Bits Bucket For February 22, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Georgia No. 3 in mortgages past due
Atlanta Business Chronicle
Georgia is third in the nation, with 13.5 percent of mortgages one or more payment past due as of Dec. 31, according to the Mortgage Bankers Association’s National Delinquency Survey.
Florida and Nevada were the worst offenders.
Nationwide, the delinquency rate fell to a seasonally adjusted rate of 9.47 percent of all loans outstanding as of the end of the fourth quarter. That’s down 17 basis points from the third quarter, but up 159 basis points from a year ago. A basis point is one-hundredth of a percentage point.
The MBA said the drop in the 30-day delinquency rate is “a concrete sign” that the end of the mortgage crisis may be near. That’s important because mortgages that are 30 days late generally serve as a leading indicator of serious delinquencies and foreclosures.
MBA bank says the crisis is over. You don’t think they would have any interest in fabricating the truth?
“The MBA said the drop in the 30-day delinquency rate is “a concrete sign” that the end of the mortgage crisis may be near.”
A .17% drop is “a concrete sign.” They gotta be kidding. .17% is statistical noise.
Mortgage Bankers Association, got it.
Wouldn’t it make more sense to use the year-over-year comparison instead of the month-to-month to avoid seasonal variation?
Of course it would.
0.17% / (9.47% + 0.17%) = 1.8%. I bet the margin of error on this report is at least +/- 3%. So as Al says, statistical noise.
Isn’t this the same MBA that’s walking away from the mortgage on its DC headquarters?
Yes. Which is a far more significant and concrete sign the bottom is near than a data point that is nothing more than statistical noise.
How can you have a CONCRETE sign that something MAY be near? That’s basically saying you’re CERTAIN that something MAY happen soon (ie, without even giving a specific date)! Gee, where do I sign up for *that* job?
How can you have a CONCRETE sign that something MAY be near?
If you run into a concrete sign, there’s no “maybe” about what will happen to the front of your car.
Here is “a concrete sign” that…
Palm Beach County’s misery index soars again
by Jeff Ostrowski
The Palm Beach County Pocketbook Pain Index continues to soar, thanks again to Florida’s nation-leading rate of “seriously delinquent” mortgages.
In a nod to the Misery Index (which sums national unemployment and inflation), I track a local index that combines three indicators: unemployment in Palm Beach County, inflation in South Florida and the rate of mortgages in Florida that are either 90 days past due or in foreclosure.
That adds up to an index of 34.05, the highest point for the measure since 1979, the year my quarterly index begins.
The Pocketbook Pain index is based on these stats: December unemployment of 11.5 percent, according to the Florida Agency for Workforce Innovation; South Florida inflation of 2.12 percent in December, according to the Bureau of Labor Statistics; and 20.43 percent of mortgages statewide that were either 90 days past due or in foreclosure in the fourth quarter, according to the Mortgage Bankers Association of America.
This entry was posted on Friday, February 19th, 2010 at 11:15 am and is filed under Uncategorized.
Why that simply can’t be true. I have the facts from reputable experienced professions:
March 2005:
“South Florida is working off of a totally new economic model than any of us have ever experienced in the past.” The realtor also predicted that “a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.”
The boom will continue indefinitely. It just can’t be stopped.
(quote from prior HBB post in 2006).
“The boom will continue indefinitely. It just can’t be stopped”
-Temporary delay. Bernanke and Goldman are working on it, give them some time.
Where is Eddie when you need salient commentary on a Georgia real estate story?
Yeah where the heck is he? I miss him, seriously.
I’d like to MISS him.
Someday we need to do a tribute for all our departed posters, wherever they are.
tribute for all our departed posters
good idea
Well the problem is that there are two different reasons that the 30 day late number may be going down. The MBA and most of the media that reported this have assumed that this is because fewer people are BECOMMING 30 days delinquent on their mortgages. But with all the talk of the increase in “strategic/ruthless default,” it’s possible a higher number of defaults are going proceeding directly to 60 and then 90 day lates.
Typically, people who are trying to keep their house will keep paying SOMETHING to the mortgage company, often not enough to become current, but enough that they don’t fall further behind, and stay 30 or 60 days late for an extended period. But if you’re INTENDING to default, and just want to get the benefit of living in your house without paying for it, people will generally find better things to do with money that could go to partial payments.
So the decline in 30 day lates could be slightly good news, really bad news, or a statistical fluke. Breaking out the Champaigne is definately premature.
Could the 30 day late decline indicate that the 60 day late is increasing?
ISTR that the 60 day late is pretty flat, but the 90 day late is increasing. There’s little doubt that the time folks are spending between 90 day late and foreclosure is increasing. This is probably due to a mixture of lenders not wanting to recognize their losses, a lack of staff to process foreclosures, both by the lenders and courts, and finally due to various foreclosure prevention programs. Of course the last one has mostly delayed, rather than avoided foreclosure, but either way, it does put people in the 90+ bin for a longer period of time.
Of course this is all my limited understanding, somebody with actual experience in the mortgage serviceing business could shed some ACTUAL light on this, not the dim, reflected stuff that I can do.
An interesting chart from FDIC data (Q4 should be out soon). Note that the 30-day delinquency rate actually *has* been going down since late 2008 even! It is simply because a large portion of walkaways due to the big price drops in 2007/2008 moved from the 30-90 day delinquent to the 90+ delinquent category. Prices flattened in mid 2009 and have been up some since then, so there isn’t a new crop of walkaways.
If/when prices start falling significantly again, there will probably be another new crop of walkwaways, and thus another rise in the 30 day rate (after having fallen some now).
read some where, maybe here, that decline likely caused by decline in number of new home loans.
Can’t we just trace this back to the good ol’ Credit Suisse graph, again? We’re at a trough in resets, therefore a trough in increases in the monthly mort payment due, therefore a trough in NOD’s. No relation to the politics/Heliben/tttim/etc.
Not rocket surgery, folks…
And, for your tracing pleasure, here’s that Credit Suisse graph.
Thanks, Slim. Looking at that graph makes me just all ‘a tingle. My head swims from the beautiful, graceful symmetry.
I’m gonna throw up, I think.
We really have another half to go.
I think I want my Mommy!
Roidy
Ya know the really scary part to me is how few of those mortgages are plain, vanilla prime loans.
When downpayment requirements tighten, its gonna get pretty darn nasty out there. Now I can see that people must have felt we stretched for our home just like they were stretching for theirs (instead of being very close to pay-off) I suppose most might have guessed a home on an acre paid off by 50 was a waste of good leverage. Explains so much.
Very, very nasty CarrieAnn because then the real problem with wages will be exposed.
I had the opposite reaction, I was surprised how many were prime. I figured more prime borrowers would opt for fixed rate mortgages in a historically low rate environment.
“I figured more prime borrowers would opt for fixed rate mortgages in a historically low rate environment.”
They couldn’t. The payment on a 30-year fixed would have been too big a monthly nut for them to afford. The only way for these people with prime credit to afford massively overpriced real estate was with adjustable loans and low teaser rates that didn’t reset for 3 to 7 years.
You can have great credit and still make real stupid buying decisions.
Exactly SDREB.
Any continuation of my Investment Banking rant from yesterday is going to have to wait. I’m too busy today and likely to remain that way for the rest of the week.
However, the part from yesterday is by far the most coherent part of the rant. IB’s bleeding huge amounts of working capital away from companies going public and keeping it for themselves and their buddies in exchange for almost no work other than some minimal sales work and no expertise other than the list of people they sell stuff too.
Gee Polly, did I ever tell you how lucky I feel to be able to read your thoughts. Really, thanks for sharing your knowledge with us.
+1
Polly, I used to have a saying for what Wall St has done to this country:
Wall St. took capital from physical investments and put it into investments that invest in other investments that are investing in yet other investing investments.
Decaying apartments symptom of housing crisis
Mortgage crisis brings creeping decay to middle-class apartment buildings from Calif. to NY.
NEW YORK (AP) — There was no heat or hot water, so for weeks Mary Fountain would fill a bowl and put it in the microwave, then strip off her extra layers to sponge herself clean.
Upstairs, her longtime neighbor, 70-year-old Gearaldine Davis, peers skeptically out at her balcony, hesitant to step onto the cracked concrete. The last time the city inspector came by, he told her he was afraid to walk out there.
This Bronx apartment building, where city housing violations have increased from 82 to nearly 600 in 16 months, is among thousands of rental properties from Los Angeles to Harlem showing a creeping decay as housing values collapse and funds for repairs dry up.
As landlords find themselves owing more than their properties are worth, some have simply walked away, leaving garbage to pile up. Others have disappeared into bankruptcy, with unpaid utility bills. Some have tried to reduce their losses by neglecting basic maintenance.
Tracy Residents Now Have To Pay For 911 Calls
http://cbs13.com/local/tracy.911.calls.2.1502690.html
“Residents can pay a $48 voluntary fee for the year which allows them to call 9-1-1 as many times as necessary. Or, there’s the option of not signing up for the annual fee. Instead, they will be charged $300 if they make a call for help.”
It’d be interesting to see what would happen if a bunch of angry residents turned up at a city council members house at 3 AM.
There will be no end to what cities, states, counties will come up with to raise revenue. Plenty more fees/taxes on the way, nation wide. It will be very interesting to see all the expanding taxes the federal gubmint come up with to boot.
How much revenue does nickel and diming truly produce? Can a meter maid write tickets fast enough to justify her salary?
I predict we’re going to see means testing and possible residency requirements on pensions.
“Taxman” - George Harrison
Let me tell you how it will be
There’s one for you nineteen for me
‘Cause I’m the taxman
Yeah I’m the taxman
Should five percent appear too small
Be thankful I don’t take it all
‘Cause I’m the taxman, yeah I’m the taxman
If you drive a car I’ll tax the street
If you try to sit I’ll tax your seat
If you get too cold I’ll tax the heat
If you take a walk I’ll tax your feet
Taxman
‘Cause I’m the taxman, yeah I’m the taxman
Don’t ask me what I want it for
Ah-ah, Mister Wilson
If you don’t want to pay some more
Ah-ah, Mister Heath
‘Cause I’m the taxman, yeah I’m the taxman
Now my advice for those who die, Taxman!
Declare the pennies on your eyes, Taxman!
‘Cause I’m the taxman, yeah I’m the taxman
And you’re working for no one but me
Taxman
A week ago - a holiday for most people - my daughter got a parking ticket in Albany CA for parking on as street with a “No Parking except for Sundays and holidays” sign on it.
The fine was something like $38.
She went to the police station to inquire about the reason behind the ticket and was told the DMV didn’t recognize last Monday as being a holiday.
Let’s see: the post office thought it was a holiday, the schools were closed, many business were closed …
But anyway, it was only for 38 dollars and most people won’t fight the DMV for a mere $38 so - right or wrong - the DMV will end up making a lot of money.
“…only for 38 dollars…”
I’m disappointed to hear these words coming from you, disappointed. Sob, sniffle, tear.
Did I mention it was my daughter’s money?
The point is: Thirty-eight dollars is in the price zone between making the penality worthwhile for the city to issue tickets but at the same time not so high as to fire up the receipiant enough to want to go to war.
Those automatic speed and red-light cameras are also priced there.
I dunno, 38 smackers sounds like a better reason to wage war than some of the reasons presented earlier in this decade!
Those stationary targets will become the recipients of much anger and rage soon enough- I’m sure “terrorist” will be applied to those that want to show just how irritated they have become w/ our system. As long as they trash the camera watching the camera there is a good chance of getting away with it.
Along those lines- What would you do as a parent if your child came home from school with spying laptop that could be remotely accessed to show your family’s activities in the privacy of your home? (Pennsylvania) My answer: Whoever authorized such intrusion into our private life would need to have said laptop removed surgically.
I live at a “T” intersection in Queens NYC. There are no crosswalk lines painted but there are curb cuts on the side of the street that forms the top of the T. Anyone who parks there gets a $165 ticket. See at least two tickets per week. Been going on for several years now.
Time to move to Bisbee, Ariz. Believe it’s in the town charter that parking meters are off the menu.
Time to move to Bisbee, Ariz. Believe it’s in the town charter that parking meters are off the menu.
Yes, but there’s a city law requiring you to glue hundreds of Kewpie dolls and reflectors to your car.
“There will be no end to what cities, states, counties will come up with to raise revenue. Plenty more fees/taxes on the way, nation wide. It will be very interesting to see all the expanding taxes the federal gubmint come up with to boot.”
Yes indeed, and it’s why I’m planning to leave my rental in Marin and go up to Sonoma County sometime this year. It’s going to be ugly everywhere, so I figure why not go someplace where my core monthly expenses (rent, groceries, gas) will be a few hundred a month less. Wait it out in a less expensive part of the Bay Area.
We left there 16 years ago. What took you
so long.
don’t new taxes need voter approval?
So if I see, say, a car wreck with people injured, or a bank robbery going on, it would cost me $300 to call 911 and report it? I foresee problems with this idea.
Can you call collect?
Charge it to the unconscious bleeding guy, operator.
Presumably it only applies if its a medical emergency?? Or the article was badly written.
I wonder if the increased cost for 911 services will be measured by official CPI?
“I wonder if the increased cost for 911 services will be measured by official CPI?”
No. CPI is a political device to tell voters that inflation isn’t inflation. With hedonic measures and substitution, along with changes in items used and their weighted relevance, CPI is a terrible measure of “prices”.
However, it WILL go to increase GDP, so we can say the economy is expanding. GDP and “rational” consumers were the reasons I dropped out of economics as a major field of study. The basic concepts of modern economic thought are perverse. CPI is one of them.
The thing that really pissed me off was that when AT&T was known as Ma Bell they forced all customers to pay a special fee for upgrading the network to support Tone dialing way before this technology was widely available. If fact the 911 call feature was designed into the system from day one. We’ve been paying for this ‘feature’ for 30+ years and will keep paying for it as long as the phone companies can control the FCC and the government. Since they are also able eavesdrop on 99% of the public and provide this information to the government I doubt the FCC or the regulators are going to step up and roll back any of these fees.
Didn’t the Spanish American War tax finally get removed from phone bills a few years ago?
Yes, but you really can’t put a price on that kind of regulation. The government is just ensuring that the phone companies behave and don’t screw us. We wouldn’t want to end up with unregulated chaotic service like Vonage or Skype or that kind of thing, would we?
(Comment not directed at you but at the general notion discussed elsewhere, that government regulation is done to our benefit, to protect us from the big bad corporate wolves)
Didn’t the Spanish American War tax finally get removed from phone bills a few years ago?
Yep, in 2006, after 108 years.
Incidentally, from the article:
Elimination of the tax will cost Treasury about $46 billion in refunds, lost revenue and administrative expenses in the next five years. That should be offset by higher tax revenue from a strong economy, Snow said.
Oops. Well, at least they got about a year and a half of “strong economy” anyhow.
It was removed… and replaced by other “fine print ” fees.
I pay almost $6 in bullsh!t fees for my phone.
A lot of city & state pensions may be rolled into the federal catch-all bankruptcy program .. that would drop them to the 20K region ..(per year) .
Hey, that’s better then nothing …A lot of senior airline Captains ended up there .
$25K after tax is enough to live comfortably in flyover country if you keep a low profile and rely on Medicare. All a retiree needs is a decent TV antenna and a beater car to get them to Super Wal-mart. That $25K factors in $700 rent and a $300 car payment.
The American dream!
From Wisconsin flyover county…
$199000 / 3br - Buy my house… set me free.
http://madison.craigslist.org/reo/1613059147.html
Let’s all become renters!
That would certainly help home prices find a fundamental bottom a lot sooner…
It never ceases to amaze hearing from people who insist that renting a SFH is far better than renting in a corporate apartment complex. The corporate owners have such an economy of scale that they are better off than the FB LL or small apartment owner. Also more accurate ratings and referrals in the on-line sites: http://www.apartmentratings.com/ You won’t find reviews for small time rentals. Plus maintenance at corporate apartments are usually same day as call.
Well renting from a company is kind of like fast food: the main virtue is a predictable mediocracy. You’ll never have a “good” relationship, but they will unclog your toilet. I’ve known people (like my uncle) who have become close friends with their landlords.
Mortgage crisis brings creeping decay to middle-class apartment buildings from Calif. to NY.
Given that the middle class is being thrown under a bus and will soon move into poverty, it seems fitting that their apartments should be downgraded to slums.
If they had just bought a house they couldn’t afford, they wouldn’t have to put up with this. Get with the times, folks - the new Amerikan Way is to scam people all the time!
/sarcasm
24/7
OK. No need to panic. 911 is an annoying opperator service. Keep the number of the local police/fire/ER handy and call them instead.
Problem solved.
Bad economies in states to worsen: governors
WASHINGTON (Reuters) - The already gloomy conditions of states’ economies are set to worsen, according to preliminary survey findings from the National Governors Association released on Saturday.
“The situation is fairly poor for a lot of states around the country. In fact, most states,” Vermont Governor Jim Douglas, who is chairman of the association, said at a press conference at its annual meeting.
“What we’re finding out from a fiscal standpoint is that the worst is yet to come,” Douglas said.
In a survey conducted last week of 45 of the 50 states, the group found that states have $18.8 billion of budget gaps yet to be closed in fiscal 2010. This comes after they have already imposed measures to eliminate budget imbalances totaling $87 billion in the fiscal year, which for most started last summer.
In the budgets they are drafting for fiscal 2011, states foresee shortfalls of $53.6 billion and for fiscal 2012 $61.6 billion.
“Economists have declared the national recession over. But for those who are still unemployed, for those who have lost their homes, it’s clear that as a nation we have a long way to go,” said Douglas, who added that states’ revenues have plummeted for four quarters in a row.
Let me get this straight: The United States of America is undergoing a robust green shoots economic recover, but the states which comprise the Union are, economically speaking, toast.
Does that about capture the situation?
recovery (I can hear the coffee still brewing in the kitchen…)
‘ “Economists have declared the national recession over. But for those who are still unemployed, for those who have lost their homes, it’s clear that as a nation we have a long way to go,” said Douglas, who added that states’ revenues have plummeted for four quarters in a row.’
That statement is amazingly perceptive. Let’s see: if you don’t have any problems, then things are fine. If you do have problems, such as unemployment and home loss, to say nothing of plummeting tax revenues for the municpalities, then things aren’t so good. Give that man both an Oscar and a Nobel Peace Price. Wow. My world is steadier and little bluebirds are flying around my head just from knowing these things.
The recession is over for whom? Bankers and traders? WTF?
Exactly.
For the rest of us? Not so good.
Let me get this straight: The United States of America is undergoing a robust green shoots economic recovery, but the states which comprise the Union are, economically speaking, toast.
Does that about capture the situation?
You got it!
Noteworthy: there’s one piece of real estate in the U.S. that’s not part of a state. Perhaps not coincidentally, unlike the various states - this entity has been notably silent with respect to budget problems.
(and I’m not talking about the Virgin Islands, Guam, etc. - I’m talking about land attached to the lower 48)
This entity has been notably silent with respect to budget problems because this entity has no voting representitives in the House or Senate, despite having a population on par with Wyoming and Alaska.
Try again.
What? I’m having trouble making the connection here. What does their voting status have to do with it?
One would think actually that the lack of representation would make their budget problems *worse*, since they don’t have the ability to sell their votes for money (tax breaks, stimulus, etc) like the states do.
DC
If it makes you feel better, Obama is worried about the deficit/budget. After Congress rejected establishing a deficit-reduction committe, Obama established one himself, by exec order. Unfortunately, the recommendations won’t be binding to Congress.
Well - my comment was partly tongue-in-cheek, only partly. Actually I am specifically talking about DC, not government in general. Even though DC, Virginia, and MD were right up there with CA, FL, NV, AZ in terms of magnitude of the bubble, they have nowhere near the financial problems right now. And it’s exactly because of the money physically flowing into the DC area.
And I’ll believe in Obama being “worried” about the deficit - in terms of actually taking the hard actions required to reduce it - when I see it. Creating a commission is easy. Meaningful spending cutting is not.
Oxide,
Excuse me if I take a wait and see attitude towards O’s new fiscal team. This, imho, is nothing more than pure politics.
If “O” was serious about truly helping the masses he would give everybody a Wall Street job.
Sarcasm off
Can’t argue with you, SV. I want to see what the O-man is up to myself.
“The United States of America is undergoing a robust green shoots economic recoverY”.
Yes, because Government “servants” consider that they are the United States. Government employees and Public “service” Unions are doing just fine, thank you very much. They are getting huge salaries and benefits which a contractually expanding throughout the US of A, even though the rest of America is in decline.
Remember the “saved jobs” the Obama is always telling us about.
Well, that’s teachers jobs and state workers and others employed by the government at various levels who would have been cut due to insufficient funding. The Cities got to keep their police and fireman, teachers and college professors, city desk clerks and code enforcers.
The “other” people got laid off, meaning factory workers, construction crews, truckers, miners, electrical engineers, you know, those kinds of people.
Yes, because Government “servants” consider that they are the United States. Government employees and Public “service” Unions are doing just fine, thank you very much. They are getting huge salaries and benefits which a contractually expanding throughout the US of A, even though the rest of America is in decline.
I’m reading a sci-fi zombie novel called “State of Decay”. General theme is that technology has been developed in the not-to-distant future to reanimate the dead and control them. The “revivors” are used to augment military/police and perform manual labor. I’m not finished, but I forsee the zombies going out-of-control at some point (don’t they always).
Anyway, the relevant part of the story line I find interesting is that, similar to Heinlein’s Starship Troopers novel, citizenship is tiered, with tier 1 being the wealthy, tier 2 being the middle-class, and tier 3 being the poor. In order to achieve tier 1 status (and all the benefits therein), you need to do government service, either in the military or with a Federal Agency, or have some skill that the government deems critical. Seems like we’re getting closer and closer to that model…
technology has been developed in the not-to-distant future to reanimate the dead
That technology is already here. It’s called turning off the television.
Diogenes, many, many reports of government employees being laid off have been posted here.
It’s double-plus good!
I have insider information on the State of AZ revenues and as of two weeks ago, the bottom had yet to be reached.
IMO the green shoots of the reported economic improvement are about as reliable as the global warming crisis data points. There could be some positive stuff happening somewhere (ie Fed Govnt), but it requires a lot of faith to believe its country wide and I don’t think the data contains much “Truth”.
FYI, it’s snowing in Albuquerque today!!! Yipee!!!
The trouble with AZ is that this state’s economy is based on building houses for people who are going to come here and sell houses. Until AZ gets over its real estate obsession, it’s not going to recover. And, sorry, economic development types, nice sunny weather isn’t sufficient inducement for businesses to relocate or start up her.
It’s that realization that will lead AZ property taxes to rise more than most other states. Backlash and hitting back at an industry that ruined an economy. Gov leaders are calling for an end to tip toeing around and bowing to the housing industry. Leadership is angry at the failure on their watch and need somebody to hit. Rasing property taxes and giving what is left over after city/county/state needs are met to fund new biz tax breaks is the likely plan. We will see if that actually materializes…
The trouble with AZ is that this state’s economy is based on building houses for people who are going to come here and sell houses.
Back in the late ’80’s, I described Tucson’s “growth” as “carpenters and masons building houses for electricians and plumbers”.
But the houses were smaller, more manageable, and didn’t have the “Tuscan” crap architecture. I’m very familiar with the Tucson 3/2 ranches with a carport or a garage if you wanted to spring extra for it, and they’re nice houses. My former in-laws had one built, all brick, masonry fence. It was nice.
My former in-laws had one built, all brick, masonry fence. It was nice.
That was pre-80’s. Estes was building stucco boxes just like everyone else by 1985.
Poll: Economists see ‘healthy’ expansion under way
Forecasters expect economic recovery to continue adding jobs, growth at least into 2011 ~ February 22, 2010,
CHICAGO (AP) — Economists expect the recovery to remain “firmly on track” over the next two years though job growth is likely to remain slow, according to a new survey.
The latest outlook from The National Association for Business Economics, set to be released Monday, sees regular job gains resuming this quarter but no drop in unemployment below 9 percent for another year. Consumer spending will be relatively sluggish as consumers continue to dig themselves out of debt but inflation is expected to remain subdued, and home prices should rise at a rate slightly above inflation in 2010 and 2011.
“We see a healthy expansion under way, although it will take time to reduce economic slack and repair damaged balance sheets,” said Lynn Reaser, the group’s president and chief economist at Point Loma Nazarene University.
What was written: “…the recovery to remain “firmly on track” over the next two years though job growth is likely to remain slow.”
Translated as: “Things are going to be pisspoor for a long time.”
Implication: The economy is mainly for the rich and well connected. If it actually benefits the unwashed masses, that is a mistake which should be corrected immediately.
Roidy
Monmouth County New Jersey:
The two highest-paid workers in the county last year were corrections officers, who more than doubled their base pay with overtime. Dana J. Townsend and Robert B. Kornett were the beneficiaries of an out-of-control system. In 2009, both of them raked in $186,000 each — $11,000 more than Gov. Chris Christie. And each received more than $98,000 in overtime alone.
From a news story today. Are these the “well-connected” you are talking about? Government Employees?
You think 98k is the well connected?
That was good for a laugh.
The top 400 earners in the US pulled in 350mil last year and paid 16.6% effective tax rate, ie likely less than you.
No, but their $98,000 in overtime pay was more than i have made annually during my lifetime. The $186,000 salary for a prison guard is grossly out of line for a government worker.
It’s like this at all levels of government. City, State, Federal.
AS for the very high salaries, these are mostly from your Goldman-Suchs types who have a working relationship with our Treasury Secretary and Federal Reserve and get essentially free money to manipulate markets and speculate and front-run the markets.
IF they lose, we pay. If they win, then they return 16% in taxes, unless they are the Treasury Secretary himself, in which case they are exempt from taxes.
The average payout to Goldman Employees was $500,000 in BONUSES for last years fleecing of the American taxpayer. All made by “trading” in a rigged market. You just can’t beat that.
Yes, there are the grossly overpaid execs at almost all corporations, raking in millions annually. The shareholders don’t have much say.
Nonetheless, Average annual HOUSEHOLD income: $50,000, for providing the things that keep America going, like real work and actual production of goods and services.
It’s like this at all levels of government. City, State, Federal.
It depends. My wife is paid $17/hr as a librarian.
“The top 400 earners in the US pulled in 350mil last year”
Assuming you’re right and that these are households we’re talking about, let’s run the numbers.
If the IRS confiscated EVERY CENT of that income, it would amount to $140 billion, which is rather less than ten percent of the deficit that Obama plans to run this year.
As Lady Thatcher cogently observed, the problem with socialism is that eventually you run out of other peoples’ money.
“…It’s like this at all levels of government. City, State, Federal…”
No Diogenes it is not. Some of my friends would be very surprised to hear this.
The top 400 wage earners = 400/300,000,000 ie the top .00013% so I think we could likely throw in a few more at the top.
The main point is that they pay an effective tax rate of 16-17%. I know the brainwashed that follow the emperors every fashion change think this is fine and dandy, but even antigov anti tax citizens should be outraged that the elite get taxed at a lower rate than the middle class.
Diogenes,
“Are these the “well-connected” you are talking about? ”
No, these are the unwashed masses. They will never be allowed to do that again. It was, as I pointed out, as mistake. Therefore, it must be heralded across the land. Much brouhaha will be made of this. They may even be fired. At the very least their careers will be circumscribed.
Now, crash the entire world and you get a multimillion dollar bonus, etc., etc.
Roidy
“Forecasters expect economic recovery to continue adding jobs, growth at least into 2011.”
Job doing what? “Consumer spending will be relatively sluggish as consumers continue to dig themselves out of debt..”
Consumers busy digging themselves out of debt are consumers who are not spending. A consumer-based economy is, by definition, based on consumer doing a lot of spending.
What will the people who have these added jobs be doing?
And how much will they be paid for doing it?
Those jobs are known as “McJobs” and the pay is exactly what it sounds like.
Who would have thought that “doomsday” came with a price tag?
BY DAVE McKINNEY Sun-Times Springfield (IL) Bureau Chief
SPRINGFIELD — To become solvent, the state must enact the largest tax-increase package in Illinois history, whack another $2 billion from already starved government programs and wrest major financial concessions from the state’s unionized work force, a nonpartisan government watchdog contends.
In a new analysis of Illinois’ “horrific” finances, the Civic Federation lays out the painful choices awaiting Gov. Quinn and the Legislature as they stare down an epic $12.8 billion budget deficit that has choked the flow of state cash to public universities and schools, transit systems and social-service agencies to the point of economic collapse.
“Doomsday is here for the State of Illinois,” said Laurence Msall, the organization’s president.
Two words that all state agencies loath is “budget cuts” it is a foreign concept. Their goal is constant expansion, “Doomsday” won’t be bad. They will have to learn to make do with less, or tax the hell out of the citizenry. Which would not be a very wise thing to do, people can pack up and move, as Florida has found out.
We are nearing a point of no return. Raising taxes in an epoch of structurually weak employment means that something’s gotta give.
The salient question is: if you were a small business owner - would stories like this one inspire you or discourage you from expanding your business and hiring more people? Throw in the fact that claims of real economic growth remain dubious, and it becomes a no brainer.
Given that technology has reduced labor demand, and outsourcing has allowed companies to pay people so little they can’t afford the products they make thus reducing demand. How do people propose we handle the rising tide of unemployment in the US?
I believe the bubble was created to stem the tide of unemployment and deflation resulting from technology and outsourcing. We won’t be able to blow a bubble this big again. We know bubbles produce poor allocation of money and work. So again. How do we deal with the inevitable increase in unemployment? Consider Detroit a test bed for poverty and unemployment and ask if you want to live in a place like Detroit.
How do we deal with the inevitable increase in unemployment?
To start, I think your ideas to spend money on infrastructure or even needed public work type projects are better ideas than more UE, bailouts or trying to re-inflate bubbles.
“How do we deal with the inevitable increase in unemployment?”
Who is this “we” of which you speak?
We will borrow more from the Chinese to pay for more police and prisons to keep these unemployed types from taking our goodies.
“We will borrow more from the Chinese to pay for more police and prisons to keep these unemployed types from taking our goodies.”
We don’t need any sissy police or prisons. Everyone in America is packing heat or should be according to the NRA.
Hell, we just need someone to squint, spit or twitch wrong and then let God sort out the bloody mess when the gunsmoke clears.
Yoy…you evil eyeballing me man ?
One thing a lot of serfs don’t know is that a managers government salary is dependent on the number of people who work under him/her. So
the more people, higher salary. If I’m wrong, let
me know.
Years ago, when I worked at a university, I was in charge of publication production. Then, as now, much of this work was outsourced to freelancers and small studios. Y’know, publication designers, typesetters, and photographers.
The fact that I oversaw the work of these people counted for nothing at annual review time. Only supervision that mattered was that done to people in the office.
Which government? As far as I know, you are wrong as far as the feds go. You have to have a certain number of people in a group to justify having a manager for that group (so if you just have one person leading a project that consists of herself and one other person, you can’t make the leader a manager) and front line managers are generally lower level positions than upper level managers - no big surprise, but that is not even close to number of people equalling a higher salary.
But if the manager’s salary were actually based on the number of people in the group? They would all be jostling to get the new people assigned to their groups to up their salary. They don’t. They would also all apply to be the managers of larger groups when the managers of those groups left. They don’t do that either. My boss got stuck managing a second group when its manager was on maternity leave - he couldn’t get rid of them fast enough.
“Doomsday is here for the State of Illinois.”
It’s not just Illinois, doomsday is here for a lot of states. And a lot of counties. And cities. And towns. And families.
I agree combo. There will be few places to run and hide.
That’s my reason for posting that - lest any of my coastal HBB compatriots entertain thoughts that the heartland is a solvent bastion that will help pull them out of their own messes. Stop looking for our retirees FL, NV, AZ, CA, etc. - they’re on a bus alright, but it ain’t touring condoze - it’s taking them to the grocery store.
More taxes = less money for people to spend = lower prices for things purchased with discretionary income.
An excellent way to mask inflation actually. As government increases subsidies for various things (housing, food, etc.) and uses higher taxes - or even just new $$$ - to pay for these subsidies, the companies can produce such things and sell them at lower cost, even though the cost to society to produce such things has gone up.
So the sum total of the cost of living as a whole goes up (largely due to increased taxes and newly-printed money), while the total cost of the individual components - and thus the measured CPI - goes down.
I wonder how many of those new taxes will be reflected in CPI measurements?
(FWIW - many taxes are - e.g. sales tax. Many aren’t though, e.g. income tax.)
The State of SC has one of the most blatant money grabs for state retirees in the nation . At retirement age , they have a choice . Retire then , or work 5 more years while still getting your retirement checks.. Guess what most of them do ??? and with a dozen young unemployed folks waiting for any or all openings ….makes no sense at all . originally it was a deal between The teachers and Politicians , later it was expended to all state workers .. And we are at the 49th spot in Education results .
Welcome to the State of Almost Michigan.
Illinois’ “horrific” finances…………..hhuummmmmmmmmm.
Isn’t this the State that the Community Organizer learned big-government deficit finance from? We need, let’s see, uhm…..
$787,900,000,000 to help “stimulate” the economy.
Mostly to pay government employees, but some for political patronage.
Article in Slate about how the AMA first learned to scare the gullible into opposing health care reform. Some snippets:
Nearly 50 years before Sarah Palin gave us “death panels,” the American Medical Association was testing the limits of health care scare tactics in the Canadian prairies. During the 1960 provincial election in Saskatchewan, the AMA helped fund an advertising campaign aimed at defeating the Co-operative Commonwealth Federation, a quasi-socialist party whose leader, a former Baptist minister named Tommy Douglas, had promised to introduce universal, government-funded health care in the province.
Protesting the implementation of medicare in Saskatchewan, July 11, 1962The AMA, together with Saskatchewan’s College of Physicians and Surgeons, warned that if the CCF won, doctors would leave the province in droves. But here was the kicker: As Dave Margoshes writes in his 1999 biography of Douglas, the campaign told voters that if the state were permitted to take over health care, “patients with hard-to-diagnose problems would be shipped off to insane asylums by bungling bureaucrats.”
The campaign failed. Douglas won the election, and the CCF government went on to introduce his health care plan in 1962, creating the model that the rest of Canada would later follow. (So far as we know, insane-asylum panels did not come to pass.) But the fight for health care reform in Saskatchewan, which the AMA worried could spark change in the United States, was a precursor to the battle in America today—a mix of populist anger, political opportunism, and disinformation. As Democrats debate whether to pursue health care reform in the face of growing opposition, they might consider the lessons of Saskatchewan.
Like the Democrats after their 2008 victory, the CCF moved slowly at first to implement its plan, a delay that emboldened the opposition. In an attempt to win the support of doctors, the government created an advisory panel for their concerns. Doctors used the panel to stall, and the government waited more than a year to pass its reforms, with the start date delayed until July 1, 1962. The province’s doctors responded with a vote to strike if the plan was implemented.
The events of the next 10 months were ugly by Canadian standards. Douglas’ push for health care reform “lit the fuse of the incendiary bomb that would tear Saskatchewan apart into its two opposing elements,” wrote Doris French Shackleton in her 1975 biography of Douglas.
Part of the unrest came from doctors themselves. In the months leading up to the new plan, physicians across Saskatchewan put up office signs reading, “Unless agreement is reached between the present government and the medical profession, this office will close as of July 1.” Douglas’ wife, Irma, described how a doctor would tell his pregnant patient, after a check-up, “I’m afraid this is the last time I’ll be able to see you.”
The doctors’ worries about being paid by the province, rather than patients, may have been genuine. But those concerns were amplified by Saskatchewan’s opposition Liberal Party, which had been shut out of power since 1944. Like the American Republicans 50 years later, the Liberals fought health reform in two ways: directly, by opposing it in public; and indirectly, by supporting groups that could provide the appearance of broad-based public anger. In Saskatchewan, the public opposition to health reform came in the form of a movement called Keep Our Doctors, which organized rallies and protests across the province.
—
But in another precursor to today’s Tea Party movement in the United States, the unrest over health reform in Saskatchewan proved to be more than just political theatrics. “The fears inspired by the doctors and fanned by the Liberal party,” Shackleton writes, “convinced many people at least briefly that the CCF was a dictatorial, power-mad, ruthless group of politicians who would rather see people die for lack of medical care than back down.” Shackleton described “a sense of civil war.” (Read more about the unrest in Saskatchewan.)
—
“The city’s residents had been whipped into a near-hysteria by the doctors’ anti-medicare campaign,” Margoshes writes, adding, “There were graffiti threats on city walls and calls in the middle of the night to Tommy’s house. His campaign manager, Ed Whelan, got frequent calls from a man threatening to ’shoot you, you Red bastard!’ A few homeowners placed symbolic coffins on their front lawns.”
As in the United States today, opponents of the health reform plan weren’t sure whether to denounce the CCF as Communists or Nazis, so they did both. Protesters greeted Douglas’ motorcade with Nazi salutes—when they weren’t throwing stones at it. Other opponents painted the hammer and sickle on the homes of people thought to be associated with the party.
The doctors made good on their threats: When the new health care plan was introduced on July 1, doctors across the province walked off the job. But the government was ready, flying in replacement doctors, mostly from Britain. The strike ended after three weeks, the health care plan stayed in place, and four years later, the Canadian government passed the Medical Care Act, which provided funding for every province to create a similar plan.
Douglas and his party were vindicated. Once their plan took effect, Shackleton writes, it “was soon so well accepted that no political party had the temerity to suggest its abolition.”
—
But the anger of those months in Saskatchewan undermines a key belief in the debate over health care reform. When confronted with the overall success of Canada’s brand of government-funded health care—better health outcomes at much lower cost—Americans tend to respond that such a broad government role is anathema to American culture. This has the ring of an excuse—after all, the idea was apparently somewhat anathema to Canadian culture in 1962. As Douglas said then, “We’ve become convinced that these things, which were once thought to be radical, aren’t radical at all; they’re just plain common sense applied to the economic and social problems of our times.”
they’re hooked
scare the gullible
Hohum. The same people in charge of the DMV will be in charge of your health.
I dunno, I haven’t had much problem with the DMVs, and I’ve dealt with four separate states. You just have to go online, look up their system, do what they ask, bring exactly what they tell you to bring, and they take care of you pretty quick. Isn’t this the Era of Personal Responsibility, and we should be Expected to do That? As for the long lines…that’s because all the other yokels in line weren’t Personally Responsible. Blame them, not your DMV.
It’s not as if the DMV is working off a profit motive.
As long as you have no more contact with the gov’t-run health care system than you do with the DMV, you should be fine, then.
DMVs are revenue generators for most states. Nothing I hate worse than registration fees.
Should be called a Fu&k the poor fee.
Better that than the bastards that are running insurance companies now.
I always find it interesting that people worry that there will be rationing of health care, but they don’t consider that insurance companies are currently rationing their care by restricting choices in doctors (preferred providers, HMO’s, little or no out-of-network coverage), drugs (generics instead of brand names) and covered procedures. AND the insurance companies profit motive certainly makes denying claims attractive.
My mother cannot tolerate the different “filler” additives in the generic version of a drug she needs, but not covered because there is a generic available even though the doctor has confirmed a bad reaction.
Bingo
Jim
+100
+1000. I’m sitting in cubeland in the middle of the people who have to make the phone calls to United Health Care, Health Alliance Plan, Assurant, Humana, and You Name It Insurance Co. because there isn’t an open desk in the coders’ Room of Silence, and I hear the calls that the billers have to make to these half-essed outfits just to try to get our money. The excuses and rude customer service staff they encounter are unbelievable. I’m the person the billers go to to get certain rejections fixed so that we can get paid, and the newest scam is that these insurers won’t pay for our ekgs unless a certain modifier ( “25″ ) is placed on the office visit line on the bill, or if the patient was seen on the same day by a different doctor, on that doctor’s billing. The modifier means that a procedure was done on the same day and that the office visit is unrelated to the procedure. A “procedure” is a surgery, or an endoscopy, or something along those lines. It’s not a stinking ekg. However, staff has to be paid to put “25″s on stuff, and make the calls, and submit the reconsiderations. I hate insurance companies. Hate ‘em.
FWIW - I really hate that analogy. In general I think the DMV does a decent job actually. However just think about the level of expertise required to perform a DMV function vs. the level of expertise required to do health care. Total apples and oranges. In fact more like apples and robots or something.
Try the NJ DMV for an extra special experience.
Better the DMV than, say, the people that run any cellphone company in the USA.
Ever had to go to a cellphone store for service, or to buy a phone? A mind-numbing, soul-destroying, never ending hell awaits you………
And Blue Cross is better?
I hate insurance companies way more than I hate government interference and that’s saying something!
I want universal health care.
I hate insurance companies way more than I hate government interference and that’s saying something!
+1
I hate insurance companies way more than I hate government interference and that’s saying something!
me too
And Blue Cross is better?
I hate insurance companies way more than I hate government interference and that’s saying something!
I want universal health care.
+ positive infinity
“We’ve become convinced that these things, which were once thought to be radical, aren’t radical at all; they’re just plain common sense applied to the economic and social problems of our times.
Last night I had the subdued pleasure of watching, with 2 nice Canadian tourists, the USA beat Canada in hockey.
Me: How do you like the Canadian Health Care system?
Canadians: We like it, it’s pretty good. My Uncle just got a quadruple bypass operation, spent a week in the hospital and it might have cost 25K without insurance.
Me: In the USA it might cost almost $70K without insurance.
The Canadians then looked at me like I’d smacked them in the face with a cross-country ski.
Canadians: But that could put them in debt for the rest of their lives.
Me: Most BK’s in the USA are caused by health issues.
The Canadians then looked at me like I’d smacked them in the face with a hockey stick.
Canadians: We pay higher taxes for our health system.
Me: Middle aged couples with kids can pay $1500 a month with high deductibles and co-pays for under coverage.
Canadians: What’s under coverage?
When I explained, they looked at me like I’d smacked them in the face with a baby seal…
In the end I don’t know if they were more shocked about losing he hockey game or hearing about the American health insurance scam.
‘Course Canada’s still in a housing bubble, so what they [supposedly] save on medical treatment, they more than pay for in higher housing costs.
My Chiropractor is a Canadian. During my last visit I asked him if the scare stories about the Canadian health system had any basis in fact. His response was “practically none”. He said that some kinds of non critical procedures (he use the example ofjoint replacements)the wait might be longer than in the US, but for any critical procedure, the system was a fast and good as anything he had experienced in the US.
So, why are you practicing in the US then, I asked. To escape Alberta winters he answered.
This is what I can’t quite reconcile. All the talk about raising taxes to support a health care system. But why not when you already pay astronomical amounts to the insurance companies?
My close friend pays nearly $200 per month out of pocket and she’s covered under her company’s plan! Mine is $80.
How much would our taxes go up?
But the anger of those months in Saskatchewan undermines a key belief in the debate over health care reform. When confronted with the overall success of Canada’s brand of government-funded health care—better health outcomes at much lower cost—Americans tend to respond that such a broad government role is anathema to American culture
This is the effect of years of propaganda and brain washing. Seriously if they can deliver a better product for 50% less why would people oppose it. There is no such thing as a free market in medicine period.
Measton, just curious, is there something magical about medical services that supposedly allows the govt to deliver them at 50% of the cost of free enterprise? Or do you advocate socializing the entire economy?
Lehigh
I for one would like to see the US dictae prices.
But even withou that there are enormous economies to be had buying medicine and equipment for 300 million instead of hospital by hospital.
Measton, just curious, is there something magical about medical services that supposedly allows the govt to deliver them at 50% of the cost of free enterprise?
1. They have the power to enforce cost controls.
2. They have the power to enforce quality of care measures.
3. They don’t pay CEO’s 10’s of millions of dollars.
4. They don’t pay for advertising.
5. They have the power to ration health care dollars. In my system people could still buy health insurance for things the gov system does not cover, but the basics would be covered by the gov program. In this system there would be copays and a tax to cover increased costs.
6. They have record keeping requirements and can be audited by the tax payer.
The facts speak lowder than idiology. The US system is grossly inefficient at allocating health care dollars. Blindly following the I hate gov mantra is penalizing small business and consumers and hurting our economy.
6. They have record keeping requirements and can be audited by the tax payer.
So I can walk into gov’t buildings and audit what they’re doing? Cool, when do we start?
1-5 This also applies to all other sectors of the economy. So you’re arguing for a complete government takeover of all businesses.
4. They don’t pay for advertising.
Really? Don’t tell that to the Census Bureau, who paid big $$ for Super Bowl commercials.
Measton,
You want an example of the goverment doing a good job on price controls. Take a good look at Medicare. That is a big winner.
It is difficult to measure and control cost. Especially when things get that big.
Then you have a big system managed by a bunch of disinterested bueracrats (how the hell do you spell that) spending other peoples money. Probably have a great public employees union as well.
While I’m not totally opposed to this system, I don’t think the govt will be able to address costs well.
Again, Canada is a leech on the US system. Not meant to be demeaning but Canada is small compared to the US and buoyed by oil revenue. Don’t know how much money they are directing into the system. Probably would be a shit load.
They have a doctor shortage, no problem. Raise salaries and get some from the USA. They have excess doctors. No problem, lower salaries or hold them flat and docotrs leave to the US. They can live in the margin because it is a small number.
It is also nice to say the government can enforce quality. Maybe at first. How exactally would you propose they do it? I can’t think of an exact system that wouldn’t be overly complicated. Kind of like QB rating in football. Guys post high ratings but still manage to suck.
You could have problems like in medicare now. I posted a link to an article about that a while back. Basically a hospital that had a high rate of problems gets fed more and more money to fix the complications they are creating. You start heavily penalizing hospitals for that and then you end up with a system where hospitals try to play with diagnosis so they don’t take on riskier cases to keep their rating up. Best that you could get would be a sytem where really outrageous fraud gets punished.
Not to mention things like quality of care. We have plenty of options now for healthcare providers. So, you can select how much care you want to cover and choices on flexability. My guess is if you heavily subsidize the govt coverage and make that the cheaper option for people and employers than it will quickly become the only option.
What about hospitals? They are outside the system now. How do you approach that? I’d also mention that healthcare companies are also probably up to their eyes in debt. Do you bail those guys out when you make publicObamacare the option?
Why the fixation on health insurance? It is still a low margin business. They are effectivly negotiators for prices with hospitals and money managers. Do you honestly believe the government will suddenly become good at that?
I just do not see an easy answer to any of this. It would be a major change that is pretty much unworkable. The public option is equally unworkable, burdensome and likely to drive cost up.
Measton,
The ones on this board who object to government involved healthcare are the ones who can afford to pay for personal insurance.
Lucky them. I couldn’t if I lost my job today.
Medicare advantage costs the tax payer 15-20% more to provide the same services as Medicare. Same population but costs more in private sector. This despite some obvious cherry picking of patients by private insurance.
Measton,
Interesting data. Love to see how that number was invented or came from.
Would also like to factor in cost of revenue generation in that.
Data. Just data. Should be able to speak for itself.
I am totally open to the idea but don’t feel like I can trust anything that isn’t really carefully and clearly spelled out.
Much like climategate. Trust is broken there. Now, you can’t tell who is or isn’t lying anymore. System needs to be washed clean of all those involved.
Medicare Advantage is being scrapped by the government. It either went away this year or is going away next year. I don’t remember which, but the biller who handles that product line told me…too expensive.
US news
Next year, seniors enrolled in Medicare Advantage plans may have to pony up an extra $40 to $70 a month in premiums or see services reduced by a comparable amount, according to estimates by the Blue Cross and Blue Shield Association based on new plan payment rates that the government announced yesterday.
“The most likely thing that plans will be forced to do is to change their benefit packages, increase benefit premiums, or increase cost sharing,” says Kris Haltmeyer, the deputy executive director for legislative and regulatory policy for the association, which represents 39 independent Blues plans across the country. Collectively, the plans cover 1.5 million Medicare Advantage members. Altogether, roughly 10 million seniors are in Medicare Advantage plans.
The Obama administration had signaled for months that it planned to trim the higher reimbursement rates that the government currently pays for beneficiaries in Medicare Advantage plans. The government pays 14 percent more for a beneficiary in a Medicare Advantage plan—which combines hospitalization, outpatient, and drug services into a single managed-care plan—than it does for a patient in traditional Medicare’s fee-for-service plan. Obama is counting on revenues from lower Medicare Advantage payments to help finance his health reform agenda.
Washington post
Medicare Advantage was established in the 1970s (under a different name) when private insurers convinced Congress that they could deliver care at lower costs than Medicare. The program blossomed in the late 1990s when Congress bolstered it with millions in additional federal subsidies to for-profit HMOs. It has proven popular among younger, active seniors who had managed-care plans as workers, and about a quarter of Medicare’s 45 million beneficiaries are enrolled.
Many private plans require no additional monthly premiums, yet the government pays an average of $849.90 in monthly subsidies to insurance companies for a person on Medicare Advantage, according to the Kaiser Family Foundation. That is about 14 percent more than the government spends on people with standard Medicare, according to the nonpartisan Medicare Payment Advisory Commission.
“The promise of Medicare Advantage and Medicare HMOs was to save the government money, to save consumers money, all the while providing additional benefits and coordinating care,” said Joseph Baker, president of the Medicare Rights Center. “That promise has been unfulfilled overall because the plans are overpaid by the federal government at this point.”
Note that in addition to the 14% there are higher copays for the medicare advantage program which get’s total cost 15-20% over medicare.
Like anything else, medical care seems to be a choice of picking two out of three: “Good, fast, cheap.”
Thanks for the article. Seems that we have an even worse program than medicare. Medicare advantage. And shock of shocks, the companies are bilking the govt.
Perfect.
This has gone on for how long, with the govt letting us take it in the shorts?
This article does not portend well for the proposed legislation.
Like I said, we are far down the road in development of private care, but public care system isn’t as developed.
For some fodder… your favorite web site
www dot heritage dot org/research/healthcare/wm2505.cfm
As usual, I expect no one will check the site and will dismiss it; just like the climate debate.
LehighValleyGuy, is there something magical about medical services that allows them to charge us 100% more than the government?
$4 for one aspirin? Seriously? $2000 for a simple bone break?
And maybe, just maybe, the government might get rid of the doctors who should have lost their license years ago.
While this is all fine and good I think you have to look at our health insurance reform vs a larger scale health care reform. Seems like we are keeping the worst of both systems.
Have a private/public insurance systems along with public/private medicare/medicaid.
It is this ugly bastardized system now and I think the current legislation focusing on the insurance companies only is a mistake.
I have some fledgling ideas about how to get away from the current system but they don’t involve a political victory for passing bullcrap legislation.
My guess is that we are different here because we have a large private system already in place. And it’s hugely profitable. Hence, well funded and hard to get away from. Lots of wealthy people will fight you. So, you do something silly like add another bureaucracy to deal with an aspect of it in insurance.
I could see you radicals proposing something like seizing private hospitals. Will not go over well.
You also have to think carefully about investment in medical technology and what has happened in Canada and other places with socialized medicine. What advancements have they made? I’m not really sure if it has been a net positive or net negative for the art of medicine.
Years ago, I heard Andrew Weil speak at the University of Arizona. His comment on the AMA: “It’s a very ineffective organization. Whatever it opposes comes to pass.”
Viking Lays Off 20 More Employees.
GREENWOOD, Miss. (AP) Viking Range Corp. says a shortage of orders forced the company to lay of 20 more people this past week.
Viking has slashed at least 347 jobs since April 2008, almost a quarter of its work force.
The cuts have come in various departments of the Greenwood-based appliance maker.
Bill Crump, director of governmental affairs and executive assistant to the president, said in a statement that Friday’s layoffs were in manufacturing.
He said that he hopes the positions will be restored if business improves.
Four employees of The Alluvian, a hotel in downtown Greenwood owned by Viking, were also laid off recently, according to the Greenwood Commonwealth newspaper.
my hometown and one of my best friends is a vp in manufacuring there.
the alluvian hotel is to greenwood what dubai is to the world.
HOARDING LIGHT BULBS?
Hoarding 40w to 100w tungsten light bulbs.
In an effort to make you behave yourself and treat the earth with a less conspicuous “carbon footprint,” the federal government will halt the sale of incandescent bulbs in 2012. But many people like them and are stockpiling them. (The law will only prevent the SALE of them…not the USE of them.)
But here’s a lawmaker in Arizona who isn’t going to let the feds dictate to the people in his state without fighting back.
“The Founding Fathers never intended to control commerce in light bulbs,” says Rep. Frank Antenori, as he stirs up a conversation over states’ rights and the role of the federal government.
It’s amazing the lengths people will go to so they can use more resources and spend more money.
Gimme a friggin’ break.
Certainly fluorescent are better in that they use less energy, but there are lots of advantages that incandescent bulbs still have over fluorescent. I know, as I have many of both in my house. I’m swapping out to fluorescent in many cases - but I don’t like the government forcing people to do so.
- They’re not as dangerous; fluorescent contain poisonous mercury powder - definitely not something you want breaking on your countertop.
- They light up instantly; fluorescent still take warm-up time (something that I can live with, but is annoying nonetheless).
- They look better, both in appearance of the bulb and in light quality.
-you can’t use a ‘clip-on’ shade on a flourescent bulb.
-you can’t use a flourescent bulb to keep your reptiles/ baby chicks warm.
-lava-lamps need incandescent bulbs.
-just sayin’
Hmmm - I sense a theme here.
- Lampshades
- Keeping chicks warm
- Lava lamps
Just one question to fill in the picture - do you often have Barry White on the stereo?
lol
He da Ladies Man!
you cna use an incandescent to keep baby chicks warm
Lets see you put a fluorescent bulb on a dimmer.
Dang - forgot to mention that in my list above.
Actually they do make CF for dimmers now, but they’re quite expensive.
The appliance bulbs - for ovens and refers - should be exempt.
Will flashlight bulbs be banned? How about turn-signal bulbs for cars?
I think it is only for over 20 watt bulbs
It’s amazing the lengths people will go to so they can use more resources and spend more money.
Suspect the mercury in the compact fluorescents won’t be an issue when they end up in the land fills.
Some of us get migraine headaches from fluorescent bulbs.
Last time, a trip to the hospital cost me $1400 (due to fluorescent bulbs). Now, WT Economist, if you want to write me a check for $1400, then fine.
And perhaps write a second check - payable to eudemon - for $1000 - needless pain and suffering.
Talk about a waste of resources….
Appeals to Founding Fathers and States’ rights is kind of a last resort. By the same argument, we wouldn’t have a health care crisis at all because whiskey, leeches, and hatchets are cheap. Did the Founding Fathers ever intend that Arizona even be a state?
And it’s going to be tough getting around interstate commerce, unless Rep Antenori intends to build a light bulb factory in Arizona.
Thankfully CF bulbs have improved over the years. But there are still areas where an incandescent bulb is a FAR better choice, such as outdoors if you live up north, plus a walk-in closet, utility room, or other area that is only occupied occasionally and for a short time. We’re building a stash of incandescents for those kinds of applications. Being retired, we don’t need too many years of supply!
You also need to up-size a CF bulb. If you’re replacing a 60-watt incandescent bulb you’ll need to buy the CF bulb that says it has the equivalent light output of a 75-watt incandescent. Even that may not provide the same amount of light. A recent Popular Mechanics review of CF bulbs found across-the-board fudging of the lumen outputs. In some cases the light output was fully 30% less than the advertised value. Now I know why our CF’s seem so dim. They are!
www dot popularmechanics dot com/ home_journal/how_to/4215199.html?page=1
such as outdoors if you live up north
Out of curiosity - why is that?
CFLs take forever to reach full-brightness in cold temperatures. If you just want to flip on a light in a toolshed to get a snow shovel, you may have to wait 20 minutes with a CFL.
The Effect of Temperature on Fluorescent Bulbs
http://www.electrical-online.com/fluorescentlighting.htm
Thanks Bill, I’d been wondering about those dim bulbs myself. Also, I’ve noticed that CFC’s don’t last nearly as long as advertized, plus I’ve seen quite a few bum bulbs that fizzle and pop right away. Bulbs had better QA/QC in the past, but then — surprise surprise — GE outsourced the entire operation to China.
As for incandescents, couldn’t the government just declare incandescent bulbs a “sin,” along the lines of cigarrettes and beer? They could tax the old bulbs into costing as much as the CFCs. For most purposes people go for the CFCs to save on power bills, but you can get an incans if you want to pay a little more. Everybody is happy…
As for incandescents, couldn’t the government just declare incandescent bulbs a “sin,” along the lines of cigarrettes and beer?
Yep, the gov’t can do pretty much anything it wants these days, thanks to expansive interpretations of the interstate commerce clause. They can declare breathing a sin, too, since CO2 has officially been deemed a pollutant. And they can then selectively tax anyone who doesn’t send them enough campaign contributions. And those who are partisans of one side or another in the old Republicrat wars will be fine with that arrangement, as long as it’s their side in power.
Very true LVG- that was my first thought on CO2- Heck I produce that stuff. The compact fluorescents are a joke. I replaced all of my lights with them just to see what the savings would be. 5% is a stretch. No kidding- when they get up and running they produce lots of heat. LED is the next wave. They are getting better everyday. Producing the yellow tones and not attracting bugs are nice traits, plus they actually save energy. Case in point: take 2 flashlights run by AA batteries one LED one regular (funny how no CFL flashlights exist, eh?) turn them on and check them tomorrow.
Packman, fluorescent bulbs of any type won’t light up when you turn them on if the temperature is too low.
www1 dot eere dot energy.gov/femp/procurement/eep_fluor_tips.html
Here are some quotes from that web page.
“Many currently available CFL products are rated to start at 0 degrees F. The Defense Logistics Agency offers products with starting ratings at -20 degrees F.
“The same temperature range that affects how a CFL will light also affects the ultimate light output of the lamp. At low temperatures, the lamp provides less light. In these cases, it is more difficult for the ballast that is driving the lamp to produce maximum illumination.
“Extreme low-temperature conditions or high wind chill potential can mean that a CFL may not be suited for outdoor use. If low light output and starting trouble are likely to occur often, it may be more practical to stay with an incandescent product for that location.”
Wow - I didn’t know that. I do have fluorescent outside and haven’t seen a problem, though I’m in NoVA so haven’t generally used them below about 10-20 F.
I have CFLs on all of my inside light fixtures except for one. They’re working just fine, and I’m noticing a difference in my electric bills as well.
I’m with Shizo. The LEDs are great products and I expect that any other type of lighting to be gone with in a decade.
Basically they are getting cheaper and cheaper. Don’t care how often you turn them on and off. Run for many years. Can be built in array form which has gradual degredation.
Probably the biggest problem with the LEDs will be lawsuits for when the things accidentally lazer.
I have CFLs now and they burn out a lot. Nornally it is because you turn them on and off too much. They are vunerable to that. Otherwise I realized substantial savings from them.
I’m guessing the cheap power here in the Pacific NW negates much savings on my end using CFL’s. I was shocked to see very little savings when the shiny box says how much I can expect to use less. I went to an eco-nomics summit at our local resort about 2 months ago. The LED lighting was the best savings- they had one of these old electric meters that had the wheel spinning around. It was amazing how much the LED’s slowed that bugger down… a 10w LED is too bright to look at directly!
Shizo,
Evolux has a 100W replacement that is supposed to be similar to 100W incandesant for 50$ a pop. Three year or so turn around to break even.
I’m paying 0.13$/kwh for electricity.
Problem is florescents are in that ball park too. Even if they go bad three times a year it is still a lot cheaper.
If you are talking about business places, the ecobulbs probably make up for the cost in reduced maintinance.
Speaking of dim bulbs, how many loyal Obama supporters are still on this board? Just wondering.
Enough to know that no one was ever foolish enough to waste lighting a candle or light bulb in your attic.
Ha ha ha
Some of the neighbors have gotten LEDs for the outdoor fixtures to avoid the cold weather start up problem. That is an obnoxious light.
I need one of those for my back yard. It would send a nice “Shut up!” message to the neighbors to the north. They have a late-night habit of getting loudmouthed in their yard.
“Appeals to Founding Fathers and States’ rights is kind of a last resort.”
The Constitution of the United States of America is far and away the best document for forming a government anyone could have thought of in 1789.
And in 2010, the best thing most people can think of is, the government can do anything it wants, because, hey, it’s the government!
Antenori is a dim bulb.
Oh FGS. Flourescent light bulbs have their advantages but they are NOT as environmentally friendly as they are portrayed to be. The disposal of the mercury in them is a major issue. How long until we start reading the stories of CF bulbs put in ordinary trash that leach their mercury into the soil and water?
I have switched to CF bulbs in every light fixture in my home that will take them. I refuse to buy the extremely expensive dimmable CF bulbs, though. I tend to vote as a librul Democrat but this gubmint intrusion into our daily lives makes me want to vote Libertarian!
For a while there was a booming black market in 5 GPF toilets until the 1.6′ers were perfected. I suspect the same will be true of incandescent bulbs. I can just see the customs line at LAX or JFK when someone is stopped for smuggling incandescent bulbs.
You can still buy entire old (like new, though - they’re in good condition ) from a guy on Ebay with a company that sells toilet tank tops for older toilets. The painters broke one of the toilet tank tops in the office and I got a replacement on ebay. If you don’t know what exact shape you need, you can even trace the toilet tank and send it to him. His name is Dollar Dan and he’s an extremely good businessman. We got our replacement by UPS ground in 5 days, and it was packed hell for stout. He emailed me twice to make sure everything was copacetic.
CNN Poll: Majority think government is broken.
Washington (CNN) - Americans overwhelmingly think that the government in this country is broken, according to a new national poll. But the CNN/Opinion Research Corporation survey, released Sunday morning, also indicates that the public overwhelmingly holds out hope that what’s broken can be fixed.
Eighty-six percent of people questioned in the poll say that our system of government is broken, with 14 percent saying no. Of that 86 percent, 81 percent say that the government can be fixed, with 5 percent saying it’s beyond repair.
And broken down,
-43% think all the problems with government are because of the “Democrats/Liberals/Socialists”
-43% think that all the problems are due to the “Republicans/Conservatives/Moral Majority”
-14% think everybody else in the country is FUBAR.
Hard to solve any problems, when no one can agree what the problem is.
The problem isn’t about government. It’s about money.
When the first “social” programs started under FDR, such as social security, there were 8 workers to every retiree and people died much earlier. Times have changed and social programs have “expanded” to include “free money” for people with so-called disabilities, that are really cash cows for claimants. ADD, ADHD, alcoholism, drug-addiction, etc. etc.etc.
The expansion of government spending of working people’s money has reached a point where half work, half collect.
That is why there is a split in the votes. The workers are tired of giving and the recipients don’t want to give up their government gravy train. By recipients i include government “contract” work for all aspects of the government. I’d like a no-bid contract myself.
I wouldn’t call SS a social program. At least it wasn’t intended to be..
The govt was broke. They tried all kinds of ways to get citizens to buy US govt securities but people were broke or just not interested for whatever reason..
So they wrote Social Security Act in a particular way:
SS money taken from people’s pay MUST be “invested” in government bonds. Those bonds (IOU’s) are then put into the SS Trust Fund.
The money is put into the general fund, to be spent by government in any way it sees fit.
At best, whatever security SS might someday provide was an afterthought.
Back when the law was written, the average life span wasn’t too much > than the normal benefit age, particularly for men, who were about the only wage earners. So the payout relative to collections was very small. Fast-forward to today, and all that has changed.
wait til it’s really broken…
The point it becomes obvious to all that it’s really broken is when real solutions will be proposed and considered.
Evan Connell wrote in “Son of the Morning Star” that he eventually became convinced that people do not learn from history/mistakes; that they will do the same thing every time, given a similar set of circumstances. And that, given his past actions in the Civil War and at the Washita River in 1868, his actions at the Little Bighorn were entirely predictable.
We are seeing the same thing in real time. People riding off to their destruction by doing what they have done in the past.
“…people do not learn from history/mistakes…”
That’s because it’s different this time.
Every social system must cause serious pain and suffering before it is fixed.
Yes, the human race is THAT stupid.
I, like many before me, am always amazed we’ve made it this far.
Washington (CNN) - Americans overwhelmingly think that the government in this country is broken, according to a new national poll.
Do you hear that Joey?
Remember you said just two days ago?:
Comment by joeyinCalif 2010-02-20 18:40:45
We do not think America is ruined. In fact, we’re very proud of where we stand in the world, and have high hopes for the future.
High hopes for the future Joey?
Americans Believe Nation Headed Down Wrong Track, According to New Poll November 16, 2009 poll: Marist Institute
67% of Americans believe the country is headed in the wrong direction.
75% of Americans; Want the same set of moral standards in business life as in personal life.
74% of Americans; See business decisions based on greed as morally wrong.
55% of Americans Think their careers will be negatively impacted for the long-term by the current economic situation
A Wall Street Journal/NBC News poll reported this week that more than half of Americans, 55%, think America is on the wrong track, with only 33% saying it is going in the right direction.
A stunning 66% say they’re not confident that their children’s lives will be better than their own (27% are).
It is another in a long trail of polls that show a clear if occasionally broken decline in American optimism.
http://online.wsj.com/article/SB10001424052748704238104574602470345172100.html
Now Joey, How can you reconcile your statement;
we’re very proud of where we stand in the world, and have high hopes for the future.
With the facts of the WSJ/NBC news poll finding?
A stunning 66% say they’re not confident that their children’s lives will be better than their own (27% are).
It’s not too hard debating you with facts Joey.
Don’t waste your energy confronting trolls with facts. They inevitably respond by poking a finger in each ear and beginning their ritualistic chant:
“Nah-nee-nah-nee-naah-naah”…
I’d go so far as to suggest that a blatant disregard for facts or data is a defining characteristic of trolls.
Joey/Eddie, would you guys care to weigh in on this debate?
Rio, you have the absolute wrong idea about polls.
Far from being designed to reveal what people actually think, a poll is deliberately constructed to produce a desired result. Whoever pays for the poll tells the polsters what the result is to be. The pollsters then carefully formulate question so that answers provide the result desired by whoever paid for it.
“Does it please you that we are at war?”
99% no
1% yes.
——
“Should whoever destroyed the World Trade Center and murdered 3,000 innocent people be hunted to the ends of the earth and exterminated?”
99% yes
1% no
I don’t agree with much of your optimism but I agree that modern polling is largely produced to drive public opinion, not measure it. Did you notice the attention the media seems to give to to so called Independent voter when in reality the true Independent is about 5% of the voting public not the 30% figure they harp about. Check out this article:
www nationaljournal com/njonline/mp_20100219_9614.php
So the Tea Party is really 87% republican to begin with and the claims of Independents and Democrats in their ranks is mostly BS. Fox News is the worst about telling us over and over how the Independents are the driving force behind the Tea Party. They are actually trying to get the real Independents to move to the right by using peer pressure.
30%?
afaik, currently there are ZERO declared Independents in the House and just two in the Senate (VT and CT).. so I’d say even claiming 5% Independent voters is wishful thinking on someone’s part.
as for polling driving or even molding public opinion.. very true dat..
I think the lack of independants says more for the efectivity of the machine than of anything else.
Might try to get someone to run with only free media in my area. Might be a neat experiment with the kids.
James, otoh..
If we define Independents by what they actually are (moderates, or centrists, or true non-partisans) you might say their candidates are more often elected than anyone else’s by a large margin, and the effectiveness of the political machine is what enables that.
.. which is saying that the machine is put together such that it hinders those further away from the middle, even moreso the extremists, from ever being elected.
Gotta love bias in the results. You can also go a long way by polling in specific locations like San Francisco or Orange county Ca to get very different populations.
Part of the problem with things these days. Things are so politicized and worked.
Ain’t psycho-warfare fun?
Rio, you have the absolute wrong idea about polls.
No Joey, apparently I know more about polls than you do. Sorry but you just don’t like the conclusion. Let’s take this issue I mentioned in the previous post;
On Feb 20 you said that I was in the minority in thinking America was on the wrong track and said:
We do not think America is ruined. In fact, we’re very proud of where we stand in the world, and have high hopes for the future.
I countered most Americans would agree with me. (Gee dude, what do you think this whole HBB is about. It’s about the greatest economic, financial bubble in the HISTORY OF THE WORLD. Feel happy high hopes yet?)
WSJ/NBC news poll
A stunning 66% say they’re not confident that their children’s lives will be better than their own (27% are).
Now here’s the deal. This is a poll issue that deals with personal experience not politics or policy. Even the most vocal critics of polls concede that these types of personal experience issues lead themselves to accurate polling.
For example David W. Moore, a former senior editor at Gallup Poll for 13 years wrote a book critical of polling, The Opinion Makers: An Insider Exposes the Truth Behind the Polls,
Was asked if we can believe polls.
I believe that polls that deal with people’s personal experiences can be valid representations of what the public at large is thinking. For example, a question in a recent Gallup Poll asked respondents if they thought they were financially better off or worse off now than they were a year ago. In that type of question, there’s no reason not to believe what people tell the pollsters. That kind of poll has been tremendously important in helping us understand American culture, showing how people live, what their concerns are, what makes them happy.
You’re fake poll question examples as with many of your arguments were expectedly farcical.
You’re just flat out wrong if you think American’s are happy about their families future right now or that most think America is on the right track.
From Amazon.com..
The Opinion Makers: An Insider Exposes the Truth Behind the Polls (Paperback)
Editorial Reviews
From Publishers Weekly:
In this succinct and damning critique of the pitfalls of public opinion reporting, Moore (How to Steal an Election), former senior editor of the Gallup Poll, argues that today’s polls report the whims rather than the will of the people due to an intrinsic methodological problem: poll results don’t differentiate between those who express deeply held views and those who have hardly, if at all, thought about an issue.
——
“You will never regard political polls the same after reading David W. Moore’s devastating inside account of their severe limitations and misapplications. —Robert W. McChesney, author of The Political Economy of Media
—–
“A powerful argument that polls do not merely misinform us but pose a genuine, if subtle, threat to our democracy.”
—Mark Crispin Miller
—
..someone please tell me why nothing gets through to this guy… i really do try my best to explain things so that even a child could understand.
I’m a failure.. it’s my fault..
Joey …we all know that the majority isn’t happy with what is going on . Maybe your happy if your a Wall Street Banker or someone who is a winner in the pick and choose handouts . Most people are concerned about the future of American ,including
the Constitutional issues at stake . The more Americans perceive the game as a stacked deck ,the more unrest will follow .You can talk a good PR rap but even if you have a good job if your kid can’t find a good job , or if somebody you know is effected , that might effect the ones that aren’t affected right now . In general people are worried that their pensions or Social Security might be slashed ,or taxes in the future might overwhelm a already stretched budget . People are nervous about the future ,in spite of the PR that everything is just peaches and cream . Everybody knows someone that has been laid off . There is a PR battle going
on right now , but people are aware that there is something fishy in Denmark . There isn’t very much faith in the politicians ,and those polls must be accurate to some extend
because it something like a 18% approval rating .
..someone please tell me why nothing gets through to this guy…
Because maybe nothing you say to “this guy” is much more than re-fried talking points, seemingly emanating from a special interest point of view, and never supported by facts.
And thanks Joey for enhancing the credibility of the author I mentioned, David W. Moore, who is critical of polls but supports the type of poll finding below.
WSJ/NBC news poll
A stunning 66% say they’re not confident that their children’s lives will be better than their own
Of this type poll question David Moore said:
I believe that polls that deal with people’s personal experiences can be valid representations of what the public at large is thinking.
There it is. 66% fear for USA’s future, means I am NOT in the minority by thinking the same.
And you helped me prove it again Joey, by lending credibility to David W. Moore who is critical of polls BUT supports my argument. Why do you think I used him as an example?
“CNN Poll: Majority think government is broken.” Kind of like Fast Times at Ridgemont High after Spicoli wrecks Jefferson’s car.
L.C.
My brother is going to kill us.
He’s gonna kill you and then he’s
gonna kill me. He’s gonna kill us.
SPICOLI
Just be glad you’re all right.
L.C.
My brother is gonna shit.
SPICOLI
Make up your mind. Is he gonna
shit, or is he gonna kill us?
L.C.
First he’s gonna shit. And then
he’s gonna kill us..
SPICOLI
Will you just relax, mon? He’s not
gonna kill us. My father is a
television repairman. He’s got all
kinds of tools. I can fix-this car.
L.C.
You can’t fix this car, Spicoli.
Jefferson’s car waffled and mangled. It is just inches away from
scrap iron.
SPICOLI
I can fix it.
I think people thought the poll was asking if the government was broke… could understand the confusion.
And these same sheeple voted in our current political leadership, and will vote for the same or worse next time around.
The current, and more importantly, the previous ones.
I had a very hard time explaining to people in the 80s that the freewheeling days of a little perseverance, pluck and luck guaranteeing success was over for more and more people.
The decline has been in motion since the 1970s.
Hard times in the “village” of Miami Shores. I went on the village website to see how my tax dollars are spend. The budget crisis has hit home and the village council of Miami Shores was forced to make budget cuts. Among others, the full time tennis instructor and 3 (!!!) of his part time assistants was let go. Yes folks, we have hit rock bottom if we have to lay off a tennis instructor and some of the village idiots. What is the world coming too?
Of course tax increases are on the horizon to pay for further tax payer funded largesse ranging from pension benefits for village idiots to the debt service for the newly built Aquatic center.
More money is wasted on brother-in-law government contracts than payrolls.
Still, a tennis instructor is certainly not critical to operations.
I asked this question yesterday, but instead of getting an answer, the discussion turned into a critique of the way I phrased the question, and how it was a “majority” viewpoint vs. a “Republican” view. So I’ll ask again, without any “similes” or “straw men”.
-A group of individuals or entities has done things that have done real damage (let’s just say financially or economically, for the sake of the discussion) to the community (for the sake of the discussion, let’s call it, say, The United States of America). The “community” passes these things called “laws”, trying to regulate “destructive” behavior.
-Except when it comes to one group of individuals, lets just call them “business”; specifically, for the sake of discussion, a group I’ll call “Investment Banks”. With them, the argument of “the majority” is that the IBs are smarter than everyone else, will outsmart the government, so it is futile to try to “regulate” their actions. (I disagree, but that’s beside the point)
So…….. would someone explain to me why they believe that the government/community’s response to destructive behavior of individuals/groups/entities is “less regulation” of same?
Using that reasoning, the government should quit prosecuting murderers that hire good lawyers. (Sorry, couldn’t resist…….)
To me, “less regulation” flies in the face of common sense, but I’ll admit that I’m just a wrench-turning dumb-a$$, who can be swayed by by a contrary argument.
(I could start another argument about whether, collectively, pedophiles or Investment bankers have done more “damage” to kids in the USA, or whether the average German knew what the Nazis were actually doing to those trainloads of Jews, but lets just keep things focused for now….. :)…)
If the word “regulation” means the same as “rules”, then I think we need regulations.
Rules determine what is allowed and what isn’t allowed.
In football rules determine how many downs the team that has the ball gets and what they have to do to get more downs. Those who follow the rules get to advance the ball; those who violate the rules get penalized. And there are enough of striped shirts on the field to enforce the rules.
The same should apply to finance. There should be rules. These rules should be enforced. Those who fail to follow the rules get penalized. Those who do follow the rules don’t get penalized.
It’s not all that difficult, although there are those who try to make it so.
That’s what I thought. Silly me.
Still waiting for the “Let’s give the guys that created the problems more leeway” side of the story.
All you have to do for that story is turn on CNBC
Easy to say combo, but not so easy in practice. The hard part isn’t defining the rules, or enforcing them - the hard part is deciding what rules to write - or even at a higher level - what is the jurisdiction even of the rules makers.
E.g. the new rules on credit cards. Seems clear cut - just create new rules to protect people from outrageous interest rates. However the result is that banks have jacked up rates like crazy lately to beat the deadline, and now after the rules are in place it’ll be harder for people with poor credit to get credit cards. The banks will find ways around these rules. There will also probably be an increase in payday loan places.
And what about other forms of regulation that caused the housing bubble? E.g. the GSE act in 1992, mandating that HUD set higher goals for GSE subprime lending? Or the CDFI act of 1994, also expanding such lending? Is this “rules”? Or the taxpayer relief act of 1997, creating the 250k/500k exemption? Or the SEC pushing the banks the late 90’s and early 00’s to lessen their loan loss reserves?
Or for that matter - the very creation of the Federal Reserve entity (via new rules), which was the icing on the cake with its easy lending and low rates?
Might I suggest that the two acts that started the ball rolling, the 1997 Taxpayer Relief Act, and the repeal of Glass-Steagal were acts of “deregulation”, rather than regulation?
Well except for three things:
1. The taxpayer relief act wasn’t equitable - it didn’t remove cap gains taxes on on all cap gains, just housing. Thus the nature of regulatory changes; by their nature they cause imbalances.
2. If cap gains taxes hadn’t existed in the first place (as was true before 1913), then such a change wouldn’t have happened, and thus triggered the problem.
3. Glass Steagall repeal took effect in July 2001. The housing bubble was already well underway by then - started about 1997. So while it certainly contributed to the magnitude of the bubble, it didn’t trigger it.
Certainly the act of deregulation contributed to the bubble. However IMO it was a case of releasing pent-up energy that should never have existed in the first place.
An analogy would perhaps be dropping a 50-lb weight on your foot. A more-regulation-proponent would say you shouldn’t have weakened the shelf the weight was on. A less-regulation-proponent would say that maybe you just shouldn’t have lifted the weight up in the first place.
Pondering the bubble effects of reducing the capital gains tax that was all the rage in the late 90s. Made growth stocks more desirable than dividend stocks because the growth stocks got taxed as a gain when you sold.
Since growth is finite that was sure to create a bubble in values.
Similar the effect on housing.
…after the rules are in place it’ll be harder for people with poor credit to get credit cards.
Back in the Jurassic Period (aka my youth in the sixties and seventies), it was very difficult to get a credit card. You had to be pretty well off, which most people weren’t.
So, if we wanted something, we saved up for it. That’s how my parents bought their cars.
Or, if you just had to have it and could make payments, then you did a layaway. Lotta people did that.
“..it was very difficult to get a credit card.”
So true Slim. The first CC I ever tried to get was a Sears Card. I had no credit history so I was denied. AND I WORKED THERE! So I played the game and resubmitted a new CC application alongside a relatively large purchase. Well guess what, I was approved. So I kept the card and told them to jam the merchandise. I used that card to establish some history and never looked back. To this day I only go to Sears to buy an occasional hand tool. Watching their demise over the last 20 years reaffirmed my faith in the Karma Police.
P.S. Their mistreatment of their part-time employees was very real. On the rare occasion I’m shopping there I usually ask the cashier how they like them. Most of the time they roll their eyes. My dislike for the company was for more than the CC incident.
Well as secured debt, car loans were MUCH more common then credit cards. There’s nothing really wrong with borrowing money to buy something and paying it off at moderate interest rates over a time period less than the useful life of the object. Especially if the alternative isn’t non-consumption. The difference between interest paid (on the loan) and interest earned (on the savings) has to be compared to rents/busfare. But paying years of CC interest on say, eating out, when the alternative is eating more cheaply at home is a bad bad idea. But bad loans have become good business.
“Karma Police”
I applied for a Sears card when I graduated from school (needed tools). App rejected, of course. 2-3 years later, they sent me an invitation to reapply. Got ANOTHER reject letter.
Haven’t spent more than about 50 bucks at Sears since 1982.
Sears loss was Snap-On and MAC Tools gain.
Sears loss was Snap-On and MAC Tools gain.
Ohhhhhhhh, Snap-On tools. How I miss having them around.
Boss had them on his bench in the bike shop. If we asked him nicely — and took very good care of them — he permitted us to use them.
Snap-on tools are great. Snap-on tool calenders are even better.
I think the main answer from a very high level is this: From a theoretical standpoint regulation is good, in that it prevents people from doing bad things that they would otherwise do, given free reign otherwise. However in practice regulations are regularly twisted/influenced/corrupted in certain parties’ favors, such that they end up doing more harm than good. A large part - in fact perhaps the lion’s share - of the harm of regulations is that they tend to supplant our own protection mechanisms.
Banks IMO are a very good example. If we never had an FDIC, and never had Glass-Steagall, I believe very strongly that the currently-minuscule private bank ratings industry - e.g. like Bauer - would be much larger than it is. People want their money protected - and without the implicit/explicit government protection, they would be a lot more careful about making sure they put their money into a known solid bank. As it is however 99% of people just look for the “FDIC” label on the door, and figure “it’s all good - no more work required on my part”.
I think the “more regulations” theory sees the grass as being greener on the other side of the fence, not really seeing the pitfalls. This is masked to a great extent by the increase in our standards of living by just technological/industrial evolution. We see that:
a. Regulations are increasing, and
b. People are living better (more video games, faster internet, bigger houses, etc.)
and tend to see that as a cause and effect thing, when it’s really not; with less regulations our standard of living would have improved even faster than it did.
(There’s a *lot* more to it than that, but there’s at least my surface view. E.g. the same principle applies to debt - our dependence on debt has also been increasing by leaps and bounds, but that isn’t something that can continue to fuel our prosperity.)
There’s a saying (not sure where it originated): The difference between theory and practice in theory is much less than the difference between theory and practice in practice.
“Theory” is great, but…
Might I suggest that there would NOT be as much an increase in our “Standard of Living”, if the population felt it neccesary to spend half their time researching everyone that they do business with, to confirm that they aren’t crooks?
I’m betting commerce would slow down a BUNCH, if there were no laws, and no police to enforce them, and the whole family had to pack AR-15s to go shopping, or to the movie.
I exaggerate.
I’m not talking about anarchy here. Certainly there is a base set of rules that have to exist, with a base level of enforcement to go with them. At a financial level, such rules should be focused on removal of fraud, not management of risk or on wealth redistribution.
I see the government’s role to regulate a floor in the rush to the bottom, and to mitigate, as much as is practical, the asymmetry of information between buyer and seller.
Where that floor is doesn’t really matter, its just important that everyone plays by the same rules.
The problem isn’t so much with regulation, its with the government. The USA is not a first world country any more. We have a brazenly corrupt political system. Until that is resolved, nothing else can be fixed.
Banks IMO are a very good example. If we never had an FDIC, and never had Glass-Steagall, I believe very strongly that the currently-minuscule private bank ratings industry - e.g. like Bauer - would be much larger than it is
Are they like Moody’s and S and P?? I’m supposed to take comfort in a private rating company. These companies were major players in the bubble and collapse. They are not to be trusted . FDIC insurance creates stability in the system as does regulation.
Your arguement is that because companies try to manipulate regulation it’s ineffective and we should have none is a long stretch. I’m not sure people want more regulation, they want regulation that works. This is a pendulum. We just went through a period where regulations were manipulated by corporations and gov did not enforce the remianing rules. In the past these failures lead gov to re assert itself, but this is not happening this time around, likely because the PTB is printing money to keep people from feeling the full effects of poor and manipulated regulation. You can bet if unemployment was 30% with no unemployment benefits there would be a lot of social unrest right now and a few bankers heads would roll and regulation would be fixed. In addition our Gov is so manipulated by money (thank you supreme court) that threats from the increasingly poor masses do not alarm them yet.
Are they like Moody’s and S and P?? I’m supposed to take comfort in a private rating company. These companies were major players in the bubble and collapse. They are not to be trusted .
Moody’s and S&P (and Fitch) are highly regulated themselves, via their SEC NRSRO status. Once again we have the implicit nanny-like oversight of the Federal Government being relied upon, only to be let down by them. These ratings agencies had a government-enforced oligarchy - many muni’s required NRSRO status for their bonds.
Not to mention that these rating agencies relied upon very complicated models - models which were completely thrown off by the massive government/Fed financial changes - the GSE subprime lending push, the extreme interest rates, etc.; and yes the deregulation. If all of these changes (government intervention) had not happened so quickly and in concert, the ratings agencies would have been perfectly correct in their ratings, because the housing bubble wouldn’t have happened.
Your faith in corporate America which is motivated by short term profits alone over gov which at least to some point has to listen to the people is odd.
The rating agencies are not a gov enforced oligopoly. Others could get in the game if they wanted too. The fact that these companies had been around for along time and had built up trust is what kept the competition out and what got muni’s to require their certification.
It’s clear that there were massive conflicts of interest at the rating agencies, who make money rating and then make money telling companies how to improve their ratings. A simple regulatin that rating companies can’t sell such services to those they rate would have removed a major conflict of interest.
It’s pretty interesting that those on the HBB were able to see a building problem based on price to income and rent ratios and leverage, but the rating agencies were not able to see this? Those must be some complicated models they were using, or is it that complicated models are used as cover for the quid pro quo the rating business has with Wall Street?
Measton,
I think the situation changed with the ratings agencies in the mid/late 90s under Clinton/Rubin/Summers/Ginrich and some of the other clowns.
Basically became a pay to play system and the rating agencies also charging for “consulting” with the banks on what to do to get a security rated AA+. Also remember the MBS/CDO products were delivered and rated as bonds on the cover but DEEP in the many page documents they noted the ratings were approximate and not similar to other bond issues. So, the rating agencies actually hid some out clauses which leads me to believe they were fully aware of what they were sticking pension funds with.
I also remember megabank sponsored Vegas (and other) junkets for pension fund managers to buy up this stuff. Right before the market cam unglued.
Also remembering the banks were reporting all the option arm stuff as being paid as amoritizing AND get this, increasing in values as the debt was getting larger.
So, I’m sure a lot of pensions are >50% underfunded and have not had the loss realization yet.
Only well narrowly-tailored, intelligent regulation creates benefit. Everthing else just creates market inefficiencies and harm. The politicians can’t even articulate the problem, and most still believe that falling home prices was the cause of our pain rather than the inevitable result and ultimate solution to debt dependance and leverage games. Do you really think people that preached the virtue of homeownership for everyone regardless of purchase price and circumstances, and even worse outright discrimination like Obama supports, and/or can’t explain the securitization process or the difference between credit default swaps and interest rate swaps should be the ones running the show? That is insane. The simple truth is that if we let prices fall to normal with minimal intervention we can rebuild. The prior game is already over, and politicians are not smart enough to cover new games before its too late. The politicans are too dumb and confused, and all too willing to act solely in their best interest, not to cause more harm. A smarter and more efficient move would be taking a proactive stance when bubbles begin to emerge. That might actually work, but is not even being discussed.
We know what the politicians are saying and doing…….not what they really believe.
Take a look around, and there are vast swaths of the economy and government that are dependent on house prices remaining high. If house prices collapse, their business model goes with it. Along with their tax base. So, we have the full court press to keep prices high/”stabilized”.
Since many of their constituents will be screwed if house prices collapse, they support high house prices, and hope something will happen that will make this mess go away.
Since many of their constituents will be screwed if house prices collapse, they support high house prices, and hope something will happen that will make this mess go away.
And that something that will happen is, ummm, what is it?
Hope that you can push it on to the next guy’s term or inflation kicks in.
“A smarter and more efficient move would be taking a proactive stance when bubbles begin to emerge.”
You’re asking for regulations and government interference NOW??
Everthing else just creates market inefficiencies and harm.
Strict adherence to the above dogma especially when it comes to finance and globalization, is mainly why the US middle class has been hammered and mainly why the above dogma itself is becoming more discredited every day.
There is more to the social-contract between businesses, government and it’s people than solely the pursuit of “efficient markets”.
Here’s some quotes from a Harvard Business Summit on Globalization’s requirements for it’s own existence. It’s lessons are equally well applied to the financial sector since it is that sector mainly responsible for the current destructive form of globalization.
Globalization is not inevitable; it has come and gone before. Conventional wisdom holds that globalization is achieved when government gets out of the way, with lower taxes and regulation, allowing markets to operate unfettered. This view gets the role of government wrong. Globalization flourishes when governments are actively involved, creating rules and agreements that allow global trade to take place.
Navigating globalization requires fundamentally changing society’s social contract.
The argument to “just let markets function” assumes political stability and social peace. But a system where the gains are concentrated among a few winners won’t remain stable;
But advocating for freer global trade was always coupled with social protections for the general population—a minimum wage, unemployment insurance, unions, and more. A bargain was struck with society: Open the country up to the vagaries of the global marketplace and in return, society will receive social protections in case they lose out as a result of global trade.
This lesson shows that markets don’t exist in isolation of a broader social system. Just advocating for markets to operate with no protections for those who lose out is certain to further a protectionist backlash. What is necessary is for the country’s political leaders to strike a new bargain with society—a new social contract.
http://www.hbs.edu/centennial/businesssummit/business-society/globalization-and-the-social-contract.html
social contract thinking is becoming one of the most significant tools used in analyzing ethical issues in business.At the heart of the social contract effort is a simple assumption, namely, that we can understand better the obligations of key social institutions, such as business or government, by attempting to understand what a fair agreement or “contract” between those institutions and society, or among different communities within those institutions, entails. blackwellreference.com
OK, X-GS, since you want to continue this thread, I’d like to respond to ecofeco’s comment from late last night:
So repeal of the Glass / Steagal Act was not deregulation?
How about all that airline deregulation in the 80s?
You might seriously want to google “deregulation” before you make absurd claims that there hasn’t been any.
I’ve done a lot more than google deregulation. I have spent years haunting law libraries and researching laws on my own. I recently asked on this board if anyone had a link to the entire text of the Glass-Steagall Act. The only responses were links to the Emergency Banking Relief Act of 1933, which is NOT the same thing as the Banking Act of 1933 aka Glass-Steagall Act of 1933 (See wikipedia “List of United States Federal Legislation” under 1933). So, I used a temporary Lexis account to download the entire text.
You, on the other hand, have still not even learned to SPELL Glass-Steagall correctly, so I think you have a ways to go before you should be condescending remarks about this.
And no, there was never any meaningful financial deregulation in recent decades. Even just looking at Glass-Steagall, only a small fraction of that act was repealed. I will post more about this in a day or two.
Sorry…….I didn’t know that my incorrect spelling of Glass-Steagall kept me out of the discussion.
And all I asked was a simple question, preferably one that deals with the way things ARE, not some theoretical utopia.
I was responding to ecofeco, and no, incorrect spellings don’t keep you out of the discussion, but they do imply that maybe you have a learning curve ahead of you on banking regulation. Unfortunately, a lot of people who have never seen the inside of a law library think that legal research consists of typing “deregulation” into Google and repeating whatever partisan talking points pop up.
Einstein had atrocious spelling. How’s that work for your learning curve?
Yeah, well German’s harder ’cause they have umlauts and stuff.
I wouldn’t call The Congressional Record, “partisan.” But that’s just me.
And just for good measure:
* 1976 - Hart-Scott-Rodino Antitrust Improvements Act PL 94-435
* 1977 - Emergency Natural Gas Act PL 95-2
* 1978 - Airline Deregulation Act PL 95-50
* 1978 - National Gas Policy Act PL 95-621
* 1980 - Depository Institutions Deregulation and Monetary Control Act PL 96-221
* 1980 - Motor Carrier Act PL 96-296
* 1980 - Regulatory Flexibility Act PL 96-354
* 1980 - Staggers Rail Act PL 96-448
* 1982 - Garn - St Germain Depository Institutions Act PL 97-320
* 1982 - Bus Regulatory Reform Act PL 97-261
* 1989 - Natural Gas Wellhead Decontrol Act PL 101-60
* 1992 - National Energy Policy Act PL 102-486
* 1996 - Telecommunications Act PL 104-104
* 1999 - Gramm-Leach-Bliley Act PL 106-102
Well, I hope my other post is coming….
Well that figures. Maybe later tonight.
Saving and Loan?
“…Congress finally acted on deregulating the thrift industry. It passed two laws, the Depository Institutions Deregulation and Monetary Control Act of 1980 and the Garn–St. Germain Depository Institutions Act of 1982…”
- wikipedia
The airline industry?
“…Airline deregulation is the process of removing entry and price restrictions on airlines affecting, in particular, the carriers permitted to serve specific routes. In the United States, the term usually applies to the Airline Deregulation Act of 1978. A new form of regulation has been developed to some extent to deal with problems such as the allocation of the limited number of slots available at airports…”
Transportation?
“…After Nixon left office, the Gerald Ford presidency, with the allied interests, secured passage of the first significant change in regulatory policy in a pro-competitive direction, in the Railroad Revitalization and Regulatory Reform Act of 1976. President Jimmy Carter devoted substantial effort to transportation deregulation, and worked with Congressional and civil society leaders to pass the Airline Deregulation Act (October 24, 1978), Staggers Rail Act (signed October 14, 1980), and the Motor Carrier Act of 1980 (signed July 1, 1980)….”
You were saying? Shall I continue?
I’m not here to pick on anybody. I first started coming here because the facts, analysis and speculation were some of the best I’ve ever seen. I try hard to contribute in that vein.
But some of the disinformation, misinformation and honest ignorance needs to be corrected.
And when I’m wrong, I need to know so that I learn as well.
Even good behaviors can do damage if taken too far.
Borrowing in itself is not destructive. Eating is not unhealthy. But people sometimes borrow or eat too much and that can be most troublesome..
It might be possible to regulate ourselves so that “just the right amount” of eating or borrowing takes place, and government would be more than happy to provide us with the necessary regulations, but who wants to live in such a society?
I agree with you actually. People should take responsibility for their actions. And if their actions are harmful to others, there should be some kind of punishment. But that’s not the way it’s working.
Everyone should be get the thrashing they deserve. Except Wall Street and the Investment Banks, who basically “enabled” the whole mess, and who would be jumping out of windows, or washing windshields on street corners, if events had been allowed to play out.
Essentially, they got a “government subsidy”. and we all know that whatever government subsidizes, we get more of.
Simple regulation would have prevented this
1. 20% down required for all home purchases.
2. No securitization, or at the very least those who make the loan must keep 20-50% of each loan.
3. Preventing banks and investment houses from merging creating huge conflicts of interest. GS selling MBS to it’s investors while massively shorting it on the other end. Banks should be bread and butter lending. It would have limited the huge problems with leverage.
4. All management compensation is taxed at income tax rate, no break for capital gains or dividends. They are getting paid for work and should be taxed that way. I’d offer tax breaks only if incentive stock was paid out each month with a fixed period until it had to be sold. ie every month you get stock that must be sold in exactly 3 years. This keeps management focused on the long term health and growth of the company.
I’d love to live in this society joey rather than the one that has driven the country off a cliff.
1. and 2. can be taken care of with one sentence: All loans must be seasoned for two years at full amort before being sold (in order to encourage long-term strategy).
3. Aren’t there already laws against this? Monopolies? Anti-competitive? Insider trading? Oh right, you need a government who actually enforces such laws…
4. Agree.
Oxide: on amoritization. Oh they might just include ballon payments or give you a second loan to pay down the first loan.
Have to be real careful on how that was set up.
Maybe the Texas solution would help as well. No HELOCs.
Seasoning a loan for two years isn’t enough. You have to require that the securitizer keep some of it on the books - preferably the “worst” chunk which would allow you to get the kept percentage down to the vicinity of 10%. At least it was 10% when I was a tax associate and the tax partner was running things.
measton, it’s not difficult to kill some sector of the economy, and your proposed regulations on MBS will do just that to the housing industry.
Additionally, the restrictions on banks keeping at least 50% of the loans they make would cut lending to businesses in general as well as limit money in circulation by about 50%.
—-
Huge money (reserves) gathering dust in a bank vault does nothing.. it’s not working.. it’s not helping anyone. It’s not being invested. It’s not being used to build anything. It’s not being paid to workers. It is literally a waste of money.
Is it somewhat riskier for banks to keep only 5% or 10% reserves? Yes, but no risk, no gain.
Is no-gain the price we must pay for regulations? If so it sure ain’t the world I want to live in.
Yes but no reserves means bank failures and instability.
You would have to make this up with HUGE insurance premiums that would be on the same orders as the reserves. Or.
The current system only works in a highly inflationary enviroment. Further it requires exponential growth in the money supply to keep defaults from happening.
Eventually the wealthy beancounters at the banks will own everything and all real economic activity will stop, and finance isn’t real activity, because the medium of exchange will have been so badly corrupted. Why work if the money is worthless by the time you get it? The money gets recirculated and produces new debt everytime it goes out. Hence an ever increasing debt level that requires more and more money to service it. The money consequently mostly going to the wealthiest.
Further complicating the situation is that we need to buy raw materials from overseas. Meaning the life blood of our transportation system, oil, will become unaffordable.
What you arguement fails to capture is the effect of circulating more money is merely inflationary. While there is a temporary boost when you introduce new money, either it flows to the wealthy for debt service, out of the country for raw materials purchases or serves to drive up prices. While that produces a pretty GDP number, it does nothing for real wealth and makes wealth distribution more inverted. Not a desirable situation.
Hence the lack of reserves only contributes to inflation while decreasing stability.
The decreased stability in this case led to epoch levels of bailouts for the rich which will result in either higher inflation or diverting larger resources to debt service. Again causing the wealth distribution to get worse.
We’ve been over this again and again around here.
I think there is just a occasional bubble head that wants to go back to the rapid exponential increase in prices because that will fix things and return to the “prosperity” of 03-05. Unfortunatly that was all malinvestment in housing stock and sappped resources needed for retooling manufacturing. Also keep wages higher and increased the amount of outsourcing. That and putting more money into the hands of elietes and bankers. Not to mention distracting us from things like fixing our border as FIRE guys supported/exploited illegals for cheap labor.
I think the outsourcing bubble most likely will pop as well. Looking at businesses that are meant to serve the US market and based overseas. What happens when the USA isn’t spending anymore. SO, it will end up being further malinvestment.
What you were seeing in 00-06 was the begining of a hyperinflationary event that happily collapsed. All the government pandering to that element since the S&L crisis has lead to worse and worse instability in the financial system.
Right now, this recession and eventual collapse of all the bailout measures, will result in a stronger country going forward.
Write off the debt, realign pensions and municipal salaries, commit to sustainable systems, liquidate, liquidate, liquidate. And we come out the other side.
The current plan is still trying to re-inflate. Don’t think it will work. Have you seen people’s attitude tword debt change? I don’t think anyone is considering their HELOC to be emergency funding in case they lose there job. The people have seen how fast that emergency credit disapears once the banks realize you are in trouble. Do you think people falling into the loving arms of goverment assistance are going to want to do that again? Maybe no? People are seeing everyone crushed around them and making the effort to save. Velocity is being sucked away.
Further deflation is getting entrenched now. Banks are risk weary and so are ordinary folks. Those reserves Ben is priniting up will sit and sit and sit. A lot of the credit card lending is going south too. Those are the people in debt death spirals that are going further under every month. No place for them to go but spend every dime you give them till they go kaput. Bankruptcy is the only option.
And those undischargable debts due to the law changes. Oh, they will eventually go away in a populist fervor in a couple years.
Good luck
(as they say in Vegas without meaning it)
Additionally, the restrictions on banks keeping at least 50% of the loans they make would cut
lending to businesses Joey’s income in general as well as limitmoney in circulationhis blog posts by about 50%.?I might have fixed it Joey.
“Additionally, the restrictions on banks keeping at least 50% of the loans they make would cut lending to businesses in general as well as limit money in circulation by about 50%.
Huge money (reserves) gathering dust in a bank vault does nothing..
1. Money left in banks??? No Joey they loaned out the money it is no longer in the bank. All that securitization did was shift risk it didn’t increase lendable money. If there was no securitization then the person who purchased the debt would have money to lend directly. Wall Street and the Banks suckered people to purchase securitized debt with an interest rate that was not sustainable and credit quality that was a myth. You really are a shill for Wall Street.
“Is it somewhat riskier for banks to keep only 5% or 10% reserves? Yes, but no risk, no gain.”
Joey once you merge investment banking with traditional banking even those 5% reserves seem like a paragon of conservative banking. The system was all about getting around reserve requirements via off balance sheet book keeping.
Yes and your bubble system has worked so well Joey.
Securitization = offloading risk = no incentive to make good loans = banking failure = government bail out = higher taxes and eventually interest rates for the middle and upper middle class and inflation and decreased services for the middle class and the poor. It’s a wealth transfer system to the elite pure and simple.
measton, you are so ignorant of how money works I’m almost embarrassed.. you should be.
All that securitization did was shift risk it didn’t increase lendable money.
What?? Do you even know what securitization is?
Look.. you are a bank. You have $100K to lend. You write a 30 yr mortgage on a house for $100K. You LEND.
Your bank now has ZERO money to lend for 30 years or so but you hold a mortgage.. a piece of paper.
——
You can securitize that mortgage. You can exchange it for cash. You can sell it to me (an MBS investor) for $100K.
Bingo.. your bank now has $100K cash to lend to someone else
You lend the original $100K and thanks only to securitization you were then able to lend ANOTHER $100K.
———-
Securitization doesn’t increase lendable money??
sheesh.. no wonder you people don’t trust banks.. you don’t know the first thing about them.
Joey says
“You can securitize that mortgage. You can exchange it for cash. You can sell it to me (an MBS investor) for $100K. Bingo.. your bank now has $100K cash to lend to someone else”
and where did that cash come from Joey????
It came from someones bank account or out of the stock market. It it was removed from a money market or bank account at bank A to buy securitized debt at bank B. Bank A now has less money to lend.
All that happened was the person who had their money at a conservative lender say bank B, put money into a reckless lender Bank A because they were told the MBS was as good as a US treasury and paid a higher interest rate. The money did not come out from under a mattress or a magic hat joey. Securitization might increase reckless lending in this scenario, it might draw funds out of the stock market and conservative banks. We have all seen the result of reckless lending, you are standing on thin ice.
You mean the part where they fraudulently claimed the CDOs to be AAA rated?
Yes, we know about that part.
Plus, you have the added benefit of completely removing repayment risk from the original lender.
And that allows them to make riskier and riskier loans, and make more and more money, because they’re selling off the risk.
Until it implodes and the taxpayer is made to pay. Like it just did. Banks and the finanicial industry still make out like bandits. I guess if that’s the goal, the securitization model does work.
measton..
You have somehow acquired a perverted view of what a security is. Consider yourself lucky we had this conversation because this could be the one little thing that prevents you from understanding and appreciating a great many important things.
..take that for what it’s worth..
..And that allows them to make riskier and riskier loans, and make more and more money, because they’re selling off the risk…
neuromance, that statement is myopic. Look further down the time line:
I’m a bank and I’m writing crap mortgages. You are an investor who’s buying them. Well, those crap mortgages are crap.. and they’ll default.. and investors like you who have taken on the risk of default will lose money.
Are you gonna be buying any more of my mortgages? When word gets out about the crap I’m trying to sell, will anyone buy them?
—-
But during a housing mania investors DON’T CARE how crappy the loans are and how high the risk is because property prices cannot fall! There are no defaults no matter how risky the loans are.
So, investors can’t lose. They demand more MBS! Lend to strawberry pickers for all we care! Just write more mortgages and package them up for sale.
High risk is immaterial when investors are sure that property prices will rise forever. Home owners can re-re-refinance forever. Just like the housing market, these securities in the secondary market will never tank.
—-
When investors convince themselves it’s profitable to buy garbage someone will provide them with all the garbage they can absorb. Is it reasonable to blame the provider for the stink?
“…But during a housing mania investors DON’T CARE how crappy the loans are and how high the risk is because property prices cannot fall! There are no defaults no matter how risky the loans are….”
Exactly.
Now who were those investors exactly? That were writing CDOs? That ones the smaller banks and other lenders were all too willing, and profitably, to sell into?
ecofeco..
The investors who bought and traded were everyone from private investors to banks, big and small.. from the various retirement / pension funds to government treasuries.. hedge funds.. brokerage houses.. wall street traders, insurance companies, and various businesses… schools? I seem to remember some schools.. Anyone who had some money to invest.. all over the world.
Can we give Barney Frank’s job to meatson?
Well. Without a lot of regulation we could have been rid of the megabanks.
How?
Basically if there isn’t a bailout, cept of depositors up to old 100k limit, then the banks die.
So, people would get burned and be more cautious about what their bank is doing. Perhaps electing to pay for a deposit box instead of putting the money into an account where the bank could F with it.
Further, you could get rid of a lot of the megabanks and the problems by getting rid of the Fed.
You could also look at the system and make things more stable by increasing the reserve requirements. Which is an already existing legislation.
Also you could let the bondholders take their lumps. You get burned like that and you learn to take precautions.
No additional regulation required. Without the implicit backing, the large money opperations would be curtailed.
Have you ever talked to anyone over 80 about banks? Man, they HATE banks. And stock brokers? Minions of Satan himself!
Yer dang skippy people would be more cautious and as well they should be!
How a New Jobless Era Will Transform America
http://www.theatlantic.com/doc/201003/jobless-america-future
“There is unemployment, a brief and relatively routine transitional state that results from the rise and fall of companies in any economy, and there is unemployment—chronic, all-consuming. The former is a necessary lubricant in any engine of economic growth. The latter is a pestilence that slowly eats away at people, families, and, if it spreads widely enough, the fabric of society. Indeed, history suggests that it is perhaps society’s most noxious ill.”
I thought a corrupt, self-serving government was society’s most noxious ill? I guess we have multiple problems.
American FutureVision tuned to Channel Z:
Dear Family and Friends,
We have been plunged back into a dramatic, gruelling electricity crisis for the last ten days which has left most areas receiving electricity for 5 hours a day. When electricity is restored it is only in the middle of the night between 11.30 pm and 4 am. Normal functioning has become almost impossible and no electricity means no water can be pumped and many days communication also collapses as mobile phones are unable to pick up a signal. In private homes water supply has dwindled to 2 or less hours a day, geysers are cold, fridges and deep freezers have defrosted and their contents gone bad.
Unemployment is huge in Zimbabwe. Everywhere you go there are groups of young men standing around doing nothing. Youngsters that have been to school and are strong, willing and able but just can’t find jobs. Young women are in equally dire straits: they come out of senior school and are keen, fresh and eager to work but there are no jobs. University graduates, new degrees in hand, are no better off, unable to find places to put their new skills and talents to work.
One small businessman told me how he’d been investigating the status of his bank account this week. The amount he had left in the bank had dwindled to a negative balance and when he queried where his money had gone he was shown the list of fees, charges and commissions the bank had taken. Then the businessman noticed a regular amount being deducted that didn’t fall into any of the other categories. He queried it and was directed to the bank accountant. “Ah, she said, that’s funeral insurance. If you die we’ll pay towards your funeral.” Funeral insurance that the man hadn’t asked for, hadn’t been consulted about but that the bank was just deducting! Can you believe it?
This is the reality of running a business in Zimbabwe and until politics stops interfering, there’s not much light at the end of the tunnel.
“The amount he had left in the bank had dwindled to a negative balance and when he queried where his money had gone he was shown the list of fees, charges and commissions the bank had taken.”
I didn’t know BAC had branches in Zimbabwe.
“Everywhere you go there are groups of young men standing around doing nothing.”
Maybe that is part of the problem…
Gettin’ nothin’ but static
Static up in my attic
Gettin nothin’ but static
On Channel Z
- B52s
Not long ago, I read this story regarding a 15 percent year-on-year increase in U.S; foreclosures; then all last week, there seemed to be a barrage of stories to the effect of ‘foreclosure crisis ending.’
ME CONFUSED!
Foreclosures Up 15 Percent From January 2009
5:02 pm
February 11, 2010
By Caitlin Kenney
The number of foreclosure filings fell 10 percent in January, but surpassed 300,000 for the 11th straight month.
Real estate data firm, RealtyTrac, reports that 315,716 properties received a notice of default, auction or bank seizure — that’s one in every 409 households. Foreclosure filings also fell in January of 2009, only to rise months later.
“If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works,” James J. Saccacio, RealtyTrac’s chief executive officer, said in the statement.
According to the Treasury Department, only about 66,000 delinquent loans were permanently modified under the Home Affordable Modification Program as of December 31. That has left many homeowners feeling helpless and mortgage officials searching for new techniques to deal with distressed borrowers. The Washington Post reports:
Citigroup, for instance, plans to announce a pilot program on Thursday that would allow delinquent borrowers who don’t qualify for or decline mortgage relief the opportunity to stay in their homes without making payments for up to six months before turning over the keys, in return for keeping the property in good condition. The bank estimates that up to 20,000 borrowers in Texas, Florida, Illinois, Michigan, New Jersey and Ohio could be eligible.
The program is just the latest amid a growing acknowledgment that foreclosure prevention efforts will fail to reach millions of borrowers over the next few years.
“This is a graceful way to move on with their lives instead of being foreclosed on and being evicted from their homes,” said Sanjiv Das, chief executive of CitiMortgage.
Nevada continues to have the highest foreclosure rate with one in 95 households receiving a filing in January. Arizona ranks second, with filings for one in 129 households.
…
Like I said, roughly 100k out of, what? A few million was it?
Yeah, that’ll help.
If only I joined the LDS Church, perhaps I, too, could be blessed with a foreclosure home, in a vain and futile attempt to prove the Lord was blessing me.
The New Economy
Foreclosure mystery:
Why can’t conservative Utahns afford their mortgage?
Utah missed the big property run-ups in California and elsewhere, but it’s No. 5 in foreclosures, according to a new RealtyTrac study.
By Laurent Belsie / February 11, 2010
What is it about Utahns?
Utah’s foreclosure problems may be caused by different factors than California’s or Nevada’s, making a national fix more difficult. What’s causing high foreclosures in your state? Let us know on Twitter.
Back during the housing bubble in 2006, when this Sandy, Utah, home was for sale, Utah struggled with high bankruptcy rates. Now that the real estate bubble has burst, it has nation’s fifth-highest foreclosure rate, according to a new report released Thursday.
Douglas C. Pizac/AP/File
During the housing bubble, they led the nation in bankruptcies. Now that the bubble is bust, they’re among the top states in foreclosures. A RealtyTrac report released Thursday showed they had the fifth-highest foreclosure rate among the states, with 1 in 231 homes receiving a foreclosure notice in January. That’s nearly double the national rate and not far from No. 4 Florida’s rate of 1 in 187.
The US foreclosure rate actually fell 10 percent from December’s level – and Utah was down nearly 12 percent – but RealtyTrac suggested they could surge again in coming months if last year’s pattern holds true.
It’s relatively straightforward why the housing bubble walloped Florida and the other Big Four foreclosure states (Nevada, Arizona, and California). Home prices there more than doubled since 2000 and people who stretched to buy those homes were pummeled when real estate values plummeted.
But Utah homes rose only half that much during the decade. What’s going on in Utah?
“It’s a lot of younger people who spent way, way beyond their means, absurd amounts of money trying to keep up with their folks,” says one Utah resident who helps counsel financially troubled families at his church. They’re “cool, nice, wonderful people, but an awful lot of them don’t know how to spend money very wisely.”
In mid-decade, when Utah was tops in bankruptcies, various commentators pinned the blame on Mormon religious and cultural practices, such as tithing, creating large families, buying homes at a young age, and as one critic put it: “the pressure in Mormonism to be, or at least appear, financially successful as proof the Lord is blessing them.”
…
‘They’re “cool, nice, wonderful people, but an awful lot of them don’t know how to spend money very wisely.”’
I know this description of many Mormons is true.
Is not knowing how to spend money a trait unique to Mormons? I don’t think so. However, large families and forced Tithing is.
I cannot imagine the financial pressure that would come with providing for 6+ kids while giving 10% off the top. I read that the average cost of raising a kid to college age is $175K. Multiply that by 6 to 10 and you have a real money drain.
“Is not knowing how to spend money a trait unique to Mormons?”
No. For that matter, I doubt the compulsion to impress the neighbors with your conspicuous consumption is unique to them, either, though I can say I personally know quite a few Mormons who seem especially preoccupied with the practice.
It’s a shame that Oly isn’t around to regale us with her stories of growing up Mormon in Utar-r-r.
Can a person be a mormon leader on Sunday and then work a business that promotes others to go into debt? These business being banks, real estate, cars, tvs, appliances, …everything else that can be bought on payments.
Seems that it would be a serious contradiction between what is preached and what is practiced.
Heck the LDS church even OWNED a bank until circa 1970: Zions Bank.
I have a MM account there. They pay good interest by today’s standards.
* February 22, 2010, 6:28 AM ET
Greece Fixation Plagues European Markets
By Dave Kansas
European financial markets are opening the week in tentative fashion. The main event – debt offering news from Greece – isn’t expected until the end of the week.
Shares in Athens are higher, up more than 0.5%. Among the big three, London is up a smidge while Paris and Frankfurt are down a bit. The euro, after a half-hearted bid to rally, is falling back against the dollar.
The weakness in European shares contrasts with strong action in Asia overnight. Japan, Korea and Hong Kong all rose more than 2% coming into Europe’s morning.
…
Good Morning HBBers.
Long-time lurker, infrequent poster (for what 4 years? wow blog times sure flies)…
…so I watched “Money as Debt Part 2: Promises Unleashed” (find it on you tube and take the time to watch) and was as impressed with it as I was with Part 1.
His take is that the housing bubble was not so much a psychological phenomenon as it was a natural outcome of fractional reserve banking and the very nature of having a private banking system.
I’ll be honest, I’m hard-pressed to find too many interesting debaters who disagree with me among my circle of friends.
Would love to see a discussion here about that video.
Agree? Disagree? Have at it. I love a good discussion. Or argument.
Maybe watch the video first before spouting - that would be helpful.
In the spirit of full disclosure: I am socialist-leaning but have Ron Paul’s “End the Fed” on my bedside table, and believe I am able to stretch my mind and ideas outside of my “San Francisco values” political leanings.
Here are some talking points:
1. WHO SHOULD CONTROL THE MONEY SYSTEM and HOW?
2. Do you agree that fractional reserve banking is THE main cause of inflation and will necessarily lead to PEAK DEBT, and eventual economic collapse?
3. Why is the idea of a STEADY STATE, no-growth economy not even on anyone’s radar?
4. Is it even possible to have a steady state economy and a for-profit monetary system?
His take is that the housing bubble was not so much a psychological phenomenon as it was a natural outcome of fractional reserve banking and the very nature of having a private banking system.
I wish people would make up their mind. All the past few weeks we kept hearing about how the Federal Reserve was a public entity! Now it’s private?
I’m confused.
How “private” can the Fed be when its CEO has to be confirmed by the US Senate?
The banking system is private. They are the ones that create money into existence. Watch the video.
I plan to when I get time.
Nevertheless:
The banking system is private. They are the ones that create money into existence.
- Seems there’s an implication that in order to create money an entity must be private. Not sure if or why that would be true.
- As DennisN states - how can an entity be “private” if its CEO must be confirmed by the Senate?
- I would add - how can an entity that’s given a legally-enforced monopoly on our money supply be considered private?
- Is there an implication in the video that the banking system should be made public? (i.e. presumably totally nationalized) IIRC the first video, while being extremely informational, also was tied to a socialist website. So I’m just wondering.
That all being said - it seems it’s pretty much splitting hairs. The Fed of course is a pseudo public/private entity, as are now a multitude of organizations - GM, AIG, Fannie, Freddie, etc. Key point being that it seems like these entities - the Fed in particular - are simply not subject to financial failure, to lawsuits, etc. Thus I would put for that for all intents and purposes the Fed - the very “cornerstone” of our banking system - is not private.
Unfortunately they seem to enjoy the opaqueness of a private entity, but the protection of a public entity - the worst of both worlds.
<>
No, governments can and have at various times been the entity to create money. Right now our private banking system (think BofA, Chase, etc.) creates money.
Only 5% of our money is actual physical money - the other 95% is digital - created by the banks whenever they make loans (”money is debt”).
And yes, of course the PTB are in cahoots with the private banking system. Duh. Socialism for the rich.
Right now our private banking system (think BofA, Chase, etc.) creates money.
And the Federal Reserve, right? Or am I just imagining for instance the $300B that they last year created out of thin air and gave to the government, which then cut checks to various other entities (states, corporations, people) with it? That $300B came from no BofA, Chase, etc. - it came directly from the Fed.
Death is a steady state.
The planet has a finite amount of resources. Constant growth is not sustainable.
If economic growth is contingent on consumerism, there will be a point where we hit peak resource use. In many cases we are already there. (salmon, water, etc.).
If economic growth is dependent on buying and selling digital money (gambling), what kind of society is that and who benefits?
The planet has a finite amount of resources. Constant growth is not sustainable
Theoretically not really true. For instance computer software is a component of growth. If someone writes new software for a computer game, providing the benefit of new entertainment, that’s economic growth. Such a thing could consume zero resources, if say such person did this with a PC being recharged with solar cells. In that respect actually the planet doesn’t have a finite set of resources - it’s actually acquiring additional energy from solar radiation constantly. You might think this is insignificant but it’s not. It manifests itself in the form of rain (i.e. all hydroelectric power is actually just a form of solar), and even in the form of fossil fuels, which had their origins in solar energy. We just happen to be using them up faster than they were created - but theoretically this doesn’t have to be the case.
In the end - resources aren’t actually “consumed”, they are just changed from one state to another, where the new state just isn’t as useful as the old state. As technology advances however hopefully we can get to a point where:
- We do less transforming from useful to not-so-useful states
- We can make the not-so-useful states more useful (i.e. recycling)
such that eventually hopefully we can get to a break even point, where resources are created as fast as they are used.
We’re a long, long way away from that point (probably more than 500 years still), but I think theoretically there is such a point.
Why is the idea of a STEADY STATE, no-growth economy not even on anyone’s radar?
I think it is on the powers that be’s radar and it scares them because a no growth economy would require real productivity as opposed to funny-money finance paper shuffling for them to increase their wealth.
Why is the idea of a STEADY STATE, no-growth economy not even on anyone’s radar?
I think it is on the powers that be’s radar and it scares them because a no growth economy would require real productivity as opposed to funny-money finance paper shuffling for them to increase their wealth.
+1
Part of the problem is - our very growth itself is measured in $$!!! How absurd is that? Thus all you have to do to stimulate “growth” is to add $$ into the system!
I realize that there is no easy alternative. Just thought I’d point out how inherently bad the existing mechanism is, by its very nature.
The idea he puts forth is that the very nature of our monetary system (for-profit fractional reserve banking) makes a steady state economy impossible.
Inflation and debt and constant growth are necessary or the system collapses.
Except when you hit up against peak consumption, peak debt, no more natural resources. Screwed either way.
“Why is the idea of a STEADY STATE, no-growth economy not even on anyone’s radar?”
As long as population grows, the economy should grow with it.
“Do you agree that fractional reserve banking is THE main cause of inflation and will necessarily lead to PEAK DEBT, and eventual economic collapse?”
Nope. Any monetary system that is flexible enough to handle a dynamic economy will also allow human failings to create boom/bust cycles.
A for profit banking system should act as a check and balance against overlending. As the ability of a borrower to pay becomes more suspect, the lender should reduce the amount of debt available and raise the price (interest rates). Obviously the system broke down (short term thinking for bonuses and TBTF status, at a minimum).
According to the maker of that video, the banks cannot stop lending money, nor can they even slow down their lending - in fact, lending and debt has to necessarily increase exponentially.
Please watch the video and THEN explain how you think banks can provide checks and balances (ie., regulate themselves) given the nature of our monetary system and how money gets created.
It explains why inflation in a way that makes more sense than anything else I’ve ever read.
If you don’t agree with his explanation of the root cause of inflation, give me another convincing theory.
How is it then that we had private banking - with fractional reserve lending - in the United States for about 120 years, with economic growth, yet without significant inflation?
Does the video explain that?
P.S. Sorry not meaning to be argumentative - perhaps the key is that it’s describing our “current monetary system”, in which case I would agree - our monetary system is such that it requires (or perhaps “encourages” is a better word) constant inflation to survive. That’s exactly why we have a broken system, and need to return to a real (i.e. non-fiat) one.
Please look up the 1st Bank of the United States and the 2nd Bank of the United States.
Where do TTT and LS stand on the Volcker Rule?
* LETTERS
* FEBRUARY 22, 2010, 9:16 A.M. ET
Congress Should Implement the Volcker Rule for Banks
We who have served as secretary of the Treasury in both Republican and Democratic administrations write in support of the proposed legislation to prohibit certain proprietary activities of commercial banking organizations—the so-called Volcker rule, as part of needed financial reform (”It’s Time for Financial Reform Plan C,” by Alan Blinder, op-ed, Feb. 16).
The principle can be simply stated. Banks benefiting from public support by means of access to the Federal Reserve and FDIC insurance should not engage in essentially speculative activity unrelated to essential bank services.
Hedge funds, private-equity funds, and trading for speculative gains are activities carried out by thousands of nonbanking firms. These firms and funds are and should also be free to compete and to innovate. They should, like other private businesses, also be free to fail without explicit or implicit taxpayer support. Those few nonbank firms that present systemic risk should be subject to reasonable restrictions on capital, leverage and liquidity.
We fully understand that the restriction of proprietary activity by banks is only one element in comprehensive financial reform. It is, however, a key element in protecting our financial system and will assure that banks will give priority to their essential lending and depository responsibilities.
We urge the United States to take the lead in the forthcoming G-20 meeting and other appropriate forums to achieve broad agreement on this principle among the leading financial centers.
W. Michael Blumenthal
Nicholas Brady
Paul O’Neill
George Shultz
John Snow
hear, hear
Since Congress and the WH are paralyzed by Wall Street banking lobbyist pressure from enacting substantial financial reform, it is up to the American voter to make this happen.
Good luck with that!
MarketWatch First Take
Feb. 19, 2010, 12:20 p.m. EST
Polls support Volcker Rule
Commentary: Voters want an end to proprietary trading by banks
Home foreclosure troubles only hibernating
Volcker Rule dead? Not so fast …
By MarketWatch
NEW YORK (MarketWatch) — You’ve heard of zombie banks, how about zombie bank reform?
The legislation in question is the so-called Volcker Rule, the president’s proposed limit on bank activities. After all but being thrown off Capitol Hill, Paul Volcker’s plan to cut proprietary trading, hedge funds and private equity out of banks appeared nearly dead.
Sen. Richard Shelby, R-Ala., might want to take note: people like the Volcker Rule.
A poll released Friday shows 68% of respondents said they support proposals to separate these businesses from banks. The poll, conducted by the CFA Institute of its members, also found that 58% of respondents support measures to rein in banks considered too big to fail. See CFA poll results (PDF file).
The poll of 1,471 respondents also suggested they’re unhappy with the pace of reform in Washington: 67% said the government had made “little progress” in reforming Wall Street, as opposed to just 24% who said “some progress” had been made, CFA said.
“They want banks to focus on their specialty — taking deposits and making loans,” Jim Allen, CFA Institute’s head of capital markets policy, said in a statement.
The poll may be a warning to Sens. Shelby, Christopher Dodd, D-Conn., and Bob Corker, R-Tenn., all of whom who have expressed objections to the plan, that voters are unhappy with the pace of change and may hold them or fellow lawmakers running for reelection accountable.
Just when many of them thought their political lives were safe, along comes zombie reform.
…
quick crank up the GS propaganda machine.
Tell the crowds that although Shelby does not favor this legislation it’s because he want’s stronger rules and stronger enforcement. Then wait for the bill to fail and sweep the whole mess under the rug. Then thanks to the Supreme Court, give Shelby 20million for his campaign.
Will the U.S. housing market come back soon, now that the Souper Bowl is behind us and the red hot spring time sales season is right around the corner?
MarketWatch First Take
Feb. 19, 2010, 12:16 p.m. EST
Foreclosure troubles only hibernating
Commentary: Seemingly positive data doesn’t mean it’s spring time for housing
By MarketWatch
CHICAGO (MarketWatch) — You would like so desperately for our housing woes to end that you want to believe the latest numbers on mortgage delinquencies and foreclosures signal a turnaround in the fortunes of American homeowners. But the numbers just don’t ring true.
The Mortgage Bankers Association on Friday said the delinquency rate for loans on one- to four-unit properties in the U.S. fell to 9.47% in the fourth quarter from 9.64% in the third quarter, a sign the group said that the mortgage crisis is easing. The percentage of homeowners entering the foreclosure process also fell from the third quarter. Read more on mortgage foreclosures and delinquencies.
Home prices not rising anytime soon
Expiring tax credit for home buyers pressured home sales in December and then the credit was extended, so we’re in uncharted territory in terms of volatility, according to Trulia CEO Peter Flint, who says prices aren’t going up over the next six to 12 months. Stacey Delo reports.
Both of those figures, though, were higher than they were in the fourth quarter of 2008. And even if you concede the MBA’s point that the delinquency numbers rarely show a fourth-quarter drop (the Scrooge effect, you’d suppose, of bankers liking to foreclose ahead of Christmas and have their books in better order for the new year), how much solace can you take in the fact that we still have more than 15% of all U.S. mortgages either in arrears or in foreclosure?
…
Ron Paul was on Squawk Box this morning.
Outstanding!!
He made Kernan, quick and Quintanilla look really dumb..
He said we should have suspended the income tax for 3 or 4 years instead of bailing out the banks.
“Mr. Paul, what should we do if Iran gets a nuclear bomb?”
Answer ” What do we care. they’ve never done anything to us. THey’re surrounded by countries with nuclear weapons. The soviets and the chinese had thousands of nuclear weapons, we traded and negotiated with them.”
“I’m sorry Mr. Paul, we’re out of time, but we would really like to continue this conversation.”
(yeah, right!)
“What do we care. they’ve never done anything to us. ”
I guess he never heard about all those IEDs with components from Iran that is killing US soldiers in Iraq? Is it really that difficult to believe that Iran could pass nuclear material to AQ or the Taliban?
I could never, never vote for him, even if I agree with some aspects of his view on the bank bailouts.
I am American to the core but wouldn’t you want to drive a foreign invader from your area by any means necessary? An extreme scenario strictly for argumentative purposes. China invades the US after we tell them to pound sand on our debt. Wouldn’t you smoke as many of these invaders as possible? I know I sure would.
With deference to Step, I don’t buy our stated mission objective over there. Me thinks it has something to do with “Texas Tea”.
The US should not have invaded Iraq, that I agree. But how difficult is it to imagine that once Iran has the bomb it could pass that to AQ or groups sympathetic to AQ? If Ron Paul doesn’t get it, and I don’t think he does, he doesn’t deserve to be any where near the White House.
“With deference to Step, I don’t buy our stated mission objective over there. Me thinks it has something to do with “Texas Tea”.”
It’s not about “Texas Tea”; think of Israel’s security.
We could have developed nuclear energy back in the seventies as did France, but in Israel’s interest we remain in the region soaking up the region’s energy resources at high cost so that they can’t afford to make use of it internally since economic development eventually leads to funding terror plied against Israel.
Afghanistan and Iraq will host permanent U.S. airbases effectively surrounding Iran in order to protect Israel from the growing threat in the region. Without U.S. backing Israel would be forced to sign peace agreements, but with U.S. backing Israel can embark on its creeping expansion policy of restoring King David’s historical borders.
I personally don’t care what Israel does to their neighbors, and likewise, I don’t care what their enemies do to them. However, I resent having to support this theological nonsense with family in the military, and our U.S. government politically occupied by rabid Evangelicals and Jews.
I don’t see any way that Iran gives a very difficult and expensive nuke to a bunch of yahoos out in the wasteland.
While that might seem like a good plan, it is likely they would blow themselves the hell up.
It is also probably the bomb will be large and unweildy. Might be that a nuke gets smuggled into a container/fish ship and into a US port. Probably port of long beach or somewhere in NJ. Then we will have a major situation.
Our current plan seems to be to bury our heads in the sand.
Now, if some yahoos got caught trying to do some such thing, well, we might not place nice anymore. Then we might start carpet bombing everything in the middle east that is bigger than a hut.
Guys, time is on our side when it comes to Iran. Just leaving it alone is a win-win for us.
-Iran gets nukes, thereby reigning in some of our more grandiose contingency plans for the use of military force in the region.
-Saudi Arabia, Kuwait, etc. get scared $hitless, start converting petrodollars into F-15s, F-23s, stuff to hang off the wings of them, Patriot missiles, etc.
-With any luck, even the Israelis might start to put the brakes on some of the things they do to kick the hornet’s nest.
Unlike the North Koreans (who IMO, are certifiable), the Iranians aren’t crazy. They’ve just noticed that we tread carefully around our nuclear armed opposition.
If Ron Paul had had his way we wouldn’t have US soldiers in Iraq getting killed by IEDs, because we never would have invaded the place. History will record that that was the costliest strategic blunder in U.S. history, and for what?
they’ve never done anything to us.
Not sure I’d go so far as to say that. Holding 53 Americans hostage for 444 days isn’t exactly “nothing”.
(I realize that was 30 years ago, but he said “never”. I hate blanket statements.)
You might want to read up a little bit: http://en.wikipedia.org/wiki/Iran_Air_Flight_655
How does killing 66 children compare with holding 53 people hostage for a year? Sorry, forgot that it was an “honest mistake”!
Packy,
I would suggest that we brought much of that on ourselves by installing a puppet regime in that country. For “Black Gold” I’m sure.
Yes I liked the Beverly Hillbillies as a child.
Not to mention that we engineered the overthrow of the Mossadegh regime in the 1950s. The Iranians have never forgotten that.
Yes, though the people taken hostage were diplomat civilians, not CIA operatives.
There were Marines taken hostage along with the civilians. The Marines were the embassy guards.
Suspending the income tax would have been a great boon the economy. Of China.
Oh you mean Americans are too stupid to know what to do with keeping more of what belongs to them in the first place?
So it’s better for a fuzzy headed bureaucrap to take 33% of one’s money and spend it on the study of mating habits of snail darters.
I get it.
Suspending the income tax (instead of a banker bailout), would have had the benefit of letting the income earners keep (and spend) some of their money, while the courts searched the wreckage of an investment bank crash for possible survivors.
But our buddies in the government decided to let the banks fix their balance sheets by profiting on the spread between free money (to them) and jacked up interest rates on everyone else. The fact that an income tax suspension/cut wasn’t even discussed speaks volumes….
Eff the rest of the country, as long as GS, BOA, and JPM survive.
Not at all. I’m just saying that ending the income tax for a few years would not have as great a stimulative impact because it does not force consumption of products that would require an increased need for American labor.
Man, this is rich, coming from the fat mouth of another tax cheat.
Top House tax writer opposes administration’s debt commission.
The Hill
House Ways and Means Chairman Charles Rangel (D-N.Y.) blasted the creation of President Barack Obama’s debt commission and questioned its constitutionality since the panel could replace Congress in making tax new law.
“If they expand the idea of a commission, it could reach the point that you don’t need the Congress,” he said. “I think it is a bad thing constitutionally, I really do.”
Senate Finance Chairman Max Baucus (D-Mont.) also opposed legislation creating a debt panel, which never passed Congress. His office did not respond to inquiries on whether the chairman supported a panel created by the White House.
Timmmberrrrr!
Equities rolling over now! (IMHO)
PB,
I think we’ll get a chance to see if 10 k is really the line in the sand.
10k or bust says it all!
Have you lost faith in the PPT?
The Thousand Mile Commute - It Lasts Longer:
JANESVILLE, Wis. – In the early dawn, after another week building cars, Michael Hanley leaves his job in Kansas. He quickly zips into Missouri, then heads up a ribbon of highway past grain silos and grazing deer, across the frozen fields of Iowa, over the Mississippi River and into the rolling hills of Wisconsin. Finally, he pulls into his driveway — 530 miles later.
It’s one heck of a haul: more than 1,000 miles roundtrip, 16-plus hours of driving, every week.
“I like to say I gave up an eight-minute commute for an eight-hour commute,” he says wearily, running a hand though salt-and-pepper hair as he watches his two sons play basketball for the first time this season.
After the aging General Motors plant where he worked for 23 years was idled about a year ago, Hanley faced a Hobson’s choice: Stay with his family and search for an autoworker’s salary ($28 an hour) in a county where more than 40 percent of its manufacturing jobs disappeared from 2006 to 2009. Or hang on to his GM paycheck and health insurance and follow the job, no matter where it leads.
in a county where more than 40 percent of its manufacturing jobs disappeared from 2006 to 2009.
OMG! Please tell me that can’t be right.
I believe the 40%, but not the 2006-2009.
Keep in mind this is only one county we’re talking about. In many counties in the U.S. shuttering a single plant, or portions of multiple plants, can easily cause a 40% hit.
Keep in mind this is only one county we’re talking about.
Thank you, I just skimmed it and misread it as country, whewwwww.
Figured that might be the case - it threw me at first too.
Right. When I was in Janesville for a couple weeks, years ago, it seemed like almost everybody worked in the GM plant. When I heard that it was closing, I couldn’t imagine what that would do to the community.
According to today’s Janesville Gazette, they’re losing another 100 jobs soon.
I wonder if he makes it across the Mississippi every time. I used to drive Madison WI to KS a few times a year and I got stuck a couple of times in Dubuque because the bridge was closed due to weather.
They’ve built another bridge across the Mississippi since then.
Going to and from Janesville every week, I guess he would cross at Davenport on an interstate bridge rather than being on the smaller US highway I took to and from Madison.
Are some bridges relatively weatherproof?
BTW, Cowtown, are you in Wichita?
Yes. It’s cold and windy.
I grew up northwest of there. That KS wind can be a bit@h.
My husband was born and lived in KS until he was 14. The town he was born into had a population under 400 . His mother knew what kind of trouble he was in, prior to his arrival home. Maybe what WS needs is some of that small town accountability.
being unfamiliar with the term, i looked it up..
A Hobson’s choice is a free choice in which only one option is offered.
In other words, it’s take it or leave it.
But this guy had plenty of choices.. to find a job at home or commute 8 hours… or move the family.. or whatever.
I have no opinion on if he made the “right choice”.. his priorities are whatever they are.. but I do resent these human interest stories that victimize people by claiming they are powerless or have been caught in the wheels and are chewed up..
——
He was offered a termination buyout package by GM but chose not to take it.
Almost his whole family worked for GM..
“Hanley’s father and brother worked there. So did his father-in-law, two brothers-in-law and an assortment of uncles, cousins, nieces and nephews.”
…and all knew GM was in decline for decades. He “returned to college to complete two credits he needed for an accounting degree”..
“.. his brother and two brothers-in-law – also GM workers, and now his roommates” (in Kansas).
This guy had plenty of choices and has it pretty good compared to someone who lacks the union job, pay, bennies and connections.
Are you saying that being out of work in a region where 40% of the jobs (and probably the only decent paying one) were gone is some kind of choice?
Yes, it WAS a Hobsons choice. Drive the long commute or become poor indefinitely.
..Are you saying..
not exactly.
Among other things, I’m saying that this guy was in a better position than almost anyone else who found themselves unemployed in a region where 40% of the jobs disappeared.
The choice of “becoming poor indefinitely” wasn’t even on the radar.
It’s tough to find details of the early retirement packages GM has offered.. i guess the UAW is embarrassed to publicize how generous they are… but some of it is online. Cash / voucher payout seems to vary within and among the Big Three from about $90K to $125K, plus the other retirement benefits..
——————
“Because of the benefits, the working conditions, the pay … it was the coveted job in the area,” he explains. “In many cases, people, because of who they knew, were able to walk in and get a job there. That created animosity.”
“There are those people who worked there who have lost something they thought would be around forever and provided them with a real good lifestyle,” he adds. “But there are others, I would say, who were jealous of folks who had that opportunity. And they don’t have a lot of sympathy for the stress the (GM) people are feeling these days.”
“…Among other things, I’m saying that this guy was in a better position than almost anyone else who found themselves unemployed in a region where 40% of the jobs disappeared….”
True, and that’s the only reason he even had a choice.
But it was certainly a one sided choice. Because once a region looses it best paying industries, you either move, or wither.
Hobson’s.
Sen. John McCain: I was misled on bailout
Feb. 22, 2010 ~ The Arizona Republic
Under growing pressure from conservatives and “tea party” activists, Sen. John McCain of Arizona is having to defend his record of supporting the government’s massive bailout of the financial system.
In response to criticism from opponents seeking to defeat him in the Aug. 24 Republican primary, the four-term senator says he was misled by then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.
Looks like JD Hayworth (the Republican primary challenger) is really rattling McCain.
well then…he should defend his record of being an idiot.
I love how politicians use the active voice when boasting about their achievements and the passive voice when referring to their screw-ups. e.g.
I invented the internet.
We fixed health care.
vs.
Mistakes were made.
I was misled.
if that is true…isn’t it a federal offense to lie to a congressman?
not even sure if “under oath” is a requirement.
I heard McCain say during the debates that he wanted to offer “mortgage assistance” to seniors!
Here’s the exact, nonsensical words he used:
You know that home values of retirees continues to decline and people are no longer able to afford their mortgage payments. As president of the United States, Alan, I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes — at the diminished value of those homes and let people be able to make those — be able to make those payments and stay in their homes.
It’s hard to believe someone who said this in direct response to a question during the second debate was “misled.” He knew EXACTLY what he was saying.
..that answer’s pretty bad.. but it was impromptu.. which may provide some insight into why we rarely elect the wisest or best people for the job.
Candidates are required to think fast and answer any question quickly and with confidence. The answer need not make sense, nor must it be correct or even reasonable, because voters are impressed by appearances and care little about substance.
As president of the United States, Alan, I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes
And people still think there’s any real difference between Republicans and Democrats? This clown was the GOP Presidential candidate!
SS,
The US Gov deficit has tripled in one year. That’s a huge difference IMO.
McCain sucks, I know all too well, but he might be the best choice again and I really hate to say that.
“It’s hard to believe someone who said this in direct response to a question during the second debate was “misled.” He knew EXACTLY what he was saying.”
Plato would explain it: Crippled body, crippled mind.
so what he’s saying is that the 99% of constituents who called to try and get the TARP bill killed, were smarter than congress.
It was pretty obvious that this bill was misrepresented, including the original which had the clause that nobody in the fed or treasury could be held accountable in any court for what they used the money for.
And now, after he had ignored those 99% of constituents, he’s appealing to them that he was mislead. Why would we want someone who is so easily mislead, and dumber than 99% of his constituents in office?
I just couldn’t bring myself to vote for McLame, and voting for Obama BinLyin was completely out of the question. I am hoping my quandry was typical of thinking people in this country.
“…Obama BinLyin…”
+1 LMAO!
Why would we want someone who is so easily mislead, and dumber than 99% of his constituents in office?
Because the brilliant and beautiful maverick Sarah Palin would have been the brains of the operation.
We would’ve been so screwed. At least now we have an actual Democrat to blame instead of a RINO running as a Democrat.
So he’s not a RINO after all - he’s merely stupid. Like Hillary saying she was “misled” on the invasion of Iraq. And this was the Republican standard-bearer?
Hbb predictions
NEW YORK (Reuters) – More generations are living under the same roof and the trend will deepen as families grappling with near double-digit unemployment share expenses, a study showed on Monday.
Demand is escalating for multi-generational housing as buyers scale down during the deepest housing crisis since the Great Depression, according to a survey by Coldwell Banker Real Estate in Parsippany, New Jersey.
Thirty-seven percent of the company’s real estate agents polled in January said that in the past year, buyers were increasingly shopping for homes that fit more than one generation. Almost 70 percent of the agents said they expect economic conditions will drive still greater demand for this type of housing over the next year.
It’s not just families that are moving in together. Students, workers without families, and I suspect even families that aren’t related. Migrant workers have been doing this for ever, now that the middle class in this country is being reduced to poverty you will see more and more of this.
When I was growing up, I rode the school bus past a house that was owned by several teachers. None of them were able to afford a house on their own, so they bought as a group.
Nothing wrong with sharing, folks.
Here is a prediction (just to be clear, I am making it up off the top if my head at the moment):
Some day soon, we will read a story out of Utah showing an increase in the number of families reverting to traditional polygamist household arrangements to increase their chances for financial survival.
I’ve wondered about that sort of thing, especially since our society is now so accepting of other types of “alternative” arrangements. After all, if you describe household as “two lesbians with a male friends-with-benefits roommate” nobody is going to say a word :-).
“of” not “if” (I am keyboard-challenged today…)
Wifes # 5/6/7/8/9 @ ages 12/13/14/15/16 ….to Men ages 35-78 …just isn’t going to stand the legal environment…going forward in America., imho.
How about wives aged 20-35 to men aged 30-50? Because I am pretty sure there are some economic arguments in favor of seeing that sort of “recoupling” in the Utah back country…
There are a lot of single boomers without children. For those who remain without children (don’t adopt), there is talk of creating communes.
I think I will “adopt” a security-cleared 30-something!
There are a lot of single boomers without children.
Yours Truly being one of them.
Muggy & everyone looking to buy-
Make sure you get a C.L.U.E. (ChoicePoint -national database) report from the seller as part of the contingencies, early on. Only the seller can order it.
You want to make sure the house isn’t on a homeowners ins. black list. BTW, it’s 5 years of current history of claims that show up.
Hey, thanks for that. I’ll pass it on to my tenant, who is seriously house-hunting now.
You’re welcome, hip. It’s competitor is less known, “A-PLUS”. We’re looking at REO’s and people aren’t too pleased with us. They like to get you emotionally attached before the agent brings up this possible deal breaker, usually as “It’s a good idea..yada,yada,…” I’m licensed in California (worked for developer). Premiums could be sky high, if at all.
Dumping fuel on the fire and turning off the fire alarm had “minimal effect” on the buildings structural situation?
Feb. 22 (Bloomberg) — Goldman Sachs Group Inc. said
The contracts “had a minimal effect on the country’s overall fiscal situation,” Goldman said in the statement. “These transactions were consistent with the Eurostat principles governing their use and application at the time.”
Goldman said it then arranged new cross-currency swaps and restructured its other swaps with Greece at a historical exchange rate in December 2000 and June 2001. The transactions reduced the country’s deficit by 0.14 percentage points and lowered its debt as a proportion of gross domestic product to 103.7 percent from 105.3 percent, according to Goldman.
. Goldman Sachs made about $300 million from the Greek swaps, the New York Times reported Feb. 14.
we should start using boxes of ziti as our unit of measure…like the Sopranos.
one box of ziti = $ 1,000.
so goldman made 300,000 boxes of ziti.
Went to an open house yesterday. Ridiculously overpriced (what else is new?), but it was local and I was curious as I grew up in an identical house.
1100 sq. ft. Less than .20 acre. Shared driveway (potential snow shoveling drama). Small rooms. In pretty good shape. Redone bathroom (only 1 bath). Kitchen in good shape. Newer items (heater, air, windows) - replaced in 2002. But, the kicker on that timeline is that the current owners bought it in 2005 for $220,000. The realtor was trying to tell me how much $$ they put into it for all this fancy, newer stuff. I’m like, “Huh? How is all that done in 2002, but they bought in 2005?!” I didn’t even bring it up because I’m not interested in small talking with realtors.
Asking price for this? $260,000. Good luck with that. (Though seems my area has no shortage of greater fools, which continues to be my problem.)
was watching suze orman show with the wife this past weekend. they had a couple with two children. the husband was 38 and the wife was 33. they had $ 15K of credit card debt with some of their rates at 29%. their problem?
help them find away to use the $ 8K housing credit to buy a home.
Suze…in a very round about nice way was basically telling them go eff themselves.
it was entertainment.
Orman makes my skin crawl. SNL nailed her schick. http://www.hulu.com/watch/99690/saturday-night-live-update-thursday-suzie-orman
My sister just purchased a similar house in Florida. Actually, it’s about 1400 sq ft. In good shape, but it was a foreclosure. Asking price? $49,000.
Where to cut?
HARTFORD — Billions in state spending is essentially untouchable — the legislature and the governor can’t cut a dime of it.
The outlays include payments on the state debt, Medicaid and pension contributions. Federal consent orders mandate certain spending, too. The federal stimulus act also precludes some budget cuts for the time being.
The governor’s Office of Policy and Management estimates the untouchables account for more than $8 billion of this year’s $18.6 billion state budget.
This estimate doesn’t reflect a concession agreement with state employee unions that restricts or prevents layoffs through the 2011 fiscal year. The state’s payroll is about $3 billion, according to budget documents.
Having so much of the state budget off limits complicates efforts to close a stubbornly persistent budget gap.
“We are not cutting off $18 billion,” said Rep. John A. Geragosian, D-New Britain, the House chairman of the Appropriations Committee. “We are cutting off $6 billion or $7 billion.”
This year’s budget is running a projected deficit of more than $500 million, and the governor’s budget office calculates next year’s $18.9 million budget is nearly $700 million out of balance. Other projections have the shortfall reaching $3 billion to $4 billion in two years.
Which is why parks, libraries and other services get shafted while cops and firefighters are safe.
Coming to a big box store near you
An apparently well-organized group of thieves using modern communications technology made off with 80 pairs of Levi’s jeans valued at $4,500.
The Madison Police Department said the four suspects used Bluetooth technology to communicate with each other during the theft, which happened about 3:30 p.m. Sunday at the JC Penney store at East Towne Mall.
Spokesman Joel DeSpain said the theft was similar to thefts at JC Penney stores in other areas.
“Video surveillance cameras showed four Hispanic males wearing Bluetooth headpieces entered the store about 3:30 p.m.,” DeSpain said. “The group used a shopping cart from a different store when they entered JC Penney, each using a different door.”
According to police, the suspects removed sensor tags from the jeans before departing with the stolen goods.
Store security described two of the suspects. One is a Hispanic male, 25-35 years old, 5′8″ tall, 170 pounds, black hair, wearing a dark coat, blue jeans and a phone piece in his right ear. The other is a Hispanic male, 25-35 years old, 5′10″ tall, 170 pounds, wearing sunglasses, a black coat and a skull cap
Big box stores have worked in an environment where the majority of Americans felt well off. A small number of poorly paid people could guard massive quantities of goods. This model will fail in the coming years. On the plus side more minimum page jobs.
Levi’s cost $56 a pair now?
Part of that I’m sure is just for that “JC Penney experience”. You can’t put a price tag on that kind of amenity.
Maybe they were designer jeans, and not 501’s (which can still be pricey).
One of the perps was wearing a skull cap? A stroke of genius. Store security probably wouldn’t touch him if they thought he was a Muslim. A discrimination lawsuit would’ve been sure to follow.
Judge OKs “half-baked” SEC-Bank of America accord
NEW YORK (Reuters) - Bank of America Corp (NYSE:BAC - News) won a judge’s approval of a $150 million settlement with the U.S. Securities and Exchange Commission over the Merrill Lynch merger, ending an embarrassing public battle between the largest U.S. bank and the nation’s top securities regulator.
U.S. District Judge Jed Rakoff nevertheless called the settlement “half-baked justice at best,” and in criticizing it may have given new ammunition to the many lawsuits over the merger, including litigation by New York Attorney General Andrew Cuomo.
Rakoff said it was clear that the bank had failed prior to a shareholder vote on the merger to adequately disclose the scope of Merrill’s “historically great” losses, and that it had authorized Merrill to pay as much as $5.8 billion of bonuses.
U.S. District Judge Jed Rakoff nevertheless called the settlement “half-baked justice at best,” and in criticizing it may have given new ammunition to the many lawsuits over the merger, including litigation by New York Attorney General Andrew Cuomo.
Uh-oh, look out. Cuomo shoots with real bullets.
And, as far as we know, he lives a much cleaner personal life than Mr. Spitzer.
Heard on the radio this morning, an ad from a local mortgage company touting low-down, low-cost mortgages to Native Americans. My best guess, with help from Google, is that they’re trying to write some Section 184 loans.
That program has been in place since 1992 but this is the first time I’ve ever heard it advertised.
Good for them…(Hwy wonders who the Bank sends out to the Rez to staple a NOD on the front door…that’s guarded by x4 angry dogs)
* 2.25% down payment requirement for loans over $50,000;
* 1.25% downpayment requirement for loan under $50,000;
* No monthly mortgage insurance
* A one-time, 1% loan guarantee fee that can be added to your financed loan
* HUD underwriters and Loan Guarantee Specialists are familiar with the unique issues and circumstances that Native Americans face when trying to obtain a mortgage in Indian Country.
Lennar to terminate $1billion credit facility
South Florida Business Journal -
Looking to save $8 million, Lennar Corp. terminated its $1.1 billion senior unsecured credit facility with lenders – including JPMorgan Chase – shifting to cash collateral for its letters of credit.
The company (NYSE: LEN), which determined it would be more cost-effective to enter into cash-collateralized letter of credit agreements, has agreements with a capacity of $225 million with two banks, according to a Friday filing with the U.S. Securities and Exchange Commission.
Miami-based Lennar, one of the country’s largest homebuilders, will use $164 million to replace existing letters of credit issued from the credit facility.
Lennar also disclosed in a Feb. 10 filing a series of strategies to ramp up home deliveries. Recent purchases of “well-located home sites” that are “expected to generate significantly above average gross margins” include sites in Homestead; Baltimore; Raleigh, N.C.; Charlotte, N.C.; San Francisco and San Antonio.
..Recent purchases of “well-located home sites”…
that’s gotta be some of the cream in that $1 billion worth of failed bank assets Lennar bought from the FDIC a couple weeks ago..
Lennar also disclosed … a series of strategies to ramp up home deliveries
Man, they just don’t stop
Forbes names Pittsburgh best housing market
Pittsburgh Business Times
Forbes Magazine named Pittsburgh the best place to buy a house on its new list of America’s Best Housing Markets.
Using the Housing Opportunity Index, a metric created by the National Association of Home Builders and Wells Fargo, the magazine said Pittsburgh’s appreciating prices, affordability rating and low number of foreclosures, which help keep prices stable, all factored into the city’s ranking.
Forbes said the decline of what it called Pittsburgh’s “manufacturing-dependent economy,” helped the region’s real-estate market avoid the sharp increase in prices that occurred in other parts of the country.
Other cities in the top 10 included Louisville, Ky. (2nd); Houston, Texas (3rd); Minneapolis-St. Paul (4th); Indianapolis (5th); and Columbus, Ohio (tied for 6th).
Pittsburgh is now quite dependent on education and health care. And, as numerous HBB-ers have suggested, these are the next bubbles to pop.
Pittburgh…ah, the armpit of the nation.
Look up “axilla” in Wikipedia and take a look at the model’s picture showing her axilla (armpit). Yikes !!!
N.C. commissioner of banks: State Home Foreclosure Prevention Project helps 3,000 keep homes ~ Triangle Business Journal
The state’s home foreclosure prevention project has helped 3,000 North Carolina residents keep their homes and has counseled 8,000 more, the North Carolina Office of the Commissioner of Banks reports.
“Our program is helping home owners save their homes,” says Deputy Commissioner Mark Pearce. “However, the down economy continues to push more home owners toward foreclosure. I urge home owners who may be struggling to pay their bills for the first time to call for free assistance.”
The State Home Foreclosure Prevention Project, which uses 34 local nonprofit counseling agencies across the state and one national nonprofit phone counseling agency, has prevented foreclosures in 99 of North Carolina’s 100 counties, according to the commissioner of banks’ office.
The office also estimates that the impact of avoiding foreclosures on these homes has prevented almost $270 million in neighboring property value declines and financial system losses.
Last year, there were more than 60,000 foreclosure filings in North Carolina, and that number is expected to increase in 2010 due to the economic downturn and job losses.
Continental to lay off 600 more reservation agents
Houston Business Journal -
Continental Airlines Inc. confirmed Monday that it will be laying off another 600 reservation agents as travelers continue to use the Internet more to book and manage their flights.
This is a second round of layoffs in less than a year among the Houston airline employees who help travelers make flight arrangements via telephone.
Last May, Continental (NYSE: CAL) cut 500 reservation agent positions and closed its Tampa, Fla., call center.
In this most recent round, the airline cited a 15 percent decline in call volume due to traveler preference of booking and managing their own flights through its online presence at Continental.com.
In this most recent round, the airline cited a 15 percent decline in call volume due to traveler preference of booking and managing their own flights through its online presence at Continental.com.
A trend that has been going on since use of the Internet became widespread.
Might this be a “15 percent decline” in the number of people flying, rather than a 15% decline in calls?
Are saying that a 2 hour wait that includes the intimate pleasure of a total stranger inspecting your body isn’t fun and enjoyable and detracts from the flying experience?
..as travelers continue to use the Internet more..
yeah.. as if you’re not forcing it on us..
I for one avoid booking on the internet. I want to talk to a human being because I’ve always got some question or other about the fare, seat availability or whatever, and web pages are not always current.
I mentioned the other day I booked by phone with AAirlines (my first experience with them) and at the end she recites the prices, fees, taxes etc and says “plus a $20 telephone reservation fee”.
That $20 fee was listed as a separate charge on my CC statement for some reason..
The weak hand of justice
DEFERENCE
The judge said he accepted the settlement despite its “very modest punitive, compensatory, and remedial measures that are neither directed at the specific individuals responsible for the nondisclosures nor appear likely to have more than a very modest impact on corporate practices or victim compensation.
“While better than nothing,” Rakoff went on, “this is half-baked justice at best.”
Rakoff particularly faulted the $150 million fine, which he called “modest” and said “penalizes the shareholders for what was, in effect if not in intent, a fraud by management on the shareholders.”
The judge also accepted the settlement though Charlotte, North Carolina-based Bank of America rejected his proposal to let the SEC and the court help choose a pay consultant.
Rakoff nevertheless said that it is not judges’ role to “impose their own preferences,” and that he would exercise “self-restraint” in declining to block the settlement. The judge was appointed to the bench by President Bill Clinton.
He’s adopted the Obama approach. Stern rhetoric but a slap on the wrist for perpetrating a gargantuan fraud. Justice is for those who pay.
IIRC, here’s what went down.
BoA told the feds that they’ll have to put up more money if they want BoA to go through with the purchase Merrill Lynch.
Boa’s leverage was that the feds were in a desperate situation, and wouldn’t want to take the chance Merrill went down, due to the negative affect that might have on the economy.
The feds came up with the money. BoA then applied that money (instead of their own) to Merrill’s losses, one of which was the huge payroll.
——-
Sometime later the squawking about bonuses started up and, although there were no restrictions against using fed bail-out money to pay those bonuses, the politicians feared facing public ire and needed a scapegoat..
So, they sued BoA on a trumped up charge of “fraud”.. the bank which they felt had “screwed them” in the aforementioned negotiations, and the feds wanted to get even..
To Michael Fink:
After a busy weekend I only just had time to read yesterday’s bit bucket and wanted to respond to your rant against Avatar.
I don’t understand why you are so negative on this movie. I saw it a couple weeks ago and went to the 3-D version. The most amazing graphics I have ever seen and the modern glasses added much to the movie going experience.
And the best part? After listening to warnings by PB and others, I knew enough to take Dramamine before viewing the movie as I am highly susceptible to motion sickness. No matter how many times I feel asleep (did not take the non-drowsy formula obviously) when I woke up I knew exactly what was happening in the plot and who were the good guys vs. the bad guys. I mean, do you really think someone could sleep through 40% of The Godfather and understand the plot entirely when they rejoined the movie?
See? All kinds of great things about the movie that you just weren’t sophisticated enough to understand!
I heard a great alternate title for that movie:
“Dances with Smurfs”
I think that originated in Southpark.
“Dances with Smurfs”
Perfect!
Juan Valdez to close flagship NYC coffee store.
BOGOTA (MarketWatch) — The Juan Valdez chain of Colombian coffee shops will close its flagship Times Square branch in New York City on Feb. 28 due to the high cost of rent and changing spending patterns among U.S. coffee drinkers, the company’s chief executive told Dow Jones Newswires.
The opening of the store in 2004 in the heart of Manhattan had such symbolic importance for Colombia’s coffee industry that Colombian President Alvaro Uribe flew to New York to be with Juan Valdez and his mule Conchita for the opening ceremony.
U.S. consumers are buying more coffee from supermarkets to drink at home, and less from coffee shops, said Catalina Crane Duran, chief executive of Procafecol SA, the holding company that manages the Juan Valdez brand.
U.S. consumers are buying more coffee from supermarkets to drink at home, and less from coffee shops, said Catalina Crane Duran, chief executive of Procafecol SA, the holding company that manages the Juan Valdez brand.
Buy coffee to drink at home from a coffee shop? I didn’t know people did that. I thought they went to coffee shops to sit and look important while tapping the keyboards of their laptops.
Yeah, it’s damn near subversive, isn’t it?
Gasoline heading above $3 a gallon by this summer
Fuel is getting more expensive, but don’t expect the price spikes of 2008
February 22, 2010
NEW YORK (AP) — Retail gas prices likely bottomed out last week, and they’re again headed to above $3 a gallon this summer, experts said Monday.
Although pump prices typically rise this time of year as refineries switch to a more expensive grade of gas, the increase likely will frustrate many motorists. Prices are climbing even after millions of Americans received pink slips and kept their cars in the driveway.
“If you look at demand, it’s just abysmal,” said Fred Rozell, retail pricing director at Oil Price Information Service.
What’s pushing prices higher isn’t American consumption. It’s the crude oil that’s used to make motor fuel, Rozell said. Crude is an international commodity that’s become ever more expensive as demand grows in China. As crude increases, so does gas.
“Although pump prices typically rise this time of year as refineries switch to a more expensive grade of gas …”
Interesting statement. Why would refineries switch to a more expensive grade of gas this time of year? Anyone know?
Summer / Winter blends as mandated by law.
You can wiki or google why, but the short of it is that the temp difference seriously affect overall pollution. (they do)
Thanks. I’ll Wiki for more.
From ask dot cars dot com
The Energy Information Administration says the switch between the two fuels happens twice a year, once in the fall (winter blend) and again in the spring (summer blend). Summer-blend gasoline is typically more expensive to produce than the winter blend, and it won’t affect vehicle performance or the durability of the engine and fuel system, according to the EPA.
In many large cities as well as California and New England, the EPA requires the use of reformulated summer- and winter-blend gasolines. These RFGs contain oxygenates that lower RVP and other toxic chemicals even further than conventional gasoline.
From Times Online
February 22, 2010
‘Half-baked’ BoA-Merrill settlement approved
Christine Seib
A federal judge grudgingly approved a $150 million settlement between Bank of America (BoA) and the Securities and Exchange Commission (SEC), averting a trial over allegations that the bank mishandled its $50 billion takeover of Merrill Lynch.
Judge Jed Rakoff slammed the settlement as inadequate and misguided but said that the law required him to give “substantial deference” to the regulator, which was keen to settle.
“This is half-baked justice at best,” the judge said, adding that the $150 million seemed “paltry”.
The settlement ends two legal actions brought against the bank by the SEC, in which the regulator accused BoA of failing to disclose to shareholders mounting losses and bonus payments at Merrill.
BoA announced its acquisition of Merrill in September 2008 but by November was worried about rising losses at the investment bank. BoA’s management, however, decided not to tell shareholders of the impending losses before investors were asked to vote to approve the deal on December 5.
BoA also told shareholders that it would not agree bonuses for Merrill’s bankers before the deal was complete, despite having signed of up to $5.8 billion in payments months previous.
The legal action had been due to go to trial on March 1 after Judge Rakoff rejected a $33 million settlement agreed by BoA and the SEC last year. Judge Rakoff said that the settlement further penalised BoA shareholders who were already left out of pocket by the Merrill losses.
The judge had been scathing of SEC for allowing BoA to get away with a lenient penalty. The two parties were forced to renegotiate the terms of the settlement before returning to court last month with increased sum of $150 million.
Judge Rakoff yesterday remained unhappy with the fact that BoA’s shareholders would effectively be footing the bill for the settlement for a fraud committed on themselves.
Under the terms of the new settlement, BoA must hire an independent auditor to assess the bank’s disclosures over the next three years and give shareholders a non-binding vote on compensation at the company. The SEC will be given a say on selecting the auditor.
…
And the “sweep it under the rug” plan continues.
How Boomers Will Impact the Health Care Industry
CNBC ~ February 22, 2010
As the first wave of Baby Boomers reaches retirement age, predictions for the nation’s health care system have been nothing short of apocalyptic.
Many predict the surge in demand for medical care associated with the aging population will so strain our resources that future generations will face permanently higher inflation, higher taxes - or both.
Some suggest the rising cost of Medicare, the federal insurance plan for those aged 65 and older, will drive the national debt to a point of no return.
And still others have suggested that cost pressures could ultimately result in reduced health benefits for all - or a reallocation of benefits in which higher-income people receive less coverage.
Though dire, such speculation is not without merit.
At 78 million strong, the oldest of the Boomers - born between 1946 and 1964 - are already making unsustainable demands on federal entitlement programs — Medicare and Medicaid.
At some point in the not too distant future, there will have to be a “spend down” provision for seniors, similar to what exists for long term care. Seniors must spend down substantially all of thier net worth and assign their social security proceeds before Medicaid will pick up the nursing home tab.
A similar provision for medical procedures under Medicare will eliminate a lot of the excess spending for end of life care. Want Granny around another 6 months? Pony up the inheritance. I have no problem with that concept, and I am old.
The well to do already transfer their assets to appear poor on paper.
I’m shooting for an early stroke, or fatal heart attack. You got to have goals.
All my kids have assured me that they have no intention of changing my diapers when the runs-in-the-family Alzheimer’s kicks in.
State and Federal Borrowing Is Crowding Out Everyone Else
CNBC ~ February 22, 2010
As if the credit markets aren’t already under enough pressure, the mass intrusion of state and federal debt will only make matters worse.
At a time when credit availability is at a premium, the federal government has launched its biggest series of Treasury auctions yet while more states are issuing debt in order to support their spending needs.
Consumers and businesses looking to borrow and investors trying to find a way to navigate a marketplace heading toward higher interest rates will find the conditions daunting, experts say.
“Clearly the government is not the 800-pound gorilla-it’s the 8,000-pound gorilla in the credit markets nowadays,” says Mike Larson, analyst at Weiss Research in Jupiter, Fla. “These numbers are just so mind-boggling. Really what’s going on is you have intractable debt and deficit problems in the country that neither side wants to tackle in a meaningful way, so the market is doing it for them.”
Yep.
So here’s a question. If the leveling off of housing debt - like this - caused a crash in the housing market, spreading to be the worst recession in the economy since the Great Depression, then what will happen when the predicted leveling off of government debt - like this - happens?
Noting of course that the latter is actually greater in magnitude then the former by about 20%, just with about a 5 year offset?
The leveling off of housing debt didn’t cause a crash in the housing market; the crash in the housing market caused a leveling off of housing debt.
“State and Federal Borrowing Is Crowding Out Everyone Else”
That’s an interesting notion. The interest the government is paying investors is essentially nothing. It seems that everyone else should just offer to pay like 5% interest and the feds would be crowded out. That assumes that investors would risk their capital on something other than federally guaranteed returns.
“It seems that everyone else should just offer to pay like 5% interest and the feds would be crowded out.”
There is a little secret behind ZIRP which I don’t recall the Fed clarifying. When the central bank hammers interest rates down to way below market rates, it is effectively rationing credit. Notice how Megabank, Inc can borrow from the Fed at zero percent interest and loan out the money at 4 percent, while you and I cannot and small businesses (those not deemed “too big to fail”) cannot?
I would love to see the rules that allow the Fed to pick credit market lottery winners and losers in this manner.
Bunge to cut 100 workers
Commercial-News
DANVILLE,IL. — What’s sure is Danville’s Bunge plant will shed 100 jobs as the company closes its soybean-processing operations April 23.
What remains to be seen is which of the plant’s almost 300 employees will lose their jobs.
“We have to work with the union on (identifying) the hourly employees,” said Deb Sidell, spokeswoman for St. Louis-based Bunge North America.
She said the employee cuts were not simple layoffs and were being made in participation of a “permanent shutdown” of the soybean division.
“This doesn’t come easy because we’ve been a part of the Danville community for a long time,” she said.
Officials for PACE Local 6-0972 said they are reserving comment until they are provided more information from company leaders.
Corporate officials blame the general state of the soybean market, which they say has become over-saturated with producers. The Danville plant was more at risk for staff cuts due to added transportation costs associated with it, Sidell explained.
“There’s just too much processing,” she said. “Really, this is related to processing capacity trouble throughout the United States.”
They said “bunge”……..
And my reply:
From: RAL
Sent: Sunday, February 21, 2010 5:13 PM
To: irene@XXXXXXXX
Subject: Fwd: FW: MLS #XXXXXXX
Irene,
Thank you for responding. We really need to determine how the
property taxes are substantiated on this house. Based on the most recent state data, the average(possibly median) house in the state is roughly $170K and the total taxes on that average is roughly $2400/yr. These figures don’t align with the $220k price and the $6K tax bill. Is there a way you can determine that the $6k/yr tax figure on the cut sheet is accurate? If it is, how can it be substantiated given state data?
Thanks,
RAL
San Francisco resident wins $2 million Larkspur home
San Francisco resident Tommy Toy has won this $2m Marin home in a raffle. SF Gate
It was a good weekend for Tommy Toy of San Francisco (not the Tommy Toy of Tommy Toy’s Restaurant fame, but a 26-year-old smog technician). On Saturday it was announced that Toy was the grand prize winner of a $2 million bay-front home in Marin. The home came courtesy of Community Action Marin’s third annual Dream House Raffle.
The 3,200 sq ft, 3-bedroom, 3-bathroom home is located in Larkspur, and features an open floor plan with wrap-around views of Mt. Tamalpais and the San Francisco Bay. It includes a private elevator, gourmet kitchen with Viking appliances, white-oak hardwood floors, landscaped garden and an outdoor terrace.
Tickets for the raffle had cost $150 each and all proceeds benefited Community Action Marin in its ongoing support of low-income individuals, families and children in Marin County. The total number of tickets sold was 27,000.
The Marin Dream House Raffle began on September 1, 2009, and the winner has the option to choose between the $2 million house or a cash prize of $1.6 million.
The Marin Dream House Raffle began on September 1, 2009, and the winner has the option to choose between the $2 million house or a cash prize of $1.6 million.
I’d take the cash. Even after the tax bite, it’d be worth it.
Absolutely!
Cash. Keep the house. A 26-year old would just lose it the minute the first year’s taxes come due. As would I.
End of day and won’t get much commentary but it’s a worthy discussion.
I engquired about a FNMA REO through realtard…… The taxes are grossly inflated. The median price in the state is about 170k and the average taxes on that 170k house is 2400. The dump I’m looking at is priced at an inflated 220k. Taxes? $6500.
So here it goes. Her first reply.
From: irene@XXXXX
To: (Realtors Are Liars)
Subject: RE: MLS #XXXX
Date: Sun, 21 Feb 2010 06:37:00 -0500
Hi RAL and Wife,
My name is Irene XXXXX - I am a an agent with XXXX and
was
asked to contact you regarding MLS #XXXXXXin XXXX
The property is still for sale, it is a foreclosure and
being
sold “AS IS” The taxes for 2008 are: $ 6,430.24, not sure
why
the current taxes aren’t listed. I am attaching the full MLS
listing sheet for you to see. If you have any further
questions, please do not hesitate to e-mail or call me.
I look forward to hearing from you.
Irene
Greek debt tragedy sets Europe trembling
RUTH WILLIAMS AND LUCY BATTERSBY
February 22, 2010
Protesters in Athens this month. Greece owes $US300-400 billion.
Photo: Reuters
On New Year’s Eve 2002 , Syntagma Square in Athens was lit up by an enormous ”Euro Monument” - a pyramid bedecked with hundreds of blue neon tubes, topped triumphantly with the new Euro symbol and 12 stars of the Eurozone.
The monument was part of nation-wide celebrations to usher in newly minted Euro coins and notes, replacing Europe’s oldest currency, the drachma. Unlike several of its Euro peers, Greece fought hard to join the Eurozone club; it desperately wanted to be admitted, and was finally granted its wish in 2001 after a knockback two years earlier.
Fast forward nine years, and Greece has become the European Union’s worst nightmare. This month Greece’s open secret became common knowledge around the world - the country spent years understating its true level of debt, obscuring the size of its budget deficits with the help of complex, off-balance-sheet instruments sold by investment banks including Goldman Sachs.
Now, the Eurozone membership that Greece once proudly celebrated has become a fiscal millstone, preventing the struggling country from easing its financial pain by devaluing its currency.
And, after a series of downgrades from credit rating agencies and a pasting by so-called vigilantes on the bond market, the world is watching and hoping that Greece does not do the unthinkable: default on part of its debt, which stands at somewhere between the US$300 billion quoted by the US media, and the almost US$400 billion calculated by Germany’s Commerzbank. This event, some fear, could tip the world into a second crisis.
Even though some bond traders are betting on it, the possibility of a default is still considered unlikely. A pan-euro bail-out package worth up to €25 billion is being put together by Germany’s finance ministry, Reuters reported on Saturday, with the Germans throwing in €5 billion of their own money.
Meanwhile, the Greek government has put in place austerity measures to slash public spending and reduce debt. But investor anxiety about sovereign debt - already heightened after Dubai’s scare late last year - has spread beyond the Hellenic Republic to Spain, Portugal, Ireland and Italy; a cluster of nations collectively christened the PIIGS.
Indeed, the biggest issues exposed by the Greek crisis may not be the problems of the Greek economy itself, but wider questions around transparency, trust and risk in the global financial system barely 18 months after Lehman Brothers’ collapsed.
”We live in an era of unprecedented global systemic risk,” says Alan Laubsch, head of RiskMetrics Group’s risk consultancy division in Asia. ”Australia is in a very good position in the sense that it doesn’t have a mountain of sovereign debt-but unfortunately it’s the exception rather than the rule. So clearly, if a debt crisis spreads, all major economies will be hit due to interconnections via trade and investments.”
…
Casino capitalism. I was reading in The Economist magazine (February 6th-12th, p83) about something called “Longevity Swaps”, in which investors take on the risk of paying for longer living pensioners in return for an agreed upon stream of payments from the seller. And on February 1st, a group of banks and insurers launched the Life and Longevity Markets Association, to spur the development of a liquid longevity market.
It’s just gambling it seems to me. Sounds a lot like the derivatives, credit default swaps, etc. It’s gambling. If organizations wish to do it, great, but make sure my banking and lending institutions never get exposure to it.
Seems like the Volcker rule and the reimposition of Glass Steagall would go a long way towards doing this.
Sounds like a set up for someone releasing infectious disease across American Nurshing homes.
Found a note on the bulletin board in my apartment building in LA. Bankruptcy proceedings are scheduled in San Diego.
For now I’m not worried. I can move out if it’s the worst case scenario. I don’t have much. I did not know. Was unaware. No wonder they did not raise my rent! It’s part of a mega corporation. Things like this are no big deal if you don’t have much. The biggest pain is change of address forms.
What will probably happen is that some interim management firm will carry on for a few months managing this place.
Nice article NYT
http://www.nytimes.com/2010/02/12/health/policy/12insure.html
the five biggest insurance companies (WellPoint, Cigna, UnitedHealth Group Inc., Aetna Inc. and Humana Inc. )had an average profit last year of 5.2 percent — for a combined total of $12.2 billion. This was an increase of $4.4 billion, or 56 percent, compared with 2008
While the insurance companies posted substantial profits, they said they have had to increase premiums to keep up with the rising costs of medical care.
In her statement, Ms. Sebelius said she was skeptical of this explanation. “High health care costs alone cannot account for a premium increase that is 10 times higher than national health spending growth,” she said.
The insurers said they had also lost some of their healthiest customers, many of whom dropped their insurance during the economic downturn. Mr. Sassi of WellPoint said the loss of these customers had left “an insured pool that utilizes significantly more services per individual than under better economic times.”
But critics say the substantial increase in premiums is contributing to the industry’s profits, as are a host of other practices.
Insurance companies last year continued to try to purge their most costly customers, which are often small businesses with older workers, said Richard Kirsch, national campaign manager for Health Care for America Now.
Another reason for the robust profits, Mr. Kirsch said, is that the companies reduced the percentage of their premiums that they spent on actual medical care and devoted more to administrative costs and profits.
A third factor, he said, is that the insurers continued to attract more customers to public programs like Medicare Advantage, in which the federal government pays private insurers 14 percent more than it pays Medicare to cover the same people.
The report said that the insurance industry’s long-term strategy was to shift responsibility for the care of millions of older, sicker and lower-income customers to taxpayer-supported programs, like Medicaid and the state Children’s Health Insurance Program. Those programs in turn are increasingly hiring the big insurance companies — and paying them — to manage the coverage.
So just like banking, the medical insurance industry wants to cherry pick the winning accounts and off load the loosers onto the American Tax payer. Oh the free market at work.
Of course the plan of the big Health Insurance Companies was to offload
their high risk patients to the taxpayers ,while they take the cream of the crop profits ,much the way the Banks are trying to get rid of anything toxic on their balance sheets to the taxpayer . Thats why you have to just provide basic coverage on a National Health plan and maybe allow for
increased coverage for people who want to purchase extra . Insurance Companies and Big Business today just look for ways for the government to supplement their profits and lobbying has been very effective in creating
monopolies and supplements for business . When Government becomes the servant for Big Business greater profit margins ,so CEO’s can get millions in
pay ,than maybe it time to redefine the role of Government and the taxes in the coffers .
Creating a employers based Health Plan tie in was a disaster waiting to happen in that eventually the Employer wouldn’t be able to afford it ,and the small Company owner can’t begin to afford it now . Its one thing to require a low cost min.liability insurance on cars verses requiring Citizens to purchase much more costly Medical Insurance ,especially when a high % of the healthy aren’t even using the medical system .
Look , the Health Insurance Companies are on the verge of pricing themselves out of the market when people start dropping coverage in favor of eating and being able to pay taxes and rent .
I’m just saying that Business use to operate on much lower profit margins during my working life ,and now you get less and pay more .
Nobody is getting value for the dollar anymore and Globalism has
put a wrench in wages keeping up with price increases that industry demands .