Bits Bucket For February 15, 2010
Post off-topic ideas, links and Craigslist finds here. Please visit the HBB Forum.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
May 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Dow 1500 here we come:
http://finance.yahoo.com/banking-budgeting/article/108837/dead-cat
pressboardbox,
Can I rent the refrigerator carton next to yours?
Roidy
I did not read the article closely but I think he was saying Dow 5,000.
I posted a link last night also from Yahoo that in ten years if taxes do not go up, 80% of all the revenue will be to pay for social security, medicare, and the interest owed on the public debt.
This is a deep recession and it will worsen into a depression if the taxes are raised.
More significant, I agree the debt is a national security issue because there will be no way we could afford to defend the U.S. at the way things are going. With a madman in Iran and one in North Korea, we will have to stand by idly and let Iran clash with Israel and North Korea invade South Korea. Some of us think that’s okay though. Unless the rogue states get more powerful, then what?
The middle class is squeezed enough. There will be bloody hell to pay if Congress raises the federal income tax on the middle class. But top 5% of all income earners are already taxed enough and even if you double their taxes it won’t raise the revenue needed to pay off the debt.
There will have to be a combination of three things then: Raise taxes, cut spending drastically across the board, and inflate the currency.
“With a madman in Iran and one in North Korea”
Oh, please, the much more immediate threat to this country is the madman gunning the printing press. The puppeteers behind him scare me a heck of a lot more than Kim Jong Il or Ahmad Rashad (or whatever that other guy’s name is).
I remember when I was a kid and my uncle would point to something that was outside the dining room window. I would look out the window and there was nothing to see. I would turn my head back and my roll or a pickle would be gone. It took a while but I caught onto that trick.
Right on, NYC Boy.
The other day I saw a bumper sticker that said “F**k Tibet. Worry about what your own government is doing.” Not surprisingly, it also had a Ron Paul sticker.
Ah, your second paragraph. Brilliant! I get your point. I’m not saying pulling out of being the world’s policeman would be a bad thing. The U.S. stirred up a hornet’s nest for decades.
I’ll put it on record here: America as a police state is a scam to provide high tech jobs to defense contractors, employ millions of people in the armed forces who may otherwise be dangerously idle on the streets of America, and I say this about domestic police also. Laws against victimless crimes are a scam to give more dough to Law enforcement, corrections officers, and prosecuting attorneys.
We’d be far better off with no standing army at the national level and no victimless crime laws at the local level.
Conservatives are duped big time into thinking that being the world’s policeman is protective of America and that victimless crime laws are protecting the American public. The pickle on the plate is being grabbed by Uncle Sam and the state/local equivalents.
Oh yeah. My job would go away if we become like Costa Rica. But I would welcome it. Until then, if I quit my profession “for morality’s sake,” someone else will come along and fill the position.
Don’t worry, I voted Libertarian all along up to here and lately decided not to vote. I am not sanctioning the system. It will cave in eventually.
“My job would go away if we become like Costa Rica. But I would welcome it.”
Would you say the same if you didn’t have hundreds of K stashed away to live out a depression in some sort of comfort?
Not all of us have had a whole generation of relative peacetime, along with productivity and job stability fueled by “growth” and bogus debt to pile up a stash, as you did. And it’s not because we didn’t “work hard” or “make good choices” or what-have-you.
Bill in LA is also single. He can devote his entire productive energies toward working and earning income, if he so desires. For us “married with children” types (not saying we’re Al Bundys), that’s not an option. Raising a family is expensive and limits your options as far as career and income go. Not a complaint - I wouldn’t trade my family for all the precious metals on the planet - but yes, it’s easier to build a stash and ride out a depression if it’s just you and you have the freedom and mobility to go where the opportunities are.
What I don’t get is why we pay for their security. It just like Iraq we should have 1st dibs on their oil to pay off our Trillion dollar cost of the “war”.
I’m not saying pulling out of being the world’s policeman would be a bad thing.
Sammy, you have a family? *tsk* *tsk* You’re not making good choices.
[/snark]
The neo-cons assured us (and Bush) that the war in Iraq would pay for itself - maybe even turn a profit. And the people would dance in the streets to welcome us.
Bad assumptions, as it turned out.
Why do we still have 2 divisions (plus) garrisoning Germany? I imagine the economic benefit of having them stationed here rather than there is several billion a year to our economy rather than Germany’s.
Conservatives are duped big time into thinking that being the world’s policeman is protective of America
+1000. Notice how nobody threatens Brazil?
Sammy, you have a family? *tsk* *tsk* You’re not making good choices.
Sadly, under our current system of faux capitalism, that statement is 100% true. The PTB know that they don’t need home grown families as they can import all the low cost labor they need.
Having a family isn’t just an economic choice. It’s a biological imperative and a purpose in life beyond everything else. We are not just atomized “economic units” in my scheme of thinking, or our Creator’s.
“Why do we still have 2 divisions (plus) garrisoning Germany?”
That’s where we fly the seriously wounded & sick.
“The neo-cons assured us (and Bush) that the war in Iraq would pay for itself - maybe even turn a profit.”
How could that possibly be? Pillaging?
Cheney said in a speech that “Iraqi oil will pay for the war”.
I think he meant to say “Iraqi oil will pay for Haliburton’s no bid contracts”.
Oil.
“Why do we still have 2 divisions (plus) garrisoning Germany?”
It used to be that the German Gov paid for the basic cost of US soldiers in Germany. Without the bases in Germany we could not support military operations in a large section of the world. More AF Bases in Oklahoma would not cut it.
Bill, I understand your libertarian viewpoint on avioding a standing army as a defense of liberty. Unfortunatly, the problems of the world are minutes and hours away.
There isn’t any way to handle a large mechanized modern army except with another modern army. And the temptation of conquest would be too much otherwise.
Notice how nobody threatens Brazil?
Nobody asks them to be the beacon of hope in the free world either…
Plus, I bet their immigration line is alot smaller than ours…
Nobody asks them to be the beacon of hope in the free world either…
Oh please.
Plus, I bet their immigration line is alot smaller than ours…
Yeah. The pay is still better here. For now.
re: oil and war
not Cheney - Wolfowitz
not war - reconstruction
On March 27, 2003, Wolfowitz told a Congressional panel that oil revenue earned by Iraq alone would pay for Iraq’s reconstruction after the Iraq war; he testified: “The oil revenues of that country could bring between $50 and $100 billion over the course of the next two or three years. Now, there are a lot of claims on that money, but … We are dealing with a country that can really finance its own reconstruction and relatively soon.”
Wikipedia http://tinyurl.com/ya6a37x
Having a family isn’t just an economic choice. It’s a biological imperative and a purpose in life beyond everything else. We are not just atomized “economic units” in my scheme of thinking, or our Creator’s.
Yes Sammy, thank you for sacrificing for the rest of us. I suggest you do not worry. There are more than enough children born to keep humanity going. Mostly Muslims and Hispanics are having large families these days (good or bad).
The difference on this issue between religionists and atheists, are that atheists understand it does not matter from what parents the kids are born to. The potential for that kid to become a great human being is very good no matter what parents produced him.
Out of four siblings, one of my sisters bore children. All of us are above 50 now. The birth risks to the children are too great for the remainder of us to be parents. Even a male older than 40 introduces more risk in the child’s health the older he is when he becomes a father. I did not know that until a few months ago. I could not settle for less than perfect health of my children. My opportunity passed ten years ago and I did not know it at the time.
It’s too late for me to be a father. So I can now focus my energy on other areas of my life to make the best of it.
Would you say the same if you didn’t have hundreds of K stashed away to live out a depression in some sort of comfort?
Not all of us have had a whole generation of relative peacetime, along with productivity and job stability fueled by “growth” and bogus debt to pile up a stash, as you did. And it’s not because we didn’t “work hard” or “make good choices” or what-have-you.
Oxide, before I got to college, I was not expecting to work in defense areas. I wanted to have a lot of money. I even have a framed poster in my Phoenix apartment of my goal - a beach house, several sexy cars, and a phrase “justification for higher education.” I was hungry for wealth before I looked for how to get there fast. I ended up in defense work and at 41 my career became interesting for the first time when I became a consultant.
Reread what I wrote above. You imply that I am immoral for working in defense. It’s not a question of morality. First, if I don’t do my work, someone else will, and earn the same hourly rate. Second, it’s the only game in town. Or it’s the biggest amount of work in embedded software. If we were a pure capitalist society with a Costa Rican stance on military, I would be doing different work. It does not matter. Government work is a large part of the GDP. Third, providing national defense is constitutional. Either it must be done by government employees or private employees. I’m a private employee.
Your envy is showing. You are like Measton, Excretor and Grizzly. You hate me for everything. So you have to manufacture BS for anything I write.
The hiding the pickle game?
OT, but I was recently lead to a website of some independent documentary guys that managed to get into North Korea. Very interesting video. Go to vbs(dot)tv.
“Russell predicts that Dow 1,000, the number at which the Dow began its rally in the 1970s, may not be out of the question.” -from the article.
-I personally think such a prediction is silly. The Dow should not break 1500.
I’m predicting Dow 1501. What do I win Bob?
“The middle class is squeezed enough. There will be bloody hell to pay if Congress raises the federal income tax on the middle class. But top 5% of all income earners are already taxed enough and even if you double their taxes it won’t raise the revenue needed to pay off the debt.”
We can/should stop the enormous entitlements to the middle class that don’t really help them anyway: The mortgage income tax deduction or tax credits for college, for example, just create housing and tuition price bubbles. The government would get more revenue, and not increase the economic burden to the middle class by eliminating them.
And those outrageous tax-free mortgage cramdowns Obama and his ilk want amount to a $1 TRILLION tax break for the ‘middle class’. For some reason, I can’t feel to sorry for our middle freeloading class.
Reuven for President!
Well, for one thing they’d never elect a Jew.
And, of course, if I pledge to eliminate all tax deductions and make a fair tax system where everyone pays 20%, period, I’d never get elected.
“They”?
If a leader of intelligence, integrity and vision happens to be Jewish, I’d like to think they’d be electable. Of course those attributes would mark a sharp break with our recent string of goyim candidates.
60 minutes did a segment lat night on ponzi schemes and the gullible people that get pulled into them.
Throughout the interviews, reporting, etc, I could help but think how it all applied to government promises like social security, Medicare, etc.
I was in favor of reforms 30+ years ago, but my parent would go ballistic if you even mentioned Social Security to her. AARP had the Greatest Generation’s backs on that and informed them of Congress’s every move.
Now that I’m 61 I’m a little less philosophical about it, and hardly disinterested, but I hope I never lose my s*** over the subject they way they did. I’m trying to keep an open mind.
I still favor my draconian cramdown in BK. For folks with jobs and primary res: 1) Stay in your home but take BK, 2) get out and rent, now.* For HELOC’s and specuvestors, option 2 only. House goes for firesale price and is recorded as a comp. At least this would solve the crisis FAST.
Banks bought off the Senate to stop the cramdown, but it all the underwaters walk, the banks will wish they’d taken the cramdown deal. *ha* I wish, more like they already bought the Senate when Fannie and Freddie agreed to take the hit.
*Allow for some hardship, a few breaks so BK’s can rent even with a destroyed FICO. But no mortgage.
We can/should stop the enormous entitlements to the middle class that don’t really help them anyway: The mortgage income tax deduction or tax credits for college, for example, just create housing and tuition price bubbles. The government would get more revenue, and not increase the economic burden to the middle class by eliminating them
Isnt this what I have been saying all along? Just eliminate tax deductions altogether and raise the money we need. This by itself could fund the huge social programs the libs want and may even be able to pay off some debt…
Stpn you really seem to hate the so called social programs yet has a member of the Armed forces are you not in one of the biggest social programs around?
Yes in times of War you put your life on the line but what about in times of peace, Paid monthly ,if on base given housing, food, medical care, or more common to some:
Welfare, food stamps medicare medicade?
Yes in times of War you put your life on the line but what about in times of peace, Paid monthly ,if on base given housing, food, medical care…
To be fair, Stpn is doing a job…he is being paid for his time, work, effort, etc.
Very different from entitlement programs.
Still on the gov’t payroll, sure…
“Stpn you really seem to hate the so called social programs yet has a member of the Armed forces are you not in one of the biggest social programs around?
Yes in times of War you put your life on the line but what about in times of peace, Paid monthly ,if on base given housing, food, medical care, or more common to some”
Really?
Really, somebody on this board is going to take shots at our soldiers? Even Realtors don’t do that…
I can’t recall any other “social programs” that involve people shooting at you while you’re stuck on the other side of the planet.
Seriously, I’ve about had it with people who think that the armed forces are a waste of money. Name any case in history where a nation of any size and wealth managed to maintain its freedom long-term without either its own military or that of a very powerful ally… Yeesh, why don’t we just get rid of cops, too, so we can get to that lawless, taxless paradise that some people here seem to be dreaming about… Because after the lessons of the Housing Bubble, I’m sure leaving ourselves defenseless in the face of the “kindness” and “integrity” of others can’t possibly end poorly! Duhhh…
Bob, you are likely to be amongst the first to squeal for protection, deterrence and retaliation, at the point Ahmadinejad (sp?) goes tactical with the nukes about which he brags.
Ever been in the Armed Forces? Didn’t think so.
Let me guess. You’re sucking down UE benefits, aggrieved that nobody recognizes you for the genious (tm, OLY) that you think you are. Soldiers several thousand miles away, OTOH, are a safe target for your resentment.
Here. Let me make it fair. I am five feet, three inches tall. You are welcome to come to my hood, and say those words to MY face. I’ll make it even fairer. You can say it while my arms are full of groceries, and you can follow it up with a left hook.
My son is a United States Marine, and I do not take kindly to folks who disparage his effort, his work ethic, or his sense of duty.
seems like the russians, the turks, the french and israel have more to worry about if iran gets a nuke……
people forget (or never learned) their history….
the US overthrew the duly elected government of Iran back in the 1950’s (teddy roosevelt’s son, kermit, was the chief of teh operation)
the US is the only country to have ever used a nuclear weapon on people (twice)
Now….exactly why should Iran listen to the US?
Bill in LA wrote:
reuven wrote:
The interesting thing is, most people - 65-69% of the population - support the giant government intervention in trying to reflate the housing and credit bubble. People with paid off homes still want to have the accidental windfall profit, and people with mortgages want that same windfall profit, plus don’t want to feel like chumps or that they are priced into their home.
Whether they can understand the oncoming consequences and the linkage to reflation is the question. They do know what they see - that their standard of living is dropping. Whether they can put two and two together - government profligacy, financial industry treachery, and the fecklessness and venality of their politicians, remains to be seen.
“This is a deep recession and it will worsen into a depression if the taxes are raised.”
Dumb predictions:
1) Rather than raising taxes and morphing the Great Recession into something even greater, Uncle Sam will use some combination of entitlement reductions and tax increases, with the former carrying the lion’s share of program modifications.
2) Rather than roiling the masses through politically unpopular explicit reductions in entitlements, Uncle Sam will use creative financial engineering measures, such as tightening qualification standards, increasing the minimum qualification age, reducing the amount that goes to people who already have enough from other funding sources to get buy, etc.
In short, what have been viewed for several decades running as “entitlement programs” will gradually evolve back into something more like those who coined the acronym OASDI envisioned: An insurance program to cover those with no other means of supporting themselves in the events of old age, survival (of a deceased spouse), or disability. The technical details of this financial engineering exercise are straightforward: Scale back anything that looks like a sure thing (e.g. Social Security benefit payments to healthy 67 year olds with other sources of pension income) and keep in place anything that looks like insurance (e.g. Social Security and Medicare benefit payments to unhealthy 85 year olds with no other means of support).
The trickier problem would be to communicate the transformation of these programs from currently-active-worker-funded retiree cash cows back into insurance. It hardly seems fair that the baby boom generation got to fund Winnebago purchases and endless vacation opportunities for the Greatest (and first) Generation of Social Security retirees, only to have their own opportunity to live the high life post-65 snatched out from under them by a demographic tsunami. Nobody ever said life was supposed to be fair; in fact, I go to lengths to teach my own kids to not expect fairness in the adult world, as I see little evidence it is part of the program.
I firmly believe that most of us should work most of our lives. Most of us do not do well with too much time on our hands. Look at the children of the idle rich for a mountain of evidence to support this.
My mother is a significant exception to this. At 85, she still works tirelessly in the community in mostly unpaid, volunteer positions, including publishing the Voters Guide in her county.
Work gives rhythm and purpose to our daily lives and connects us to our community. It is silly to expect that we should have 20-30 years of idle time in our lives.
I have never expected to collect Social Security and I have never resented that my parents did. I expect to continue to work until I am 85 or beyond. If Medicare is still available when I am eliglible for it, I will not need to make much to support myself and could be content to work in a low level, low stress job.
One of the things I wonder is how we will organize ourselves when productivity increases to the point that 1 of us can produce enough to support 100 of us. Are the 99 so poor that they can’t afford to consume the output of the 1? Does the 1 resent the other 99 because they are welfare queens or does he consider himself fortunate to still have a job?
It appears that I am cranky tonight.
My good friend, would you have me work until I am 85 in metro DC, commuting away and taking a slot that would more ‘deservingly’ go to a younger person?
Personally, I want to move to flyover country and do something I would never be able to do here. That is, buy some land and live ’sustainably’. Regrettably, sustainable living is a myth without filthy lucre.
Take your line of reasoning to its conclusion. What would you do with people like me? Euthanize us? Herd us into densely packed housing in areas we loathe?
Sorry to have to slap you topside the head. I slaved my entire life in geographies I detested, in excoriating jobs, in exchange for the dough to support my children and get them through college without debt. I have paid taxes up the wazoo, and have maxed out in Social Security (and Medicare) withholdings every year I have been in the workforce. I have nothing to apologize for, in holding out for some of my Social Security cash back.
Furthermore, I’ll be dam*ed before I apologize to the likes of you.
I’m kinda curious why you think there is a madman in Iran?
They have an elected government that seems to have support.
They have a constitution.
They have a supreme court, like ours, composed of clerics but outside the political structure.
They haven’t invaded anyone. We’ve invaded at least two countries to “set them free”. One of which was not justified.
Because they are Islamic Fundamentalists and would deny YOU the right to act as you please if they were given the chance.
1. They kill protesters on the street for disagreeing with the govt.
2. They cut internet access of dissidants and anyone who disagree’s with the govt. Ironic you are defending them on the internet you KNOW isnt going to get cut off when if you were THERE talking you would be taking your life in your own hands.
3. They openly say they will destroy Israel if they get the chance or the bomb. And please dont tell me they wont, because you know they will, regardless of what anyone thinks…
Why liberals defend oppresive regimes is beyond me…
Its amazing how we Americans preach diversity, but cannot accept Islam. Whats really amazing, is that most Americans have never paid attention to history.
Remember the crusades? For centurys, the so-called christian world has rejected Islam and its teachings. We invade Iraq and expect to set up a democracy, in spite of what the people really want. We invade Afganistan and repeat. We protect Israel, even though its a Jewish State. We deny the arabs their religion, but we defend Israel. These Islamic countries were for many years nomadic tribes. They fought each other and Europeans for years. So, if they want their women to wear veils and cover up, cut off a hand for stealing and execute by beheading, let them have at it.
Who made the US so self righteous, as to determine what is modern and civilized?
If the Russians couldn’t be sucessful in Afganistan, does anyone think the US and Nato will do any better? Only a fool repeats history. So much for Bush and Obama.
If we wouldn’t have screwed Osama in Afganistan, while he was on our payroll fighting the Russians, 911 would have never happened. No, we had to give Russia their Vietnam, at the expense of the Afgan people. You reap what you sow. I’m sure, the Russians are laughing at us every day.
I am not a liberal.
We are the group engaged in colonialism. We have had Israel on our defensive dime for a long long time.
We have secret prisons in Iraq and Cuba. We are using mercenaries in both conflicts to have plausable denability.
We’ve killed protesters in the streets in the past. Many times. Recently, we resemble Nazi germany more and more. Aggressive social programs with dubious potential.
See global warming. Or healthcare.
While we don’t practice much censorship, I got put on a list for getting a copy of the Turner Diaries. A peice of forbidden litterature.
Steph. I’m going through this mental exercise and doing some self examination. Trying to take in the other sides perspective too. Often we start out with good intentions, not realizing where that path leads.
I remember a small college town a while back called Kent State… seems to me there was some shootin’ there, too. Exceptin’ that time it was us doin’ the shootin’. Careful, now.
And why those in the Armed Forces believe they have every right to invade other countries, Steal from those countries after they invade, and then tell those countries how to act yeah that’s real Freedom spreading. The USA is one of the youngest Countries yet we have Fought more in our short
History then some others, not just limited to the world hell we even fought between our own states just because someone decided that some states had no rights.
I was a 72-E in the Army and what i saw was kids given a chance for no Jail or High school kids who were lied to hell even for me to get in my Recruiter falsified my papers.
And what gives Israel the right to tell those who owned that land way before they did that its theres.
The only purpose of any Standing Army is War or occupation
We spend Trillions blowing stuff up and then trillions rebuilding what we destroy. Maybe some are right we should not police the world what gives us the right?
From 1175 to 2009 the US has been involved in 20+ conflicts and wars figure that means for most of this countries existence we have been fighting someone somewhere, perhaps that’s all we have learned in our short history, after all that is how this country was formed we decided that we did not want to listen to another country and we fought them.
Um, you do realize that if we were living in Iran now, we’d all be dead for posting on these forums and shouting truth against the Powers That Be.
Now, I’m not saying we go out and invade every nation that is run in such an evil fashion, but to seriously ignore the threats posed by these people is extremely unwise.
It amazes me that we have people on this forum who can clearly see the evils performed by our bankers and politicians, yet who are somehow blind to the evils of other politicians and leaders, including the ones who have flat out said that they want us dead.
To say that Iran is a fine place because of its (fixed) elections and “constitution” is like saying that the crooks at Goldman Sachs and the Fed are clearly great people who would never break the law since none of them have gone to jail yet.
It was a very poor article. They guy simply looked at a silly after the fact theory, not really much different than sunspots and such. Then he colluded he doesnt trust banks. He didn’t discuss any actual fundamentals. You guys could have done a better job.
. . . but its published! You wouldnt believe the number of people on here that think a published article has more legitimacy than the nonpublished opinions of people that are in the actual industry or had it right all along. They liked to be fed politics and finance by journalists or people that look like great in a suit (e.g., losers on cnbc that clearly don’t know their stuff but “connect” well with an audience or seem cool). What is even more comforting is if they share the prejudices.
The author is Robert Kiyosaki, the ‘rich dad, poor dad’ book guy. He makes his living selling vague theories.
Wasnt that casey’s mentor?He reminds me of a snake oil salesman.
A very telling piece is the quote “even if –like me — you do not trade in stocks.” So he is giving advice about something he doesn’t even participate in. How valuable is that? I never understood the rich dad, poor dad fascination. All you need to do to become rich (assuming you can find a job which i realize is a stretch these days) is save your money and buy undervalued assets when you discover fire sales. Base investment decisions on gut, common sense and fundamentals, and ignore salesperons. Also avoid bling and crazy spouses. How hard is that? Certainly not something that needs a whole book.
Kind of like the Pope giving directives on birth control, no?
Also avoid … crazy spouses. How hard is that? Certainly not something that needs a whole book
I don’t know..this one may require a book. There are many different kinds of crazy to look out for
Oh no, I just had to retract my suggestion of that article to friends on IRC (Internet chat thing.) I hate that Kiosaki guy.
EFNet?
EFNet?
Is it 1996? Do people still use IRC these days?
IIRC, IRC was the first internet “application”, no? Even predating email?
Robert Kiyosaki is a motivational speaker and writer. His aim is to grab and hold neophyte investor’s attention which precludes boring them with technicalities..
I know what I will do. I will buy more gold and silver. Why? The answer is because I trust gold and silver more than Central bankers, the Oval Office, and Wall Street. Gold and silver have been real money for thousands of years..
Gold used to be real money, but so was a lot of other things, like beads, shells and salt.
Don’t forget cigarettes.
For many years, post exchange booze, chocolate, cigarettes, coffee and silk stockings worked wonders for GI’s stationed in post-war Europe.
Ah yes. Very similar in many respects.
But is there less than one ounce of beads, salt, shells, or cigarettes per person in the world, with no ability to create more?
Therein lies the undeniable difference.
More gold can be produced whenever the price justifies the cost. When less productive ores become profitable they will be mined.
—–
If the price is high enough, gold might be transmuted from other elements.
http://en.wikipedia.org/wiki/Synthesis_of_noble_metals
Since the technology is only as old as are nuclear reactors, (about 70 years) there will no doubt be more efficient and less costly ways to create gold in the future.
—-
How much gold exists on earth?
Wood has calculated that 1.6 quadrillion tons of gold must lie in Earth’s core. This may sound like a lot, but it is really only a tiny percentage of the core’s overall mass—about one part per million. The core holds six times as much platinum, Wood notes, “but people get less excited about that than gold.”
http://discovermagazine.com/2006/sep/innerfortknox
1.6 quadrillion tons of gold distributed among 6 billion people is something nearer to 266,666,000,000,000 tons of gold per person. Gold critters better hope we don’t find a way to get hold of some of it.
A. Gold that’s produced through nuclear reactions remains radioactive. And the process is prohibitively expensive, and normally involves using other elements that are even more expensive than gold. Not feasible.
B. “In the earths’ core”? You’re kidding right? Look a little deeper into gold mining and you’ll find out. The mining costs are prohibitively expensive as well, and obviously it’s not feasible to actually extract it from the earth’s core.
Paper money on the other hand - very easy to produce. Electronic money even easier!
Maybe we don’t have to actually mine the gold at the earth’s core. We could just leave it there for safe-keeping while we use it to back our paper currency. We’d be back to a gold standard and everyone would win!
The last 30 years , one would have been further along $$$$$ wise to just put the money in a bank Savings account , and let it grow ..At least it would be all there . Not one of the money Gurus , not a single one predicted that .
That is because it isnt true. If you had bought as much house as you could afford in the late 80’s, sold it in ‘2005, held the money in CDs, and invested 100% of it in stock last March you would be a millionaire many times over. The choice isn’t bank accounts or buy and hold. Buy and hold doesnt work in bubble economies. You have to pounce on bargains and get out when fundamentals dont support prices.
Yes, the bankers love making money off the churn or pulling the rug out from under us. What you say is technically true, but it requires a lot of time and fortune to dedicate to playing the Bubble Economy game; most of us don’t have that type of time or that type of fortune…
I agree even true financial gurus will miss the bottom and tops, but as long as you can get it generally right (i.e., only act when the prices seem shockingly low or high based on fundamentals), you should have outperformed savings rates by a significant margin. If I timed everything exactly right I could have averaged a several thousand percent return on the stock market the last 10 years. I am not that good so only averaged around 12% per year. If it sounds too good or too bad to be true, it usually is. Over time, it is never really different. I actually think it is easier to make money with bubble booms and busts. You just have to take an active role and lead not follow.
That is because it isnt true. If you had bought as much house as you could afford in the late 80’s, sold it in ‘2005, held the money in CDs, and invested 100% of it in stock last March you would be a millionaire many times over.
Yeah, perhaps you have a crystal ball or a time machine - lucky you. To quote Hugh Hendry: “Um hello? Can I tell you about the real world?”
Left LA - I would suggest that more than half of the people on this blog refused to pay 2003 and later prices for housing and almost as many sold their stock either before or soon after the stock market started crashing. You are free to check the postings here for verification. It is a pretty informed bunch. No one saw this coming is a fallacy. I am sure 95% here did. Didn’t it all seem wrong to you somehow?
I dont know if you are new here or not Left LA, but using your logic at least 85% of us had crystal balls and/or time machines. Fundamentals have been discussed daily with great accuracy on this site both before and after the crashes. There are admittedly a few tin foil hat people, and a few overly optimistic or pessimistic, but general, we pretty much all saw it coming a mile away. Economic fundamentals never really change. There is a general logic to them. Fundamentals is in fact the “real world.” I could go on about historic ratios for housing and stocks, but the history of this blog contains it all. I would argue that thinking post 2003 prices of homes and stocks were sustainable was the true fantasy.
I think a lot of people average about the market. There are also a lucky group that average below the market.
I’m putting it down mostly as luck. Precise timing of the major events involves a substantial amount of luck.
Anyhow, lots of people with good technical analysis got burned like hell by the market. If you looked at the financials reporting, it seemed like you should be still in. I got out around 13K based on the stuff I read around here.
I did not call the rebound or believe it would have been as strong as it had been. Thought we might dip to 4000. Anyhow, the risk didn’t seem worth it so I missed out on major gains. Meh. Over the last 20 years I think I’m eeking out a little more than 5%.
Natalie’s main points are correct.
You’re not going to win if you try to time the market precisely. Forget about it.
My approach is to try to take advantage of 80% of the upside in the market. If I miss 20% of the upside - taking both market entry and exit in account - I consider myself way ahead. Not just monetarily, but also in piece of mind.
There was a fascinating article in The Economist about the carry trade between various currencies. While there is the occasional outrageous windfall profit, the average investor would get slaughtered if trying to engage in the trade.
The article was about some theory which would lead to a higher likelihood of profit in the carry trade.
Ditto with the stock market - if you pick the right horses at the right time, you win at the track - and in the stock market.
The problem with that idea is that most people have most of their investments in Employer sponsored 401-k’s. I don’t think I have ever seen a 401-K that allowed investments in CD’s or other FDIC insured interest bearing investment products. The exception is money market funds which typically have fairly low returns.
In my opinion that is a major problem with defined contribution pension plans, they force participants to be more exposed than many or even most should be.
Yes, money market and GICs funds do not have great returns, but are safe havens to park money in temporarily if the market is too high with the intent to reinvest after the correction. I saved myself about a 25% negative correction by doing so.
In my opinion that is a major problem with defined contribution pension plans, they force participants to be more exposed than many or even most should be.
Thank you, Spokaneman!
I don’t recall anyone on this board saying to get 100% back into stocks in March. If so, it was a great call, but who made it? No one that I recall. Habeas postus.
colluded = concluded
I notice a certain recurring formula in many of these “get rich quick” type articles:
1) The banks are not to be trusted, and the dollar is going to go into hyperinflation any day now.
2) BUY GOLD.
I forgot:
3) Give me your worthless green pieces of paper in exchange for the gold I want to sell you.
We sold ours a couple of weeks ago, and were glad to be done with it for the nonce. It definitely isn’t going any higher for awhile, and might be going lower.
3) Give me your money for a “seminar” to learn how to be rich.
During the gold rush,there was more money in selling the pickaxes than there was in actually using the pickaxes.
See “Rich Dad, Poor Dad” above.
“Dow 5,000 in 2010?”
DJIA = 10K or bust
Right, Kiyosaki clearly has no knowledge of the PPT. Anything below 10k is not going to be an option. As Goldman is my witness, that will never happen!. -scarlett
Tomorrow is another day
for the PPT to protect 10K.
10,000 forever, even if the dollar loses half its value over the next few years… Gotta love inflation, since nobody (aside from the wise) sees it coming!
I actually think these stock prices are a fair but not great value assuming Obama can keep extortion and back stabbing to a minimum, and he stops trying to move us away from fundamentals and preventing sustainable recovery and job growth to line the pockets of unions and other corrupt people and entities. That’s a pretty big “if.” I have no doubt prices will be notably higher than today’s levels when he is gone. He is such an insane wild card, however. It will be a bumpy ride for sure, so I keep large cash reserves to buy on his fumbles.
Last nights video:
http://www.youtube.com/watch?v=3QTQMdG8sJs
Can you please tell us a little more about what it is that we are watching here?
Zydeco music from Louisiana …funky kickazz bands…about 140 last night in NYC at $22 each. Imagine if they had publicity
more on my youtube page …
http://www.youtube.com/aNYCdj
It’s either:
1. Footage from aNYCdj’s gig last night, or
2. Ron Paul speaking about the need for fiscal responsibility, or
3. A video with NYCityBoy’s missing pickle, a goat, and a quart of 10W-40.
Survey says…
Wait… my mistake. That’s not a goat, that’s Ben Bernanke. With the beard I thought… oh, never mind.
Finally! An analyst who has told it like it is.
Look up Bloomberg News.
Mitsubishi’s Brown Says Greece’s Euro Exit `Inevitable’
This guy Brown is forthright: Germany will find it easier and cheaper to dump Greek debt and run. He observes that the Fed and USGov’t found it cheaper to pay Wall Street and let the US Homeowner default. Germany will follow the same plan with Greece. Wall Street gave the gov’t a better deal.
Roidy
Here is the URL:
http://www.bloomberg.com/avp/avp.htm?N=av&T=Mitsubishi%27s%20Brown%20Says%20Greece%27s%20Euro%20Exit%20%60Inevitable%27&clipSRC=mms://media2.bloomberg.com/cache/vdwkCVPFYQzg.asf
Roidy
Roidy,
German politicians, like politicians everywhere, have never earned an honest day’s euro or dollar in their lives. So they have no qualms about throwing massive amounts of borrowed or printing-press currency at whatever problems crop up during their terms - future generations be damned. Let’s just defer the problem until after the next elections. But the productive sectors of society - the ones that pay the bills - are furious about paying more and more taxes that bring no discernible benefits to them or their communities, but instead go to subsidizing corruption, sleaze and sloth in their own countries and abroad.
The Europeans, unlike us, can turn to several standout newspapers that actually tell the truth. Our corporate-owned MSM seems congenitally incapable of delivering real news and real truth. When the sheeple start showing signs of coming out of their lobotomized complacency, the MSM will divert them with such riveting and relevant fare as mugged poodles in Manhattan or the latest hijinks of Paris Hilton and Lindsey Lohan. Meanwhile they all but ignore real issues, set in context, like our wars in Afghanistan and Iraq that are bleeding our treasury dry, and the true state of the economy. But European taxpayers are in general more reflective and far better informed than their US counterparts. They are showing real signs of pushing back against their government’s “largess” with their money, and of turning out those governments in the next elections - instead of replacing them with more of the same like US voters do.
European politician, like ours, have no core principles or convictions beyond the craving for the perks and privileges of power - hence, if their pollsters and focus groups tell them a bailout of the PIIGS will doom them in the next elections, they will suddenly be reborn as ardent nationalists opposed to EU dictates and bailouts of their deadbeat southern neighbors. So I wouldn’t assume that a bailout of the PIIGS is in the cards. Which means that despite all the conniving of GS and the central banks, the global debt and credit Ponzi scheme could be imploding sooner rather than later.
I agree with what you say except this:
The Europeans, unlike us, can turn to several standout newspapers that actually tell the truth.
I lived several years in Europe. Their “right wing” media is about two steps left of CNN. Even Fox news is banned in certain places. You usually have two choices – socialism or communism media. And the US is always wrong and evil (except when they are defending our particular country). English language newspapers are even worse.
“Even Fox news is banned in certain places.”
As it should be everywhere unless they’re forced to admit that they aren’t a legitimate news organization.
Because CNN and the rest of the left-wing nutballs are all sooooo honest!
Right… whatever.
HAppy president day!
at least in the 80’s we had ronald Regan’
bob hope and Johnny cash …. Not what we got?
Obama, no hope and no cash!
“Their “right wing” media is about two steps left of CNN. Even Fox news is banned in certain places. You usually have two choices – socialism or communism media. And the US is always wrong and evil (except when they are defending our particular country). English language newspapers are even worse.”
That simply isn’t true. In the UK, The Independent, Guardian, Times, Telegraph (”Torygraph”) are all worthy of reading at times. I wouldn’t call any of these particularly left wing or right wing.
Have you ever been to the UK or Europe? Referring to the choices of available media as either socialist or communist is bizarre. Is Fox “News” actually banned or just unavailable? Where? Referring to Fox “News” as news, is well, bizarre. If one wants corporatist/fascist “news”, Fox “News” is a good place to go.
” If one wants corporatist/fascist “news”, Fox “News” is a good place to go.”
As are all the other major media outlets.
Yep, good thing CNN, CBS, etc. are all honest, news sources. I’m sure they reported on the Bubble years before it popped, have opposed the Bailouts, have stood up for what is important in this nation, etc.
Oh, wait - they haven’t, but still people go on bashing Fox as if they are somehow the only questionable source of “news” out there.
“Yep, good thing CNN, CBS, etc. are all honest, news sources. I’m sure they reported on the Bubble years before it popped, have opposed the Bailouts, have stood up for what is important in this nation, etc.”
There’s little to like about any of the U.S. MSM, but Fox is by far the worst of the worst. When your “reporters” are orchestrating “news” events or your network is showing file footage from a previous time of the year as if it were current, you are at best a third rate “news” outlet and at worst a first rate propaganda outlet.
There’s little to like about any of the U.S. MSM, but Fox is by far the worst of the worst.
But that’s the problem isnt it? ALL of the news outlets pander to those who watch them. They are all preaching to their individual churches.
I prefer foxnews. They speak more to me and my world view than socialist, liberal news outlets of CNN or ABC. I get tired of the liberal outlets bashing the U.S. and always trying to get U.S. citizens to want a one world view.
I want to see a U.S. outlet cheer for the U.S. for a change.
“I want to see a U.S. outlet cheer for the U.S. for a change.”
I’m not looking for news outlets to cheer anything, just cover the news. I’m not looking for a propaganda outlet or something that is comforting to whatever preconceived notions I might have.
It should be rather obvious by now that being fed “news” that will comfort us or make us feel better isn’t really doing us much good.
Come Home, Walter Cronkite…
SD Greg, what do you think of the PBS News Hour with Jim Lehrer?
Their format is to have some background, then some analysis from experts. Yes, they have on a lot of partisan experts on both sides. However, they are very careful to have equal time for both, and they are very clear about which organization each expert belongs to.
Recently they started sending their anchors on location…a welcome change.
If you can’t tune into the show, the website has transcripts and podcasts all over the place.
There’s a little bit more self-promotion on the show than I would like, but at least its doesn’t have any commercials in the middle. (you have to ignore the first two minutes and last 5 minutes, which is where they pack the “commercials.”)
“SD Greg, what do you think of the PBS News Hour with Jim Lehrer?”
I’ve watched some of Bill Moyers programs. His interview of bank regulator William K. Black was excellent. Thanks for the reminder on the news content available from PBS. It’s well done and well organized.
Of course it lacks the entertainment value of the U.S. MSM “news” which is one of the big drawbacks of ad revenue driven “news” programs. The focus is less on news and more on drawing an audience to support the ratings to draw the ad revenue. While that may be good for the bottom line of the networks, it doesn’t do much for creating an informed electorate necessary for a democracy to function effectively.
“The Europeans, unlike us, can turn to several standout newspapers that actually tell the truth.”
“But European taxpayers are in general more reflective and far better informed than their US counterparts.”
At least in the case of the UK, I would argue that the UK media does a far better job of delivering the news than does the U.S. MSM. However that does not mean that they cover all things well or that the public acts any differently as a result. The UK still had a massive property bubble as did places the Brits chose to buy abroad such as Spain and Florida. It’s hard to say anything the UK media did had any impact as far as the property bubble.
Still, it was both eye-opening and distressing to read in the UK media things that were happening in the U.S. that would never be covered by the U.S. MSM.
Sammy Schadenfreude,
What I’m saying is that the US Gov’t found it easier and cheaper to bail WS and screw everyone else.
Look, all I’m saying is that the Germans will not bail Greece out completely. They will let certain parties to the debt take a hair cut.
The Us Govt and Fed completely bailed the bondholders. I’m beginning to understand why. The US did not want to directly infuse money into European and Asian companies and gov’ts. It was a “fast one” alright.
Yes sireee. Hank “My Pants Knees are worn out” Paulson said on TV the other day that in Sept 2008, he had to visit China and talk Russia and China from dumping bonds originating in the US.
So they paid them off.
I would have been better to flush the system. Remember that we really wanted to save the investment system. What we saved was a “Casino”. The actual percentage of investment banking done at Goldman, etc is 20%. The rest is “trading”. Read: it’s a slot machine.
Hey! Jamie Dimon! Over Here! You Run A Gambling Casino!
Ya twit.
Roidy
I think Greece is going to get kicked off the island.
An O.S! moment in real time:
While out tomcatting this weekend I got to observe a houseowner O.S! moment firsthand. With the housing bubble far removed from my mind, I was escorting a young lady back to her condo when we came across an Open House sign. The sign was for a 2/2 for $340k.
Visibly concerned, she stopped to read it and mumbled something. Not knowing prices in her building, I asked: “is that good or bad?”
Her response: “it’s not good”. Followed quickly by some unprompted bargaining: “that’s the 07 tier though, mine is 03 so it might be smaller or something”
I didn’t pry anymore, after all I wasn’t there to buy a condo! Still, it’s very amusing to watch people unfamiliar with this huge event come into contact with it in their own little way - one at a time.
Back in my tomcatting days the young lady would have been so enraptured at the idea of getting me back to her condo as quickly as possible, she would have paid no heed to inconsequential diversions like open house signs.
That’s my story and I’m sticking to it.
The older you get the better you were!
It takes an old guy all night to do what he used to do all night.
It was different back then, Sammy, as there was no housing bubble. Quite honestly, back in my tomcatting days, I doubt a single thought of condo prices ‘then versus now’ ever entered the minds of me or my dates.
Yeah, I lived in some hovels that Mother Teresa’s supplicants would have turned up their noses at. And somehow the young ladies never minded. It never occurred to me that I was “entitled” to a nice house of my own.
“While out tomcatting this weekend…
I didn’t pry anymore, after all I wasn’t there to buy a condo!”
Sounds like you wisely know when to keep your mouth shut about the housing bubble thingee
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5MJFT2dMyIU&pos=3
Goldman Sachs helped Greek officials use accounting tricks to hide their ballooning deficit. I am shocked, shocked!
How many of these hidden debt time bombs, on top of the ones already visible, are waiting to detonate?
Bill in Los Angeles gets some jibes in here about being a gold bug, but I suspect he’s going to have the last laugh as fiat currencies become near-worthless in the face of such Bankster/Government chicanery.
When debt bombs blow up they take money with them.
The blowing up of debt bombs don’t act to make fiat currencies near-worthless: they act to increase the value of the currencies that remain.
Not when governments make their unpayable obligations go away by ramping up the printing presses. At that point the average citizen would rather have a few ozs of gold close at hand than banknotes from a government printing press backed by “good faith and credit.”
At that point the average citizen would rather have a few ozs of gold close at hand than banknotes from a government printing press backed by “good faith and credit.”
Or USD at this point in time.
Ramping up printing presses is creating money, not destroying money. Debt bombs destroy money.
We are talking about two different things here.
But the printing presses are the direct result of the debt bombs. It is a cause and effect relationship - they are technically “two different things”, but cannot be separated.
Technically you could claim you could fall out of an airplane without a parachute and not die, if you claim the “fall” and the “splat at the end” are two different things. But everyone knows that the cause of the splat is the fall itself.
Debt bombs and printing presses are intrinsically related. Do some basic research on the Weimar Republic. And what arose from the destruction of the value of the currency, i.e. hyperinflation.
History records what happened after that.
ROTFLMAO!
Combo - come on. You can’t be serious.
You may want to talk with some holders of rubles, Z$, or Argentinian pesos before making a statement like that. All of these experienced hyperinflation exactly because of debt bombs; with the values of these currencies plummeting.
Somehow you always seem to forget that these currencies are simply createable from nothing. There is very much not a limited supply driving the demand/supply curve.
P.S. from most of your discourse you seem like an intelligent person. Which is why it continues to puzzle me why you don’t seem to realize this concept.
Packman, we went over this a while back. Combo’s point is that the collapse of private credit will overwhelm even the gov’ts ability/willingness to print money, at least in the short/medium term. It seems convincing to me.
Certainly it depends on the nature of the debt bomb. The key is whether or not the entity that’s in the debt has the ability to print its own money. Since we’re talking about fiat currencies here, then we’re talking about entities that can print their own money.
Just take a look at the Euro since this Greek debt crisis began. It has plummeted - even relative to the US$ - down from 1.5 in Nov to 1.36 now. It’s down significantly against *all* currencies, as well as against gold etc. I don’t think all the people holding Euros are feeling like their currency is worth more due to its “rarity” at all right now.
If printing money is the only way to satisfy, or rather, repudiate, government financial obligations, then that’s what the government will do. That’s what governments have always done when faced with similar situations. Zimbabwe being the most recent example. You can never “overwhelm” the gov’ts ability/willingness of gov’t to inflate its way out of what it owes.
LVG - to your point specifically:
the collapse of private credit will overwhelm even the gov’ts ability/willingness to print money
I agree to an extent, however the thing is, in today’s world of easy currency exchange, it’s not the actual rarity of an item that determines its value - it’s the expectations of future rarity. People are dumping Euros like crazy, not hoarding them, which is why the Euro is plummeting. So even though yes the government can’t print them fast enough, it doesn’t matter - there are tons of Euros being dumped on the market even by private investors as they switch to more stable currencies.
(”Stable” being a relative thing)
Then all the financial problems of towns, cities, counties, states and the federal government are readily solved by the printing press, so all this gnashing of teeth over revenue shortfalls is for nothing.
Who said anything about “solved”? I just said they could use them to pay back past debts. The unfortunately problem is that today’s debts always seem to be larger than yesterday’s debts.
e.g. paying a minimum balance on your credit card each month doesn’t solve anything, if the balance keeps getting higher and higher - especially if it’s getting higher relative even to your income level.
Eventually bad things happen - generally unpredictable bad things. If you’re lucky you just get knocked down the world economic hierarchy several notches. If you’re not you end up with all-out war and political regime changes, and probably have to rebuild your economy pretty much from scratch.
Packman, we went over this a while back. Combo’s point is that the collapse of private credit will overwhelm even the gov’ts ability/willingness to print money, at least in the short/medium term. It seems convincing to me.
What if the gov’t gets into the business of providing EZ private consumer credit? You know, to “stimulate” the economy. Or what if they just handed out non-trivial amounts of free money to J6P, or give every othe J6P a gov’t job?
I know these scenarios sound far fetched, but if everything starts to collapse again (and who says it isn’t already) then we might find ourselves in a “desperate time call for desperate measures” kind of situation.
What if the gov’t gets into the business of providing EZ private consumer credit? You know, to “stimulate” the economy. Or what if they just handed out non-trivial amounts of free money to J6P, or give every othe J6P a gov’t job?
All of these are already happening to some extent.
- Extension of credit - check (all kinds of stuff discussed ad nauseum on here)
- Free money? - check (tax credits part of stimulus)
- Government jobs? - check (USG employee base expanding, while private contracting.)
“Then all the financial problems of towns, cities, counties, states and the federal government are readily solved by the printing press….”
The US Congress sends cash to states, cities, and counties via the stimulus bill. The Treasury sells bonds to fund the stimulus bill. The Fed buys the bonds using newly printed cash, diluting the value of existing cash.
The gnashing of teeth encourages cash printing.
This talk of “debt bomb” is a misnomer. The money was lent - someone pocketed it, the actual dollars are out there - the sellers and the middlemen. So the money is still out there.
BUT - the lenders now have holes in their balance sheet. And because the power that be believe lending is the most important sector in the economy, they are willing to shovel trillions to shore up the lenders.
So, in addition to the money out there, the government has turned out the printing presses to make the lenders whole because of their supremely important place in the minds of the PTB.
Hence the high inflation fears. Instead of allowing the current crop of lenders implode and allowing a new group to arise (heck, they’re arising in the most underdeveloped places in the world, with microloaning and such, why wouldn’t they arise that much more quickly here?), the government and politicians, paid heavily by the current group, is shoveling tax money at that group. This invites yet more risky behavior, puts the taxpayer on the hook for yet larger bailouts, and encourages yet more malinvestment.
And all the while, the standard of living of the populace drops.
So just what is your definition of a debt bomb? Is a debt bomb debt that will be deemed to become worthless, a debt that will never be paid? If this is the case then it means somebody is out some money, does it not?
If this person is out some money then that means he has less money to spend. If he has less money to spend then his buying power is diminished, his ability to bid up prices is diminished.
If enough debt bombs go off and enough people are out enough money then the whole economy goes into a contraction because the is not enough money left to support prices.
Which means those whose money is not attached to a debt bomb still have their money left intact and thus get to enjoy an environment where prices are on the decline.
Take a hard look at the trillions of derivatives and other “instruments of financial mass destruction” that have built up over the last ten years. When that blows - and it will - the impact on economies and currencies are going to be catastrophic.
So just what is your definition of a debt bomb? Is a debt bomb debt that will be deemed to become worthless, a debt that will never be paid? If this is the case then it means somebody is out some money, does it not?
No.
What you’re talking about is repudiation - where an entity simply refuses to pay; directly defaulting. Most nations do not choose this, instead they choose inflation/hyperinflation.
Thus the somebody is not “out some money”. They actually do get the money that was promised to them. It’s just worth a lot less than they thought it would be.
The term “debt bomb” suggests to me the destruction of debt. Repudiation of debt is the destruction of debt.
Borrowing or the “printing press” suggests to me the creating of debt, which is just the opposite of the destruction of debt, just the opposite of a debt bomb.
If we are to throw around colorful terms such as “debt bomb” then we had better agree on definitions.
True, true. It appears my definition was different than yours - in my case I was considering a “debt bomb” to be financial destruction caused by debt, and not necessarily including the destruction of the debt itself.
When the trillions of dollars of derivatives mass destruct they will take a lot of money with them. This will cause money to become scarce. The value of scarce money will increase in proportion to its scarcity just as the value of anything that is desired increases in proportion to its scarcity.
So does that mean that home prices are gonna go up or down? Gov just issued new program of 0% interest- down payment loans on foreclosed properties if they are going to be used as primary residences. These loans do not need to be paid back until the borrower sells the house.
So you still need no money to buy a house. Government keeps trying to entice homebuyers at any cost, which in turn screws the investor who actually has cash, and unfairly keeps prices high because if you can get in initially “free of charge”, you won’t or can’t quibble on the price.
So those without money keep getting rewarded and prompted to buy by the government, and easy money loans are still propping up the market. And they are trying to lure in the last of the rubes to buy a foreclosure
Thoughts?
“This will cause money to become scarce”
I don’t get it. How can money ever become truly scarce, if CB can always print more of it?
In theory, if we lived in a fair world (we DON”T), then yes, I’d agree with you, debt destruction would mean deflation, savers rejoice, the banks and borrowers be damned…
But as long as TPTB control the printing press (and they DO), there’s always that nagging risk that if too much of TPTB own money is destroyed, they will choose to inflate.
After all, who’s the ultimate loser in a hyper-inflation/currency devaluation scenario? Is it the owner of the company, RE, gold mine, farms, distribution networks (real assets)? …Or is it a poor working schumck with his lifetime cash savings in the bank?
Who will TPTB try to protect, if the push comes to shove? People like us (savers with some cash), or themselves (real assets rich)?
I’m afraid we already know the answer, after looking at Fed’s behavior so far. Their answer has been quantitative easing, risk of inflation be damned.
Who will TPTB try to protect, if the push comes to shove? People like us (savers with some cash), or themselves (real assets rich)?
This is what I saw first hand in Mexico City in the late 70’s and early 80’s. Cash was crap. Christmas bonuses (aguinaldo) were mandated by law (20 days salary, 90 days for Federal gov’t employees).
NOBODY saved a penny (a centavo?) of their “aguinaldo”. The gov’t even ran commercials begging people to not burn their aguinaldo, but they did anyway. Why save it? Just to have inflation eat it away?
I knew people who would buy rebar, bricks, etc., and stockpile them in their yards, knowing it would keep pace with inflation and they could sell it of they didn’t use it.
Packman:
What you’re talking about is repudiation - where an entity simply refuses to pay; directly defaulting. Most nations do not choose this, instead they choose inflation/hyperinflation.
Those nations can hyperinflate all they want. If they are paying the debt back in foreign currency, they will simply have to pay a lot more of their own currency to settle their debts.
“Bill in Los Angeles gets some jibes in here about being a gold bug…”
I think that is a bit unfair, as he has long preached dollar cost averaging into a diversified pool of assets. I confess to having occasionally jibed him myself, while privately agreeing with his main point: In times like these, it is impossible to predict which asset class is going to do well and which is going to tank; hence it is best to not gamble by putting all your beans into the same basket, or by allocating too much to any one basket at a particular point in time.
Fair disclaimer: When I kick the tires of what a poster writes here, that doesn’t necessarily mean I disagree with what he is saying; I simply place a high value on critical scrutiny of ideas.
Another good question is this was probably a multi staged ambush. I expect multiple tiers of bobby traps.
How many derivative landmines does this set off?
Wait a minute Bill in LA is hedged with equities (70%) t-bills, muni-bonds and precious metals.
He’s bullet proof, unless cops start checking out of state licence platees more thatn a mile inland from the coast.
55% equities, 34% cash, 11% precious metals.
I suspect he’s going to have the last laugh as fiat currencies become near-worthless in the face of such Bankster/Government chicanery.
With just a tad over 11% in precious metals and 34% government securities, $6,600 per ounce of gold (and commensurate increases in the prices of silver and platinum) would get me to $1,000,000 outside of my holdings in stocks.
I’m betting that I’m wrong about inflation, hence 34% government securities.
alpha - answering your question from the other day about JFK’s threat to the PTB (been tied up since then) - check out “executive order 11110″. Yes it’s very conspiracy oriented. Key is that that order gave the government the power to issue currency without using the Federal Reserve; a definite no-no. I’m definitely not saying he was killed because of it (and probably other things like it going on behind the scenes) - but it wouldn’t surprise me.
“Key is that that order gave the government the power to issue currency without using the Federal Reserve; a definite no-no.”
Granting the executive branch a secret right to print money sounds like a recipe for outright currency collapse.
This doesn’t make any sense at all. This is about the silly and stupidest thing I’ve heard.
The president can always order the SOT to print money. Been that way since 1913.
The primary difference in the government prints treasuries and sells then through the reserve. Cycles dollars back through the mint. Then the mint takes some out of circulation and ,occasionally, just prints money.
So, the Fed does more of a recirculation job. The treasury does the actual printing. And they can print about as much as they’d like to.
Now, the bankers are rich guys and IF JFK was going to cut spending, raise taxes and pay down debt…. maybe some over leveraged rougue might have gone after him. There isn’t any evidence of that though.
In some ways you can argue the Fed is a less inflationary form of printing. They produce debt which only acts like increasing money supply when you first do it. However, when you are paying it off it acts like a liquidity drain and sucks up a lot of money. Hence we are seeing all these little deflationary signs as people default, payoff or otherwise get rid of debt.
The PROBLEM with the debt, as I see it, is that it caused malinvestment and it creates excess wealth concentration. Not a good thing.
You can go to the treasury website. They printed millions of notes a day.
We can also go into a long discussion of federal reserve note vs dollar. Kind of pointless though.
Say what?
The primary difference in the government prints treasuries and sells then through the reserve. Cycles dollars back through the mint. Then the mint takes some out of circulation and ,occasionally, just prints money.
A. Treasuries are not actually money. They are not legal tender. I cannot walk into a Walgreens with a U.S. treasury and demand that they give me products for it.
B. Where do you think “the reserve” gets the money to buy the treasuries? By creating money. Actual money - legal tender, with which you can walk into Walgreens and buy stuff.
So no - the U.S. Treasury does not have the ability to create money. The Federal Reserve does. That is why our paper currency says “Federal Reserve Note” on it, and not “U.S. Treasury Note”.
You’re confusing “notes” with “money”. “Notes” are a more general term than is money. Any U.S. company can print “notes” - i.e. bonds, for the purpose of borrowing. These are not money, in the form of legal tender. They can be exchanged for money, but they are not money. Broccoli can also be exchanged for money, but that doesn’t make it money, at least in the “legal tender” standpoint (which has legal meaning).
But JFK was giving the Treasury permission to print silver certificates, not notes- if that makes a difference. And if I understand it right, he already had that power himself, but was giving it to the Treasury.
Did the Fed reserve have the ‘monopoly’ on printing silver certificates too? Or did they gain the printing monopoly with the introduction of the fed reserve note?
I meant to say that JFK was giving the Treasury the power to print silver certificates without having to get authorization (or whatever) from him. He apparently already had the power to authorize their printing himself, as James points out. It seems he was just delegating this power to the Treasury.
I think you guys are misreading the wording from Wikipedia. It’s misleading. It does mention 11110 as delegating powers to the Treasury that previously had to be approved by the president, as per 10289. However the issuing of silver certificates wasn’t one of those - 10289 didn’t address any monetary items. The authority to issue additional silver certificates against silver for which hadn’t yet been issued was new in 11110.
FWIW though - it seems unclear on both sides. This guy says that the order doesn’t give new authority, that it indeed does just delegate authority to the Treasury from the president.
It appears he’s right in that it’s a stretch to conclude that 11110 did anything to significantly curtail the Fed’s power - and an even further stretch of course to then try to tie this to his assassination. To be honest I haven’t/hadn’t looked into it that deeply - just something I’d heard about.
Granting the executive branch a secret right to print money sounds like a recipe for outright currency collapse.
Never said secret. I’m not aware of the details, but since it would be done through the U.S. treasury, I’m sure it would be quite transparent - a heck of a lot moreso than the Fed, at least.
The Winter of -10 is going down as the coldest , snowiest , just plain , longest in several decades .Feb. normally has a dozen balmy days .But not this year .We had 7 inches of snow on Sat. the first major snowstorm in 18 years . (In upstate - central SC) .I have friends in central Florida , and they are only marginally Warmer there .. Any way we can blame all this on Obama and that Washington DC crowd ?
“.. Any way we can blame all this on Obama and that Washington DC crowd ?”
Yes!!! Clearly we have upset the gods who oversee our “village”. The entire administration should immediately be hurled into an active volcano as a sacrifice.
At least in upstate SC we have coats, hats, and gloves. I feel for the people who got snow when they almost never get cold weather.
I do not feel sorry for these people. In a way I am glad for these people. Every once in a while we need to be challenged to see what stuff we are made of. If it takes some cold weather to remind people that they need to look out for their own well being then bring it on.
Time and again I see hurricane Katrina mentioned as proof that we can no longer take care of ourselves. I say, “bulls–t” to that. I grew up in a place with terrible winters. When that cold would rip your face off and snow would come along by the feet it was not every man, woman and child for themselves. Everybody pulled together. Men with snowblowers would help each other out. Shovels in tired hands would work around the clock. Boys would be recruited to help push cars to get them out of snow banks. Hot chocolate was available to any visitor. Often times it was tiring and painful work but eventually Mother Nature was fought by a neighborhood not a bunch of individuals.
I have loved this winter here. It has been cold by NYC standards. During the first cold stretch I heard all of the usual whining. Last week it snowed and was cold. The amount of whining had dropped precipitously. Those that were weak and feeble only a month before were resolute and determined this time around. The strength of humanity is its ability to rise up to challenges.
To lament a little adversity is much worse than the adversity itself.
As usual, supermarket shelves were picked clean by panicked suburbanites. Hello, dumbasses, winter comes at the same time every year - ever thought about actually PREPARING beforehand for natural or man-made emergencies?
People stocking up on water because it’s going to snow a bunch? Gotta love it.
If people could think ahead, they wouldn’t have bought overpriced McMansions based upon “future raises” that could never have hoped to keep up with the explode-a-loan payments.
+1
It’s not like they didn’t know winter was coming. Said rhetorically, are people so poorly prepared that they don’t have enough on hand of things they use every day to get by for 2 or 3 days?
I saw the same crap when I lived in DC. The only reason I cared about whether it would snow or if snow was in the forecast was so that I could avoid the dumb@ssed lemmings at the grocery stores.
Yes NYC boy…that’s the way it used to be when i grew up too…last week the nice guy who walks his 3 dogs, took out his snow blower and plowed the whole streets sidewalks, and some peoples driveways I guess It’s just his way of fitting in..he is Indian.
. Everybody pulled together. Men with snowblowers would help each other out. Shovels in tired hands would work around the clock.
Having lived in Florida most of my life i have seen the worst Hurricanes you could have and one real bad one named Andrew
after Andrew we were with out power for a few weeks most houses were destroyed the few that were livable became small community shelters for us and others we had one pump that got water for everyone we helped anyone that needed help.
And now those same folks would not even give the time of day,
lets face it we pull otgether when things are the worst possible
but when things improve or go back to how they were its every man for themselves.
NYC Boy,
I don’t think it’s coincidental that in surveys of corruption, the “ice people” countries of Scandinavia are always the least corrupt, while in the hot climes of Africa corruption is off the scale. The harsh winters of the north forced the inhabitants to evolve in a more cooperative, mutually-respectful and virtuous manner. Only the hardy and resolute could thrive in such an environment for hundreds of generations. In warmer climes anything went, and it was every man for himself.
“I don’t think it’s coincidental that in surveys of corruption, the “ice people” countries of Scandinavia are always the least corrupt, while in the hot climes of Africa corruption is off the scale. The harsh winters of the north forced the inhabitants to evolve in a more cooperative, mutually-respectful and virtuous manner. Only the hardy and resolute could thrive in such an environment for hundreds of generations. In warmer climes anything went, and it was every man for himself.”
I don’t think this theory works well in regard to Russian empire, where corruption is in the soul of any Russian governing body starting the Ivan the Terrible… till today’s most corrupted Putin style “democracy”…
Personally, I prefer the Guns, Germs, & Steel explanation. It appeals to the scientist more than the sociologist.
one of my favorite books
Truly, an excellent and eye-opening book.
Plagues and Peoples is another book that will make you forever look at history differently.
Often times it was tiring and painful work but eventually Mother Nature was fought by a neighborhood not a bunch of individuals.
And not by corporations or governments, either.
I was just thinking about the Parris Island weather, too.
Roidy
Parris island is thankfully not what it used to be .In by-gone days , If a DI had a nasty attitude from an awry weekend , he could take it out on the recruits by marching them into a swamp , and drowning a few ,too.
They stopped all that , they’re not even supposed to curse them now , imagine that .
You are kidding, right? The most eloquent, verbose, and artistic cursing I ever heard was at PI. It was a Drill Instructor Gunnery Sargent Singleton as I remember. Pure genius. A real artist.
Roidy
Parris island used to be a nasty place , where if the DI had a bad weekend , he could march a squad of raw recruits into the swamps , and drown a few of them . They’ve ”reformed ” the place , don’t even let the DI’s curse the poor kids like dogs anymore , imagine that.
Expecting another one here this afternoon in NoVA - our 9th of the season. Last year we had 2. Ugh.
At least this one’s supposed to be minor, only 2-3 inches.
Another one expected early next week though
I have head-high snow piles beside my driveway right now, on both sides. This is getting old.
DC area is having a good Ohio winter. Temps have been about 10° colder than usual, which is enough to turn a cold 38° rain into a 28° snow. We had *one* nice 58° F day. That was our January thaw.
Global cooling has arrived! Are you ready for it?
NO
The Winter of -10 is going down as the coldest , snowiest , just plain , longest in several decades
It’s been kind of average out here.
Bad here, meaning not enough snow and too warm. Typical El Niño year everywhere, IMO.
Same here in Oregon, and Canada to boot. No snow at 4,000 feet, and the ski mountain has not broken the 100 inch barrier yet, due to too much rain (At 6 to 9 thousand feet??). Yeah its cold in the east. It is also hotter than ever in Rio, and the pacific ocean is still quite large.
Global warming/climate change is real. I cant stand to here the myopic visions of right wing pundits saying since it is cold where they are it means the world is cooling. OPEN your minds, OPEN your eyes, and look at the climate from a global prospective.
I am neither a believer or denying global warming. The entire system has really not been figured out. Thus inaccurate forecasts for three days out, nevermind three decades out. And is it manmade, coming from sunspots or what? If antartica is gaining ice and the north pole is losing it, what is the net effect on sea levels?
Let’s all agree to wait and see(a likely story), and forget about the carbon credit thing, and put some more resources into scientific meterorogical studies. OK Should not peak oil ensure lower emissions in the future anyway. How will we ever combat the resultant global cooling without all those greenhouse gases?
Yes, my northern friends. Just went up to Tug Hill (north east of Syracuse and more importantly east of Lake Ontario) this past weekend. They’re usually on the news for getting buried in lake effect snow. This time they only had a few inches on the ground. Snowmobiliers went out and quickly returned saying the trails were in awful condition.
They are criminals!
UPDATE # 5: More evidence that this was a fraud all along. The Chinese scientist I have referred to in other places appears to be the one mentioned.
In 1999, I had a stroke of luck. I asked one of the IPCC officials for the data from which one of their maps was compiled, and I received it. I wrote a paper analyzing the results, and submitted it to Geophysical Research Letters. They just sat on it. I instead published it on John Daly’s website. Today, it is still the only paper recognized by Google on “Regional Temperature Change.”
I now know my paper was not critical enough, since we have proof that the basic data and its processing is far more dubious than I had envisaged.
I tried to update my paper and resubmit it. Nothing doing. Since the small group — revealed within the CRU emails — control most of the peer reviewers, very few peer reviewed papers which criticize that group are allowed to appear in the most prominent published literature which dominates the academic establishment.
I have only been able to find a place to release my criticisms on the internet, now the only realm where unfettered scientific discussion is possible.
…
“Global warming” as pitched by the High Prophets of Climate Change, is a total fraud.
Is the climate changing? Yes - it is always changing. Is it warming? Maybe. Is this change caused by man? Some of it, probably, but most of it is probably natural. Is there anything that can be done about it? That’s where it gets interesting…
Most reasonably educated people would be in favor of reducing, reusing, and recycling: trying to cut down on waste, looking into alternative energy sources (though most are not ready for prime time) and so on. But the “change” that the Climater Fearmongers want is nothing like this. They are more interesting in raises taxes, confiscating wealth and freedom, and so on… carbon rationing is the type of idea they’d love!
If the powers that be were so concerned about the climate, how come none of them spoke up about the negative climate effects of the Housing Bubble? Paving over so much good land to build grossly oversized and energy inefficient monster houses that won’t last? Hmmm… I guess when money’s involved, the climate can take a back seat! Of course, if we’re to believe their lunacy, climate change is caused by taxes not being high enough…
“most of it is probably natural”
Sure. It’s all natural. When we dump poison into the lake, and the fish dies and mutates, that’s natural. If you were fed poison, you also would have quite naturally died.
…Moscow mayor controls the weather. There’s NEVER rain or snow on major holidays. How does he do it? By sending and exploding shells with chemicals into the air around the city and its periphery counties. That causes precipitation around (but not in) the city in advance of major holidays, guaranteeing clear blue skyes. (There’re also resulting problems with crops and soil in neighboring regions, but who cares?)
Since you can easily change the weather for a few days by releasing certain chemicals/particles into the atmosphere ONCE, then how effective is constant and growing multi-year pollution on a world-wide scale? No effect at all? That would be quite unnatural…
I never said it was “all natural” and I *did* say that I am favor of reduce, reuse, recycle, alternate energy, and conservation in general.
However, I do not believe that raising taxes will fix anything that is wrong with the environment. It seems that the dream of swapping carbon credits as the next Bubble is what is really driving all this; that, and more control over our lives by others who have no interest in our well-being.
I’ll have interest in what the Global Warming crowd has to say when it is no longer championed by people with a carbon footprint 20x my own who stand to make a fortune from reducing us all to goat-herders so they can keep flying to “climate summits” in private jets. When Al-Gore moves to a small condo in the city, rides the bus, and telecommutes to his conferences, maybe I’ll take him seriously, but not until then.
Why confuse the very real problem of uncontrolled pollution and it’s negative impact on environment/climate with taxes or Al Gore?
If you don’t like Al Gore and/or taxes, you must deny the climate change? Why throw the baby with the water? Keep them separate. Politics, taxes… and earth. Just because politicians will try to screw it up and enrich themselves at our expense, does not make the very real plight of climate change any less worthy of attention.
P.S. Like you, I’m against carbon trading. What we should do is punish pollution, with tarrifs, if necessary - China, I’m looking at you! - not engage in the stupid game of changing chairs.
And this is the mildest winter in years here in Boise. Normally there are few daytime highs in January above freezing. This year every single day in January got up to at least about 40 degrees, and there were several 50 degree outliers. No snow that stuck at all, just several long rainy days. As mentioned before, my nephew in Dallas has had a much snowier colder winter than I have had here in Boise - that’s just not natural.
It’s as though the jet stream stopped going west-east and started going north-south.
I bet Goldman Sucks is wishing they had driven the price of heating oil and gas up before this winter… they probably also wished they had cornered the snow shovel market!
Can we blame this winter on bankers? Please?
Dallas got 12″ of snow last week.
A record. They average 1-3″ for the year. If that.
Some ground truth raw data.
I work about 20 miles east of home on the southern border of the slums. Recently, a diploma mill has been in negotiations to set up shop with the city. You know the kind of place I’m talking about, marble and mahogany financial aid and executive office, katrina cottage classrooms, etc. The place is so bad, that our local corrupt govt reps, when they’re not in the news for indictments and convictions, have quotes in the local fishwrap about how the place exists solely to exploit the poor (aka moving in on the govts job), the “degrees” are worthless but the loans are immense, etc.
Anyway, thats the background. So, I’m driving to work, and roughly at the future site of that “school” I see a billboard from one of one of the legit competitors, the kind of place that in the past, used to train lower to middle class kids to become welders, plumbers, corporate drones, etc. The billboard has something like this:
Stocks
Real Estate
(Big checkmark) Whatever the next big thing is
So, essentially, the educational institution that used to pride itself on manual labor-type career training, is now positioning itself as the premier bubble training facility for the lower class folks whom live in the slums.
There is some truth to the claim that the poor don’t have the luxury of being delusional. Middle and upper class folks can B.S. themselves into thinking they’ll get a “profession” or a “career” and have the luxury of watching their standard of living slowly decline, but the lower class folks can’t afford (literally) to daydream like that, and know the only future for america is bubble surfing, so marketing in the slums is adjusting to their beliefs.
Its no news to folks on this blog that the only employment future in america is bubble surfing, but I thought it interesting and notable that this is now hitting mainstream advertising, at least in the slums. I’d assume its coming soon to McDonalds and Walmart ads.
The latest bubble is in the government. I guess the school could teach how to land a government job “where you are expected to do as little as possible and get paid the most”. In the new economy such a position would be (already is, I’m afraid) considerd to be the highest form of success/achievement.
Like I said in another post, competition for Federal gov’t jobs has become quite fierce. States and municipalities are broke and not only are not hiring, they are laying people off as well.
I’ve seriously had young people tell me they’ve taken 8-week courses in medical billing, office assisting, medical coding ( ! ), reiki healing ( New Age stuff ), massage therapy, and various Hollywood movie cameramen scams, all for big bucks, and feel that NOW, they’re going to be hired. Also, my one nephew, who is going to be graduating from a decent 4-year college, told my family last year that because he is a philosophy minor, employers will hire him because they can tell that he’s smart. Oh boy. I tried to speak up, but of course, there was no use. This was to the unemployed chemist with 35 years of experience, and the unemployed automotive engineer with the double masters degrees from U of M. Yep, it must have been those philosophy courses they were lacking. I kid you not.
Hint Hint Sliverback:
You tax money is supporting all this…what do you think welfare reform was about…sending the poor to “Upgrade” their skills by sending them to those kinds of schools with vouchers also paid by the taxpayers..to make them “success” stories…….GED’s ,truck drivers for Fresh Direct, Home health aides, ramp agents, security guards all for Free.
——————————————————
I’ve seriously had young people tell me they’ve taken 8-week courses
If they can get jobs as truck drivers after 8 weeks of steering through pylons or whatever they do, then I’m all for it. But, I seriously doubt that such things happen.
“lower class folks whom live in the slums”
…probably wouldn’t dream of misusing “whom” that way.
I guess it is at least truth in advertising since the eCONomy in this nation is now almost completely based upon Bubbles. Even those with “real jobs” will lose all their wealth once the hyperinflation hits, so Bubble surfing may the only option left.
Hi HBBers,
I have two sons. One is 16 and the other is 12 going on 25! LOL. They are good boys with the occasional lapse in judgment.
The eldest seems to be interested in chemistry and the youngest has dreams of being an “inventor” of some sort.
I have a paid out Florida Prepaid College Plan that is in the black and ready to roll. This is just great with one small exception: This “Creative Destruction” has made our country a hollow shell. I’m not really confident that if they follow the path of science and engineering that my guys will be able to enjoy fruitful, comfortable, productive lives.
My Question: Will they have the opportunity for world-class work in a world class job with top-flight salaries? Or will it be world-class work in a world class job with slave wages? I keep thinking about China, India, and their ability to undercut labor costs.
Roidy
If they have jobs that can easily be exported then they are hosed. If their jobs cannot be exported then they are not hosed.
That’s what it boils down to.
Plumbers, electricians, shoe cobblers, dentists,
furrier, blacksmith, cooper, etc.
The most inventive people as a group are farmers and ranchers who HAVE to be able to fix and make things run by themselves.
Cobblers, furriers, blacksmiths, and coopers? That will be quite an economic collapse.
like coffee pots?
Engineering that requires secret clearances+ do not get outsourced…
not outsourced…but cut.
friend of mine who works for NASA is gonna lose his job.
Don’t they generally try to repurpose those gov workers to other agencies?
Not these days. Destruction of jobs is part of the goal now.
Factor in insourcing of cheaper labor, like EE’s and Programmers from India. Many Americans have trained their replacements.
Biotech, and all other sciences too. Notice the influx of imports in all fields. I live close to Amgen/Thousand Oaks (So Ca), and the Indian population around here has grown noticeably. Our neighbor is a broken English Indian, who is a Programmer.
Spirit Aerosystems (formerly Boeing Commercial) announced 125 layoffs today. These are IT jobs and are being “outsourced” under contracts already in place with IBM and HP.
If they have jobs that can easily be exported then they are hosed.
I know being a professional musician is a tough job and underpaid maybe but I’m wondering if their prospects might be better (not great but better) going forward because:
1. In today’s digital, video-game age there are fewer kids practicing regular analog instruments.
2. It’s hard to outsource live music.
3. Everything goes in cycles. Live music has been hurt by recorded music lately so when it has its upswing years from now there will be less live musicians available.
I’m going out now to listen to some live Samba street music. And it’s not as hot today here (temperature wise.)
A “live” musician might become a status symbol in certain circles, just like a human receptionist is becoming less common but shows a kind of prosperity.
(My company eliminated all receptionists except the one on the CEO’s floor… all now have a phone and listing in the waiting area. Have noticed similar changes elsewhere, with the exception of higher security buildings which have guard types at building entries.)
Teachers in the public school systems cannot be outsourced.
They can be replaced by lower wage, insourced foreign teachers who will do the “jobs that American’s won’t do.”
“2. It’s hard to outsource live music.”
LOL! Ever heard of disco, karaoke, and singles & duos playing to prerecorded tracks?
Not many care about live music anymore. The twentysomethings are just as happy doing the freak to DJ’s as dancing to a real live band, unless they’re famous already.
Our party had a live band this weekend. The crowd really loved it.
I have another friend who is in several bands. He’s quite busy. Also works in the pit at theatre productions.
Ever heard of disco, karaoke, and singles & duos playing to prerecorded tracks? Not many care about live music anymore.
All of that was addressed in my point #3 acknowledging the cyclicality of societal trends, values and perceptions affecting many things including certain profession’s viability and even people’s objectivity utilized in comprehension.
“Our party had a live band this weekend.”
We used to work 5 or 6 nights a week. Then again, our crowd were working stiffs who don’t work anymore.
If they have jobs that can easily be exported then they are hosed.
Which is basically any non “customer facing” job in Corporate America. It won’t be long before the only American employees in the Fortune 500 will be sales droids. Everything else will be offshored to Chindia or some other 3rd world hellhole.
Anything with the word “world” or “trade” is the death knell for American incomes.
Having an income based on a State license insures that one is one step ahead in a local economy…no matter how bad it gets.
Just be there for them.
Requests from them you might want to prepare yourself for:
-Lawyers
-Guns
-Money
in sequence:
Get money
Buy gun
Shoot Liarer
oops, I’s forgot something:
Send lawyers, guns and money.
The Shi% has hit the fan.
Send lawyers, guns and money.
Lord get me out of this.
My advice is for hedge their bets by double majoring in college. Even if it costs you five years of tuition instead of four, it’s worth it. The 16-year-old especially should be double majoring, no matter what his other major is. Even if he can’t find a true chem job and has to rely on his other major, the chem degree carries a wow-he’s-smart competitive advantage over other applicants. (Also try to find out if he wants the bio or the physical side of chem. There’s a huge divide there.) Good double major: something highly applied like logistics.
In general, there may be some hope for science and engineering after all. Science funding was gutted under Bush. Science was seen as a “mature” field, meaning that they had everything all figured out, no more expensive brainwork necessary. They could ship the factories off to low-skill China and plow the money into financial “innovation.” Now that the true innovation pipeline has dried up and things are physically falling apart, there may be a place for science again.
The other son…mechanic, maybe They may gut the defense budget, but nuts-and-bolts stuff (non-outsourceable) will always be in demand.
Chemistry might be a tough go for your son in the new economy. Stay away from analytical. There’s very little market for it. If he can do formulations, such as adhesives, coatings, etc., then maybe, yes.
“…Stay away from analytical”… lol
Hey Silverback1011, I resemble that remark!
By 2020 they should be ready to help scrape rust off the former space infrastructure of Florida’s Space Coast. Or they could be helping to fill in the holes where the high speed rail system sank into the swamp.
My Question: Will they have the opportunity for world-class work in a world class job with top-flight salaries? Or will it be world-class work in a world class job with slave wages? I keep thinking about China, India, and their ability to undercut labor costs.
There’s a reason why Engineering and Computer Science Enrollments are down (especially CS). There is no future for those professions in the US. The offshoring of those jobs continues to accelerate. Those lucky enough to hang on to their jobs are faced with never ending combination of salary freezes and cuts.
Small wonder that the competition for Federal gov’t jobs is incredibly fierce these days.
The budding chemist sounds like myself, two decades ago. Can’t outsource being a chemistry teacher. Can’t outsource being a civil engineer with P.E. License involved with drinking water treatment plants. Chem Eng with P.E. license is in a pretty good spot. Civil eng with P.E. license, maybe even better. Also you can “be involved with” the wonderful world of chemistry by working at a chemical plant, yet being educated and working in a completely different, somewhat more stable field, like accounting, legal, or management.
Find a similar strategy for young Mr Inventor. Many MBA financial types are crooks or run companies into the ground, but some build startups into the leading companies of the future. Intellectual property lawyer probably can’t be outsourced. Einstein started out as a patent examiner, more or less, never let your schooling get in the way of your education…
As Indiana Jones Friend said, “looks dangerous, you go first”. Let us know how it turns out, my kids are following about one decade behind yours.
well…i am a CPA…and i think accounting is a great career choice as far as job security goes…mainly because of the many options it affords:
- emphasis in tax.
- emphasis in financial auditing.
- emphasis in financial accounting.
- law enforcement (fbi and irs love people with accounting degrees.
- cost accounting.
it’s also a great stepping stone for an MBA or law degree.
make sure they study hard and make good grades in under grad though to set them apart from the crowd.
‘…the youngest has dreams of being an “inventor” of some sort.’
1) Encourage him to move from dreams to action (you might mention Edison’s famous quote: “Genius is one percent inspiration and ninety-nine percent perspiration”).
2) If he shows promise as an inventor, push him to learn the ropes of patent law early on. Many inventors over the course of history did not suffer so much due to a lack of brilliant ideas, but rather because they did not understand how to protect their rights to the royalty value.
“…but rather because they did not understand how to protect their rights to the royalty value.”
Or…
They “TRUSTED” a “ETHICAL” “PROFESSIONAL” like this guy did:
Flash of Genius: (Excellent movie)
True story of Dr. Robert Kearns
“…Chrysler was represented by Harness Dickey and Pierce, one of the first firms Kearns went to when he contemplated suing Ford in the late 1970s.”
(Note: This thing happened x2 to ol’ Hwy, 1st an American Corp. with a “visiting” Australian Engineer, 2nd time an Italian Co., which turned out to be a hidden subsidiary of a German Corp…who yours truly was supplying production items to…)
My stepmother’s eldest is an inventor type. He works for our defense department.
i also remember that about 10 years ago…i was doing tax returns for two anethisists in greenwood, mississippi that both made over six figures. that was 10 years ago and in a place that has the lowest cost of living in the country.
an anethisist is a specialized nurse. crazy money if you ask me…and probably pretty good job security being in healthcare.
It’s spelled anesthetist, (CRNA) Certified Registered Nurse Anesthetist.
Like in ….”I’m going to place this mask on your face, please take your last long deep breath michael”
When I was stationed at FT. Gordon, one of my friend’s husband was a nurse and was going to the local medical school to get a master’s in Anesthethist or whatever. He said the attending Doctor was probably making 500k+ and paying the nurses out of that. Blew my mind really…
I have a niece who was trying to go to nursing school. I tried to tell her about this, but she now has changed her major to Spanish. Whatever. She graduates this spring. I wonder how it will work out…
It even made me think about trying to get into nursing school. But I hear nursing school has a shortage now and it’s a long line to get into a school..
There is a huge shortage in nursing teachers. The reason: any nurse with enough experience to teach easily has enough experience to make far more money actually nursing.
This is one thing I would not mind the government funding: subsidize some nursing teacher pay so that it matches nursing pay. That would help solve the shortage.
This is one thing I would not mind the government funding: subsidize some nursing teacher pay so that it matches nursing pay. That would help solve the shortage.
You don’t think the free market can handle this? If the demand is high enough that wages are high enough, then people will be willing to pay more for the education. Thus, higher tuition allows for higher salary for teachers and…voilà, equilibrium!
Until the market is flooded with newly minted nurses….
This is why we should all get on board with Bernanke’s printing press. If we can devalue the dollar enough against the Yuan and Rupee, we can keep our future workforce employed. Just don’t hold your wealth in dollars for the long term.
The WTO prevents explicit trade protectionism, but does not address currency devaluation. I think that devaluation is the implicit policy of the US. The problem we have is that the Asian economies are also trying hard to devalue their currencies so that they can salvage their export based economies.
Ultimately the value of the dollar, like that of any paper-based wealth, depends in large part upon the public’s perception of the intentions of the persons authorized to issue that paper. I am not in the camp of those who assume, therefore, that all paper-based wealth is valueless.
On the contrary, some forms of paper-based wealth are actually quite reliable as stores of value and as investments. For instance, Berkshire Hathaway stock is a paper-based store of value. The Board of Directors of Berkshire Hathaway could decide tomorrow to sell billions of dollars of additional Berkshire Hathaway stock to the public, then use the proceeds to pay themselves huge bonuses, thereby diluting the value of the existing Berkshire Hathaway stock. However, people assume, based on a long track record, that Berkshire Hathaway’s Board would not do this, so the stock has value.
So when investing in paper (whether corporate stock, dollars, or otherwise) I think you have to start by evaluating the integrity and intentions of the issuers of that paper. Do they intend to issure more paper? If so, what will they do with the proceeds of the issuance? In the case of a publicly traded company, do they intend to enrich themselves? Or do they take seriously their fiduciary duty to maximize shareholder value? In the case of a government, are they more interested in minimizing inflation, or maximizing employment?
I think in the case of Bernanke, he is more concerned about unemployment right now. A perfectly rational choice, but one that the holders of dollars should understand.
Going points CB.
With respect to the US$ - it’s hard to measure the “intentions” though, due to it being such a complex system of interactions. Bernanke may announce intentions to pull back injected $$ till his face turns blue - but will the economy, and the powers’ political expediency, let him? (assuming he actually does wish to do this)
I look at this as an indicator:
- Budget projects for the next 10 years shows us having growing deficits, not only in nominal terms, but even in GDP-adjusted terms 10 years from now.
- These budget projections IMO are hugely optimistic in that they predict 5+% GDP growth for 2012 - 2014. That to me is just insane.
- The projections also factor in no additional recession in the 2010-2020 timeframe. When is the last time we had an 11+ year period with no recession?
IMO significant further quantitative easing is simply baked into the cake, sometime within the next 10 years. Even with that, I see a very high danger of us with a “debt bomb” of our own - getting into a downward spiral that we simply can’t get out of without some kind of fundamental economic and/or political change (i.e. full-on reset - I’m not talking about elections or a mere “great recession”). Not saying it’ll happen, but I think we’re entering danger territory, where there is at least some significant chance of that happening.
Based upon what we’ve seen so far, “extend and pretend” will continue until we can no longer escape the Doom that is ahead of us. There is simply no will to change from those in power, and the masses just want their share of the loot, too.
Once it all crashes down, there will be cries of “nobody saw it coming,” and I doubt anyone will be interested in knowing that we did see it coming, unfortunately.
Mortgage applications fall despite low interest rates.
Laurenti said home purchases could go up “towards the end of April.” But Binetti’s hope for recovery focused on the end of the third quarter this year.
“Without government help it will be tough to sustain any momentum,” Laurenti said.
Binetti pointed out that Federal Reserve Chairman Ben S. Bernanke said Wednesday that the government would continue to keep interest rates low. He added that is it a “positive sign that the government continues to purchase mortgage backed securities.”
http://news.medill.northwestern.edu/chicago/news.aspx?id=156334&source
Berneke is blowing the scarab-ball uphill with YOUR tax dollars. Sucking naive “first time” homebuyers into longterm debt on depreciating “investments” is a strategy developed by Bel.Z. Bub and Saitin, LLC.
Binetti pointed out that Federal Reserve Chairman Ben S. Bernanke said Wednesday that the government would continue to keep interest rates low. He added that is it a “positive sign that the government continues to purchase mortgage backed securities.”
So basically he’s confirming that the Federal Reserve really is a part of the government now?
Nice that we have these pseduo agencies - all of the control, with none of the oversight.
pseduopseudoApparently the plan is stalled:
1) Bail out the banks at all cost
2) Re-inflate the stock market so it looks like a recovery
3) Get real estate prices to start rising again
3) Get real estate prices to stop falling
3) Get real estate prices fixed
3) Get real estate prices fixed
3) Get real estate prices fixed
3) Get real…
…
4) Raise rates and dump everything for a “profit”
Just can’t seem to get past that third step. Hmmm. Oh… and something somewhere in there about jobs…Wow, this is hard! Bernanke, I think we may need a different plan.
“I’m not gonna pay too much for this recovery!” -taxpayer
Shouldn’t we be able to shop around as we would for a muffler?
Magic 8-ball says:
“Sorry - option not available”
Late tax whining: Where is my $800?
Remember, they “stimulated” the economy early in 2009 by reducing our withholding per paycheck. I guess I was overly naive and figured they would actually reduce the tax bill by that amount too.
Ha, shame on me. I can’t seem to find that feature in the new tax forms. My $600 refund has turned into a $200 payment.
Ha, shame on them. I KEPT the $800 loan in my lousy 1.25% savings account. So much for their stimulus. It’s $800 effect turned into a year late $200 budget fixer-upper.
$600 is way too much to be loaning to Uncle Sam interest-free IMNSHO. Paying more sucks too, I suppose. I am always happiest when I can come as close as possible to $0.
actually…reducing withholding stimulates tax revenue becuase the government collects more underestimated tax penalties and interest.
i hate it when they fracking do that crap.
You are not alone, Matt. This is happening to millions, all over the country.
I owe money, too. Nothing beats forking over an extra $700 after you already declare 0 exemptions on your W-2.
Stimulate THAT, Obama and Congressional hoodlums. Get ready for your approval ratings to plummet further. Through the 30s, down into the 20s.
It’d be interesting to know what the original intent of this program was. Appears it’s going the way of M3, FASB mark to market, etc. Also appears some of the recouped funding would be used to “
reducemanipulate the Consumer Price Index Variances”.Obama’s budget proposes elimination of the program in the Bureau of Labor Statistics that collects and publishes comparative data on employment, unemployment, manufacturing productivity, and labor costs, among other things.
Justification
The International Labor Comparisons program provides estimates of international comparisons to equivalent domestic hourly compensation costs; productivity and unit labor costs; labor force, employment and unemployment rates; and consumer prices. The data series is used to produce articles, technical papers, or special reports that are not widely used.
Savings from this termination would help finance other program increases in BLS, including the introduction of year-to-year comparisons of the Occupational and Employment Statistics, modernization of the Consumer Expenditure Initiative, and expansion of commodity and service price quote collections to reduce Consumer Price Index variance.
Contained in PDF file
http://www.whitehouse.gov/omb/budget/fy2011/assets/trs.pdf
Do these EU economics officials really believe their own public pronouncements? Their delusion/denial is palpable.
Europe Economy Chief Calls for More Steps by Greece (Update1)
By Jonathan Stearns and Emma Ross-Thomas
Feb. 15 (Bloomberg) — The European Union’s top economics official said Greece should take more measures to cut the region’s largest budget deficit as evidence emerged that the nation may have used swaps to mask its swelling debt.
“We expect that in due course the Greek government will take the necessary additional measures,” European Union Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today before a meeting of EU finance chiefs. Greek Finance Minister George Papaconstantinou said his task was like changing “the course of the Titanic.”
Finance ministers meet today to review Greece’s deficit plan under pressure from investors to spell out the concrete actions they will take to rescue the country if it fails to convince markets it can control its budget gap. Even as the risk premium on Greek debt fell last week on the prospect of European support, the euro weakened on concerns about the euro region’s stability.
Greece’s deficit, at 12.7 percent of gross domestic product last year, was the highest in the EU, and the government of Prime Minister George Papandreou has pledged to slash the shortfall to the EU limit of 3 percent in 2012. It has set a target of 8.7 percent of GDP for this year, even as its cost- cutting moves have triggered strikes.
Papaconstantinou said in Brussels today that the government is “doing enough” on the deficit. “People think we are in a terrible mess. And we are,” he said.
Finance Chiefs
Luxembourg’s Jean-Claude Juncker, who will lead today’s meeting as head of the group of euro-area finance chiefs, said the ministers need reassurance that Greece can reach the target.
“Greece will have to make sure it cuts its deficit by 4 percent of GDP for 2010. We have to check if that’s possible or not,” Juncker told reporters in Brussels. Spanish Finance Minister Elena Salgado, whose government currently holds the rotating EU presidency, also said ministers would discuss the possibility of imposing extra measures on Greece tomorrow.
Underscoring concerns about Greece’s public accounts, a Greek government inquiry has uncovered a series of swaps agreements with securities firms that may have allowed it to mask its growing debts. The Feb. 1 report commissioned by the Finance Ministry in Athens didn’t identify the securities firms that Greece used.
The EU’s statistics office has asked for more information about the transactions by the end of February, European Commission spokesman Amadeu Altafaj told reporters in Brussels today. Johan Wullt, a spokesman for the Luxembourg-based statistics office, said that “until recently, Eurostat was not aware” of the transactions.
Vice President
The extra interest investors demand to hold Greek 10-year bonds rather than German equivalents was 300 basis points today, down from a high of 396 points at the end of January.
Finance chiefs from the 16 nations sharing the euro meet at 5 p.m. in Brussels, where they also may decide who will replace Lucas Papademos in June as vice president of the European Central Bank. Juncker will hold a press conference after today’s meeting. They will be joined tomorrow by their colleagues from the rest of the 27 European Union countries.
Good thing the U.S. can steer its own titanic, and doesn’t have those pesky financial bosses to tell us how to steer!
“Underscoring concerns about Greece’s public accounts, a Greek government inquiry has uncovered a series of swaps agreements with securities firms that may have allowed it to mask its growing debts.”
——————————————————————————
This sounds a lot more like Enron’s work than God’s work.
The Financial Times
EU demands details on Greek swaps
By Joshua Chaffin in Brussels and Kerin Hope in Athens
Published: February 15 2010 15:09 | Last updated: February 15 2010 15:09
European Union authorities have requested information from the Greek government about currency swaps it entered into on advice from Wall Street banks.
The transactions were undertaken as recently as 2008, and have come under scrutiny as a possible means for the highly indebted government in Athens to mask further borrowings from the public.
…
Goldman Sachs and other investment banks arranged swaps that allowed the Greek government to raise funds to trim its budget deficit while pushing payments well into the future. Those transactions were not classified as loans, according to a report in The New York Times.
The Greek government failed to disclose information about the transactions to a Eurostat team that visited Athens in September 2008 to monitor Greece’s debt management.
A Eurostat spokesman declined to say which transactions were subject to the group’s request, or whether it was focusing on the work of specific banks.
…
“…GoldenmanSucks and other investment banks…”
Really, their are “other” investment banks?
The Year in Foreclosures
NYTimes.com
Last week offered some sobering news on the housing market: Even with broad government support for housing, data from the National Association of Realtors showed that the median price of single-family homes continued to decline in 2009. RealtyTrac, an online marketer of foreclosed properties, said foreclosure filings rose by 15 percent in January compared with a year ago.
Foreclosure is generally a long process, with multiple filings as delinquent borrowers fall ever further behind. What is most ominous about the latest RealtyTrac numbers is that nearly 88,000 people had their homes repossessed in January, a 31 percent increase from a year ago. The big jump indicates that many foreclosures that were in process in 2009 are now beginning to move to repossession and, eventually, auction. With more than four million homes in that pipeline, the foreclosure crisis shows no sign of abating.
Worse, as The Times’s Peter Goodman recently reported, the Obama administration’s antiforeclosure plan (which pays cash incentives to mortgage companies that lower monthly payments for troubled borrowers) may be doing more harm than good for some borrowers.
Before a lender will permanently modify a loan under the plan, eligible borrowers must go through a trial period — several months in which they keep current on reduced monthly payments. For some borrowers, even a reduced payment is too onerous, leading to redefault. Others reported being denied a permanent modification even after keeping up the trial payments. In both cases, the borrowers do not avoid foreclosure, and are out the money they have paid during the trial period. That is money they could have spent moving to a rental home or for other purposes.
There is an emerging consensus among financial experts and policy makers that the key to successful modifications is to reduce the amount of the borrower’s loan balance, rather than merely reducing the monthly payment. The goal is to lower the payment while restoring equity, thus giving borrowers both the means and the incentive to keep up with their payments.
Administration officials have resisted that approach, in part because they believe it would be too expensive. Another obstacle is the lenders themselves. In general, a lender is unwilling to take losses by reducing principal unless the owners of the second mortgage on a home also take a hit. For banks that own the second mortgages, such losses would be huge — something they clearly would prefer not to face up to.
Banks’ unwillingness to take losses on second mortgages may also be holding up so-called short sales, in which a lender agrees to retire a first-mortgage debt by taking the proceeds from the sale of the home, even when the amount is less than the mortgage balance.
Last April, the Treasury detailed a plan to get second-mortgage owners to write down their debt once the first mortgage is modified. But until recently, when Bank of America signed on, no banks had cooperated.
Unless the banks can be compelled to get on board — allowing principal reductions to become the norm — the antiforeclosure effort may have more success in letting banks postpone their losses than in helping Americans keep their homes.
Why do the MSM gloomsters have to put a pessimistic spin on every housing-related story they publish?
“…data from the National Association of Realtors showed that the median price of single-family homes continued to
declineshow improved affordability in 2009.”Yep. Amazing how you just haven’t heard much about the “affordability index” on the backside of the bubble, even though it’s been skyrocketing! Far be it from them to present falling prices in a positive light.
P.S. I just thought up a new conspiracy theory. Seems like there was a lot of discussion about the affordability index in the 2005/2006 timeframe. Might this burst of discussion have been done to purposely pop the bubble?
(Am I a good tin-foil-hatter or what?)
“…show improved affordability in 2009″
The “affordability waves” propagated inland from the Pacific Coast sea cliffs…they appear to increase with distance…their intensity in the desert regions is truly phenomenal…
Hunter S. Thompson quote:
“So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high - water mark - that place where the wave finally broke and rolled back.”
Fear And Loathing In Las Vegas
A Savage Journey To The Heart Of The American Dream
“…that place where the wave finally broke and rolled back.”
(a gleeful smile flashes across Mr. Bears face…)
http://www.marketwatch.com/story/spanish-secret-service-said-to-probe-market-swings-2010-02-15
Spanish intelligence service investigating speculative attacks on the economy. Interesting. But what exactly do they intend to do if they uncover evidence of such “attacks”?
Maybe they should be investigating homegrown mal-governance instead.
LOL - here’s the picture in my head (just watched this movie over the weekend):
Spanish government to Goldman Sachs:
“My name is Inigo Montoya. You killed my economy. Prepare to die.”
LOL. A waterboarding or two wouldn’t go amiss, either.
LOL! You made my day!
So who murdered his economy? The dread pirate Blankfeld (sp?)? Or was it the six fingered Bernanke?
It was the eleven-fingered Count Rugen, ironically. Even his fingers were inflated.
Incidentally, I didn’t know until the credits rolled that his part was played by thus guy. I was shocked.
Christopher Guest is perfect actually for the role of Bernanke.
“… but this printing press goes to 11!! It’s one higher.”
Also - get this - Christopher Guest also did a move in 1976 called “The Billion Dollar Bubble”, about the Equity Funding Corporation of America scandal.
Plus I think he’s quite balding now.
Guest is the perfect Ben Bernanke on screen.
Spain’s own plutocrats killed their economy. Goldman Sachs just helped them hide the bodies.
More like…
Goldman Sachs to Spain:
“It’s not my fault being the biggest and the strongest. I don’t even exercise.”
Housing in America - The next decade
Urban land institute
The housing markets in the United States are at an inflection point. Today, they are in a state of turmoil. As the economy recovers, markets will stabilize but the old “normal” will not return.
Interesting read - 25 pages
http://www.docstoc.com/docs/24407229/Housing-in-America
U.S. Housing Aid Winds Down, and Cities Worry.
ELKHART, Ind. — Over the next six months, the federal government plans to wind down many of its emergency programs for housing. Then it will become clear if the market can function on its own.
People here are pretty sure the answer will be no.
President Obama has traveled twice to this beleaguered manufacturing city to spotlight the government’s economic stimulus program. The employment picture here has indeed begun to improve over the last nine months.
But Elkhart also symbolizes the failure of federal efforts to turn around the housing slump at the heart of the economic crisis. Housing in this community has become almost entirely dependent on a string of federal support programs, which are nonetheless failing to prevent a fall in prices and a rise in mortgage delinquencies.
“plans to”
We keep hearing that.
“We keep hearing that.”
It keeps hope alive.
LOL. This will be like when FDR tried to balance the budget in 1937.
Yep. It’s worth noting that the only thing that actually got us a balanced budget, without wrecking the economy (as happened in 1938), was a world war.
After the bulk of the infrastructure of the developed war, except the U.S., was destroyed, we managed to keep a balanced budget until about 1975, about when we lost our competitive advantage as other economies such as Germany and Japan caught up. We haven’t had close to a balanced budget since then, save for a brief stock-bubble period in the late 1990’s (when cap gains tax revenue went thru the roof).
So basically we haven’t had a fundamentally strong economy since before the GD. If you were to also discount the 1920’s (post WW1 and also debt-fueled) then it’s really been since about 1915 or so that we’ve had a fundamentally strong economy - one that truly competes in a stable world, and not fueled by an explosion of debt.
Use of temps may no longer signal permanent hiring
Hiring of temps may no longer signal that employers will soon add permanent staffers.
WASHINGTON (AP) — It’s not the signal it used to be.
When employers hire temporary staff after a recession, it’s long been seen as a sign they’ll soon hire permanent workers.
Not these days.
Companies have hired more temps for four straight months. Yet they remain reluctant to make permanent hires because of doubts about the recovery’s durability.
Even companies that are boosting production seem inclined to get by with their existing workers, plus temporary staff if necessary.
“I think temporary hiring is less useful a signal than it used to be,” says John Silvia, chief economist at Wells Fargo. “Companies aren’t testing the waters by turning to temporary firms. They just want part-time workers.”
“It’s not the signal it used to be.”
Not much is what it used to be, anymore:
1. “Til death do us part”
2. ” A man’s word is his bond”
3. “Owning your own home is always the better option”
4. “These securities are rated Triple A”
5. “It’s as good as gold”
6. “We’re finally turning the corner on the economy”
7. “If you can’t trust the bank with your money, who can you trust?”
8. “Also, along with this comes a written guarantee.”
They just want part-time workers.”
Where they don’t have to pay health benefits. Corporations have gone anorexic. Problem is, the fat’s gone and now they’re eating their own muscle. (heart muscle appears to be the first to go.)
“They just want part-time workers.”
They’ll keep stepping down until they reach the day laborers.
Anybody see that video where the Hispanic fellow in the pickup drives into the office complex seeking day labor accountants and marketing people? Wish I could remember the link, but it’s on YouTube.
I saw that. If it wasn’t so close to reality it would be funny.
They just want part-time workers.”
They’ll keep stepping down until they reach the day laborers.
Correction
They’ll keep stepping down until they reach slaves.
Mass transit for Motor City.
DETROIT (CNNMoney.com) — Can Motor City combat its economic ills by becoming Rail City? ~February 15, 2010
Along Detroit’s Woodward Avenue, a downtown stretch that seems permanently stuck in the “emerging” phase of business development, community leaders are hoping a new light rail system will help spark a renaissance. The city plans to break ground this year on stage one of a $420 million project: the first modern, mass-transit initiative in a city long synonymous with automobiles.
“Transit in Detroit has kind of been a joke,” says Matt Cullen, CEO of M1 Rail, a private consortium heading the development effort. “We’ve been a victim of vulcanized politics and other efforts. But now we have a plan in place. We’ll get it done, and we feel it will have a huge impact on this region.”
In most cities, civic cash would pay for major infrastructure projects like a new mass transit system. But in Detroit, which faces a $300 million annual budget deficit, private backers have stepped in to try to kick-start the venture.
It’s the only project of its kind in the U.S., and the donor list reads like a Who’s Who of area megamillionaires: Compuware (CPWR) CEO Peter Karmanos, Quicken Loans founder Dan Gilbert, Penske Corporation CEO Roger Penske and Red Wings owner Mike Ilitch are among those ponying up $125 million to cover the project’s entire phase-one price tag.
“Community leaders are hoping a new light rail system will help spark a renaissance.”
“Community leaders” = shakedown artists, embedded con-men, and other assorted racketeers
In order for a Light Rail system to work, do you need business and employees that will use the system? Seems like that is a major problem in Detroit these days.
Here in little Spokane, the Civic Leaders have been trying for years to implement a light rail system even though the freeways are never crowded and the park and ride bus system seems to work just fine for those that choose to use it. They even had a referedum vote on light rail and it was defeated by about a 2 to 1 margin, but even with that, they won’t drop the idea.
They have the idea that because its been a success (?) in Portland, it must be viable in a city 1/4 the size.
Monorail!
http://www.youtube.com/watch?v=AEZjzsnPhnw
Zale Corp. cuts 60 jobs in Irving ~ Dallas Business Journal
February 15, 2010
Jewelry company Zale Corp. has confirmed that 60 employees were laid off at its Irving headquarters on Friday.
The cuts leave Zale with about 800 corporate employees at the site.
The news comes as Zale Corp (NYSE: ZLC) continues to realign after disappointing holiday and 2009 sales.
And discretionary consumer spending takes another hit. More to come.
Another item we can live without.
BTW, I’m the offspring of a man who has never, ever worn a wedding ring. My mother does, and Dad bought it for her a-way-back-when.
As for Dad, he doesn’t like jewelry. Hence, no ring.
Get a tatoo in place of the ring
We don’t do tattoos in my family.
The rats keep jumping ship!
Democratic Sen. Bayh Will Not Seek Re-Election This Year
FOX News
Indiana Sen. Evan Bayh will not seek re-election this November, an unexpected decision that hands Republicans an opportunity for a pick-up in a year when Democrats are already defending several open Senate seats.
“Hands Republicans an opportunity for a pick-up”
Or do they mean, “hand Republicans an opportunity for another stick-up”? Talk about a race to the bottom of the pork barrel.
Makes you wonder who will be left to clean up the mess Baroke Obummer and the Defecrats leave behind.
“Kick the moderates out” seems to be the operating philosohpy of both parties.
His wisdom and vision will be missed. I think it was Evan Bayh that co-sponsored the 2003 Iraq invasion bill in the Senate.
Orlando-area hotel occupancy at 52.5%
Orlando’s hotel occupancy was 52.5 percent for the week of Jan. 24-30, down 3.4 percent from 54.4 percent in the year-ago period, said Smith Travel Research.
In addition, hotels’ average daily rate fell 12.8 percent to $94.64 from $108.51 reported for the same period in 2009.
Revenue per available room — a barometer for the health of the hotel industry — was $49.70, down 15.8 percent from $59.02 in same week in 2009.
Eh - no one goes to Florida in the winter. It’s always dead down there this time of year. Especially since its been such a warm winter up north.
True, but I was always under the impression that the lions share of tourism in OTown was centered around Mickey.
During the height of the bubble the realtards would tell everyone: “there are a thousand people a day moving to Florida” - “The wealthy baby-boomers are coming in droves”. Everyone just went around parrotting the realtards as they licked their chops over how fast their stucco boxes were making them rich. We all now know the truth. This state is a world-class economic disater. There are probably 1000 people a day fleeing the state of FL as the creditors chase them north on I-95. Not to mention all of the foreign wannabe Trumps who have already gone home with tails between legs.
“The wealthy baby-boomers are coming in droves.”
I seem to recall hearing similar blather here in Tucson.
I’ve heard that the mouse is discounting again this year.
That’s why we sold our Disney points. You can stay at the Sheraton for $79 bux a night between Xmas & New Year’s. What’s not to like ?
Germany rejects European fund for Greece
Feb 15~10
BERLIN (AP) - Germany has rejected the idea of setting up a special fund to bail out eurozone countries, like Greece, that run into budget trouble.
Finance Ministry spokesman Michael Offer said Monday that a European Monetary Fund would not help a case such as Greece’s. He said there was “no way around” painful austerity measures being pushed through by the Greek government.
No bailouts for deadbeats? What is the world coming to? Deadbeats all over the world are relying on bailouts and other people paying for their financial largesse. It is simply not fair expecting deadbeats to solve their own problems. Every deadbeat deserves a bailout, it is their birth right.
Of course it has to be Germany that breaks the time honored tradition of bailing out the fiscally irresponsible. Maybe the UN should put pressure on Germany instead of Iran. This is a blatant violation of deadbeat’s rights. Not only does the deadbeat Greece have their rights trampled on, now other deadbeats around the world can no longer base the budget calculation on the sole assumption on future bailouts. This could spell the end of fiscal irresponsibility as we know it. This could endanger the world’s entire financial Ponzi scheme.
Little brother and I drove cross country last week from Jacksonville to Los Angeles. 38 hours non-stop. This was my first time doing the coast to coast drive and I came away with one indelible impression.
They aren’t making any more land!
They are actually, just not in a state that you can drive to.
Cannonball!!
‘06 GTO, 400hp, 13 sec 1/4 mile. Many smiles on this trip.
When I was in my 20s and 30s, I bicycled in all 50 of the United States. (Some people collect rocks. I collect states.)
Any-hoo, what I learned is that this country is HUGE. Lotta land with no one on it too.
Yep Slim, my impression exactly. I only added two new states, LA, and AL, which is slightly funny when you think about it.
http://cop.senate.gov/reports/library/report-021110-cop.cfm
This is a sobering report. The COP all but says that the Commercial Real Estate problem will be as big or bigger than the Residential Real Estate problem.
Myt teh title of the report : “Commercial Real Estate Losses and the Risk to Financial Stability” is enough to give serious pause.
“The Panel found that “a significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American.” When commercial properties fail, it creates a downward spiral of economic contraction: job losses; deteriorating store fronts, office buildings and apartments; and the failure of the banks serving those communities. Because community banks play a critical role in financing the small businesses that could help the American economy create new jobs, their widespread failure could disrupt local communities, undermine the economic recovery and extend an already painful recession.”
Someone just had a nice flip in Chandler, AZ in 85249:
http://www.azcentral.com/realestate/homes.php?pgAction=homedetail&address=2151+E+KAIBAB+PL&city=CHANDLER&zip=85249
Bought the house for 480,000 on 10/07/2009 and sold it for 569,000 1/08/2010.
Dead cat bounce is alive and well. Buyers put over 50% down as the mortgage on the place is $250,000.
Like as has been said, there has never been a better time to sell!!
Check THIS out….
http://www.dailymail.co.uk/news/article-1250872/Climategate-U-turn-Astonishment-scientist-centre-global-warming-email-row-admits-data-organised.html
There’s a reason why the Brits call it the “daily fail.”
The dog ate my junk-science homework.
Funny, funny. They’re still making “barren stretches of nothing covered with little tan rocks” though. I don’t know if that stuff exactly qualifies as “land”.
I guess I expected to see more civilization in the sunbelt, especially east of the Mississippi. It is astonishing how much empty space there is. I wonder what percent of land in the US is utilized? After that trip my guess is about 5%.
From the USDA website, urban land is 2.6% of the US area.
“This publication presents the results of the latest (2002) inventory of U.S. major land uses, drawing on data from the Census, public land management and conservation agencies, and other sources. The data are synthesized by State to calculate the use of several broad classes and subclasses of agricultural and nonagricultural land over time. The United States has a total land area of nearly 2.3 billion acres. Major uses in 2002 were forest-use land, 651 million acres (28.8 percent); grassland pasture and range land, 587 million acres (25.9 percent); cropland, 442 million acres (19.5 percent); special uses (primarily parks and wildlife areas), 297 million acres (13.1 percent); miscellaneous other uses, 228 million acres (10.1 percent); and urban land, 60 million acres (2.6 percent). “
Ruh roh. Greece just outlawed the use of cash, for things above 1,500 euros at least.
“From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards”
Everything is bigger in Greece - even Big Brother.
So they’re going after the “underground economy”.
Yep. That’s the hallmark of a massively-corrupt government. You screw up the real economy so bad that it drives everyone to an underground economy. Then you have to go after this underground economy to fund your government.
See Russia, North Korea, etc. for plenty of examples.
Greece has an enormous underground economy. It seems the government is hoping it can fix its woes by demanding its share.
Good luck with that.
Sounds like most of these transactions would already be considered illegal anyways.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100003763/britain-and-the-pigs/
Britain joins the PIIGS. As is the case in the US, both major parties - Liberals and Conservatives - are equally guilty of spending their way to national ruin.
First they came for Dubai, but I was not invested there so I didn’t speak up.
Then they came for Iceland, but I never went for those high-interest Icelandic bank CDs so I did not speak up.
Then they came for the PIIGS but I never much liked those porkers anyway. Although US banks have $176 billion exposure to them - that we know about.
Then they came for Britain, but those effete useless Brits deserved to take a fall to humble their imperial airs.
Then they came for Wall Street, and there was no one left to speak up. (Well, other than tens of millions of defrauded, impoverished American investors and savers, i.e. bag-holders, but what do they matter?)
Home Affordability: Prices Are Still 40% Higher Than ‘Normal’
CHARLES HUGH SMITH Economy, Real Estate. ~DailyFinance
According to the old truism, the only arbiter of price is what a buyer is willing to pay. But when it comes to the biggest purchase and investment in most people’s lives — a home — there’s another time-tested way to reckon fair value: the home’s cost divided by the buyer’s income. This ratio is a broad measure of home affordability.
Of course there are innumerable variables in the pricing of specific homes: location (”The three most important factors are location, location and location,” as the old joke goes), home loan interest rates, the availability of mortgages, the “animal spirits” of a rising economy, and so on.
Despite the inherent complexities of calculating an individual home’s value, we can discern large-scale changes in affordability over time by comparing U.S. Census Bureau data on median and average income and home costs.
The Census Bureau provides data for both median and average income, and it’s important to understand the distinction.
The median is the actual number at the 50% line: Half of all households earn less than the median household income and the other half earn more. Mean income (average) is the amount obtained by dividing the total income of all U.S. households by the number of households. For example, the median income of U.S. households in 2008 was $50,303 while the average income was $68,424, according to the U.S. Census Bureau.
Care for the elderly and taxing the dead - how Labour could grab an extra 10 per cent of all estates
~By Daily Mail UK ~ 15th February 2010
How many times is it possible for our earnings to be taxed?
First we pay between 20 and 40 (soon to be 50) per cent in income tax and a minimum of 11 per cent in National Insurance contributions.
Then there are savings taxes, fuel taxes, council taxes, green taxes, Capital Gains Tax and VAT.
Even in death our loved ones can’t escape, as any assets we leave worth more than £325,000 are hit again by inheritance tax.
Now Labour is considering a ‘death tax’, by which the state will grab an extra 10 per cent of all estates, ostensibly to fund care for the elderly.
It is a disgrace that such care is not properly funded already.
Health and welfare spending has doubled over 13 years of Labour rule, yet thousands of elderly who have paid taxes all their lives must still sell their homes to get a place in a residential home.
It isn’t over till its over
Next Crash: Is China or Europe to Blame?
It is not overstating matters to say that the global economic recovery is pinned to the wings of China’s dragon. There seems a heightened degree of tension now between China’s efforts to aggressively slow the frothier edges of its economy — fears of domestic bubbles in China, particularly in real estate, are real — versus China’s need to manage its domestic front.
Hedge fund manager James Chanos has been saying for weeks already that China is in a real-estate bubble. Chanos, founder of New York-based Kynikos Associates, rates China as “Dubai times 100 or 1,000.”
Will Chanos be to China’s real estate bubble what John Paulson was to the U.S., calling his bubble shot and, unfortunately for the rest of us, being proven right? China could be the commercial real estate equivalent of the U.S. residential housing disaster
http://www.thestreet.com/story/10681016/2/next-crash-is-china-or-europe-to-blame.html
Italian minister warns against ‘ghettos’
Feb 15 US/Eastern
Italy should avoid “ghettos” dominated by single ethnic groups, Interior Minister Roberto Maroni said in an interview published Monday after deadly inter-ethnic violence in northern Milan.
“We need to try to avoid the concentration of ethnicities in a same area, which could lead to the creation of ghettos,” Maroni told the leading daily Corriere della Sera.
The stabbing death of an Egyptian youth blamed on Peruvian and Ecuadorian gang members on Saturday sparked a rampage by dozens of North Africans in a northeastern section of Italy’s industrial hub.
They overturned several cars and attacked shops owned by South Americans in the district, which is home to many immigrants from Colombia, Ecuador, Peru and other South American countries.
Milan’s deputy mayor, Riccardo De Corato, called the area a “Far West between North African and South American gangs.”
“There is a social model that is not working, and it needs to be rebuilt,” Maroni said, adding that Italy should find “new occasions to integrate foreigners” who are legally living in the country.
Italians warning against single ethnic neighborhoods? Yeesh, they’ve never been to South Philadelphia, have they?
We’ve been going back and forth for a century
I want to steer markets
I want them set free…
Hey Teacher, Leave Those Kids Alone
Rhode Island Town Fires All Teachers
A school superintendent in Rhode Island is trying to fix an abysmally bad school system.
Her plan calls for teachers at a local high school to work 25 minutes longer per day, each lunch with students once in a while, and help with tutoring. The teachers’ union has refused to accept these apparently onerous demands.
The teachers at the high school make $70,000-$78,000, as compared to a median income in the town of $22,000. This exemplifies a nationwide trend in which public sector workers make far more than their private-sector counterparts (with better benefits).
The school superintendent has responded to the union’s stubbornness by firing every teacher and administrator at the school.
A sign of things to come?
Link to R.I Teacher Firings:
http://rifuture.org/myblog/support-central-falls-teachers-tonight-at-515-pm-.html
Tuesday, Feb 16 2010 6AM
Goldman Sachs in new storm over secret deal to mask Greek debts
By Sam Fleming
Last updated at 9:15 PM on 15th February 2010
Goldman Sachs struck a secret deal with Greece to help it mask its vast debts, it emerged yesterday.
The Wall Street giant is claimed to have reaped as much as £192million in fees by entering a complex currency transaction in 2001 that helped Athens borrow cash without putting it on the books as a loan.
The so-called ’swap’ deal, while permitted under EU rules, helped Greece meet eurozone limits on government borrowing.
Greece’s vast deficits caused it to fail the criteria for joining the single European currency in 1999, but it succeeded in 2001.
Member nations had to reduce their budget deficit to less than 3 per cent of gross domestic product and trim national debt to less than 60 per cent of GDP.
The Greek deficit stands at nearly 13 per cent of GDP and public debt is almost twice the official ceiling at 113 per cent of GDP.
Read more: http://www.dailymail.co.uk/news/article-1251280/Goldman-Sachs-new-storm-secret-deal-mask-Greek-debts.html#ixzz0ffxWaz7w
Thanks to Gollum, Greece turned into Enron. Heckuva job, Gollum.
COMMENT by ALEX BRUMMER:
Wall Street back under fire
By Alex Brummer
Last updated at 10:57 PM on 15th February 2010
Wall Street’s hopes of escaping the worst of the ‘Volcker rule’ and the curbs on casino banking will not be helped by the disclosures coming out of Greece.
In much the same way as the investment banks created off balance sheet entities - so called SIVs and conduits - to hide sub-prime mortgages from regulators, so its seems they have been using similar techniques for sovereign governments.
It comes as no major surprise to find that the ‘giant vampire squid’ of Rolling Stone fame - Goldman Sachs - was part of the effort which allowed Greece to sneak its real debt levels past the monitors in euroland without anyone noticing.
Goldman insists it did nothing wrong, and only subsequently did Eurostat - the keeper of euroland data - change the rules.
That does not quite explain why a senior Goldman executive, Gary Cohn, was in Athens in November before the current crisis broke, allegedly offering the Greeks a new exotic deal under which they could essentially securitise future payments from the health care system and use the proceeds to lower national debt level.
Read more: http://www.dailymail.co.uk/money/article-1251329/Greece-crisis-puts-Wall-Street-Volcker-rule-fire.html#ixzz0ffxrjrri