Bits Bucket For February 2, 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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Hey Big Apple dwellers, I’m sure this was just an isolated incident.
Toxic Dust in Luxury NYC Apartments Worse Than Ground Zero.
NY Post
Shoddy construction work at a luxury midtown New York City building left residents with apartments covered in a dust that had higher levels of a carcinogen than what was found at Ground Zero, a report says.
Crystalline silica, a toxic substance found in mortar, permeated many of the apartments at L’Ecole, at 212 E. 47th St., during the facade work, said Steven Wagner, a lawyer for tenants who are now suing the building.
Microecologies Inc., an environmental-testing firm, reported finding “highly elevated levels” of the toxin in Steven Rosenhaus’ 20th-floor apartment last May, seven months after he says he came home to find it blanketed in dust from the exterior work.
You do realize you’re talking about sand? Silicosis maybe, but cancer???
Ecole? Sounds like a bacteria.
Don’t know if it’s still true, but bags of play sand sold in California, the kind you put in kids sandboxes, were labeled: “known to the State of California to cause cancer”.
But I concur silicosis maybe. I’m not sure you’d call it cancer.
Of course if you find it objectionable you could always clean it up. It’s a one time mess that’s only hazardous if you breathe it in.
As many of us have pointed out—people decades from now (if the US still exists) will avoid “Bubble Era” housing.
“if the US still exists”
Thanks for the uplifting contingent qualifier to start out the day
I wouldn’t buy bubble-era housing in any other country, either.
I think you’re right there . From nasty sheetrock to bought inspecters ,, a lot of recent houses are trash … All can at some point be fixed , except the bad footers and cement work . And sometimes houses are perched on hillsides like birds . A nice tremor could shake them off.
On August 24, 1992, Hurricane Andrew, a category 5 storm with peak winds of 155 mph, hit Homestead Florida causing $37.28 billion damage in 2010 dollars. My brother, who is a civil engineer and lived in Homestead, inspected the damaged homes and concluded that the structures were not built to code. None of the structures he designed and inspected failed. The only thing he did that was different was to make sure his structures were built to code.
Additional thoughts about the hurricane destruction in Florida, my brother said a contractor with a bribe to do below standard work had approached him on a major roofing project. Looks like bribery is a common practice in Florida, and (as DinOR was first to post: bubble built bubble bad, BBBB acronym?) the BBBB problem will be evident with the next hurricane. After Andrew, the building code was revised in Florida, but looks like the real problem is corruption of the inspection process.
Looks like bribery is a common practice in Florida,
When I was a business owner in the USA, I experienced more scams emanating from Florida than from any other state.
NY/NJ came in second.
California was pretty honest. Actually all the states were pretty honest, even Florida, but it did have the highest rate of scams.
lots of paperwork in Florida bids, namely affidavits swearing you aren’t a scammer…lol.
No offense but it always seemed Florida attracted a louche crowd.
Carl Hiaasen did a great book (comedy) - Stormy Weather - on this very subject. Hilarious writer.
“After Andrew, the building code was revised in Florida, but looks like the real problem is corruption of the inspection process.”
During the boom, builders were doing their own inspections. Seriously, look it up! They were allowed to inspect their own homes, and sign off on them.
Thank god they don’t allow bankers to regulate themselves.
Oh wait…
jess,
Well, agreed. Anything can be salvaged if you’re willing to throw enough money at it? Just last week a contractor came buy and when looking at our back decks he noticed that they’ll be in need of major repairs in short order.
Given we’re already facing a special assessment for the gutters/roofing debacle, I’m seriously thinking about either turning it into a rental, selling and taking the loss, but one way or the other, the wife and I are moving on.
This building is barely 5 years old and is more trouble than it’s worth. Bubble Built, Bubble Bad.
Bubble Built, Bubble Bad.
Now, there’s a good slogan!
Slim,
In the past I’d launch into a long winded explanation/tirade but it really ‘is’ just that simple.
DinOr,
Might be better to just take the hit. If the building has any structural problems then watch out.
But think of how wonderful this is for bankers!
People will need to buy houses more often! If your house falls apart every 10 years, you’ll have to CONSUME more. Better yet, you’ll still have 20 more years on that 30 year mortgage, but we can roll that loan into the mortgage on your next Bubble House, which will also fall apart in 10 years.
Disposable homes, people, jobs, and nation in the end.
SV Guy,
Now just more a matter of timing than anything. I have no illusions we’ll ever get to the bottom of the const. blunders, we’re finding more every day.
Pondering!
Too funny! Who’s to say it wasn’t the plan all along? There certainly has been enough wink/nod inspections.
The shades of the Japanese bubble are quite amusing. They had the same issues and thought part of the recovery would be due to that. Substandard construction.
RE was always a “horse trading” business.
Without all those regulation that some folks like to complain about (hmmm, I wonder why?) you would be paying the same price as now for a toxic, drafty, firetrap that would literally fall down around you.
A lot houses were built like that in the 1970s and 80s. Think aluminum wiring. Sandy mortar. Thin slabs with almost no rebar. Thin insulation. Fiber board siding.
Consumer big ticket items are always caveat emptor.
http://www.osha.gov/OshDoc/data_General_Facts/crystalline-factsheet.pdf
Per OSHA its a carcinogen that can also cause silicosis (kind of like emphysema)
Oh boy, the cleanup is going to be a huge mess. Basically you put a tent on the building, contain all of the dust from the building and then tear out/clean up the source. It might be easier to tear it down and start all over.
Sand is now a carcinogen? This is the stuff that beaches are made of. Glass and all that. I know some rare sands contain radioactive elements, but in general how could one of the most inert things on the planet be carcinogenic?
Silicosis is caused by much finer particles than sand. For instance, it affects constuction workers doing blasting in tunnel projects.
Size matters more than composition. If a particle is within a critical size range (0.3 - 0.5 μm I believe), it will stick in the lungs. particle shape is important too. Asbestos is a problem because its particles are little stings, which are also easily stuck.
Particle shape, it does depend on the type of particle. Crystalline silica is a serious inhalation hazard because of silicosis. Amorphous silica can cause dusty lungs, but does not carry the same risk.
Crystalline silica found in Diatomaceous Earth the stuff used for pool filters because its heat treated it forms Crystalline silica
Before the heat treating when its mined out of the ground you can eat and use it as a insecticide for birds.
I use it for gardening and only recently found out the difference between the pool stuff and the food grade
A little triva for ya
What? They never heard of vacuum cleaners?
I agree the construction company should hire some maids and janitors, but a medical and property damage lawsuit? Get real.
Anything that a sufficiently gullible jury can be convinced is a carcinogen, for all practical purposes -is- a carcinogen.
Remember all the people that were shorting builders, and wondering when a lot of the biggies were going to go bankrupt? Guess the absurd amount of cash they (builders) pocketed from the whole scam was easily enough to weather the storm.
“NEW YORK (MarketWatch) — U.S. stocks rose Tuesday as better-than-expected pending home sales and a surprise quarterly profit from builder D.R. Horton boosted sentiment toward the housing sector, while analysts’ ratings upgrades also provided a lift.”
http://www.marketwatch.com/story/us-stocks-slightly-positive-led-by-alcoa-2010-02-02
Sand is amporphous silica (glass). They are talking about some form of crystalline silica… I dont know anything about its toxicity though.
Say it ain’t so, ‘they’ may dilute the new banking rules. Now that’s a huge surprise.
Treasuries Fall on Speculation Lawmakers May Dilute Bank Rules
Feb. 2 (Bloomberg) — Treasuries fell for a second day on speculation U.S. lawmakers will dilute President Barack Obama’s “Volcker Rule” plan to restrict U.S. financial institutions, easing concern the proposal will crimp the economy.
Thirty-year bonds led the decline as Paul Volcker, the former Federal Reserve chairman who has been advocating curbs on the size and trading activities of banks, prepared to testify before a Senate committee on the plan today. Obama’s proposal may be either significantly modified or dropped, DealReporter news service said, citing unidentified lawmakers and staffers.
Speculation the plans will be watered down means “Treasuries are a bit soft,” said Orlando Green, a London- based fixed-income strategist at Calyon, the investment-banking arm of Credit Agricole SA. “Uncertainty has been diminished.”
Wow! A couple down days in the markets and they back right down. Doesn’t really leave much mystery as to who is really running things.
Bingo!
Anytime Goldman et al gets worried about a tougher regulatory environment all they have to do is sell the DOW off a little. OR if they need aTARP, just sell it off a lot.
Housing, equities, debt (bonds) they all need a massive repricing!
Yep. Nothing like a little extortion at a macroeconomic level, eh?
Volcker is but a tool being used by the Administration.
Unleashing Volcker unleashes financial pain. Ain’t gonna happen in an election year.
Agreed. What I see at the moment is a signaling game to alert the observant of what is to come after the election…
just watch bernanke become volcker
‘Treasuries fell for a second day on speculation U.S. lawmakers will dilute President Barack Obama’s “Volcker Rule” plan to restrict U.S. financial institutions, easing concern the proposal will crimp the economy.’
Sounds like the vaunted bond vigilantes are back in the game…
Tentative conclusions:
1) There is still no such thing as a free lunch.
2) Money may sometimes grow on trees, but not for very long before the tree dies.
‘they’ may dilute the new banking rules
‘They’ being our bought-and-paid-for congress. Good thing the ‘conservative’ wing of the supreme court just turned the money hose into a water cannon.
And then you have people who think everything was fine and dandy with banking law prior to 1999.
It all started when they broke the Glass Seagull.
Remember in November.
And do what?
I’ve followed this rule for years: don’t vote for any Democrats for New York City government, don’t vote for any Republicans at the national level, and don’t vote for any incumbents in the State of New York — based on who I blamed for the Generation Greed era damage.
After the Democratic Congress punked the Obama Administration, I might go with a “don’t vote for any incumbents” rule at the federal level too. But with regard to legislative offices, everyone in New York runs unopposed. There are virtually no elections.
Sounds like quite the politburo they have there.
I fully expect to be voting against all incumbents, regardless of party, for the foreseeable future.
With Bernanke in for another term, look for him to start buying the Greek bonds and the Portugal bonds. All to keep this bubble scheme alive.
It is so obvious about what is to occur with massive debt crushing the economy and then the printing press destroying savings and the national fabric. My guess now is housing prices will drop another 50% and will not go up as there will not be a financing mechanism such as Fannie or Freddie that can sell bonds again - at least for 20 or thirty years.
My guess now is housing prices will drop another 50% and will not go up as there will not be a financing mechanism such as Fannie or Freddie that can sell bonds again
The problem is that you’re going on the base assumption that they’ll sell them to the public. They’ll continue having no problem selling them, just as they have had no problem selling them all through this so far. If the Fed really turns off the spigot, the economy will crash harder than Elvis.
I suspect they’ll just dribble the houses out at inflated prices for the next 20 to 30 years while inflation destroys wages.
You’ll see plenty of houses that should be for sale, but nobody will sell them since that would drop prices to affordable, and they won’t let that happen.
…continues to destroy wages.
As in “continuing from the last 30 years.”
Re:buying greek/portugese bonds)
Oh my Gosh, Don’t say that!!!
(of course I am glad you said that - because i couldn’t even imagine it- but i hope it’s not happening!)
Don’t forget the commercial real estate crisis. Within 3 blocks of me is an abandoned Winn Dixie superstore, an abandonded K-Mart superstore and another superstore that never opened so it just sits as a shell. No sign on it. These all closed during the boom and now we are in the bust. The firms that own commercial real estate must be cooking the books and that will end when they run out of cash.
“Don’t forget the commercial real estate crisis”.
We have hundreds of thousands of unoccupied sq.ft. in our little burg. Still building of course, but at a slower pace. Commercial RE is a great big shoe that will be/is dropping this year and on.
I spoke with one of our local bankers several weeks ago, he said that commercial RE has him greatly concerned. His bank has more exposure than he would like to have.
They funded a couple of insane multi-million dollar condo projects last year that have yet to be finished.
I asked him about one project located downtown next to a Publix, Micky D’s and a busy RR track. I said, I’m sure people are camping out to pay a million bucks to live next to a grocery store. Silence was the response.
What did you expect his response to be? Under the circumstances you described, it sounds to me like silence was the best choice you left him.
please people
where is “around me”? give a zipcode/state
Pay no attention to the barrister from the nutmeg state.
I agree with that..corporations are “pros” at cooking the books..use to work for a publicly traded company that would book up “orders” on the 31st only to “de-book” then on the 1st…
Not the kind of accounting I learned in college..but hey..that is the real world..I wouldn’t trust any company that his heavily invested in commercial real estate right now…
“that is the real world”
We all are presented with opportunities to lie, cheat and steal. Your choice.
My what a surprise.
Commercial real estate grew to size due to an unsubstainable debt-financed consumer-driven equity cash-out boom that ended several years ago and has since reversed itself.
Which means a WHOLE LOT of money is destined to vanish into thin air.
What happened to “Poof!”
I need more “Poof!”
Sorry, fresh out.
Very amusing website, Trif.
Courage. Spring will be here eventually.
Real curiosity to me is how the Comm. property companies hang in there.
SPG has 300 malls. They just raised cash in a debt offering, but you have to wonder when the rug is going to get pulled out from under them.
“Real curiosity to me is how the Comm. property companies hang in there.”
“They just raised cash in a debt offering …”
There’s your answer. It crashes just after the supply of stupid money dries up.
The Fed has an endless supply of stupid money to paper over losses. What makes you think it will dry up?
The companies that didn’t overbuild during the boom years won’t have to pay exorbitant $$ to keep the properties, while those that did overbuild are toast.
A commercial mortgage broker I know told me, about a year ago, that the commercial mortgage brokers could only sell a mortgage to someone with “money in the bank”. So the only people getting the loans were the ones that really didn’t need it.
No matter what the experts say, Comm RE has a long way to go.
“Don’t forget the commercial real estate crisis.”
Didn’t Sam Zell himself say commercial RE has bottomed out, or somesuch nonsense designed to lure greater fools into catching themselves falling knives?
Well, the REIT’s have had a ‘bailout’ of sorts in that they’ve suspended sanity ( FASB Rules ) and also a special kiss me from the IRS to -suspend- they pass-thru of dividend pay-outs to the shareholders ( and still ’somehow’ retaining their charter? )
PB,
Actually, I’ve found quite the opposite. Wilbur Ross ( and others ) seem frustrated by the lack of fire sales and are only too willing to talk down the market, if that is what it takes?
Truthfully, since there’s only a handful of well-connected players in this arena, I don’t really see all that much need for Greater Fools. All the players know each other.
And as usual, all the comments center around MEW-based consumption and retail sq. footage. There are other classes of REIT’s folks.
Did you see the front page of the NY Times today?
“Huge Deficits May Alter U.S. Politics and Global Power
By DAVID E. SANGER
Projections suggest there is virtually no room over the next decade for new domestic initiatives for President Obama or his successor”
We’re DOOMED!
It’ll probably be a terrible place for business (and for Taxpayers) over the next decade. And that’s if we survive at all. I think becoming like Japan in the 90s is our BEST CASE scenario.
We’ve hit the infamous “lucky ducky” threshold predicted by the WSJ (where the majority of voters pay little or no taxes–and now they have the expectation of Free Houses, too!) so expect the country to heavily punish productivity. There’s no way out of this.
Oh! I’m in Central Florida this week at a client site. Housing vacancy rates here (across rentals, Condos, and SFH) is 28%! It would take a miracle for the Orlando area NOT to become one of the biggest slums–with blocks of boarded up houses–in the United States.
Florida is the new Haiti.
Aw, man!
I would hate to see Baltimore lose its title as one of the most boarded-up and dumpy cities along the east coast. They’ve worked so hard there to build a tomb-like mess of abandoned rowhouses with no life in sight… to lose that title would be a shame! Hahaha…
Do people (and nations) succeed because of politicians - or in spite of them?
mentioned a couple days ago that Cameron (british conservative leader) proposed raising the reiremnt age in Britain and his poll rating went UP
“Huge Deficits May Alter U.S. Politics and Global Power”
(Rocks back and forth, tightly shuts eyes, and chants:
There is no macroeconomic budget constraint…
There is no macroeconomic budget constraint…
There is no macroeconomic budget constraint…
There is no macroeconomic budget constraint…)
Snort!
“It’ll probably be a terrible place for business (and for Taxpayers) over the next decade.”
You live in California, right? So aren’t you used to this by now?
“…so expect the country to heavily punish productivity.”
I dunno. What’s worse punishment: Having to work as one of Wall Street’s debt slaves but continuing to get paid for your efforts, or having to choose between riding out a spell of unemployment as a discouraged worker or as an optimistic job seeker?
I personally think the ‘free stuff for certain people’ is an urban legend, but am open to whatever contrary evidence you can offer.
I personally think the ‘free stuff for certain people’ is an urban legend,
So does Warren Buffet….but he uses math and stuff. Like Mr. Buffet, I think the super-rich are grossly under-taxed and I think many Americans are diverted, with propaganda, from this conclusion.
Buffett blasts system that lets him pay less tax than secretary
Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.
The [Very rich] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”
Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent
that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.
http://www.timesonline.co.uk/tol/money/tax/article1996735.ece
Maybe Mr. Buffet should consider giving his secretary a raise?
Maybe Mr. Buffet should consider giving his secretary a raise?
No way. Are you kidding??
(That would put her in a higher tax bracket)
60K is pretty good pay for a secretary. I know EE’s that are paid less than that.
But sure, Warren could afford to pay her 300K without even noticing it.
Anyone who would seriously propose that Warren Buffet pay his secretary $300k has no clue about business environments.
It’s feasible/reasonable for him to pay her perhaps slightly above an “average” executive secretary’s salary (say 10-30% above, based on Berkshire’s success), but no more. Otherwise you’re inviting all kinds of pain from the rest of the staff (all 246,000 or so of them), unless you pay them in kind. Then your profits are simply gone, with most subsidiaries (about 50 of them) probably just going bankrupt.
Not exactly good for business.
P.S. I’m assuming by “secretary” we’re talking essentially a receptionist here - someone who basically answers the phone, bars the door, and schedules meetings - based on a $60k salary. Seems like a more serious “administrator” person for an exec (prepares reports, collates data, etc.) would make much higher. Usually such an exec would probably have several such people though, not just one.
I was assumimg that she was his personal assitant, paid out of his own pocket. If she’s a Berkshire employee then forget it.
Dudes, it ain’t “secretery” anymore……..its “executive assistant” or “administrative assistant”
Get with the freaking program…….
Well - “secretary” was his own word.
You are missing the point by being distracted by the 60K salary of the AA. The point is the effective tax rates and that they are out of whack, no?
Executive Assistiat
(March 30, 1970 – October 4, 1989) was an American Thoroughbred racehorse, who in 1973 became the first U.S. Triple Crown champion in twenty-five years, setting new race records in two of the three events in the Series…
Sorry to burst your bubbles but, there’s no way $60k/yr is in the 30% federal tax bracket.
there’s no way $60k/yr is in the 30% federal tax bracket.
Maybe he was married.
One more reason to take out all deductions from tax code.
But I don’t understand the obsession of some of these people wanting to pay more taxes.
1. First of all your tax money will do nothing to help the people that need help but will perpetuate the beauracracy that loves wars and waste.
2. I bet Buffet has fulltime accountants and lawyers working hard to get his deductions.
3. If you love paying tax so much, why not write a check to IRS? I bet IRS will accept it giddily.
4. And this coming from a guy who invested in GoldManSachs only after the Taxpayers bailed out the joint. His behaviour doesn’t sound like a very consistent to what he says about taxes, does it?
One more public figure who believes in do as I say not as I do. Sick and tired of his populistic rhetoric.
I agree with everything you said here re: Buffett. He is hardly the paragon of virtue.
(where the majority of voters pay little or no taxes… so expect the country to heavily punish productivity.
This is the shell game’s goal, to make us believe that many Americans are freeloaders and to become bitter towards ourselves. However, most Americans are hard working, sincere and earnest and they have had the economic rug pulled out from underneath them, (from underneath us.)
And let’s face it, we are all heavily taxed at a much higher total rate than the very rich. Some of the regressive taxes everyone pays: SSI, Payroll tax, Medicare, State, gas, local, utility, phone, property tax, and sales tax hit the poor and middle much harder than the super-rich.
The working poor and middle-class are not freeloaders no matter what “the productive class” would wish us to believe.
Poor Pay Biggest Income Share in State, Local Taxes
by Michelle Chen
Mar. 1, 2006 – Federal program cuts, tax breaks for the wealthy and state budget crises are not the only forces squeezing the working poor… low-income households are getting pinched yet again by state income-tax policies that turn what little they have into even less.
The layering of heavy taxes over poverty, White said, “certainly contributes to joblessness in our community. It certainly contributes to hunger. It contributes to an unfair burden on those families…. So we’re taxing people who are least able to afford a tax system of this nature.”
For a typical working-class family, saving a few hundred dollars in taxes “means shoes and eyeglasses and paying the heating bill.”
Though states’ tax codes vary widely, a state-by-state analysis of 2002 non-elderly household tax … revealed that overall, combined state and local tax systems heavily favor the wealthy.
http://newstandardnews.net/content/index.cfm/items/2879
“And let’s face it, we are all heavily taxed at a much higher total rate than the very rich.”
Wall Street ‘housing tax’ = dupe greater fools into taking out ‘low interest’ loans to purchase ‘really, really expensive’ homes. Does it really matter from the standpoint of the Wall Street plantation owners whether debt slaves’ monthly payments are massive due to interest or due to unrepayable principle, so long as the payments are crushingly large?
Inflation the stealth tax crushes anyone who has a fixed income or salary(ie can’t bargain for more). Hedge funds and Wall Street can move money to escape the pain, but working stiffs, small business owners etc get crushed.
Inflation the stealth tax crushes anyone
+1 +1
Prof. Bear: Wall Street ‘housing tax’ = dupe greater fools
Measton: Inflation the stealth tax crushes anyone
That’s the truth and those two too are types of taxes that tax the working poor and middle-class disproportionally higher than they tax the truly rich.
“Though states’ tax codes vary widely, a state-by-state analysis of 2002 non-elderly household tax … revealed that overall, combined state and local tax systems heavily favor the wealthy.”
“Non-elderly?” I think if they would have expanded the analysis, they would have found that state and local and federal taxes favor the retired.
Right on Rio, i get sick of the high income people pay 98 % of icome taxes, as if that is all tehre is—income taxes.
I’d like to run the numbers on what the country’s total receipts would be if they took the max cap off income taxable to social security.
I can’t quite parse what you’re trying to say, so I’ll say this:
Maximum tax on the very wealthy 38%. After deductions and shelters and barely dodges, they pay less. A lot less. Figures range from 28% to 33%
Tax on the well off but still middle class is 32%.
I have no idea where you are getting 98%.
The Prophet of Change will achieve his mission to Change America into a backwater, dying nation. Now, he couldn’t have done this without a lot of help from both “political parties,” the banksters, and the people themselves, but he really is working to achieve the title of The One… After all, somebody has to give us that last nudge off the cliff…
The Prophet of Change
Wow, did you make that up yourself?
socialize medicine ….restructure our banking and tax laws….you might bring us back from the brink
“…where the majority of voters pay little or no taxes”
Where do you get this crap? The only entities paying little or no taxes are the big corporations or “deduct and shelter until it bleeds” rich.
So yes, in a round about way, I’m saying you are wrong.
Just google “Lucky Duckies” and find the WSJ Editorial
But they are NOT the majority.
And they are so damn poor that the tax break amount to pennies.
Perfect time to raise tuition, with enrollment going up.
Coast-to-coast double-digit college tuition hikes.
State budget deficits contribute to higher education costs.
SEATTLE - As students around the country anxiously wait for college acceptance letters, their parents are sweating the looming tuition bills at public universities.
Florida college students could face yearly 15 percent tuition increases for years, and University of Illinois students will pay at least 9 percent more. The University of Washington will charge 14 percent more at its flagship campus. And in California, tuition increases of more than 30 percent have sparked protests reminiscent of the 1960s.
Tuition has been trending upward for years, but debate in statehouses and trustee meeting rooms has been more urgent this year as most states struggle their way out of the economic meltdown.
“Florida college students could face yearly 15 percent tuition increases for years”
Myself and other posters from FL have agreed for a long time that this would happen.
It won’t happen. Very soon these college students will find out that tuition exceeds their future earnings. At that point the game is over.
Already starting to happen. Just look at the increases in community college enrollments.
Foreigners will fill the void. In some fields they already are. A doctor I chat with said that in her son’s highly respected engineering school as a white waspy boy he is by far the minority.
I got my engineering degree in the mid-90s. Coming out with a Bachelor’s degree from a not-very-respected state school I had a job offer in had and a “pie in the sky” M.S. application in at the private school I wanted to attend as an undergraduate (but couldn’t even afford 10% of the cost). Figured if I got in full ride I’d go, if I couldn’t I’d take the job.
I had the application in for a few months and hadn’t heard anything. So I called the school and explained my situation with the job offer. The Graduate Advisor’s exact words after he pulled my file: “You speak English very well, we’ll give you a full ride teaching assistantship.” So I went.
That was how bad it was in the 90s. Of the 60 or so graduate students in the department, only five to seven of us were from the US - and we were also the only graduate students that attended an American university as undergraduates. So I had a full ride for two years, all because I spoke English.
I thought for sure this would happen last year with the credit crunch and my school’s total cost of attendance over $52,000. But, record number of applications. We did have to admit about 20% more people in order to make our target freshman class size, however. If that trend continues into this year, the game might be nearing the final innings, anyway. I figure I have a few great years left in higher education. Ride the bubble!
Ride on!
“Perfect time to raise tuition, with enrollment going up.”
Obama is working hard to keep the college tuition bubble inflated! That’s why they’re raising tuition:
For example:
“Current and former University administrators praised President Barack Obama’s State of the Union pledge to tackle college affordability issues, calling Obama a friend to the field of higher education.
In his 70-minute speech Wednesday night, Obama called on colleges and universities to reduce their rising costs, introduced the idea of tax credits for families paying for college, and called for debt forgiveness programs for low-income families and students who enter public service.”
Let’s see: Reduce costs? Fine! That will raise their margins. (He didn’t say reduce tuition.
Tax credits? Great! Now they can keep the prices high!
No need to pay back debt? Perfect! The kids can borrow more, and the Taxpayers will bail them out.
NO, He did not say no need to pay back, if you go into private enterprise.
There’s no need to pay back if you become a government employee.
He thinks government handouts and jobs is the solution to all problems. More government.
Just look at the huge disparities between public/private sectors over the past decade. Bubble “valuations” meant huge increases in tax revenue, assumed to continue forever, as guaranteed by “realtwhores”, who said we were working off a new paradigm.
So, they spent lots of money on public works projects, salaries and benefits (all to be extended into perpetuity), without the slightest regard for fiscal prudence.
What’s Obama’s proposal……….get a good paying government job, because, after all, if you are working for the government, you are doing a public service. It’s just so annoying to see these ridiculous proposals.
Also, Obama is having the FED’s take over student loans to make sure every person who wants to hang out on college campus can do so. I am certain the loans won’t be targeted to specific fields of engineering, medicine, science and technology. More like, Sociology, philosophy, business voodoo math, and humanities classes, all of which have good curriculum, but are usually where the bizarre courses, such as “women’s studies”, Ethno-centric world views, Ugandan culture and art, Self-worth exploration, Santaria’s contributions to America, etc.,etc, become part of the liberal left takeover of American Universites. That will certainly help bring costs down.
Also, Obama is having the FED’s take over student loans to make sure every person who wants to hang out on college campus can do so.
This is already a problem in Europe. Especially in countries where college is tuition-free.
Two weeks ago I was in Sarasota visiting New College with my daughter. Since its an honors school, in-state residents basically go for free(including books). Out-of-staters cost approx. $34,000/yr. The admissions guy told us that the in-state vs out-of state ratio is 80/20, when historically it was 60/40. He said they’re trying to change that.’ I bet you are’ is what I thought. I’ve been paying FL property taxes for 25 years, w/o residency, so the cost differential turned me off before the tour started.
If public perceptions on the value of higher education ever catch up to global economic realities - watch out! (In the past year I’ve read a couple articles that suggest they are.)
Could elaborate on your vague statement? Do you mean higher education is overvalued or undervalued now? And the global economic realities are…what? That higher education is worthless, or worth a lot? And watch out for…what? A shortage or surplus of educated kids? And which college majors would this all this apply to? I make a HUGE distinction between science/engineering and liberal arts.
The Millenial Generation is in real trouble. Maybe Robert Toll’s prediction will come true…these kids will have to stay home with their parents until they are 40. Not because house prices are high, but because there are no jobs to be had due to outsourcing/automation. They are effectively stuck waiting for the baby boomers to die off and open up the jobs. And that’s assuming that the Baby Boomer jobs are not taken by H1-B’s whose education is fresher, or outsourced to countries with cheaper knowledge workers.
The American education system is starting to look like the American health care system. It’s the “best system in the world”…IF you’re rich.
For the individual education is priceless - but in the current socioeconomic context its value diminishes. Education, like housing, has been commodified and the result is that for many, many people college is no longer the start of a journey but merely a prerquisite for participation in the Am. Dream.
Where gloablization comes into play is that American youth no longer have a lock on the benefits of higher ed. At the same time, globalization is also irreconcilable with the trappings of the postwar lifestyle. Over time something has to give and while there won’t be a shortage of educated people those people may find that the financial burden of acquiring that education does not pay the monetary dividends they expected. At that point higher ed may very well lose the carte blanche it enjoys to more nimble institutions that offer targeted and flexible curricula.
In short, cramming every breathing soul into a university ain’t gonna sell all those houses if both the education and houses cost too much. But, at least we’ll probably have some real enriching conversations with our baristas and pizza delivery guys.
“we’ll probably have some real enriching conversations with our baristas and pizza delivery guys”
Don’t forget the moving guys — I had one drop Žižek on me in NYC. I actually really enjoyed that.
For the individual education is priceless - but in the current socioeconomic context its value diminishes. Education, like housing, has been commodified and the result is that for many, many people college is no longer the start of a journey but merely a prerquisite for participation in the Am. Dream.
And this is exactly why fewer and fewer of America’s brightest choose to go into engineering and science.
The perception may be worse than the reality with respect to the employment of college grads. Ancedotally, my daughter, who graduated from a second tier Washington state university, one year ago, and all of her fairly wide circle of friends all of whom graduated with some kind of business degree, are all now gainfully employed in reasonably well paying jobs and at least in the case of my daughter, with decent benefits.
It certainly wasn’t the hiring frenzy that graduates found in 2005 to 2007, and it took a couple of them a few months to find something, but they are employed.
I’ve always questioned the cost/benefit ratio of private universities, and clearly even the state universities are in danger of pricing themselves out of the market by raising tuition, rather than attempting to become more cost efficient, but for now, a meaningful degree from a state university seems like a decent deal.
For my daughter, four years and a semester including housing was a tad over $80K. We had saved the money, no student loans needed.
For my daughter, four years and a semester including housing was a tad over $80K. We had saved the money, no student loans needed.
I seem to recall my mother and father starting to save for my college education when I was a wee little Slim.
We are definitely going to have to change the way we deliver higher ed in this country. To expect that taxpayers and parents will together pay over 100K to provide a student with a Bachelor’s degree is incompatible with the new global marketplace for jobs. The cost structure has to change to more closely resemble that found in most high schools. Even CC’s are too expensive. Taxpayers can no longer afford to finance expensive public higher ed. Here in Colorado there is talk of privatization of some of our public U’s
We are definitely going to have to change the way we deliver higher ed in this country.
Already starting to happen.
But online schools are too expensive as well. Most charge $300-400 per unit. Sure, its less than the $1000 per unit most private schools are charging now, but its still way too expensive.
Colorado is right. This is about breaking down the price barriers to knowledge - of which there should be hardly any.
Small wonder so many young guys chose to become electricians, plumbers, trim carpenters, HVAC techs, etc. instead of going to college during the bubble. They made more money than engineers without the 4 years of school and the huge student loan balances at the end.
Of course now they’re hurting for the lack of work. And I’m finally starting to see labor discounts. Example: one of the coils on our garage door broke last month. I shopped around and was able to save $100 on the repair by going with a local guy as opposed to a chain (like Raynor).
That said, I’m seeing a lot of stickiness with labor charges, especially when done by chains (Best Buy, Home Depot). Also just bought an “over the stove” microwave. The local mom-n-pop appliance store charged $30 less to install than Home Depot.
Don’t wanna get too wrapped in the discusion here. Colorado, you are mixing some things up here about breaking price barriers. The MAJOR PROBLEM is the same problem we saw with home loans. The more EASY CREDIT was thrown at the market the more prices went up. Be it education or be it houses. Or healthcare.
The POTUS had a speach that sounded like “throw money at the problem”. OK a tax credit.
All those greedy (?) teachers unions will see that new money and DEMAND to be compensated like the saviors that they are. A couple years later and price for education has gone up about as much as the credit you created.
Also have to consider the value of education. It is a big deal to have people sit on their ass and study for five years of pondering. Perhaps the problem is too much supply of degreed people? Maybe, just maybe a lot of these people don’t deserve to get an education? So a price barrier makes it a difficult choice that needs to be considered.
Part of what I’m seeing as an employer. Lots of unqualified degreed candidates.
Part of what I’m seeing as an employer. Lots of unqualified degreed candidates.
I agree with this, but I think the problem would become even worse if there were a big shift to online schools as the Washington Post article suggests. I don’t believe for a minute that the average caliber of applicants will go UP if that happens.
BUT civil service Unions force you to have any 4 year degree to apply for most jobs.
Even CC’s are too expensive.
What do they cost in Colorado? It’s $17 per unit in California, which is practically free (to the student at least). Books and even parking permits can easily cost more than the tuition.
“Perfect time to raise tuition, with enrollment going up.”
Does Wall Street some how get a cut of the higher tuition payments?
Yes, PB, they do. The “servicing” of gov Stafford college loans was contracted out to private companies during the Bush years. Higher tuition –> higher interest payments –> higher service fees. Obama is changing that back.
And there you have it. Proving once again that giving government responsibilities to private companies is a surefire recipe for unbridled greed.
This joker like all the rest of them act like this freight train heading toward a place called insolvency just now got on the tracks. Besides who cares it’s only national debt,right?
Obama’s Budget Is ‘Fiscal Insanity’: Sen. Gregg.
President Obama’s economic policies are promoting ‘fiscal insanity’ that is leading the nation down the path of insolvency, Sen. Judd Gregg (R)-NH told CNBC Monday.
“We’re going to get ourselves into deep, deep trouble here if we continue to pursue this course of fiscal insanity, in my opinion,” said Gregg, a ranking member of the Senate Budget Committee, said in a live interview.
“It’s not just this year, which is the issue of stimulus,” Gregg added. “It’s the year after, it’s the year after that and the year after, eight years out the president is projecting a trillion dollar defecit, a trillion dollars every year for the next eight years, that’s not acceptable. You just can’t do that to this country because you’re basically taking us down the road of insolvency.”
Don’t worry, Greggster. BB will make it all good.
“…….called insolvency………”
I would offer that this threshold has already been crossed.
I need Drumminj this morning….OOPS my computer automatically updated to Firefox 3.6 and the Joshua tree ext doesn’t work
Calling Drummin……..
aNYCdj,
While… we’re on the topic? I run XP and even though I’ve been good about installing updates, my neighbor across the hall told me I don’t have Service Pack 3 ( SP3 )
From what he describes, it’s like basically installing a whole new operating system! ( Huge file ) Every night I try to get it installed but when I come in in the morning, the download wasn’t completed and all I get is “Access denied”. Anyone have any exp. w/ that?
DinOR
The best technical explaination that I can give…
You and I are both must be running a Microsoft Windows Operating System on our computers.
I think it’s some sort of destructive VIRUS that periodically mutates.
It was created long, long ago by some kid named Bill Gates.
SP3 came out years ago - I’m surprised you didn’t get auto-updated then.
Microsoft is in the process of “de-supporting” XP what with the release of Win7.
Recent updates from Microsoft require “authenticating” the copy of Windows on your machine - if it looks bootleg to MS, they won’t let you get the download. You may be getting error messages in the middle of the night asking you to manually enter the serial number off your Windows CDs - and if these time out it gives up.
I went and checked my MS update history. The same day I updated to SP3 back in June 2008 I had to first install “Windows Genuine Advantage Validation Tool (KB892130)”.
Windows Genuine Advantage Validation Tool
You MUST have this for SP 3 to install. And you HAVE to sit there and manually tell it Next and Accept. Several times.
You could try downloading the .exe file and installing it manually instead of an automatic update.
Thanks guys, I think I’ve managed to encounter each and every issue you’ve collectively managed to bring up.
I may need a sleeping bag and an alarm clock but I WILL get this done! The problem is, too many lay people like myself click on the icon when it pops up and actually are delusional enough to think we’re making a difference?
Are you running Symantec antivirus? That crops up often on posts about “can’t load SP3″.
See http://support.microsoft.com/kb/949377
I had no problem loading SP3 on my XP platform. Although you’re right. It did take a while to complete.
I’m still running SP2 and install MS updates very, very selectively. With Avira antivirus, Zone Alarm firewall and Spybot all active, plus the fact that I do my browsing in a Sandboxie window, I have had zero problems. Three out of these four programs are free.
Stock watch
Monday’s rally should get alittle follow through leading up to Friday’s job’s number. 20 day moving average on the DOW is around 10,450 (about 300 points from here) could be agood place for this little rally to fail.
“20 day moving average on the DOW is around 10,450 (about 300 points from here) could be agood place for this little rally to fail.”
Yes you could be right I will probably sell a little into this small rally. I still beleive we are in a secular bear market which will last for years.
INDIA IS DOING GREAT. LOOKS LIKE THERE AUTO SECTOR IS BOOMING NOW. TO ME IT ALL LOOKS LIKE A MASSIVE BUBBLE.
Strong demand, spurred by imminent emission deadline has pushed auto sales during the month of January to unprecedented heights. Maruti Suzuki, the largest automobile manufacturer in the country posted a whopping 33% increase in sales for the month.
While Maruti’s domestic market surged ahead by 21 % to sell 81,000 vehicles, the export tripled to almost 14,500 vehicles. This is Maruti’s best ever performance in a month till date.
Maruti Suzuki is not the only auto company to benefit from the auto boom. Hyundai Motors recorded a 42% hike in sales during January. The giant of SUV segment, Mahindra & Mahindra posted a 71% y-o-y increase for the January sales.
The general health of the industry is rosy, as the country is emerging relatively unscathed from the global economic slowdown. In a way, recession helped boost car sales, with the government bringing down interest rates, which led to easy availability of car loans.
“The general health of the industry is rosy, as the country is emerging relatively unscathed from the global economic slowdown.”
This “global economic slowdown” forced companies on the margin to ship jobs to a much cheaper India, that’s why India is “emerging relatively unscathed”.
combo,
Remember, they’re just ‘now’ coming out of the horse & buggy days, so things are bound to look more robust. Come to think of it.., just about anyone looks robust when compared to US.
+1
It’s easier to rebound when you’re basically being dragged forward by the rest of the world. As technology advances, and world trade increases, world economies will tend to equalize. This will make the weaker economies appear “stronger” than the stronger economies, in terms of percentage growth.
About that shipping jobs to India thing, here’s Slim with a cautionary note:
I work in the web development field. On a recent project, I used Indian programmers as subcontractors. Never again.
Why not?
1. They don’t have the same sense of time urgency as Americans do. After all, this is the land of “I want it yesterday!” With the Indian programmers, it took days to get very simple tasks done. Which did not amuse my client.
2. Despite the fact that English words were used by everyone, there was quite a language/understanding barrier.
3. Time difference. They’re on the other side of the world. Which meant that when I was starting work here at 8 a.m., they were heading off to nighty-night time. Which added to the delays mentioned in Item #1.
Lesson learned: Don’t outsource to India.
I prefer to outsource tech projects to lower-cost cities in the United States. Places like Pittsburgh have good talent (due to Carnegie Mellon University, etc.) and lower cost of living, so they can charge 25-50% less.
Right now, I’m subcontracting a project to people in Massachusetts and Texas. And they’ve been wonderful to work with.
Right now, I’m subcontracting a project to people in Massachusetts and Texas. And they’ve been wonderful to work with.
Being a resident of Mass and heavily involved with the hi-tech industry in Boston, I can attest to the quality of the talent pool here, though the cost-of-living is relatively high, between housing, taxes, cost of insurance, etc, and incomes are generally high as well.
My MA sub rocks the house. I’m about to engage her services on another project that I’m working on.
Brother works as a programer for Bof A (used to be Countrywide) in Simi Valley they out source work like crazy to India.
Thoughts on Treasury Inflation Protected Securities (TIPS)? And what about SKF?
SKF! The hot plate!
Don’t touch the plate, you will burn your hand!!
My broker recommended TIPS to me. Knowing the answer I asked who decides what the inflation rate is? You mean the same people that have been lowballin’ SS increases forever.
No thanks.
Treasury Inflation Protected Securities (TIPS)?
I don’t think they pay much interest ? what are they duration wise about 10 year ?
The Rich Pay Higher Taxes Than the Very Rich nytimes.com
While generally the United States personal income tax system is (by design) progressive, at the very top of the income ladder, it is actually regressive.
Americans earning more than $10 million a year, for example, pay an effective income tax rate of 19.7 percent on average, whereas those making $500,000 to $1 million a year pay an effective tax rate of 23.4 percent.
What is the main explanation for this regressivity at the top of the income scale? Three words: capital gains taxes.
http://economix.blogs.nytimes.com/2009/12/09/the-rich-pay-more-taxes-than-the-very-rich/
The very rich and powerful are exempt from the rules. Taxes are for the little people to pay.
(BEGIN VIDEO CLIP)
REP. EDOLPHUS TOWNS, D-N.Y.: In effect the taxpayers were propping up the hollow shells of AIG by stuffing it with money. And the rest of Wall Street came by and looted the corpse.
REP. JOHN MICA , R-FLA.: You know when you were being confirmed, a lot of controversy surrounded your not paying your taxes. You gave lame excuses then. I believe you’re giving lame excuses now.
Your punting the blame and I think you’re trying to position yourself as the —
(CROSSTALK)
TIMOTHY GEITHNER, TREASURY SECRETARY: Congressman, you don’t know me very well.
MICA: And yet —
GEITHNER: You don’t know me very well. I will take —
(CROSSTALK)
MICA: We’re not getting the whole story, we’re getting a lame story.
REP. STEVEN LYNCH, D-MASS.: You could have done the right thing by those people, by the American taxpayer because their money was being put into this deal.
GEITHNER: Congressman, I —
LYNCH: It just stinks to the high heaven what happened here.
(END VIDEO CLIP)
That was a Democrat.
Machiavelli has a proud smile on his face from whichever corner of the next world he watches us.
The real rub is that before the bail-out of AIG Goldman offered to take a major discount on those CDS contracts . Apparently a lot of those contracts didn’t even involve the real ownership of those assets, but just a bet on them . This was a case where
the Casino players should of eaten it but they ended up with 100% on the dollar, including Foreign Banks .
Isn’t there a issue here of Insurance Companies insuring parties
that are not the Real Party of Interest ,not to mention not having enough reserves to back the bet to begin with ? The unregulated world of financial markets is a joke yet the system remains in tack .
Feb. 2, 2010, 3:13 p.m. EST
Banks shouldn’t be hedge funds, Volcker tells Senate
Federal safety net shouldn’t cover speculators, Obama adviser says
Explore related topics –Banks
* Bank Of America Corporation
* JPMorgan Chase & Co
* Citigroup Inc
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — The federal safety net for commercial banks should protect depositors, not speculators, former Federal Reserve Chairman Paul Volcker told senators on Tuesday, urging them to pass the so-called Volcker Rule that would ban banks from trading for profit and that would restrict the size of the biggest banks.
Volcker, now an adviser to President Barack Obama, told the Senate Banking Committee that the banking system must be restructured to prevent a repeat of the bailouts of 2008.
The top Republican on the Senate Banking Committee, Sen. Richard Shelby of Alabama, said he was open to any idea that would prevent another “calamity,” but chastised the administration for “air dropping” its latest proposal months after debate had begun on rewriting the rules of the banking system.
Sen. Chris Dodd, D-Conn., said he “strongly supports” Volcker’s proposal. Banks must not be allowed to reap the benefits of successful speculation while handing taxpayers the costs of failure.
…
Bear,
Interesting. Perhaps Dodd knows he is out and is taking some pop shots at the banks along the way. Hell, what kind of loytal did all those millions of donations get them?
Here’s a link:
http://www.youtube.com/watch?v=PCQ8730oFnk
Not much in there, in fact Mica is just shooting aimlessly, at least that’s what I felt. I want to see Geithner nailed, but we need an inquisition for that to happen.
This is just political grandstanding by lying scum politicians. THEY voted for the bailout, not the taxpayers. The taxpayers sent a message, which these corrupt pigs ignored. I no more blame Geithner than I do these f***ing swine.
Well said. They grill Geithner in front of the cameras for the benefit of yahoos, while ignoring their own culpability. There’s plenty of blame to go around, starting with tens of millions of our fellow citizens who think they’re entitled to have it all, now.
I don’t want to see Geithner pilloried, as satisfying as that might be. Rather, I would like to see systemic fixes identified and institutionalized that reflect sound-money principles, responsibility, and accountability. True conservative principles, which means this generation refuses to dump its problems and debts onto future generations. We do what has to be done. But expecting that from our current political class is simply not realistic.
Now
1. Factor in payroll taxes
2. Factor in state sales taxes
3. Factor in that the very rich are able to hide a lot of their income thus making the effective tax rate look higher than it really is.
I’ve seen graphs that suggest that the top 1% pay a lower total effective tax rate than people earning approximately 80k a year.
If you factor in inflation as a tax then the top 1% are absolutely killing the upper middle class because they can hedge their investments but most of the upper middle class have incomes that are eroded by inflation.
Rising FHA default rate foreshadows a crush of foreclosures
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020103527.html
Just remember, a closely watched pot never boils over.
Except when it’s me making oatmeal or soup.
Some real gems in there:
“As these loans from 2007 and 2008 go bad and clear off of the FHA’s books, agency officials said, losses are expected to taper off, aided by the housing market’s anticipated recovery and an influx of more creditworthy borrowers, who have flocked to the FHA’s home-buying program in the past year.”
“On Monday, the agency projected that the fees should generate $5.8 billion in fiscal 2011, up from $2 billion this year. That would fatten the FHA’s cash cushion, used to cover unexpected losses.”
So we have unrealistic expectations for a housing recovery to save the day, combined with a ponzi scheme-type outlook on finances.
I got a letter from Wells Fargo letting me know they changed my credit card interest rate to 28.89% APR…
My credit score is ~740, I do not owe them any money (I pay it off at the end of the month, every month), and I have no debt elsewhere.
What are these companies thinking?
Brett-
You’re not alone. My Chase CC rate was 8.25% and then went to 15.50% overnight. Not one late pymt, pay off every month like you, and FICO 825.
I called, and they basically told me tough chit. It didn’t matter what the facts were.
I want to be a bank, too!
Cancel your credit card. Problem solved.
I dunno about the rest of you, but I’ve been making a point to increase the amount of plastic-free transactions in my life. As in, more cash. More checks. And less on the debit/credit card front. It’s my way of stickin’ it to the Plastic Man.
Az Slim-
Me too! I don’t like anyone to know my buying habits, or where I go, so I usually pay in cash. It’s the gas transactions that the CC’s come in handy for.
For some business transactions it’s either essential to use plastic, or it’s a good record keeping tool.
Umm…if you don’t like people to know where you go, then using CC’s for gas are about the worst thing you could do. Unless you are only buying at the closest gas station to home.
Polly,
I only fill up about 2 times a month, and yes it’s close to home. Are you still jazzed about your new place?
I recieved a letter from one of my banks 1/5/2010 stating that I would be recieving a new Platinum Visa CC.
My old Gold Visa Card was supposed to be good until 4/11/2010 and they advised me that it would not be good anymore after 1/1/2010. They gave no good reason why.
The new CC came a couple of weeks ago, all new, shiny and Platinum excitable.
It stares mournfully at me with the CALL 1 800 Dial-a Debt number taped across it’s seemingly little happy CC face.
I stare at the telephone and think…
Storm’d at with shot and shell,
Boldly they rode and well,
Into the jaws of Debt,
Into the mouth of Hell
Rode the six hundred.
Platinum card = high annual fee?
I wonder what it would do to the banks bottom line if we all started using checks again instead of the debit cards? It has to have been an incredible savings not to deal with paper checks.
England has done away with checks, my guess is they will at some point try to do away with cash and checks all together. Then the PIG men can control it all electronically.
You do know that if you try to make large purchases of say, a few thousand dollars or more, you are automatically reported to the feds?
Drug money, dontcha know.
My way of stickin’ it to the plastic man is to use my credit card whenever humanly possible but pay it off in full every month. Maximum convenience for me, minimum profit for them.
They are trolling for pockets of unused shadow cash.
Example: I bought a new phone from Verizon and got a $50 rebate. As far back as I can remember, the “rebate” was a check in the mail that you deposited in the bank. Nope not this time. They sent me a $50 Citi Rebate Card “which can be used wherever mastercard is accepted..[yada yada marketblurb].” In other words, they don’t want me to hide the cash in my mattress. They inserted Citi as a middleman to force me to buy $50 of STUFF.* And when I buy my STUFF, Citi, of course, will receive a juicy 3-5% fee from the merchant, for not doing much.
I wonder how much golf the Citi boyz had to play with Verizon boyz to land this sweet deal.
——–
* They did have some mechanism to convert the card to cash, but it was (deliberately) too many frekin’ hoops to jump through. I do need some new shoes (I’m serious! My old ones gave me blisters and I need to replace them), so I’ll use the card for that.
You can always sell it on eBay, you’ll probably get 80-85 cents on the dollar, which translates to 70-75 cents on the dollar after eBay fees.
I’ve sold off a few gift cards for iTunes, JCrew that way….
Just use it to buy gasoline. As good as the cash you would have spent, and gasoline is easily divisible to spend exactly $50.
Captain,
True, and that is probably the best course of action. Oxide ‘does’ have a very legit point though! Recently I got a letter from my (1) c/c company, bal. $409 and their ‘new’ terms are, subject yourself to the higher rates we’re slammin’ across the board, or… decline and pay off the bal. ASAP.
Where do these people come off? O.k, just, whatever. Next!
My husband received a mastercard for our medical reimbursement account. It’ll go in the file cabinet and will not be utilized.
I bought new phone at Staples and had to go online to get the $40 rebate. The default option was a $40 Visa debit card. So returned to the previous web page and changed the option to get a $40 check. Not really that big a deal. USAA will deposit for me, either through deposit at home or by prepaid envelope.
AT&T raised the rate on my wife’s credit card, she called they said too bad, she later paid off and cancled the card and they begged her to stay lowering the rate etc, she canceled anyway.
It’s the new CC laws. Need to raise rates BEFORE you spend the money. They are assuming you will get stuck with a balance.
I never knew you can buy jobs. I always thought you have to sell goods to create jobs. Now all you have to do is use the taxpayers money and make government larger….and volla…..there are a few more employees sucking of the taxpayer.
I know. I am starting a new company and am planning on hiring 2 million workers. My plan requires government assistance with obtaining the funds which I am sure will be available with all of the new programs out there. My business plan is simply “Too Big To Fail”. My company will produce nothing but will export heavily to China and other foreign countries. Chinese products will be bought and resold back to China for pennies on the dollar. Obama says he is down. Lets Roll!
pressboardbox-
lol
Make sure you don’t keep those 2 million workers too long. Be sure to downsize a few thousand each quarter, to keep the stock price going up.
You are on to something here……..
-Build “paper company”, get listed on NASDAQ.
-Start issuing Press Releases, announcing layoffs to “right size” “remain competitive” and “align staff more with demand”.
-When stock goes up on anticipation of “future profits”, sell.
-If you are really brave, start the rumor that your “company” is the target of a LBO attempt.
-Build another “paper company” to buy out the first one.
-Lather, rinse, repeat
Any Wall Street shyster worth his Rolex ought to be able to set up a deal like this, and keep you out of jail.
Government contract company employees outnumber actual government employees.
Harry Reid and Nevada
Obama boosts Senate Majority Leader Harry Reid (D-Nev.) with a plan to allow the government to guarantee $36 billion more in loans for companies seeking to build new nuclear plants even while his budget takes Yucca Mountain in Nevada off the table as a repository for the waste they would create. That’s a move the politically struggling Reid has pushed on behalf of Nevada voters.
A new breed of senator, born of a much more independent and self-centered attitude, walks the corridors of power today. These new senators are interested in doing a good job, but their mentality is different than that of most of their predecessors. The first priority of most is reelection. Genuine accomplishment in the Senate is secondary. It’s quite a different priority than we had.
Ours was, first, the good of the nation and, second, the good of our home state. Reelection was a distant third. Today, freshman senators no sooner land in Washington than they’re raising money for their next campaign, a full six years away. Their loyalty has been transformed from their party to political action committees and their personal organizations back home. Many are less interested in what good their position can accomplish than that it become their property, their little family firm.
Barry M. Goldwater, page 10, from the autobiography “Goldwater” c. 1988.
Our federal government has been “making it rain” now for at least three years. At what point do they realize you can’t have an economy based this strategy?
To clarify: I mean government “stimulus” ranging from $600 checks for everyone to cash4clunkerz to TARP to Fannie and Freddie nationalization to first time homebuyer credit to extension of unemployment benefits to… You get the idea.
I think that the extended unemployment benefits are more of “life-line” than a stimulous. Take those away and we might see rioting across the country.
At a per-person level the effect is different - stimulus uses new money to create jobs (mostly government), whereas extension of unemployment uses new money to keep people jobless.
At a macro level, the effect is the same - creating new money and spending it on something with little actual benefit to the economy - except the largely mythical Keynesian supply-side benefit, with the end result being the same - when the money’s taken away you still have high unemployment.
Somebody (excuse my memory) brought up a new Short Sale regulation yesterday effective April 2010. I found this:
Program Benefits. The HAFA program does the following:
Short Sale Agreement. The lender provides the borrower with a standard form Short Sale Agreement (SSA). The SSA creates the following obligations and benefits: (1) the borrower must list the home for sale with a licensed real estate agent; (2) the borrower has 120 days to sell the home, but the lender may extend the term; (3) the lender must postpone any pending foreclosure sale during the 120 day term; (4) the borrower must maintain the property in good condition; (5) a new, lower monthly mortgage payment is set, which cannot exceed 31% of the borrower’s monthly income; (6) the borrower must move out at close of escrow, leaving the property in good condition; (7) the borrower cannot sell the property to a family member, friend or business associate; (8) the buyer of the property must agree not to resell it for 90 days after the close of escrow; and (10) the lender has 10 business days to approve a short sale that meets or exceeds the minimum net price.
This came from a BK Law Professor Blog.
What good does it do to only limit resell for 90 days ,except it makes a Double Escrow a long escrow I guess . How much of the log jam with
foreclosures have to do with Double Escrows these days ?
The practice of buying a place and re-selling it before the escrow actually is closed on the original sale
was a big practice/racket during the boom which drove up prices in a
big way . Real estate agents/investors were purchasing the good deals and re-marketing them without
ever actually closing the escrow or obtaining financing …all done in escrow .I’m sure that appraisers didn’t have knowledge of the original sale.
Could have been me that asked, Thanks for looking for something.
Every other property here seems is a short sale with a realtor created asking price, that has no connection to either what is owed, what the bank will take on it otherwise, or what the market will bear. They are just priced to solicit offers, however low that may be. No visible connection to reality. (I saw a 175 ss price on a unit, purchased new in 2005 for 208, sold again in 2006 for 350, and is now in forclosure. cuz buyer bought too high with bank financing, he owes close to 300k on this unit. Now , maybe the ss price was too low, or there was no market any higher, but now there is a new bank price of 274, a full 100k over what the short sale “price” was. Sure an offer was made at 175, but I guess the offers were “scoffers” so the bank never responded. Maybe Mortgage Insurance pays them better than selling it for 175???)
Generally all these ShortSale attempts, with one offer on it(thousands in Central Oregon, dont know about the rest of the state/country), are waiting for bank to get back to them. The UHSs are excited when it is “just one lender”, but feclempt when even “just one lender” turns out to be Bofa/Countrywide, as they are slow as molasses in Jan…
How will this impact things should it transpire, do ya think?
Does the seller have to offer it at a price that meets or exceeds the minimum net price(which I assume is amt owed plus fees)??
In order to prevent short sale pricing, banks must decide how much they are willing to lose. Pricing now on short sales would not even come close to paying off the loan, thus they are getting plenty of offers, most of which the lender(s) barely look at. Minimum net price i assume, is a price required to meet cetain minimums, if that means amount owed without the banks lowering that amount and taking less than owed it would not be a short sale at all). So the banks need to SET A PRICE or stop this short sale racket.
Yeah, that “net price” clause (#10) got me thinking about the word “arbitrary”. I think a Foreclosure is probably more of a defined deal, too.It feels like our homeownership re-entry is in a parallel universe, and the shadow inventory fiasco will drag on for a long time. We’re 100% down, and it’s discouraging. Just trying to contact an Asset Manager is quite a task.
Comparison shopper study:
143k for: an in process, nicely located, good pastoral view from the subdivision edge, 9000 sq ft lot, brand new DR Horton home, 1550 sq feet, w some basic upgrades. OR
139k for: a short sale, just fell apart due to financing, similar view being 2 story, corner lot,for a 1998 built 2000+ sq feet 3/2.5 two stories, someone paid 150k for it in 2002??
The tide is turning slowly, very slowly.
“Mexicans crossing the border, legally or illegally, are soon discovering that the American dream is turning into a national nightmare, and Obama’s jobs’ bill is yet another empty promise.
The Houston Chronicle reports that, “money sent home by Mexicans abroad plunged a record 15.7 percent in 2009 as migrants worldwide struggled to find work during the global economic slowdown, the central bank reported Wednesday.”
Mexico’s No. 2 source of foreign income after oil is remittances, which totalled $21.2 billion in 2009 that compared to $25.1 billion in 2008, the bank disclosed.
Since the bank started tracking remittances in 1996, it has recorded just one other annual decline - a 3.6 percent drop in 2008, as the world financial crisis erupted.
President Agustin Carstens of the central bank attributed the most recent decline to the weak economy in the U.S. and the rising difficulties Mexicans are facing securing employment there. More than 11.8 million Mexicans currently reside in the U.S.
Carstens announced a 1.3 percent increase in remittances in December, in comparison to the previous month that gave some hope for a recovery.
The Chronicle quotes Carstens as saying that, “it is just one figure, but it could indicate the beginning of a relative stabilization in the drop in remittances, and it would be congruent with the fact that economic activity in the United States is about to go from negative to positive.”
An analyst has been less optimistic, claiming that employment levels in the U.S. “remain very bad” and remittances to Mexico will likely continue to drop through the first half of 2010when compared to the same period of 2009.”
www dallasblog com/201001281006044/dallas-blog/15.7-drop-in-remittances-to-mexico.html
We need to tax remittances to Mexico to make up for the free health care they receive…
Indeed. Funny how the elite in Mexico actually factor in the fruits of illegal immigration into their national “business plan”.
The tide is turning slowly, very slowly.
“Mexicans crossing the border, legally or illegally, are soon discovering that the American dream is turning into a national nightmare, and Obama’s jobs’ bill is yet another empty promise.
The Houston Chronicle reports that, “money sent home by Mexicans abroad plunged a record 15.7 percent in 2009 as migrants worldwide struggled to find work during the global economic slowdown, the central bank reported Wednesday.”
Mexico’s No. 2 source of foreign income after oil is remittances, which totalled $21.2 billion in 2009 that compared to $25.1 billion in 2008, the bank disclosed.
Since the bank started tracking remittances in 1996, it has recorded just one other annual decline - a 3.6 percent drop in 2008, as the world financial crisis erupted.
President Agustin Carstens of the central bank attributed the most recent decline to the weak economy in the U.S. and the rising difficulties Mexicans are facing securing employment there. More than 11.8 million Mexicans currently reside in the U.S.
Carstens announced a 1.3 percent increase in remittances in December, in comparison to the previous month that gave some hope for a recovery.
The Chronicle quotes Carstens as saying that, “it is just one figure, but it could indicate the beginning of a relative stabilization in the drop in remittances, and it would be congruent with the fact that economic activity in the United States is about to go from negative to positive.”
An analyst has been less optimistic, claiming that employment levels in the U.S. “remain very bad” and remittances to Mexico will likely continue to drop through the first half of 2010when compared to the same period of 2009.”
Does anybody realize that this southbound dinero is money that would normally be reused in the communities and states it originated in? I would venture a guess that most of it was ‘under the table’ as well. So there goes expected tax revenue. So guess who makes up the shortfall? You and I, that’s who. Why do you think California is broke? Not for this reason alone, surely. But this is one of the most, if not the most, pressing problems we face today.
Now before any ‘hope believers’ chime in, understand that I know these illegals aren’t evil. Hell I would probably do the same thing if the roles were reversed. They are pawns in a much greater game. But when I see stories like this it gives me just a little hope that maybe, maybe we a nearing the loooong slow recovery we need. Which will include IMO, repatriating manufacturing to this formerly great nation.
“More than 11.8 million Mexicans currently reside in the U.S.”
What a nice humble low estimation. I would say at least 30 million. (FAIR)
Judging from the ones (illegals) in my hood, they pay no taxes and get free $ and entitlements (i.e. anchors). The car port is full of Escalade SUV’s, Runners, Expeditions,and other pricey yuppie-mobiles. Most of these folks didn’t even finish high school. Some even bought their 16 yr old cars, and the 16 yr olds don’t work.
I only wish I had it that good, and I belong here.
I’m seeing something interesting playing out next door to me. Family in which both adults (I’m not sure they’re married) are from Mexico. They seem to be in that “All Spanish! All the Time!” category of people. As in, not assimilating into American life.
They have a teenager living there — not sure if it’s a child or someone they’ve taken in — and she hasn’t attended school on a regular basis since, oh, 2005. Been busted for drugs at least once, and has been known to associate with young men and women who, shall we say, adopt similar styles of dress and use certain hand gestures.
Lately, I’ve seen young fellas’ vehicles parked overnight there. There was one that was there for, oh, about a month. Then it disappeared. Different vehicle now. Been overnighting for about a month.
I can’t help thinking, with my evil little mind, that these guys are coming around for, ummm, a cycle or two. And, if, ahem, nothing comes of it, they are cast aside in favor of someone who, errr, can get the job done.
And, in case you’re wondering, this is the same group that caused all that ruckus when I was having my water line replaced last May.
Yeah, 30 million is more like it, if not more. This country is crawling with those cheaters. They really are sucking on the government teat, and that’s BS. I don’t see why they should even qualify for benefits. What a great scam, huh? Move to the US, and live off the taxpayers. This is why I have nothing but contempt for people who use this illegal labor.
Technically, 30 million IS “more than 11.8 million”.
X-GSfixr
You’re right, but they were being PC. If they would have said, more than 20+ million Mexicans currently reside in the U.S., the impact would have been more dramatic.
For those of you who can read Spanish:
http://www.eluniversal.com.mx/graficos/00coberturas/crisis/index.html
Its an article that’s been following 12 different families in Mexico and how they’ve been coping with the economic crisis down there.
We often get to talking about people in power who claim “I couldn’t have seen it coming”…..
I’m finally getting around to reading General Heinz Guderian’s classic 1937 text, “Achtung-Panzer!”. He never uses the term “blitzkrieg” but that’s the thesis of his book. In May 1940 panzer armies under his command made the breakthrough at Sedan and raced to the coast at Abbeville, knocking France out of the war in 6 weeks. Books like Achtung-Panzer! - and Mein Kampf - were freely available in Europe and elsewhere but nobody paid any attention to them. Western governments strained to comprehend what the Nazis had planned for them - yet all they had to do was take a trip to the library.
I’ll never understand why European Jews didn’t arm themselves in the 1930s. When someone explicitly tells you they intend to do you harm, maybe you should take them at face value.
Restrictions were placed on Jews starting in the 30s. Many tried to emigrate, but were denied. My mother’s cousin was in Vienna in 1937 and wrote about the lines at embassies as everyone was trying to leave.
A Bubble within the House of God? Interesting article on the parallel between the rising popularity of prosperity gospel and the housing bubble:
http://www.theatlantic.com/doc/200912/rosin-prosperity-gospel
.
And to think that, in the church of my youth, we kept hearing things like it’s more blessed to give than to receive, do not lay up your treasures here on earth, and, well, you get the point.
We’ll have none of that godless, socialeest/commie talk around here!
Crude oil up $6 since the beginning of Friday’s trading session. Yeah, that’s fundamentals.
This thing started being offered for like $899k….maybe more.
Now look at what’s happening with it. $429k! The owner also used to own 2 Hummers. (His and hers?)
http://syracuse.craigslist.org/reb/1582382769.html
What would the property tax be on this thing? 10K per year?
Ha! That’s funny Colorado. You can pay $10k on a 2000 sq footer on a 1/4 acre in this area if you’re talking new construction. I’ll look it up for you though. Madison Cty is not as bad as Onondaga. That property is across the street (lake view) from a local lake known for its more well heeled property owners.
With 40 acres:
$22,379.05
Total assessed value: $740,000
Full market value: 2009 - $948,781
Full market value: 2010 - $967,320
(still going up? even when it will only fetch in the $400k’s?)
Fugly on the outside, cheap on the inside. And in a 6000 sf house, the kitchen is, what, 150 sf with low ceilings? No thanks.
It’s amazing how retro that thing looked on the inside, huh? It was built in 1994. Most of the older architecture in this town is much more attractive. It was purchased for $600k in 1998. But there is a 1/2009 sale of $400k also recorded. Not sure what that is all about. Flipper? I drive by this place all the time. The front of the property did not look taken care of. Like I said above, its recorded as owned by HSBC now.
NEW YORK (AP) — Better news from the housing industry sent stocks higher Tuesday, including an increase in the number of people with contracts to buy homes.
The Dow Jones industrial average rose 100 points as optimism grew about an economic recovery.
The National Association of Realtors, a trade group, said its index of sale contracts rose 1 percent in December. It was the ninth improvement over the past 10 months as buyers scrambled to take advantage of a first-time homebuyer tax credit before it was set to expire last November.
This is great news. Now that housing has recovered the govt. can stop supporting it. The sooner the better.
I hope the NAR and their propaganda can wring the last FB out to take advantage of the 8K or 6.5K available for purchases. Less people for us on the sidelines to compete with.
Just about every time my home state, S.Carolina makes national headlines it’s a lame brained politicians comment. We are “blessed” with some real winners here, among them is the #1(and that’s saying a lot) most ignorant man in Washington. Here is his latest moronic comment.
Why are S.C. representatives such an embarrassment?
Rep.James Clyburn (D-SC), like most members of Congress, has little or no understanding of money - - except to believe that it grows on trees. On national television Clyburn said yesterday, “We’re not going to save our way out of this recession. We’ve got to spend our way out of this recession, and I think most economists know that.” Clyburn on Economics
“This statement by Clyburn will have to rank in the top five stupid statements of the year. So, my fellow Americas, let us all go to the bank this afternoon and borrow money so that we may spend our way out of our debt”.
It’s so easy to ’save’ or ‘create’ jobs, mo to come.
Largest-ever federal payroll to hit 2.15 million
February 2, 2010 ~ Washington Times
The era of big government has returned with a vengeance, in the form of the largest federal work force in modern history.
The Obama administration says the government will grow to 2.15 million employees this year, topping 2 million for the first time since President Clinton declared that “the era of big government is over” and joined forces with a Republican-led Congress in the 1990s to pare back the federal work force.
Most of the increases are on the civilian side, which will grow by 153,000 workers, to 1.43 million people, in fiscal 2010.
The expansion could provide more ammunition to those arguing that the government is trying to do too much under President Obama.
The era of big government has returned with a vengeance,
But doesn’t something have to go away before it returns?
Meet the new boss, same as the old boss…but he was worse! nuh uhh! uhh huhhh! you’re wrong! no i ain’t….pppppppppppp!
Under President Bush the federal government grew more than under any president since Lyndon Johnson. By whatever criterion we may choose to measure it - budget, spending, the size of federal workforce, national debt, entitlements, regulatory burden, bureaucratic apparatus - the growth was truly prodigious.
Consider this. During his term in office, President Bush expanded public spending by more than 70 percent. He was the first president in 176 years to go through an entire term without vetoing any legislation or spending bill. When Bush was sworn into office our national debt was $5.7 trillion. By the time he left, it stood at $10.6 trillion, an increase of more than 100 percent. When military personnel and contract employees are included, the number of people who worked for government rose from 11 million in 1999 to nearly 16 million in 2008, an increase of nearly fifty percent.
http://www.americanthinker.com/2009/10/they_call_us_leftists.html
Yes, the era of big government is over. Now we’re in the era of huge government.
Yes, the era of big government is over. Now we’re in the era of huge government.
Does that mean that when we get the next Republican president we will have a firm base to become the era of “humongous” government?
Cheney-Shrub: “We’re the party of Fiscal Conservatives”
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
Copper Market Set for ‘Catastrophe,’ Threlkeld Says (Update1)
Feb. 2 (Bloomberg) — Copper prices, which more than doubled last year, are set to plunge as speculators unwind positions and global inventories expand, according to David Threlkeld, president of metals trader Resolved Inc.
“We’re going to see a catastrophe in the market,” said Threlkeld, who first got the world’s attention in 1996 when he showed that hoarding by Sumitomo Corp.’s Yasuo Hamanaka would lead to a collapse. Prices may slump to less than $1 a pound, he said by phone. That about 67 percent less than today’s levels.
Copper, used in pipes and wires, sets the pace for other industrial metals. A slump in prices may reduce profits at mining companies including Freeport-McMoRan Copper & Gold Inc. and drag other commodity prices lower.
Some 90 percent of buying “has been from speculators,” said Threlkeld, who has traded the market for more than 40 years. “Whether they are exchange-traded fund speculators or China pig farmer speculators it doesn’t really matter, because that buying is going to come back to the market,” he said from Arizona.
Now, this is news that will make a local group very happy.
Mining is an ugly business, some types more so the others.
“China pig farmer speculators”
Combo!
No poof for you, Mugster.
2009, the year I tried and minimally succeeded in day trading.
SKF
SRS
FAZ
FAS
Farewell…
No FEED though.
China Warns Obama on Dalai Lama as U.S. Ties Sour (Update1)
Feb. 2 (Bloomberg) — China said a meeting between the Dalai Lama and President Barack Obama would set back ties with the U.S. that have soured in recent weeks over censorship of Google Inc., climate change and arms sales to Taiwan.
Such a step would “seriously undermine the political foundation of Sino-U.S. relations” and “threaten trust and cooperation,” Zhu Weiqun, a Communist Party official who manages Tibet affairs, told reporters in Beijing today
While Zhu’s comments mirror oft-repeated warnings, tension between the world’s No. 1 and No. 3 economies is on the rise. Any further provocation from either side might hamper global efforts to contain the Iranian and North Korean nuclear programs and make China less willing to cooperate on financial matters, such as mitigating the effects of the global credit crisis.
We’re being played.
U.S. Rating Under Pressure From Deficit, Moody’s Says (Update1)
Feb. 2 (Bloomberg) — Moody’s Investors Service Inc. said the U.S. government’s Aaa bond rating will come under pressure in the future unless additional measures are taken to reduce budget deficits projected for the next decade.
The U.S. retains its top rating for now because of a “high degree of economic and institutional strength,” the New York- based rating company said in a statement today. The ratios of government debt to the U.S. gross domestic product and revenue have increased “sharply” during the credit crisis and recession. Moody’s expects the ratios to remain higher compared with other Aaa-rated countries after the crisis.
President Barack Obama projected yesterday the U.S. budget deficit will rise to a record $1.6 trillion in 2010, representing 10.6 percent of U.S. gross domestic product, the highest level since World War II. The Treasury will sell $2.43 trillion in notes and bonds this year, a 16 percent increase from the record $2.1 billion sold in 2009, according to the average forecast in a Bloomberg News survey of 10 primary dealers that trade with the Federal Reserve.
“If the current upward trend in government debt were to continue and become irreversible, the rating could come under downward pressure,” said analysts led by Steven A. Hess, senior credit officer at Moody’s in New York.
It’s official.
One of the proposals buried in the federal budget would grant the U.S. Mint authority to use cheaper metals in the production of coins.
“The Budget proposes to provide the U.S. Mint with greater flexibility in the material composition of coins to reduce its losses on some coins and the production costs associated with volatile metal prices.
“The Mint’s primary cost driver is the price of metal, a factor over which it has no control. Daily spot prices of copper and zinc, the Mint’s two main metallic materials, have fluctuated in excess of 100 percent, and the price of nickel by 500 percent in recent years.¹ This contributes to volatile and negative margins on both the penny and nickel: in recent years the penny has cost approximately 1.8 cents and the nickel approximately 9 cents to produce.² Costs have exceeded the value of these two coins by over $100 million in prior years.”
However, through its profits on other coins, gold and silver bullion coins, commemoratives, etc., the Mint annually returns hundreds of millions of dollars to the Treasury General Fund. But stand by for the cent and nickel to switch to something like steel or aluminum in 2011 or thereabouts. Coin debasement is a consequence of bad monetary management.
Disband the penny, please. It serves no useful purpose. Round to the nearest 5c (so in some average sense there is no loss in each transaction assuming a flat distribution in transactions ending in 1,2,3,4,6,7,8,9 cents).
This won’t happen. There are far too many people making a profit form those pennies. Even fractions of pennies.
If you charge .001% for any type of transaction fee, that adds up fast when you’re transacting millions.
In other words, without the penny, skimming is harder to hide.
Thing is though - many financial transactions are already done in fractions of pennies. Have you traded stocks much recently? Many now trade in thousands, or even tens of thousandths of cents. No microcent coins required.
Count me among those that would just as soon see the penny die an ignominious death. It really just serves as a novelty at this point - being the only widely circulated copper-colored U.S. coin.
A very smart Brazilian business guy once told me we should not kill the penny. Having lived through hyper inflation, and inflation he said that when Brazil would eliminate their “pennies” from circulation, it would slightly accelerate their rate of inflation.
As the decline of Rome accelerated due to civil wars and a literal split of the government (Rome & Constantinople) the quality of the metal in the coins began to change. Tin and bronze replaced more precious metals and the actual gold & silver coins were “trimmed” by the citizens who would cut small slivers of metal from the coins edges. Eventually the imperial mint started to add a grooved edge to the coins to thwart this skimming.
Ecclesiastes 1:9 -
What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
(Modern version - “The more things change, the more they remain the same”.)
Nice self-assesment tool for preparation against the coming crash:
http://www.chrismartenson.com/files/Crash_Course_Self_Assessment_v2.doc
This document better demonstrates how planning for TEOTWAWKI is kinda absurd. There are too many variables to make an useful predictions.
You have a lot of water? Great, that’s hard to carry.
You have a security system? Great, are you just going to stay inside for five years?
You have a bunch of gold? Don’t tell anybody (makes it hard to spend)
I spent some time (same meeting that I lost my cool) talking to a true self-made RE millionaire who owns a portion of an island in Maine. He wants to convert all of his “worthless paper” to gold. Why?
Oh yeah, stuffing pants with ingots = awesome.
If you do a simple 4 square risk analysis you’l find it is better to prepare for something that doesn’t happen than to not prepare for something that does.
AeroThrust, Gap plan layoffs ~ South Florida Business Journal
Two more companies have notified the state of plans to lay off a total of 176 employees.
Miami-based AeroThrust Corp. said it plans to lay off 129 workers, while San Francisco-based GPS Services said that its Gap International Sourcing division plans to lay off 47 employees. Both layoffs are effective April 1.
AeroThrust, which is independently owned and operated, has produced airplane engines since 1946, according to its Web site.
However, in December, the company filed for Chapter 11 bankruptcy protection.
Its headquarters and 140,000-square-foot engine shop are located at 5300 N.W. 36th St., at Miami International Airport.
The company is seeking buyers, but so far none have come forward. As it stands, the company’s assets will be sold at auction.