Bits Bucket For March 13, 2010
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Weekend off-topic: Can I just say I’m pretty happy that Avatar only won three FX Oscars? I think we’ve the margin of diminishing returns with the visuals; time to go back to basics. The Academy knew the truth: for all its money, Avatar was a jaded story with blah dialog, forgettable characters, bad casting, and every cliche in the book, which happened to take place in a cool video game.
Once 3D becomes the norm Avatar will relegated to the trash bin of history.
Once 3D becomes the norm Avatar will relegated to the trash bin of history.
Once 3D becomes the norm … where have I heard that before?
Oh yeah.
Circa 1954 with “Creature From The Black Lagoon.” And circa 1983 with “Jaws 3.”
Will this time be different?
It might be different. The difference this time around is these movies are making boatloads of money. i.e. Avatar and Alice in Wonderland.
And don’t forget 3D TV, which was recently introduced. Will it catch on? Wait and see, I guess.
Yeah well when Avatar cost me $12 — at 4:50 pm on a Wednesday — of course they’re going to rake in boatloads of money. Question is, how long can Hollywood attract this money on the strength of 3-D alone?
I see no reason to pay for Cameron’s video games when the most memorable Cameron character was the pre-pixel Alien Queen.
Who’s stash do you think obama is spending???
Huh?
whose stash? who is stash?
What stash have you been smoking?
Quick, somebody take away his stash!
Will the younger generations simply give up?
I hear more and more young people making comments about things like social security not being there for them. It seems like it’s becoming more common knowledge that young people will be paying the cost of the debts being created in Washington. I wonder how the next generations will react to the burdens being put on them? Will rising taxes take away motivation to work hard and make money, just to see it get taxed away?
Has the American dream been stolen from them?
It is being stolen every day. If this country wanted to, it could turn things around in ten years, but that would require sacrifices by those 55 and over, the very generations that got us into this mess — and the very generations who control our institutions.
As for how they will react, for a best case look to today’s Japan. There the young don’t have children, and they don’t want to work as hard as their parents. They just live at home, because given the hand they were dealt, they would be hard pressed to make it on their own.
For a worst case look to 1930s Germany and Italy. There are plenty of potential Mussolinis around, if not yet any Hitlers. But to get the latter, all we need is to identify some Jew-equivalents.
Oh yeah- the Japanese ‘grass eaters’! (I think the name is mocking them as being ‘herbivores’. I prefer the term ’sitzpinkler’- one who sits down to pee):
Japan’s twenty- and thirtysomething males seem disinterested in careers and apathetic about the rituals of dating, sex and marriage. They spend almost as much on cosmetics and clothes as women, live with their mums and sit down on the toilet when they pee. Some have even been known to wear bras. “What is happening to the nation’s manhood?” wonders social critic Takuro Morinaga.
What happened to bushido?
There used to be a saying: “Scratch a Japanese businessman and you’ll uncover a samauri.”
Weren’t these the people who, thirty years ago, were destined to rule the earth?
Weren’t these the people who, thirty years ago, were destined to rule the earth?
That’s the Hubris that you get with financial bubbles. When you think you are richer than King Solomon, you set out to conquer (buy up) the world. We saw a lot of that here, too.
The people destined to rule the world are the con-men in New York who got us to pay off their bad debts and got to keep all their possessions, while mortgaging ours. In fact, they are ruling the world and having a great time doing it. They are doing ‘god’s work’.
“Weren’t these the people who, thirty years ago, were destined to rule the earth?”
They’ve been temporarily replaced by the Chinese, at least until their corner of the credit bubble soon pops (I’d give it less than a decade, but then I am a confirmed bear…).
All the Samari genes probably got killed off in WWII. The flatfoots who were unfit for military service were the available gene pool once the war ended.
Business magazine Weekly Diamond recently noted that more than 80 per cent of 35-year-olds in Japan live on an annual income of two million yen – a key poverty benchmark.
This is the sentence that jumped out!!!
Not surprising. Entitlement programs make quite a mess of market forces.
sitzpinkler! awesome. can’t wait to use that term in conversation. reminds me of a Demotivator entry… 9mm: for those who squat to pee
The 9mm Sitzpinkler. Not a formidable weapon.
Very formidable when I have 15 of them to project at you in 15 seconds…..
Japan’s twenty- and thirtysomething males seem disinterested in careers and apathetic about the rituals of dating, sex and marriage. They spend almost as much on cosmetics and clothes as women, live with their mums and sit down on the toilet when they pee. Some have even been known to wear bras. “What is happening to the nation’s manhood?” wonders social critic Takuro Morinaga.
FWIW - I thought I saw something after this piece came out (last year I think) that made a good case that the view was mostly bunk. True to some extent perhaps, but not nearly as much as the writer made it out to be. The writer apparently highlighted some extreme cases, and made them out as if they were the norm. The same could easily be done in the U.S.
The writer apparently highlighted some extreme cases, and made them out as if they were the norm. The same could easily be done in the U.S.
The same is done all the time, here, there, and everywhere.
You’ll see the same here in articles about teen cell phone culture, Gen Whatever-It-Is-Now, emo kids, whatever — the formula, journalistically speaking, remains the same: spot a trend (it’s always too late when these journos spot it), highlight the more extreme examples of trend, pump trend. Trend is over-hyped or already dying, but they still need their 2000 word feature …
Well. That is what happens to you with 30 years of codling and the nanny state in Japan and all that social spending.
It isn’t a vital society.
I think you see this over and over in history. Rome, Soviet Union exc.
There are plenty of potential Mussolinis around, if not yet any Hitlers.
I’ve always seen Obama as a reincarnation of El Duce. In fact, whenever i see Obama raising his arm and condescending to the audience that the “time for talk is past”, i see Mussolini.
As for the Jew-equivalent, I think that would be the Wallstreet Bankers and Brokers who have ravaged our land while driving us into poverty and indebtedness. Oh, wait…………….? I think that is them. Perhaps Obama will rail against them while mobs of angry Citizens throw rocks and bottles through the windows of Goldman Sachs and Citigroup and it can be recorded as history with a word or phrase to embed it into people’s minds………”Krystalnacht?”, no that’s already taken…..”GlassKrackin Day?” Bank-krushin’ March?
Are you on crack?
“It is being stolen every day. If this country wanted to, it could turn things around in ten years, but that would require sacrifices by those 55 and over, the very generations that got us into this mess — and the very generations who control our institutions”
I’d invite you to do a little factual historical research before you blame, condeem and expect sacifices by the 55 and older gang. That’s a sweeping generalization of a bygone youth who had their own motto of “Never trust anyone over 30 yrs old”.
Those people got draft notices from their own friends, neighbors and PTB in the White House that they owed 6 years of their lives, whether active duty, reserve or national guard to get Honerable Discharge papers to get a job in their country. Only wealthy kids or families that had the means, sent their kids off to college on higher educational deferements.
Businesses, companies and even families complied with that n ational press-gang or “blacklist” game or mentality. For women, the only tickets out of a small town in those days were something like marriage, or a job as a secretary, airline stewardess, teacher or if you were lucky, a RN degree.
You could fight in Nam, in the streets of DC or even go to Canada but it was hell and near impossible for any young male to get any kind of a job, get into any college or even have any kind of a life without those US Gov’t approved walking papers. That’s just the way it was and those older people tried hard to change it. Many were jailed, beaten and even shot for trying.
Heck, those days were even before the civil rights movement. One black guy that I was with was awarded the Medal of Honor for heorism. The living 1st black to be awarded that decoration since the Spanish American War I believe.
He came home to signs that read “For Whites Only” at the Richmond bus station and a huge “This is KKK Country billboards 14 miles outside of Raliegh, NC on his way to Ft Bragg before the real beginning of the Women’s Rights Movement.
Those 55 and older generations went on to work hard, lead good productive lives and raise familes while trying to make things better in this country within their powers for themselves and everyones children. They did the best that they could with what they had at their means and what they PTB and their country would allow them to do.
Right or wrong, they at least…did something.
If you want somebody to blame or correct all the wrong of this nation, perhaps you should look towards the direction of the Hudson or the Potomic rivers or even the closest mirror…and never trust anyone under 30. Good luck.
mikey:
I think you hit on something, but in my opinion (I’m closer to 40 than 30), I think you left something off.
My generation - coming of age in the 80s and 90s - saw what the generations before us went through. You’re right - that generation mostly worked hard, did what had to be done - and then got the short end of the stick. They have a right to be angry. They bought the Ponzi scheme of Social Security and Medicare and six years of three hots and a cot and in exchange saw that promise broken.
A few days ago (yesterday maybe) someone posted about the younger generations being not ‘career oriented’. Well, my old man was a career guy. After 50 years he’s halfway retired and leading an ok life, but he’s seen almost every promise made to him about his future broken. I look at that and think: ok, don’t believe anyone. The older generation did everything by the books career wise and got hosed. My generation - and younger generations - aren’t dumb as many people think. The older generation has taught us well.
I’m sitting here 3000 miles away from my family because my employer reorganized last fall and some big-wig bean counter changed financial reporting to such an extent it makes more sense to have me live out of a hotel room three weeks a month and pay expenses than it does to just have me do the work out of my home office. This trip I had a 48 hour notice from the phone call to wheels up on the tarmac. And the choice I had was: go or take time off without pay for three weeks. Yet in the past three weeks of sitting here I missed seeing my son crawl for the first time, he’s started saying ‘da-da’ sounds, and he’s started recognizing his name. And I missed it because ‘at least I have a job’? Do you think I’m putting my heart and soul into this career and employer or looking for a new job? If you guessed new job - you’re right. I’ll never get those moments back.
Note the lack of qualifiers a couple paragrahs up: don’t believe anyone. That was the older generation’s mistake - they trusted their own generation. And got hammered for it. Me? I don’t trust anyone but myself.
Bad Chile…Way to go, I left a hell of a lot out and you know that and caught it. You can’t cover everything in a mikey rant dispite how much I ramble.
By the way, my son is 2232.27 miles from home. He is glad to be away from the rat race and working Alaska.
There was very little for him around the midest so he split.
Good post.
“…Yet in the past three weeks of sitting here I missed seeing my son crawl for the first time, he’s started saying ‘da-da’ sounds, and he’s started recognizing his name. And I missed it because ‘at least I have a job’?
Sorry to hear about that chili, watched “Up in the Air” last night…I’ve worked in the past for micro / mid-size / Macro companies…then I gots the Popeye syndrome, “I’s had ALL I’S can stand…and I’s can stand no more…
Funny that all the Free Agent blather touted ad nauseum by magazines such as Fast Company isn’t quite all it was cracked up to be.
Perhaps gray-flanneled Organization Man had its merits.
Bad Chile– I know this is only a sop, but please get Skype or some other program and little internet cameras. Video chat is no subsitute for the real thing but it sure beats no visual contact at all for three weeks.
(My husband and I did this at one point when he was off setting up a new job and I was working a couple of months off our lease.)
They taught about Navajo “code talkers” in Texas elementary schools in the 60’s & 70’s didn’t they mikey?
The real history in America is like archaeology, You either have to dig a lot or have been one of the fossils.
dinosaur mikey
Texas TRIED to draft me when I was home in civies on leave at my family’s new assignment. I was back from Nam and just out of the hospital. Look, a warm body and he’s not one of OUR boys. Grab him.
So I then showed up at their Texas local Selective Service room in my 82nd airborne war suit as a teenage Sgt. looking for trouble dressed like a Christmas tree with jump boots and combat medals ready to be drafted.
The Fools still wanted to sign me up with their local draft board. I told them, do it and the entire US Army along with The Army Times would know about their a snatch kid game within 24 hours.
Don’t mess with mikey TEXAS !
If they want to eat, they won’t give up.
They could live with their parents, grow a garden, and sit down to pee.
I have seen the future, and it’s a real sitzpinkler. And it’s wearing a ‘bro’. (And they laughed when I said the male mumu was coming back.)
I want to say one word to you. Just one word. Plastics.
Plastics + sit down to pee
Hey now, I personally know the American/Chinese fellow that got the Patent for a device that let’s female backpackers posture like males…1975
I have seen the future, and it’s a real sitzpinkler. And it’s wearing a ‘bro’. (And they laughed when I said the male mumu was coming back.)
No, it will be a snuggie. And there will be snack pouches on them too.
“Has the American Dream been stolen from them?”
Sold out is the term I’d use.
Who’s stash do you think obama is spending???
The same stash that funded the Reagan and Bush tax cuts.
Of course there is an alternative. Take senior benefits away from younger generations, while making them pay for current seniors.
That’s the current political divide — how to screw the next generation, not if.
How about the world dream? David Galland has an interesting article on entropy in kitco.com. can’t provide a link since I am on a not-so-smart phone. And the comments about Japan in this thread apply to most developed countries, as well as hifh growth countries like China, for depending on the boomer credit binge of the last three decades. Just another article that tells you to head for the hills and cache ammo.
Wouldn’t the Japanese model be to head for mom and dad’s house and cache cosmetics?
The younger generation are like insects. They have a dim perception that they’re getting the supreme inter-generational reaming, but they lack the intelligence to recognize the full magnitude of the screw-job. Witness the dewy-eyed “hope ‘n change’ dolts who helped install their savior Obama as President. These fools never suspected the degree to which their champion of the people was beholden to his Wall Street masters, even though a few mouse clicks would have told them the financial sharks like Soros and Goldman Sachs were funding The One’s campaign out of naked self-interest. Now as Hope ‘N Change manifests itself in the unbridled looting of the productive sectors for the benefit of parasites and too-big-too-fail financial predators, these young dupes are getting their first serious reality check.
Some fine day, when ugly reality imposes itself through young people’s cocoon of mindless distractions, virtual reality, and their MSM-induced lobotomies, they are going to be very, very pissed off.
It’s no accident that Ron Paul’s popularity is highest among college-age kids who are finally opening their eyes and having their apathy cured.
(Sitting on the couch in the hotel room, ‘on call’.)
I read this and thought: if the younger generaitons spent half as much time on the internet as it was said they did, you’d think a good chunk of them would find this blog, don’t you?
I got a buddy that is all-Obama. Friend has been out of work since August, but has no skills someone 10 years younger than him and willing to work for half of what he wants can bring to the table. But my friend bought the Obama message 110%, no money down, easy credit. He is all Obama, do no wrong. I try to tell him that Obama is no different than Bush. He refuses to believe me - or the facts. He just doesn’t get it that both the Republicans and Democrats are the same side of the same evil coin.
When he finally realizes that Obama isn’t going to make the US into Lake Woebegone and make all his troubles go away…he is going to be crushed. But I suspect he’ll never come to that conclusion because doing so will eliminate the easy ‘us vs. them’ ideals he has, he’ll have to take responsibility for falling for the con job, and own up to the fact that “the blessed Democrats” are just as corrupt as “the evil Republicans”.
Still a good buddy of mine. Just difficult to have a beer with sometimes.
I know a couple that were rabid Obamaites. We never talked politics because I never bothered to hide my contempt for people who took Obama’s campaign rhetoric at face value. Now they’re both out of work. They still refuse to see what is blindingly self-evident: that the Obama Administration is a wholly owned subsidiary of Goldman Sachs and Wall Street. Now, I understand people who held their nose and voted for The One because of the even more ghastly alternative, McCrazy and Sarah Palin. But the youthful idealists who supported Obama out of a sincere expectation that he meant what he said on the campaign trail, were just plain stupid and willfully self-deluded. Some simple due diligence would have showed who he served and who he was beholden too. And the Chicago Democratic Party machine is a cesspool of corruption and graft. Did they really think a champion of honest government would emerge from such a slime pit?
Now they’re at the point where they wish they would have backed Hillary instead of Obama. It’s amusing to see their “progressiveness” turn to progressive disillusionment.
“I know a couple that were rabid Obamaites. We never talked politics because I never bothered to hide my contempt for people who took Obama’s campaign rhetoric at face value”
Perhaps you, your insults, venom and your continuous contempt for other people on this blog could find a better medium than Ben’s HBB.
Frankly, I’m tired of it.
I’m fairly EZ to get along with but I make mistakes and put my foot in my mouth quite frequently. But I don’t go around intentionally trying to hurt or make people feel guilty just because they don’t see the world the way I’d like them to see it.
Shall we take it up with Ben or just tone it down a little ?
This is a housing blog that covers a lot of ground but it’s not your, mine or anyone elses personal political ideological free for all soapbox where anything goes.
That crap alienates good people and is just plain counter-productive to Ben’s blog.
I think you and some others are continuously and intentionally pushing it well over the line. The others know who they are.
It’s your call Sammy !
You did not mention the wealthy Illinois Pritzker family, also multi-billionares. If not for the bankrolled campaign by the billionaire Gulfstream socialists, Obama would just be a flunkee neighborhood activist doing shakedowns of small businesses in Chicago to force them to hire n’er do-wells.
“Some simple due diligence would have showed who he served and who he was beholden too.”
Most people prefer buying into happy lies than doing a little work to uncover unpleasant truths.
And the Chicago Democratic Party machine is a cesspool of corruption and graft. Did they really think a champion of honest government would emerge from such a slime pit?
Yet you believe Ron Paul — who emerged from the tar pools of Texan politics, a place with its own storied, Texas-sized history of corruption and graft — is somehow different than all those other politicians he stands with in Congress? Do you really think a champion of honest government would emerge from such a slime pit?
If so, I’ve got some mortgage-backed securities you may be interested in.
Perhaps you, your insults, venom and your continuous contempt for other people on this blog could find a better medium than Ben’s HBB.
Mikey,
My contempt is reserved for people who are willfully delusional or fail to take responsibility for their own actions. The vast majority of the people on this board do not belong in that category. In fact, they’re here because they saw through the scams and have shown themselves capable of independent thought and critical judgment. I’ve also stated very plainly that I can understand why people voted for Obama, given the worse alternative (in my view), the McCain/Palin ticket.
Shall we take it up with Ben or just tone it down a little ?
Yes, in the spirit of a five or six year old children, let’s go run crying to Ben. Ben as moderator reserves the right to decide who’s over the line. My sense is that Ben is well aware that you can’t ignore the government’s central role in creating and perpetuating the housing bubble, and causing ruinous unintended consequences by its policies intended to “address” the problem. As you’ve maybe figured out, I’ve lost all patience with people who point the finger at government for the mess were in, while ignoring their own culpability for sending people to Washington who continue to perpetuate the status quo.
I’ve never blamed the banks, the REIC, or the government for the housing bubble. I blame the great mass of people who made poor decisions, both in their personal finances and in who they elect to represent them (supposedly). If that causes some posters to get their panties in a twist, just remember, the bits board is a great arena for free thought and free expression. Of course posters should exercise some restraint and decorum. Have I violated that on occasion? No doubt.
Ben shouldn’t HAVE to step in and exercise his moderator prerogatives. I would suggest that if my posts bother you, one solution would be to simply not read them. But you’re probably right in saying that I’ve dwelt too much on politics in here. So, to avoid antagonizing people whose political sensibilities don’t correspond with mine, but who I happen to respect nonetheless, I’ll keep your comments in mind and “tone it down.”
I’ve never blamed the banks, the REIC, or the government for the housing bubble.
Now who is delusional.
So you blame people who are fed a constant stream of BS from media and banks and gov. Who see housing going up and decided they wanted to invest or buy a house.
but
Wall street who pays our gov officials to repeal glass steagle and allow them to gamble, allows them to leverage 30 to 1, allows them to bribe rating agencies to overrate their mbs, allows securitization and sale of debt, insurance with companies that won’t be ableto cover their losses, and the GSE’s etc etc gets of the hook?
Delusional
The banks, REIC, and government didn’t sign the mortgage contracts. FBs did.
Your points about Wall Street and the cast of villains who fed on and enabled the housing bubble are dead on. That doesn’t excuse the people who signed their name on the dotted line. They are ultimately the ones who drove up the housing market, and bear ultimate responsibility for their own poor financial decisions. Few of them deserve to be called “victims.”
True confession of a die hard HBB poster:
I enjoy the exchanges here, even the brutal ones.
I even enjoy occasionally wrestling with pigs, though I don’t like to roll in the mud or get dirty as much as the pigs do — I just enjoy slaughtering their arguments!
I was not insulted by Sammy’s post, nor was I insulted by Mikey’s, (although I agree dragging Ben into it is rather a waste of Ben’s time). I voted for Obama. My brain THOUGHT that voting for Obama was a good idea because if I didn’t, McCain might win. My heart felt that voting for Obama might be a good idea because he might really be able to change the direction of the country. He might be, but in my opinion, he is not, nor do his actions demonstrate a desire to. Based on his cabinet choices and the fact that he has done absolutely nothing to help the situation this country is in,except bail out the big banks, I believe he is a typical politician who is so indebted to his corporate supporters, that his interest lies mainly with them and not with the people who voted for him. I think the sooner people wake up and realize that our government, from one end to the other and every part in between, is dirty, dirty, dirty and that INCLUDES Obama, McCain, Palin, Bush, Reid, Gingrich, all of them. The Democrats and Republicans are equally at fault for what has become of this nation and will continue to pillage whatever they can from it until there is nothing left to pillage. It’s just my opinion and I don’t care if you all agree with me, but it might just get you to thinking. And thinking is good! Learning is good! If we share ideas, insights and opinions with each other freely, we all might learn something. I’ve learned a lot from people on this blog and I would hate for fear to prevent people from voicing their opinions, as long as they’re not completely retarded. Ooops! I said the “r” word. Hope I don’t get into trouble. Now I’m afraid.
Government -failed to regulated the gambling casino and the highly leveraged RE Ponzi Scheme .Failed to regulate Corporate America and stop the formation of Monopolies and
loss of Jobs of American people and failed to enforced proper trade balances . Failed to regulated money supply from all
over the world . Failed to protect tax base (jobs) that actually funds the government . Failed to control illegal immigration and on and on . Failed to enforce the rule of law and Politicians being controlled by Big Lobbyist . Failed to keep Wall Street abiding to good faith in business and all the transparency that goes with that by weak regulations . Politicians de-regulated without concern of consequences ,
mistakenly thinking self-regulation was possible .
Borrowers-failed to say no to debt and speculation in buying stuff they couldn’t afford by believing a creepy housing scheme promotion that was speculation greed based , and it promoted criminal activities . Public failed to overcome ongoing PR campaigns to get them to go into unsustainable debt . Stagnation in wages and the war on savors no doubt made people open to get rich schemes . Certain percentage
were fraudulent on loan applications.
Lenders/Investment Firms- Breached Fiduciary Duty to make low risk loans while rating them high grade ,thereby creating a high leverage real estate Ponzi scheme that was greed based that promoted criminal activities . Don’t have enough reserves for the Casino games that are being played . Greedy mad-hatters that are taking the ship down ,but get what they want because of their lobbying power .
Insurance Companies -made insurance bets they couldn’t cover regarding real estate ,thereby giving the public the illusion that markets were safer than they were . Did all this for greed profits . Not regulated enough with proper reserves Other Insurance monopolies like Health Care raised prices so much it stressed the entire economic structure that was tied into employers .
Casino - filled with unregulated games that are basically leverage games that create a destabilization of the entire financial markets . Lacking in transparency for purpose of
gaining advantage by cheap shot trick investing based on short term profits .
Corporations -sold out to cheap outsourced labor and manufacturing thereby creating a monopoly that caused competition to do same . Bribed Politicians to set up favorable laws to accomplish goals of a world wide labor pool and manufacturing pool . Destroyed the tax based for America in this process and increased their profit at the great loss of Jobs for Americans and they are trying to made
the Government the bag=holder for their pension obligations
and inability to fund the health care monopoly .
Main Stream News -failed to report facts and promoted a
Real Estate Ponzi Scheme by cheer-leading it and not asking the right questions or engage in both sides investigative
reporting . Gave in to Advertisers who pay their check and gave slanted versions of the news ,or didn’t report contrary data .
Authority figures and Experts - Bought off hired guns that supported whatever industry and wall streets spin was .
REIC- promoted a RE lending scheme and myths about real estate investing .Took borrowers to
houses they couldn’t afford and referred them to loan agents that would twist the loan application and sell the lending scheme of leverage .Twisted the arms of appraisers for hit the mark appraisals . Agents engaged in cash back fraud ,double escrowing ,and many forms of market deception to
promote the housing scheme and make a commission .Kick backs were not uncommon .
Front line loan agents - Certain percentage resorted to loan
fraud and extortion of appraisers to make a loan and get a commission . Made promises to borrowers that were not
ones that they could keep ,therefore deceived the public .
Encouraged leverage and high loan amounts with promise of
money available for refinances when real estate always goes up ,just for a commission . Encouraged loans that made them the biggest commission rather than what was right for the borrower .Both RE agents and loan agents gave assurances of projected gains in real estate which is something that you can’t do. Loan agents willing to create falsehoods on stated loan applications or out right fraud on
documented loan applications .
Builders : in combination with their special lenders , builders
promoted faulty loans in order for speculation buyers to
buy their product and inflate the price of their product . Builders in bed with appraisers/lenders Conflict of interest with
lenders and appraisers . Builders engaged in one -sided
unfair contracts ,set up seminars and faulty promotions of
real estate . In the last days resorted to incentives without disclosure fraudulently increasing price .
Fed Chairman -keep interest rates to low for to long .Failed to spot speculative market and faulty lending and huge money supply distortions . Out for the welfare of the Banks and Wall street anyway ,rather than the public.
Tax law -recent tax law changes encouraged speculation .
Unions-went to far with their demands and didn’t consider
a system change that would challenge their ability to honor their promised obligations .
You get the idea ,I have missed a lot of the players like the building departments and other entities that breached on their duties .
Goldman Sakes - One of the biggest promoters of the bad faith Casino games ,especially the high leverage ones . Basically one of the most powerful evil entities on the planet
in which greed and power is the sole motive .
“Goldman Sakes”
Giant blood sucking vampire squid…
they will just stop paying on the debt. The bond holders, (the older generations), the pensions get shafted. All is right with the world.
“they will just stop paying on the debt. The bond holders, (the older generations), the pensions get shafted.”
Born in ‘61, I expect that will happen before we get to retirement age, Cassandra. The burden on the workers will have reached critical mass by the time the bulge of boomers are online w/the social security/medicare teat and not producing. But the markets will have reversed in value by then too. Escalating numbers of boomers will be pulling pension & investment money out of those markets in greater and greater numbers as we go forward. ; ) Pffft!
Most workers paying into that system will be losing something.
These fools never suspected the degree to which their champion of the people was beholden to his Wall Street masters,
Maybe they didn’t, but at the same time, they DID know for a fact how beholden to Wall Street was the other guy. I needn’t mention the other guy’s running mate. And didn’t Golden Sacks and the like only give a couple million to Obama? Whereas Obama was raking in millions more in little-guy individual donations…every month.
That’s what the MSM would lead us to believe.
Not the MSM
1. Google Keating Savings and Loan
2. Campains have to report donations.
I voted for Obama and so far I’d say a major disapointment. TARP went through before him and the mess was created before him, but he has appointed the peoplewho caused this mess to positions of power and he and congress both R and D have done nothing to reign in banks. Wall Street has complete control. R’s and D’s all do their bidding.
Both McSame and the Prophet of Change rushed back to DC to pass the Bailout.
There is no real difference between the “2 parties” - both want ot rob you.
“If you would be wealthy, think of saving as well as getting.”
~Benjamin Franklin
“A man is rich in proportion to the number of things he can let alone.” - Henry David Thoreau
“A man can become rich in proportion to the number of things he can’t let alone.” - MUrDoch’s “TrueProvoker ™” Faux News
i don’t think it’s right for one generation to take from another generation . I can hardly blame the younger folk for copping out
when they don’t have much motivation for little gain .This is why this mess needs to be corrected .
I don’t blame this mess on a generation as much as I blame the mess on the Greed machine Corporate America / Wall Street /Globalism and Dirty Politics.
By the same token taking away Social Security averaging 1k a month from older people who won’t have anything else isn’t the answer either after they paid in for all those years .
Unions set up unsustainable pensions ,Government set up unsustainable pensions ,inflation created unsustainable costs ,
Monopolies set up price fixing and Wall Street set up their
fleecing of the American people . The Health care industries is fleecing the American people and the future youth also . All the while Corporation America is taking the jobs away from the new youth while reducing benefits . Who are the bad guys here .All generations have been conned by the various tricks that the people in power have pulled . I say give the youth the same opportunities that prior generations had by going back to the systems that promoted a happy job-rich America under a somewhat closed economic system with local manufacturing .
Think about it ,why did the baby boomers get ahead for a while ?It was because of the big job base and the Corporations and Wall Street only being able to take so much percentage of the Pie until
the game changed and everything became a winner or loser game based on Dirty Politics which fostered crazy Globalism ,casino financial games and Monopolies that change the whole competition game . The balance was better with the distribution of the wealth
that built a big middle class /upper middle class. Corporate America and the Power Brokers would love to divert people from the real causes and get
people fighting between each other rather than looking at them.
It’s all about balance and keeping the corruption from occurring
that pads the pockets of one self interest group over another .
BINGO
They reported the other day that the top 400 earners in teh US pay an effective tax rate of 16%. They make an average of 350million.
So I pay a much higher tax rate then a person who makes 10x less than me but someone who makes >1000x what I earn pays a far lower effective tax rate. I’ve seen other comparisons that include state and payroll tax then you see that these people pay lower taxes then people earning 60k a year. If you count inflation as a tax which it is the numbers would look even worse.
“He is richest whose pleasures are cheapest.” - Thoreau
One more point right now . How do the Politicians propose to pay for things by taxes if they allow their tax base of jobs to go elsewhere ?
This is the problem you get when a self-interest group gains control and tries to change the functioning of a long term system .
They are arguing over who pays for costs normally paid by taxes ,yet
they allow the loss of the tax based jobs . They are destroying the great middle class who were a class that paid a lot of taxes by many means ,such as sales taxes ,property taxes and Federal taxes etc.
What is even more devious is the way they pulled a systems change
while they hyped up the stupid wealth by real estate Ponzi-Scheme and that debt and leverage is good BS.
I truely think that they believe that due to natural resource depletion vs the population and the effects of globalization that the elite don’t need to support a middle class and democracy to rule supreme they just need to control natural resources. I think they have decided to do away with the middle class and eventually democracy.
measton . They were more concerned about making a market out of emerging market than they were concerned about what their acts would do to the great work force in America,or what
unsustainable debt would do to people .
If anyone thinks that they can separate the job base of America from the health of America ,your wrong .One of the most common traits of poor countries is lack of jobs and manufacturing base owned by their Country .
Countries like to exploit workers ,especially ones from poor Countries , rather than trade with the proper trade tariffs .
Somebody said that this was the best efficiency for production . I would say that its the best efficiency for increased profits for a small percentage of the population .
I don’t see it as y efficiency for all the dollars to end up in
such a small percentage of hands while everyone else struggles to survive .
It doesn’t matter that America had a higher lifestyle based on the long term systems that made the middle class stronger .
What matters is what was done to steal it away . While I totally agree that American needs to be more concerned about conserving energy and not buy what they can’t afford ,I don’t buy that one Country having a higher quality of life should be destroyed just because other Countries might not have same . Regulated Capitalism made the American assent possible ,but we understood protecting our lifestyle before the crazy open border policies and Global wage competition monopolies concept took over .
Does it improve the World that the rich get richer and the poor get a dollar a hour(which won’t improve their life much ),and American middle class is brought down to that level ?
And why would someone want to give up their standard of living in favor of being poor and powerless (talking about the middle and upper middle class of America ),so elite hands can get more and poor country people never get enough to actually improve their lot in life .
President of Detroit Public Skoolz Kant Rite Veri Goode
Posted by Karen De Coster on March 13, 2010
Detroit school board chief Otis Mathis admits to a “grammar problem.” When some of his emails (consisting of 3rd-grade level grammar) got out in the public, the local media nicely jumped on it.
From Laura Berman’s column:
He also acknowledges he has difficulty composing a coherent English sentence. Here’s a sample from an e-mail he sent to friends and supporters on Sunday night, uncorrected for errors of spelling, grammar, punctuation and usage. It begins:
If you saw Sunday’s Free Press that shown Robert Bobb the emergency financial manager for Detroit Public Schools, move Mark Twain to Boynton which have three times the number seats then students and was one of the reason’s he gave for closing school to many empty seats.
It turns out he couldn’t even pass an English proficiency exam required to graduate from college. Here’s another one of his emails:
Do DPS control the Foundation or outside group? If an outside group control the foundation, then what is DPS Board row with selection of is director? Our we mixing DPS and None DPS row’s, and who is the watch dog?
He graduated from a Detroit high school with “a 1.8 grade-point average but was previously reported as a .98 average.” He used to be a substitute teacher. He calls himself a role model.
LOLZ
This is what you get when you promote anybody for anything other than intelligence.
That is racism at work. Otis got where he is at due to his skin color. That is the definition of racism.
No, no, no. It is only racism if a *white* dude gets where he is because of his skin color. In the case at hand, the proper term is affirmative action.
Here’s another “Southern” definition from Georgia:
Our Corporate sponsor : MUrDoch’s “TrueProvoker ™” Faux News
Georgia Considers Outlawing Abortions Based on Race, Gender:
By Stephen Clark…FOXNews.com
“Are health care providers using abortion to curb the growth of the U.S. black population?”
“I’m excited,” said the author of the bill, Republican state Rep. Barry Loudermilk
Two anti-abortion groups, Georgia Right to Life and the Radiance Foundation, have bought space on 65 billboards in recent weeks to run ads that link abortion to racism.
Actually If you really think about it….its exactly the opposite.
Keeping minorities barefoot and pregnant is racist.
————————
Two anti-abortion groups, Georgia Right to Life and the Radiance Foundation, have bought space on 65 billboards in recent weeks to run ads that link abortion to racism.
My guess is that this will backfire and many of their members will have an Osht moment and then reconsider public funding of abortion.
There’s a flip side to promoting based only on intelligence.
Quants are supposidly very intelligent, they were the Smartest Guys in the Room. Look where they have taken us.
Well, let’s look at some comparison’s”
Billy Bob Thornton, Sling Blade: “It’s outta gas…”
Helen Keller: “College isn’t the place to go for ideas.”
Rash & Limbaughs: “You don’t even have to think, I’ll think for you, I’m right about everything 98.8% of the time…”
Donald “pucker Lips” sTrump: “Buy my video’s, learn my system, …become rich!”
Maybe these thoughts of mine are simply because I went to engineering school. But I’ve always been of the mind, does it work? Doesn’t need to be smart. Doesn’t need to be pretty. But when you put the key in it, does is go?
Agreed Combo. There are many other attributes that should be considered as well. Work ethic, character, etc. But I would still put intelligence at or very near the top.
Where do you get “promotion” when talking about someone who is chair of the school board? Isn’t that an elected position? The voters get to choose. If they don’t choose someone who can write, that is their problem.
I do have an issue with a person who can’t write at all being hired to be a substitute teacher.
I didn’t mean promotion in the literal sense. I was referring to advancement by artificial means.
Being elected is the only means of advancement in elected offices. There is nothing artificial about it.
Polly,
I enjoy your posts. I don’t feel like arguing semantics.
Enjoy your day.
The New Jim Crow
Perhaps greater lies have been told in the past century, but they can be counted on one hand. Racial caste is alive and well in America.
Most people don’t like it when I say this. It makes them angry. In the “era of colorblindness” there’s a nearly fanatical desire to cling to the myth that we as a nation have “moved beyond” race. Here are a few facts that run counter to that triumphant racial narrative:
There are more African-Americans under correctional control today–in • prison or jail, on probation or parole–than were enslaved in 1850, a decade before the Civil War began.
As of 2004, more African-American men were disenfranchised (due to felon • disenfranchisement laws) than in 1870, the year the Fifteenth Amendment was ratified, prohibiting laws that explicitly deny the right to vote on the basis of race.
A black child born today is less likely to be raised by both parents than a • black child born during slavery. The recent disintegration of the African-American family is due in large part to the mass imprisonment of black fathers.
If you take into account prisoners, a large majority of African-American • men in some urban areas have been labeled felons for life. (In the Chicago area, the figure is nearly 80 percent.) These men are part of a growing undercaste–not class, caste–permanently relegated, by law, to a second-class status. They can be denied the right to vote, automatically excluded from juries, and legally discriminated against in employment, housing, access to education, and public benefits, much as their grandparents and great-grandparents were during the Jim Crow era.
http://www.thenation.com/doc/20100322/alexander
Just got done watching a “special features” piece on Henry Fonda in the “Ox-Box incident” Oscar nominated movie 1943.
Seems Henry’s father (a printer & liberal Democrapt) took 14 year old Henry into Omaha without explanation one day…(A black man had been arrested on an assault charge) rumor spread about that “they” were going to lynch him…So the 14 year old watches the frenzied crowd “go nuts” lynch & burn the man in public…apparently Henry’s father never said a word to him or offered an explanation.
And SUguy the solution is very radical idea:
We must force them to read write and speak English…In schools before they can graduate and of course in prison
You want early release then start reading the NY Times aloud and be ready to answer questions…
This will decimate the rap and hip hop market…..finally!
—————————————-
These men are part of a growing undercaste–not class, caste–permanently relegated, by law, to a second-class status.
“There are more African-Americans under correctional control today–in • prison or jail, on probation or parole–than were enslaved in 1850, a decade before the Civil War began.”
Are you saying they are wrongly imprisoned? Set up? Targeted by the man? Forced into crime? That without racism most of these convicted criminals would be at home minding their own business, raising families, etc?
The causes may be under dispute, but unfortunately one thing is not– African Americans get disproportionately higher sentences for equivalent crimes, including the death penalty.
Another sad statistic is that people of color– including Asian sub-groups, Hispanic sub-groups, etc. experience racism EVEN IF they were raised by white adoptive parents. So there’s something there that’s not just culture.
“He graduated from a Detroit high school with “a 1.8 grade-point average but was previously reported as a .98 average.”
IDIOCRACY B here now. I b down wit dat!
http://www.bing.com/videos/search?q=Idiocracy+the+movie&FORM=VDRE
Was that on a four-point scale?
I’ma bee, I’ma bee, I’ma I’ma I’ma bee..
Affirmative Action at its finest.
It is called an election.
Wasn’t there an election that featured a candidate who was mocked for “having a silver spoon in his mouth”? (Or some such).
While not the same, Affirmative Action policies are similar…at times leading to an election featuring candidates who didn’t make it on their own merits.
that’s an extremely high IQ for the detroit area.
Thanks for that quote link as usual wmbz…followed it to a personal blog…(too bad you’re married Mr. Bear, might missed the boat with her…) :
Karen De Coster:
About Me
I am a Certified Public Accountant and freelance writer who is devoted to the causes of liberty, individualism, and the free market. I embrace the right to keep and bear arms; recognize the superiority of the Articles of Confederation; subscribe to a motley assortment of minor conspiracy theories; and believe that government is evil, immoral, corrupt, and unnecessary in a free society. I am also an ardent lover and student of Austrian economics, the pro-market, anti-statist school of economics. Also, I proudly wear the title “Queen of Political Incorrectness”, given to me by my friend Tom DiLorenzo.
I am a Certified Public Accountant and freelance writer who is devoted to the causes of liberty, individualism, and the free market … I am also an ardent lover and student of Austrian economics, the pro-market, anti-statist school of economics. Also, I proudly wear the title “Queen of Political Incorrectness”, given to me by my friend Tom DiLorenzo.
Wow. She sounds like … so much … fun.
My grammars got problems, too. Both of ‘em died over ten years back.
that was cute PB!
If you don’t get my drift…who cares.
I wasn’t put on this earth JUST to raise you past 18 yrs old!
Love, Dad
He calls himself a role model.
Unfortunately - he is.
Idiocracy ascendant.
This guy’s the chief of the Detroit School Board? This is so outrageous it’s not even humorous, This is absolutely disgusting, and a failure of epic proportions.
http://www.telegraph.co.uk/news/worldnews/northamerica/7427691/Detroit-family-homes-sell-for-just-10.html
Homes in what used to be decent, blue-collar neighborhoods in Detroit can be had for $10, if you don’t mind living in a ghetto wasteland.
My company president sends out e-mails like that, e.g., “I have know idea what your asking me..” LOL
Did we just bailout Greece ?
That is beautiful. More dopes and change.
Rhymes with ropes and chains.
We live on a floor with 7 apartments. The tenant down the hall skipped out months ago. Another apartment looks like it may have been abandoned. The door slammer across the hall had a notice posted last night that she has 3 days to pay $1,100. But the management company tells me rents are going up. Hmmmmmm.
The landlord tenant thing seems to be a game of chicken. Moving is expensive, but so are vacancies.
New York landlords are used to having the upper hand. We may have all New Yorkers living three to an apartment in half the apartments before they get used to the idea that it’s a two-way street.
The management company has to make their numbers else they get replaced. Soooo … those renters who stay have to subsidize those who leave.
Nothing new here: Those who have a job have to subsidize those who don’t.
Those with health insurance subsidize those without health insurance.
Those with money are expected to support those without money.
And so on …
“Hope ‘n Change” in action. Get used to it. Once the Republicrats find a way to amnesty 11 million illegals, while continuing to hold the floodgates open for new immigrants, the Democrats will have a permanent lock on elections. Entitlements for everyone! Except those who pay the bills.
“..11 million illegals,…”
Sammy,
I would bet that when a final count is done the number will be 30 million +. They will be coming out of the woodwork for the free loot.
It ain’t free. You and I will pay dearly for it. But the Corporations will get their slave-wage labor and cheap nannies and yard boys, and the Pelosi Democrats are salivating at all those new votes-for-entitlements additions to keep venal and corrupt Democratic politicians at the trough.
I couldn’t agree more. I would still argue that the illegals don’t have a rational concept of where this money is really coming from. Hell most of the legal citizens haven’t a clue either.
China and the others will surely expect their money back.
College costs have a ROI. Do the math before you send Johnny and Salley to get a degree in communications that costs $200,000 in student loans…
—————–
Engineering Grads Earn The Most
Wall Street Journal | March 12, 2010 | Joe Walker
New college graduates may be entering the worst job market in decades, but there are still some majors that pay off—and all of them are in the applied sciences.
A new report from the National Association of Colleges and Employers finds that eight of the top 10 best-paid majors are in engineering, with petroleum engineering topping off the list at $86,220.
—————
List of top 10 majors:
Petroleum Engineering $86,220
Chemical Engineering $65,142
Mining & Mineral Engineering (incl. geological) $64,552
Computer Science $61,205
Computer Engineering $60,879
Electrical/Electronics & Communications Engineering $59,074
Mechanical Engineering $58,392
Industrial/Manufacturing Engineering $57,734
Aerospace/Aeronautical/Astronautical Engineering $57,231
Information Sciences & Systems $54,038
Those are also some of the most difficult majors, ones that need to pay off if you want people to do them.
But I suppose some of our “geniuses” with the less valuable majors will try to outsource the jobs of these better paid majors too.
Been expecting my field of embedded software engineering to be shipped out the last fifteen years. But “embedded” implies the SW developer has direct access to HW. VMware holds promise for virtual HW. It is very difficult to make a virtual system. So there must be big money in system engineers. Actually, I would love to be a SW engineer in a mobile mansion, a mega yacht, with clients in any nation. And go where the sun goes, as a sovereign individualist. Just move my home where it is bikini season and follow that season.
Been there done that Bill. It ain’t that great. I mean the money is good, but what do you do with it if you don’t have time to spend it?
Simple. You take heart that at least you have a job in these tough times. While this deflation-inflation continues on your buying power over the unemployed increases remarkably! Let’s talk slightly used luxury sport cars at 60% off! That time will come. I already am seeing upscale loft rent prices falling. I can even go out on a limb and predict vacation home rent will be “a dime a dozen,” so to speak. Three years ago an old timer told me that “you could not even give houses away” in NY in the late 30s and 1940s. So I will continue to watch my buying power increase for awhile. If you can find me a supercharged Jaguar XF in mint condition and less than three years new for under $28k maybe I will fiddle like a grasshopper a little bit. But I prefer not owning anything that anchors me.
In December I bought a big *ss truck. not too much really good in snow. Got a tax note I’ll probably cash in sometime in fall.
I’ll keep my eye out for the jag
If you could afford a mega yacht, would you need to do engineering work?
Yup, for megabucks. I’m a nerd and love software engineering.
I cannot imagine wanting to retire. Retirement is for former racehorses. They are put out to pasture and do nothing but eat.
Well, some racehorses get put out to stud…that might beat software engineering.
What it doesn’t say is % who found jobs nor the institutions that are handing out these degrees? For example, could “BS Info systems” be obtained from DeVry?
However, I do agree with fundamental point. Get a degree that has a use.
or get a RN degree, then go on to became CRNA and give anesthesia for an average salary of $189,000 a year according to yahoo news.
a gas pusher, it’s so easy that even a mikey could do it.
http://tinyurl.com/yavjg5y
And how many years is school? What’s the ROI?
I did it many years ago. A quick and dirty 2 year RN degree and into a two year Anesthesia School.
I had a lot of hands on blood and guts hospital experience under my belt before I did it. Those days are gone now as well as the 2 year anesthesia schools.
Bring money and pack a lunch to do it today, you’ll be there for a while.
Mikey,
Are you a CRNA? If so, I’ve got some questions.
And they don’t mention that there is at least four years of no wages, so at least double the cost, at least. I’ve been in and around education most of my life. There are very few degrees, in my opinion, that are worth the money. Trades pay almost as well, and ramp up must faster.
Those are only for the top graduates….the ones that get jobs. There is unemployment for new/existing graduates.
Before anyone thinks these degrees are “sure things” :
My Daughter got a degree in Civil Engineering almost three years ago. Worked for a year at about $55K, then was laid off and has been unemployed for almost 2 years. In the meantime, two more classes of Engineers have graduated. I wonder what they are doing ?
Aside from demonstrating that OB (and, by extension, RE) can get his way, does anyone out their in HBB land have the first clue what useful purpose the passage of Obamacare would serve?
March 13, 2010
Dems Confident Health Care Will Pass
But Some in House Suspicious That Senate Will Not Pull Through; White House Says Public Support Is on Rise
The latest news and analysis on the continuing battle over Barack Obama’s health care reform plans.
(CBS) The year-long battle to dramatically change the nation’s ailing health care system may be coming to an end. House and Senate Democratic leaders are confident they are very close to passing health care reform.
CBS News chief White House correspondent Chip Reid reports that Democrats seem to think they are closer than they’ve ever been and are confident it is going to pass in the next couple of weeks.
But one thing House Democrats are really worried about, says Reid, is that they will pass the bill, be out there with what to some is a politically unpopular vote, and then the Senate will fail to pass it.
When asked this morning on “The Saturday Early Show” if he believes the Senate is trustworthy, Rep. Anthony Wiener, D-N.Y., said that in the past the House has passed bills which the Senate has “let die” 290 times.
“There have been many cases where it’s been problematic, sometimes because of their rules or they’re just institutionally that way,” Weiner said. “But ‘fool me once, shame on me; fool me 290 times, shame on us.’”
So the Senate will have to provide real assurances - as Reid points out, “sign in blood that they are going to pass this thing.”
…
Given that every MSM story I hear on the health care bill focuses on the likelihood of its passage and the political wrangling involved in getting it passed rather than its actual contents, I believe the PR effort to convince America that this bill is needed has failed. Of course, this is just my personal subjective impression; being as cynical as I am about the political horse trading involved in the sausage making operation, I feel little inclination to figure out exactly what it actually proposes to do.
I agree Bear. This is change we can’t believe in.
“Given that every MSM story I hear on the health care bill focuses on the likelihood of its passage and the political wrangling involved in getting it passed rather than its actual contents, I believe the PR effort to convince America that this bill is needed has failed.”
Good point, PB. There is very little in the MSM on what the bill actually entails.
I agree 100% PB . If they actually discussed the real issues about Health Care it would be confronting why a monopoly insurance system can’t work with all the system changes that came about because of Globalism and the Wall Street finance games. Back in the old days when Employers paid for the insurance and the system prices stayed in check and various prices went up ,but than wages went up accordingly (in the closed economic system we had ),the system worked . You can’t make major changes to one part of a system without it making it clear how out of whack another system is . That why you get the health care industry increasing prices in a recession ,or Wall Street humming along as usual
just being concerned about Corporate profits claiming a recovery while Main Street is in ruins . They disconnected from the American people and took on a life of their own .
That’s why I say, “screw it.” I hope the R-cans are wildly successful in their efforts to derail Obamacare.
Just wait til the sheeple find out that with Obama Care you get to pay for the medical insurance three years before the government starts paying out. Wonder who will pay for the insurance claims during those three years?
The Dems are in suck a pickle, they’re screwed not matter they do. 1) If they pass it the nation revolts against their leadership in 2010/2012. 2) If they don’t pass it their own base will revolt.
And what do I have to hope for? The Republicans to save us!!! Oh man, this country is screwed too.
I’ll admit I don’t know enough about the current bill but my understanding is that it doesn’t have a “public option.” How is passing the bill without a public option in this case for the common good?
Seems like it forces one to get coverage without adding incentive to keep costs in check. If I’m an insurance company knowing that more people are going to be forced to buy my goods would I lower or raise my prices?
Or, do I have it wrong?
You could be right, hardly any of us know what’s in it because they’ve (the Dems) have been doing it behind closed doors. Even the Rep don’t know.
If the Senate version gets passed by the house, I think it has the public option with federally subsidized abortions. Each one of us will give $1 per month into an abortion fund that will allow them to provide funds for free abortions. I guess this has never been the case and its by the Stupack 10 (?) are holding out.
With the public option comes subsidized insurance rates, which in the end will drive the normal insurance companies out of business. Putting the insurance companies out of business is their main goal because once they come up with all their rules, the insurance companies will start being even stingier with their money and this will lead to discontent.
Lip, you are so wrong I barely know where to start.
No public option. No funding for abortion (though people will be able to buy additional coverage for abortions that cannot be paid for with subsidy money). No forced fund to pay for abortions. That is already against federal law and remains that way.
The bill is easy enough to find on the web site of the Senate Finance Committee.
Ben - how do you get your advertisers? I love this new one you have:
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Money for nothing and chicks for free?
Hurry up, fence sitters — it is time to get going before the tax credit expires later this spring!
BTW, doesn’t “gyration” refer to something that spins? Wouldn’t the risk of “further home price declines” be the concern for those who purchase a home to capture the $8K credit but only intend to stay in it for a few years?
* GETTING GOING
* MARCH 13, 2010
The Home-Credit Derby Has Its Price
By KAREN BLUMENTHAL
Federal tax credits for home buyers are some of the best deals around—but you will have to jump through some hoops to get one before the deadline.
Under the program, first-time buyers can take up to $8,000 off their taxes, and existing-home owners can take up to $6,500. To qualify, a contract to buy must be signed by April 30 and the purchase must close by June 30.
When the program was expanded late last year, the income limits were raised. Now, individuals with adjusted gross incomes up to $125,000 and married couples with adjusted gross incomes up to $225,000 qualify on home purchases up to $800,000. If you owe less in taxes than the credit, the Internal Revenue Service will send you a refund check.
But these days, getting a mortgage involves something of a financial inquisition. Here is what you need to know before you jump in:
To qualify for a mortgage, you will need a job and at least two recent pay stubs. You also will be asked for two years of W-2 forms, proof of other assets and either your tax return or a form allowing the lender to get your return from the Internal Revenue Service. That means that items that reduce your adjusted gross income, like business expenses or IRA contributions, can reduce the loan for which you qualify.
Then there is the appraisal challenge. With home prices still falling in many markets, an appraisal below the purchase price puts the deal in jeopardy. That is because a low appraisal means the buyer must come up with more cash or the seller must lower the price to keep the deal alive.
David Romero, who has 17 Century 21 offices in Southern California, says that has been a problem in San Diego, where lower-priced properties are in demand and buyers sometimes get into bidding wars.
Mortgage rates remain low—around 5% for a 30-year mortgage and closer to 4% for a shorter one. But to get the best advertised rates, you will need a FICO credit score of at least 720 out of a possible 850. Under guidelines set by Fannie Mae, the big mortgage buyer, every 20-point drop in your credit score below 720 results in a steeper origination fee.
While you can put down as little as 5%, you also generally will pay more fees with a lower down payment.
…
If you put down between 20% and 25% of the purchase price, you will find yourself in a strange middle ground: You will avoid mortgage insurance, but you will pay extra origination fees because Fannie Mae considers this group to be its highest risk at a time when home prices may decline.
For example, a buyer in this category with a credit score of 680 to 700 would pay an origination fee of 1.5% of the loan, while a buyer who put down 10% would pay a fee of half that.
Last, consider how long you plan to stay in the home. If you move within three years, you will have to pay back the tax credit. Realistically, given the cost, hassle and potential for home-price gyrations, you should plan to own the home five years or more.
“If you put down between 20% and 25% of the purchase price, you will find yourself in a strange middle ground: You will avoid mortgage insurance, but you will pay extra origination fees because Fannie Mae considers this group to be its highest risk at a time when home prices may decline.”
Hint to would-be buyers thinking of making 20% to 25% downpayments:
Your downpayment (aka your nest egg) is at risk of getting wiped out by further home price declines, at least in Fannie Mae’s opinion.
Don’t worry about that risk if you were thinking of funding your downpayment with the $8K credit, as that is other people’s money.
With all the mis-guided incentivization in place, have you noticed not one of these “Drive Housing Prices Up” organizations have a heavily discounted finance rate? Best rate I’ve seen is 4.1% through FHA.
It’s all about making the *entry* into LoanOwnership more possible and never about making homeownership something the average person can endure. Buyer walks in cell, door slams shut. Over.
The incentivization of housing is still misguided, distorted and unfriendly to the end user.
It’s all about finding new bagholders to bail out owners of toxic MBS…
‘Financial Innovation” = English/French/German/Italian/Russian/Irish/Greek… literature Majors
Not sure about the Austrian/Swedish students…
The Wall Street Journal
* MARCH 13, 2010
Legal Experts Say Lehman Criminal Case Would Be Difficult
BY AMIR EFRATI AND ASHBY JONES
A bankruptcy examiner’s report about the accounting practices at Lehman Brothers Holdings Inc. is filled with legally charged language, calling the bank’s financial statements “materially misleading” and saying its executives engaged in “actionable balance sheet manipulation.”
If federal prosecutors in Manhattan and Brooklyn decide to bring criminal charges, juries may eventually come to agree with his conclusions. But legal experts say hurdles remain to criminal prosecutions that, while potentially surmountable, could also be significant.
…
Could the average juror even begin to understand any of this?
I would think it would be lots easier to figure out whether OJ did it, based on the bloody, shrunken glove…
“If the figures don’t fit… you must acquit!”
If the figures don’t lie . . . you must FRY!
You can forget about jurors understanding derivatives contracts.
I’ve pored over quite a few in my life (not a lawyer here) and they are quite subtle.
The chance of an average juror poring over thousands of these and grasping them is the same as me jumping up and landing on the moon.
BWBS = “Bedazzle ‘em With Bull Shasta” = “not guilty”
It’s not that black-n-white, pondexter.
I could show you some contracts where you wouldn’t even be able to demonstrate to a buncha interested smart people who exactly was wronged at what point in time mathematically.
Complex cash flows are exactly that. It’s not always possible to decompose it into a sequence of rights and wrongs even assuming you had full information.
Which you don’t.
Ha, I’ve sat in court rooms, legal Thespians & Theater.
Perhaps I’m mistaken, but you only need one juror to acquit? right? Just doing the math here.
You only need one juror to hang the jury. If you hang the jury the prosecutor can try again.
and SOL is what 2 years (civil) most places?
The chance of an average juror poring over thousands of these and grasping them is the same as me jumping up and landing on the moon.
While I certainly believe average jurors wouldn’t be able to grasp the ins-and-outs of derivatives contracts, it’s the prosecutor’s job to frame the evidence in a way that the jurors don’t have to do that themselves.
PS: it’s “poindexter,” poindexter.
Generally counsel will kick off prospective jurors who appear to know something….
After law school I once got called down for jury duty. I was put on a voir dire panel and questioned. We weren’t told exactly what the case was about other than attempted murder, but listening to the questions I gathered it was a drive-by gang shooting that only wounded the victim. The opposing counsels grimaced when I said I was a lawyer. Then the judge asked the panel “do any of you own guns, and if so how many” Quite a few had a shotgun or a revolver, but when it got to me I said “well I have a type 3 FFL and don’t know exactly how many guns I own right now…probably about 40″. The opposing counsels grimaced some more (as did the defendant
). Finally they asked if anyone had any specific technical knowlege about firearms, and I had to raise my hand again since I was doing some gunsmithing for myself in my collection.
Guess who was the first prosepective jurror tossed? The DA said “the people thank and excuse DennisN”. The second prosepective juror tossed worked in child protective services - for the Sheriff’s Dept.! She and I walked out to the parking lot together comparing notes. We were both certain that the other one would be the first kicked off.
That reminds me of an old cartoon I saw of the Iran-Contra hearings. The prosecuting attorney was interviewing potential jurors and one by one each asked, “What’s an Iran-Contra? until they got to Ronald Reagan who asked the same question.
I thought the problem with the Lehman stuff was just messy repurchase agreements…meaning they “sold” something for $x and said in their financial statements that the item was sold and they had no further risk of ownership related to that item. What they failed to mention was that the contract required them absolutely to buy back the item at $y (x<y) at a later date, so that they would, once again, be completely responsible for the risk that the item would go down in value.
It isn’t the easiest idea in the world, but it sure ain’t the hardest. I think a jury could figure it out. The problem isn’t understanding it. The problem is that it may not be a violation of standard accounting practices. Someone came up with a new way around the rules. Or perhaps this is the first time that this particular violation caused a major financial crisis.
In any event, as I have said here before, being evil isn’t illegal. Only violating the law is illegal.
perhaps they lie
It’s called making it appear that your more wealthy than you are right when you need to disclose your wealth . This could affect people even wanting to buy your stock had they know you were in debt up to you eyeballs .
Yeah, ok I hate this. But feel compelled to comment.
We do business. As long as it’s a straight game I’m good. I get it sometimes I win, some times I lose. But cheat me, and Guido, the really big ugly guy in corner is going to do bad things. And everyone is going to say you fell down the stairs.
That’s how I feel about these Wall Street guys. “no seriously officer, I saw him fall down the stairs” 200 flights
“Your Honor, I believe that I have qualified my answer several times, in that my attorney appears to be asleep, could you please ask the Federal Prosecutor to make his point or please move on ?”
It’s more like lets make regulations that are so weak that we can get around them . Strong plain laws like “you can’t do this “are what is needed . Also it would help it the culprits weren’t the ones writing the laws .
http://www.independent.co.uk/news/business/news/london-link-to-50bn-lehman-coverup-1920701.html
Anybody who owns any stock in “too big to fail” banks or insurers should be reading this. Lehman used a London law firm to conceal its massive liabilities through creative accounting. I don’t think for a minute that Lehman is the only firm doing this, or that what the banks are being honest with shareholders or regulators about the true extent of their failed speculation and bad loans.
What do you think in part they vied for the bail-outs. Bail outs cover
up a lot of sins . My hunch is a great many of them should be in jail .
The other great con going on today is this con job that the laws didn’t exist that were violated . Oh lets just talk about the new laws were going to make so people won’t pay attention to the standing law that was violated . For starters they all violated fiduciary duty .
Barney Frank, June 27, 2005:
Rep. Barney Frank (D-Mass.) on June 27, 2005 on the House Floor:
“Those who argue that housing prices are now at a point of a bubble seem to me to be missing a very important point. Unlike previous examples we have had when substantial excessive inflation of prices later caused problems we are talking here about an entity, home ownership, homes where there is not the degree of leverage where we have seen elsewhere. This is not the dot-com situation. We had problems with people having invested in business plans of which there was no reality; people building fiber optic cables for which there was no need. Homes that are occupied may see an ebb and flow in the price at a certain percentage level. But you’re not going to see the collapse that you see when people talk about a bubble and so those of us on our committee in particular will continue to push for home ownership.”
“I am very pleased to join in support of this resolution. Indeed, I was a prime cosponsor. The main sponsor is our colleague, the gentleman from California (Mr. Gary G. Miller), who comes to Congress with a distinguished record himself in building homes.”
Distinguished record, indeed– if you’re willing to overlook Congressman Miller’s federal tax evasion, making false statements in connection with land sales, and misuse of Congressional staff in connection with a land sale…
“This is a very important resolution, particularly at this time, because we have, I think, an excessive degree of concern right now about homeownership and its role in the economy.”
And Mr. Frank, supposedly one of the foremost experts in the House on matters of banking and finance, must have also been ignorant of the fact that hedge funds were busily concocting byzantine layerings of financial instruments to create mortgage-backed securites which themselves could be leveraged 30 to 1. While Mr. Frank was asleep at the wheel, hedge funds were engaged in perhaps the most reckless use of leverage in history.
“So those of us on our committee in particular will continue to push for homeownership. And I very much agree with the gentleman from Ohio who has chaired the Subcommittee on housing and Community Opportunity of the Committee on Financial Services about the importance of this and about the various ways in which we do that.”
That gentleman from Ohio to which Mr. Frank is referring is none other than Congressman Bob Ney, who was soon to be tried and convicted for various corrupt activities.
“I just want to add, as I bring these remarks to a close, Mr. Speaker, and I enjoyed working with the gentleman from California (Mr. Gary G. Miller), that I want to pay tribute to a couple of organizations that have done a good deal to help us with this. I found the National Association of Home Builders has been a very constructive participant in our efforts to promote homeownership. The National Association of Realtors has also played a very useful role in helping us shape public policies that expand homeownership.”
Good thing that nobody slipped some truth serum into Barney Frank’s lunch, because otherwise, he might have said this:
I just want to add, as I bring these remarks to a close, Mr. Speaker,
and I enjoyed working with the crook from California (Mr. Gary G. Miller),
that I want to pay tribute to a couple of organizations that have bought their way into the legislative process to further the narrow self interests of their dues-paying membership. I found the National Association of Home Builders has been very generous to my campaigns in the past to the tune of $35,500. The National Association of Realtors has also ponied up $62,000 to my past campaigns , so I let them shape public policies that will keep the commission checks flowing to Realtors.
* * *
The fact that Mr. Frank was dead wrong at the height of the housing bubble does not stop him from positioning himself now as the guy who knew it all along. Chairing a hearing last September entitled “Recent Events in the Credit and Mortgage Markets and Possible Implications for U.S. Consumers and the Global Economy” , Frank conveniently forgot how he dismissed the existence of any housing bubble just two years earlier, and instead shamelessly said this:
“We will be focusing today on the question of what happened in the market situation, and my concern is this: For some time now, we have seen the subprime crisis. I believe that those in charge were a little bit surprised that the subprime crisis spilled over as such as it did into other parts of the mortgage market. And more specifically, you know, you are supposed to pretend that you don’t ike to say, ‘‘I told you so.’’ But as I have said before, I find that to be one of the few pleasures that come with age.”
I guess it takes a long measure of hubris and a short memory to serve in Congress nowadays…
“homes, where there is not the degree of leverage where we have seen elsewhere”
What? A home is probably the most leveraged purchase made by the average person. 3 to 20% down and the rest leveraged over 30 years.
And this from “supposedly one of the foremost experts in the House on matters of banking and finance?”
Thanks JS for that trip down memory lane.
The deal with the out-of-control Prius might be a scam, perpetrated by a financially troubled….
wait for it….
Real-estate agent!
You can’t make this stuff up.
http://www.foxnews.com/story/0,2933,589090,00.html
“You can’t make this stuff up.”
Fox can and does. 24 hours a day.
What is the difference in this case between “respect” and “lie about”?
This is something I truly cannot fathom about central bankers. They seem to believe that if they say something, it somehow makes it come true. Is that really how truth works?
Bloomberg
Trichet Says Rating Firms Will Respect ‘Courageous’ Greece Plan
March 13, 2010, 12:32 AM EST
More From Businessweek
* European Stocks Climb for a Second Week as Greece Concern Fades
* Trichet Sees 1.95% Inflation, ‘Price Stability’ at End of 2010
* Emergency Bank Funds May Not Be Feasible, U.K. FSA’s Sants Says
* Treasury Two-Year Notes Fall as Greece’s Deficit Crisis Eases
* U.S. Stocks Gain as Worries Over Greece’s Budget Crisis Fade
By Simon Kennedy and Joshua Zumbrun
March 13 (Bloomberg) — European Central Bank President Jean-Claude Trichet said Greece’s plan to cut the euro-area’s largest budget deficit will win the support of investors and credit-rating companies.
“At this stage my working assumption is the Greek government decision will be convincing,” Trichet said in an interview yesterday with Bloomberg Radio before delivering a speech at Stanford University, near Palo Alto, California.
Greece’s fiscal crisis could be exacerbated at the end of this year when the ECB is due to revert to lending rules that were loosened during the global recession. If Moody’s Investors Service cuts Greece’s credit rating to a level comparable to the other major ratings companies, the nation’s government bonds would no longer be eligible as collateral at the central bank, making it more difficult for the country to borrow.
While Trichet said the ECB will study its rules, he said “there is no case” for Greece to be judged more negatively in financial markets or by ratings companies. Bundesbank President Axel Weber said March 9 the bank could accept government bonds with lower credit ratings as collateral if a higher risk premium were applied.
“Certainly, we have to look at this particular issue,” Trichet said. “The Greek government has taken additional measures which I’d qualify as convincing and courageous.”
…
Does the Greek crisis simply amount to a Donald Trump problem for Greece’s creditors?
The self-inflicted woes of Greece
Tahera Ahsan
GREECE and its woes have been in the forefront of business news in recent times. Greece reported a huge budget deficit as 12.7% of GDP (the EU limit being 3.0%), and an enormous debt as 112.6% of GDP (300 bn Euro). While many may view this as just a country-centric problem, it has much wider implications for Europe and the global economy.
During Greece’s induction in the European Union (EU) in 1981 and its adoption of the euro in 2002, the country had reportedly been already carrying considerable debt. However, as they became part of the EU their perceived creditworthiness improved, as many judged the creditworthiness of the sovereign through the other nations with which it shared its currency. Barclays estimated that about 95 per cent of Greece’s debts are held by banks operating in the euro zone. This means that the problem has been brewing right under the nose of the EU watchdogs, who chose to not pay attention to it, leading to the current catastrophe which is threatening the entire structure of the union. Greece entered complicated financial derivative deals with Wall Street hot-shot Goldman-Sachs, which in effect hid the size of their debt, albeit marginally.
While all these borrowings enabled the country to go on a spending spree making its economy look like a ‘turn-around story’, no attention was paid to the less than adequate revenue being generated in return, mainly low tax revenues through notorious Greek tax evasion. Greeks also tempered with their own national accounts; Eurostat found that they barely recorded any expenditure on military equipment for years, routinely overestimated tax collections, didn’t record hospital costs in the state health system and counted EU subsidies to private entities in Greece as government revenue. The fear plaguing the global economy now is the chance of a sovereign debt default by Greece.
…
“Does the Greek crisis simply amount to a Donald Trump problem for Greece’s creditors?”
Which problem do you refer to, that Greece may become another serial defaulter or that it needs a good haircut?
“Greeks also tempered with their own national accounts; Eurostat found that they barely recorded any expenditure on military equipment for years, routinely overestimated tax collections, didn’t record hospital costs in the state health system and counted EU subsidies to private entities in Greece as government revenue. ”
Sovereign grifters?
Beware of both Greeks and geeks bearing grifts.
MS DOS WOW that was useful…
“Jean-Claude Trichet said Greece’s plan to cut the euro-area’s largest budget deficit will win the support of investors and credit-rating companies.”
I guess Moody’s Rat-Hole Ratings will fall for anything.
Wasn’t the ECB threatening to create its own rating agency just a week ago? Maybe that was a warning to the ratings agencies to ‘get with the program’ or else.
Coffee Talk amongst yourselves….
Is the “Coffee Party” the Next Big Thing? cbsnews 3/12/10
Looking for change, but not quite ready for a revolution? Disappointed in President Obama and Congress, but not ready to turn your back on Washington? Prefer a double, non-foam latte over a cup of Earl Grey? The Coffee Party might be for you.
Months after the Tea Party erupted onto the national scene at health care town halls, an alternative, more pro-government group of citizens is emerging to say they’re angry, too — they just want less yelling and more talking.
Just as the Tea Party organized to remind the Republican Party what its conservative base stands for, the Coffee Party movement is organizing to represent citizens who believe in government solutions for national problems but aren’t necessarily enthralled with Democratic leadership. After gaining steam online over the past few months, the Coffee Party is launching its first national event this Saturday: National Coffee Party Day.
“We want jobs with decent pay for all Americans,” the Coffee Party declares on its Facebook page. “We want affordable health care and education. We want our government to cut wasteful spending and practice fiscal discipline. We want regulation of Wall Street to protect consumers and promotion of financial literacy.”
http://www.cbsnews.com/8301-503544_162-20000354-503544.html
“Until 1767, the East India Company paid an ad valorem tax of about 25% on tea that it imported into Great Britain. Parliament laid additional taxes on tea sold for consumption in Britain. These high taxes, combined with the fact that tea imported into Holland was not taxed by the Dutch government, meant that Britons and British Americans could buy smuggled Dutch tea at much cheaper prices. The biggest market for illicit tea was England—by the 1760s the East India Company was losing £400,000 per year to smugglers in Great Britain—but Dutch tea was also smuggled into British America in significant quantities.
In order to help the East India Company compete with smuggled Dutch tea, in 1767 Parliament passed the Indemnity Act, which lowered the tax on tea consumed in Great Britain, and gave the East India Company a refund of the 25% duty on tea that was re-exported to the colonies. To help offset this loss of government revenue, Parliament also passed the Townshend Revenue Act of 1767, which levied new taxes, including one on tea, in the colonies. Instead of solving the smuggling problem, however, the Townshend duties renewed a controversy about Parliament’s right to tax the colonies.
CNN just devoted a major puff piece to these contrived “coffee parties” that just happened to be organized by a hardcore Obama activist. What a sham. The fact that the MSM is striving so mightily to get this manufactured “movement” to take off is very telling indeed. Just as Establishment Republican dirty-tricks outfits like Freedomworks headed by K Street whore Dick Armey are subverting the riled-up cretins of the Tea Party movement, so will “coffee parties” be an attempt by the corrupt DNC establishment to mobilize “useful idiots” for their own purposes.
If this is some sort of major conspiracy by the president’s supporters, they are doing a miserably poor job of doing it. Seriously, have you even listened to the coverage? During an interview on NPR this morning, the organizer couldn’t express a single coherent organizing idea though she did say that she thought they might have something in common with the tea party folks, but she would have to see what came out of the meetings to be sure.
I just looked to see if there were any meetings in my area, and there were only 3 in the entire District of Colombia and one in the entirety of Montgomery County, Maryland. No meetings on any of the many college campuses in this area. Believe me, if anyone seriously wanted this group to have a major voice other than “people care enough about what is going on in this country to get together and drink coffee and talk for a little bit” they have already failed.
The “coffee parties” have the same future of Air America. Launched with all kinds of breathless hype from the MSM, but just one problem: only the most grimly dogmatic liberals bothered tuning in. The kinds of people who gravitate to coffee parties will be “joiners” and Volvo-driving lib-Dems looking to validate their lame existences. They’ll figure out in a hurry that there’s no substance and no driving force behind this MSM-hyped “grassroots movement.” But compare the fawning coverage the MSM devotes to this to their open revulsion for the Tea Party movement.
…citizens who believe in government solutions..
we want.. we want.. we want..
oh yeah.. We can never have enough of them government solutions. The nice thing is that government is more than willing to provide as many of their solutions as we care to ask for.
So that’s the core of this new age “revolution” strategy? Petition government to solve our problems?
That’s truly pitiful. I’d say more, but why bother.
So that’s the core of this new age “revolution” strategy? Petition government to solve our problems?
That’s truly pitiful. I’d say more, but why bother.
Tell me about it. If these people had been around in 1773, they’d be signing petitions to ask King George III and the British Parliament for more “regulation” of the East India Company.
I just got back from a coffee party. I thought we were going to break up into groups of 5 or 6 and discuss the issues of the day. But as soon as I walked in the door, some guy told me to put my keys on the coffee table, and then the whole thing quickly devolved into a tickle fight. Never again. Never!
Luv,
Jen
whole thing quickly devolved into a tickle fight. Never again. Never!
Or at least not until the next time, eh?
Are you sure it wasn’t a Congressman Massa staff meeting?
did you video it ?
Sheesh Jen…are you sure that you got the address right ?
The creator of “the coffee party” is an ex-Obama campaign hack and a former analyst for the New York Times. Not exactly a “grass roots” op if you know what I mean.
There were 3 meetings in DFW. I went to a Coffee Party meeting in Ft. Worth.
It was scheduled to meet at a coffee shop but too many people showed up and we had to meet in a nearby warehouse. We lost a few folks that couldn’t find the new meeting place but about 25 people showed up. They ranged in age from the 20s to 60s with most over 50yoa, 50/50 male-female and about 80% white. I would classify the group and left of center but there were a few republicans. This meeting was 100% grassroots. No one there seemed to know anything about the national leadership or who was funding it. I looked up the democracyinaction.org connection and they are providing some technical support and advise but it’s really low budget stuff from what I can see.
A list of issues was compiled as follows:
#1 campaign finance reform & gerrymandering districts.
#2 health care reform - several personal horror stories were offered.
#3 financial regulation.
#4 education reform (no one liked the new Texas school history book rewrite).
A small group of older ladies from a local church offered to hold the next meeting. The first protest action might be the next Texas Education Board public meeting.
Blessed are the truth tellers, for they shall inherit the future approval of economic historians.
This recovery is a sham
Last year, the door to this foreclosed Bronx, N.Y., home was chained and padlocked. Despite better times for large companies and the wealthy, for most Americans the recovery remains a sham.
Julie Jacobson/AP/File
By Robert Reich Guest blogger / March 12, 2010
Are we finally in a recovery? Who’s “we,” kemosabe? Big global companies, Wall Street, and high-income Americans who hold their savings in financial instruments are clearly doing better. As to the rest of us – small businesses along Main Streets, and middle and lower-income Americans – forget it.
Business cheerleaders naturally want to emphasize the positive. They assume the economy runs on optimism and that if average consumers think the economy is getting better, they’ll empty their wallets more readily and – presto! – the economy will get better. The cheerleaders fail to understand that regardless of how people feel, they won’t spend if they don’t have the money.
…
“Blessed are the truth tellers, for they shall inherit the future approval of economic historians.”
But not the appointments of current cabinet posts, kemosabe.
you probably have no Idea what this does for me.
Olygirl used to make up scripture from II Cosmopolitans. That and geoducks. God miss her
“The cheerleaders fail to understand that regardless of how people feel, they won’t spend if they don’t have the money.”
Give spenders money and they’ll spend it, that’s what spenders do. Give the money to savers and they’ll save it.
During the era of Borrow & Spend the spenders held sway, now it’s the era of the savers.
Circulating money that winds up in the clutches of savers gets saved and hence the circulation slows, especially if the saved money ends up in a bank (money that flows into banks is reluctant to leave).
This starves the spenders of their spending money. Not a good thing in a consumer based economy, but maybe having a consumer based economy isn’t such a wonderful thing to have in the first place.
Transitioning Times make for Interesting Times.
He makes two interesting points. One, that S&P 500 companies are making up lost sales in the US with increasing sales to Chindia, Brazil, etc. Two, that those same corporations are sitting on tons of cash, and are using it to buy back stock (thus keeping stock prices high) and to buy up competing companies.
A flaw in the ‘cash is king, wait for the good stock values’ plan?
“A flaw in the ‘cash is king’, wait for the good stock value’s plan?”
Maybe so, but probably not.
History has shown stock prices run in cycles, from being overvalued to undervalued to overvalued…and so on.
When the cycle is favorable to a buyer then that’s when he should buy. Same goes for selling.
The reasons for the overvalued/undervalued swings can be various and many, but reasons explaining why they happen don’t matter as much as the fact that they do happen.
I’m betting stocks haven’t seen their lows for this cycle. If I’m wrong then …well, I’m wrong. But being wrong and flush with cash is not such a bad place to be.
Oh, you’re more of a ‘long-wave’ theory investor, then? I thought your plan was more of a ‘value investing’ thing, ie picking up individual undervalued stocks as they became available.
Well, yeah, I am. When they’re offered. I’m still waiting for them to be offered.
I can still remember 1974 when stocks were a screaming buy. That’s what I am waiting for. That or something along those lines.
Stock buy backs are signals that management can’t think of anything better to do with the money that will make their stock options go up in value - in other words, they don’t see any upside in investing in capital equipment or hiring more people.
Take overs mean they think they can make more money by buying the other company and firing a bunch of people or otherwise combining and/or reducing operations.
“History has shown stock prices run in cycles, from being overvalued to undervalued to overvalued…and so on.”
The question we should all ask is, given the dot com / telecom peak and subsequent crash which began in the year 2000, how long will be the duration until stocks are relatively cheap again?
For an indication, it might pay to consider how long the peak-to-trough period it was during previous stock market busts. For the U.S. in the 20th century, we had peak-to-bottom periods roughly along the following lines:
Peak-trough
1901-1921
1929-1945
1966-1982
2000-2010+
Then there is Japan:
1990-2010+
The moral of the story:
- The shortest duration of the five cases listed above was 16 years (1929-1945, 1966-1982).
- Unless you believe this time is different, it might be reasonable to expect U.S. stocks to again have attractive valuations for long-term buy-and-hold investors by 2016 or later.
P.S. My U.S. examples are based on the S&P500 price-earnings graph in Shiller’s “Irrational Exuberance.” (I would offer a specific reference, but I think my copy is floating around somewhere in Moscow at the moment, with my cousin, to whom I loaned it, who happens to be stationed over there for the time being…).
Another thing about buying stocks at their troughs is that that’s often precisely when there is an alternative, very attractive investment option. Like super-high returns on your money market account in 1982.
“Another thing about buying stocks at their troughs is that that’s often precisely when there is an alternative, very attractive investment option. Like super-high returns on your money market account in 1982.”
Exactlimento! Ding! Ding! Ding! We have a winner here!
Owning stocks sucks when they are at their lowest price. They are at their lowest price when it is widely perceived that they are the worst place to put one’s money.
If investor perceptions runs rampant that there are better places to put one’s money than stocks then these better places is the direction to where investment money will flow.
People will get fed up with dismal stocks returns and finally throw in the towel and sell out their holdings and use the money obtained from their stock selling to chase the latest whatever. This selling creates incredible stock buying opportunities.
For the past ten years or so the return on stocks has been dismal. This is good if you intend to become a buyer, not so good if you are a seller. But the “I’m fed up and I want out” attitude among investors is not there - not yet.
But stay tuned and wait for furthur developments.
Exactlimento! Ding! Ding! Ding! We have a winner here!
Yay! What do I win?
My point was a little more subtle (I like to think) than just that stock price are at their lowest when stocks are least attractive to investors. My attempted point was that it’s not always a ‘crash’ that marks the nadir of the trough- it’s often just stock market ‘malaise’ coupled with an exciting investment alternative (high returns on commodities, high interest rates, etc). Sometimes these alternatives are very hard for an investor to ignore- 20% returns on money market accounts are an example of this. It takes a strong will to remove money from an almost guaranteed 20% return and park it in an asset class that’s been treading water for 10 to 20 years. It’s easier to say than do. (But I hope to do it, too.)
“Another thing about buying stocks at their troughs is that that’s often precisely when there is an alternative, very attractive investment option.”
And another nudder thing about buying stocks at their troughs is that that’s often precisely when there are very, very few other qualified buyers, because Main Street households tend to be completely wiped out at that point.
Of course, so long as Megabank, Inc can get their near-zero-interest loans provided by ZIRP advocates Ben and Janet at the Fed, Wall Street should be in an excellent position to snap up stocks at fire sale prices.
“Owning stocks sucks when they are at their lowest price. They are at their lowest price when it is widely perceived that they are the worst place to put one’s money.”
I see a striking parallel to the housing market here. My rules for even thinking about buying a house in the wake of the largest real estate bubble in the history of man:
1) Wait until there is blood in the streets.
2) Wait until it is universally agreed that real estate is a terrible investment.
I see a promising sign from on high that development 2) is not all that far off as some might believe. It will take a while for the meme to diffuse from the FRB economist’s academic paper to the sheeple, but in due time, it will happen.
“…it’s not always a ‘crash’ that marks the nadir of the trough - it’s often just stock market ‘malaise’ coupled with an exciting investment alternatives…”
True that. So many alternatives, so little cash.
However … if one is in for the long term then buying stocks of good, solid companies when they are temporairly offered for sale at extradordinary prices is the way to go BECAUSE interest rates (other than for long-term bonds) and commodities are SHORT TERM investment vehicles.
The price you pay determines your rate of return. If you can lock in a high rate of return on a long-term investment vehicle then you will get a high rate of return for a long time. If you choose to go after a high rate of return on a short-term investment vehicle then your high rate of return is but for a short time.
After this short time has ended then you are stuck with looking for another place to put your money. This doesn’t happen when you are long-term invested.
People howl about the buy-and-hold concept, they badmouth it at every opportunity. Their badmouthing has merit if whatever was bought-and-held was the wrong stock, bought at the wrong time, bought at the wrong price. But buy-and-hold works wonders if it is the right stock, bought at the right time, at the right price.
“But buy-and-hold works wonders if it is the right stock, bought at the right time, at the right price.”
That works for housing, too, or any long-lived, high-valued asset, for that matter (violins, paintings, etc). Having twice before bought homes and later sold w/ gains, I know first hand what it means to buy low and sell high. But I believe this time is different, due to government intervention to prop up home prices. I am still waiting for someone to show a shard of evidence this has ever happened before.
The upshot is that this point in the business cycle would normally be a good time to buy a home, but intervention to artificially support prices means that the market has not yet finished correcting, and the time to buy may hence have been delayed until some years into the future.
For reference - here is my version of the chart PB talked about - updated per current Shiller data that came out recently.
Stocks are kinda sorta cyclical, but not really. Certainly there are periods of very long trends - however you can’t count on them - there are also some very significant breaks/spikes in those long-term trends. E.g. if one were to count on long-term trends/waves, you probably would have started selling a lot in about the 1995-1997 timeframe. If so you would have gotten shafted - royally, since prices went through the roof after that, and didn’t come down below those levels until just this past year - and that’s in inflation-adjusted levels; even last year’s dip didn’t take them below pre-1997 levels in nominal terms.
packman –
Many thanks for providing the HBB with yet another outstanding chart.
Some very important differences between the 1930s episode and the 2000s episode can be spotted on that chart:
1) The Roaring 20s runup in P/E ratios really only lasted about eight years, 1921-1929, during which the P/E on the S&P500 climbed from about 5 up to 33. Contrast that to the more recent episode: 1982-2000, or 18 years, during which the P/E ratio climbed from its 1983 trough level around 7 to the relatively higher recent peak of 44; small wonder an entire generation of investors concluded, “The stock market always goes up.”
2) The 1930s saw a correction from a P/E peak of around 33 in 1929 straight down to a trough of about 6 around 1933. By contrast, the current secular bear market correction appears to be still playing out.
3) So far as I am aware, there was no Plunge Protection Team for stocks or other assets back in the early 1930s as there was in the 2000s. It is easy to see the footprint of AG’s effort to prop up the market as it started to plunge in the 2000-2002 period, in the form of a dead cat bounce off the P/E level of 22 or so back up to a temporarily-higher plateau of P/E = 26 which held up for a period while Hank Paulson was in command at the Treasury Department. The Fall 2008 crash blew that to smithereens, but the various subsequent bailouts (especially TARP coupled with ZIRP) appear to have driven another dead cat bounce which brings us up to date.
4) If I were a betting man (and we are all betters, now), I would bet the market has a few more bounces both up and down ahead of it before finally bottoming out at a P/E level below ten some time by 2020…unless it is different this time!
Nice chart. A simple rule, if followed, might help make one rich.
This simple rule is: Buy quality stocks when the stocks on this chart are selling below a P/E of 10. A better simple rule is to buy quality stocks when the P/E is below 9. Or, better yet, below 8.
What should one do if stocks on this chart are selling above a P/E of 10? A simple rule: Don’t buy stocks if they are selling above a P/E of 10. Put your money somewhere else. Cash maybe.
Look at this chart and see for yourself if this simple rule would have worked or not.
“America’s biggest companies are also showing fat profits and productivity gains because they continue to slash payrolls and cut expenditures. Alcoa, for example, had $1.5 billion in cash at the end of last year, double what it had on hand at the end of 2008. Sounds terrific until you realize how it did it. By cutting 28,000 jobs – 32 percent of workforce – and slashed capital expenditures 43 percent.”
This isn’t just bad for American workers now, it’s worse for the future.
This so-called recovery is a farce. I ran into a friend I hadn’t seen in a few years a couple of days ago who was laid off from a job of nine years a few weeks ago. In talking to my parents yesterday, my brother’s had his hours reduced recently after having his wages reduced last year. He works for a printing company in the middle of the country. Apparently what the company is saying is that one of their presses is down for a week awaiting repairs, with no one working or getting paid when this happens. Funny, this never happened in the past. But it screws those working for the company. They aren’t unemployed so they can’t get unemployment. Because they don’t know when these “outages” will occur, they can’t search for other work to fill the gaps. Apparently the reason for the decline in business was that one of their bigger clients, a well-known weight loss company, sent their printing work to China.
The printing industry being outsourced now to China ? What next ? Fat profits for Corporate America and Wall Street while Main Street in ruins . Nothing but monopolies forming in that Corporations seek greater profit by joining the outsourcing to cheaper labor World wide to compete with the other monopolies that are firmly entrenched .
Will people be forced into going to Mexico to get health care . Health Care is the one monopoly industry that is local ,and this is the one industry that is gouging beyond belief . This is what happens with price fixing and monopolies . Cheap wage labor is becoming a monopoly .
And the cheap labor from other Countries are being exploited as far as I’m concerned .If America has to give up all their jobs ,at least you would like to think it has uplifted people some where else, but it hasn’t .You just have to look at where all the money is going and who is getting the doe .
And these crap products that only have a fraction of the lifespan of well made products and materials aren’t worth the price that is being charged on top of everything else . Isn’t that in itself a violation of Global warming that the cheap products will produce a situation where more has to be produced sooner(to replace junk) and more junk in the garbage dumps of the World . Why aren’t the
Scientist bringing up that point as a neg. to cheap junk Globalism .
The printing industry being outsourced now to China?
There’s been quite a bit of outsourced printing to China.
But it’s not the kind of thing that could be completely outsourced — not with current levels of technology, anyway. First of all, the quality of Chinese printing isn’t as good. Some companies just don’t care, and for some print jobs that’s not too crucial anyway. Second, at some point, shipping costs may again be a factor. Most importantly, too many art directors, creative directors, and print managers want to make adjustments to their print runs personally, tweaking colors and saturation and so forth “on-press.” That’s difficult to do without being onsite, no matter how good the press.
I’ll go to Mexico for health care. Can’t be any worse.
And I’ll be able to afford, a new car.
This seems to be perpetually apropos.
The cheerleaders fail to understand that regardless of how people feel, they won’t spend if they don’t have the money.
Yep
Creating inflation only increases GDP ifpeople have money to spend.
1. Are people getting raises?
2. Are there extra people in most homes that go out and get jobs? We’ve already sent the wife off to work.
3. Are there pots of money that the average American can tap into? Nope most have little savings.
4. Can the average American borrow money? or do they want to?
We’ve gone through all 4 of these there is no new money to increase spending. Thus we will just shift spending from manufactured goods to food and fuel which will create more unemployment and thus the downward cycle will continue.
San Diego home buyers shouldn’t worry about stories like this one, as used home sellers have determined that a bottom is in already and real estate can only go up from here. Buy now, or lose out on the chance to claim the $8K tax credit!
BTW, for the moderately mathematically inclined, a one-month rate of notices at 5,399 runs at an annual rate of 12*5,399 = 63,788. How does that compare to the rate at which San Diego homes are selling these days? Since there are only 8000 or so homes currently listed on the MLS, I suspect the current rate of home sales is much lower than 5000 a month, but I am too indifferent to check up on this.
I suppose a careful assessment of the supply side of the market should consider not only foreclosure and default notices, but also the number of people walking away from underwater homes, new home construction and used homes put up for sale for non-distress reasons. There seem to be lots of sources of supply these days, considering how little inventory shows on the MLS…
San Diego distressed housing market among the worst
Thursday, March 11, 2010 at 2:43 p.m.
View a chart of the report (PDF)
San Diego County’s distressed housing market ranks 27th worst in the nation, according to a report Thursday, with one in every 211 homes receiving a default, foreclosure or other type of notice in February.
There were 5,399 such notices last month, up 1.9 percent from January but 11.3 percent below year-ago levels, an improvement on national trends, according to RealtyTrac, an Irvine research firm.
Las Vegas ranked first, with one for every 90 homes receiving a distress notice, followed by Fort Myers, Fla., at one for every 92 homes. Ten California areas ranked higher for distress than San Diego. The state’s worst was Modesto, at one notice for every 100 homes.
Among the 50 hardest hit markets were 17 in California. Riverside-San Bernardino ranked fifth with one notice for every 117 homes; Los Angeles-Orange County, 35th with one for every 244 homes; and the San Francisco Bay Area, 39th with one for every 264 homes.
Nationally, RealtyTrac said one in every 418 homes received a distress notice, based on 308,524 notices in February, down 2 percent from January but up 6 percent year-over-year.
…
PBear, Thanks for the second Larry Summers post yesterday about women and their innate inability to do science. I actually had a friend who was at the talk; there was more said than was reported, luckily for Larry.
I’ve been disappointed that there haven’t been more Larry stories coming out of Washington. When he was here in Cambridge you couldn’t throw a stone without hitting someone he had ticked off. A few years ago I went to a book talk by the former dean of Harvard College. Naturally I thought I’d hear all about his book, “Excellence without a Soul: How a Great University Forgot Education.” Instead it was a 1-hour gripe session about Larry.
Maybe the current administration has better damage control than Harvard.
Let them eat pollution
“Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs [Lesser Developed Countries]? I can think of three reasons:…”
What kind of a mind would come up with this so-called economic logic:
(1) “I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that.”
(2) “The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost.”
(3) “I’ve always thought that under-populated countries in Africa are vastly under-polluted; their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City.”
“What kind of mind…”
Brilliant but bored.
One more thing:
When LHS says “the logic is impeccable,” he is subtly ridiculing his own chosen profession, on whose standard religious tenets his logic is based.
Some of the brightest women I’ve ever met were women.
I was trying to explain smarts to my very bright daughter yesterday. I told her that if my wife and I were both students at the same high school, she would get straight A’s, and I would not, but I would have to tutor her in her harder math and science courses for her to get A’s in them.
P.S. My daughter is actually very bright in science and math — gets A’s in math without studying hard — but she also does not much care for science. I have to question whether LHS is confounding ability (a technical constraint on human intelligence) with desire (a preference-based factor). My sense is that boys and men tend to enjoy science more than women, whether or not they have higher innate intelligence.
To further muddy the waters, ability is endogenously determined by desire; i.e., someone who likes a subject better will try harder, and hence show greater “ability,” than someone who dislikes it.
Boys like to get their hands dirty…..to fix things, to tinker around
Now get the girls to do that and it will be even.
————————————
My sense is that boys and men tend to enjoy science more than women, whether or not they have higher innate intelligence.
I believe that the bell curve of intelligence distribution is steeper for women than for men. In other words, there are far more women in the middle– the average– than on the extremes. This basically means you’ll tend to get fewer geniuses for women, but you’ll also get fewer idiots.
As for desire– I completely agree. I started off in college working towards an engineering major, and the percentage of women was fairly low. But I never had any of the other students look down on me because I was one of the few girls; most of them treated me just the same as the male students. After a year and a half I realized that I was not enjoying myself the way that I should if I wanted to make engineering a career*. I ended up going into Broadcast Studies, of all majors (cool equipment) and was moderately appalled to note the decrease in intelligence and application. There were a few students in that major that actually had reasonable intelligence but the vast majority came off as narcissistic morons.
*My dad pointed out that if I were really into engineering, I’d be getting straight As instead of a B average. He was right. Still glad I got through second semester physics, though, because that professor more than made up for the first semester physics teacher.
Bank Failure Friday is becoming a regular fun-fest.
As of this morning, 28 banks have failed in the US in 2010.
As of this time last year, 17 banks had failed in the US (through March 13, 2009).
Assuming YOY data is a good trend and that taking 140 banks out of the equation did not sufficiently reduce the pool of banks to have a significant impact on the rate of failure:
This year’s failure rate is 64% higher than last year,
If the relative rate of failure continues, 2010 will see over 200 bank failures - currently projected to 230 banks.
(Also, we had a rare Thursday failure this past week!)
Bank Failure Friday = BFF
LOL
BWAHAHAHHAHAHHAHAHAHHAHAHHAHAHHHHHHHHHHHHHHH!!!
Right ,they are letting the smaller Banks fail and the TBTF get bigger and get a bigger piece of the pie. They should of let the big guys fail and bail out all the med and small banks .
Or maybe Bend Over Friday? We all know who is on the hook for those failed banks.
Do we know anything about the relative size and losses of the banks that have failed this year versus last?
fdic.gov has all the information anyone desires.
..like go to this page for failed banks of the last ten years, and click the bank for it’s detailed info..
http://www.fdic.gov/bank/individual/failed/banklist.html
Geez, you’d think they they could at least posted it’s corollary:
www fdic gov/bank/individuals/bankerslist/arrested html
Filed under: “The wheels on the bus go round & round…round & round…round & round ..or…”Nobody could have saw it coming!”
It’s all here: Mal-investment, “Moral Hazard”, Tax Reform Act of 1986, Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Bank Failures : 1,043
Savings and loan crisis…From Wikipedia:
“…The US government agency FSLIC, which at the time insured S&L accounts in the same way the Federal Deposit Insurance Corporation insures commercial bank accounts, then had to repay all the depositors whose money was lost. From 1986 to 1989, FSLIC closed or otherwise resolved 296 institutions with total assets of $125 billion. An even more traumatic period followed, with the creation of the Resolution Trust Corporation in 1989 and that agency’s resolution by mid-1995 of an additional 747 thrifts
Heck, even a Shrub sibling:
“Silverado Savings and Loan collapsed in 1988, costing taxpayers $1.3 billion.
The US Office of Thrift Supervision investigated Silverado’s failure and determined that Neil Bush had engaged in numerous “breaches of his fiduciary duties involving multiple conflicts of interest.”
As a director of a failing thrift, Bush voted to approve $100 million in what were ultimately bad loans to two of his business partners. And in voting for the loans, he failed to inform fellow board members at Silverado Savings & Loan that the loan applicants were his business partners.”
I know you love GW, but it’s not fair to leave out the Clintongs..
what was that S&L’s name.. madison something.. Madison Guaranty. Jim McDougal’s operation.
Or McCain.
not to mention a rare NY bank failure.
Palmy, how long’d it take to you fall in love with FL? Had my kid at the beach today, thinking, “I like it here!”
It took five years.
This is the normal length of time to get used to a place.
I’ve lived across the globe (all cities) and this is the amount of time it takes to become familiar and “think natively”. You need to instinctively know how to convert a desire into action and/or figure out a mechanism to find out how to convert a desire (= know all the knowledge sources.)
It takes about five years, and no, you can’t just google it. It’s gotta be native in your brain.
Interesting… I never really “got settled” in the NYC area.
The Second-Mortgage Conundrum
Since putting up my last post, I’ve been doing some more research into the vexed question of whether big banks are hiding enormous losses on home equity loans and other second mortgages. The Roosevelt Institute’s Mike Konczal reckons that is what is happening. He argues that this practice makes a mockery of last year’s “stress tests,” which the Treasury and Fed carried out to assure investors of banks’ solvency. Finding reliable data on this issue isn’t easy, but after speaking to industry experts and government officials, as well as reading various reports, this is what I’ve found out.
Roughly speaking, there are about a trillion dollars in second-lien mortgages outstanding, of which about five hundred billion dollars are on the books of big banks and five hundred billion dollars are distributed elsewhere—in the hands of small banks, credit unions, specialty finance companies, and investors who bought mortgage-backed securities. Now, five hundred billion dollars is a lot of money, and if a majority of these loans went into default, the nineteen banks that took part in the stress tests would certainly face heavy losses. Restricting his analysis to the Big Four—Citigroup, Bank of America, JP Morgan Chase, and Wells Fargo—Konczal estimates that with a default rate of forty per cent total losses would be a hundred and ninety billion dollars, and with a default rate of sixty per cent total losses would be two hundred and eighty-six billion dollars. Either sum would decimate the Big Four’s equity capital.
http://www.newyorker.com/online/blogs/johncassidy/2010/03/the-second-mortgage-conundrum.html#ixzz0i4zjmvzG
But hey, Obama is going to pay each bank $1000 for each house they short sale. That will fix it!
(sarcasm off)
“But hey, Obama is going to pay each bank $1000 for each house they short sale.”
He’s also going to refill all of the tootsie roll bowls at the credit unions!
If they were Tootsie Pops….oh yeah!
It’s Payback TimeHere’s a surprise: AIG might pay back $170 billion of its $182 billion bailout.
AIG might pay back $170 billion of its $182 billion bailoutAIG may be the only three-letter, four-letter word in the English language. The company ran into huge problems by selling insurance on financial assets without setting aside reserves to pay out claims. When the financial storm hit, no single private-sector company proved to be as messed up: The toxic issues surrounding its payments to Goldman Sachs on credit-default swaps, its absurd insistence on paying bonuses even as it racked up a $99 billion loss in 2008, the general lack of oversight by its executives. One number rankles above all: $182 billion—the total financial aid extended by the Federal Reserve and Treasury Department to AIG.
When you look at the financial markets as a whole, the post-crisis bailout efforts have worked out better than expected. Many of the financial market guarantees were lifted without having been used, and the Treasury is turning a profit on the central component of the TARP. But AIG has so far loomed as a gigantic rebuttal to the optimists, a symbol of everything that went wrong.
http://www.slate.com/id/2247558/
..the Treasury is turning a profit on the central component of the TARP..
dang..
If banks and businesses not only pay back the money they were lent but TAXPAYERS MAKE A PROFIT, what ever will economic revolutionists find to complain about?
..profit by way of bailout.. that’s gotta be a new one.
Seen v/s unseen.
The government made a tiny profit on the deal.
They screwed over all the private capital that would’ve made HUGE profits on the deal (= real profit potential for the taxpayers too!)
It’s a buncha hooey made to bamboozle the taxpayers that they got taken to the cleaners.
In case you are not up to speed with the blog personnel du juor, we have a couple of banking industry PR types who post here from time to time (well, Eddie used to post)…
Take their spin with a very large grain of salt!
I am not up to speed.
…that’s gotta be a
new onewhopper.well..
At least be consistent in your claim that banks should pay for their mistakes. Do you want to see TBTF-Failures pay for their mistakes, or not??
We are the BANK. We (taxpayers) are LENDING, charging businesses and banks and wall street firms interest and penalties on the money. They are PAYING. We are PROFITING. The tables were turned.
If I’m a bank shill, would I be happy about that?
You and your ilk should be happy about it in any case..
As a matter of fact, the TARP recipients hated the deal from the get-go. They foresaw what lay ahead while you fail to see it even after it’s arrived.
The government rigged the market so Banks/investment firms
could fleece other sectors . Your forgetting the public funds toward
borrower bail-outs and dumping of toxic assets on F&F . Your forgetting accounting tricks and funds rates at zero creating
loss in various sectors such as the fixed income sector . Your forgetting short term loans lent to Banks/Investment firms
prior to Tarp that they have defaulted on .
Trying to prop up the RE market and all funds going to that
have only served to help the lenders that made those bogus loans . Add to this the risk that was passed to the Government in backing FHA loans made in a declining market ,that still were
high risk loans . Add to this the 8 k incentive to buy paid by taxpayers dollars . Add the tax relief for forgiven debt and
on and on . It adds up to Trillions and trillions in damage this Lending and Investment industry caused . Lets not even talk about the losses to the borrowers and pension sector of the
economy with this meltdown .
Friday, March 12, 2010, 8:47am EST
Mortgage rates stay below 5%
Charlotte Business Journal - by Jeff Clabaugh Washington Business Journal
…
On Thursday, the Charlotte Regional Realtor Association said the Charlotte market had 1,397 home sales in February, up 3.6 percent from February 2009. Closings also increased 2.5 percent from January.
The average sales price in February was $191,288, a 4.6 percent increase during the year, according to the association. The average sales price dropped 4.6 percent from $200,592 in January. The average listing price of homes sold in February rose 5 percent to $216,605 from February 2009.
There were 1,954 pending contracts on residential properties in February, up 14 percent from the same month last year. Pending contracts rose 6.6 percent from January.
“We are pleased that closings, contracts and the average sales price figures are up compared to this time last year,” says Lyn Kessie, president of Charlotte Regional Realtor Association. The association’s figures are derived from activity in its Carolina Multiple Listing Services Inc. “With the spring selling season upon us and the tax credit expiring, we are hopeful this trend will continue. It is critical that distressed properties in the MLS be absorbed so that stabilization can continue to occur in our local market.”
…
http://www.bloomberg.com/apps/news?pid=20601010&sid=aIylss..voRM
China may face “massive” bank bailouts after stimulus program.
Good thing that couldn’t happen here.
Oh, wait….
Hey Slimmy,
Tucson Festival of Books is on this weekend.
Going to check it out? (IT’s on cspan-Book tv)
I’m trying to figure out if there is a downside on the Gubernator’s decision of whether to veto this tax proposal or not.
If he vetos it, California taxpayers will be saved a bundle of money which is owned by FBs who would otherwise be able to dump the tab for
their previously profligate lifestyles, funded out of the housing ATM machine, onto lenders and the state government.
If he signs it, underwater borrowers will have an increased incentive to send jingle mail, which will add to the shadow inventory of used homes which will eventually hit the market, driving down prices and helping to restore affordability.
Where is the downside, no matter what he does?
State tax on losses may stay
Veto possible from Schwarzenegger
By Roger Showley, UNION-TRIBUNE STAFF WRITER
Saturday, March 13, 2010 at 12:04 a.m.
A state income tax on losses forgiven by lenders in short sales and loan modifications has been repealed by the Legislature, but Gov. Arnold Schwarzenegger may veto it as he did similar legislation last year.
The bill, SB 32 (8X) by Sen. Lois Wolk, D-Davis, which was passed by the Senate on Thursday, would eliminate state income taxes on up to $500,000 in debt forgiveness when a principal residence is sold for less than the outstanding mortgage balance or an owner gets a loan modification.
State and federal law traditionally treated cancellation of debt as a form of income, but with record foreclosures and defaults occurring nationwide, many homeowners faced not only the loss of their homes but thousands of dollars in unexpected income-tax payments.
The federal government exempted such losses from taxation through 2012, and the state’s similar provision ended in 2008. The new law would bring California law into conformance with Internal Revenue Service guidelines and would be effective for transactions from 2009 through 2012.
…
i’m all for tax cuts of any sort… Tax cuts are a good thing.
But they must be inexorably joined with a reduction in government spending, and hopefully in a reduction in the size and scope of government power.
Government tells us to believe all tax cut are a “loss” (of income), and threaten to cut govt services, so consider this one a loss too.. and cut away at bureaucrats’ jobs or salaries or pensions to make up for the predicted revenue shortfall.
The governator should veto this bill. The state needs the money and the FBs have not been squeezed enough. Plus this bill is added incentive for FBs to just walk away.
If necessary the FBs can be taken off the hook at any time, but they can’t be put back onto the hook once they are taken off.
This is a card the governator can play in the future if need be, meanwhile the FBs get to squirm.
“If necessary the FBs can be taken off the hook at any time, but they can’t be put back onto the hook once they are taken off.”
To play my accustomed Devil’s advocate role, wouldn’t it be more in keeping with the general philosophy of government du juor to reward the profligate and punish the prudent by passing this tax forgiveness measure into law? I am sure the financial engineers in Washington can figure out how to prop up the value of California housing, even with this added incentive for underwater borrowers to walk away from their obligations and leave the lenders with still more REO to sell at some undetermined future point.
The prudent will continue to be punished as long as they are willing participants.
The banks need money. As long as the prudent keep on paying their bills then nothing needs to be done in their behalf. It’s when they decide being prudent is not in their best interest - meaning they stop paying their bills - that’s when government comes to their rescue.
Threatening to tax FBs if they walk helps keep prudent FBs prudent.
Profligate Fbs should be forever hounded by the tax man. They have forfeited their right to sleep at night. They should fear the ringing of their telephone, fear the knock on the door.
This is the hot stove method of getting messages across: People who touch hot stoves rarely want to touch them a second time. Smart people who watch others touch hot stoves rarely want to touch them in the first place.
Posting in the bits bucket because, really, being on the internet is a bad idea in this state of mind….
Per the above posts I am (a) 3000 miles from home, due to lack of work back home (and yes, I miss Mini-Chile and Mrs. Chile, a whole bunch); and (b) have a half a six pack left (out of a whole two hours ago - on call status is over for the day!) and am enjoying the heck out of watching basketball this afternoon (wow is Purdue terrible).
What does this have to do with the housing bubble? Well, I never bought a house so I’ve been spending my money this afternoon on a six pack of a drink with bubbles. Which I’m thankful for. And the next drink I’m raising a toast to Oly. We miss you, but I know wherever you are now is a better place for your presence, to cry for more of your time than we got would just be greedy…
Now someone please crack a joke about Suzanne before I start crying.
Suzanne and her boyfriend were out hunting and Suzanne accidently shot him with her rifle. She immediately got on her cell phone and dialed 911.
“Nine-one-one, what is your emergency?”
“Please help me! I just shot my boyfriend with a gun!”
“Is yourboyfriend still alive?’
“I don’t know. He doesn’t seem to be moving.”
“Well, first thing is we have to do is make sure he is dead.”
“Okay, hang on a moment.”
BANG!
“Okay, now what do I do?”
Your wish is my command:
In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.
“South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.”
BWAHAHAHAHAHHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHHHH!!!
Oh yeah! Forgot that quote.
Cheered me right up!
Thanks!
“BANG!”
Suzanne researched whether he was really dead…
Hubby: Oucchh! How long does a JTing hurt?
Wifey: Suzanne’s researching that now.
Dumb question of the day:
Won’t subsidizing FB status tempt more households to attempt to qualify for a slice of government mortgage relief largess by themselves becoming a FB household; or is foreclosure relief only available for those who were already FBs as of when this program was enacted?
Borrowers in foreclosure prevention plan losing mortgage aid
By Renae Merle
Washington Post Staff Writer
Saturday, March 13, 2010
About 90,000 distressed borrowers have lost their mortgage aid under the government’s foreclosure prevention plan, and many more are at risk of losing the help, according to Treasury Department data released Friday.
Many of those borrowers did not turn in required documents to prove they qualified for the program, which typically lowers mortgage payments by more than $500 a month. Some applicants earned too much under the government’s formula, while others made too little and were unlikely to be able to keep up even with the lower payments.
Under the program, which was launched a year ago, borrowers could receive a loan modification after a phone conversation with their lender and then have three months to prove they qualified for the program and to make the initial payments. Then they would be moved into a permanent loan modification.
But the Obama administration was forced to loosen those guidelines as lenders struggled to collect all the required documents, including pay stubs and tax returns. Although more than 1 million borrowers have had their payments lowered under the federal program, about 500,000 have passed the required three-month threshold without receiving a permanent loan modification.
Those borrowers are in limbo while mortgage lenders review their applications to see whether they qualify for the government program or should be considered for other types of mortgage relief.
“Those are the ones we are going to be watching closely,” said Faith Schwartz, executive director of Hope Now, an alliance of mortgage lenders. Some borrowers will be put into non-government mortgage relief programs, and others will lose their homes, she said.
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“I am optimistic you will see transitions to [non-government] solutions. [But] you can’t avoid foreclosures, so you will see those as well,” she said.
…
Here is my r-ball partner’s sad story:
- He is a partial FB, in the sense that his loan is $50K underwater, but he and his wife are both FT-employed, and hence can make payments, though it is a struggle.
- If he refi’d at current interest rates, their monthly nut would drop by $400.
- All the lenders he has approached say they cannot do a refi because they are $50K underwater.
My question: Doesn’t the Fed have some kind of TALF/LALF/GALF/ZIRP or whatever program that lets households refinance their underwater mortgages at the same rates that Megabank, Inc gets to borrow against their underwater balance sheets (e.g., around 0%)?
If not, why not?
Why do Megabanks get to borrow from the Fed when they are deeply underwater, but Main Street households are summarily screwed if they try to get loans when their balance sheets are underwater?
Doesn’t Uncle Sam have laws against lending discrimination, and don’t the Fed’s underwater loan programs to Megabank, Inc violate them?
Oops — sorry — I forgot again that the Fed is above the rule of law.
The government is tacitly conceding a point we have made here all along:
Many FBs are way too underwater for any kind of small-change workout program to bridge the gap between what the lender is willing to accept on a payment reduction plan and what the buyer is willing and sustainably able to pay for the HAMP to offer hope.
The short-sale rules appear to offer a triage approach: Help those with HAMP who are not to underwater to help, and offer the hopelessly F-d buyers a small bribe to jump off the short sale cliff.
I am wondering if the $1,500 relocation expense will be sufficient to cover the damage deposit on the relocating FB’s new rental housing?
The Washington Post
Guidelines for new short-sale rules
Real Estate Search
Search for new homes, condos, and other real estate in Washington, D.C., Maryland and Virginia.
Saturday, March 13, 2010
The new short-sale rules
What sellers can expect from participating lenders starting in April:
– Sellers must be unqualified for a loan modification under the Home Affordable Mortgage Program or be unable to afford the modification.
– The bank will set an acceptable value of the home upfront, based on an appraisal or broker’s price opinion.
– Lenders must approve or deny a purchase offer within 10 days of it being submitted.
– Once the bank approves a home for short sale, sellers may stop paying all related mortgage payments, and unpaid mortgage debt will be forgiven.
– These mortgage payments will not be shown as late on credit reports.
– At closing, sellers are entitled to as much as $1,500 from the government to cover relocation expenses.
I am instantly drawn to any writer who keeps a copy of Ivy Zelman’s famous ARM reset chart close at hand:
Homeowners get another rescue offer
March 10, 9:51 PM
St. Louis Investing Examiner
Jim Mosquera
What happens when a generous government program to stabilize the housing industry does not have the necessary impact? For the Obama administration it means generous payments for homeowners to vacate. It is estimated that 5 million households are behind on their mortgages and risk foreclosure. The administration’s mortgage modification program has helped but a small percentage. The alternative to foreclosure is a short sale.
A short sale means a bank accepts a sale price of the distressed property for less than the outstanding loan amount. The short sale avoids the foreclosure process though it certainly is not a great option for the lender who is frequently out a sizeable amount of money. Under the new program to take effect April 5th, the government will provide lenders accepting a short sale a financial incentive to accept the short sale. Additionally, the soon-to-be ex-homeowners receive a relocation benefit.
If successful the plan benefits homeowners who likely suffer less damage to their credit ratings. They also benefit from a guarantee that the lender will not sue them later for an unpaid mortgage balance (some former homeowners found this out the hard way). And of course, they get to walk away with some cash in hand courtesy of Uncle Sam.
For a lender, however, the program has mixed benefits. In order to qualify for the program the lender must accept the opinion of real estate agents in the appraisal of the home. The appraisal value is not shared with the homeowner. If an offer is tendered that is equal or higher than the real estate agent appraisal, the bank must accept the sale. The problem is that most banks will not be eager to sell at a discount.
Another problem is that many of the potential short sales have second and third mortgages on the properties. The lenders owning these second and third mortgages will certainly want to be part of the payout. If they are excluded, they can block the short sale. Still another problem are loans that are owned by investment pools where banks merely provide loan servicing.
Like the government’s initial loan modification program, this program should help some distressed sellers. It will, however, be a very small remedy to a problem that is beyond the government’s capacity to adequately address. In all of these programs the government targets the homeowner for relief while the original lender sees the effort through a different prism. The end result will continue to be a deterioration in the residential housing market and yet another strong deflationary sign throughout the continuation of credit contraction.
This is really great. Keep up the good work, Jim!
Housing continues its slide
February 25, 8:55 AM
St. Louis Investing Examiner
Jim Mosquera
Confused about the direction of home prices? Two articles in Yahoo Finance create some of the confusion. In the first article, published 2/23/10, home prices are credited with edging up for the seventh month in a row by increasing 0.3% in the November to December period. The Case/Shiller 20-city home price index is the basis of the measurement. The article also goes on to anticipate that sales data for January are also expected to show gains over the December period given historically low interest rates and government tax credits.
An economist was quoted as saying that the price increases of December are “further evidence that conditions in the house market continue to stabilize.” The same economist concluded that price conditions appeared improved in the Western states.
One day later, another article appears in Yahoo Finance indicating new home sales hitting a record low in January. This article quoted the Commerce Department who reported a whopping 11.2% drop in monthly sales. The drop translates into an adjusted annual sales pace of 309,000 units, which is the lowest level on records going back nearly 50 years! It was clearly a shock to economists (perhaps like the one quoted earlier) who expected a 5% increase over December figures. The same economist who concluded an improving price picture in the Western states was no doubt surprised that sales were down 12% in that region for January.
Not only were there fewer sales than in December but the median sales price declined 5.6% from December. The decline in volume and price is particularly worrisome given the unprecedented level of support offered by the government and the Federal Reserve.
What does all this mean?
Economists continue to be seduced by the magic dust of government and central bank (Fed) intervention. If there is intervention, then all will be well, right? Fundamentally, the government really does not apply any stimulus to our markets, housing or otherwise. The U.S. Government does not have a supply of saved or surplus funds for any stimulus. All stimulus money must be borrowed into existence which implies two things: a) deferred taxation b) interest charges above amounts borrowed.
The Federal Reserve tried to revive lending by acquiring toxic assets held by banks. Banks in turn, have not been as aggressive in lending (who can blame them with all the defaults) and most of the current loan activity is guaranteed by the government. So the private residential mortgage market, for all intents and purposes, is nil.
The residential housing market will not recover any time soon. There are several factors leading to this pronouncement:
a) A wave of mortgage resets is on the way. Millions of mortgages will require refinancing and it is reported that 25% of all mortgage holders have loan amounts greater than the value of their properties. How many banks, or for that matter homeowners, will refinance under those conditions?
b) Banks are likely sitting on properties that are near foreclosure or at foreclosure that will hit the market.
c) Some homeowners are willing to walk away from their properties despite being able to maintain payments. They see their homes as a cash drain in an increasingly uncertain environment.
d) Banks also have problems on the commercial side with plunging collateral values. This will only have adverse consequences for lending.
e) Government will likely have to withdraw the support they have given to the housing market. The current deficit picture and the bond market may well dictate this. The Federal Reserve has seen their portfolio of assets deteriorate significantly now that they hold toxic sludge (mortgage-backed securities for example) and wishes to unload it to the market soon.
Don’t be confused by stories of sudden residential housing market health. The very thing that precipitated the economic crisis will continue to place a heavy drag on the economy. No housing market bottom is in sight.
Good article.
A comment on “c)”:
“c) Some homeowners are willing to walk away from their properties despite being able to maintain payments. They see their homes as a cash drain in an increasingly uncertain environment.”
These people should be encouraged - even threatened - into keeping up with their payments. The banks need the money, and the banks are going to get their money one way or another. It’s better that banks get money from FBs than from everyone else.
Forgiveness should be discouraged, punishment encouraged. FBs should be made to pay to the max.
On the Dylan Ratigan show on Friday he explains the Lehman Brothers accounting fraud ,
http://www.msnbc.msn.com/id/31510813/#35841681
Basically Lehmans inflated the value by hiding debt and the CEO signed off on it knowingly . This would mislead the market as to what the value was and it was done with billions of dollars .
This is the kicker,they don’t have solid proof that the other TBTF outfits
didn’t do the same .
Cockroach theory suggests that if Lehman did it, its Megabank, Inc brethren likely also did it — never mind the obligatory disclaimers.
Anyone inclined to trust Megabanks or their regulators should consider themselves amply warned about the reasons not to do so.
Editorial
Learning From Lehman
Published: March 13, 2010
On top of everything Lehman Brothers did before it collapsed in 2008, nearly toppling the financial system, it now seems that it was aggressively massaging its books.
Of course, many colossal bankruptcies involve bad accounting. But a new report on the Lehman collapse, released last week and described in an article in Friday’s Times, would leave anyone dumbstruck by the firm’s audacity — and reminded of the crying need for adult supervision of Wall Street.
The 2,200-page report was written by Anton R. Valukas, a former federal prosecutor who was appointed by the Justice Department as an examiner for the Lehman bankruptcy case. According to the report, Lehman engaged in transactions that let it temporarily shift troubled assets off its books and in so doing, hide its reliance on borrowed money.
The maneuvers, which Mr. Valukas said were “materially misleading,” made the firm appear healthier than it was. He wrote that Richard S. Fuld Jr., Lehman’s former chief executive, was “at least grossly negligent,” and that Lehman executives engaged in “actionable balance sheet manipulation.”
At the time, one Lehman executive sent e-mail to a colleague describing the accounting ploys as “basically window dressing.”
Window dressing? Shortly before Lehman’s failure, $50 billion in troubled assets were shed from its balance sheet.
…
Bail Outs hide discovery of crimes .
So do green shoots of recovery. With a quick enough recovery, crimes will soon be forgotten as the sheeple become preoccupied with trying to figure out how to get rich quick, or at least how to get reemployed.
I think you guys are going to find out in the final analysis (but it will be way down the road ) that the bail outs were specifically engineered to cover up
the discovery of crimes . Hasn’t anybody ever questioned why everything happened so fast as in one day these Wall Street Companies are doing good ,than all of a sudden a FIRE call for a immediate bail out . “We didn’t see it coming defense .” And Congress just gives blank checks without investigation based on a ex Goldman Sakes guy (Paulson ) making a FIRE call.
And we are to believe when GS helped Greece hide their debt ,and now it comes out that Lehmans was deceiver ,that the whole damn bunch weren’t playing this game .
I have said it many times that the bail outs were the biggest Obstruction of Justice ploys that have ever been attempted ,and they got their way with keeping the Casino in tact (no meaningful reform to this very day )
How can you discover faulty systems when a Guy comes before the public claiming the credit markets will dry up if you don’t give me 700 billion right now ? Solving the problem by standing law would of been the
best way in spite of the need for some restitution in the whole mess .
Now we have all this crazy public policy of bail-outs and support of gamblers who can’t afford their homes and wasted public funds on
hiding a system that was corrupt from top to bottom . And than they flaunt their bonuses while they hide their insolvency in new accounting tricks . We don’t have to worry ,the government will bail us out .
It’s really is getting more and more absurd . In the meantime you have all the monopolies converging in crashing heads because the various TBTF systems are coming apart at the seams ,while they all think that the
bag-holder middle class and upper middle class will be the bag-holders
and the burden takers . Each self interest group thinking that some
other self interest group should pay for the meltdown of systems .Winners or losers chosen by power groups …..not my idea of fair or sustainable .
In my view, Lenders,insurance Companies and Investment firms committed
a number of crimes .Why do you think these clowns don’t want transparent
markets . Why do you think the Feds don’t want a audit ? These high leverage risk taking games ,combined with misrepresenting what ratings and net worth or real risk should be with Companies ,was a con game that crashed ,no different than Mr Madoff in a lot of respects .
“In my view, lenders, insurance companies and investment firms committed a number of crimes.”
Yeah, but these were legal crimes, so they don’t count as crimes.
What gets me is the accounting profession. Accountants are supposed to account, and they have rules to guide them in their accounting endeavor. Yet we get all sorts of variables in accounting as to what is counted as what.
Is a debt that is uncollectable still counted as an asset? That depends: If the accounting rules are smudged a bit then, yeah, uncollectable debts can be counted as assets. They can be counted until they can’t anymore. When will that be? It depends.
Did a bank make money or did it lose money? That depends. If it didn’t have to write off a bunch of uncolletable loans then it probably made money. If it did have to write off a bunch of uncollectable loans then it probably lost money.
If a bank loses enough money then will the FDIC will eventually close it? Maybe. Maybe not. Again, it depends.