridge? Very good space opera IMHO.
I’ll try them, Jim. I like Space Opera….
Whatever their reasons for hanging on and feeding the alligators, I hope they stay with it.
An occupied house is worth a lot more than an empty one. Entire neighborhoods can be destroyed when the tipping point is reached, causing trillions of dollars of “value”, “wealth” - whatever you want to call it - to vanish. This screws not only the banks, it screws all of us.
Keep hope alive (and love the NAR).
I have a friend in South Florida ( Palm Beach County). They are so underwater that they will never be about to dig out of the hole they are in. But, their current mortgage payments are less then they would have to pay on equivalent space elsewhere, it’s in the school district they want (son is in gifted program) easily commutable to their jobs, etc…
They treat their mortgage payment as rent payments realizing that they may mever actually be “above water” or own anything. Any they get to stay in a place that is still nice and safe at least for now.
I don’t know if that is a moral argument for staying with an “underwater” property but it seems like a pretty logical argument to me.
How could their mortgage payments be less than rent if they are far underwater? Do they have an ARM? If so, sounds like they won’t be nice and safe for long.
To rent anything decent in their neighborhood would be much more than the 1,400 a month they are currently paying in mortgage. These are not people who went out and bought a 600k+ house. They bought a 240k townhouse that is now worth less than 70k. So as long as intrest rates stay low, they are fine. Once intrest rates climb they will be in deep ******.
So, a comparably priced 70K townhouse doesn’t rent for less than $1,400 a month? Something wrong with that picture.
HOA costs and other costs are for the townhome owner would make a difference. It could easily cost the townhome owner at $70k a couple of hundred a month in HOA dues ($2,400 per year). Tack on top of that property taxes, insurance, and everything else, and it wouldn’t surprise me if the other costs are close to $4,000 per year (for apartment owners, who own in bulk, it is pretty standard to be paying +/- $4k per year as expenses).
So, with that, your $1,400 per year would gross you about $10k per year, or a 15% return. Seems like a pretty good return to me.
But that means the $70k townhome would likely only rise to about $100k to make it a 10% yield (or rents would fall to about $1,000 per month.
If the HOA dues are $300 per month, the math changes…
This screws not only the banks, it screws all of us.
No, it doesn’t screw all of us. What screwed “all of us” was Uncle Sam taking on trillions of dollars of bad mortgage debt, when most of those mortgages should never have been written in the first place. As far as blighted neighborhoods, I would submit that that’s more a disease of the spirit than a by-product of foreclosures. How many people even know or interact with their neighbors anymore? That isolation and atomization is what has really killed our neighborhoods. In addition, how many lowlifes were able to move into nice houses and nice neighborhoods on easy credit alone? The sooner these Bozos find their natural level in some apartment complex or trailor park, the better. And the sooner “entire neighborhoods” become affordable for working and middle class Americans, especially those willing to rehab foreclosed houses, the sooner we can start the road to a true recovery, as opposed to the “let’s throw trillions more Federal Reserve Notes (printing press bucks) at the problem.”
Agreed, there needs to be lots of pain in order to bring about true reform.
Not a problem; Lots of pain coming right up.
“Thank you sir; May I have another?”
combotechie:
Not a problem; Lots of pain coming right up.
As always Sammy, spot on.
Amen, Sammy.
Thanks for making those points.
It does get tiring to hear everyone go on about how falling housing prices are bad. Falling prices are GOOD for those who are purchasing. You know, HALF of the people involved in the transactions.
Quite frankly, nobody is owed house price appreciation, and the sooner we get this entitlement mentality out of the way, the sooner we can rebuild our economy is a safe, sustainable way.
New buyers (the ones who set the market price) are absolutely hurt by these artificially inflated prices.
“An occupied house is worth a lot more than an empty one. Entire neighborhoods can be destroyed when the tipping point is reached, causing trillions of dollars of “value”, “wealth” - whatever you want to call it - to vanish”
That bubble value or wealth never really existed unless you sold at the peak. It appeared out of thin air over a 10 month period and is sssllooowwllyy vanishing. The MacGyver securities created by financing bubble priced homes never really had any value either. As for the neighborhoods, the sooner we clear out the suckers and bring back affordable prices, the sooner we will have more occupied homes.
Dr. Bloomfield’s broomstick-on-top-of-the-head mantra’s: “Read the source “directly”, not was been “interpreted” by “others!
(One of Hwy’s first college professors in Philosophy)
I like this example by Brent White:
“Consider, for example, Sam and Chris, a young professional couple with two small children, who stretched to buy their first home - an average 3 bedroom, 1380 square foot house in Salinas, California – for $585,000 in January of 2006. Sam and Chris had excellent credit and a solid income, and were thus able to qualify for a 30-year fixed interest loan with nothing down. At an interest rate of 6.5%, their total monthly payment is $4300, which is just under 31% of their gross monthly income, and within the payment-to-income ratio considered “affordable” by most lenders. However, after paying for taxes, health insurance, student loans, childcare, automobiles, food, and other necessities, Sam and Chris do well to break even each month. At the time they bought their home, they were not overly concerned about this - as they saw their mortgage payment itself as an investment in their own and their children’s futures. Unfortunately for Sam and Chris, the housing market began to collapse in 2007. Though they still owe about $560,000 on their home, it is now only worth $187,000. A similar house around the corner from Sam and Chris recently listed for $179,000, which, with a modest 5% down, would translate to a total monthly payment of less than $1200 per month – as compared to the $4300 that they currently pay. They could rent a similar house in the neighborhood for about $1000. Assuming they intend to stay in their home ten years, Sam and Chris would save approximately $340,000 by walking away, including a monthly savings of at least $1700 on rent verses mortgage payments, even after factoring in the mortgage interest tax reduction. The financial gain for Sam and Chris from walking away would be even more substantial if they took their monthly savings and put it into an investment account. If they stay in their home on the other hand, it will take Sam and Chris over 60 years just to recover their equity – assuming, of course, that they live that long, the market in Salinas has indeed hit bottom, and their home appreciates at the historical appreciation rate of 3.5%. Millions of homeowners who bought homes in the last five years are in similar situations to Sam and Chris, particularly in the hardest hit states of California, Florida, Nevada, and Arizona.”
Though they still owe about $560,000 on their home, it is now only worth $187,000.
Now THAT is a bubble popping! Too bad around here (NYC and Philly area) we have maybe seen about a 10% decline off of peak.
And - they should run, not walk, away.
Salinas, California – for $585,000 ??
Salinas…OMG…How did this ever happen…
Hwy50… OMG your example is a good one for showing just how
buried some of these people are that bought at the height of the real estate bubble . Wow, about a 398 thousand dollar loss in value that isn’t likely to come back for at least 20 years or more and they didn’t even do equity extracting to make the loan that high . Wow,1380 sq feet for 585k ?
I just can’t believe that people didn’t reject these high prices and back off during the boom . It takes a willing borrower and how could so many people be willing at prices like that . I actually feel sorry for them because they were most likely one of the borrowers that were sold on the myth that they better by now or be priced out forever .
Take a look on Zillow for this house.
1003 Burga Loop, Chula Vista, CA 91910
I would not be able to sleep. This will never be made up.
* Year Built: 2000
* 5 Bedrooms
* 3 Bathrooms
* Approximately 3,211 Sq Ft
* County: San Diego
* Parking: Garage 3 spaces
Source: Public Records
Last sold for $1,235,000 on 10/21/2005
Last assessed at $603,000 on 2009
Previous sales
$1,235,000 on 10/21/2005
Previous assessments
* $603,000 on 2009
* $805,000 on 2008
* $1,259,700 on 2007
You feel sorry for some; you call me a liar! (without actually having current knowledge of what a no documentation loan product is). Is your moniker a fraud? Notice me asking, not telling! But a wizard should know the rules, or else you are but an ex-wizard (and to dum too spell ta boot .)
“They could rent a similar house in the neighborhood for about $1000.”
And a low-life like myself, used to paying $1270 per month in L.A. can move in and bring down the neighborhood of families paying $4300 per month mortgages! LOL! That type of people looked down their noses at us.
In addition to the high cost, the 2002-2008 tax assessments were incredibly high. The taxes much more than offset the writeoff of home ownership. I think Proposition 13s free ride for the elderly in California exascerbates the problem. But no worries, the next leg down is on its way especially in mid to high-priced areas, and I still patiently rent. My teenager punched a hole in the wall again so I’m getting pretty good with spackle and patch paint.
Proposition 13s free ride ??
I totaly disagree….It was passed to put a stop to the greedy hand taxing at will on a specific group of people “property owners”…Government, at all levels needs less money not more…California is broke because of overspending and entitlements..
Didn’t the voters pass Prop 13 and it’s tax cap restrictions? As voters, didn’t they allow for the overspending? IOW, they wanted their entitlements but, didn’t want to pay for it.
BTW, did someone mention that CALPERS has up to 90% gov’t pensions AND cola increases? COLA increases on pensions is fiscal insanity. NYS has a COLA, but only on the first $18,000 of a pension and only begins five years after retirement.
IOW, they wanted their entitlements but, didn’t want to pay for it ??
Who are they ??
Who are they??
As a majority group, the same voters that voted for prop 13 and subsequently voted for big spending republicrats.
“Free Ride”?
If it weren’t for prop 13, I would have been forced out of my paid-up $300,000 home! When the identical house next-door sold for $1,400,000 during the bubble, my property tax would have become $25,000/year.
Is it fair to screw me because some idiot wants to pay too much for a 4/2 in 94087?
is=in
Okay, that’s meant to go up the thread a bit.
Anyway, I agree 100% with you, Reuven.
People **choose** to pay more in property taxes when they **choose** to pay more for a house. If everyone took the total PITI payments into consideration, they would not agree to purchase at prices that cause their taxes to be so much higher than their neighbors’.
Long-time owners should not be “taxed out” of their own homes simply because some numbskull decides to take a 100% LTV loan and overpay for a shack down the street.
Wall Street loves to claim the problem is the credit markets drying up ,but the problem is crashing values making the property unmarketable based on the current loan on the property ,unless the borrowers brings money into escrow or the lenders write the loan off. Those thugs rendered the real estate market non liquid unless your willing to take a huge loss or mark to market. Wall Street can’t sell their junk paper unless they mark to market which renders the face value of that paper a joke ,or even the performance on that paper a joke . I guess that is why the Government is buying it ,or giving hard core cash to cover the loss.
And Joey likes to defend those thugs while ignoring the incredible damage of making a market non-liquid in terms of anything close to normally . And than it really adds insult to injury when the bankers demand 100% on the dollar based on high market value ,such as in the case of AIG pay-offs .
“Proposition 13s free ride”
Prop. 13 established an annual cap on property tax increases. This benefits every property owner. The fact that you may have a neighbor that pays significantly less $ than you doesn’t change the fact that THEIR TAX BASIS IS BASED ON WHAT WAS THEN THE CURRENT MARKET VALUE FOR THEIR PROPERTY. Nobody was given anything.
The real problem is an out of control government, not the little old man/lady down the street.
And then they came up with mello roos to really start screwing over people as usual.
That’s a give-away to developers. It’s not the govt screwing anybody over, it’s the developers who are able to overpay for the lots and increase their margins due to the Mello-Roos taxes.
Ben has frequently stated the importance of jobs in this tough economy.
This is just a reminder what is happening nationwide.
Business
It’s a boom time for bankruptcy filings
Job losses, cuts in income bring 30% increase in state, which is close to national total
By Paul Gores of the Journal Sentinel
Posted: Jan. 23, 2010
Job losses and cuts in pay pushed more Wisconsin residents into bankruptcy last year, and experts say the situation isn’t likely to get better until the employment picture improves.
Bankruptcy filings jumped almost 30% in the state in 2009. That surge came on top of a 35% increase the year before.
“Unemployment would absolutely be the No. 1 issue,” said Milwaukee-area bankruptcy attorney Robert Waud, who said his practice had its busiest year ever.
Bankruptcy lawyers noted it’s not only layoffs and firings driving people to insolvency as the economic downturn drags on. The losses of once-regular overtime pay and full-time status have left consumers unable to stay current on monthly payments that in the past were no problem to handle.
“The under-employment issue is huge,” said Milwaukee bankruptcy attorney James Miller. “More and more people are working multiple jobs but they are making less now than they were five years ago and trying to make a go of it on these limited incomes
…”Anybody that’s on a commission-based job, whether it’s auto sales, real estate, mortgage brokers - they are hit hard,” said Miller, of Miller & Miller. “Anybody that’s in the construction field, the trades, is being hit real hard.”
http://tinyurl.com/y9r22sp
I had a discussion recently with my BIL. He told me his pastor was preaching this message from the pulpit, telling the congregation that it is immoral to walk away from your obligations if you can afford them. I argued with him, asking, how can you have a moral obligation to an entity that does not reciprocate that obligation? Further, when you signed the loan documents you agreed to certain terms (including lender remedies) none of which have the slightest to do with morality.
I believe in the important of a society having moral standards, but in this case the farce has been perpetrated on the serf to keep them obligated to the master, who has no such obligation.
..I argued with him, asking, how can you have a moral obligation to an entity that does not reciprocate that obligation? …
it’s easy. In fact, you may have tripped over the very definition of “morality”.
You do what’s right despite others doing whatever the hell they want to do.
——-
You have a cat. You’ve accepted the responsibility of pet ownership.
Is it morally acceptable to abandon a pet because you don’t want to spend the money? Because the cat shows a negative return on the investment?
The cat’s sure not gonna thank you, or return the favor… so out the door it goes…
False analogy. Are you comparing a bank to a cuddly little kitty?
Okay, now replay this idea if your cat tried to kill you (or at least rob you) every morning.
Would you still feel an obligation to take care of it? Because the banks are out to destroy you, not cuddle up in your lap!
Henry M. Paulson Jr., who while in office said that anyone who walked away from a mortgage would be “simply a speculator — and one who is not honoring his obligation.”
I tell everyone I know who is upside down to walk and I will continue to do so. The house is the bank’s collateral, they seemed to think a 2000sf home in Maricopa, AZ was worth 320k and took the gamble by issuing the loans to folks who had no business bing approved for a standard loan at that amount let alone an interest only or pay option adjustable loan.
The people taking out the loans were idiots, greedy or just in denial, but when they are paying upwards of 60% or more of take home to feed the alligator, it is itme to bail.
Hank Paulson - What a douchebag.
There’s an externality in this argument. Security clearances. If you need one to work, or to keep working, neither BK nor walking away is an option. You walk away, you lose your clearance, hence your ability to work. You are locked into debt servitude.
The way I think about it, is that it is a nondeductible employment tax.
I rent and save my pennies. And buy guns.
I think the “walkaway” issue is largely determined by how an owner feels about housing. If they bought with the intention of flipping or selling it at a profit in order to “move up,” then they are more likely to walk away than someone who bought for the sole purpose of living in the home, with no expectation of appreciation, and no desire to move up.
Technically, someone who buys because they think prices will rise in the future (intending to sell and “move up” with the expected proceeds, or to finance their kids’ educations, or to finance their own retirement, etc.) is a speculator, and is more likely to default than someone who intends to stay in the home, pay off the mortgage, then retire/die in that home. Being “underwater” really only matters if someone is planning to move/sell at some point in the future.
Additionally, if the mortgage payments are causing financial hardship, then the “owners” are more likely to walk away if they can get similar housing at a lower cost. That being said, a long-term buyer is proably more likely to make a conservative purchase than someone who is willing to stretch their finances because they plan on selling for a profit in the short/mid-term.
While I’m sure some people are avoiding foreclosure for “moral” reasons, my guess is that most people are acting fairly rationally, and that their actions can be traced back to what their plans/beliefs were when purchasing the house in the first place.
From late last night on bits:
Me: Anyone else watching COPS? They just raided a foreclosure in CA.
PB: Details? (Non teevee viewers are interested in how the foreclosure crisis is entering popular culture…)
—————
San Bernardino County Sheriff, they had a call of “activity” at an abandoned home. The guy (drugged out) was hiding in the closet. What was amazing was A. how trashed the house was, and B. how brittle it was.
One of the deputies kicked through a door and crumbled into a bunch of pieces and the frame fell out — the officer sort of got tripped up, it was obvious even he wasn’t expecting the door to just fall apart.
The house could have been demolished with bare hands in a short time.
Those houses were built for flippin’, not for livin’.
This house was made for flippin’
And that’s just what it’ll do
One of these days this house is gonna
Flip all over you.
That was like a high, hanging curve ball wasn’t it?
it’s outtttttttttttttttttttta here!
One of these days this house is gonna
Flip all over you.
Ba doon doon doon doon doon doon doon doon doon.
You forgot the best part!
I thought the best part was Nancy Sinatra’s legs?
Run Hwy, …RUN!
You people….
“Are ya ready house? Start flippin’!”
Da da-da-da Da.
Da da-da-da Da.
Da da-da-da Da.
Now with timing!
Da, da da da Da,
da da da Da,
da da da Da,
Good one DennisN….
Dennis,
You da man.
With some of these crappy newly built houses, a robber might have an easier time entering by cutting/breaking through one of the outer walls than by breaking the locks.
Saw a house recently that had an alarm system that featured six interior motion detectors and “panic buttons” in most rooms.
Sounds like teevee worth the time to watch it!
“One of the deputies kicked through a door and crumbled into a bunch of pieces and the frame fell out — the officer sort of got tripped up, it was obvious even he wasn’t expecting the door to just fall apart.”
Reminds me of the fight on “Blade Runner” between the lead android thug Rutger Hauer and Harrison Ford. The walls were like paper-thin.
Saturday Night Live had a Rich Man, Poor Man skit. The first view was a front door of an expensive place, nice woodwork. The second view was an out-house door, and moments later a fist comes crashing through it.
(AP) - Regulators shut down banks Friday in Florida, Missouri, New Mexico, Oregon and Washington, bringing to nine the number of bank failures so far in 2010, following 140 closures last year in the toughest economic environment since the Great Depression.
~~ Looks like January will feature some 12 or more bank closings. On an annual basis that’s about the same rate as 2009.
The FDIC has a very long list of potentially “troubled” banks and 2010 may see a lot more of them fold.
I predict the list of failed banks is going to start increasing geometrically over the remainder of the year.
I predict the failure rate (failures per month) will decline as 2010 progresses.
WTH? I’ve been told unions were a good thing…
WASHINGTON — President Barack Obama has sharply criticized a Supreme Court decision easing limits on campaign spending by corporations and labor unions, saying he couldn’t ‘think of anything more devastating to the public interest.’ He also suggested the ruling could jeopardize his domestic agenda.
In other words, corporations and unions should not be permitted free political speech. I listened to anguished liberal commentators rail last evening about the court’s decision being the “worst setback in a century.” Here and there a few pundits see the decision as a good thing.
George Will: “The court’s decision will be predictably lamented by people alarmed by the prospect of more political money funding more political speech. The Supreme Court has now said to such people approximately this: The First Amendment does not permit government to decide the ‘proper’ quantity of political speech.”
It’s generally accepted that the politician or cause with the biggest budget can “sell” the stupid American voter anything. Hence the desire to muzzle corporations at election time. This suggests that corporate America is an evil, greedy influence out to do harm to the people. Why would a business enterprise strive to wreck the country?
In other words, corporations and unions should not be permitted free political speech.
Maybe the conservative commentators should point to the clause in the Constitution where it says that “free speech” means “unlimited microphone.” Or does the “liberal reading” of the Constitution only apply to other people?
Maybe the conservative commentators should point to the clause in the Constitution where it says that “free speech” means “unlimited microphone.”
Fine, let’s limit free speech. You’ve posted here a lot more than I have, so I think you’ve exceeded your limit. So be quiet until I catch up.
Which part of CONRESS SHALL MAKE NO LAW do you not understand?
Which part of CONRESS SHALL MAKE NO LAW do you not understand?
That part that say’s a woman is a murderer for using birth control…
RUN HWY, really…RUN!
Assuming you own the microphone, free speech does allow unlimited microphone.
Since nobody is forced to listen to you, there are no legitimate objections to that freedom..
Speaking of listening (!?), a lot of this has more to do with freedom to listen than it does our freedom to speak.
imo, the liberals don’t like the idea that we have the freedom to listen to whomever we choose, as much as we want to.
They think I should listen to their point of view. If I choose to listen only to conservatives, it annoys them no end. They want to structure things so I am forcibly exposed to both points of view at the very least.
I, you must understand, am somewhat slow witted in their eyes, and am easily influenced by what I hear. Liberals, with their superior insight, have volunteered to save me from my mental inadequacies and can’t understand why I’ve turned down their generous offer. I must be stupid.
The HBB PR tag team is back in action!
“My Microphone is bigger than your microphone!”
Faux News & WSJ = MUrDoch’s “True Chupacabra™”
Fox News has the annoying Quentin Hardy, Susan Estrich, Bob Beckel, Juan Williams, and not as frequently celebrity socialists such as Jesse Jackson and Al Sharpton.
Susan Estrich has toned down her shrill socialism, but Quentin Hardy and Bob Beckel are still clueless nitwits.
Liberals have NY TImes, Washington Post, LA Times, NBC News, ABC News, CBS News, CNN, MSNBC, Newsweek, Time, 95% of Hollywood.
Conservatives have Fox News and WSJ.
And still the libs complain about how unfair it is that god forbid conservatives have 2 media outlets available. That’s why they hate this ruling. Their monopoly on speech is in danger.
Disney, “New” Viacom (and its former parent CBS Corporation, the former “Old” Viacom), TimeWarner, News Corporation, and General Electric together own more than 90% of the media holdings in the United States.
Yeah. “Liberal” corporations. Pull my other one.
Whoooooaaa!
NYTimes liberal?
that drumbeat to war in Iraq was not Liberal.
…the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
There you go Oxide, you just didn’t finish reading the 1st Amd.
What else is a corporation other than a peaceful assembly of people?
What else is a corporation other than a peaceful assembly of people?
Actually, it’s a lot more. It’s a government-granted charter with a specific limitation of liability that is not available to individuals. Again, though, the answer is not to limit free speech, but to do away with corporations.
gotta tell you…
corporations running minny movies for their causes/points of view isn’t as bad as giving them 4th and 5th amendment rights thta should only attach to “natural” citizens
What else is a corporation other than a peaceful assembly of people?
Yeah, that’s the ticket…let’s have more CEO’s like this role model…are there other examples you can think of?
1.Tyco = Dennis Kozlowski
2.Enron = Ken Lay
3.Lincoln Savings = Charles Keating
4.
5.
6.
7.
8.
9.
(Hwy wonders if their “Corporations” ever gave monies $$$$$$$$$$ for some sort of “Political” influnce?)
is a corporation a person, or is it property, or some combination of the two, or something else?
Can I marry a corporation?
No, but some people are married to their jobs.
Marriages, to both people and jobs, tend to become stronger in economic downturns.
My lunch companion talks only about work during lunch.
And Everybody is married to their DOG…..lol
———————————————–
No, but some people are married to their jobs.
Why is it none of the leftists mind when unions spend money on elections. But an EEEEEEVIL corporation spends money and it’s the loss of democracy.
The hypocrisy is mind numbing.
Why is it none of the righties mind when corporations spend money on elections. But an EEEEEEVIL union spends money and it’s the loss of democracy.
The hypocrisy is mind numbing.
Can I marry a corporation?
Hey, let’s put this to a true repubican test…let’s ask “Dicky boy” Cheney’s daughter if Meg Whitman can be a Repubican Gov of CA and get married to a woman.
This is a good decision. I am as concerned as anyone about the abuses of corporations, and the disproportionate influence of corporate money in political debates. But the way to address this problem is through reforms in corporate law, not by trying to repeal the First Amendment.
Actually I think it should be the catalyst to completely re-write the current election laws. The real object should be to go to a whole new model. I hope that is one of the side effects of this decision.
Maybe we should just mandate that the top industries should just get seats in congress or the government? The voters could choose between which mega-corporation they like the best. How about we elect the Sec. of Defense so that Lockheed vs. General Dynamics vs. Boeing would be on the ballot. Think of the possibilities. Cut out the middle man! Plus it would finally put to rest this idea that democracy is a suitable form of government in the 21st. century. The relentless pace of technology demands it.
very interesting idea you got there..
Government would not necessarily be dominated by the mega-corporations.
People will vote their own interests. One of their interests is a job. Small business hires the majority of people. So, a small business representative could be heavily favored in an election.
Another interest is environmental. Big manufacturers would promise to clean everything up if elected.
Large corporations might run on the promise of lower prices for large appliances … automobiles.. telephone service. The banking industry might offer high interest savings rates and lower borrowing rates.
.. i like it.. an open market government that really tries to satisfy the needs and wants of the people. Put it all to a vote.
free-market socialism?
i dunno what you’d call it.
socialism.. …public or direct worker ownership and administration of the means of production..
The public wouldn’t own the means of production, although they might choose to own some share (stock) of some of the companies in this government.
A solitary business owner might get elected, and he would “own” a small portion of the “means of production”.
—-
As I see it, the middlemen (politicians) are taken out of the loop, as BlueStar says. Otherwise, nothing much changes.
The words that properly describe a business-government may not exist.
“i dunno what you’d call it.”
I’d call some of the ‘free speech’ that is regularly on display on this blog ‘public relations work.’
If, for example, you voted on an environmental group to represent ‘environmentalism’ , it would be corporatism I think.
If you only voted for businesses, and they got to run everything, it would be a new form of fascism. I’m not clear on how business would represent say, the workers, or the environment.
..I’m not clear on how business would represent say, the workers, or the environment…
I haven’t thought this out.. I wouldn’t know where to start..
But for instance, in today’s time:
The Small Business representative(s) are running for office.
That campaign platform says “We will not spend economic recovery funds bailing out big business. Big business is too cumbersome, too wasteful and lending them money will not address the core problem that concerns you voters. That problem is job loss.
Jobs are disappearing. If elected, economic recovery efforts will go towards the support of local small businesses, the major provider of jobs. We think this is the best use of your precious dollars.
In addition, our proposed Local Industry, Less Total Waste / Recycling Program (better known as Lil Twerp), which includes the entire small business community, will become effective immediately.
–
What are the biggest polluters? I guess you could say automobiles. Who makes cars? Big Car.
Big Car’s platform is “Elect us and we will build engines that are not only more efficient, but also cleaner burning. We will also put a practical, affordable electric car on the market by the end of next year. Our running mate, Big Electric, will immediately begin building the infrastructure necessary to support those millions of electric vehicles, from coast to coast. This project will create approximately 4 million new jobs.
I can understand the concept that each individual has free speech rights under the Constitution ,but they do have laws that limit that for the public good .
For instances ,they have laws against yelling “FIRE” in a movie
house because that free speech would cause more harm than
protection of individuals right to do it . They have laws against ‘
slander in expressing free speech and all kind of rules on this
Constitutional right to free speech .
I question the fact that a Corporation can be considered the same as a individual under the law .It goes without saying that the wealth of a Corporation ,that isn’t really a individuals ,could have unfair advantage to buy election outcomes .
I can just see it now ,
Corporation headquarters : “Whats our budget for destroying this Politician and getting Mr X in instead ?”
So if your just looking at this right in terms of what the intent of the law was ,it seem like the Courts have gone beyond the Constitution in deeming a Corporation a individual under the law .
‘For instances ,they have laws against yelling “FIRE” in a movie
house because that free speech would cause more harm than
protection of individuals right to do it .’
Isn’t that pretty much the way Big Hank, W and BB precipitated political support for the TARP in Fall 2008? I am thinking a similar threat is in place to support BB’s reappointment…
I know Professor Bear . These players are becoming more like thugs every day . I just watch the business channel to check out
their reactions whenever the Politicians say something they don’t like . I feel like they practice extortion ,even if you couldn’t really pin it on them . Oh thats right Hank Paulson got immunity for any of his acts regarding the TARP MONEY and he get’s to yell FIRE rather than have other solutions being carefully explored .
But the way to address this problem is through reforms in corporate law, not by trying to repeal the First Amendment.
Thank you for putting that so succinctly.
“Congress shall make no law respecting an establishment of religion…”
Here’s were I get stuck:
Religion = Corporation
or is it the other way around?
Corporation = Religion… with a trademark name
the way to address this problem is through reforms in corporate law, not by trying to repeal the First Amendment.
No, actually the way to change the law is to have a constitutional amendment, because if you say “there oughta be a law”, it will simply be challenged and struck down again by the ideologically divided Supremes.
By the way, this ‘liberal’ vs ‘conservative’ interpretation of whether or not McCain’s campaign finance laws limit free speech are a slippery slope. If you can spend unlimited amounts of money as a third parties to campaign, there is now a very legitimate argument to have the same third parties “volunteer” to help your favorite “causes” in return for the ability to “educate” you about their concerns.
It’s going to get very ugly.
No, actually the way to change the law is to have a constitutional amendment
That says what? Corporations are not even mentioned in the Constitution, nor would it make any sense to mention them, because corps are creations of state law.
If you can spend unlimited amounts of money as a third parties to campaign, there is now a very legitimate argument to have the same third parties “volunteer” to help your favorite “causes” in return for the ability to “educate” you about their concerns.
You’ve lost me. If you LIMIT money that people can spend to support campaigns, won’t they try to get around those limits by giving indirectly, or in non-monetary ways?
According to the Supremes, you can have companies advertise on your behalf, without calling it a gift and having it subject to limits…it’s “free” speech now.
As far as a constitutional amendment, they could create one that allows Congress to set spending limits on political speech related to campaigns only. Nothing else would be considered constitutional by this court.
we have laws prohibiting politicians from offering to pay voters money in exchange for their vote. perhaps we need a first-amendment based challenge to this law.
shouldn’t freedom of speech, and freedom to make voluntary choices about what one does with their own money, make outright buying of votes permissible in a free society?
Good point. If money = speech, then what’s wrong with bribery? It’s just another way of ‘talking’ to someone.
“It’s generally accepted that the politician or cause with the biggest budget can ’sell’ the stupid American voter anything.”
Lol, everywhere I look I see evidence that this statement is true.
“Why would a business enterprise strive to wreck the country?”
Uh, for money? Why did the financial industry go nuts and bring not only the country but the world’s economy to its knees? Why are they still trying to do so?
Barry said he would work with congress to come up with a response to SCOTUS.
So it seems like in the land of the liberal, Roe v. Wade is settled law that is never to be questioned. But when SCOTUS makes a ruling libs don’t like, it’s open season. Same with Prop 8 in California that was upheld by the CA SC.
“It’s generally accepted that the politician or cause with the biggest budget can “sell” the stupid American voter anything.”
With the MSM in trouble, I have a business plan for a newspaper. Just auction off what will be presented as “news” to the highest bidder, assuming that what is generally suspected is true.
Why would a business enterprise strive to wreck the country?
That’s what I say when anyone tries to tear down Goldman Sachs.
But is there a difference between a contribution from Halliburton and one from SEIU? How about AARP or Emily’s List?
A difference other than whose ox they want to gore, that is.
“But is there a difference between a contribution from Halliburton…”
War is Good! How’s that for a “difference”
Why would a business enterprise strive to wreck the country?
A business enterprise probably wouldn’t strive to wreck the country. It would strive to make as much money as possible, the country be damned. The fact that this behavior has indeed wrecked the country numerous times I guess should just be glossed over. We’ll just be good ‘conservatives’ and ignore history.
I’m sure goldman sachs supports George Wills interpretation. I mean litterally they can go out and buy politicians. I think WallStreet’sabillity to screw the hell out of America just increased exponentially. The few good politicians like Feingold and Ron Paul will find it more difficult to get elected. Speak ill of wall Street and your competition will get a giant check. State supreme court races will be bought and paid for by corporations who will then get their way in court, see massey coal company history for an excellent example. People hated the seizure of private property via eminant domain case in Connecticut. Get ready for a lot more of this. This decision by the Supreme Court is the biggest FU to the people ever.
“Why would a business enterprise strive to wreck the country?”
Come on WMBZ even you have to admit that this statement is laughable. Hasn’t Wall Street demonstrated that they will gladly jeopordize the security of the country for a quick buck!! Companies do not look at the big picture they look at the bottom line and bonustime.
Spot on. “I got mine — screw the rest of you,” seems to be the guiding principle on Wall Street.
“Spengler:” “We have been borrowing in order to consume; we need now to save in order to invest. We need to shift the tax burden, moving it away from savings and investment and toward consumption. We should replace individual and corporate income taxes with consumption-based taxes”.
“Americans need to be told that they will need to invest before they can consume, and that the cure will take years rather than months to take effect. It’s not a happy message, and no one in politics is willing to deliver it - if indeed anyone in politics understands it.”
The tax code was massively shifted from a subsidy for consumption (all consumer interested deductable) to a subsidy for savings (with various tax free savings options) early in the Reagan administration. The effect is not what those who believe incentives explain all would have assumed. Culture matters more.
Notice how all these proposals are for regressive consumption taxes to replace the progressive income tax. How come no one, absolutely no one, has ever proposed a VAT to replace the regressive payroll tax? Doesn’t that discourage work, or at least penalize it?
More “savings and investment” is not the goal.
I have been reading Spengler for years. Some of his essays reveal that he thinks we (America) need to move toward a theocratic form of government too, specifically a christian based one. Big supporter of Iraq war and war on terror too. Interesting reading.
Despondent man kills wife, 2 kids in exclusive Wellington gated community
By Michael LaForgia
Palm Beach Post Staff Writer
Posted: 8:31 a.m. Saturday, Jan. 23, 2010
WELLINGTON — As Neal Jacobson sank deeper and deeper into depression, something terrible was building inside him, according to authorities, friends and family members.
The once successful mortgage broker from New Jersey left his company and moved to Florida to care for his ailing father, who died in 2007. Jacobson, 49, lost money in bad investments and hated himself despite his beautiful wife and brilliant twin sons, he confided in his best friend, Richard Norton.
When Norton died of cancer this month, it pushed him farther off his axis, said Norton’s wife, Laurie.
Less than a week after his friend’s funeral, Jacobson took up a gun and shot and killed his wife, Franki, 53, and 7-year-old boys, Eric and Joshua, according to a family member and Palm Beach County Sheriff’s investigators.
Their bodies were found in the Jacobsons’ sprawling single-story home Saturday, the day 12 families were supposed to celebrate Eric and Joshua’s seventh birthday. They had planned a party at Fun Depot in Lake Worth.
After killing his family, Jacobson drove his 2002 GMC Envoy south from his $765,798 home, at 11580 South Sea Court in the gated Isles neighborhood, and crashed at the intersection of U.S. 441 and West Atlantic Avenue.
He was carrying a .38 caliber revolver and extra ammunition and was stained with blood when paramedics pulled him from the sport utility vehicle, according to an affidavit for Jacobson’s arrest.
He told them what he had done.
“I went off the deep end,” he said, according to the affidavit.
“I never dreamed that Neal would do this, but he was a desperate man,” said Laurie Norton, who last saw Jacobson on Jan. 15. “When he was here for Richard’s funeral, all he could talk about was how stupid he was for doing what he did — the stupid things he did to end up in the financial position that he was in.
Underwater on the house by about 250K. Then re-fi’ed the house with about 100K taken out. So, underwater by about 350K or so at the time of this incident.
Not saying this has anything to do with it, but I’m sure the “trapped” feeling didn’t help the situation. People are dying because of what the banks and MTG business has done; I hope that we (and everyone else) understand the gravity of this situation.
This is also (IMHO) why people should be encouraged to walk. If this guy had walked away from the alligator in Wellington; would his family still be alive?
“People are dying because of what the banks and MTG business has done;”
Talked to a realtor yesterday about a short sale in Palm Beach Gardens, askining price $243,000.00 had sold in 05 for about $420,000.00 and in 95 for about $143,000.00. I told her the most I would offer was $180,000.00, she put on her best realtor your just dreaming voice and told me they had a much better offer than that. I told her well, that`s just next years forclosure. She got pissed and said goodbye. She didn`t give a damn about the people who made the offer, just her commision and I`m sure she didn`t tell them the county appraisal had dropped from over $300,000.00 to $187,000.00 in the last three years.
I told her well, that`s just next years forclosure. She got pissed and said goodbye.
LOL! I would have loved to see that reaction in the realtwhore!
Less than a week after his friend’s funeral, Jacobson took up a gun and shot and killed his wife, Franki, 53, and 7-year-old boys,
The wife havig kids at 46 years of age?
You need to talk it over with Sarah Palin.
2banana, it coulda’ been an “oops.”
We know more than one couple who had another kid well into their 40’s, when the prior one was at least 10 years old and in one case about 15 years old. Totally unplanned.
The link below is very discouraging for men who want to conceive later in life.
http://nyp.org/news/hospital/75.html
Or how about this?
I had noticed that some guys I knew who married younger women and had second families usually had children who weren’t as successful as their first set of children. Maybe this is why.
http://www.webmd.com/baby/news/20090309/older-fathers-lower-iq-in-kids
Yeah. That’s creepy. My chance was longer ago than I thought. But I had a low income and could not afford a family back then. So I have to make the best of my situation and keep on keeping on.
I could still meet a younger woman and we could still have a family, but not from my genes. The atheist in me does not see the difference, so no fret and no regret.
Oh Bill, nonsense. The odds are still in your favor. Plenty of older guys have wonderful children. But if you want to pay for someone else’s sperm, go ahead.
Twins happen quite a bit when fertility treatments for older women are involved.
The guy kills his family but doesn’t have the frikkin nerve to kill himself? You failed again, Jacobson! (They’re gonna ‘love’ you in prison.)
He should have killed himself first, and then gone after his family.
Did this guy think that killing his family spared them the pain of
life starting over again ,or did he just have pent up rage over the feeling of being stuck and he took it out on the family ,or was there some other reason or combination of reasons .
I guess they have authentic stories of people jumping off skyscrapers when they lost in the Stock Market Crash . They had investors that loss their life savings and killed themselves during the Keating/Lincoln Savings ordeal in the 80’s.
Actually they have a story in the Bible about a couple that lost their fortune . The couple had to become servants in order to survive .
The story goes on in the Bible to describe how the couple started enjoying life under their new circumstance .Actually I don’t know if I read that in the Bible or from some other reference .
But anyway ,I guess there will always be a certain % of people
that kill themselves , or family members ,over financial set backs . This guy must of been loco on some level for a long time
I’m sure Wall Street wasn’t thinking about people being driven to the edge is they were one of the losers in their Ponzi Schemes .
Gotta admit I never did get the “I suck so I’m going to kill my family” mentality.
What a selfish bastard.
“Why would a business enterprise strive to wreck the country?”
For the next quarter’s report.
Since we cannot know what drives someone else, we tend to project our own thoughts, feelings and desires. Would you as a business owner strive to wreck the country for the sake of your next quarterly report?
“Would you as a business owner strive to wreck the country for the sake of your next quarterly report”?
An honest answer would of course be no!
Wonder how many people go to work each day for a company they believe who’s bottom line is to wreck the nations economy?
It’s always some other evil corporation.
Again
Hasn’t Wall Street demonstrated that they are willing to risk the company and in fact the entire country in order to maximize short term profits and bonuses . There is no argueing this point. With no regulation wouldn’t big coal pollute theh ell out of rivers with no thought of the long term consequences ofr the state and people. Wouldn’t power companies dump radioactive waste in rivers and lakes. Wouldn’t drug companies sell drugs that they know are harmfull. Wouldn’t chinese dry wall suppliers continue to sell toxic dry wall. Wouldn’t toy providers continue to sell toxic toys. They’ve done this again and again when they think they can get away with it. Business is focused only on the short term bottom line and bonus, they care nothing for the long term health of the country.
The people of a country want what they want.
If they want inexpensive power, a coal company will try to provide it. If the method includes polluting the air, so what? The people want cheap power.
The coal company is not “destroying the country” and is not the villain in this scenario..
If anyone is to blame for the pollution it is the consumers who are willing to live with pollution for the sake of saving money.
——
There might come a time when the air gets so dirty that people change their wants. They’ll cough and choke and desire clean air, knowing they must accept a higher price for energy.
The coal company either changes it’s ways or it’s business will be punished somehow.. If necessary, laws might be put in place, fines imposed for polluting, etc.
It is the people of the country that mold business activity to their liking.
Same with today’s financial troubles.
It started with what people wanted.. to make lots of money trading RE in many various ways. The business world provided the necessary tools.
Now things have changed because, instead of choking on foul air, we started to choke on debt…
—–
“Judge a man according to his time..” ..meaning if slavery was perfectly acceptable in the past but not now, it’s unfair to condemn those people who owned slaves, and certainly unfair to condemn the businesses that only provided those slaves.
We do and accept things today that will appear as barbarism to future generations. Hindsight is not as 20/20 to some as it is to others.
Seriously, joey, you’re not even trying. How can you even ask that question?
“Current events” ring any bells?
+1
Induction periods are lost on the idiots.
http://www.nytimes.com/2010/01/24/realestate/24cov.html?hpw
Still, Mr. Scaglion said, condo buildings for the most part are not easily turned into rentals because they have “high-end finishes that don’t wear well with rental tenants, and there’s usually no back of house, no shop or staff to fix and renovate apartments.”
Any problem can be fixed by price.
When these buildings and units go into default, a good landlord will get them at the right price and make it work.
That’s one of Benjamin Graham’s lessons regarding stocks.
If a business can’t generate positive cash flow at one price then the price will eventually decline to the point where it can, or maybe go out of business altogether.
Sometimes the price goes way through the positive-cash-flow point and settles (and often languishes) many dollars below where it would be in ordinary times. This creates great opportunities for patient cash-laden investors.
This is the direction I believe stocks in general are headed in the coming years.
“…If a business can’t generate positive cash flow at one price then the price will eventually decline to the point where it can, or maybe go out of business altogether.”
Bugs: “eh, not much price change in Durcell batteries or See’s candies, or Fruit of the Loom, or Sherwin Williams paint, or…
What does Warren see that hardly anyone else does?
“I’m a born again American”…
http://www.bornagainamerican.org/index.html
Nice catchy tune.
But what is the political agenda? Big government protectionism? I am skeptical. I don’t want any big government, but I will take significantly higher tariffs if they abolish all income taxes, all capital gain taxes, all dividend taxes and all corporate taxes.
System lets builders, Realtors access projects, clients remotely.
Business ~ Sunday, Jan. 24, 2010 ~ thestate.com
Sitting on a beach in St. Bart’s on his honeymoon, Columbia home builder Brantley Jones flipped on his laptop and checked in on a construction site in Newberry.
He chatted with his project manager, who was wearing a helmet cam, and helped his crew through a crucial stage of adding a second floor to a single-story home.
virtual real estate
Businessman David Jones, left, along with Bob Engwall, right, and Josh Witmyer have developed a ‘virtual agent’ for new home communities that allows potential buyers to get face-to-face information even when no one is staffing the info center.
“I was definitely more eased at dinner knowing the trusses and everything was set right,” he said. “It relaxed me to be able to control it.”
Jones was using a “Builder Buddy” system invented by his father, David Jones, last year. It is just one use for the new technology that David Jones dreamed up more than 25 years ago - before the Internet made it possible - and hopes to take nationwide next year.
“We’re not doing this just for Columbia, South Carolina,” David Jones said.
The 62-year-old owner of a plastics company has the whole family involved.
His wife, Donna Sue Jones, who inspired the original concept, is sales manager for Shumaker Homes, which has the “Insta-Live” version of the product to help guide prospective buyers via a remote feed in three of its model home communities.
And son Jason, a graphic artist in New York, came up with the graphics for the products.
Brantley Jones - currently the only business owner using Builder Buddy - said it has allowed him to grow his company during the past eight months.
“I was doing one project every six months before, and now I’m doing 10, and I can spread out from Newberry to Sumter,” he said.
Hal Von Nessen, a Columbia-based national real estate consultant, planned to mention the new technology during a speech at the International Builders Show last week in Las Vegas.
“I was definitely more eased at dinner knowing the trusses and everything was set right,” he said. “It relaxed me to be able to control it.”
Control freaks drive me nuts. I can’t work for a micro-manager; my interest in doing the job plummets drastically when someone is riding my tail.
So he’s able to relax. That’s great. It’s his business apparently, so he should run it the way he sees fit.
But what are his employees doing when he’s not watching their every move? Plotting THEIR next move, and perhaps drinking too much off-the-clock.
When you can’t trust your employees to do the job right, why are they your employees? Especially in this job climate. There’s a psychosis issues here somewhere.
The Global Debt Bomb
Forbes Magazine dated February 08, 2010
Spending our way out of worldwide recession will take years to pay back–and create a lot of pain.
Kyle Bass has bet the house against Japan–his own house, that is. The Dallas hedge fund manager (no relation to the famous Bass family of Fort Worth) is so convinced the Japanese government’s profligate spending will drive the nation to the brink of default that he financed his home with a five-year loan denominated in yen, which he hopes will be cheaper to pay back than dollars. Through his hedge fund, Hayman Advisors, Bass has also bought $6 million worth of securities that will jump in value if interest rates on ten-year Japanese government bonds, currently a minuscule 1.3%, rise to something more like ten-year Treasuries in the U.S. (a recent 3.4%). A former Bear Stearns trader, Bass turned $110 million into $700 million by betting against subprime debt in 2006. “Japan is the most asymmetric opportunity I have ever seen,” he says, “way better than subprime.”
Bass could be wrong on Japan. The island nation (and the world’s second-largest economy) has defied skeptics for so long that experienced traders call betting against it “the widowmaker.” But he may be right on the bigger picture. If 2008 was the year of the subprime meltdown, 2010, he thinks, will be the year entire nations start going broke.
The world has issued so much debt in the past two years fighting the Great Recession that paying it all back is going to be hell–for Americans, along with everybody else. Taxes will have to rise around the globe, hobbling job growth and economic recovery. Traders like Bass could make a lot of money betting against sovereign debt the way they shorted subprime loans at the peak of the housing bubble.
I am thinking the same thing but I’m shorting the US long bonds. There is a debt bomb and the bomb squad is our dynamic duo Ben Bernanke & Tim Geithner!
We’re so screwed.
T-bills paying 0.31% seem like a bargain in light of all of this. Cash is king!
If the banksters bulldoze all of their empty houses in Las Vegas and Phoenix, would that be similar to having a huge bonfire burn up all the excess printed currency? That is one way to support higher house prices. Bulldozing idea was put out last June and I think may be resurrected.
http://tinyurl.com/mpltpo
As the support for any $8,000 tax credit disappears and interest rate hikes become more and more likely, and environmentalists pressure against more development, bulldozing would be supported by both large political parties. The Republicans would see it as not rewarding irresponsible home moaners and much cheaper to flatten homes than to subsidize them. Demos would see it as a way to win back support from the responsible middle class who like their property values to be protected.
Like what kind of investments? Sounds like a good place to put a few dollars of mad money…
Inverse Yen ETF?
Hola HBBers,
Yea, yea, I know. Brutal week for markets. I was in New York this week too. Lotsa pissed off people at Uncle Barry’s plans to extinguish what little there is left of capitalism.
I don’t think any of the threats will come true. It’s all fire up the base stuff.
On the other hand what a fantastic week politically. Brown is #41. ObamaCare is DEAD. And as an added bonus McCain-Feingold was put out of its misery too.
I had to time to check in here, I was too busy popping champagne bottles.
If any of you want to see comedy gold, search for Keith Olbermann’s “SPECIAL COMMENT” on the SCOTUS decisiion. It was so over the top and utterly insane, that even fellow traveler Jon Stewart had to call him out.
I’ll take a 5% drop in markets for that alone.
“I was too busy popping champagne bottles.”
Make it rain, Eddie! Make it rain!
I am wondering if the Supreme decision is going to make it easier for Megabank, Inc PR (prostitute) contractors to make megabucks, now that corporate money flows are protected as “speech”?
Also - Air America bankrupt and off the air!
Yeah, that warmed my heart as well. I never understood the need for yet another “progressive” propaganda outlet, when the MSM already fulfills that function.
+1 Sammy.
There IS no need, so that’s why they failed.
You’re kidding right. MSM progressive propaganda. Excuse me while I go have a great laugh. Never mind that most of the MSM are owned by corporations. That was a real knee slapper Sammy. So funny I forgot to laugh.
None of the compassionless conservatives here are ever bothered by facts.
How Rachel Maddow continues to have a presence in the media is unfathomable. What a twit.
No wonder MSNBC has no audience. Between Maddow and Olbermann, the station is a laughing stock.
A shame about GE, though. They used to be a great outfit before they let themselves get bought by the Left. Ditto the Weather Channel, which is a mouthpiece for NBC and its crackpot GE-affiliate stations. John Coleman must eat antacids by the pound.
There is no such thing as a liberal Fortune 500 corporation.
“…I was too busy popping champagne bottles.”
Hey Haskell, Mrs Cleaver wants you to send a bottle to Haiti, if you can find the time…
Eddie’s girl
“how about that other boy, that Eddie”?
“oh Mother!”….
Editorial suggestion:
“Lotsa pissed off people at Uncle Barry’s plans to
extinguishpreserve what little there is left of capitalism.”Preserve capitalism by running the banks out of business. Bear you live in a Animal Farm and it’s 1984.
Nice try, strawman king.
Preserve capitalism by
running the banks out ofrestoring competition to the banking business.Running the banks out of business? Seems they did a pretty good of that themselves, didn’t they?
Despite your revulsion of facts, we’re glad you’re here. Always nice to know where the perpetrators of this country’s problems are.
Your ignorance and arrogance are at once breathtaking and pathetic. Give yourself a pat on the back for raising the bar!
“I don’t think any of the threats will come true. It’s all fire up the base stuff.”
This political earthquake just struck a couple of days ago. It is way too early at this point to predict its ultimate impact. That won’t prevent Megabank, Inc’s PR (prostitute) hacks from a desperate attempt to spin the financial overhaul tsunami in a favorable direction.
From where I stand, it looks to me like Megabank, Inc’s greed pigs shot themselves in the foot by paying out humongous bonuses after a year in which Main Street America struggled to feed and house itself.
Obama’s drawn first blood – now it’s the UK’s turn
We supporters of the US’s Glass-Steagall Act used to be regarded as eccentrics. Now the most powerful man in the world is backing it
o Ruth Sunderland
o The Observer, Sunday 24 January 2010
o Article history
Paul Volcker, head of the Economic Recovery Advisory Board, with President Barack Obama
Paul Volcker listens as President Barack Obama outlines his financial reforms. Obama plans to limit the size and scope of US banks.
Not so long ago, fans of bringing back the Glass-Steagall Act – American Depression-era legislation that separated utility banking from casino speculation – were considered members of an eccentric and tiny minority.
Now the most powerful man in the world, Barack Obama, has joined our club. His new best friend is the octogenarian former head of the Federal Reserve, Paul Volcker, who advocates a return to the spirit of Glass-Steagall. The return of Volcker comes at the expense of treasury secretary Tim Geithner, who is widely perceived as being aligned with Wall Street’s monied elite.
The “Volcker Rule” would forbid any bank holding deposits that are guaranteed by the government from operating hedge funds, private equity funds or trading on its own account. Obama also wants an overall limit on the size of any one bank, on the basis that if an institution is too big to fail, it is just too big. No doubt there is an element of populism in this: Obama needs to regain the high ground in the week Goldman Sachs reported mega-bonuses and republican Scott Brown, aka Senator Beefcake, won the seat in Massachusetts left vacant by Ted Kennedy’s death.
Never mind. It marks a break with the so far lily-livered approach to finance sector reform in the US, and has removed at a stroke the favourite excuse trotted out by apologists for the City for ducking reform: that there is no point in the UK acting alone. If the arch-capitalists in the US are doing it, then there really is no excuse.
…
Should Conan be taxed extra on his going away money? I mean how unfair is it that Conan walks away with $40M while millions suffer?
Or how about Derek Jeter? Should he be making millions for hitting a ball while so many people are unemployed?
And how Cameron making all that money from Avatar when so many people are suffering?
Eddie…Its Business…..Conan &Jeter brings in the customers so they get a percentage of the sales….
Remember if people were smart they would boycott the Wussified “new” Yankee stadium and pay for the players would go down significantly
None of them were bailed out with taxpayer money. Get it?
Funny I don’t remember Connan getting a federal bail out.
No sh!t. The implicit comparisons offered above to banksters on the bailout dole are a total joke…
“I mean how unfair is it that Conan walks away with $40M while millions suffer?”
Unlike Megabank, Inc cartel members, who rationally expect to receive bonus payments in the megamillions of dollars even if they throw money into the sea, Conan earned every penny of his walking away money. And he didn’t work as a prostitute, either.
“And how Cameron making all that money from Avatar when so many people are suffering?”
I don’t begrudge the market-based earnings of people who work seventy hour weeks to produce enduring cultural contributions of great value to society. Are you trying to somehow equate your examples with the “greed-is-good / I got mine, screw you” mentality of Wall Street?
Hugh Jackman, James Cameron offer money-cant-buy items for charity
Hugh Jackman and director James Cameron are offering up cool money-cant-buy items for Varietys upcoming Power of Youth auction, the proceeds of which will go to American childrens charities.
Washington, Dec 3 : Hugh Jackman and director James Cameron are offering up cool money-can’t-buy items for Variety’s upcoming Power of Youth auction, the proceeds of which will go to American children’s charities.
Jackman has offered up a walk-on role in ‘X-Men and ‘Lethal Weapon’ producers Laura and Richard Donner’s next movie and a chance to spend time with him on set.
On the other hand, ‘Titanic’ director Cameron has offered a private screening of his much-anticipated new movie ‘Avatar’.
…
Not only do these entertainers not have government backing; but their actions do not cause systemic risk.
Additionally, they are not in control of money flows, unlike the financial firms that control where money goes, and to whom.
Please. Why Obama’s sudden support for any Glass-Steagal principles? This is just more pandering and more b.s. from yet another president. This time, he reminds me of Clinton and his constant about-faces.
Obama’s repeated failures and guffaws are really getting to you, aren’t they PB? I’m surprised by that, since you’ve long proclaimed yourself to be non-partisan.
And what’s with your constant railing against eddie and joey for stating their views, when you never rail against anyone holding views opposite of theirs? For someone who claims independent thought, that’s a curious thing.
I read a recent comment from you stating that you post such comments for entertainment purposes; if so, you remind me of my emotionally-stunted eldest sibling. Few people anywhere talk to that sibling, who is very childish. He spends his life posting on blog sites, too. It’s his only outlet.
eudemon, I can see you’re watching this economy closely.
Please help me solve this nagging jobs problem. I need some support and new ideas to find jobs for 6 million+ Americans and we need it before the next election or the democrats will retain enough control that they will just be obstructionist to conservative goals.
http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/012410dnmetsamsclub.acce54da.html
“Obama’s repeated failures and guffaws are really getting to you, aren’t they PB?”
Nope.
“And what’s with your constant railing against eddie and joey for stating their views, when you never rail against anyone holding views opposite of theirs? For someone who claims independent thought, that’s a curious thing.”
To be quite honest, I get the rather strong impression from their steadfast support of positions favorable to the banking industry that they are PR representatives who take money from posting here. I am also annoyed by anyone who constantly takes contrary positions and who feels they deserve a pass on supporting whatever they say with any factual backing. And the Archie Bunker / Eddie Haskell resemblances don’t exactly thrill me.
Bear dude,
So we’re back to me being a PR rep for banks? I thought I was realtor. And an insurance PR man. And I think it was you who said I was a used car salesman (maybe it wasn’t you, but someone said it).
Come on man, make up your mind.
As much as it may shock you, not everyone thinks in lock step with you. You live in California so you’re used to nothing but socialist ideas flowing from you fellow citizens. Not so much the case in the rest of the country.
“You live in California so you’re used to nothing but socialist ideas flowing from you fellow citizens. Not so much the case in the rest of the country.”
Hey Haskell, Mrs. Cleaver wants to know if you sent ant of your Champagne bottles to Haiti yet, A. If there’s any remaining. B. If you really give a Shasta. C. Don’t remind her how much you spent on postage, and what a “disruption” it was to you’re Supreme Court celebration.
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
“TrueHaskell™” = “But, but, but…”
I think in lockstep with pb.
Eddie,
I developed a fact-based response which seriously calls into question your assertion below that the recession ended six months ago. I realize you might not want to bother reading it, because it is a bit on the long side; besides, your numerous purely opinion-based posts suggest a careless disregard for the facts.
Eddie,
If you’re not dependent on one of the FIRE sectors for a living, I’d be extremely surprised.
Yea, yea, I know. Brutal week for markets. I was in New York this week too. Lotsa pissed off people at Uncle Barry’s plans to extinguish what little there is left of capitalism.
I don’t think any of the threats will come true. It’s all fire up the base stuff.
On the other hand what a fantastic week politically.
Eddie, I consider myself a hard core free market type. But the mindset among conservatives always seems to be that stocks are being held down by bad government policies, and that prices will rocket upwards once those policies are lifted. But what if the government is actually holding prices artificially high, and the free market would say that they need to be LOWER?
“But what if the government is actually holding prices artificially high, and the free market would say that they need to be LOWER?”
Aside from numerous MSM articles discussing the Fed’s and other federal government asset price support programs, what evidence do you have to support your conjecture?
The selloff was started by Uncle Barry’s tax proposal on banks. Or was that just a crazy coincidence?
Nope, selloff started the day before Obama’s plan, the day that stocks were supposed to rise in the face of a Republican senate victory. The concensus is that economic uncertainty is fueling the selloff - no Fed chair, which direction congress will take, Obama’s proposal, etc.
There is a big ’spin’ going on that the markets started dropping when Obama gave his speech. I think the fact that they really started dropping after the Repub Mass senate victory is interesting, but I’m not sure what it means. (Unless deep down inside, mr. market knows the repubs will once again screw the pooch if they get the chance.)
“…the repubs will once again screw the pooch…”
They are good at doing that, then blaming the aftermath on the D-rats who subsequently get themselves elected into office.
“…the repubs will once again screw the pooch…”
Cheney-Shrub: “We want him to succeed as president, we really do.”
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
And yet conservatives are still in such a minority they won’t be able to even sniff being able to implement something that they want to do for at least 3 more years. Not exactly a reason to celebrate.
Conservatives don’t want to do anything. They just want to prevent the government from screwing things up even more.
Well, The Republicans sure want to do things. And since they are the only “conservative” option in government…
Minority eh?
From Gallup on June 15, 2009
PRINCETON, NJ — Thus far in 2009, 40% of Americans interviewed in national Gallup Poll surveys describe their political views as conservative, 35% as moderate, and 21% as liberal. This represents a slight increase for conservatism in the U.S. since 2008, returning it to a level last seen in 2004. The 21% calling themselves liberal is in line with findings throughout this decade, but is up from the 1990s.
Sorry, should have said GOP. I was talking about the government.
Ummm. 40 percent is still a minority compared to 60 percent who aren’t.
“Brutal week for markets.”
There is more where that came from if BB does not get reappointed. I would expect the Wall Street weathermakers to throw Teppich-Fressen temper tantrums that precipitate a massive stock market correction, then blame the selloff on ‘the market response’ to the reappointment failure.
Senators assure Obama Bernanke to win 2nd term
By JEANNINE AVERSA, AP Economics Writer
Saturday, January 23, 2010 at 2:39 p.m.
FILE - In this July 22, 2009 photo, Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington. Bernanke faced mounting Senate opposition for another four-year term Friday, Jan. 22, 2010, even as the White House described President Barack Obama as confident about his confirmation. (AP Photo/Gerald Herbert, file)
FILE - In this July 22, 2009 photo, Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington. Bernanke faced mounting Senate opposition for another four-year term Friday, Jan. 22, 2010, even as the White House described President Barack Obama as confident about his confirmation. (AP Photo/Gerald Herbert, file)
WASHINGTON — President Barack Obama phoned Senate allies Saturday as two key senators predicted that embattled Federal Reserve Chairman Ben Bernanke will be confirmed for a second term.
Obama made calls from the White House to members of the Senate leadership and others and was assured Bernanke would win confirmation, a senior White House official told The Associated Press. The official spoke on the condition of anonymity to discuss the private phone calls.
If Bernanke’s nomination were derailed it would send tremors through Wall Street, which in turn could hobble an already fragile economic recovery and slow any comeback in the ailing jobs market. The mounting opposition to Bernanke was one of the factors worrying investors as the stock market suffered its worst setback in more than 10 months this week, losing 552 points from Wednesday to Friday.
…
Growth Probably Accelerated as 2009 Ended
Jan. 24 (Bloomberg) — The U.S. economy probably grew in the closing months of 2009 at the fastest pace in almost four years as factories stepped up production and companies purchased new equipment, economists said before reports this week.
Gross domestic product expanded at a 4.6 percent pace from October through December, more than double the prior quarter’s growth rate and the strongest since the first three months of 2006, according to the median estimate of 74 economists surveyed by Bloomberg News. Other reports may show orders for durable goods increased and home sales declined.
Manufacturers such as Intel Corp. are leading the recovery as growing demand and dwindling inventories prompt companies to speed up assembly lines. Slower consumer spending after the third-quarter’s “cash for clunkers” rebound is a reminder that 10 percent unemployment is causing Americans to hold back, one reason why the Federal Reserve may keep interest rates low.
“Inventories are going to be responsible for at least half of the growth, if not more,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “There’s been an enormous amount of government stimulus that will be fading as we go through the year, so it’s unclear how much the economy can do on its own.”
“‘There’s been an enormous amount of government stimulus that will be fading as we go through the year, so it’s unclear how much the economy can do on it’s own.”
It’s not all that unclear if you look around a bit. Seventy percent of the economy is based on consumer spending. Consumers used to get their spending money by borrowing against their forever-increasing home prices. This pumped up the economy, created a lot of business that wouldn’t otherwise exist without all this borrowing/spending.
Now the borrowing has stopped - it’s even gone into reverse. Banks are taking in more money than they are putting out.
This squeezes the money supply, makes cash hard to get. It’s hard to spend cash if you can’t get it. This hoses businesses dependent on what used to be easy cash.
A reminder: Seventy percent of the economy is (was?) based on consumer spending.
I keep telling you people, the recession has been over for at least 6 month. This is further evidence of that.
BULLLLL eddie……I still send out at least 10 resumes a week to REAL paying jobs I am qualified for and still nada not even an acknowledgment of an email
But I am starting a pt job at an Internet radio station for a whole whopping $10 hr off the books…does that count as a recovery?
When you’re not willing to move, it does count as a recovery.
Since when are jobs supposed to come to you? If jobs aren’t available nearby, go to where you can find them.
Girlfriend’s whining be damned.
I guess i made my choices, and she is still not ready to learn to drive. Never drove at all.
———————————-
Girlfriend’s whining be damned.
Eddie this recession is far from over I think.Things are not getting any better out there.The real estate market is a total fraud, but that hasn’t changed much.
Short sale fraud, banks holding back inventory, and low down loans are keeping the market afloat.
“the recession has been over for at least 6 month”.
That’s easy to type, however the gubmint agency that declares beginnings and ends to “recessions” has yet to make the call.
On a personal note: A nephew of mine was layed off last week from his job as a commercial construction foreman. My wife’s company layed off five people in the last month. (Construction Management)
South Carolina’s offcial un-employment rate is 12.9% and climbing, so in our neck of the woods the ‘recession’ is far from over.
It’s not a recession of course, just a clever word to keep hope going.
I’m in the consulting engineering business with one of them fancy mega-companies (my interpertation of the comany “we’re not an engineering company, we’re a mergers and acquisitions company”)
Every week I get the layoff report. Five here, 23 there, 32 people reduced to part time. Every single week there is something like that. The hiring list is always on the order of two new college graduates. Or usually no one.
And then there is Wal-Mart’s announcement a few minutes ago. 10,000 people at Sam’s Club are getting the axe.
The recession might be over, but that is because this is the new normal.
Sounds to me like the economy remains Up in the Air.
‘For the first time since the start of the economic downturn, every state and the District of Columbia reported losing construction jobs over the past twelve months, according to…the Associated General Contractors of America.’
‘There’s nowhere for construction workers to turn for relief from job losses and hardship,’ said Ken Simonson, the association’s chief economist. ‘Sifting through the monthly variations, it is obvious that construction employment is losing ground almost everywhere.’
Hey Ben any Pics of your house after the Big snowfall ????
How much did you get last week?
Haskell, you’ve been gobbling down every “ricochet biscuit” you can catch!
Blues Brothers — Rubber Biscuit lyrics:
“….Have you ever heard of a wish sandwich? A wish sandwich is the kind of a Sandwich where you have two slices of bread and you, hee hee hee, wish you had some meat…
Bow bow bow…
“Ummm… the other day I had a ricochet biscuit. A ricochet biscuit is the
kind of a biscuit that’s supposed to bounce back off the wall into your
mouth. If it don’t bounce back, hee hee hee,… you go hungry!”
Eddie, you either love playing the troll or you’re delusional - probably both. But rather than launch into foaming rants against you, which seems to be a popular sport in here, I’d rather just let you figure this out on your own as collapse of the credit- and debt-driven “recovery” becomes blindingly obvious in the months ahead.
While you still have a fixed address, would you like me to send you the large and sturdy cardboard box for the Sony XBR HDTV I bought from my “economically distressed” FB neighbor? It may come in handy in your next, more “mobile” phase of life.
“I keep telling you people, the recession has been over for at least 6 month. ”
Brought to you by the same person who insisted recently that apartment rents are going up, and occupancy is down. HBB’s own Baghdad Bob!
“We have them surrounded in their tanks. No, I am not scared and neither should you be!”
Eddie is a renter. He said so. So if the recession is over, how come our Eddie hasn’t bought a house?
Valid question SF Girl.
Haven’t bought yet because Im not sure where I will be living in a year from now. Might be FL, might be coastal GA, might be NYC. Long shot but maybe SoCal.
Don’t bother confronting trolls with data. They inevitably respond by sticking their fingers into their ears and chanting:
“Nah–na-nah–ne-nah—nah—…”
Let’s be fair PB. For those of us that were not scared to invest at the bottom, we are up big time. My ROR on my house fund which was trickled into equities is up 75% while houses fell another 5% in my area. I started taking money off the table recently because that is just crazy appeciation, but as Obama drags us down further I will invest more on the major drops. I expect to make over 10% per year for the next few years. It’s one thing to be scared, it’s another to know when to strike (my actual return for the last two years have blown away previous expectations so if i have a tendency to be wrong its usually because my appreciation estimates are too conservative). Yes you have to have cash to play the game, but some of us (including you for yourself and your dad) saw this coming years ago and pulled out of equities before the drop. And as for my personal interest in bank regulation, yes, I brought, among many other things, large amounts of C at an avg price of $1.50.
I love you PB and am not arguing with you, but statistics do show that those that called bottom last Spring as far as the recession goes are making a killing (equities lead, jobs and housing prices follow - well usually - throw in a self-interested nut (more specifically ACORN) in the White House and who knows). I urge all Democrats to demand they find a replacement fast before we lose more power and respect.
Natalie, why did you buy Citi in March? Because you were counting on Obama continuing to prop it up? Instead of getting upset with Obama for finally doing the right thing, just sell your Citi, pocket your losses, and short the damed thing.
I actually think they can be profitable again without bad legislation. I am actually in favor of good legislation (e.g., more transparency, getting rid of rating agency conflicts, and no Credit Default Swaps).
My longer post is not showing. Try to be fair PB. The market has gone up well over 50% since we were calling a bottom last Spring. Many stocks have gone up several 100% (stocks are leading, housing and jobs are lagging, indicators). Those that have listened should have had the best year of their lives looking at YOY ROR. BO’s insanity and anger management and ego issues will set us back for sure, but maybe some of the more timid ppl on here can get back in before its too late, Obama is out and we are on the road to recovery.
If the economy is back and booming, then weren’t Obama’s policies a rousing success? Or at the very least, not bad?
No. I do not think Obama was a major factor in the final recognition of the over valuation of housing and pricing readjustment.
Didn’t the stock market go up by some outlandish amount during FDR’s first year in office (1933), only to tank again in the subsequent years?
Nonetheless, I believe long-term buy-and-hold investors who gradually got in after 1932 (my mom’s dad among them) did quite well over the subsequent half century.
It must be different in Atlanta than it is in California.
State’s jobless rate stuck near record
Tens of thousands give up on looking
By Dean Calbreath, UNION-TRIBUNE STAFF WRITER
Saturday, January 23, 2010 at 12:16 a.m.
California’s unemployment rate remained at a near-record 12.4 percent in December as tens of thousands of workers dropped out of the labor force, unable to find full-time jobs.
The jobless rate was unchanged between November and December even as employers shed 38,800 workers from their payrolls, according to data released yesterday by the California Employment Development Department.
In San Diego County, the unemployment rate fell from a revised 10.6 percent to 10.1 percent, related in part to seasonal retail hiring. Even with that holiday boost, however, the county lost 1,600 jobs.
The jobless rate grew in 43 states last month, a sharp contrast from November, when the unemployment declined in 34 states. Only Michigan, Nevada, Rhode Island and South Carolina had worse rates than California.
Economists say one reason California’s rate remained steady, instead of going up, is that many of the jobless have become so discouraged about finding full-time work that they either are working part-time or have stopped looking for work altogether — going back to school, entering job-training programs or biding their time until the economy improves.
“I think there are an awful lot of people doing that, particularly in households where they’re not the primary breadwinners,” said Alan Nevin, director of economic research at MarketPointe Realty Advisors in San Diego.
Beacon Economics, a research firm in Los Angeles, estimates that over the past three months, 106,000 Californians have dropped out of the full-time labor force and are not being counted among the unemployed. If they were, it said, the number of Californians unable to find full-time work would almost certainly be above 20 percent.
…
Professor Bear’s really simple predictors that the economy has bottomed out:
1) The economic picture is so ugly that even Eddie is too embarrassed to suggest otherwise.
2) The consensus that the economy is FUBAR is so overwhelming that it is too boring to discuss.
3) Everyone agrees that stocks, long-term bonds and real estate are all terrible and risky investments.
Unemployment today is well below unemployment in the last real recession of the early 1980s. But why let facts get in the way of a good emotion?
You do know the method of counting the unemployed is totally different now then it was back then, right?
“But why let facts get in the way of a good emotion?”
Great question, especially considering the source! Sorry for the lengthy answer; feel free to ignore it if you consider facts irrelevant to your opinion that the economic recovery started six months ago.
Comparing the unemployment rate at the current juncture to that in the early 1980s episode is somewhat akin to comparing LA’s San Gabriel mountains to the Colorado Rockies. Proud Coloradans will note that their 14K+ peaks are taller than the San Gabriels, which max out at just over 10K.
However, measured from the base to the peak gives a different picture; the San Gabriels rise from a base elevation near sea level, for a total increase in elevation near 10K feet, while the Colorado Rockies start out near 5,280 feet or so (remember Denver is the “mile high city”), climbing from there by a total of less than 10K feet to their peaks.
In a similar fashion, though the highest unemployment rate
seen in the current recession so far of 10.1 percent (in 10/09) has not surpassed the peak level of 10.8 percent (Nov and Dec 1982) hit at the peak of the second dip of the early-1980s double-dip recession, the early 1980s unemployment rate rose off a base level of 5.6 percent (May 1979), while the current recession’s increase in unemployment rose off a trough unemployment level of 4.4 percent (May 2007).
To summarize, during the early 1980s recession, the unemployment rose from 5.6 percent in May 1979 to 10.8 percent in November 1982, for a total increase of 5.2 percent over the course of 42 months, at an annualized average rate of increase = 12*5.2/42 = 1.49 percent per year; during the present recession, unemployment rose from 4.4 percent to 10.1 percent for a total increase of 5.7 percent over 29 months, at an annualized average rate of increase = 12*5.7/29 = 2.36 percent per year.
Further points:
1) It is too early to say whether peak unemployment has been reached in the current recession.
2) I am not sure how the picture would compare with a more honest denominator in the unemployment rate statistic — i.e., one that did not ignore so-called “discouraged workers,” defined as people of working age who have given up looking for jobs because none are available. I saw a quote in the SD Union-Tribune just today (I believe it came from Beacon Economics) suggesting California’s unemployment rate would be 20 percent if all those discouraged workers were not excluded from the calculation.
And yet the unemployment rate went up in like 46 states last month.
“this…that…the other thing…”
Keep whistling away as you walk along side the grave yard.
Obama facing huge economic challenges ahead
By TOM RAUM, Associated Press Writer
Saturday, January 23, 2010 at 9 p.m.
WASHINGTON — One year in, President Barack Obama faces a perilous economic choice.
He can’t pull back the stimulus too quickly, despite the public’s concerns about rising deficits, because that could kill a fragile recovery. If he steps too hard on the throttle to create more jobs, responding to another voter imperative, he risks feeding inflation and restarting the dangerous cycle.
The GOP Senate upset in Massachusetts shows that the political risks of any bold move are enormous.
…
Unknown, eddie. I’m not sure anyone will know the answer for quite a while because the methods used to collect and report the data are so infathomable and politically motivated. No one knows the real answer because everything reported aggregates into a giant cluster****.
I don’t know if you surfed here a few years ago. Back then, there was quite a discussion here about the sectors of the economy that would suffer most in any upcoming recession. Those sectors that the “common man” relied upon would be hit severely, as society privatized the losses and socialized the risks.
I think that IS what we are seeing.
Eddie,
Stats from your home state don’t bear you out:
(1) Georgia has the highest number of failed banks, 32; the latest failed in December, compared to 19 for Florida, and 6 each for Nevada and Arizona.
(2) Georgia’s unemployment rate increased in December to 10.3%, one of the highest in the nation, and is expected to reach 11% according to your state economic forecast.
(3) RealtyTrac Inc. estimates that Georgia saw 9,664 foreclosure filings in November, among the highest rates in the nation.
9600 foreclosures in a state of 10 million people. OMG!!!
That’s 9,600 in one month. And you do know a significant portion of those 10 million don’t own homes…like renters and, oh, children.
So Obama pulled us out of recession in only 6 months? Then why all the complaining?
Go Detroit! & Gubmint Motors!
http://www.youtube.com/watch?v=1hhJ_49leBw&feature=player_embedded
The giant Cincinnati Mall, struggling to lease space.
Business Courier of Cincinnati -
A year after changing owners and 10 months after changing names, Cincinnati Mall is fading again.
Treehouse Kids Co. and the Guess Factory Store this month joined a growing list of tenants closing up shop in the region’s largest shopping center, formerly known as Cincinnati Mills and before that, Forest Fair Mall. Local real estate brokers say anchor tenant Bass Pro Shops is exploring options as its lease nears expiration, too.
“It’s a bad situation there,” said Treehouse Kids owner Scott Jasper. “It’s just about empty now.”
Beyond the leasing woes, the property is one year late on payments required under a 2004 bond deal. Forest Park Finance Director Harlita Robinson said the mall’s new owners missed a $1.2 million payment last February. Another $1.3 million is due in a few weeks. The money is needed to cover debt service on $18 million in revenue bonds, used to finance a parking garage and road improvements.
Maybe he should just take his $7mm and stick in the bank ? Betting on the way an entire nation will go is kind of stupid. Japanese are able to absorb a lot more punishment than Americans. They have more determination (witness the almost impossible odds that brought them to Pearl Harbor ), sense of honor and duty ( samurai would do things of physical daring for their lords at a mere word from them even if it meant a painful death on the spot ), and a national sense of “face” which makes it very difficult for them to repudiate anything, including a loan they take out. To quote the last line of “Cousin Greylegs and Grandfather Mole” from The Wonder Clock by Howard Pyle, ” So all he gained by his roguery was a burnt skin and nothing to show for it; and that has happened more than once to rogues whose wits are so sharp that they cut their own fingers with them.”
“Japanese are able to absorb a lot more punishment than Americans. They have more determination (witness the almost impossible odds that brought them to Pear Harbor)…”
Lol. Was it really determination or was it an astonishing amount of hubris, arrogance, misjudgement and miscalculation that brought them to Pear Harbor?
I’d say a combination of all of the above. One of the most interesting old books that I occasionally reread is “The Maker of Modern Japan: The Life of Shogun Tokugawa Ieyasu” by A.L. Sadler, first published in 1937, so the writing is untouched by the shadow of WW II/Pearl Harbor. If one can tolerate the archaic writing style, it really opens up the psyche of the Japanese Bushido culture passed down from the previous 400 years. Just because they did away with the Samurai class in 1867 doesn’t mean that the families or mentality died. I’ve checked out the biography through other sources, and it’s exhaustive and accurate, as far as I can tell.
There was a saying in the 80’s: “Scratch a Japanese businessman and you’ll uncover a Samurai”.
Those were the days when it was widely thought that Japan was going to soon rule the earth.
Then, something hapened …
Remember these days. Funny how true the words were and are, however they were issued at the beginning of Japan’s multi-decade depression.
New York Times
A Top Japanese Politician Calls U.S. Work Force Lazy
By DAVID E. SANGER,
Published: January 21, 1992
One of Japan’s most senior politicians said over the weekend that America’s economic troubles were rooted in a work force “too lazy” to compete with Japan, and argued that one of the biggest problems of the United States was that nearly a third of its workers “cannot even read.”
The harshly worded assessment by Yoshio Sakurauchi, the 79-year-old Speaker of Japan’s powerful lower house of Parliament, seemed bound to fuel the trans-Pacific arguments over the causes of America’s trade and competitiveness difficulties with Japan.
Toyota is the number one car company in the world.
Sony is THE standard in professional broadcast TV.
They are unmatched in robotics.
In many ways, they DO rule the world.
You really need to look at the demographics of Japan. Their population is shrinking along with their industrial base. I think it’s a good bet.
“It can’t happen here.” is a great setup for a Black Swan event.
Coffee County Film Processing Plant To Close
201 Will Lose Jobs March 31
TULLAHOMA, Tenn. — Two hundred workers in Tullahoma will be losing their jobs at the end of March.
That’s when the Fuji Film processing plant will close.
A corporate spokesperson says the work that had been done in Coffee County since 1996 will now be shifted to a plant in Greenwood, S.C.
According to documents the company filed with the state, the workers will not be offered transfers.
Fuji is consolidating processing plants because so many people are switching to digital cameras.
Finding work will be a challenge for the newly unemployed. There are already more than 2,500 people in Coffee County out of work in a county of less than 25,000.
“It’s tough to find a job,” said Christy Smith, who was laid off when the envelope company where she worked cut its third shift.
“My brother’s been trying for six months to find a job, and I got laid off a year ago and I haven’t found a job yet,” Smith said.
“…will now be shifted to a plant in Greenwood, S.C.”
Abandoning Tennessee workers for South Carolina? Who’s pimping South Carolina these days?
How did they ever come up with a “coffee county” in TN?
It was named after General John Coffee according to Wikipedia.
Fuji stopped making cameras a year or two back. Now they’re pulling back on film. However, they’re still making some of the best photographic paper on the market, so I hope they stay in that business.
(Photographic paper is chemically reactive, and the color is an intrinsic part of the paper. This is why a “real” photographic print looks so different from an inkjet or laser print, which is on the surface of the paper.)
Depends on the definition…That’s why all this tough talk is just that. If the banksters don’t like the way the game is being played, they will simply change the rules.
Obama Plan Hinges on Definition of Client Trades
Jan. 22 (Bloomberg) — President Obama’s plan to curb risk- taking by banks hinges on how rigidly regulators define proprietary trading at firms such as Goldman Sachs Group Inc. and JPMorgan Chase & Co.
Goldman Sachs, which generated at least 76 percent of 2009 revenue from trading and principal investments, gets the “great majority” of transactions from customers, according to Chief Financial Officer David Viniar. About “10-ish percent” of the New York-based firm’s revenue comes from “walled-off proprietary business that has nothing to do with clients,” he said on a conference call yesterday.
The plan to curb proprietary trading at banks is among proposals that Obama said yesterday will strengthen the U.S. financial system and help prevent a repeat of the credit crisis. Other restrictions would prohibit banks from investing in hedge funds and private companies and put new limits on banks’ borrowings, according to the White House.
JPMorgan, Goldman Sachs, Citigroup Inc. and Bank of America Corp. tumbled more than 4 percent in New York trading yesterday, leading the S&P 500 Financials Index down 3 percent, its biggest decline since October. All the banks are based in New York except for Bank of America, which is in Charlotte, North Carolina.
“If the banksters don’t like the way the game is being played, they will simply change the rules.”
It almost sounds as though you believe the U.S. government is owned and operated by banksters.
GM Aims to Sell 2 Million Vehicles in China in 2010 (Update1)
Jan. 24 (Bloomberg) — General Motors Co. expects to sell about 2 million vehicles in China in 2010, a level it didn’t expect to reach for at least another two years, said Kevin Wale, the company’s top executive in the nation.
GM plans to introduce more than 10 new models in China this year, Wale said in an interview in Shanghai yesterday. The company, China’s largest overseas carmaker, sold 1.83 million vehicles in the country in 2009, 67 percent more than a year earlier. In an April statement, GM forecast reaching annual sales of 2 million vehicles over five years.
The Detroit-based automaker has boosted investment in China since exiting bankruptcy in July as economic growth and stimulus measures caused the nation to surpass the U.S. as the world’s largest auto market last year. At home, U.S. government- controlled GM has shut plants on tumbling demand.
“After last year’s sales boom driven by government stimulus, GM may see sales slow in products like Wuling minivans while Shanghai GM may continue to perform well with more attractive models,” Yu Bing, an analyst at Pingan Securities Co. in Shanghai, said in a phone interview today.
“The Detroit-based automaker has boosted investment in China since exiting bankruptcy in July as economic growth and stimulus measures caused the nation to surpass the U.S. as the world’s largest auto market last year.”
“At home, U.S. government-controlled GM has shut plants on tumbling demand.”
Am I to assume that this “U.S government-controlled GM” is going to build all these cars in China?
“GM plans to introduce more than 10 new models in China this year…”
1. Saturn Panda
2. Pontiac Bamboo
3.
3. Chevrolet Long March SUV
4. GMC Chairman Mao edition pickup
5.
5. Dodge Decoupler
6. Chevy Censor
7. Pontiac People’s Party Van
(I know Dodge isn’t GM, but I thought you’d like it, Hwy.)
Well, for Dodges, just in case any are made in China, they should consider the
Dodge Yellow Running Dog.
I like it.
Apple Sees New Money in Old Media.
With the new tablet device that is debuting next week, Apple Inc. Chief Executive Steve Jobs is betting he can reshape businesses like textbooks, newspapers and television much the way his iPod revamped the music industry—and expand Apple’s influence and revenue as a content middleman.
In developing the device, Apple focused on the role the gadget could play in homes and in classrooms, say people familiar with the situation. The company envisions that the tablet can be shared by multiple family members to read news and check email in homes, these people say.
For classrooms, Apple has been exploring electronic-textbook technology. Apple also has been looking at how content from newspapers and magazines can be presented differently on the tablet, according to the people familiar with the situation. Other people briefed on the device say the tablet will come with a virtual keyboard.
“…looking at how content from newspapers and magazines can be presented differently…”
Hwy’s idea: “With one click I can eliminate all the ad’s… just leaving the text article.” OK, so I got the idea from the inventor of the “mute” button.
Tablets have come and gone.
If you’ve had to use one for long periods of time, you know why.
More good news! Drill baby!
US estimates vast crude deposit in Venezuela (AP)
Venezuela’s Orinoco Oil Belt is one of the world’s largest known oil deposits, and the U.S. Geological Survey says in a new estimate that it likely holds 513 billion barrels of recoverable heavy crude - nearly twice as much as the proven reserves of Saudi Arabia.
The USGS said in the assessment released Friday that it estimated how much oil could be recovered using existing technologies, and that the area has the largest accumulation it has ever assessed.
There was no immediate reaction from the State oil company Petroleos de Venezuela SA, or PDVSA, which has said it hopes to eventually certify more than 235 billion barrels of crude in the Orinoco River basin in eastern Venezuela.
USGS geologist Chris Schenk, who led a group of researchers in preparing the assessment, said the team based its figures not on estimated reserves that could be certified, but rather on “what could be recoverable with the technologies that we’re aware of today.”
My crystal ball tells me that China, not the U.S, is going to make a deal with Hugo Chavez and go after this oil.
“Communist’s & Catholic’s Oil Co-Op”…or …”How Oil trumps theology”
Heavy crude = hard to pass US smog laws. Let the Chinese buy it. They don’t appear too concerned with pollution laws in their own country. This will benefit the US by increasing overall supply and hence cap world oil prices.
Exactly, Dennis. It all goes on the world market.
Let the Chinese develop the oil field. Then let Chavez nationalize it.
“Venezuela’s Orinoco Oil Belt is one of the world’s largest known oil deposits, and the U.S. Geological Survey says in a new estimate that it likely holds 513 billion barrels of recoverable heavy crude - nearly twice as much as the proven reserves of Saudi Arabia”
Those Venezuealan’s harbor terrorists. They’re very bad people with WMD.
I smell…an invasion !
Peak Oil?
What stands out to me is if you look at the BTU input cost of petroleum energy extraction it has been rising dramatically over the last 20 years. The energy recovery ratio is going the wrong way. The new technology costs are offsetting the fact that we keep finding oil and gas in hard to get places. It’s the same way with our food supply, it takes about 10 calories of energy input to get 1 calorie of food now. Back in the hay-day of our agricultural boom the ratio was 2-3 calories for 1 calorie output.
Nice foreclosure story from Albany Times Union today.
http://www.timesunion.com/AspStories/story.asp?storyID=892639
I wonder if any of those prospective bidders know about the mold. And, LOL Trapper! I love the way you called it “nice foreclosure story.”
Obama erects a Maginot line. FT ~ Published: January 22 2010
The best that can be said for Barack Obama’s latest plan for financial regulation – banning deposit-taking banks from proprietary trading and capping financial groups’ market share of funding – is that it shows he now sees only radical policies can crisis-proof the financial system. But the claim that these ones will increase stability is misguided, if not misleading.
Being cut off from trading securities for their own book will not stop banks from putting insured deposits at risk. Their inventiveness in finding ways to lose money knows no bounds, and the most time-honoured money-loser of all – making bad loans – remains available. While it is bad to subsidise banks’ bets on mortgage-backed securities, is it worse than backing their bets on plain old mortgages?
“Their inventiveness in finding ways to lose money knows no bounds…”
Rewrite:
“Their inventiveness in finding ways to award themselves bonuses… knows no bounds!”
“Their inventiveness in finding ways to privatize profits and socialize risks, with the witting complicity of Republicrat “public servants,” knows no bounds.
I just saw a couple of banksters studying a map of the Ardennes Forest…….
Love that video! This latest is about the fifth version I’ve come across. Lots of clever folks out there.
?????
“?????”
You are talking about the video with Hitler, aren’t you?
Other versions had Hitler upset about he recent election in Mass, the Presidential election in 2008, the mortgage meltdown…
Google-up “youtube hitler videos”. There’s a whole bunch of them.
Oh. I wasn’t talking about any videos.
The French didn’t extend the Maginot Line to cover the Ardennes front because some French general said “it’s impassible” to armored forces. So the Germans ran their armored divisions through there all the way to the Atlantic, knocking France out of WWII in about 6 weeks.
My point was than anything Obama may propose will be circumvented by clever banksters.
Was Glass-Steagall a “radical policy?”
While it is bad to subsidise banks’ bets on mortgage-backed securities, is it worse than backing their bets on plain old mortgages?
Wow, I haven’t seen anything this moronic in a long time.
Securitization is what made MBS’s so risky. Especially if you could buy a swap on the downside, because now you “can’t lose” and can collect your fee either way…so who cares about the underwriting standards?
If you are on the hook for the loan you give, then no ratings agency or mortgage insurer can protect you from your own stupidity or greed if you don’t adhere to good underwriting standards. Prop trading is no different from gambling with other people’s money.
“Securitization is what made MBS’s so risky.” That is the biggest load of bull I ever heard. What made them risky, and why they are having problems, is that the debt evidenced by the securties was priced at or near par when the underlying loans were not that great and housing was in an enormous bubble. Don’t be fooled by the spin masters. WMBZ is right. Bad loans make bad securitizations at par (or any unrealistic estimation of value). Good loans make good securitizations. It’s not really that complicated to understand that debt performance depends on the value of the collateral. Securitization itself was not the problem. If the underlying assets were not overvalued to begin with no one would even be talking about it. As for Obama’s view on risky loans, his association with ACORN says it all. He loves them.
Oh dear.
Securitization is the root of this whole mess. No ifs, no buts, and no, oh it’s just a problem of securitizing only the good loans. There are no good loans.
Securitization broke the banking system, because it removed any limits on the total amount of money individual banks could lend. That caused the underlying assets to be over valued in the first place.
It’s a little more complicated to understand that the value of the collateral itself, depends on supply and demand, and in particular the supply of loans to buy it. But not much. Take that supply away, as eventually it has to be, and poof. There goes everybody’s value.
Prejudice is a terrible impediment to rational analysis.
I agree you need to try to look at it with an open mind. I don’t know you experience with the subject matter but to think that value of debt is based on ability to lend rather than likelihood of getting paid debt service due is insane and fundamentally wrong. There was over estimation of the value of the collateral and the credit worthiness of applicable credit enhancers and liquidity providers. I agree the ratings were bad, but that can be easily fixed and is not what was proposed. Even the bond insurers got it wrong, see MBI and ABK.
Why is it prejudice when Natalie disagrees with Obama or others, but not prejudice when you disagree with her? Stop being a hypocrite and try to be civil.
How is Natalie disagreeing with Obama. Has he come out with a low to prevent securitization. I don’t think so. If anything she supports keeping the status quo, which is exactly what Obama has done up to this point.
Natalie is a paid disseminator of Wall Street propaganda.
If i dont support Obama, I support the status quo? That makes no sense. It is like saying if you dont support Bush you hate America.
“…if you dont support Bush you hate America.”
‘You’re either with us or you’re against us.’
i dont support Obama, I support the status quo?
No I was saying just the opposite. If you support Obama you support the status quo. He hasn’t changed anything yet. It’s all been lip service.
“Natalie is a paid disseminator of Wall Street propaganda.”
That brings up an interesting question: Which current posters here fall into this class?
- Eddie?
- Joey?
- Natalie?
- Anyone else whose name ends with the “ee” sound?
Cool.
Securitization is the #1 cause of this mess.
Why make good loans when you can take crappy loans and sell them as good loans due to rating agencies and the GSE’s that take all the risk off your hands.
Crappy loans would not have been made if banks had to keep the loans on their books and CEO’s bonus payments were tied to the long term performance of those loans.
I am certain that Natailie is a member of the Wall Street program to infiltrate blogs. There is just no way you can deny securitization was a major cause of this mess unless you are bought and paid for by GS.
“Why make good loans when you can take crappy loans and sell them as good loans due to rating agencies and the GSE’s that take all the risk off your hands.”
I agree government involvement in this mess is messed up, and securitizations should be left to the investment banks and free market. As for rating agencies and transparency, those areas need work and is not what is being focused on.
GSE’s actually controlled a smaller percentage of the market in 2004-2007 than they did in 2002. Most of this bad crap was sold to pensions, and conservative investment funds. Securitization was the problem.
Again Natalie I strongly suspect that you are a poster who is paid. There is no way anyone with a brain or a shred of honesty can make the statement that securitization was not a problem.
There was a problem with valuation and ratings, not with the concept. Can you articulate the problem securitizations represent if the assets are fairly valued and the risks are known?
See below
“……and securitizations should be left to the investment banks and free markets.”
You must be kidding me . Do you really think that Wall Street should have the right to throw any piece of innovation
on the market ,in spite of it’s potential risks ,especially when
it had not been tested and create the potential for entire financial failures of entire systems ? Thats like saying that a car company should be able to throw a car with untested breaks on the market ,and lets just see what happens .
These were crooks that just thought of a way of taking vast amounts of money and making money off it by
using securities to do it ,and by mis-rating them. I heard one insider say that the only problem with their risk models was they had not included fraud as one of their risks . What ,fraud isn’t considered as one of the risks . Thats the main reason for underwriting loans ,to prevent fraud or liar loans applications or fraud on appraisals or cash back fraud and on and on . Lets get serious here ,in their unbridled greed ,the
market makers failed to do their duty regarding lending and
improperly offered high risk paper and mis-rated the risk
,in large part based on their breach of duty to underwrite loans and prevent fraud . Serious breach in fiduciary duty ,so
Wall Street has proven that giving them freedom results in
them taking advantage of it ,in what some would call a criminal way .
I would like to extend an olive branch to both Natalie and warlock in the hope that the excellent perspective you both bring to the discussion here does not get obliterated in a vituperative cloud of mutually destructive contumely.
Love ya PB.
If you are just saying that no one will perform due diligence if they buy a security I am not sure you know what you mean. Most of the higher rated paper was insured. The bond insurers got it wrong and are on life support. See ABK and MBI. They were as dumb and greedy as the ppl willing to pay bubble prices. Do you really think we need hasty legislation from an angry man with no economics background or history of any interest on the subject other than working for ACORN to make bond insurers to start doing more due diligence. I agree Credit Default Swaps and some OTCs need to be regulated, but do you think that Congress even knows the difference between CDS and IR swaps? Do you think many could do well on a test on the securitization process and how derivatives work? If we stop the bubbles at the ground level and increase transparency, it will be more efficient and might actually work. Regulating things they dont understand will just mess things up.
I really think you are wrong to support these exotic financial instruments and I think Adam Smith would back me up.
It’s the complexity of the whole financial system that is it’s Achilles’s heel. In theory they work but you can’t model human behavior so they all fail eventually. I wrote computer code for 20 years and no mater how ‘elegant’ the program it was the incredible complexity we had to build into software that would cause the biggest problems. Remember the F-22 that crashed because it’s software screwed up during take-off. Lockheed spent 15yr. and 30 billion dollars developing that airplane and a few lines of bad code wiped out a 350 million dollar airplane.
Apparently Wall Street made up risk models for lending funds for securities . Apparently they were claiming because they broke up the securities into trenches of risk ,this spread out the risk
therefore they could chuck long term lending principals because the risk was spread-out by the MBS trenches . Actually they set it up whereby the trenches would be in a conflict of interest position . Not only was the securities structure flawed ,but
that structure did not change the risk based on long term lending principals .
So you had all this money flooding the market for lending to the point they were giving a loan to anyone willing to sign on the dotted line .
The point is that if you have unqualified buyers making up the market and they aren’t even putting any skin in the game by low/no down payments ,you created a fake market by faulty lending risk models and a breach of duty to underwrite or prevent fraud
I don’t know how the Market Makers could possibly justify
this misuse of funds with bogus risk models and ratings or condone the crazy loans that were developed ,and than fail to underwrite as if it didn’t matter if a bunch of people submitted liar loans .The fake market drove up the cost on property ,the insurance /taxes and every other product went up in value because of all this money generated by real estate fake values .
You can’t just make a loan based on real estate always goes up . That isn’t the way you make loans . Loans aren’t made on future potential value of the property . A person makes a investment perhaps based on that principal ,but you don’t make a loans based on that principal and its mostly the borrowers ability to pay the loan and the skin in the game they have,and accurate value of the property . Serious rules have to be applied to the risk factors in any loan. It’s just unbelievable what they did . Thats why Investment firms should never be a lender. This group were a bunch of crooks
as far as I’m concerned .
In addition ,in response to somebody above who was defending these securities ,IMHO ,they need to go back to the drawing board .
Does Volker have an economics background?
Paul Volcker was chairman of the Board of Governors of the Federal Reserve System from 1979 to 1987, and is Professor Emeritus of International Economic Policy at Princeton University. He worked in the federal government for nearly 30 years, serving in office under five presidents. He is currently director of, or consultant to, a number of corporations and nonprofit organizations. Volcker is a founding member of the Trilateral Commission and has been awarded numerous honorary degrees.
Guts or a PhD?
* Jul 2nd 2008, 14:50 by The Economist | NEW YORK
(Due to an editing error this post was given the wrong byline. It was written by Richard Baldwin of VoxEU dot org.)
WHEN Paul Volcker, Stan Fischer, Jacob Frenkel and Jean-Pierre Roth discussed what central bankers and academics learn from each other at a conference last month, the line that stayed with me was Mr Fischer’s comment that “central banking has become a profession.” The current Bank of Israel governor went on to claim that academic economics was a big help to him in trying to decide how to run Israel’s monetary policy. Mr Frankel, who formerly held Mr Fischer’s job, agreed and said that having an economics PhD was a plus. But Mr Volcker, a former chairman of the Federal Reserve, would have none of it.
A central bank governor’s most essential trait was “guts” and some management abilities, said Mr Volcker. When discussing Ben Bernake’s qualities, he focused on the Fed chairman’s two terms on the local school board; Mr Bernanke’s MIT PhD, Princeton professorship and outstanding research were only also-run traits.
Now, unlike Mr Frankel and Mr Fischer (both star professors of economics before turning to central banking), Mr Volcker does not have an economics PhD; he has a Harvard MA in political economy and two years of study at the London School of Economics. Despite this, he is frequently called the best central banker ever.
…
Master of (gasp) ARTS? Say it ain’t so, PB! Say it ain’t so.
I’d rather just do away with securitization or at the very least make banks keep a sizeable portion of their loans on their own books.
Do we need hasty legislation??? That’s laughable, the crisis is going on 2 years now, and we’ve had essentially zero legislationreform . It’s been buisiness as usual.
Can you please cite obama’s detailed plan before before the senate issue or are you just making it up? Just because others had plans has nothing to do with obama’s apparent new found sense of urgency. One of the reasons that we lost health care is that he wanted to ram it down ppl’s throats before giving it careful thought. Now he lost that one, he just grabbed a new box of toys to play with that he doesnt understand.
Actually, it looks like he may lose on health care precisely because he didn’t ‘ram it down ppl’s throats’ but instead gave it to congress to royally screw up.
“While it is bad to subsidise banks’ bets on mortgage-backed securities, is it worse than backing their bets on plain old mortgages?”
The current incentives for making really stoopid mortgage loans to borrowers who are unlikely to ever repay them are very simple to eliminate:
1. Legislators in all the economically developed countries should pass laws forever more outlawing taxpayer-subsidized too-big-to-fail bailouts.
2. To ensure that economic crises do not erupt which create pressure for ad hoc bailouts of the financial system (like the U.S. government Wall Street bailout of Fall 2008), the too-big-to-fail Megabank, Inc cartel members need to be chopped up into non-systemically-risky pieces.
3. Take any further measures necessary to put a firewall between Wall Street’s casino gambling operations and Main Street taxpayers. What happens on Wall Street should stay on Wall Street.
What could be simpler than eliminating moral hazard in the financial system?
But if they can’t be huge, corrupt, and quasi-nationalized(backed by the gov but keep all the profits), how will they compete globally?
Nothing really, except the part that where it collapses as soon as you do that.
Fine. So what do you suggest?
1. Do nothing?
2. Gradually fix the problems while pretending to not fix them?
3. Try to reflate in order to turn back the clock on the TBTF systemic risk problem that brought the financial system to where it stands today?
4. Something else?
Since we like songs here….
Now imagine me in the Maginot Line
Sitting on a mine in the Maginot Line
Now it’s turned out nice again
The Army life is fine
French girls make a fuss of me
I’m not French as you can see
But I know what they mean when they say “oui, oui”
Down on the Maginot Line
Now imagine me in the Maginot Line
Sitting on a mine in the Maginot Line
Now it’s turned out nice again
The Army life is fine
The enemy we had to chase
But my gun got out of place
I went and shot the Colonel in the base
Down on the Maginot Line
(Ukulele Break)
Now imagine me in the Maginot Line
Sitting on a mine in the Maginot Line
Now it’s turned out nice again
The Army life is fine
At night, myself to sleep I sing
To my old tin hat I cling
I have to use it now for everything
Down on the Maginot Line
Bad checks, foreclosure, unpaid bills plague commissioner
A DeKalb County commissioner tasked with overseeing a $600 million budget has written several bad checks and has had her house foreclosed on and her wages garnished.
On Saturday, Commissioner Sharon Barnes Sutton told the AJC that she has made some mistakes, but her financial struggles help her better relate to taxpayers.
“I’ve lived through it. It makes me more equipped to do what needs to be done,” she told the AJC. “When I look at it, I’m looking at our budget and seeing the people behind it. It’s not just numbers.”
Sutton’s finances have been under scrutiny since Thursday when the AJC learned she had four outstanding warrants for writing bad checks at a Costco in Gwinnett County.
The warrants, which were a year old, were discovered when Sutton was involved in a minor traffic accident Wednesday night on LaVista Road, according to police reports. She has since repaid the debt, which was a little over $1,000, and had a Gwinnett judge recall the warrants.
DeKalb officials are investigating the police who allowed Sutton to leave the scene of the accident despite the outstanding warrants.
“… her financial struggles helped her relate to taxpayers.”
Convicts should be prison wardens because their experience helps them relate to prisoners.
Patients should be doctors.
Drug addicts should be in charge of dispensing drugs.
Criminals should be lawyers. (Oh, wait…)
Hackers write anti-virus software.
Burglars should install burglar alarm systems…yes they did that for ADT back in the 90’s in South Carolina didn’t matter if you were an ex-con just as long as you worked cheap.
450,000 at risk in foreclosure-prevention program
By Tami Luhby, January 23, 2010: 7:25 AM ET
NEW YORK (CNNMoney.com) — Hundreds of thousands of troubled homeowners who are making lower mortgage payments on a trial basis are at risk of being kicked out of President Obama’s foreclosure-prevention program.
Companies that service the mortgages have until Jan. 31 to review all trial modifications that have been underway for several months under the Home Affordable Modification Program (HAMP), according to a Treasury Department guideline issued late last month. The Treasury Dept. said it would issue new guidelines next week, but wouldn’t give details.
During the review period, servicers must determine whether borrowers have made all their payments and have handed in all the necessary paperwork. Those who haven’t will get letters giving them 30 days to comply.
The goal is to clear up the backlog of borrowers stuck in trial modifications, in which a homeowner’s monthly payments are lowered to no more than 31% of pre-tax income.
Some homeowners have spent seven or eight months waiting to hear if they qualify for a permanent adjustment to their mortgages.
This directive, however, has some bank regulators concerned.
“About 450,000 homeowners currently have HAMP trial modifications and have demonstrated a willingness and ability to make timely payments for at least three months,” said Richard Neiman, superintendent of the New York State Banking Department.
“Now, unfortunately and very alarmingly, these same homeowners face the prospect of foreclosure strictly on account of documentation issues,” he said.
Paperwork has proved a major stumbling block for the president’s foreclosure-prevention program. Homeowners complain that their servicers continuously lose the documents they send in, while financial institutions argue that borrowers have not been sending in their paperwork.
Aware of the problem, Treasury officials said they plan to issue new guidance to servicers next week that will help expedite the conversion of borrowers in the trial period to permanent modification. It may also lighten the documentation requirements.
Some accounts indicate that merely by entering these loan-modification programs, FBs are suddenly discovering their FICO scores take a big hit and so does their credit eligibility - as it should.
“Some homeowners have spent seven or eight months waiting to hear if they qualify for a permanent adjustment to their mortgages.”
… in the meantime they struggled to keep up with their mortgage payments rather than walk away, leaving the money-consuming alligator to the bank.
This mortgage modification program is working just fine.
Hampering the pocketbooks, you mean
In other words, corporations and unions should not be permitted free political speech.
For one, corporations have no nationality. The big ones are all multinational and many so-called American corporations have moved offshore to avoid American taxes. Likewise no corporation limits shareholders to American citizens. And absolutely nothing in this ruling prevents foreign corporations from meddling in American politics.
Here’s a list of the world’s largest corporations
http://money.cnn.com/magazines/fortune/global500/2009/full_list/
Lots of Chinese, Russian, European, Brazilian, Japanese etc. corporations on that list. Are you REALLY comfortable with the prospect of a state-owned Chinese corporation pouring millions of dollars into a local congressional election where they might have some financial interest at stake? Or say a foreign mining company pouring millions into a congressional district where they have mining interests subject to possible increased regulation? I can think of hundreds of possible examples. The possibilities for corruption just went up 100-fold and the possibilities for extortion are even greater. A corporation doesn’t even have to spend the money anymore, they only have to threaten to do so.
Why don’t we let the tens of millions of illegal aliens in this country vote as well while we’re at it. At least they are actually living here.
Meanwhile while we give foreign corporations unlimited speech, actual American citizens find their free speech restricted. Ever heard of the Hatch Act? Federal employees, military, police and many other employees have their political speech restricted. Churches also have their political speech restricted due to their non-profit status. Yet multinational corporations must be given unlimited free speech or the constitution is shredded?
Back when the constitution was drafted the only corporations were foreign companies like the British East India company, the Hudsons Bay Company and the Dutch East India Company. There’s no indication our founding fathers were interested in granting them unlimited ability to influence our elections. To the contrary.
Are you REALLY comfortable with the prospect of a state-owned Chinese corporation pouring millions of dollars into a local congressional election where they might have some financial interest at stake?
See the discussion above. No, I’m not particularly comfortable with this prospect, but I’m even less comfortable with the idea that the government can decide what kind and quantity of speech is allowed. It’s the same as with the health care debate: yes, corporations have made a huge mess of things, but handing the system over to the government is going to make it even worse. That’s going in the wrong direction. A better solution would be to de-corporatize the whole economy and revert to a free market of individuals and small businesses.
The restrictions on speech by churches, etc. are indeed a disturbing precedent. The Faustian bargain of trading away one’s free speech rights for tax advantages should really not be an option. But this is probably a somewhat smaller scale problem.
MONEY does not equal free speech.
Corporations are not individuals.
I find it amazing that the right can swallow this.
They will be the first to cry when eminant domain is used to take their property, and when corporations dump toxic crap in their fishing stream and local courts and politiceans are bought and paid for. Seriously you want to give Wall Street even more power? You want to give Chinese companies the right to buy US politicans. They could donate far more through a shell company than most tax payers.
I am truely amazed, I thought this issue would be by partisan. The Chriss Dodds of the world won’t have to rely on secret loans from Country Wide to get their bribe, they will get actual cash.
Bank of America Foreclosed Wrong Home
NEW BEDFORD, Mass. (KFSN) — A lot of people are facing foreclosure nightmares these days but imagine going through the ordeal when you don’t even have a mortgage.
That’s what happened to the Cardosos in New Bedford, Massachusetts.
Bank of America seized the couple’s rental home in Florida, evicted the tenants there, and locked it up.
The bank said the Cardosos were late on their mortgage.
But they don’t actually have a mortgage because they paid cash up front when they bought the property.
“We have a lot of friends there and we’re telling them the house has been paid for and now they think we lying,” said the foreclosure victim, Maria Cardoso.
“All of a sudden you find out your house has padlocks, tenants scared to death to stay there and they move out and your personal belongings taken,” said attorney Joseph DeMello.
It appears three address numbers were wrong on a court document - which led Bank of America to foreclose the wrong home.
A spokesperson says the bank is willing to work with the couple. But they have now filed a lawsuit in federal court.
It could have been worse.
Bulldozer operators have at times been given the wrong addresses and thus bulldozed the wrong houses.
How many police SWAT teams have staged no-knock, late-night home invasions of innocent people on the strength of testimony from drug-addled snitches or some idiot transposing address numbers when preparing the raid warrant?
“It appears three address numbers were wrong on a court document - which led Bank of America to foreclose the wrong home. ”
It sounds like an innocent mistake. How can anyone possibly expect BoA to keep track of the addresses of all those hundreds of thousands (millions?) of Countrywide-financed homes whose occupants are destined to face foreclosure after the next several years?
Once is a mistake.
Twice is incompetence.
Three times suggests malice.
Note the comment “I don’t think their case has merit.” Um, you illegally entered the house, changed the lock, allowed it to be damaged and have items removed, and basically screwed these people over, and you don’t think the case has merit?
It’s not so much what happened as the fact that they’re treating these people so badly. Anyone can make a mistake, but the appropriate thing to do is “make it good.” (My husband suggested that if they need those bonuses to attract the “best and brightest,” and those B&B are the ones who approve policies like this, does that mean that you should start with those bonuses as a target number for punitive remuneration?)
“A spokesperson says the bank is willing to work with the couple. But they have now filed a lawsuit in federal court.”
Oh hell YEAH.
I think I just got scoped for burglary. A lady knocked on my door and asked to speak with Joe. I know everyone in the hood and I have never seen her. Also, a Joe has never lived here.
Do you have a large, rather unfriendly dog in the house ? Or a little one which barks a lot ? Either might prove helpful…
The sound made by racking of a shotgun round into the chamber makes for an interesting doorbell.
Hey, why not wire up the doorbell to a recording of a growling pitbull?
Back in college I had a roommate in a shared rental house situation who was a bouncer at a local bar. For some reason we frequently got the Mormons, Jehovah’s Witnesses, etc. He liked to open the door in his “wifebeater” t-shirts, muscles bulging, and glare at them, and then shout back into the house “Honey….the M*** F****ers are here again, bring me my d**n shotgun!!” And then as whatever missionary scurried off our porch he would scream….”Hurry damnit, they’re getting away!”
Thank you for the great laugh combo.
BTW, here’s a company that does have a doorbell that sounds like a dog barking: http://www.ichime.com
1. Are you the only couple of your skin color (or one of a small minority thereof) in a racially diverse neighborhood?
2. Are you in the upper 1/4 of the household income distribution for your area?
3. Is the crime rate in your area higher than what would enable your wife to sleep well at night?
4. Would it be possible to spend a little more money to rent in an area which avoided the aforementioned drawbacks?
If you answer yes to these questions, then carefully consider the tradeoff between housing cost and crime risk next time you relocate. Having faced this tradeoff several times myself over the years, I understand it first hand.
Generally speaking, you will be safest in an area with low crime rates, where the houses are of similar description with respect to physical characteristics and demographic composition of the occupants, and where your own household appears to be in the bottom half* of the wealth distribution. I don’t mean to sound racist by including skin color on the list (in fact, I have neighbors of various different racial backgrounds); I am just pointing out that there are potential risks with standing out as the only one of your racial group in the vicinity of where you live (i.e., you may become the victim of someone else’s racism).
* It is OK if you actually are in the upper half of the wealth distribution, as long as you don’t keeps lots of expensive toys on display around your home to attract robbers away from more promising targets.
I’m a low life minority skin in an area of mostly asians. Seems that the Asian males over the age of 35 tend to glare at me. The twenty-something asian males are polite and do not display any sense of being threatened by me. I admit I see a lot of white guys in this town with Asian females, and I know that has a lot to do with asian male angst. I am also a minority in my work place. I was invited to lunch once by two young asian females at work. I turned them down, stumbling over my words, with the thought of the asian males at work being upset. Seriously, some asian males at work told me a few stories about the friction caused when white guys try to pick up on Asian employees.
There were times when I consider going to HR to complain about the racism, but I won’t do it until I am gone to a better gold mine.
1. Are you the only couple of your skin color (or one of a small minority thereof) in a racially diverse neighborhood?
No
2. Are you in the upper 1/4 of the household income distribution for your area?
No
3. Is the crime rate in your area higher than what would enable your wife to sleep well at night?
No
4. Would it be possible to spend a little more money to rent in an area which avoided the aforementioned drawbacks?
No
———–
We thought of most of this last time we moved. Our unique rental situation allows to rent in an area mostly inhabited by snowbirds, doctors, and other people with mysterious wealth that are quiet. My neighborhood has some of the most expensive homes in Pinellas County (most expensive sold, actually) — this is one of the reasons Florida drives me nuts.
Sorry — sounds like you covered the bases. There really is no way to completely avoid crime risk of which I am aware. In fact, just last week, someone who lives less than a mile from us was hit by a home invasion robbery.
One reason I bought in the subdivision I did here in Boise is that it’s a favorite of cops. Lots of cops bought houses here. You see cop cars parked in the driveways on every street. Funny thing - no burglaries in the neighborhood!
Too bad you got rid of the allegator in the back yard.
From an old Amos ‘n Andy episode:
“Not only do I deny the allegation, I deny the allegator!”
Climategate continues… and I note that bloggers helped break the story.
More power to free speakers who voluntarily blog in the interest of disseminating the real story!
From The Sunday Times
January 24, 2010
UN climate panel blunders again over Himalayan glaciers
Claims of melting Himalayan glaciers have been cited in grant applications
Jonathan Leake, Science and Environment Editor
The chairman of the UN’s Intergovernmental Panel on Climate Change (IPCC), has used bogus claims that Himalayan glaciers were melting to win grants worth hundreds of thousands of pounds.
Rajendra Pachauri’s Energy and Resources Institute (TERI), based in New Delhi, was awarded up to £310,000 by the Carnegie Corporation of New York and the lion’s share of a £2.5m EU grant funded by European taxpayers.
It means that EU taxpayers are funding research into a scientific claim about glaciers that any ice researcher should immediately recognise as bogus. The revelation comes just a week after The Sunday Times highlighted serious scientific flaws in the IPCC’s 2007 benchmark report on the likely impacts of global warming.
The IPCC had warned that climate change was likely to melt most of the Himalayan glaciers by 2035 - an idea considered ludicrous by most glaciologists. Last week a humbled IPCC retracted that claim and corrected its report.
Since then, however, The Sunday Times has discovered that the same bogus claim has been cited in grant applications for TERI.
One of them, announced earlier this month just before the scandal broke, resulted in a £310,000 grant from Carnegie.
An abstract of the grant application published on Carnegie’s website said: “The Himalaya glaciers, vital to more than a dozen major rivers that sustain hundreds of millions of people in South Asia, are melting and receding at a dangerous rate.
“One authoritative study reported that most of the glaciers in the region “will vanish within forty years as a result of global warming, resulting in widespread water shortages.”
…
Background
* Carnegie grant announcement from The Energy and Resources Institute
* EU grant announcement of research into rapid glacier melt
* How bloggers helped break the story
Related Links
* Global warming and disasters link ‘wrong’
* Sloppy science is seeping into the climate watchdog
* World misled over glacier meltdown
Follow the money.This is becoming big business.
Not only that, but the money is now considered to be “speech.” I can’t help but wonder whether this will increase the flow of money from corporate interests to support junk science to support the financial and political objectives of the funding source.
..scanning TV channels i came across that game show.. whats it called.. hmm.. oh yeah.. Family Feud.
The “hidden answers” come from a public poll, rated from most common to least common replies to some question..
———-
The question is asked, “What do I know about this planet?”
Top ten answers on the board.. contestants start guessing.
“It’s round.” Correct! (number one answer)
“It’s mostly water.” Correct (number 4 or 5)
“It’s the third planet from the sun.” BUzzzz.. wrong. Not on the list.
Contestants fail to guess all 7 (?) so the host reveals the rest.
The second most popular answer was “Global warming”.
The satellite photos are fakes! NASA is making a play for global dominion!
Climate change has been going on throughout the Earth’s history. Any recent warming trend has been going on since the 1800’s - back when there were fewer than a billion people and the only industrial contries were Britain, Germany, and the US. People may forget that John Muir was a climate scientist. Muir did a study of glaciers in the Sierra Nevada starting in 1880 and showed how they were retreating even at that time. What’s necessary is to figure out how much is due to natural processes and how much is due to human activity.
I just hope that Mother nature doesn’t bring on another “Little
Ice Age “. From what I understand it was a bitch ,but than again drought isn’t any fun either .
Well, here in Alaska, every glacier in the state is rapidly disappearing, seasonal water shortages are worsening, and many coastal villages are washing away from rising sea levels (I’ve talked to a couple of Native Alaskans who live in those villages personally).
I wonder how the global climate conspiracy managed to fake all of those things?
here in Alaska, every glacier in the state is rapidly disappearing
Sounds like a lot of land is going to become available for development. I guess they really are making more land.
NoSingleOne,
I think the issue is not “is the planet getting warmer” but what is causing it if it is. Junk science only serves to line the pockets those that report/trade on the faked science.
Therefore, if:
1)The sun is getting hotter,
2) China and India are spewing out more pollutants and/or
3) One volcano can generate more pollutants than all of the cars in the world,
Why should we (US) hinder our production and waste money on other sources of energy when the real cause of the problem is something else?
It’s not how much money we spend on something, it’s what can we do to effect change. IMO the US has done a great job cleaning up our act, just look at the environment in the late 60’s and early 70’s.
Peace
It’s hard to tax the sun or the volcano, don’t ya think?
Yeah, seems everyone is ignoring the anecdotal evidence from around the world and focusing on a few typos in a paper published a couple of years ago.
Right. Seems like everyone is also ignoring the historical evidence that Greenland used to have trees and grass and was in general “green”. The global warming at that time was caused by a race of humanoids who vanished without a trace into space to escape the widespread global disaster and extinction the heat-up was about to cause. Those idiots back in the day first heated up the Earth enough to make Greenland green, and then they took off into space and thrust the Earth into the little ice age. Idiots.
LOL. The Vikings called it “Greenland” to get people to buy real estate there. It didn’t work out too well for the FBVs.
Uh-huh:
“At that time, the inner regions of the long fjords where the settlements were located were very different from today. Excavations show that there were considerable birch woods with birch trees up to 4 to 6 meters high in the area around the inner parts of the Tunuliarfik- and Aniaaq-fjords, the central area of the Eastern settlement, and the hills were grown with grass and willow brushes. This was due to the medieval climate optimum. ”
or:
“Interpretation of ice core data suggests that between 800 and 1300 AD the regions around the fjords of southern Greenland experienced a mild climate, with trees and herbaceous plants growing and livestock being farmed. Barley was grown as a crop up to the 70th degree. What is verifiable is that the ice cores indicate Greenland has experienced dramatic temperature shifts many times over the past 100,000 years.”
It’s all lies, right?
Nothing is “all lies”. Preacher said once, if you lie 5% you are a liar. Kind of made me reflect.
Are the birch trees actually in the ice cores? Cool!
“… and many coastal villages are washing away from rising sea levels…”
Lol. These villages must be connected to a different ocean than every other coastal village on the planet. This washing away of coastal villages by rising sea levels doesn’t seem to be happening anywhere else.
Except here: http://www.guardian.co.uk/environment/2009/dec/04/bangladesh-climate-refugees
from the article
“Migration is the only escape from rising tides of climate change in BangladeshSome 60% of Bangladesh is at risk of rising sea levels, contaminating fish stock, farmland and drinking water with salt
John Vidal in Moura, Bangladesh guardian.co.uk, Friday 4 December 2009
At an impromptu meeting in Moura village on the south-eastern coast of Bangladesh last week, 30 families said that their only hope of survival was to become climate refugees.
“The tides come into the village every two weeks. Twenty years ago the sea was far away. Now it’s a few yards and we fear that our children will die. We have lost our farmland and more than 50 people have already lost their homes to the rising sea. The drinking water is salty and there are no fish in the river. We all want to leave but where? We have no money, ” said Hayaun Nesa Khatong.
At the rate that this stretch of the Bangladesh coast is being submerged there is little or no chance of Moura or many other nearby villages being habitable in five years. Unless the local government finds increasingly scarce land to evacuate them to, the villagers will have no option but to migrate. Most will go to the slums of Chittagong, 20 miles away, or to the capital Dhaka.
Five hundred miles away in India, on the other side of the Bay of Bengal, researchers in the oceanography department at the University of Jadavpur in Kolkata say dozens of islands in the Indian Sunderban region are being regularly flooded, threatening thousands. Unexpectedly fast sea level rises and storms are forcing the Indian government to consider evacuating nearly 70,000 people in the next five years.”
This washing away of coastal villages by rising sea levels doesn’t seem to be happening anywhere else.
Geez, I guess the Eskimos are making it up then and the houses washed out to see must be fictional?
Google “rising sea levels” and Vanuatu, Nauru, Tuvalu, and Kirbati Islands. You will find articles discussing the fact that the disappearance of the lowest lying countries is accelerating after hundreds, if not thousands of years of stability.
How is this gonna work out when the Obamanomics Team is loaded with Wall Street insiders whose future employment opportunities are heavily dependent on how well they promote the interests of Megabank, Inc from within the walls of the cabinet?
Published January 23, 2010
Commentary
Obama takes on Wall Street
His administration is finally on the right track in cleaning up the US banking system
By VIKRAM KHANNA
‘IF these folks want a fight, it’s a fight I’m ready to have,’ thundered President Barack Obama after he announced the most radical proposals yet to reform the US banking industry on Thursday.
READY TO FIGHT
On the advice of Mr Volcker (left), President Obama wants to ban banks from proprietary trading and hedge-fund activities; and stop them from growing too big by capping their market share of liabilities
By ‘these folks’, Mr Obama meant Wall Streeters and their friends. They certainly have something to fret about now. The Obama administration is proposing two initiatives that could hit banks where it really hurts: banning them from engaging in proprietary trading and hedge-fund activities; and stopping them from growing beyond a certain size by putting caps on their market share of liabilities.
Several prominent economists and other luminaries - among them, former IMF chief economist and MIT professor Simon Johnson and former Federal Reserve chairman Paul Volcker - have been crying themselves hoarse over the last year, demanding just such policies, to no avail. At last, they have prevailed over the status quo-ists.
Political analysts will wonder why the White House dithered for more than a year before doing this. In January 2009, bankers were battered, bruised and begging for bailouts. Politically, at least, that would have been an opportune moment to discipline them with such regulations. But a year on, they have recovered and indeed prospered. Their stocks have risen, as has their clout and bargaining power.
Cynics will say that the Obama administration’s clampdown on banks is politically motivated; bankers will echo this view. Indeed, one eminent member of the profession - Michael Rees, CEO of wholesale banking and executive director of Stanchart - essentially did just that at a Singapore Press Club luncheon yesterday.
…
“President Obama wants to ban banks from proprietary trading and hedge-fund activities; and stop them from growing too big by capping their market share of liabilities.”
Glass-Steagal?
How well will anything stand up to UNLIMITED CAMPAIGN contributions.
Published January 23, 2010
‘Volcker Rule’ shifts power away from Geithner
(Washington)
FOR much of last year, Paul Volcker wandered the country arguing for tougher restraints on big banks while the Obama administration pursued a more moderate regulatory agenda driven by Treasury Secretary Timothy Geithner.
On Thursday at the White House, it seemed as if the two men had swapped places. A beaming Mr Volcker stood at President Barack Obama’s right as the president endorsed his proposal and branded it the ‘Volcker Rule’. Mr Geithner stood farther away, compelled to accommodate a stance he once considered less effective than his own.
The moment was the product of Mr Volcker’s persistence and a desire by the White House to impose harsher checks on the financial industry than Mr Geithner had been advocating, according to some government sources and political analysts. It was Mr Obama’s most visible break yet from the reform philosophy that Mr Geithner and his allies had been promoting earlier.
Senior administration officials say there is now broad consensus within the White House and the Treasury for the plan advanced by Mr Volcker, who leads an outside economic advisory group for the president.
At its heart, Mr Volcker’s plan restricts US banks from making speculative investments that do not benefit their customers. He has argued that such speculative activity played a key role in the financial crisis. The administration also wants to limit the ability of the largest banks to use borrowed money to fund expansion plans.
The proposals, which require congressional approval, are the most explicit restrictions the administration has tried to impose on the banking industry. It will help to have Mr Volcker, a legendary former Federal Reserve chairman who garners respect on both sides of the aisle, on Mr Obama’s side as the White House makes a final push for a financial reform bill on Capitol Hill, a senior official noted.
Advocates of Mr Volcker’s ideas were delighted. ‘This is a complete change of policy that was announced today. It’s a fundamental shift,’ said Simon Johnson, a professor at MIT’s Sloan School of Management.
Industry officials, however, said they were startled and disheartened that Mr Geithner was overruled, in part because they supported the more moderate approach he proposed last year.
‘His influence may have slipped,’ said a senior industry official who spoke on condition of anonymity to preserve his relationship with the administration. ‘But you could also argue that it wasn’t Geithner who lost power. It’s just that the president needed Volcker politically’ to look tough on big banks.
…
Denial ain’t the name of a river in Egypt…
Why look a gift-horse in the mouth? I’m just glad the ‘messiah’ has finally given his sermon on the mount, I don’t really care why he gave it. All the right pigs are squealing, so he must have hit his mark.
When all else fails, do the right thing. Isn’t that the American way?
It will be interesting when we hit the next brick wall. Tricky for them to pull the same crap as last year when we are all still alive to remember it. I think they do not see it coming.
You provide some reasons why I favor a BB reappointment. Replace him now as Fed chair, and whatever goes wrong from this point will be blamed on the failure to reappoint.
Bernanke reappointment poison pill:
If his reappointment falls through, any subsequent bumps in the road to economic recovery will be blamed by Megabank, Inc’s PR mouthpieces on the failure to reappoint him.
The Financial Times
Bernanke under pressure
By Tom Braithwaite in Washington and Patrick Jenkins in London
Published: January 22 2010 19:27 | Last updated: January 23 2010 01:30
Ben Bernanke’s prospects for a second term as Federal Reserve chairman were thrown into doubt on Friday as the Obama administration scrambled to shore up faltering support among Democrats in the Senate.
Congressional critics of Mr Bernanke, some fearful for their own re-election prospects and others critical of the Fed’s management of the financial crisis, moved against him, adding to a list of proclaimed no votes.
Democratic senators Barbara Boxer from California and Russ Feingold from Wisconsin, said that they would oppose Mr Bernanke in a vote that has been promised before the end of his term on January 31.
Mr Bernanke needs 60 votes to secure confirmation as a result of procedural blocking tactics.
Donald Kohn, the Fed vice-chairman, would serve as interim head of the bank if Mr Bernanke’s confirmation were rejected or delayed.
Other names circulated as possible permanent alternatives have included Mr Kohn, Lawrence Summers, the president’s adviser, and Alan Blinder, the Princeton University economist.
White House and Treasury aides said that President Barack Obama and Tim Geithner, Treasury secretary, were confident that Mr Bernanke would be confirmed by the Senate five months after the president announced his renomination.
Earlier, the vote of Harry Reid, Democratic leader in the Senate, had appeared to be in doubt, but he issued a statement that said: “While I will vote for his confirmation, my support is not unconditional.”
Economists warned that a rejection of Mr Bernanke could be seen as a threat to the central bank’s independence. US Treasury yields were little changed but stocks fell more than 2 per cent.
“A No vote on Bernanke would be viewed by markets as adding yet another uncertainty in an already fluid economic and policy environment,” said Mohamed El-Erian, chief executive of Pimco, the world’s largest bond investor.
Chris Dodd, the chairman of the Senate banking committee, said a No vote would send the economy into a “tailspin”.
…
Yep it wasn’t the banks that brought us to our knees it was those that didn’t bend over for the banks and their henchmen. Those that didn’t say thank you sir can I have another.
You’re right, measton.
The right people are squealing, which means Obama is on the right track. Let’s hope he isn’t derailed.
I called and wrote my Senators about opposing the Bernanke reappointment. I strongly believe failure should not be rewarded, including “saving the financial system” by someone who didn’t see it coming in time to prevent it or who thinks he did nothing to contribute to it is no accomplishment. I’ve gotten 3 of my friends to do the same.
Has anyone else taken a proactive approach in the last few days? Most of the Senate is deciding this weekend, and instead of political horse trading it would be nice for them to do what their constituents think is proper, ‘populist’ or not.
If you don’t remember the exact reasons why he is incompetent, google Jim Bunning’s video discussing BB on the Interwebz.
I wrote in about TARP. We saw how that went. I’ll be remembering when I pull levers in November.
Heard about Ellie Light yet? Seems she’s been writing to many newspapers around the country in support of The One, but she states that she lives in each newspaper’s city or nearby area.
Who is Ellie Light? Inquiring minds want to know.
www dot cleveland dot com/open/index.ssf/2010/01/letter_writer_claims_diverse_r.html
Search “Ellie Light” in Google News for more links.
Another PR ploy no doubt. I’m sure a lot of people really changed their minds because of good ole Ellie.
If Bill in Los Angeles lives in AZ, what state do you live in?
Like the old Dean Martin song says,
“Just a little bit south of North Carolina,
I’ll find paradise.”
Found it, actually.
“Just a little bit south of North Carolina,
I’ll find paradise.”
What he actually found : STD
Was she one of several who fainted during Obama’s presidential run?
A thousand points of Ellie Light?
The SD Union-Tribune has good news and bad news for would-be home buyers in our zip code (92127 — Rancho Bernardo West).
The good news:
The median home sale price in our zip code was down by 22 percent YOY (from Q4.2008 to Q4.2009).
The bad news:
1. As my loverly wife pointed out, the price is “still too high” ($510,000 in Q4.2009 versus $650,000 in Fall 2008).
2. There is no way to tell from the SD Union-Tribune’s obfuscatory presentation of the data to what extent the change in median price is driven by shifts in the quality of homes which are selling versus quality-adjusted price changes. (The quality-adjusted Case-Shiller/S&P Index sheds relatively more light on this question…)
Try not to catch yerself a falling knife!
Housing data show county’s ups, downs
Changes in median price are literally all over the map
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Sunday, January 24, 2010 at 1:33 a.m.
…
In downtown San Diego, hit hard by the overbuilding of high-rise condominiums during the boom years, Jim Abbott of ARG Abbott Realty said there are 411 listings in a market where there were 337 sales in the fourth quarter. The median price was $365,000, down 11.7 percent from a year earlier.
“There’s no question that the first crush of foreclosures that hit the market were snapped up by many all-cash investors,” Abbott said. “That actually stabilized the market and made it very competitive.”
Those investors are largely gone, replaced by owner-occupants who are stymied from buying because of lender rules that are tougher for condos than single-family homes.
“I really think we have another at least three to five years of this, because there’s so much inventory that’s not on the market,” Abbott said.
He was referring to the shadow inventory of foreclosures that banks have not yet listed for sale, plus homes previously offered for sale but taken off the market by owners who did not want to lower their prices.
The result is that as of last week, listings since July have dropped 35.6 percent to 4,706 single-family resale homes, according to the San Diego Association of Realtors. Resale condo listings were down 45.4 percent to 2,571.
Jorge Vega, broker for Community HousingWorks, said the declining inventory of starter homes is forcing first-time buyers to increase their down payment offers to compete against all-cash buyers. Vega said those who want to take advantage of the $8,000 federal tax credit, plus those eligible for the $6,500 move-up tax credit, should be aware of the April 30 deadline.
“I think the market is beginning to demonstrate some consistency, but overall, San Diego’s numbers are so varied that I think we’re still in for some surprises before this is out,” Vega said. “Toward the end of the year, we will be able to have a clear picture of what’s going on.”
Yesterday, as quoted in the New York Times, Barack Obama stated that he will try to re-inflate the housing bubble:
According to the article:
The president used the word “fight,” or some version of it, more than 20 times.
Mr. Obama vowed to “never stop fighting for policies that will help restore home values.” He promised that he was “not going to stop fighting to give our kids the best education possible.” He pledged he would not “stop fighting to give every American a fair shake,” to continue fighting for a new Consumer Protection Agency and for openness in government. And of course, Mr. Obama pledged to fight for jobs.
I presume by “home values” he means “home prices.”
I don’t see how re-inflating home-prices will give every American a fair shake. It certainly doesn’t help people looking to buy a home they could truly afford. And it doesn’t help me, a true homeowner with a 100% paid-up house: all it means is I’ll have property tax inflation.
Barack Obama doesn’t care about working people or taxpayers. I’m scratching my head of who, exactly, he’s reaching out to.
“I’m scratching my head of who, exactly, he’s reaching out to.”
One guess: Wall Street banks with lots of toxic MBS they need to unload?
Of course. But his “community organizer” constituency of “useful idiots” think he’s helping them, so it’s a win-win
BO is beginning to exhibit traits of the beta-male..
..The president used the word “fight,” or some version of it, more than 20 times…\
“When you have to shoot, shoot - don’t talk!” — The Ugly
He already shot. Apparently you somehow missed the news.
I’ve heard what he’s said. Now I’ll see what he actually does. It’s possible his gun is filled with blanks. This “shooting” may be no different than the Fed’s strong dollar policy.
“It’s possible his gun is filled with blanks.”
I admit it is way too early to tell whether there will be commensurate action to follow the rhetoric. Talk is cheap; action is dear.
Let the financial reform dilution process begin. I suppose the bankster lobbying effort now is fully protected under the First Amendment as free speech.
Bankers to lobby for softer reforms
By Chrystia Freeland in New York, Gillian Tett in London and Tom Braithwaite in Washington
Published: January 24 2010 23:18 | Last updated: January 24 2010 23:18
Senior Wall Street bankers heading to the World Economic Forum will use the meeting in Davos to lobby regulators against a rigorous implementation of Barack Obama’s plan to cap the size and trading activity of banks.
They will also oppose the break-up of large financial institutions and insist there should be a concerted effort to tackle the “too big to fail” issue by other regulatory means.
“It’s not about being too big but about the interconnections,” said one banker. Executives said they would push quietly against the reforms to avoid giving the US president the “fight” he promised last week.
George Soros, the billionaire financier, welcomed the president’s plan and predicted it could reshape big Wall Street banks. “If the legislation were carried through, it would certainly mean the end of Goldman Sachs as we know it,” he said.
…
‘”Its not about being to big but about the interconnections’ “,said one banker . ” ‘
I would tend to agree with this statement ,however since they recently allowed the mergers of Big Investment Firms with Regulated Big Banks those interconnections are even more pronounced . One would think that Investment Banks don’t think they can make enough money without bank activities (or access to money or lending ) and banks can’t make enough money without investment activities and casino games and they want what the other entity has . What is the biggest thing that holds Wall Street back from making
money ? It’s if they don’t have other peoples money to make investments . They don’t care if its loan money for securities or what kind of money it is ,as long as they can get their hands on money to churn or play Casino games ,or leverage it . Banks feel limited by only being able to lend with higher reserve requirement and only being able to make conventional loans. There is so much more big bucks in casino games ,and churning lending funds for greater profit .
What is the big deal about separating them again into investment firms or lending banks and redefining the rules of the game .
The point is that the principals of lending are different than the principals of investment and casino games .
Wall Street investment firms turned lending into a high risk casino game by allowing bad loans and not rating risk proper and than leveraging it up to make even more money . Lenders sold their loans into this secondary market made up of Wall Street securities and they than replenished their funds and made the next round of risky loans .
We shall defend our prices, whatever the cost may be. We shall fight on the beach houses, we shall fight on the landing condos, we shall fight in the fields and in the streets, we shall fight in the hills. We shall never surrender!
“We shall defend our prices, whatever the cost may be.”
And in addition to all of these housing price support measures, and we will also promote affordable housing…
Obama appears confused this week. One day he’s Henri Maginot, the next he’s Churchill.
Ooops, I meant Andre Maginot.
Hmmm. And I was just about to consider giving him credit for the upcoming attempts at busting up the banking cartel, just announced this week. Now, he comes out “fighting” for a policy for whom the only real beneficiaries are… the banking cartel?
I know it’s been said at least 10,000 times here before, but wouldn’t it be much easier to just do nothing further to support them, and let them fail on their own? Much easier to pass laws preventing the next generation of too-big-to-fail trusts, than it is to bust up the existing ones.
Dennis, that is LOL funny.
That was brilliant, DennisN!
Hm. If Bernanke can’t be reconfirmed, maybe Obama will name Volker. One can hope.
It seems highly unlikely. The man is 82 years old. How did things work out the last time the Fed was run by someone well along in his years?
Besides, in contrast to the opinion offered by MSM-favored economics ‘experts’ like Zandi, there are many other qualified (and younger) candidates for the position.
yeah.. Them old guys are half asleep most of the time. There oughta be an age limit for people who run the country. Some suggest 30, but even that’s too old, imo.
Sure signs you are reading a troll post:
1) Takes contrary positions on whatever point is under discussion.
2) Creates extreme straw man mischaracterizations of what the previous poster said.
3) Includes as many implausible statements as possible in a sound bite.
4) Leaves the reader wondering whether compensation was offered, or if some people just relish the opportunity to obfuscate and deceive as much as others enjoy discussing unvarnished reality.
Begs the question whether the Fed Chairman runs the Fed, or just runs the PR.
How about Elizabeth Warren? A woman in charge of the FED would do a lot to drain some of the testosterone in the Temple.
Elizabeth Warren is just another lap dog, IMHO. I haven’t heard her say anything that I didn’t already know. If Lawrence Summers wanted his helmet shined she’d be right there standing at attention with her knee pads waiting for his fingers to snap. Who needs another 4″ thick report explaining why Strawberry Pickers find it difficult to support a $700k mortgage?
http://www.larouchepub.com/other/2010/3702next_hyperinflation.html
Get ready for hyperinflation.
For how many more years will we get to enjoy the pleasure of this enduring stopped clock prediction?
Blah blah blah - maybe you should try pointing out any factual errors in the analysis rather than making mindless knee-jerk comments about the source.
I said nothing about the source; merely suggested that the (stopped clock) prediction has endured for some time already without coming to pass. Maybe in a few years (or decades) we will have hyperinflation, but I sure am missing the signs so far.
“…maybe you should try pointing out any factual errors in the analysis…”
OK, fine. Here goes:
‘This hyperinflationary process has already started in the financial sector, and is poised to take off in the consumer-price sector. When it does, our nation, and the rest of the world, will disintegrate.’
Notice how the writer asserts without bothering to offer a shard of evidence that “This hyperinflationary process has already started…”
I’m missing it. The stuff we regularly purchase to keep our little household afloat costs about what it did a couple of years ago.
What do some of you folks think inflation isn’t happening? Sure, RE is going down along with wages, but every damn thing else is going up!
I’ve seen 25% inflation at my grocery on just about every item. In many cases 50%. That’s hyper enough for me!
Some of you really ought to get out more often.
Next Comes Hyperinflation
by John Hoefle
Jan. 8—It is often striking to watch, during the holiday season, the way in which crises seem to fade into the background, only to emerge with new fury after the season ends. But this time, the crises never quite faded, despite all the soothing propaganda.
There was no big financial news during the season—no public disasters like the closing of a major bank—but nevertheless, there was the steady drip of bad news, of surging bankruptcies, home foreclosures, unemployment, and more, as the economy continued its relentless collapse. On the international front, the threat of nations defaulting on their sovereign debt took center stage, as it became clear that the collapse is global.
This unending stream of bad news is sufficiently chilling to reveal the fraud of the mantra of “recovery” emanating from the propaganda machine in Washington, on Wall Street, and other points British. If things are so good, why are they so bad?
The truth is that none of the problems facing either the U.S. economy, or the world economy, has been solved. Instead, the various scams which have been run under the guise of the “bailout” have only made matters worse. And the bill is coming due.
Saving the Bathwater
What caused the global economy to collapse? The myth, created by the international financier mafia, is that we had a “credit crunch” caused by the collapse of the U.S. subprime housing market. That, in turn, caused investors to panic and stop buying, freezing up the entire system. To restart the system, the central banks and governments flooded the banks with liquidity, becoming the buyers of last resort for mountains of toxic waste whose values, they assured us, would return once the panic subsided.
To listen to them blather, that is exactly what happened. Their quick and decisive action—heroic, really—saved the day, returned the banking system to health, and even turned a profit. They became legends in their own minds.
Problem is, none of it is true, except for the delusions. Economies do not run on money, they run on physical production and consumption—the production and consumption of food, the transformation of raw materials into useful products, and other useful activity. The strength of an economy lies not in its banks, but in its physical plant: its infrastructure, its agro-industrial base, and ultimately, in the creativity of its people.
The economy of the United States is based upon these strengths, or upon what used to be strengths. In recent decades, we have abandoned the American System of Political Economy in favor of that foreign trap known variously as the post-industrial society, the information age, and globalization. We have shuttered the greatest industrial economy the world had ever seen, in favor of becoming a nation obsessed with making money. In a true tragedy, we traded our factories for a casino; we quit producing wealth, so that we could get rich.
To compensate for the wealth we no longer produced, we began to accumulate debt in ever increasing amounts. As the balance sheets of our banks began to overflow with the new debt, new schemes were developed to repackage this debt into assets which could then be sold to other players in this expanding casino. The derivatives markets were born, piling layer upon layer of fictitious “assets” atop the growing debt.
While the debt grew exponentially, the ability of the economy to pay that debt shrank, as the shift from industrial production to services, information, and finance continued. We were clearly headed for disaster, and that disaster struck, in the Summer of 2007.
The only way out of this mess was to write off the unpayable debt, and launch an emergency effort to rebuild out productive base. But our glorious leaders did just the opposite. They moved to save the debt, and they did it through a combination of printing money at an unbelievable rate, and by even further austerity upon the working class and the productive sector. They threw out the baby, and kept the bathwater.
Everything described in this post is deflationary, not hyperinflationary.
Combotechie,
I only printed an excerpt from the article. If you read further in the article (I’ve provided a link) then it gets into hyperinflation:
“The consequence of this combination of pumping liquidity into the monetary system while collapsing the productive base, will be a dramatic debasing of the value of the dollar. Most people are familiar with inflation—where the currency gradually loses its purchasing power; and inflation is often used by bankers and governments to deal with burdensome debts, since it allows the repayment of the debts with cheaper currency.
“This process sometimes gets out of control, as it did in Weimar Germany in 1923, and more recently in Zimbabwe. When it does, ordinary inflation becomes hyperinflation.
“The faster the monetary authority pumps money into an economy under such circumstances, the faster the money loses its value. In situations where huge amounts of money are created, such as with the bailout process, the currency can actually begin to lose its value faster than it can be pumped in. This sets up a vicious cycle in which money must be pumped in at an accelerating rate to plug the hole, causing the money to lose its value even faster.
“This can happen with astonishing speed. In Germany, there were 5.5 trillion marks of paper currency in March 1923. By August, it was 668 trillion marks, and by December 1923, 497,000,000 trillion marks of paper currency outstanding. During the same period, the wholesale price index rose from 4,872 to 1,422,900,000. People were using wheelbarrows to carry cash, or burning it for heat. Merchants were marking up prices constantly, as the value of the mark plunged.
“Don’t be misled by the currency rates quoted in the daily newspapers. These rates are merely ratios among the market values of various currencies, in a period of global economic collapse, where the values of all currencies are actually plunging. In such a case, the rise of one currency against another could reflect nothing more than one of the currencies falling faster than the other. It is reality, not the statistics, that is crucial.
“This hyperinflationary process has already started in the financial sector, and is poised to take off in the consumer-price sector. When it does, our nation, and the rest of the world, will disintegrate.
“A variation on the old joke goes: The good news is that we’re all going to be trillionaires. The bad news is that that is what a loaf of bread will cost—if anyone can find one. It’s only funny until it happens.”
Okay, I read the entire article. It described what IS NOW HAPPENING by using such words as “collapse”, “panic”, “default”, “unemployment”, “forclosure”, and “bankruptcy”. These are words normally associated with deflation, not with inflation.
It uses such words as “hyperinflation” to describe what the writer THINKS WILL HAPPEN in the future.
Look around you: Do you see lots of dollars chasing few goods? Do you see billions on newly printed dollars in the hands of everyone? Where is all this money if people and various governments (towns, cities, counties, states, national governments) can’t get enough money to pay their bills?
Deflation is at hand, not inflation, and certainly not hyperinflation.
The future is fun to predict; it’s too bad the success rate of predictions of the future is so dismal.
Combotechie - read the full article (link above).
There is nothing that the Fed can do to stop the collapse of the biggest expansion of credit in history.
Nova,
That was another excellent link. He’s exactly right in everything he’s said about the crisis. I really don’t understand why anyone here would have a problem with what he says.
Can anyone remember all the stories a couple of years back which assured the recession-proof San Diego tourism industry would pull the economy through the incipient housing bust?
How is that prediction holding up so far?
Port committed to reviving business
San Diego’s cruise industry expected to see a sharp drop in passengers
By Lori Weisberg, UNION-TRIBUNE STAFF WRITER
Sunday, January 24, 2010 at 12:04 a.m.
Passengers disembarked from Royal Caribbean’s Radiance of the Seas and into San Diego’s current cruise-ship terminal Friday. The new terminal is under construction farther south along the Embarcadero.
John Gastaldo / Union-Tribune
Passengers disembarked from Royal Caribbean’s Radiance of the Seas and into San Diego’s current cruise-ship terminal Friday. The new terminal is under construction farther south along the Embarcadero.
Passengers disembarked from Royal Caribbean’s Radiance of the Seas and into San Diego’s current cruise-ship terminal Friday. The new terminal is under construction farther south along the Embarcadero.
Photo by Howard Lipin - Union-Tribune
The framework of the under-construction, two-story, 52,000-square-foot Broadway Pier cruise-ship terminal, with a portion of the downtown San Diego skyline in the background. It is expected to open in December.
Passengers disembarked from Royal Caribbean’s Radiance of the Seas and into San Diego’s current cruise-ship terminal Friday. The new terminal is under construction farther south along the Embarcadero.
Tourism-related businesses may be suffering one of the worst slumps in decades, but you’d never know it from the cruise industry, which continues to cram its behemoth liners with increasing numbers of paying passengers.
While globally, the outlook for the industry appears promising this year, San Diego will see a sharp decline in passengers with the departure this spring of its only year-round ship, the Carnival Elation.
Declining demand for three- and four-day trips to Baja California and escalating violence in Mexico persuaded Carnival Cruise Lines last year to discontinue the shorter, year-round cruises.
Where last year nearly 806,000 passengers boarded and disembarked from ships docked in San Diego, that number is expected to fall by more than one-third, to 507,000, the Port of San Diego forecasts. The 2,052-passenger Elation accounted for as many as 81 of the 223 calls ships made in San Diego last year.
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It’s not just the downturn in US tourism it’s happening in one of the fastest growing cruise markets in the Caribbean too.
“The latest tourism arrival numbers released by the Belize Tourism Board show that through October 2009, total international tourism arrivals (by air, sea and land) were down about 6% for the first 10 months in 2009 compared to the same period in 2008, and down about 6.5% from the same period in 2007.
For the first 10 months of 2009, there were 192,157 overnight arrivals, compared with 204,449 in for the first 10 months of 2008 and 208,553 in 2007. Only the months of April, September and October 2009 saw increases from the year before.
Since the number of available hotel rooms increased in the 2007-2009 period, hotel occupancy rates are likely down more than arrivals.”
Wal-Mart cuts more than 10,000 Sam’s Club staffers
http://news.yahoo.com/s/ap/20100124/ap_on_bi_ge/us_wal_mart_sam_s_club
NEW YORK – Wal-Mart Stores Inc. said Sunday it is cutting more than 10,000 jobs at Sam’s Club, representing about 9 percent of the warehouse club operator’s staff, as it outsources its product-sampling department to marketing company Shopper Events and eliminates another unit.
Employees were told the news at mandatory meetings on Sunday morning.
Sounds downright un-Christian.
Where’s Barney Frank? He could make the tears go away!
IIRC Costco also outsourced the “sample giver” jobs several years ago.
One in 11 Sams Club jobs were sample people. That seems awfully high.
Did anyone else hear the permarenters segment on Marketplace Money?! They interviewed a couple living in a nice house with a view of the ocean. And they mentioned being comforted and kept sane by the online community they found by googling “Housing Bubble”!
Many thanks for the lead. This is awesome!!! Maybe it is high time to start the RentersSupportGroup dot com blog?
But what is Nicolas Retsinas doing in this story? We used to regularly mock this jackass back when posters here plainly foresaw the incipient housing bust while he lived on in denial. Now I suppose he is one of the ‘experts’ who claims that ‘noone could have seen it coming’?
Friday, January 22, 2010
Listen to the show
The new breed of perma-renters
Joint Center for Housing Studies
The down economy has spawned a new breed of financially mature specimens, the perma-renter. Stacey Vanek-Smith reports.
TESS VIGELAND: What if you didn’t have to deal with the FHA at all? Or mortgage brokers? Or hiring a plumber to fix the faucet? Well, that would make you a renter. Home ownership used to be a given for, you know, grownups. But the down economy has spawned a new breed of financially mature specimens, the perma-renter.
Marketplace’s Stacey Vanek-Smith has more.
Stacey Vanek-Smith: Milan Mashonovich and his wife Rebecca Eggeman live in a three-bedroom house in Santa Barbara. They can see the ocean from their backyard.
Milan Mashonovich: So here we have a couple of fruit trees, and then on the other side, you can see the Channel Islands.
Milan and Rebecca both have graduate degrees, high-paying jobs, excellent credit, a new baby — and absolutely no plans to buy a house.
Rebecca Eggeman: I kind of got the impression that people felt sorry for us because we were renting. I’d say, “We’re moving,” and the response would be, “Did you buy a house?” You know? And I’d be like “Well, no, we’re still renting.”
Still renting. In a culture obsessed with home ownership, still renting makes Milan and Rebecca feel like social outcasts.
Mashonovich: It has to make financial sense. I mean, look, we’re not in some weird sect.
If they sound a little defensive, they have reason to be, says Nicolas Retsinas. He heads up the Joint Center for Housing Studies at Harvard University.
Nicolas Retsinas: Rent could be, not to be too glib, but really was a four-letter word. That, you must be dumb if you’re still renting, you must be too poor. It was like, well if you did everything right, and you were smart and you worked hard, you should be an owner.
Milan and Rebecca have done all the math, and say it doesn’t make sense for them to buy right now. And when I say they’ve done all the math, I mean, they’ve done all the math.
Mashonovich: The median income for Santa Barbara is around $77,000 a year.
Eggeman: You shouldn’t buy a house more than three times your annual income, with a 20 percent down payment.
Even though the numbers are on their side, even though they avoided the housing bust that stung many of their friends, and even though they did so much homework, they saw the crash coming and got their money out of the market before it tanked. Milan and Rebecca still sought out an online support group of die hard renters on sites like Dr. Housing Bubble.
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A couple of weeks ago, I heard a report on the radio of a study done relating state taxes to happiness. That outcome would seem obvious, but the study went a bit deeper– it examined the effects that the taxes had, primarily their visibility and their applicability to the entire population.
The conclusions of the study break down to this: People in high-tax states report a greater index of happiness IF the taxes go towards public services. Good schools, good roads, good law enforcement mean that people are happier with a higher tax burden. In contrast, states where the high tax rates go towards less visible, more specialized interests, people report a lower index of happiness. Pension funds seen as excessive were quoted as one of those categories.
This explains California pretty well. If the high tax burden meant we had the best education in the nation, smooth roads and fast public transit, people would be happier with the taxes. Instead, there’s a perception that the money goes towards the education industry (with an ever-growing percentage of bureaucracy; people want teachers to be paid well but there’s a perception it never gets to the classroom), or towards state employees who get paid at a rate that far outweighs the private sector, and the roads and levees and bridges are neglected.
I know that after my helpful encounter with the city sewer division, I don’t begrudge them the bi-monthly payment they require, but if they’d been surly and obstructive I’d be up in arms over their bills. It makes sense that taxpayers react to their taxes in the same way as their monthly bills; you’re always happier if your payments have an obvious result.
“And I guess, but I just don’t know…I guess, but I just don’t know.”
Lou Reed
ATE’s back! What’s UP?
Hi Alph!!
Where’s Oly????
Thanks for sayin’ heah…
She’s still awol, since what…around Halloween? I wonder if anyone here still communicates with her. It would be nice to know she was alive and well, and hasn’t been eaten by an orca or chained up in the basement of her dive bar. (I hoist an apricot ale to you, Oly, wherever you are.)
Ditto:
I don’t think she will come back. That’s my bet. I think she is safe though.
What do you think?
No idea. Sure is weird how she just went *poof* and never posted since. But she has disappeared before and returned, as you probably remember.
How you been?
WASHINGTON (AFP) – Osama bin Laden’s word choice in the latest audio message attributed to him is seen as a “possible indicator” of an upcoming attack by his Al-Qaeda network, a US monitoring group warned Sunday.
IntelCenter, a US group that monitors Islamist websites, also said that manner of the release and the content of the message showed it was “credible” that it was a new release from the Saudi extremist.
“The Osama bin Laden audio message released to Al-Jazeera on 24 January 2010 contains specific language used by bin Laden in his statements in advance of attacks,” IntelCenter said in a statement.
______________________
Obama’s response: man I almost made that birdie put.
It’s really dumb to blame an intelligence failure on the CIC, as though they have nothing else to do with their time than monitor countless terrorist threats. In fairness, the same thing happened to W.
eddie, did you ever wonder why we didn’t just go and offer a huge reward, say like 10 billion in gold or euros to get someone to turn him in? Was there any amount of money or ’stuff’ that persuade somebody to just finger the guy? What it actually begins to look like is that we don’t really want to catch him as he serves a useful purpose roaming free providing an excuse to keep spending trillions on a War on Terror. Does Occam Razor apply here maybe?
Well we had to find us another Evil Empire didn’t we? I mean, geeze, all that firepower just laying around doing nothing.
BTW, Bin laden WAS found and nearly captured except it WAS CALLED OFF.
Yes, you can google it.
“TrueHaskell™” = “But, but, but…”
Perhaps the recent political backlash against the Fed will help provide them with the encouragement they need to stick to the conduct of monetary policy and to leave political decisions regarding wealth redistribution to elected officials in government.
* JANUARY 25, 2010
Bernanke’s Confirmation Battle Damages Fed’s Clout
By JON HILSENRATH
No matter how it plays out, Ben Bernanke’s bruising confirmation battle has damaged the U.S. Federal Reserve’s clout and perceived independence.
Mr. Bernanke is more than the Fed’s chief decision maker. Fed officials see him as their brand, a smart, honest and stoic voice best able to defend decisions of the past two years to a skeptical Congress and public. Even if the Senate backs Mr. Bernanke this week, he won’t speak with the same authority, and the Fed will have a harder time casting itself as above partisan politics.
Fortunately for the Fed, the hard call about when to raise interest rates doesn’t need to be made now. Fortunately for Mr. Bernanke, his support inside the Obama administration, and even more so inside the Fed, is solid. But the longer the battle drags on, the more it could interfere with the Fed’s ability to communicate convincingly. And no matter what, the Fed will have less sway as Congress debates whether to rein in its powers.
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This article points out why it is unlikely the Fed will drain its liquidity swamp for some time going forward, regardless of how the reappointment decision plays out.
* The Wall Street Journal
* ABREAST OF THE MARKET
* JANUARY 25, 2010
Stocks Have Other Worries Than the Fed
By TOM LAURICELLA
At a late January meeting, Federal Reserve officials signal to the market that interest rates are due to rise soon. The move catches investors off guard. Stock and bond prices plunge, while the U.S. dollar surges.
That isn’t a forecast for this week’s meeting of the policy-setting Federal Open Market Committee; it is the scenario that played out six years ago this month. Today, no one expects the Fed to veer from its commitment to keep rates low for an “an extended period.”
But last week’s market turmoil, which sent the Dow Jones Industrial Average down more than 5% in three days, is a reminder that the unprecedented stimulus that spurred last year’s big rally will start to be pulled back this year. And given how big and global the stimulus was, a simple increase in U.S. interest rates isn’t likely to be the spark that sets off the decline. In 2004, it would have been inconceivable that a move by China to tighten lending would cause a big selloff as it did last week.
The big question for investors is how much of the market’s rebound was driven by improving fundamentals and how much by government stimulus. Some believe that healthy earnings prospects will support U.S. stocks as long as any rate hikes are moderate and in response to real economic vigor. But last week’s China-driven action could be a taste of things to come if liquidity was the primary catalyst.
“It’s a window on what we can expect when the U.S. starts draining liquidity,” says Barry Knapp, U.S. equity strategist at Barclays Capital. “There are two places in the world where monetary policy was incredibly aggressive, one was the People’s Bank of China…and the other was the Fed.”
…
Two routes
1. The plan was to pump up the markets and give the banks the chance to get more private capital before further draining liquidity.
2. To the moon Alice to the moon.
Either way housing will continue to fall. In scenerio 1 the economy collapses and there is more unemployment. In #2 interest rates rise and people have to spend more and more of their money on food and fuel.
“In scenerio 1 the economy collapses and there is more unemployment.”
More unemployment means more contraction which means less money which means cash remains king.
“In scenerio #2 interest rates rise and people have to spend more and more of their money on food and fuel.”
People who have money get to buy food and fuel. Those without money have to make do without food and fuel. Again, cash is king.
Do you see any possible future scenario where cash is not king?
My personal hunches:
1) Cash will be king for a little while longer before it is rudely usurped.
2) Predicting how long a little while will last is critical for gambling success during the tail of a nasty bear market.
“Do you see any possible future scenerio where cash is not king?”
As long as we are living in an deflationary environment cash will remain king. When this environment switches to an inflationary one then cash will become trash.
But we’re not there yet.
Public Employee Unions Are Sinking California
Months after closing its last budget gap, the Golden State is $20 billion in the red.
By STEVEN GREENHUT
Sacramento
An old friend of mine has a saying, “Even the worm learns.” Prod one several hundred times, he says, and it will learn to avoid the prodder. As California enters its annual budget drama, I can’t help but wonder if the wisdom of the elected politicians here in the state capital equals that of the earthworm.
The state is in a precarious position, with a 12.3% unemployment rate (more than two points higher than the national average) and a budget $20 billion in the red (only months after the last budget fix closed a large deficit). Productive Californians are leaving for states with less-punishing regulatory and tax regimes. Yet so far there isn’t a broad consensus to do much about those who have prodded the state into its current position: public employee unions that drive costs up and fight to block spending cuts.
Earlier this month, Gov. Arnold Schwarzenegger proposed a budget that calls for a $6.9 billion handout from Washington (unlikely to be forthcoming) and vows to protect current education funding, 40% of the state’s budget. He does want to eliminate the Calworks welfare-to-work program and enact a 5% pay cut for state employees. These are reasonable ideas, but also politically unlikely.
As the Sacramento Bee’s veteran columnist Dan Walters recently put it, the governor’s budget is “disconnected from economic and political reality.” Mr. Walters suspects what will happen next: “Most likely, [the governor] and lawmakers will, to use his own phrase, ‘kick the can down the road’ with some more accounting tricks and other gimmicks, and dump the mess on whoever is ill-fated to become governor a year hence.”
Mr. Walters’ Jan. 10 column was fittingly titled, “Schwarzenegger Reverts to Fantasy with Budget Proposal.”
…
My mantra for the last TEN YEARS is “the state is broke.” Broke as in “no money,” though broke as in “broken” also fits.
When you have no money, you have to cut expenses. The California Legislature has been avoiding that for living memory. The voters keep voting in huge bond issues (again, I keep saying “the STATE is BROKE.”) And everybody’s blaming the governor. Yeah, he could have done a better job. BUT that ignores the true issue, which is that the Legislature has been making poor financial decisions for as long as they’ve been around.
(P.S. I grew up in Sacramento, so I don’t tend to think of this town as the mess in the Capitol building. It’s a little annoying to hear about all these people “mad at Sacramento,” but I understand what they really mean.)
“The voters keep voting in huge bond issues…”
Debtors at all levels of the system (households, city governments, state governments and national governments) have recently discovered there actually are limits to the extent to which it is possible to borrow increasingly larger sums of money and pass on the bill to the next generation down the line. I suppose this is how all intergenerational Ponzi schemes eventually collapse?
When california can’t make its payments that’s when the fun starts.
Jan. 23 (Bloomberg) — Concern that short-sellers accelerate stock declines may prompt the Securities and Exchange Commission to adopt a rule next month aimed at curbing bearish bets when equities are plunging.
The regulation would require the trades be executed above the best existing bid in the market when shares fall 10 percent in a day, said Brian Hyndman, the senior vice president in transaction services at Nasdaq OMX Group Inc. In a short sale, an investor borrows an asset and sells it, hoping to profit from a decrease by repurchasing it later at a lower price.
Forcing short sellers to wait for a stock to rise above the best price bid may prevent them from flooding the market with sell orders and causing losses to multiply. Some exchange officials say the restrictions known as uptick rules don’t work, citing studies that show they may be less effective during panics that drive prices down and volatility up.
“There is no empirical data to support the introduction of a new rule,” Hyndman said yesterday at a securities industry conference in Chicago. “But this is the least intrusive of the proposals the SEC was considering.”
Hyndman expects the SEC to adopt a so-called alternative uptick rule that includes a 10 percent trigger, changing regulations that were eliminated from U.S. markets in 2007. The commission asked the public last April to comment on strategies to cushion the impact of short selling following criticism that hedge funds and other speculators used trading tactics to deepen market retreats that began in 2008.
SEC spokesman John Heine declined to comment.
Jan. 24 (Bloomberg) — Senate Republican leader Mitch McConnell said he expects Federal Reserve Chairman Ben S. Bernanke will win a second term, indicating enough Republicans will join Democrats in backing the central banker.
“He’s going to have bipartisan support in the Senate, and I would anticipate he will be confirmed,” McConnell, a Kentucky Republican, said today on NBC’s “Meet the Press.” McConnell, 67, declined to say how he would vote.
Really Mitch you won’t say how you are going to vote?
It seems odd that a Senator who is so overwhelmingly confident about the outcome of a future vote could also be unsure about how he himself will cast his vote.
Time to advocate the same for Underwater homeowhNazs:
Posted: Monday, 25 January 2010 6:24AM
Stuyvesant Town and Peter Cooper Village Turned to Creditors
NEW YORK (AP) — The financially troubled owners of two massive apartment complexes that sold for a record $5.4 billion a few years ago said Monday they’re turning them over to their creditors.
The joint venture ownership team led by Tishman Speyer Properties and BlackRock Realty, hurt by the real estate market collapse, couldn’t make a multimillion-dollar loan payment earlier this month for the Stuyvesant Town and Peter Cooper Village apartments in Manhattan.
Over the last few days it became clear the only viable alternative to bankruptcy would be to transfer to lenders control and operation of the 110 buildings and 11,000 apartments overlooking the East River, partnership spokesman Bud Perrone said.
“We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the city,” Perrone said in an e-mailed statement.
The group bought the complexes, which have about 25,000 tenants, in 2006 at the height of the real estate bubble in the nation’s largest residential real estate deal.
The record purchase price seemed outrageous to many real estate analysts, but the partnership believed it had a winning strategy: It would aggressively convert thousands of rent-regulated apartments occupied by middle-class families into luxury units that would fetch top dollar.
But the tactic was a bust as the city’s housing market cooled considerably. Ratings firms estimated the value of the 80-acre area had fallen to as little as $2 billion - far less than the outstanding loan balance.
Apartment conversions happened much slower than expected, tenants fought back and a state court ruled that about $200 million in the partnership’s new rent increases was improper.
The group, which used a $3 billion mortgage and a $1.4 billion secondary loan to buy the properties, had been trying to restructure its debt. It couldn’t make a $16 million loan payment due Jan. 8.
Analysts had been expecting the ownership group to default on its loan for several months.
It hasn’t been determined when the ownership transfer of the sister properties will take place and who specifically the new owners will be, Perrone said.
Tishman Speyer, whose other properties include Rockefeller Center and the Chrysler Building, said it wouldn’t consider a long-term management contract to continue operating the apartment complexes if it didn’t involve ownership. It said it was committed to an efficient transition of the properties’ operations and would manage them during that transition.
The housing complexes, which are so big they have their own newspaper, were built by Metropolitan Life in the 1940s for returning World War II veterans. MetLife Inc. decided to sell them in 2005, when real estate prices were soaring.
Tenants launched their own bid to take over the 11,227 units, three out of four of which were rent-stabilized and priced far below the market rate, before MetLife announced it had closed a deal with the partnership led by Tishman Speyer and BlackRock.