Bits Bucket For January 28, 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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Experts See Another Global Dip Ahead. ~ WSJ
Davos Attendees Pin Hopes on Emerging Economies, Saying Debt and Deficits Will Trouble U.S.; Sparring Over Bank Rules.
DAVOS—The global economic recovery could lose pace later this year, dashing hopes for a rapid escape from the deepest downturn of the postwar era, economists and investors said at the World Economic Forum’s annual meeting at this Swiss ski resort.
Heavy debts will weigh on governments and households in the U.S. and Europe for some time, while hopes for global growth will continue to rest on fast-developing countries such as India and China, predicted participants at the meeting’s opening debate on the economy.
As many expected, the debate on regulating big banks also stoked passions. The push for more stringent regulation has accelerated in Europe and around the world since last week, when U.S. President Barack Obama’s administration proposed a plan to tax and curb activities of big banks.
Boom and bust cycles. Some professors at GMU made a really funny rap about Keynes vs Hayek. You can watch it at youtube. Just search for Keynes Hayek rap. I’ll try the link and see if it gets through.
http://www.youtube.com/watch?v=ACnKM-sc7ng
Very well done, nails it in about 6 minutes.
Oh hell yeah!
Blackstone’s Chief Warns of Tighter Credit Amid Bank Bashing.
Jan. 28 (Bloomberg) — Banks may start to rein in lending, hampering the economic recovery, if governments and regulators keep bashing them, Blackstone Group LP Chief Executive Officer Steven Schwarzman said.
“Banks, starting in the United States but also on a broader basis, may start to restrict credit simply because the uncertainty and the tone against them are so difficult that they may lack the confidence to do their normal functions,” Schwarzman said in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland. “It can really start to impact an economic recovery.”
And the Davos crowd, who believe that the world is their oyster, strikes back.
That didn’t them long, did it?
The Great Contraction continues to feed on itself.
First they were going to raise fees if they didn’t get their way. Now they’re going to reduce lending (which they’ve already done anyway.) Maybe it’s time they just take their ball and go home.
Blackstone’s Chief Warns of Tighter Credit Amid Bank Bashing.
Another round of attempted blackmail using scare tactics.
Here is a clip of John Stewart’s interview with Congressional TARP Oversight Panel chair Elizabeth Warren. She discusses the history of US banking and how our current/criminal banking monstrosity evolved and what we can do about it.
Nowhere does she say or imply that reforming our banking system will take us to the brink of destruction such as the nefarious bankster cabal is aggressively propagandizing.
“If you have never written a senator before now is the time,” Warren urged Stewart. She (Elizabeth Warren) concluded:
It is simple, this is America’s middle class. We’ve hacked at it, and chipped at it, and pulled on it for 30 years now. And now there’s no more to do. Either we fix this problem going forward, or the game really is over.”
http://tpmlivewire.talkingpointsmemo.com/2010/01/jon-stewart-to-elizabeth-warren-lets-make-out.php
Blue Skye to Ex: “Darlin, that’s no threat. We haven’t had enjoyable sex in years.”
‘“If you have never written a senator before now is the time,” Warren urged Stewart.’
I’d write my Senator if I believed her. Please offer one iota of a reason to think any Senator cares about anything besides getting their hands on more FIRE sector campaign contributions and I will consider.
At any rate, the Summers-esque idea that propping up home prices (aka making them less affordable) is the way to fix the problems of the middle class is patently absurd.
Please offer one iota of a reason to think any Senator cares about anything besides getting their hands on more FIRE sector campaign contributions
Because maybe the public’s increasing economic pain, feelings of being subjected to injustice and rising visceral anger might make these times different.
I guess Senators know how to find this blog if they give a flying fark about our thoughts…
PB,
I know that all of our efforts seemed fruitless when we tried to disuade politicians from giving banks a free check with TARP, but you must know that they DID hear us, and they DID comment often about the “public backlash.”
Our voices are stronger than you think. Write your representatives, call and fax them, too! I’m serious. I’ve been pretty politically active over the years and have seen first-hand how even a single, level-headed, and persistent person can change things.
Do not underestimate the power of the public voice. If enough of us speak, they will listen.
Believe it or not - congresscritters *do* care what their constituents think, if nothing else as a gauge to how to remain in power. If they get enough push on a given issue it may affect their votes, if they see it as causing a big hit in the next election. Which is the way it should be. I heard somewhere years ago that they generally view 1 letter as being equivalent of about 100 votes.
We are often writing to ours. It’s worthwhile sometimes I think. More for some than for others, and depending on the issue - e.g. writing to a deeply conservative or deeply liberal critter on the health care bill was pointless - only the ones on the fence really mattered. Financial matters tend to cross party lines more, so probably would be more worthwhile in general.
My Senators are McCain and Kyl. Writing them is useless. So is trying to talk to them. Case in point:
A few months ago, I spoke at a health care reform rally in Downtown Tucson. (I represented all the self-employed Arizonans who have few, and mostly crappy, health insurance options. If we can get it at all.)
We gathered outside of McCain’s locked-up-tighter-than-a-drum office. The rally organizers presented the empty office with an oversized, multimillion dollar check.
The check represented the millions in campaign donations that McCain has been given by the insurance industry.
Cheap private insurance would be a boon to the self-employed, no doubt about it. As it is, being you own boss is not all that, unless you have a spouse with benefits.
Last I heard, both of them are voting against Bernanke’s confirmation.
At any rate, the Summers-esque idea that propping up home prices (aka making them less affordable) is the way to fix the problems of the middle class is patently absurd.
they are just helping banks middle class will continue to shrink
The middle class have always been a nuisance to the bankers, what with their silly ideas about freedom, equality, reasonable jobs with fair pay, and so forth. Why, many of them even think they should have a say in how things are run - imagine! No, no… the sooner they can get us back to serfs in debt to the masters, the happier the banks will be.
Yeah, but the Middle Class is too stupid to realize that. For most, their house isn’t just a place to live, it’s their retirement fund (with some crazy logic that makes them think they can somehow make use of that magic equity as they age.)
Writing to senators is a waste of time and will only result in a form letter response and a lot of future spam soliciting contributions.
Voting against senators is my preference. Actions not words.
Outstanding post Rio…I also went to the TPM home page….I like all the video snips…Thanks…I never heard of this site before…
Let’s get real — the typical banking CEOs isn’t a patsy who will stop lending operations if his feelings get hurt. Once collateral values (e.g. home prices) reach levels where banks don’t face either falling knife repossession risk, or foreclosure risk due to borrowers assuming more debt than would be financially prudent to underwrite, banks will be happy to lend, no matter how much they are bashed. Of course, if the government steps in to guarantee lenders get to play heads-we-win/tails-taxpayers-lose, that would also be a good way to get the money spigots flowing again (and this is the point of govt-guaranteed mortgages).
Banks may start to rein in lending, hampering the economic recovery, if governments and regulators keep bashing them, Blackstone Group LP Chief Executive Officer Steven Schwarzman said
Now would be the perfect time for the US gov to say fine, you withdraw credit, and we’ll start lending directly to the people or we will lend through small banks. This will end the skimming operation run by Wall Street, where US gets all the risk and they get all the reward.
Hear hear! (Esp. w/ my editorial change…)
“This will end the skimming operation run by Wall Street, where Main Street US gets all the risk and they get all the reward.”
+ 1,000,000,000, guys.
“Banks, starting in the United States but also on a broader basis, may start to restrict credit simply because the uncertainty and the tone against them are so difficult that they may lack the confidence to do their normal functions,”
Oh please! Whoever knew bankers were so darn SENSITIVE. The trillions we’ve already funneled their way hasn’t been ENOUGH to give them confidence?
For some reason, I’m reminded of the scene in Blazing Saddles in which, in order to escape an angry mob that appears ready to lynch him, Sheriff Bart pulls out his six-shooter, points it at his own head, and pretends to kidnap himself.
After his getaway: “Baby, you are so good…and they are SO dumb…”
+10
God I love that movie.
Frank says Obama bank plan could be law within months. ~ Financial Times
President Barack Obama’s proposals to rein in the US banking sector and its practices could be enacted into law within six months, according to a key congressional leader.
Barney Frank, chairman of the House of Representatives finance services committee and a linchpin of White House banking reform efforts, told the Financial Times that the proposals could be incorporated into legislation making its way through Congress.
We heard that one about health care reform. Basically, the Republicans are going to fillibuster every bill on the grounds that “the worse it gets the better it is.”
Then bribe one senator with enough pork to switch votes. If something truly reformed the banking sector, a 10 billion earmark is well worth it.
I am not convinced it will go that way. However, like the audit the Fed bill insiders will gut the effectiveness of it.
Hey, where did the audit then end it bill get to?
My guess is it dies on some senators desk. Probably a parting gift from Dodd.
Frank saying there is something of substance in a bill like this isn’t exactally a confidence builder either.
Wall Streets trillions and a Supreme Court gutting of campaign funding rules suggests to me there will be absolutely no reform.
New home sales down 7.6%. Unemployment up. The Feds will quit buying up mortgage debt at the end of February. It all adds up to another big drop in home prices.
I almost forgot that the hurricane season predictions are for an active season. That will help alot
Don’t worry, we are going to spend our way out of this. Didn’t you see the speech last night? He is not going to quit (spending).
Not so sure about this, Guy. Fannie and Freddie have “unlimited” bail out funds available for the next three years, and last night in his SOTU speech, Obama made a point of mentioning his administration’s commitment to “maintaining the value of your homes” and “stabilizing home prices.”
I think this is going to drag on until all the CRE loans blow up and there’s no way to spin it any longer.
He continues to cling to his dual mandate of affordable housing and unaffordable housing. I hope he was wearing a clown nose when he made those statements.
There is no contradiction. He thinks that modest homes should have market prices out of the reach of people that have historically lived in such homes, and that the government should discriminatorily subsidize the difference. All the extra paper work and administration of such programs will foster job growth. Also, the subsidies can come from raising taxes on those making more than 250k a year which so that wealth can be redistributed to those who are outperformers to those that are not. In his ideal world, there would be over 20% unemployement and the masses would have to look up to the messiah from their knees begging for food and shelter. Allowing people to make money based on perfermance and live debt free without government invervention threatens limits his power. He is not exactly a nice person.
Sorry for the typos, I need some coffee. His speech was appalling on so many levels I get caught up in the moment as he threatens to destroy this Country.
I like your anger!
Speech? what speech? That wasn’t a speech.
That, my friends, was a incoherent, mindless
diatribe of narcissist ramblings that had no
bearing on anything other than his clueless
lack of intelligence.
Now, more coffee.
I really like your anger!
Anger? I’m past that stage, it’s more like
dispare with a smidgen of hope. Now, time
for some more coffee. Morning to you NYC!
Did you see the Supreme Court Justices (knowing their jobs were secure) roll their eyes and whisper during the debate about what a liar, fraud and bs artist he was, while all the other monkeys were giving standing ovations to any words coming out of his mouth in total fear?
I missed that one, I might have been in the
kitchen washing the dishes. Some things in
life are more important than others.
“There is no contradiction. He thinks that modest homes should have market prices out of the reach of people that have historically lived in such homes, and that the government should discriminatorily subsidize the difference. All the extra paper work and administration of such programs will foster job growth.”
Exactly!
the subsidies can come from raising taxes on those making more than 250k a year which so that wealth can be redistributed to those who are outperformers to those that are not.
The wealth distribution is to those on Wall Street from the last remaining pot of money to drain, the upper middle class. Those with overpriced homes won’t become rich they will at best hold their own due to this gift. The tax won’t hit those who get paid in stock options, life insurance, perks, and zero% loans that don’t have to be paid back.
http://www.youtube.com/watch?v=k92SerxLWtc
Natalie, check this out..
POLITICO’s Kasie Hunt, who’s in the House chamber, reports that Justice Samuel Alito mouthed the words “not true” when Obama criticized the Supreme Court’s campaign finance decision.
Already on Drudge, Politico, and NRO within 10 minutes of completion of speech!
My links take forever to post if at all. Google “youtube Justice Grimaces As Obama Criticizes Court”
There is no contradiction. He thinks that modest homes should have market prices out of the reach of people that have historically lived in such homes, and that the government should discriminatorily subsidize the difference. All the extra paper work and administration of such programs will foster job growth.
Bingo (rms beat me to it, but I’ll send his/her “exactly”).
Except don’t expect all of this - or even most of it - to be subsidized by those making over 205k. The main subsidy method will be inflation, which impacts everybody.
Rancher,
Even the MSM has commented disapprovingly on that facet of Obama’s SOTU.
e.g. CBS
http://www.cbsnews.com/blogs/2010/01/28/crossroads/entry6149295.shtml
(”send” should have been “second”)
That, my friends, was a incoherent, mindless
diatribe of narcissist ramblings that had no
bearing on anything other than his clueless
lack of intelligence.
But he who will remain nameless hasn’t even posted yet today.
Wow, Natalie — it sounds like you have uncovered a plan to return the U.S. to the feudal society the founding fathers tried to escape. I wonder if the leaders of the U.S. banking system are on board with that plan?
Don’t forget…….
We’re doubling exports in the next 5 years, tightening our borders, and making sure students don’t go broke getting their education…..
I dubbed it the kitchen sink speech. Anything that will quell the masses, or calm the sheep, it’s in there…..buying him more time.
On a related note, sure is a lot of hootin and hollerin and predicting of 2010 3rd/4th quarter doom lately. The watch will apparently be on for the first signs of us chocking on our own government paper.
Natalie! You nailed it. That’s EXACTLY what he wants.
Yup, that part about stabilizing home prices really bopped me over the head. Most notably, it got a big round of…
…silence.
“In his ideal world, there would be over 20% unemployement and the masses would have to look up to the messiah from their knees begging for food and shelter. Allowing people to make money based on perfermance and live debt free without government invervention threatens limits his power. He is not exactly a nice person.”
Yep, that’s the Prophet of Change for yah!
All who believe will be saved!!
Guys,
Obama just isn’t that smart or connected to we common folk.
What that guy knows is; times were good when house prices were high.
So, his objective is to make house prices high and to go up.
This is simialr to the notion that housing ownership was the key to wealth.
A lot of investigations showed that people that owned homes had a much higher net worth across all income classes. The conclusions was housing ownership equated to wealth generation. Unfortunatly this isn’t actually true. Said more about the fact that people needed to manage their finances to get a home and tended to be more careful. Hence, savers tended to buy homes and accumulate wealth. Spenders did not.
Then some bright people got the idea if we pushed more people into houses than we’d all get prosperous.
Anyhow, looking forward to switching healthcare to crappy healthcare to avoid the taxes.
I really don’t know with these guys. He isn’t a stupid monkey like Bush the sequel. Just seems like he stays on message from his handlers. The stuff they are handing him isn’t good.
I’m also not getting the disengenous BS flowing from the democrats. Iraq, Afganistan, FRE/FAN, GS and all that. It’s nice to hear how they are all for reform now and all for limits on bonueses. Great. Where the F*&k were you for last fricking decade. I can tell you where you were; supporting all of the above. Where were you on healthcare, credit card reform, filibustering on the debt slavery act back in 2003/2004?
Ahansen, I don’t have a website! Way too much effort.
What that guy knows is; times were good when house prices were high.
So, his objective is to make house prices high and to go up.
So you’re saying it’s all one big cargo cult…
Carl Morris,
If James won’t call it that ( I will! ) Yeah, we’ve drawn comparisons to that plenty of times over the years. But again ( just as w/ Rating Agencies and the MBS channel ) we were leaning on a whole LOT of conventional wisdom!
I mean, it worked ’so far’? And this is where we got in trouble. True, those in nicer homes/neighborhoods ( for many, many years ) were more prudent in the handling of their finances. Why wouldn’t it apply in 2000, 2001, 2006?
Well, by the time things got completely out of control, people in nice neighborhoods moving up to even ‘nicer’ homes were coming in with -nothing down-! It’s the MB’s that sculpted this behavior, legitimizing it if you will?
Hey, everyone is doing it? Look, we’ll take all of your equity ( Dr. Smith ) from this re-fi, “I” will pay off all your bills, you’ll have a great FICO score and w/ no other obligations, buying the home of your dreams will be a piece of cake! ( Even w/ nothing down! )
A lot of investigations showed that people that owned homes had a much higher net worth across all income classes. The conclusions was housing ownership equated to wealth generation.
Post hoc ergo propter hoc.
Thanks, James. I thought I recalled you having one several years back– the ideas you present here seem similarly practical.
“…What that guy knows is; times were good when house prices were high….”
What he knows is that pension funds, States, counties, and municipalities, most of which are heavily invested in MBS, legally require a certain rating of those instruments. If housing prices go down, the securities’ AAA/AA ratings go down, too– and States, Counties, pension funds, and municipalities with them. Scary stuff.
Obama made a point of mentioning his administration’s commitment to “maintaining the value of your homes” and “stabilizing home prices.”
This guy is looking more and more like a one-termer. I voted for him and I’m not sorry that I did, considering the alternative, but I won’t be sorry to see him go.
He’s gonna have to earn my vote in ‘12.
I voted for him too due to lack of alternatives.
“The Feds will quit buying up mortgage debt at the end of February. It all adds up to another big drop in home prices.”
Never underestimate the ability of the Fed and Congress to come up with new and innovative methods by which to postpone the day of reckoning. I have no doubt that while the mortgage purchases could end, something more sinister and expensive will take its place.
We’ve already seen the $7,500 loan for First Time Home Buyers (FTHB) morph into a $8,000 credit for FTHB, which got extended and added to with a $6,500 credit for SecondTHB. This patent has been brain dead for years yet Congress lacks the compassion and financial prudence by which to pull the plug.
What could happen next:
1) Extend and expand the FTHB credit to a higher level, say $12,000.
2) Extend and expand the FTHB credit to multiple years (say, $5,000 a year for three consecutive years if you remain in the same home and are current on payments).
3) Extend and expand the FTHB to be a check handed to you at closing equal to 6.0% of the purchase price (to cover the 3.5% FHA down payment and closing costs).
4) Institute a program by which the Federal government will purchase your house for 106% (to cover the UHS comission) of the “fair market value” as determined by the REIC, then place it on the market at 90%.
5) Nationalize private property so that everyone is guaranteed a home [which, in effect the FHA is already doing - creating a class of individuals that "own" their home but in reality are simply paying rent in perpetuity to the Federal Government via the FHA mortgage program.]
While I’d love for us to pull the plug and think it is a requirement for our fiscal sanity as a nation, I have no doubt it won’t happen. As was once said on this blog: “the market has the ability to stay irrational much longer than you have the ability to remain solvent.” Real estate, under the irrational and unpredictable actions of Congress and the Fed, is the same way.
6) Ability to use 401k funds, tax-free, for home/RE purchases. AKA ace-in-the-hole.
Kirisdad,
6) This might be an attractive policy because I would rather have something “tangible”, whether its land, a Jeep/PU or a cabin in the mountains (where are you Jas Jain?).
Right now I have a bunch of digits in someone’s computer that could be wiped out in a whole variety of ways.
Lip
Of course, wall street will fight it to their last breath. But, it is a hammer to hold over their greedy heads.
Wall street does not give one sh!t about you pulling money out of your 401k and spending it on housing. They are heavily dependent on your spending that money to prop up the value of their assets.
It’s just a loop. In one case they play the markets with the fear that you will someday need that large pile of green stuff you’ve acumulated. In the other case you have gone out and blown it on some over priced pile of sticks. They get a big chunk of money and lose the liability of paying it back is gone.
Much like the interest deduction on your taxes. You never see that money, it is gifted to banks. As long as the money is spent is most of the mantra. Saving are the enemy.
That is all part of the war on savers. As I repeat, saving is not spending. We can end all of this by not spending. That is about all it takes.
James, if the gov’t allowed tax-free withdrawals from 401K mutual funds into home ownership, the S&P would tank and the mortgage market wouldn’t benefit because it would be, mostly, cash transactions. How could wall street/bankers like that scenario? Of course, it would create another housing bubble, so I’m not exactly advocating this.
Yeah I actually like this plan. I fully expect them to force me to invest in long term treasuries at 1% at some point in the future.
Of course they could allow this and then in a few years institute a Federal property tax.
Both are coming, I bet.
1) The forced investments are only a matter of time. Once inflation roars, the rest of the world will not be interested in getting 1% on Treasuries while inflation destroys the dollars at a much higher rate. So, the taxpayers of this nation will be forced to eat the loss.
2) A Federal property tax is a wonderfully evil idea! And, we can use it create more selected, “special” people who will get various tax breaks for going into debt or otherwise performing in ways that the Masters like. Those who try to live debt free and afford to own their home will be punished, of course.
You know it could be more of a carrot and stick proposal. Allow a larger tax deduction for 401K on top of what already exists if the additional amount goes to treasuries.
Could also make a bunch of tax free municipal bonds and treasuries program. No taxes on the interest.
Would also drive rates down.
I don’t think supporting the spending is in any way a good policy though. Should be “careful” tax increases and major cutbacks in spending.
Really advocating to think of how to invest in society. Blowing the money into sickcare or unemployment or welfare is a mistake. Should be looking at projects that long term increase the effiency of economy.
Agree with you, James.
———————
BTW guys, stop posting these silly ideas ($5,000 for each year you “own” a new house, etc.). Believe it or not, a lot of the bad ideas we are seeing today were joked about on the HBB years ago. Sometimes, I wonder if they aren’t taking our “jokes”/”worst case scenarios” and turning them into reality.
The Feds will quit buying up mortgage debt at the end of February.
I would say we have a better chance of Eddie and Professor Bear announcing their engagement by the end of February. Hmmmm.
Ha ha ha ha. Who is the groom and who is the bride?
Come on, we’re past all that. Shame on you for using such hetero-normative terms.
Related question: Who is the butt of that joke?
“Related question: Who is the butt of that joke?”
Whichever of you is the bottom?
>Come on, we’re past all that. Shame on you for using such hetero-normative terms.
Well this coming from someone named LehighValley”Guy”.
Change your handle to LehighValley”Whatever” and then we can talk.
I’m betting on the end of the mortgage debt buy-up program (with some other bigger yet-to-be-announced home price support program to replace it).
The GSEs will have to be used for the next step in their sinister plot, IMHO.
The week before the fed is set to stop buying mtgs, the mtg rate will go to 6.5%, the politicians will freak, and Wall Street will say “I told you so” and they’ll be back in the drivers seat. The fed will continue buying.
+1
+2
The Feds will quit buying up mortgage debt at the end of February.
Hmmmm…, who’s gonna buy our treasuries then?
Fed Lays Ground for End to Stimulus With Recovery Declaration
Jan. 28 (Bloomberg) — The Federal Reserve panel in charge of interest rates declared for the first time the U.S. economy is in “recovery” and took several steps to prepare investors for the removal of aggressive monetary stimulus.
The Federal Open Market Committee yesterday upgraded its economic outlook, reaffirmed it will end liquidity backstops and a $1.25 trillion program to buy mortgage-backed securities and expressed less confidence inflation will remain “subdued.”
Ben the Bozo knows only one thing and that is dumping endless amounts of liquidity into the American economy. He is like an NFL player at a Las Vegas strip club, making it rain million dollar bills.
I was thinking he was a bit like Pete Rose, coaching the ball game while making side bets on the outcome…
“Fed Lays Ground for End to Stimulus With Recovery Declaration”
There is a predictable pattern here:
1. Announce the end of a govt-sponsored housing market life support program
2. As the date arrives, announce that the housing market is too fragile to risk phasing out the program, as doing so would put the nascent economic recovery at risk
3. Either extend the program or replace it another program that creates an even larger market distortion than its predecessor
Cases in point:
1. Non-expiration of $8K homebuyer tax credit
2. Xmas Eve 2009 elimination of GSE credit cap
…
“It all adds up to another big drop in home prices.”
Even given the POTUS’s announced plan to prop up home prices? How do you know some new unannounced plan isn’t in waiting to make sure prices never drop again? Perhaps there could be a housing market ‘uptick rule’ that says a home can only sell for more than the previous sale price? (I’m not suggesting this is a good idea; just trying to point out the absurdity of a government-sponsored home price inflation policy.)
“Perhaps there could be a housing market ‘uptick rule’ that says a home can only sell for more than the previous sale price?”
That would add a whole lot more weight to the ‘priced in’ theory.
That’s the pathetically funny part. The NARscum people are too dumb (and I guess that includes the economists who advise them) to realize there is an inverse relationship between home prices that are too high for most Americans to afford them and the ability of UHS to sell homes for a living.
Let’s make it really, really simple:
1. If home prices stay unaffordably high, UHS will find their many of their potential clients (especially young families trying to help jump start a moribund economy with a new job in a new community) priced out of the market.
2. If home prices become affordable relative to incomes, UHS will find many potential clients suddenly are priced back into the market, and cities who depend on a vibrant young workforce for economic recovery will discover its sudden availability.
This isn’t rocket science, folks.
This isn’t rocket science, folks.
Rather, it’s economics.
Like I said above… they are trying to restart the bubble. I guess not realizing to do so would require hyperinflation.
I think if current prices stick in the west coast, we’d need 10% inflation per year for the next 8 years to catch up!
That would be some honking inflation while prices on real estate remained flat.
Mmmm 6$ gallon of milk, 6$ gas, movie ticket 20$, 2$ menu at McDonalds, Vending machine candy bar 2$, Dodger’s cheap seats tickets 200$ exc. Min wage, 16$ per hour… Good stuff eh?
Mmmm 6$ gallon of milk, 6$ gas, movie ticket 20$, 2$ menu at McDonalds, Vending machine candy bar 2$, Dodger’s cheap seats tickets 200$ exc. Min wage, 16$ per hour… Good stuff eh?
Without wage inflation I can’t see any of this happening. Right now salaries are stagnant or worse. There’s certainly little market pressure to increase them, so aside from a government wage-control program (easily filibustered by the senate) prices for most things, i.e. those paid for with cash, should be flat or even falling.
Inflation has never been stopped, only slowed, by stagnate or falling wages.
In fact, with “supply and demand” voodoo, er, economics, the correct action is to raise prices when demands falls to make up for lost revenue.
It’s called “stagflation” and I’ve lived through it twice.
Oh, that’s another brilliant, evil idea!
Set the “normal” at peak Bubble price, and make an uptick rule to “protect the value of our homes.”
Man, that WOULD price everyone out forever. If they could find a way to get people to sign up for this nonsense, they’d do it in a heartbeat.
“That will help alot”
Perhaps Mother Nature could succeed where the government’s efforts to make homes affordable have failed? However, I note that Florida home flipping activity was in a state of frenzied froth during the 2005 hurricane season.
The Fed won’t quit buying. They ARE the world’s largest hedge fund now, as well as the ultimate toxic lender (in the end). Nope, I fully expect various new programs to take the place of the old ones, and we’ll keep racing onwards towards the cliff. Eventually, we’ll need to bail out the FHA so they can join the rest of the banking/housing zombies. Whatever it takes to keep housing unaffordable and the fees flowing.
Brrrr. I’m the 2ndyest person on the blog today. Wind chill below zero and peoples’ moods matching it. I don’t think the State of the Union address quite did it for us. A second stimulus package ? Oh come on.
Ben is right. Lets try a day where nobody responds to Eddie. His post are invisible today- right, PB.
Works for me.
I noticed the only mention of the poster who must not be named’s name in today’s bits bucket is in your and NYCB’s posts.
Mine was funny.
I owe ya, pal
P.S. It is very unpleasant to be the butt of that joke.
I awoke at 4 AM and realized I had figured out the solution to the economic mess we’re in. I couldn’t believe how simple it was: Free money for everybody. Debt forgiveness on loans. Tax credits. Financial gifts of one form or another. Anytime a bankster needs money, he just goes to the Fed and it’s free. Anytime a taxpayer needs money, he goes to his president and it’s free. What could be simpler? Nobody will be in debt anymore and they won’t want anything because they’ll have the money to buy what they want. I guess the idea is so revolutionary that it must be started slowly. It will finally make everything “affordable”.
It’s been done. “Next!”
That is brilliant! You should run for president…wait, you ARE the president! You sly dog, Barack!
“Anytime a taxpayer needs money, he goes to his president and it’s free. What could be simpler? Nobody will be in debt anymore and they won’t want anything because they’ll have the money to buy what they want”.
There you have it, problem solved!
So simple and easy a child could do it, and since deficits don’t matter, because we owe it to you selves there can be no limit! To infinity and beyond! I say we start with a quadrillion and go from there.
It’s not fair that the folks that won life’s “lottery” have all the goodies.
Okay, I’ll take my bundle of Federal Pazoozlas at anytime you’re ready to hand ‘em out…
Give everyone a $1,000,000. A country full of millionaires! Is this a great country or what?
One evening as the sun went down and the jungle fire was burning
Down the track came a hobo hiking and he said boys I’m not turning
I’m headin for a land that’s far away beside the crystal fountains
So come with me we’ll go and see the Big Rock Candy Mountains
In the Big Rock Candy Mountains there’s a land that’s fair and bright
Where the handouts grow on bushes and you sleep out every night
Where the boxcars are all empty and the sun shines every day
On the birds and the bees and the cigarette trees
Where the lemonade springs where the bluebird sings
In the Big Rock Candy Mountains…
There’s a big, brown cloud in the city,
And the countryside’s a sin.
An’ the price of life is too high to give up,
Gotta come down again.
When the world wide war is over and done,
And the dream of peace comes true.
We’ll all be drinkin’ free bubble-ubb,
Eatin’ that rainbow stew.
When they find out how to burn water,
And the gasoline car is gone.
When an airplane flies without any fuel,
And the satellite heats our home.
One of these days when the air clears up,
And the sun comes shinin’ through.
We’ll all be drinkin’ free bubble-ubb,
An’ eatin’ that rainbow stew.
Eatin’ rainbow stew in a silver spoon,
Underneath that sky of blue.
All be drinkin’ free bubble-ubb,
An’ eatin’ that rainbow stew.
You don’t have to get high to get happy,
Just think about what’s in store.
When people start doin’ what they oughta be doin’,
Then they won’t be booin’ no more.
When a President goes through the White House door,
An’ does what he says he’ll do.
We’ll all be drinkin’ free bubble-ubb,
Eatin’ that rainbow stew.
Eatin’ rainbow stew in a silver spoon,
Underneath that sky of blue.
We’ll all be drinkin’ that free bubble-ubb,
Eatin’ some rainbow stew.
Merle Haggard, Rainbow Stew Lyrics
From the song:
bubble-ubb = bubble-up (the soda I think)
Er, yeah..imagine liking that song and having no idea what Bubble Up® was? LOL
OK, You’re right. I did know for sure it was Bubble up. Sometimes I try to be funny because Mamma Tried to make us mirthful. Actually the first time I heard it is a Favorite Memory of Mine and if you don’t believe it You’re Walking on the Fightin’ Side of me.
Give everyone a $1,000,000.
At which point, starter homes will list for $5,000,000
Dang! I knew there was a glitch somewhere in that idea for Making Homes Affordable…
Aw shucks, eastcoaster. You just had to go and ruin our fantastic plans, now didn’t you? Party pooper.
Why not give everyone $2,000,000?
- $1,000,000 would be earmarked for investing in the stock market.
- $1,000,000 would be earmarked for purchasing a McMansion.
Benefits:
1. Everyone would be a millionaire twice over, with a million dollar home and a million dollar stock market portfolio.
2. Home prices and stock prices would both go up a lot.
Worth posting this from last night (found by CarrieAnn):
An Insider’s View of the Real Estate Train Wreck
Some interesting info about FDIC guidelines changes done in November:
from the interview:
In November, the FDIC circulated new guidelines for bank regulators to streamline and standardize the way banks are examined. One standout feature is that as long as a bank has evaluated the borrower and the asset behind a loan, if they are convinced the borrower can repay the loan, even if they go into a workout with the borrower, the bank does not have to reserve for the loan. The bank doesn’t have to take any hit against its capital, so if the collateral all of a sudden sinks to 50% of the loan balance, the bank still does not have to take any sort of write-down. That obviously allows banks to just sit on weak assets instead of liquidating them or trying to raise more capital.
That’s very significant. It means the FDIC and the Treasury Department have decided that rather than see 1,000 or 2,000 banks go under and then create another RTC to sift through all the bad assets, they’ll let the banking system warehouse the bad assets. Their plan is to leave the assets in place, and then, when the market changes, let the banks deal with them. Now, that’s horribly destructive.
…
(interviewer):
Just to be clear on this, let’s say I own an apartment building and I’ve been making my payments, but I’m having trouble and the value of the property has fallen by half. I go to the bank and say, “Look, I’ve got a problem,” and the bank says, “Okay, let’s work something out, and instead of you paying $10,000 a month, you pay us $5,000 a month and we’ll shake hands and smile.” Then, even though the property’s value has dropped, as long as we keep smiling and I’m still making payments, then the bank won’t have to reserve anything against the risk that I’ll give the building back and it will be worth a whole lot less than the mortgage.
MILLER: I think what you just described is accurate. And it’s exactly a Japanese-style solution. This is what Japan did in ‘89 and ‘90 because they didn’t want their banking system to implode, so they made it easier for their banks to sit on bad assets without owning up to the losses.
And what’s the result? Well, it leaves the status quo in place. The real problem with this is twofold. One is that it prolongs the problem – if a bank is allowed to sit on bad assets for three to five years, it’s not going to sell them.
Why is that bad? Well, the money tied up in the loans the bank is sitting on is idle. It is not being used for anything productive.
“Why is that bad? Well, the money tied up in the loans the bank is sitting on is idle. It is not being used for anything productive.”
But at least the money still exists as it was borrowed into existence to begin with. If the loan is written down then the money associated with the written down part of the loan goes out of existence. The banks can’t eat these losses without going out of business.
Hence Extend & Pretend. There seems to be no other way.
It may not be so bad to tie money up in the loans, if the FB refinanced into debt slavery and is allowed to live in and maintain the house. Otherwise, the money would be tied up in repairing the house anyway.
Love the NAR. They are the ones wh are spending their own money convincing FBs that RE is a great investment and that they should stay the course and keep up with the payments.
Not just payments, but maintenance, even if it’s only heat and AC. After all, what good is it to sit on an asset if that asset rots away right under your patootie, as McTyveks are wont to do?
Which is why I’m so glad that I’m sittin’ here inside a brick house. Even last week’s huffin’ and puffin’ windstorm couldn’t blow it down.
The whole thing is a nightmare scenario, and he puts the timing as second quarter 2010.
And Mark to Myth comes home to roost.
Exactly.
“This is what Japan did in ‘89 and ‘90 because they didn’t want their banking system to implode, so they made it easier for their banks to sit on bad assets without owning up to the losses.”
So how does the bank find investors for their shares in this scenerio?
“So how does the bank find investors for their shares in this scenerio?”
By hiring first class fiction writers to write up the bank’s Annual Reports.
Remember, there are hundred of billions of dollars worth of adjustable rate mortgages that are due to reset in the coming year or two. This is GREAT NEWS for bank stockholders because when these interest rates are adjusted up the banks will then REALLY GET TO CASH IN!!!!
Think of what these higher rates will do to the bank’s earnings!!!
Imagine how much the loan principle must have grown on loans that have options arms!!!
But an astute investor will act BEFORE the word gets out and BUY UP as much bank stock NOW before the word leaks out to the great unwashed masses!!!
Extend & Pretend, Pray & Delay: Relax. Learn to love the numbers and grow rich.
“The bank doesn’t have to take any hit against its capital, so if the collateral all of a sudden sinks to 50% of the loan balance, the bank still does not have to take any sort of write-down. That obviously allows banks to just sit on weak assets instead of liquidating them or trying to raise more capital.
That’s very significant. It means the FDIC and the Treasury Department have decided that rather than see 1,000 or 2,000 banks go under and then create another RTC to sift through all the bad assets, they’ll let the banking system warehouse the bad assets. Their plan is to leave the assets in place, and then, when the market changes, let the banks deal with them. Now, that’s horribly destructive.”
Is this move unprecedented?
How about the related move for the federal government to support housing prices? Has this ever been attempted before?
I get the feeling that we are heading farther and farther into experimental territory, highlighted by a government willingness to rewrite the rules governing the operation of the U.S. housing market as the crisis plays out to favor the interests of banks.
What is the implication for the future of the U.S. lending industry if the world realizes the rules governing the contractual relationships between the lenders and their customers were just a sham which could be summarily modified at the moment of crisis?
What is the implication for the future of the U.S. lending industry if the world realizes the rules governing the contractual relationships between the lenders and their customers were just a sham which could be summarily modified at the moment of crisis?
In a sane world - it would make lending grind to a screeching halt, which is the way it should be.
However in today’s ever-more-insane world - the various entities see the looseness of contract rules merely as a way to further their “I’ll get mine - screw you” belief system. Borrowers are still willing to borrow, knowing they can just get mods and or default later with little recourse. Lenders will still lend, knowing that they’ll just take from the general population (via new money creation) when they lose money after contracts are broken.
It’s a win/win/lose proposition. So - who loses? Savers.
That’s why a fiat money system is so fundamentally morally wrong. In a solid-base money system lenders can’t lend money unless they actually have the money first to lend. They can’t just rely on money being created out of thin air to make up the shortfalls when contracts go bust.
Are the same rules in place now that were in place in 1913, or has a New Era recently begun at the Fed?
“same rules”
(Including the unwritten rules that say the rules don’t apply during a financial crisis…)
Perhaps I am starting to wrap my brain around Soro’s reflexivity concept, without having read a single thing the man wrote on the subject. In the context at hand, a series of market blowups (LTCM, Enron, etc) leads to a (reflexive) relaxation of the rules, establishing rational expectations for future repetitive reflexive relaxation.
At this point, the financial system is destabilized; once enough financial firms catch on and base their business models on the assumption that all will reflexively qualify for TBTF bailouts during a crisis, you have a situation where growth in risk taking activities grow exponentially towards a massive explosion a few years down the road.
Damn, PB - that’s really astute. I had never heard of “reflexivity”, but after reading your link I realize I’ve been dimly aware of it all the time. Yes it’s true - to a certain extent. As stated in the Wikipedia article - reflexivity is subject to the bounds of sanity, as evidenced by every bubble eventually bursting when it gets to an obviously-insane level.
So in that respect, I think that this statement:
Reflexivity is discordant with equilibrium theory, which stipulates that markets move towards equilibrium and that non-equilibrium fluctuations are merely random noise that will soon be corrected.
… is kind of true, but depending on how you define “discordant” (which has multiple meanings). Reflexivity theory and equilibrium theory do not disagree at all (necessarily) - I think that in true live they act together, just at different time wavelengths. I venture in fact that this idea is part of some of the algorithms of program trading.
There are a set of investors who are “the trend is your friend” people - who like to follow the trend, make money as long as it continues, but then usually get burned when it turns around - the idea being to make enough money before it turns so that the burn hurts less. However there is a different set of people (maybe overlapping sometimes) that generally act against the trend, believing that a trend by its very nature is a deviance from fundamentals and is always due for correction. I tend to fall more into this category. These people tend to “give up” more and just step out of the game during long-term trends, at which point the “trend is your friend” people continue to drive the market further away from fundamentals. At some point though one or both parties say “that’s enough”, and start betting against the trend, when it becomes more obvious the prices are too far out of whack from the fundamentals.
Anyhow - thanks for introducing us (me) to a new term.
P.S. Soros is scum. He’s right (as evidenced by how rich he is) - but he’s scum.
A little more on reflexivity, bankster style:
Rules are for the little people.
“We don’t pay taxes. Only the little people pay taxes …,” NYC real estate investor Leona Helmsley once famously said. Notice although our Treasury Secretary and top administrator of the IRS never made a similar statement, he apparently lives by a similar set of guiding principles.
Now if your grandmother tried to get away without paying her taxes, you know the IRS would bully her and maybe even throw her in the slammer; she is a little person, you see.
Bailouts and forbearance are for the big firms and people.
Donald Trump has enjoyed forbearance at rough spots in his investing career. Megabank, Inc gets bailed out if it makes bad loans that lose it hundreds of billions of dollars in the business in which it specializes. But if J6P homeowner loses his job and can’t pay the mortgage, you can bet he will soon receive a NOD from JP Morgan-Chase imploring him to either start making good on his obligations, or pack up and leave.
Reflexivity is discriminatory.
- Big, wealthy, powerful people and firms have the clout to reflexively bend the rules to their will.
- Small, divided, powerless minorities (and I am not talking particularly about racial minorities here, but rather any disenfranchised group or even individual) have to follow the rules to the letter or face the consequences as stated in writing without the benefit of reflexivity to purchase lenience or forbearance, as the case may be.
“However there is a different set of people (maybe overlapping sometimes) that generally act against the trend, believing that a trend by its very nature is a deviance from fundamentals and is always due for correction. I tend to fall more into this category.”
I have a name for this category: Da Bears…
True. It’s likely almost every single one of us falls into this category, which explains why we were so glad to find each other during the bubble, when everyone else was acting “crazy.”
Go to bed, mom!
Did anybody watch the State of the Union address? I did not. I think I could get the gist. “Blah, blah, blah, transparency. Blah, blah, blah, the world would have ended. Blah, blah, blah, we need to pay the mortgages of these poor victims. Blah, blah, blah, I love the American people.”
Were there any actual highlights or lowlights? I would rather ask here than try to read anything on CNN or Fox News, both of which I loathe.
We tried to watch, but could only do about 30 minutes.
One thing I found funny, he wants to set up monthly meetings with the republicans. That sounded very corporate, like he was their boss. I fully expect that one to flop, but he covered his non-partisan, coming together behind with the proposal.
Eisenhower met every week with the Democratic and Republican leaders.
Eisenhower did some useful real-world work before becoming US President.
Toby wrote the speach;
“I wanna talk about me
Wanna talk about I
Wanna talk about number one
Oh my me my
What I think, what I like, what I know, what I want, what I see
I like talking about you you you you, usually, but occasionally
I wanna talk about meeeeee, me,me,me,me
I wanna talk about me, me,me”
“A year ago, Obama set the stage during his first major economic speech to Congress. “I will not spend a single penny for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can’t pay its workers or the family that has saved and still can’t get a mortgage,” Obama said in February. “That’s what this is about. It’s not about helping banks; it’s about helping people.”"
Wow. Who wants to blast away at that one? Can anybody think of a single family that actually saves and can’t get a mortgage? I can’t think of a single one. Did he hand any money over to Wall Street executives? I want some of what he is smoking.
Millions.
I can think of millions of people who’ve saved and can’t get a mortgage.
“Were there any actual highlights or lowlights?”
Would Nancy Pelosi jumping up like a jack-in-the-box every two sentences count as a lowlight?
I had to close my eyes just to concentrate on what Obama was saying… and then I fell asleep.
LOL - Biden would sometimes hesitate to clap from the left as if he wasn’t sure he was on queue and Pelosi would jump up from the right. Very distracting to say the least. I gave up and stopped watching it after 30 minutes.
Did she clap like a seal?
She sure did. And after a while, she looked pretty silly.
Hey, now for a first edition Congress-Drone, she’s almost life-like!
I had a tough decision last night.
a) watch the speech
or
b) watch the A-Team
I’m pleased to say that Hannibal and the boyz pulled it off.
cereal,
LOL! I love it when a plan comes together!
No, actually, I watched every minute of it and again, I thought he ’should’ take credit for averting near disaster. He’s had so many talking heads make the observation that “Well.., the President -always- gives a great ’speech’…”
So he was somewhat forced to parse his words. Commentators this morning noted that it must have been hastily re-written after Brown’s win in Mass. I also heard a tone that there was misplaced emphasis on HC when the effort would have been better directed toward job creation.
NYCityBoy, you didn’t miss much. I was on the road coming home from an out of state business trip so I got to listen rather that watch. (Egad, seeing Nancy Pelosi and Joe Biden behind the Prez was annoying)
My take: The Prez kind of moved to the middle in some areas, talked alot about tax cuts, controlling the growth of government and then doubled up on the programs that they’ve been working on (ie Healthcare and Cap N Trade). They have decided to focus on job growth, even though I doubt that they actually have any idea how to do that.
In the end I would rather see what actually happens as compared to relying on what he said, because I don’t believe much.
In addition, who were all the people that were clapping after he talked about all those tax cuts???
yeah.. i saw it..
the best part was when he got the giggles..
“My fellow Americans, I propose we freeze spending for three years.. hehe.. haha… oh..
Ahem.
As I was saying, I propose that Congress cut spend.. haha.. hehehe.. OH! HaaaaaHeeeeee haha.. pardon me.. ahahahah! cut spending ! Oh my god.. jeeze.. please excuse me.. “
You suggested a couple of days ago that inflating asset prices was not the goal. Any change in your thinking after hearing about the plan to prop up housing prices?
I would pick out one highlight. Obama said that if he didn’t like the bank reform bill that Congress sent him, then he would send it back (veto?). He was referring to the bought-off Senate.
The “all about me” talking point came out of the network news. I can’t argue with that. Obama essentially gave Congress a 90-minute lecture that they need to stop acting like prima donnas trying to keep their jobs instead of doing their jobs (he smacked both parties). I guess, after a year of it being mostly about bickering in Congress, he’s putting his foot down and taking charge.
The only thing he said that was new to me was that now foreign companies can use $$ to influence campaigns too. He said it twice, so it must mean something, but I admit I don’t know what the implications are.
“Obama essentially gave Congress a 90-minute lecture that they need to stop acting like prima donnas trying to keep their jobs instead of doing their jobs (he smacked both parties).”
Next we will have Jenna Jameson giving lectures on the joys of chastity.
I would stand and clap for Jenna.
What is the sound of one hand clapping?
That was about the recent SC overturn of the campaign spending limits.
Maybe he should pack the court. Oh, wait.
You know, a lot of those justices are pretty old. Maybe add another young justice for each of the sitting justices over the age of 70…..
I believe John Roberts is the youth you are looking for.
Sam, I know companies can buy campaign ads; I just didn’t understand the foreign aspect of it. Which foreign companies want to buy campaign ads? Halliburton, based in Dubai?
The only thing he said that was new to me was that now foreign companies can use $$ to influence campaigns too. He said it twice, so it must mean something, but I admit I don’t know what the implications are.
I suspect he is talking about the supreme courts decision that corporations can now give an unlimited sum to the candidate of their choice. If you thought are system was bad before this will take it to a whole new level. Chinese company buys plumber out for 10k, then donates 1 billion to the presidential candidate of their choice.
that now foreign companies can use $$ to influence campaigns too
Globalization baby!
And it’s only fair… If foreign countries are allowed to TAKE our jobs then they should be allowed to GIVE back too right?
Well, Bill Clinton already sold all our nuclear secrets to China in return for campaign contributions, so I don’t really see how this is any different.
President Clinton played a big role in selling out our middle-class to the the super-rich, corporations and China.
Allowing corporations political advertising essentially means ALL corporations and that means foreign propaganda disguised as corporate “free-speech.”
For of those of just joining the geopolitical world, foreign corporations are the front line of basic foreign intelligence and influence.
Now do you get the picture?
I will read the highlights. It is funny, I am an avid political junkie. I am probably the only Arizonan not in federal office who subscribes to Roll Call. Yet I was disinterested in listening to the address while driving yesterday evening, even though it was on most of my saved radio stations. Hank Sr was in the CD drive, and I opted for that.
But for the fact that I’m not feeling up to snuff (and had to stay home last night), I would have headed into Downtown Tucson for some eating, drinking, and being merry.
Sorry, Slim, do you also have that cold going around?
It’s not a cold. No aches, pains, or lack of energy. I’m my usual ornery self.
OTOH, my sinuses feel three sizes too small for all the liquid that’s in them. I keep feeling like a really good sneeze would take care of things, but does that sneeze ever come? No-o-o.
Have you tried a Neti pot?
http://www.webmd.com/allergies/sinus-pain-pressure-9/neti-pots
Was driving home from work yesterday evening (fairly late, actually) when it was on the radio. The housing-related passages grabbed my ear:
We can’t afford another so-called economic ”expansion” like the one from the last decade — what some call the ”lost decade” — where jobs grew more slowly than during any prior expansion, where the income of the average American household declined while the cost of health care and tuition reached record highs, where prosperity was built on a housing bubble and financial speculation.
…
That’s why we’re working to lift the value of a family’s single largest investment — their home. The steps we took last year to shore up the housing market have allowed millions of Americans to take out new loans and save an average of $1,500 on mortgage payments.
This year, we will step up refinancing so that homeowners can move into more affordable mortgages. And it is precisely to relieve the burden on middle-class families that we still need health insurance reform. Yes, we do.
Thoughts:
1. Any questions about the purpose of the Xmas Eve 2009 move to eliminate the GSE funding cap? (My take: This paves the way for removing the burden of propping up the housing market from the Fed’s back.)
2. “We recently made the mistake of attempting to build our prosperity on a housing bubble and financial speculation. To remedy the situation, we are going to inflate a new housing bubble and to encourage rampant financial speculation.”
How is that plan likely to pan out?
“That’s why we’re working to lift the value of a family’s single largest investment — their home.”
PB, you quoted/bolded exactly what I thought was the highlight of the speech: the POTUS admitting in no uncertain terms that they were trying to raise housing prices.
We have a president who openly admits being both for affordable housing, and for unaffordable housing.
You’re missing the point PB, Prime,
He wants high prices for sellers and low prices for buyers. It’s not rocket science.
Nicely put.
I was thinking the point was to gift the middle class a Trojan Horse of reinvigorated Affordable Housing policy, which inadvertently results in ‘higher than expected’ housing prices and future foreclosures, but provides the silver lining of higher sale prices for the toxic assets Megabank, Inc needs to unload in order to fix their balance sheet problems. (Beware of geeks bearing grifts!)
Sorry I missed the point.
“He wants high prices for sellers and low prices for buyers. It’s not rocket science.”
Does the plan also involve a money flood from the uncorked GSEs to bridge the gap?
He wants high prices for sellers and low prices for buyers. It’s not rocket science.
More like junk science!
Does the plan also involve a money flood from the uncorked GSEs to bridge the gap?
——————–
It’s practically guaranteed, IMHO.
I wonder where Joey is today? Just a couple of days ago, he was suggesting that asset price support is not a part of the plan…
P.S. I asked my loverly wife what she thought of the housing price support item. Here response:
“I guess we will rent for the rest of our lives.”
I guess Suzanne’s research failed to sway her view of the folly of purchasing real estate during history’s greatest real estate mania.
How will it play out?
This time, the grubbermind isn’t going to leave it in the hands of fly-by-night crooks. No, no… they’ll call in the big-wigs and find a way to make the Housing Bubble law. Expect endless “tax credits” continued no-money down loans, etc. Whatever it takes to keep people buying into an inflated market and being shackled to debt while paying fees through the nose for the honor of debt-serfdom. But think of the fees skimmed of the top - that has to be good for the eCONomy, right?
Got a little sinus allergy thing going on. Otherwise, I would have participated in the Huffington Post’s SOTU Drinking Game.
I watched it
Blasted banks, not happy with supreme court about lastest ruling, wants to help middle class who make less than 250K,
wants to freeze some government spending but not his year next year ( yea right ) , wants to get health care bill passed, warned about large deficeit hurting the country down the road.
Thats what I heard at least. You know its a speech so it wanders around alot before it gets to the point or points.
US slaps duties on electric blankets from China.
WASHINGTON, Jan 27 (Reuters) - The United States has set preliminary anti-dumping duties ranging from 90 to nearly 175 percent on about $30 million worth of electric blankets from China, the U.S. Commerce Department said on Wednesday.
The ruling is a victory for Jarden Consumer Solutions, a Florida-based subsidiary of consumer products company Jarden Corp (JAH.N). It filed a petition earlier this year asking for protection against its Chinese competitors.
The relatively small case is of one several ongoing U.S. investigations into charges that Chinese companies are selling their goods in the United States at unfairly low prices and benefit from unfair government subsidies.
The products covered by the probe include finished, semi-finished, and unassembled woven electric blankets of all sizes and fabric types, whether made of man-made fiber, natural fiber or a blend of both.
Why don’t we just subsidize the American firm so they can price their blankets at “competitive” rates? Wouldn’t that be cheaper for the country as a whole instead of raising the cost of electric blankets for everyone?
Or here’s a better idea: ban electric blankets. Give a few hundred million to the Florida company for the cost of going out of business. Flannel sheets are cheaper and don’t use electricity and work just as well. Nice green thing to do, except I’m not sure about the energy cost of manufacture, though.
Personally, I like my five-dollar, bought-it-at-a-neighbor’s-yard-sale sleeping bag. It’s one of those bags that the U.S. Forest Service smoke jumpers use. And, if it’s rugged enough for them, it works for me.
And away we go. More to come.
Trade wars are symptoms of contracting economies, also they add to the contraction.
I agree combo…
Now that NBC bought The Weather Channel I now must endure small infusions of econo-propaganda each morning with what used to be a very benign viewing experience.
Anyway, this morning there was a blurb about the DEC decline in new house sales. It ended with the rubberstamp blond saying words to the effect of: ” …a sign that the recovery in housing is possibly not as strong as thought.”
Sounds harmless enough, huh? Time will tell. In the meantime I still maintain that the PTB, given the context of the 24/7 new cycle, is undertaking a dangerous experiment in trying to manage popular expectations that relate to the pocketbook. I’m sure they think that the economy moves faster today than ever before and that justifies their approach. Again, time will tell.
edge,
Really? I hadn’t heard that at all. Then again, I suppose ‘the weather’ is the only remaining topic we ‘haven’t’ politicized?
Transformation complete!
Am I the only person ( when on their ‘own’ time ) that finds themselves being drawn into a shell? I’ve been really tempted to buy “The Avengers” complete DVD set and get lost somewhere in London circa 1965. Just to tune it out, I’ll start with the weekends and if all goes as planned, my world will revert back to black and white.
I suppose ‘the weather’ is the only remaining topic we ‘haven’t’ politicized?
Allow me to introduce you to “climate change”.
TWC used to be my favorite channel until they started harping on climate change.
DennisN,
lol, true enough, but I recall seeing an interview w/ the WC’s president & chief weather guesser where he publicly dimissed the whole notion as completely preposterous!
And I believe their reporting style was confined to real time observations of the ‘present’ ( not hypotheticals about the future? ) Is that ‘all’ about to change? It would be sad to have the (1) station remaining jump the shark.
It IS…. refreshing to see Jon Stewart give BO “equal time” though! His skit on the grade-school teleprompter was absolutely hysterical! Could I be coming a fan?
Buy that box set DinOR, you’ll be happy. I’ve been snagging some good used Anime box sets lately and commercial-free evenings are the way to go.
I also recommend “The Prisoner” box set (the original, not the recent remake).
Amazon has the original Prisoner on Blu-ray for $50.
It ended with the rubberstamp blond saying words to the effect of
Our version of Pravda.
Accuweather dot com is still useful. They have a “global warming” blog that’s actually even handed and thoughtful without partisan sniping.
Personally, I like weather.gov.
weatherunderground dot com
all the goodies, no politics.
Ironic, given its namesake.
I love the wunderground stuff - have lots of links and use them often; great radar data for instace. For whatever reason however I’ve found their forecasts - from NOAA no less - to be much less accurate than weather dot com. There are often large discrepancies - like temperature predictions differ by often 10 degrees or so.
“Waking up with Al”, what a repulsive idea!
Why can’t it be “Waking up with Stephanie.”?
Also if I wanted to watch Al and Brian, I would have tuned into NBC, so no weather Chanel for me. Weather dot com is still good.
Small business owners say Obama’s efforts are falling flat. CNN-Money
In his State of the Union speech Wednesday night, President Obama touted a slew of federal initiatives aimed at stimulating small business hiring and growth. Again.
Small companies employ around half of America’s workers and drive most of the country’s job growth. Obama talks frequently in his speeches about the vital role small companies play, and his administration has launched several efforts to bolster struggling Main Street businesses. But most of the president’s small business proposals remain in limbo, caught in bureaucratic logjams and the Great Black Hole of Congress.
A year ago, Obama set the stage during his first major economic speech to Congress. “I will not spend a single penny for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can’t pay its workers or the family that has saved and still can’t get a mortgage,” Obama said in February. “That’s what this is about. It’s not about helping banks; it’s about helping people.”
But small business owners across the nation say they feel left out of the stimulus and recovery action.
Is Goldman Sachs considered a small business? If so, then Obama has rocked.
Did he mention the Volcker plan during the speech? If so, I missed that bit…
He was strangely silent on that point. And I didn’t see Tall Paul in the audience.
What a difference a week makes!
NYCityBoy,
Yeah, and Oregon passed Measures 66 & 67 with no effort at all. Add’l tax on those w/ incomes over $125k ( filing single ) $250 filing joint.
67 does away with the “$10 Corp. Tax” and the OEA ( Oregon Educators Assoc. ) hails it as “voters believing in public education!” Sheesh, how do you come away w/ ‘that’ impression? Oh well, the one that wins spins!
Yes…And the first income tax increase passed by the voters since 1930 or something like that…
Isn’t the income tax, like The Fed, argued to be unconstitutional? I believe the adventures of Jekyll Island led to the income tax.
scdave,
Remember, we don’t have a Sales Tax here and if you make any money at ‘all’ ( you were paying 9% State Income Tax ) already…
There’s always been a disparity between us and WA and the number of folks moving up Vancouver ( where they have no income tax ) will only continue to escalate.
Even in The Boom Times we were introducing all kinds of user fees, like state parks, over-night camping fees etc. Portland in particular is notoriously unfriendly to biz. All “I” am saying is that many biz’s in PDX were on-the-fence about staying there. This latest “emergency measure” only cements their worst fears. See ya!
Ole Slim had to go and talk back to the White House last night. (Well, they were asking for our thoughts on the SOTU speech.)
Here’s what I blasted into their feedback form:
I am freelance graphic designer and photographer. For me, business has been quite good. I anticipate that things will get even better.
Why? Because in the coming months and years, the increase in work opportunities isn’t only going to come in the form of employment. Many opportunities will be freelance work.
Which means that the future will belong to those who can view their skillsets as packages of services that can be sold on a project basis. And, once the project is done, so is the gig. Time to go looking for another.
This is a megatrend that started many years ago. It will only intensify in the years ahead. So, don’t just look at economic recovery in terms of people getting jobs. Some of us are doing quite nicely without a job.
Some of us are doing quite nicely without a job.
But most aren’t. Not everyone is cut out to be a freelancer. I’m glad its working for you. Most people that I know who are freelancing are not doing it by choice and they tell me the pay is low and the gaps between gigs are large.
I hear ya on the gaps between gigs. I’ve certainly had ‘em. The trick is to go shopping for new business before the current business dries up.
Hey wmbz, see what happens when you post the RUMOR rather than the FACT
PS, this is the RUMOR that lit Haskell’s lightbulb yesterday!
RUMOR:
Comment by wmbz
2010-01-27 05:17:46
New home sales forecast to show 4.2 percent increase in Dec.
FACT:
Comment by pressboardbox
2010-01-27 08:34:01
New Home Sales UNEXPECTEDLY Fall:
“New home sales fell 7.6 percent to a 342,000 unit annual rate last month from an upwardly revised 370,000 unit pace in November, the Commerce Department said. It was the second straight month that new home sales had fallen. Markets had expected a 370,000 unit annual pace from November’s previously reported 355,000 unit rate.”
TOTALLY “UNEXPECTED”
Unexpectedly unexpected.
“Unexpectedly”
They keep using that word. I do not think it means what they think it means.
Stop that rhyming and I mean it!
Nobody could have seen it coming!
Especially not those “bitter, jealous renters” or the “doom-and-gloomers.”
This is why I don’t bother with the MSM anymore.
Anectdote: Took the car in for a free oil change and tire rotation at the dealer Saturday AM. In the waiting room the sheeple were busy watching Faux News. They were mesmerized.
The local QDoba (a burrito fast food place) has a flat panel in the queue permamently tuned to Faux News.
If I had a storefront, no teevee. It’s just too annoying. But the radio would be glued to (surprise!) KXCI.
One of my pet peeves is when someone “hosts a party” and they have their mega TV blaring away, even though no one is watching it. I once committed the faux pas of asking the host to turn it off. The way he looked at me you might have thought I asked him if I could bonk his wife.
Nothing, and I mean NOTHING kills a party like a TV.
Fox is more tabloidish so I’m not surprised. When I’m at the gym I stare at that screen instead of the others too. I’d prefer that anytime over Katie Couric’s treacly “American Spirit” segments on CBS…bleah!
Bloomberg, ESPN & PBS…Thats about it for me…
Spice?
More homeowners filing for bankruptcy to avoid foreclosures
star-telegram.com
The number of homeowners looking to avoid losing their homes to foreclosure by filing for bankruptcy protection is rising, but in most cases it does no good.
Foreclosure Listing Service in Addison analyzed post-bankruptcy cases of homeowners in 60 Texas counties. It found that in 2009, $2.28 billion worth of real estate was affected by a bankruptcy filing, an increase of 26 percent over 2008’s dollar volume of $1.92 billion.
The study reviewed cases in bankruptcy courts in Fort Worth, Dallas, Houston, Sherman, Austin and San Antonio. In 2009, 12,170 properties were affected, the report said, up 9 percent from 11,171 properties in 2008.
In those cases, the homeowner did not comply with a mortgage payment schedule set up by a court trustee, said George Roddy Sr., president of Foreclosure Listing Service. As a result, the property loses bankruptcy protection.
“Generally, when these properties lose the protection of the bankruptcy court, they enter the foreclosure pipeline,” Roddy said.
Does going bankrupt delay the foreclosure process, keeping FB’s like me in an unaffordable house longer?
We notice a few properties in this area that are listed as “available soon”. Upon calling, the agent tells us that the property is tied up in a bankrupcy and may not hit the actual market for 6 months.
Are bankruptcy judges getting backlogged with too many cases? Like lenders who claim to have too many short sale offers to evaluate in a timely fashion; ie assign a negotiator and set a price that is not a fantasy price set arbitrarily by the realtor trying to solicit offers? Hows about hiring a few good men to negotiate, putting people back to work. Maybe some non-paid off appraisors could run comps and get down to a somewhat accurate bottom line for what something is worth, who can’t work for the REIC because they are honest and refuse to hit the mark; appraisal fraud and collusion has played a big part in price run ups here I have heard.
Around here, just about every property it seems is a short sale, with an offer on it, or more than one offer on it, and awaiting an answer from the bank because the negotiators are backlogged! the real price is impossible to ferret out in this scenario.
I know a bankruptcy lawyer* here in Tucson. Guy reports that he’s one busy fella.
*Disclaimer: He’s not a client or someone I’m doing business with. Just know him through one of my volunteer gigs.
Mike in Bend,
Don’t take offense to this ( after all, I’m an OR too! ) but lenders need to make distinctions here? It was noted earlier today that the “Sand States” foreclosures were largely the product of over building/speculation whereas other areas are suffering from the result of job loss ( Mich. etc. )
I fail to see the purpose of lenders trying to do work-outs/holding off on a flood of inventory in Solid Speculator areas, and unfortunately, Bend definitely qualifies. In fact, it should be the Specuvestor Capital!
DinOr. Here goes a long response. I agree with you about us being specuvestor central. No doubt our economy is fooked. We moved here for help with the children cuz my folks retired here. Something to do with a federal employee retiree(my dad) paying no state tax moved them up here when it was still a 30,000 population. Service economy for ski kids, cheap enough housing. i got my teaching license because truck farming was too hard on my body. Fun place!Peeps were her for retirement or recreation. We bought a house to live in for 100k, and could not resist selling it for 300k just a few years later. I guess that makes us flippers, but dont look a gift horse in the mouth, or something like that.
Wizard pointed out, we doubled down with that money and are caught with our pants down(not in a hip way though).
Supposedly appraiser fraud was rampant, as in honest appraisers who could not hit a number for the REIC were not hired for ongoing work. So collusion in the industry and lax underwriting allowed for my wife to qualify for a 300k loan, albeit at 7%, having never held a job in her life! What if these guys get caught for their dishonest actions (Loan officers, appraisers, underwriters/lenders all in collusion possibly? Yes borrowers guilty too, especially if they were not occupying their residences or lied on income. We did neither, but loaners were really pushing the products on us borrowers as a whole, as a no brainer easy money deal) Our appraisal came in with 50k of instant equity, we believed it (naive plus greedy for easy money gains), but also for a place to live, and our intentions were to pay off the house in its entirety from another home we were holding in another state. Well we did not get enough money for that home, our rent to own client did not fulfill his option to buy, and we had to sell at a loss, and our plans and dreams were laid to waste.
Count in 4 surgeries on my part, one of which was band aid, laser neck surgery, outpatient, pre approved, subsequently denied, and we had to shoulder a 50k medical bill from a quack doctor preying on desperate pain people. Another mistake. Real fusion done with a hospital stay 1 year later at a hospital for 18k!
We just want to see what happens before we default, as our payments are eating our still significant savings. Dont want to exhaust our savings wanting waiting or hoping for some sort of relief, when we can invest our nest egg eslewhere. Were you the one recommending muni bonds? How risky are they cuz I haven’t heard many stories of 8% plus investment yields these days. Just looking for opinions on how 100k cash can help our cause seeing how our house is ultimately a lost one?
now being semi-unemployable, and my wife being a grocery checker with hours being cut like no tomorrow
When will bend return to a hwy 97 trucking corridor city retirement mecca it used to be?
Thanks for reading
Mike
Isn’t that 228/192 = 18.8%? Hard to give the article any credibility.
“It found that in 2009, $2.28 billion worth of real estate was affected by a bankruptcy filing, an increase of 26 percent over 2008’s dollar volume of $1.92 billion.”
JOBS OF THE FUTURE ~ Jim Quinn
Despite the Federal Reserve’s extraordinary printing and the U.S. Government’s extraordinary spending measures during the last twelve months, it looks like the only job categories with growth potential are printing press operator, ditch diggers, ditch fillers, whatever they call the guys handing out trillions in government largesse, Treasury Department comedians tickling Chinese funny bones by saying they favor a strong U.S. dollar and people installing Stimulus signs at highway projects.
The signs are about taking credit. An acquaintance fairly high up in the Electrician’s Union told me about a big infrastructure construction project in Philadelphia’s Germantown section that has been underway for two years and is already nearly completed. A representative of the Federal Government recently entered the construction trailer and announced that the work was now a Federal stimulus project. A big sign then was put up at the site to prove it. Two years from now, expect Obama’s re-election campaign to claim this project as one of his stimulus accomplishments.
Are you referring to that elevated rail line? The Slim family has been observing that one for, oh, a decade now. We joke about how it will be the 22nd century before that one’s done.
I’m going to barf if I hear another politician saying that green jobs will save America.
Screw the green jobs. Screw the renewable energy jobs. Screw the biotech jobs. Just get plain old polluting manufacturing back for a start, and let’s work from there!
In fairness, I did hear some remarks about increases in nuclear power plants and offshore drilling laced in with the Green Jobs rhetoric. (Naturally these will be the meanest, greenest oil drilling and nuclear generating projects in the history of mankind…)
There was a piece last night on NPR where somebody talked obout “Fixing the housing market.” Which I took to imply that price declines are an example of the housing market being broken, rather than evidence that it is self-healing, and that it is fixing itself before our eyes. Then I realized if you interpret fixing to mean the OTHER SENSE of the word, as in “that game is fixed,” you have the actual intention of many of the PTB.
No end to the housing bubble until the stupid idea that rising home prices are GOOD and falling home prices are BAD is relegated to the historical dustbin of financial folly…
To be fair, when we bought our first house in 1989, we certainly didn’t go into it w/ the notion that homes had been grossly overpriced, had collapsed and were due for a major “reflex rally”?
In… a normal context, homes appreciating at the rate of inflation is typically a good thing. Granted, the late 80’s early 90’s were some pretty dark hours for OR, and it did work well for us. I wouldn’t want to live in a world where buying a home is ‘always’ a losing proposition?
I wouldn’t want to live in a world where buying a home is ‘always’ a losing proposition?
Which is why a quick crash back to fundamentals-aligned pricing would have been the best (and maybe only) way out of this mess. Rapid crash, then back to normal appreciation is what was needed. I actually think there would have been less overall pain that way.
Obviously you don’t work for a bank with loads of toxic mortgage assets you would like to unload on greater fools.
My cat didn’t like being fixed. That’s another meaning for you.
Speaking of getting fixed, how is the Fed chair reappointment decision shaping up today?
* The Wall Street Journal
* HEARD ON THE STREET
* JANUARY 28, 2010
Political Headwinds for Helicopter Ben
BY PETER EAVIS
The Federal Reserve may have done more to jeopardize its independence than any of its critics.
Political anger toward the central bank is mounting, partly because of its role in bailouts, like American International Group’s rescue, and partly because it didn’t curb certain banking excesses. As politicians respond to these issues, there is a risk that any overhaul of the Fed could lead to interference in monetary policy. But Fed watchers need to appreciate that the Fed’s extraordinary asset-purchases, which helped stabilize a plunging economy, have left monetary policy vulnerable to politicization.
…
Any of the HBB pilots care to comment on what flying a copter into a headwind is like?
Don’t know anything about flying, but I know that if you throw money out of a copter flying into a headwind, money will get frittered away.
Hoo boy, I’m going to to get tutored!
You know every time they release the TIC numbers it shows “London” buys a huge % of the Treasury auction. Well I guess S&P thinks their banking system is getting shaky…
“The United Kingdom is no longer classified as being among the most stable and low-risk banking systems in the world, credit rating agency Standard & Poor’s said on Thursday.”
Who’s next?
http://www.reuters.com/article/idUSWNA274320100128
Psst. Yesterday short term yields were NEGATIVE.
“Psst. Yesterday short term yields were NEGATIVE.”
Please correct me if my memory has this wrong, but didn’t a massive stock market sell off follow the last period of negative short term yields?
I know it is different this time and all that…
Well, maybe not that different…
Will the PPT prop up Mr Market at DJIA = 10K? (Seems likely — dropping below that “psychologically important” support level would seriously jeapordize the nascent recovery…)
Recovery is purely psychological, ya know…
Interesting to see the market failing to rally on the BB reappointment news. Is it unfair to view this as Mr Market’s vote of no confidence in the reappointment decision? I frankly don’t think it makes sense to have stock prices hard wired to every vibration of the Fed’s printing press…whatever happened to the “money is a veil” story?
market pulse
Jan. 28, 2010, 3:46 p.m. EST
Bernanke nomination clears key test vote in Senate
WASHINGTON (MarketWatch) — Federal Reserve board chairman Bern Bernanke cleared a key test vote on his nomination for a second four-year term at the helm of the central bank. By a vote of 77 to 23, the Senate agreed to end the debate on his nomination. The Senate will immediately move to a final confirmation vote. Only a simple majority of the Senate is needed in the second vote.
…
market pulse
Jan. 28, 2010, 3:58 p.m. EST
U.S. stocks lower as Senate votes on Bernanke
NEW YORK (MarketWatch) — U.S. stocks retained substantial losses Thursday afternoon as Ben Bernanke’s confirmation as chairman of the Frederal Reserve cleared one procedural hurdle in the Senate. The Dow Jones Industrial Average (INDU 10,120, -115.78, -1.13%) was down 114.49 points at 10,121.67. The S&P 500 Index (SPX 1,085, -12.98, -1.18%) shed 12.88 points to 1,084.62. The Nasdaq Composite (COMP 2,179, -42.41, -1.91%) was down 40.59 points at 2,180.82.
Wait, wait. We were on the brink, now we’re off the brink, but you think we might be on the brink again? Not possible. I have a very good source who says we’re no longer on the brink.
He’s tall, charming as all heck and loves Portuguese water dogs…
And Porties are a real handful.
Even more so than Border Collies, which are notorious for being real PITAs. I know this personally. My parents have a Border Collie mix, and she views the job of herding my folks as her mission in life.
You may have just solved the crisis rocketing costs of medicare for the elderly!
Rather than nursing homes and assisted care, Border Collies….
but they would need to be able to tell time for the meds…
When my folks first got this dog from the SPCA, my first thought was, “OMG, that is way too much dog for them.”
And, guess what? She is indeed a handful! Seems like she needs umpteen walks a day.
But Mom and Dad decided that taking the dog for all of the walks that she requires would be a lot of fun. Mom views them as a chance to go out and schmooze around the neighborhood. For Dad, they’re an opportunity to get out of the lab and go outdoors to do some thinking.
I can’t help thinking that this very energetic dog has added several years to their lives.
U.S. Cattle Herd Falls to 1958 Low as Losses Climb, Survey Says.
Jan. 27 (Bloomberg) — The U.S. cattle herd may have shrunk to the smallest size since 1958, as mounting losses during the recession spurred beef and dairy producers to cull animals, analysts said.
Beef producers and dairy farmers held 93.181 million head of cattle as of Jan. 1, down 1.4 percent from a year earlier, according to the average estimate of seven analysts surveyed by Bloomberg News. That would be the smallest herd in 52 years, according to the Livestock Marketing Information Center. The U.S. Department of Agriculture releases its semiannual report on the cattle herd at 3 p.m. on Jan. 29 in Washington.
Wholesale choice-beef prices averaged $1.4071 a pound last year, the lowest level since at least 2004, as U.S. job losses climbed and meat demand waned. Corn, the main ingredient in livestock feed, jumped to a record $7.9925 a bushel in 2008 on the Chicago Board of Trade, and prices averaged about $3.79 last year, the third-highest annual average since at least 1959.
Cattle Cycles
The U.S. cattle herd may have shrunk to the smallest size since 1958
And we’ve added over 100 million human mouths since then.
The U.S. cattle herd may have shrunk to the smallest size since 1958 ??
Something else at work here besides a recession ?? Changing USA demographics that are drastically changing the type of food consumption ?? A large group that is aging that are consuming much less and changing their eating habits ??
Beef has become really cheap lately here in Boise. Yesterday I bought nice ribeye steaks for $2.98/lb. You have to buy a whole chunk and cut the steaks off yourself, but that takes no time at all. I’ve also been buying fillet mignon for about $4/lb when you buy the whole tenderloin.
Where?
At WinCo markets. WinCo is a grocery chain headquartered in Boise. http://www.wincofoods.com/locations.htm
They are building a WinCo here in Cd’A, ID… They say they beat Wal-Mart grocery prices by 6%, you have to bag your own stuff, though. (no biggie)
I shop at Tucson’s Food Conspiracy Co-op, where bagging one’s groceries is a way of life.
Although later in the article they said today’s cow is almost twice the size it was in 1958 suggesting that fact had an impact in the lower herd numbers.
Also are there still active Asian bans on our beef?
Macy’s to cut 1,500 store-level jobs - Bloomberg ~ Jan 28, 2010
Jan 28 (Reuters) - Department store operator Macy’s Inc (M.N) is cutting 1,500 jobs effective March 6, Bloomberg reported, citing two people familiar with the matter.
The affected jobs are store-level positions, the people told the news agency.
Earlier this month, Macy’s said it was closing five of its namesake department stores, affecting about 307 employees, as it pares underperforming locations.
Macy’s built a brand-new store out in Nampa, which opened last summer. It’s not surprising that they then subsequently closed the old urban Macy’s downtown Boise store. The valley here realistically can only support two Macy’s stores, the new Nampa mall store and the existing Boise mall store. To me the closing of the downtown Boise store isn’t particularly newsworthy.
I wonder about the other 4 stores.
Sucker fluffers’ highly successful efforts to falsely inflate recovery expectations are sparking a stock market selloff. Enjoy your falling knives, suckers!
* The Wall Street Journal
* TODAY’S MARKETS
* JANUARY 28, 2010, 11:14 A.M. ET
Tech Drags Down Stocks
By KRISTINA PETERSON
NEW YORK—U.S. stocks dropped Thursday, pulled down by disappointment in the technology sector over Apple’s new tablet computer and economic data showing smaller-than-expected improvements.
The Dow Jones Industrial Average was down 65 points, or 0.6%, to 10171, in recent trading. Caterpillar led the measure’s declines, as the heavy-machinery maker dropped 2.8%. Tech companies weighed on the Dow, with Hewlett-Packard down 2.1%, Microsoft down 1.5%, and Cisco Systems down 1.7%.
The Standard & Poor’s 500-share index dropped 0.6% recently, with its technology and telecommunications sectors leading the declines. The tech-heavy Nasdaq Composite fell 1.2%.
The tech sector’s drop came one day after Apple unveiled its new tablet computer, the iPad. But with Apple shares down 3.6%, investors said expectations may have built too high before the product’s unveiling.
…
Contributing to the sector’s slide, cellphone chip-maker Qualcomm tumbled 12% in recent trading after cutting its sales outlook. Among telecommunications stocks, AT&T slid after reporting fourth-quarter earnings rose 26% on fewer charges, but the company has faced criticism for its spotty iPhone service and speculation that its exclusivity agreement with Apple could expire soon.
Investors said the market’s drop was likely cushioned by a generally positive response to President Barack Obama’s State of the Union address on Wednesday night.
…
Economic data released Thursday morning indicated that the economy continues to recover, though at a pace slightly slower than anticipated.
The Labor Department reported Thursday that the number of U.S. workers filing new claims for jobless benefits fell by 8,000 to 470,000 in the week ended Jan. 23. The previous week’s level was revised to 478,000 from 482,000. Economists surveyed by Dow Jones Newswires expected initial claims to decrease by 32,000.
Separately, manufacturers’ orders for long-lasting goods rose in December by 0.3% to a seasonally adjusted $167.91 billion, the Commerce Department said Thursday. Economists had projected a 2.0% increase. Excluding aircraft, capital goods orders rose 1.3%.
…
P.S. Qualcomm is a leading San Diego company. I wonder what the implications of the Qualcomm story are for the local economy here?
You mean they haven’t already offshored all their jobs?
P.S. Qualcomm is a leading San Diego company. I wonder what the implications of the Qualcomm story are for the local economy here?
I figured the large Military prescience in San Diego was propping the economy up ?
Always, but this is nothing new…
Getting back to this being a housing blog…..
Something odd going on here in Boise. The Pepperwood Townhomes had a crisis about 2 years ago. About a dozen were built part way (roof on, bare OSB on the exteriors) and then the builders walked away. They have been sitting and rotting ever since.
Now this week a team of workers showed up and began working on these shells. They have torn off the black-with-mold OSB and nailed up new sheets.
Pepperwood never made sense to me. Townhouses make sense near a dense urban core. But Pepperwood is 10 miles from downtown Boise, out where the neighbors keep cows and horses. Out here why buy a townhouse when a SFH is about the same price?
linkey
http://www.pepperwoodplace.com/
DennisN,
Now I can’t recall our driving past ‘that’ place but the ones top-the-hill by the historic rail station seemed to have a more sensible lifestyle.
I recall some of the guys that stayed at the other complex 10 miles west of DT said the commute to Gowen Field could take as much as 45 min. ( depending on traffic/accidents etc. )
Those prices are INSANE.
Also, look at the streets layout. This is a prime example of bad neighborhood design.
The website hasn’t been updated since 2008 so those are old prices most likely. Note the “calender of events” stops in Sept. 2008.
“Getting back to this being a housing blog…..”
Much better this way,
neh Drumminj?
They’d better cover the new OSB real quick-like. That stuff doesn’t do well during long periods of exposure to the elements.
That doesn’t make sense to me either. Instead of the advantages of city and the suburb you have the disadvantages — you are right next to your neighbords, but you have to drive everywhere.
In addition, townhouses built for multi-car families are butt ugly.
Idaho would be better off trying to create real cities rather than paving the country for suburbs.
But on top of those disadvantages, you can at least get in debt, so that’s a good thing… or so I am told!
The Fed’s PR department staff had better get busy. Their image is slipping away.
Opinion
Updated January 28, 2010
Get Real, Bernanke Didn’t ‘Save’ Our Economy
By Alex Epstein
- FOXNews dot com
The Fed is printing more money, lending it more cheaply than Alan Greenspan did, and encouraging Americans (and their government) to borrow and spend far more than they can afford.
…
It seems as though “the masses” are catching on. Good to see the MSM getting on top of it…a few years too late.
AT&T adds 2.7 million wireless customers, blowing past Verizon with e-reader help
NEW YORK (AP) — Maybe AT&T’s new slogan should be “More books in more places.” The phone company added a near-record 2.7 million wireless customers in the last quarter, defying expectations with the help of new e-reading devices.
AT&T said Thursday it added 1 million non-phone devices with built-in cellular service in the fourth quarter. AT&T has deals to support the latest version of Amazon.com Inc.’s Kindle, Sony Corp.’s Reader and Barnes & Noble Inc.’s Nook.
Where is the HBB PR consulting tag team today? I was expecting them to be posting vehemently the day after the State of the Union speech. I guess their myriad PR gigs are keeping them too busy to post…
Wasn’t some sucker fluffer crowing here a couple of days back about Apple’s stellar profits?
Apple and data disappoint
Earnings — particularly in tech — Apple’s tablet, reports don’t impress investors. Dow industrials down 1.4%. Kodak surges.
And, courtesy of MadTV, here’s a different take on their newest product, the iPad.
Apple might want to rethink the name.
I’ve never seen that clip, but it’s the first thing that came to mind when the name was revealed! iTablet or even iTab would have been much better.
Funny!
I think naming things “iWhatnot” has jumped the shark.
How about Guetenberg Two instead?
Posh Harborwalk files for Chapter 11 ~The Daily News January 28, 2010
Galveston Tx.
HITCHCOCK — The developer of 625-acre luxury community Harborwalk will ask a bankruptcy court judge today to allow it to obtain $2.5 million in financing to keep its marina and yacht club open and to take measures to keep the lights on as it battles with lender Compass Bank about a $30 million note.
Today’s hearing comes after Harborwalk LP filed for Chapter 11 reorganization Monday in U.S. Bankruptcy Court for the Southern District of Texas.
Harborwalk LP, which developed 380 lots, a 150-slip marina and yacht club 2.4 miles west of Interstate 45 on state Highway 6, warned earlier this month it likely would be forced into Chapter 11 when it filed a lawsuit against Compass Bank seeking to stop the lender, now doing business as BBVA Compass, from foreclosing on some property used as collateral.
Harborwalk LP, whose principal is Lynn Watkins, said it had not defaulted on any provision of an amended $30 million note. The developer had made timely payments when Compass Bank sent a notice of default, according to the lawsuit.
Officials with the development firm, who said they were “stunned” by the bank’s actions, have laid off about 25 employees after Compass Bank refused to allow the company to draw more money to cover project costs, officials said.
Harborwalk, formed in 2002 and known for $1 million waterfront homes, has been relatively successful, selling about 300 lots that generated $50 million, the developer has said.
But in 2007, the once-sizzling real estate market began to cool, and in 2008, lot sales slowed drastically, according to the lawsuit.
$1 million waterfront homes
Nice view of the next Cat 5?
Blogger needs a new pair of shoes and I am going to put a bunch of money in dow index fund and make some dough. WS now knows they will get bailed no matter what they do and it’s party time, peddle to the metal. There will be some obligatory dips here and there just for drama, but overall it’s up up and away.
I’m planning to keep DCA money flowing into the stock market right through the 2015 recovery. No need to get inflated out of one’s savings, nor to get stucco having bought too much before the latest ‘green shoots of recovery’ story turns out to be a sham.
Cheapest Route to Walmart From China May Skip Buffett’s Railway.
Jan. 28 (Bloomberg) — Chinese toys and sneakers headed to Wal-Mart Stores Inc. and Target Corp. on the U.S. East Coast may bypass Warren Buffett’s $33.8 billion railway as the expansion of the Panama Canal slashes the cost of shipping them by sea.
The deeper, wider canal will allow A.P. Moeller-Maersk A/S, China Ocean Shipping Group Co. and other lines to ship more cargo directly to New York and Boston instead of unloading it on the West Coast for trains and trucks to finish the journey east. That could save exporters 30 percent, the canal operator said.
The $5.25 billion Panama Canal project, scheduled for completion during its centennial in 2014, may take business from ports including Los Angeles and Seattle, and railroads including Berkshire Hathaway Inc.’s Burlington Northern Santa Fe Corp. It costs as much as $1,000 more per cargo container to use trains than ships, said Lee Sokje, a shipbuilding analyst at Mirae Asset Securities Co. in Seoul.
Anyone know who the general contractor is on the Panama Canal job? Bet it’s not an American company.
Forget the Panama canal. Global warming will open up the Northwest Passage making the Arctic route possible from China to the East Coast USA.
http://www.nunatsiaqonline.ca/stories/article/250110_alaska_company_eyes_cable_through_northwest_passage/
(yeah, this is a submarine cable, but the fact remains that we have a new sea route opening up)
Bunch of bull and fear mongering.
Until they figure out how get those giant tankers and container ships to dock in Kansas, the railroads aren’t going anywhere.
Need to put out a Rally Monkey call, can’t let the DOW go below 10,000 by weeks end!
Bernanke’s cloture vote is at 3 p.m. We’ll see what that does. It could be a “sell the news” day. I could see him getting voted a new term and the market still going straight down as the printing efforts are getting harder and harder to justify.
The Fed
Jan. 28, 2010, 12:32 p.m. EST
Final Bernanke vote may come as early as today
Fed holds rates steady but dissent gains attention
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Senate Majority Leader Harry Reid said Thursday that he is seeking agreement to allow for the final vote on Federal Reserve chairman Ben Bernanke’s nomination to a second term to take place later in the day.
On the Senate floor, Reid, D.-Nev., said he is asking opponents of Bernanke’s nomination to waive the requirement for 30 hours of debate between a procedural vote and a final up-or-down vote.
AM Report: Obama prioritizes jobs
In his first State of the Union, President Obama focused on jobs creation. The News Hub panel parses the message and the reactions on the day after.
A few hours later, a spokesman for Reid cautioned that an agreement had not been reached yet.
The test vote on Bernanke is expected this afternoon. Bernanke will need 60 votes to clear this hurdle.
The second vote requires a simple majority of 50 senators.
Analysts now think Bernanke has the votes he needs to be confirmed.
“Odds are that Ben Bernanke will keep his job,” said Edward Yardeni, chief investment strategist at Yardeni Research in a note to clients.
Although Bernanke is likely to survive, Fed experts expect Congress to tighten its oversight over the central bank.
A measure in Congress that would allow the Government Accountability Office to audit Fed interest rate decisions is now seen as likely to be approved in some form. The Fed has bitterly opposed this proposal, saying that it will create an appearance that politicians had a greater sway over the central bank’s interest rate decisions.
The debate over Bernanke’s nomination has been the most contentious in the Fed’s almost 100-year history. Analysts said it reflected Congress’ deep unease with the policies followed in the wake of the financial crisis.
…
Fed haunted by ghost of Greenspan’s failed Reaganomics.
When Obama reappointed Bernanke, Nassim Taleb, risk-management professor and author of “The Black Swan,” warned of a new disaster: “The world has never, never been as fragile,” yet Obama reappoints an economist who “doesn’t even know he doesn’t understand how things work.” New proof? At last week’s American Economic Association, Bernanke was still shifting the blame: “The best response to the housing bubble would have been regulatory, not monetary.”
Wrong: “He conveniently forgets he was advising Bush earlier, did nothing. Now Obama’s stuck with a Greenspan clone and an insane ideology focused solely on saving a failed banking system by flooding the world with inflated dollars guaranteed to trigger another meltdown”.
“doesn’t even know he doesn’t understand how things work.”
There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. <b.There are things we don’t know we don’t know.
– Donald Rumsfeld –
How prophetic can you get?
There are things we don’t know we don’t know.
Isn’t that also called unconscious incompetence?
How prophetic can you get?
I know for sure that I don’t know if I know that.
Like religion, Rummy’s poetry has an unlimited number of potential applications.
“…flooding the world with inflated dollars guaranteed to trigger another meltdown”.
I don’t understand why a Black Swan investor could see a problem with that? Or does Taleb merely seem to be complaining, when he is secretly celebrating? Bears have a way of seeming gloomier than they really are…
Either he is a concerned citizen or just jealous of other people who made more money than he did.
I think one of the things that must be worrying the bears is the fear of class warfare might break out. If the mobs do lash out they will go after the rich and at that point it won’t matter how the money was made, bull or bear, if you made a pile of money during the meltdown there is a target on your back.
Probably only if people can tell you made a pile…
There is a dangerous misconception taking shape in the economics profession’s mainstream consensus, whose implications are something to the effect of, “Free markets have failed. Ergo more and more government intervention is necessary to fix the economy.”
No analysis of the past three decades would be complete without considering the following:
1) Alan Greenspan preached free markets, but in fact, what he accomplished was more of a central bank monopolist takeover of the entire U.S. economy, accompanied by a weakening of the regulatory mechanisms which provided for the Rule of Law which even Adam Smith (father of capitalism) stated was necessary for markets to function properly. By the time he was through, the primary determinant of asset prices was monetary intervention by the almighty Fed; I note this remains the status quo today.
2) The housing market has been increasingly shackled with a growing plethora of market-distorting subsidies and interventions whose cumulative effect was to make home prices ever less affordable, set against some variant of a publicly-stated goal of Making Home Affordable. Blaming the ginormous housing bubble on ‘free market economics’ makes about as much sense as blaming a gunshot victim’s death on the gun manufacturer.
3. Given the SCOTUS’s new definition of money flows as “free speech”
coupled with an ever-increasing concentration of wealth in the hands of a shrinking pool of 21st century feudal lords, I am highly concerned that funding sources for academic economic research will prove too politicized for the “best theory to win” over whatever theory best supports the financial interests which back the research (e.g., the Fed). I refer you to a related body of academic research on global warming for a similar situation.
May the Best Theory Win
How economists are competing to make sense of our failed financial system.
…
The hand-wringing will continue this week at the World Economic Forum in Davos, Switzerland. Last year the buzz at Davos focused on how to pull the world back from the brink. But the key topic this time will be the crisis of conscience in economics itself. For the first time in decades, the profession is rethinking all the big questions. How do we create growth? How do we raise employment? How do we spread wealth? At least since Reagan, the consensus was that you just had to make the pie grow, and the best way to do that was to unshackle markets and investors, and then get out of the way. Wealth, and thus health, happiness, and all other good things, would eventually trickle down to all.
Now that this view has been proved false, a whole slew of new theories are competing to take its place. All are based, to one extent or another, on the idea that people are irrational actors, and that markets aren’t always efficient.
…
Now that this view has been proved false, a whole slew of new theories are competing to take its place.
The crony “capitalists” had better wise-up and wake up fast and start taking care of our middle-class or the “socialists” will gain ground.
Five South American presidents spurn Davos meeting.
Tens of thousands of socialists, anarchists, environmentalists, Amazon tribes and five South American presidents under the banner of “another world is possible” promoted Latin America as a model for global economic development and co-operation.
Basically the blame for the global economic crisis was on the United States and the bankrupt “neo-liberal” capitalist system and the message from the forum “we told you so”.
(President of Brazil) Lula da Silva, whose policies have balanced social programs with free-market orthodoxy, brought a dozen cabinet ministers to the forum and spurned the Davos summit of business leaders in Switzerland that he had attended previously.
“I believe the crisis is much more severe. We don’t know how deep it will go,“ he said, adding that his government would invest in industry to create jobs rather than give public money to banks as rich countries have done.
He said the US and other rich countries should get the same tough treatment that Latin American countries received during their financial crises in recent decades. “Now, I expect the IMF to go to US president Obama and tell him how to fix the economy” said Lula da Silva.
The Brazilian president, a former factory worker who has blamed the crisis on the United States and “casino” capitalism, got the biggest cheer of all the leaders but avoided socialist rhetoric.
http://en.mercopress.com/2009/01/30/five-south-american-presidents-spurn-davos-meeting
“(Brazil’s) government would invest in industry to create jobs rather than give public money to banks as rich countries have done.”
Man, why didn’t we think of that? A former shoeshine-boy turned factory worker turned President of Brazil thought of that but the past 4 Ivy league educated American presidents couldn’t think of that?? It’s all about good JOBS!
I think we’re starting to look like greedy, brainwashed, controlled fools.
“I think we’re starting to look like greedy, brainwashed, controlled fools.”
It would be a pleasant irony if a U.S. brain drain ensued towards countries with more enlightened and less bank-friendly governmental policies, leaving Wall Street high and dry of human capital but free to enjoy its dominion over the serfs that couldn’t escape the 21st century third-world American ghetto society.
People wonder how a Chavez get’s elected. My guess is we are seeing it first hand here in the US. As the middle class and democracy are destroyed the country will go one of two ways. Toward a socialist/communist dictator or to a right wing dictator.
Pick your poison, or your getaway. Any suggestions?
Toward a socialist/communist dictator or to a right wing dictator.
Yes or towards both and great division. That is why it is crucial that the mainstream left and right find common ground quickly. We are Americans first and foremost before we are political. Never in our lives have we needed to realize this more.
Some important areas of commonality:
1. Both left and right agree we need good jobs.
2. Both left and right are against dishonesty and criminal business behavior.
3. Both would agree on less expensive college education options.
4. Neither condones political corruption.
5. Both are against excessive bank and Wall Street influence.
6. Both want taxes to be used more efficiently.
7. Neither approves of corporations owning our government.
8.
9.
At the root of this disaster is the abandonment of the rule of law ,good faith in business ,liability for defective products and false Ratings ,and breach of fiduciary responsibility .Monopolies and unfair playing fields are the natural byproduct of unregulated capitalism .
Financial markets posing as reputable entities that were nothing more than leveraged casino games with other peoples money
by the market makers and casino players that want to keep their FAT CAT status at the expense of majority .
You add to all of this that outsourced jobs and manufacturing to other countries ,without proper trade balances ,and you get a set up for a disaster of the economy .
Monopolies and unfair playing fields are the natural byproduct of unregulated capitalism
Good points Housing Wizard and it’s not just academic anymore.
History has just proven that capitalism left unregulated destroys real capitalism.
Therefore true capitalists should adamantly support the rule of law, good faith in business, anti-trust regulations, liability for defective products, honest ratings, and the upholding of fiduciary responsibility.
If they don’t support and fight for these things that PROTECT capitalism then they are not true capitalists.
Right now this is especially true when applied to the Wall Street/Bankster cabal.
“Therefore true capitalists should adamantly support the rule of law, good faith in business, anti-trust regulations, liability for defective products, honest ratings, and the upholding of fiduciary responsibility.”
Are banksters who run the share price of their companies towards $0 while continuing to collect $100,000,000s in bonuses considered ‘true capitalists’?
Are banksters who run the share price of their companies towards $0 while continuing to collect $100,000,000s in bonuses considered ‘true capitalists’?
That is one answer that I know that I know.
Just don’t call what we’ve had recently “free market” capitalism. Most of us know better, and we’ll slap you silly. Not many things get my goat - but that’s one of them.
Don’t forget the transformation of the American MSM into a giant propaganda machine that accepts the opinion of ‘economic experts’ without critical scrutiny, or the ratings oligopoly that rubber stamped many a dog pile of toxic assets with their AAA seal of approval.
And now thanks to the Supremem court, unlimited corporate campaign donations to make sure the politicians stay loyal to their masters.
Do you blame the Presidents or do blame the schools?
Problem Numero Uno for America’s “Free Market” Economy:
Leading the populace to believe that the success or failure of the economy is a direct reflection of distortionary market intervention by the executive branch or by the FOMC pretty much dooms the possibility for anything resembling a free market economy to exist.
Long live the Republicans! Long live the Democrats. Long live the mindless followers of both parties. May they consume and breed. Partisanship forever!
Signed,
The oligarchs
Good post jessman.
From Caroline Baum
The decisions the Fed made in 2008 to create a host of credit facilities to make loans to non-banks and support various markets were made under “unusual and exigent circumstances,” as specified in the Federal Reserve Act. No one would challenge that assessment of the financial backdrop.
It’s easy in hindsight to be critical of this or that policy decision and offer alternative solutions. But do any of Bernanke’s newfound critics believe he acted in anything but the public’s best interest?
“You can debate his policies, but you cannot impugn his character,” said David Kotok, chairman and chief investment officer of Cumberland Advisors in Vineland, New Jersey. “His record at Princeton, as a Fed governor, as an economic adviser to the president reveals not one single element of doubt on his character.”
Anyone have any comments?? I think there is plenty of reason to imugn his character.
#1 the notion that he didn’t see this coming is rediculous. He knew this was coming. It’s why he was brought in to lead the FED. He did nothing to prevent this early on.
#2 He has done everything to funnel $ to Wall Street tax payers be damned. The idea that he and TT didn’t know about the AIG bial out and the push for AIG to keep secrets from the SEC is laughable.
All I have to say is that Caroline Baum has a MSM megaphone and you have a blog; good luck getting your point out there!
F-ck David Kotok and everybody that looks like David Kotok.
Treasury wants to speed up mortgage modifications.
Treasury hopes new documentation requirement will appease critics.
WASHINGTON (MarketWatch) — With expectations for millions of foreclosures on the horizon, the Obama administration is making changes to its $75 billion mortgage-modification program to speed up the conversion of troubled loans into more-affordable permanent loans, the Treasury Department announced Thursday.
The changes come as lawmakers on Capitol Hill and housing advocacy groups pressure the Treasury Department to help more people faster. These groups argue the current program isn’t working rapidly enough and it fails to address the growing number of unemployed homeowners on the verge of foreclosure.
The program was designed to help 3 million to 4 million homeowners reduce monthly mortgage payments. It is currently scheduled to continue through 2012, however, many economists don’t believe it will accomplish that goal.
These groups argue the current program isn’t working rapidly enough and it fails to address the growing number of unemployed homeowners on the verge of foreclosure.
———————
Meaning???
Are they trying to insinuate that “unemployed homeowners” are entitled to subsidies/bailouts/credits/gifts that “unemployed renters” are not entitled to?
Exactly why is everyone falling all over themselves to “save the homeowners”? Would they feel the same way if renters decided to stop paying their rents en masse? Would we then be entitled to free housing, just because we didn’t feel like/couldn’t make our payments?
Bernanke confirmed by Senate. Did anyone honestly believe he wouldn’t be? What a joke.
Of course it was a done deal all along, just a little “uncertainty” for show. BB should have been bounced down the reserve steps on his azz, but the nut-less, spineless D.C. crowd has to keep to the script.
Now on the next drama.
The old botox moonbat just doesn’t get it.
White House Rejects Pelosi’s Push to Freeze Defense Spending.
FOXNews.com
The disagreement, surfacing mere hours before Obama’s first State of the Union address, threatens to cast a pall over one of the items the White House hoped would establish the president’s credibility on the deficit.
The White House on Wednesday brushed off House Speaker Nancy Pelosi’s contention that President Obama’s State of the Union proposal of freezing domestic spending should apply to defense spending too.
“Well, the president obviously believes that national security is something that is paramount,” White House senior adviser David Axelrod told Fox News, noting that Obama cancelled certain Pentagon weapons systems in an effort to be more efficient.
“But what we can’t do at a time when we’re in two wars and we have a very determined enemy in Al Qaeda, we can’t stand down. We have to make sure we have adequate defense.”
Debt limit raised $1.9 Trillion - now at $14.3 Trillion.
Current CBO projection puts us crossing that in about 18 months.
“Current CBO projection puts us crossing that in about 18 months”.
Will anyone be surprised if we cross the limit prior to 18 months?
Nah.
FWIW - we did end up with a far better 2009 than was at first predicted. In May a deficit of $1.84 Trillion was predicted for 2009 - in the end though the deficit was only $1.414 Trillion. Awful still, but much better than the earlier projection.
(Though of course way worse than earlier projections - e.g. in 2005 they projected a deficit of only $207 Billion for 2009.)
For viewing pleasure - debt projection by the CBO.
Seems like the intent is to put us on a new “permanently high plateau”.
Also of note - this is with what I would consider quite optimistic GDP projections:
Year %change
2010 3.2
2011 2.8
2012 5.6
2013 5.9
2014 5.3
2015 4.5
2016 4.3
2017 4.1
2018 4.0
2019 4.0
2020 4.1
A lower GDP of course would end up being a double-whammy on the chart - being both a lower denominator in the percentage calculation, and also causing a higher nominator value since government revenue ends up lower than expected. (assuming spending remains as predicted)
Thanks for posting the chart, packman!
Clogged shower drain, RotoRooter, $240…
Advantage: renter
I know a plumber.. owns his home.. and has lived with a serious backup for about a year. He just won’t fix it.
And I know a cabinet maker.. owns his house.. the “custom” kitchen cabinets he started have remained 80% completed for about 2 years now..
Who doesn’t know a carpenter who’s home suffers half finished projects, missing walls, doors… etc.
So why don’t these guys apply their trades in a professional manner on their own homes? I guess they consider it “work” and won’t work for free.. or won’t work at home..?
“So why don’t these guys apply their trades in a professional manner on their own homes?”
I’m guessing their wives could solve that problem in a hurry with a little creative thinking.
Ecuador Default ‘Clear and Present Danger,’ S&P Says (Update2)
Jan. 28 (Bloomberg) — Ecuador’s bondholders face a “clear and present danger” the country may default again this year as a sluggish economic recovery curbs tax revenue, Standard & Poor’s said.
President Rafael Correa defaulted on $3.2 billion in bonds due in 2012 and 2030 last year, saying the securities were “illegitimate” and “illegal.” The government’s bonds due in 2015 were the only of three global notes Correa kept servicing. S&P rates Ecuador CCC+, seven levels below investment grade and the second-lowest in the Western Hemisphere.
“There is still a clear and present danger Ecuador will default,” Richard Francis, a director of sovereign ratings at S&P’s, said in a telephone interview. He said the country’s rating is in part based on questions about its “willingness to pay debt. Ecuador is basically locked out of capital markets.”
Anyone other ex-shareholders of AIG, GM, LEH, etc. common stock get screwed over the past few years?
..or are you all holding Google and Goldman Sachs shares? Bell weather GM slithered into bankruptcy court and now sells assets that in part go back into fat cats investment accounts. Can hardly wait for (the new) GM’s Super Bowl adverts. Goldman’s the best white collar crime outfit going. Neat trick sinking Lehman for profit and then sissy slapping the taxpayers by grabbing bailout dollars to shore-up their ventures into more speculative plundering. With a firm loaded with A-type ex-government insiders and Ivy League Savile Row suits with their eyes on seven figure bonuses. God I love capitalism!
U.S. Economy: Orders Rise, More Claims Than Forecast (Update1)
Jan. 28 (Bloomberg) — Orders for capital goods rose in December, and more Americans than anticipated filed claims for unemployment benefits last week, indicating business investment is making a comeback while the job market stagnates.
Bookings for durable goods excluding transportation equipment climbed 0.9 percent last month, exceeding the median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. Initial jobless applications fell to 470,000 in the week ended Jan. 23 from 478,000 the prior week, the Labor Department said.
“It’s encouraging, but we haven’t put all the pieces together for a robust recovery,” said Ward McCarthy, chief financial economist at Jefferies & Co. in New York. The figures are “consistent with a moderate rate of investment spending, but we still have a very weak labor market. We will make slow, steady progress in the months ahead.”
U.S. Economy: Orders Rise, More Claims Than Forecast
That is fantastic and it proves that we CAN still make things. We need to get back to making things. We were the best at it and we can do it again.
Why is it that what used to be a banana republic, Brazil, is investing in its industrial base instead of its banks and America is not?
To heck with these banksters. They don’t care about us. We need to invest our money in reviving our industrial base. Do you think Brazil or China has anything on us when it comes to our background of “making stuff”? No they don’t. All they have are government programs to support manufacturing and in China’s case they have the world’s biggest market who gave them the keys to the city.
Well it’s time to take the keys back.
Amen, Rio!
Jan. 28 (Bloomberg) — Orders for capital goods rose in December, and more Americans than anticipated filed claims for unemployment benefits last week, indicating business investment is making a comeback while the job market stagnates.
OR might it be that a declining dollar forced companies to spend more for the same or fewer capital goods. Is that really a comeback?
Is that really a comeback?
Not a real comeback, not yet, especially with the job losses I know, but it says that we have a fighting chance if we get behind it as a nation as we did for the bank bailouts.
Our ability to build things is not gone……yet….
Lenders Pursue Mortgage Payoffs Long After Homeowners Default
Jan. 28 (Bloomberg) — When John King stopped making payments on his home in Coral Gables, Florida, two years ago, he assumed the foreclosure ended his mortgage contract, he said. Last month, a Miami-Dade County court gave collectors permission to pursue him for $44,000 stemming from the default.
King is among a rising number of borrowers who are learning that they can be on the hook for years after losing their homes. Amid a crisis that stripped $6.4 trillion, or 28 percent, from the value of U.S. residential real estate since the 2006 peak, lenders are exercising their rights to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors.
“The big dogs get a bailout, and the little man gets no mercy,” said King, 39, referring to the U.S. government’s rescue of banks and other financial institutions.
This is the only way to ensure borrowers become more prudent in the future. It’s not nice, but it’s necessary.
The Justices who believe that corporations are people and deserve the rights of people, and that money = speach didn’t like getting called out on it. Goldman Sach’s loved this ruling, you can bet that any congressman that threatens to regulate or limit the banks will see their competition get millions in campaign contributions. It will be interesting to see how much money Feingold’s competition get’s from these scum bags. He voted against repeal of GS, and TARP both times, he voted against BB. That can only mean Wall Street Hates him.
WASHINGTON – Supreme Court Justice Samuel Alito didn’t like hearing President Barack Obama publicly criticize the high court’s ruling removing corporate campaign spending limits — and he didn’t try to hide it.
Alito made a dismissive face, shook his head repeatedly and appeared to mouth the words “not true” or possibly “simply not true” when Obama assailed the decision Wednesday night in his State of the Union address.
The president had taken the unusual step of publicly scolding the high court, with some of its robed members seated before him in the House. “With all due deference to the separation of powers,” he said, the court last week “reversed a century of law that I believe will open the floodgates for special interests — including foreign corporations — to spend without limit in our elections.”
A reliable conservative appointed to the court by Republican President George W. Bush, Alito was in the majority in the 5-4 ruling.
‘The president had taken the unusual step of publicly scolding the high court, with some of its robed members seated before him in the House. “With all due deference to the separation of powers,” he said, the court last week “reversed a century of law that I believe will open the floodgates for special interests — including foreign corporations — to spend without limit in our elections.”’
What’s wrong with a little post-decision honesty about its likely impact?
Palm Beach Mall To Close For Good
Oldest Mall In Palm Beach County Closes Saturday ~ January 28, 2010
WEST PALM BEACH, Fla. — Palm Beach County’s oldest mall will close for good Saturday.
With only one anchor store remaining, it was almost a foregone conclusion that the Palm Beach Mall would soon close.
“When I bought a place down here, that was the most convenient mall to go to and to shop for what you need,” resident Elisabeth Tretter said.
But the 47-year-old mall is now mostly empty, and a new owner will attempt to take over where Simon Properties left off.
“I’m sad to see this mall go,” Mayor Lois Frankel told WPBF 25 News on Thursday. “But, you know what? It’s very exciting news for West Palm Beach because we have very motivated owners now.”
Frankel said the city is working with the Japanese company that now owns the property and is looking to build a stand-alone retail store.
“I think the idea right now is some big box retail — restaurants, office buildings — so, as I said, that’s going to mean hundreds of construction jobs, which we need very badly, and then thousands — literally thousands — of other jobs,” Frankel said.
This article has an interesting twist on a foreclosure: it’s a reverse foreclosure. The HOA sued to have the title issued to the lender, which was dragging its feet.
A sign of things to come for condo-associations?
news.moneycentral.msn.com/provider/providerarticle.aspx?feed=ACBJ&date=20100125&id=11056274
Attorneys for the Keys Gate Homeowners Association in Homestead have won a legal victory in a case that could set a precedent for banks that drag their feet in taking title to homes facing foreclosure.
The Association Law Group of Miami won the case on behalf of the Keys Gate HOA using what it calls a reverse foreclosure, designed to speed up the process of awarding a property to a bank, thus making the bank liable for fees and maintenance, even if the property is vacant.
Based on the reverse foreclosure procedure, Miami Dade Circuit Judge Jerald Bagley awarded title of a home in the Keys Gate development to HSBC Bank on Jan. 12.
Love it!
..As part of the reverse foreclosure, Keys Gate waived its rights to the property and, as the current unit owner, waived its right to public sale. The motion was granted and the clerk of court issued a certificate of title the same day, transferring ownership of the property to the bank….
If I get this correct, the HOA essentially transferred whatever ownership rights it had to the bank.
OK.. so the bank then owns the home, bypassing normal foreclosure proceedings..
Question is .. Is that home no longer associated with the HOA? It looks like the HOA had to sever all legal ties to that property.
If so, there’s one home on the street that is not in the HOA? Will whoever buys that property from the bank be forced to join the HOA? If so, why?
As I see this, that home is no longer within the jurisdiction of the HOA, and can’t charge the new owner monthly fees, tell them what color to paint the thing, etc…
—-
I searched for any reference to a “reverse foreclosure” proceeding but all that comes up is info on stopping or preventing normal foreclosure.
I think your interpretation is incorrect, joey; note that the HOA pursued the case specifically so that they could cause the bank to be liable for their fair share of future special assessments. That would make not sense if they were no longer in the HOA.
My impression is that they expedited the case by waiving their rights to PAST unpaid assessments. With that issue out of the way, and not needing to be addressed by the court, they could get the title transfer done; after that, they can do new assessments that the bank will be liable for.
RE: ending Moon Mission
Anybody remember Bush 43’s promise to go to mars? Iraq erased that idea.
Re: transport to ISS (int’l space station)
Anybody know what science goes on up there? the efffects of weightlessness on humans
we get more science donr with litrally 1/1000 of the money spent on probes. ever wonder why we stopped trying to explore the ocean’s bottom with people in bathosheres? besides the danger, it’s hugely expensive.
Re: road construction
know how many road construction companies there are in France ? 2
in connecticut? maybe 2,000
hint: build it better the first time and it will last longer
Jan. 28 (Bloomberg) — A strange thing happened last quarter at Wells Fargo & Co. A bunch of derivatives that were supposed to act as hedges on other assets seemed to go berserk.
The good news for Wells shareholders is that the oddly behaving derivatives boosted the bank’s fourth-quarter earnings. There’s more to the story, though. The windfall might be a sign that Wells executives aren’t so great at judging some of the company’s risks, meaning there may be more risk than they think.
The combined gains on the derivatives — which Wells calls “economic hedges” — and the assets they purportedly were hedging accounted for almost half of Wells’s $4 billion of pretax profit last quarter. That’s a lot of low-quality earnings.
About $1.1 billion came from writing up the value of mortgage-servicing rights through changes to inputs in the mathematical models Wells uses to estimate their worth. Another $830 million came from gains on the derivatives that supposedly were hedging this portion of the servicing rights’ value.
That’s right: The hedges and hedged items both went up. This scenario should have been as likely as both sides of a see- saw rising at the same time.
The government is spending trillions to buoy house prices. But when it comes to spending some money to “encourage” companies to keep jobs and factories here, they just shrug helplessly.
Follow the money.
Mark Hulbert
Jan. 29, 2010, 12:21 a.m. EST
January by the numbers
Commentary: January’s loss doesn’t automatically doom the rest of the year
By Mark Hulbert, MarketWatch
ANNANDALE, Va. (MarketWatch) — It now appears quite likely that January will be a down month for the stock market, thereby triggering a negative signal from the venerable January Barometer.
In fact, the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (INDU 10,120, -115.70, -1.13%) would have to rally by more than 3% on Friday alone to avoid that negative signal.
The January Barometer, for those of you who aren’t familiar with it, holds that the stock market’s direction from February through December is foretold by its direction during January. In other words, as the saying goes, “How Goes January, So Goes the Year.”
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“January’s loss doesn’t automatically doom the rest of the year”
That’s quite a ringing endorsement for plowing money into the stock market there, Mark!
Suppose global warming proves false — i.e., all the dire consequences the climate scare mongers like to dream up never come to pass. At what point would it be possible to conclude western society was collectively hoodwinked?
This is a direct consequence of politics-driven science. Thank you, Al Gore!
Climate sceptics bask in the light as science steers clear of debate
By Clive Cookson
Published: January 29 2010 02:00 | Last updated: January 29 2010 02:00
Climate scientists were desperately hoping for a fresh start this year after the disappointing outcome of last month’s Copenhagen conference and the “Climategate” debacle, in which e-mails stolen from the University of East Anglia allegedly showed scientists suppressing data that did not suit their case for man-made global warming.
However, far from enjoying a respite, bad news continues to flow. Yesterday, for example, the UK Information Commissioner’s Office said UEA’s climatic research unit breached freedom of information rules by failing to provide data requested by climate sceptics, though complaints were made too late for the university to face legal action.
More serious may be an assault on the reputation of the United Nations Intergovernmental Panel on Climate Change, whose assessments underpin the whole UN-sponsored battle against global warming.
The most damaging revelation is that a forecast in the IPCC’s 2007 report, the likely disappearance of Himalayan glaciers by 2035, was based on an unsubstantiated assertion rather than good science. The IPCC was forced into an apology and a promise by Rajendra Pachauri, its chairman, that “we will ensure greater consistency in the next assessment report”.
Climate sceptics sense an opportunity to weaken or even destroy a body they have always disliked - because its reports have shown how widespread is the scientific consensus on man-made global warming - and have loathed since it won a share of the 2007 Nobel Peace Prize with Al Gore, the former US vice-president.
Other accusations are flowing from sceptics’ publications. Two frequent examples are that the IPCC’s conclusions about Amazon deforestation and the increasing risk of storms in a warming world are also based on unsubstantiated work. There are snide comments too about Mr Pachauri’s lifestyle and alleged conflicts of interest.
Environmental scientists are proving poor defenders of what remains their overwhelming view: that human activities - mainly the use of coal, oil and gas - are inducing climate change that will become ever more dangerous and requires urgent action. The reluctanceto speak out is reminiscent of the silence a few years ago when plant genetic engineering was under sustained assault, particularly in Europe.
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