Bits Bucket For April 26, 2010
Post off-topic ideas, links and Craigslist finds here. The DC meetup link at the forum is here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
December 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Went out to the southern Denver area (Castle rock to highlands ranch over to parker) last week looking at the possibility of relocating. In short, the used market is insane @ 150sq ft plus almost all homes around 230k need work. As far as the new market, couldn’t stand the postage size lots. The dining room view is the neighbors siding less than 10 ft away. No thank you, I will rent. I thought CO had been going through a downturn longer than most areas?
The US Gov’t is up to their necks in this. We, the US Taxpayers, are on the hook for money and guarantees to keep the housing market from “collapsing.” With all of the efforts to prevent “reversion to the mean”, it should come as no surprise that 150/sq ft for junk it still prevalent in a lot of areas.
I was talking with my neighbor yesterday about a poorly maintained FSBO house that is for sale located two houses down from me. This house was nothing special, and they wanted 190k for that house (90/sq ft). It needs a roof and has obvious external wood damage. I was told that it needs considerable repair inside, too. Houses in this area are 70/sq ft. That house should be 150k not 190k. The owners have refused two offers of 150k. In these situations your best offer is normally your first one. Not always, bot mostly.
I paid 70/sq ft for an architected house with a circular drive, double corner lot, in an old and venerable part of town. It needs work but is comfortably livable without major problems. \
Our 90/sq ft is your 150/sq ft. Rent and avoid stress.
Roidy
“We, the US Taxpayers, are on the hook for money and guarantees to keep the housing market from “collapsing.” ”
We could fight back:
Nobody pay income tax
Nobody pay their mortgage
Nobody pay credit card bills
Banks would go under in a couple of months. We would own our government again.
A modest proposal!
So - you’re going to bell the cat?
That evading income tax thing is a little impractical when you get a wage. I am fighting back by not having a mortgage or a credit card bill. The banks do not seem to be suffering too much on my account though. I rather think that if we simply stopped buying stuff for a month or two things would get interesting.
We already conducted that experiment in September October 2001. It led to massive layoffs of hourly workers. Airline lobbyists whined and got a nice little temporary mini-bailout.
if you could get a significant movement of people to Not buy anything other than basic food (what they can’t grow or trade for) for a month, it may do something. too bad the tea party folks aren’t sharp enough to try this
The PeePartyPotatoHeads can’t be counted on for anything rational.
The Tea Party folks believe that Corporate America is God.
Boycotting for a limited time won’t do a thing. Can you say “pent up demand”?
Yensoy, I wish I could say I believe you, but businesses don’t keeps even 30 days cash in hand to quitely ride out a month-long boycott. We learned about that when banks stopped the 30-day loans and businesses started howling.* A business may not go down in 30 days, but we could see how they respond to the boycott, if only for research purposes. Which is what happened in Sept-Oct 2001.
——–
*which is a crock. Where do they get off telling us to keep six months of expenses in cash, while your average business effectively goes to the payday lender, every single month?
Any business that doesn’t have cash - or the means to get cash - to hold it over for 30 days doesn’t deserve to be in business.
S*** happens - you have to be prepared.
My experience in working with small contractors of various trades is that they all need 90 day money to meet payroll because their customers never meet net 30. Typically they’re waiting 60 days minimum for payment. I’d say this is typical for mechanical contractors as their work consists of higher dollar cost equipment (boilers, chillers, condensers, evaporative coolers, etc). It’s alot of money to be on the hook for while a customer drags their feet on payment.
“The PeePartyPotatoHeads”
How childish. OK, I’ll play.
Nanny, nanny boo-boo, stick your face in doo-doo.
Ok…. Does braindead work for you? How about low lifes? Bigots? Yeah… Honestly they act more like Rohm’s brownshirts. Spitting on people, hurling insults and bottles, threatening.
Yeah… Palmy…. they deserve your pious defense.
My experience in working with small contractors of various trades is that they all need 90 day money to meet payroll because their customers never meet net 30. Typically they’re waiting 60 days minimum for payment. I’d say this is typical for mechanical contractors as their work consists of higher dollar cost equipment (boilers, chillers, condensers, evaporative coolers, etc). It’s alot of money to be on the hook for while a customer drags their feet on payment.
Exeter, you’re playing my song. I’m not a mechanical contractor — I do design work for universities — and let me tell you, their accounts payable departments need work.
As in, you do everything you’re supposed to do in order to get paid, and you do it quickly, but they’ll still take their sweet old time about getting around to thinking about sending you money that you’ve earned by being a fast worker who’s responsive to client needs.
I’m currently dealing with a foot-dragger of an out of state university system, and in the meantime, I’m having to do all sorts of financial gymnastics to keep afloat here in Tucson. It’s not pretty, and trust me, I have *not* been a pleasant person to be around lately.
I have worked for a few companies who don’t care what the vendor/subcontractor’s terms are, their policy is that they don’t pay anything sooner than Net 60.
As with “too big to fail”, they contract out enough work locally where they are in a “too-big-to-tell-them-to-go-pound-sand” position.
“As with “too big to fail”, they contract out enough work locally where they are in a “too-big-to-tell-them-to-go-pound-sand” position.”
Heh hehe heh. Indeed! You’re so correct. Back in the mid 90’s I worked for the largest and oldest company on the planet. We had our favorite local contractors who were essentially resident contractors. In other words, if I needed them at 3am on a Sunday morning, they’d be there in a hurry. Invoice? “I’ll get around to it” was the official but unwritten corporate stance. We were the biggest guys on the planet and they were peons. Sad but true.
I have worked for a few companies who don’t care what the vendor/subcontractor’s terms are, their policy is that they don’t pay anything sooner than Net 60
Exactly! Especially the big companies. I used to have a 5% discount for paying bill early. Big companies would take the discount…and pay in 60 days. I no longer have a “discount” on the statement
Exactly! Especially the big companies. I used to have a 5% discount for paying bill early. Big companies would take the discount…and pay in 60 days. I no longer have a “discount” on the statement
I’ve been burned on that too. Which has led to my Discount Policy. Here it is:
At [name of my business], all matters regarding discounts are handled by Helen Waite. If you’re interested in seeking a discount, please contact Helen Waite. She’ll get back to you when you-know-what freezes over.
Thanks to one and all. You’re helping me get into a *much* better mood.
Besides, my first big professional gig as a photographer’s coming up this weekend, my new camera’s going to be delivered today, and I’m really looking forward to kicking my photo-game up several notches.
“…Spitting on people, hurling insults and bottles, threatening…”
Exeter, don’t bring up the pro-illegal immigration protests here. It’s not polite to hijack a thread.
Lame. Precisely what we expect from you.
“…Spitting on people, hurling insults and bottles, threatening…
Exeter, don’t bring up the pro-illegal immigration protests here. It’s not polite to hijack a thread.”
Here are two different types of posts.
One is the result of no personal investigation, just partisan political crap any chump can view plastered all day long by the Liberal Left Losers that spend all day trying to justify something they read on The Daily Kos, Huff Post, or the NY Times.
Compare and contrast with -
“My experience in working with small contractors of various trades is that they all need 90 day money to meet payroll because their customers never meet net 30. Typically they’re waiting 60 days minimum for payment. I’d say this is typical for mechanical contractors ”
This is the voice of personal direct first hand experience. The kind of voice everyone can respect.
“Tea Toaders spit and are so bad”:
The voice of an Obot runnin’ on Hopium and pure B.S. People laugh at you and that Obummer pantload of yours stinking up the place…
Look kiddo….. if you don’t want me to comment on the worn out pseudo-conservative hate, don’t post it.
It really is that simple.
the problem is we have #2 and #3, who have the blessing of Congress and Obama. That leaves the minority of Americans who pay federal taxes to foot the bill.
“Banks would go under in a couple of months. We would own our government again.”
No they wouldn’t. They would just get ANOTHER bailout.
My friends former neighbor refused to come down $2000k more to make a deal happen. She’s already in her new house across town. The property for sale is empty. So w/NY taxes and heat bills, that money she refused to give to those “greedy” buyers has been more than eaten up by the 5 mos of carrying costs incurred since the place has sat since. As far as I know the recent spate of purchasing activity caused by the tax break expiration hasn’t helped her out either so the carrying costs continue to accumulate.
Yeah….people are smart.
2000k = $2 million dollars.
What kind of house is it that you want them to come down that amount?
oh, dang! Meant to write $2k!
We’ve seen the same mentality out here. The sellers (who might have bought for $150K ten years ago) won’t drop the price from $550K to $500K because they “aren’t going to give it away.”
Seriously, I’ve heard this “not giving it away” line so many times I could vomit. As if half a million dollars isn’t a lot of money.
“Yeah….people are smart.”
But, but … they didn’t want to “give it away”.
“Our 90/sq ft is your 150/sq ft. Rent and avoid stress.”
Yes, this is a serious problem and unlike Santa, Jimmy Carter, is getting to old to be running around on new rooftops!
As far as the new market, couldn’t stand the postage size lots. The dining room view is the neighbors siding less than 10 ft away.
+1 I don’t know how people think of this as “home.”
Geez that’s the view I have but then I used to have a view of the World Trade Center from my picture window….i guess its not the same
————————
The dining room view is the neighbors siding less than 10 ft away.
The view currently selected here is a thousand acres of waterfowl reserve. Better than having a TV channel changer.
We like to joke about the new houses on postage sized lots…”You can reach out your bedroom window and flush your neighbor’s toilet”.
The new houses are so soulless… most are grossly oversized for the lots, and all of them are crammed so closely together that there’s no room for a yard in which to play, a spot for a garden or trees, etc. But of course the HOA probably prohibits gardens, trees, and anything other than yummy, toxic green lawns.
So, you end up driving past these same subdivisions years after they’ve gone up, and they are still big, lumpy, soulless things, clearly built to sell vs. as a place to live. Depressing!
Eh, whaddayawant for a measly 600K! At least that’s how it is in my nabe. … And the window’s 6 feet away, just room to get a car between and slightly open the doors to slip out of it.
it’s a condo alternative.
At least the postage-houses are grounded. Condos are a frekin’ floating box of air. I used to rent a floating box of air, and that was unnerving.
Right, the land is where the value is at. Condo owners own no land.
But they get the bill for the repairs to the building via the HOA and special assessments.
Funny how that works!
The description is like some sort of prison camp, like on Hogan’s Heros!
HOGAN!
Or most of the neighbors (and us) had a deck off the upstairs master, that stared down into the neighbor’s backyard. Great view of the mountains and our neighbor’s bar-b-q and pool, and vice versa. I lived that fish bowl life. Two story jungles, no thanks.
Lots wouldn’t be so small if the houses weren’t so big. But the little 2/1 800 sf hovels of yesteryear are unacceptable now. People need their space!
Heck yea! For all my toys!
I’ve seen houses built close enough together that the differences between “SFH” and “condo” were meaningless.
It’s more than lot size on the newer stuff. It’s the two-story jungle effect, and no mature trees to block views. We had a sizable lot. We had acceptable space between homes, but without mature trees, you live in a fish bowl.
Our first home was a new McMansion on a zero lot line, w/about 10′ between homes (side blockwall 5′ out from each home). I could have flushed their toilets.
I notice in some of the newer sales that no one’s even bothering with landscaping (eg trees), either. Either that or they’re Realtor-owned and they expect the FB to undertake it. So nothing is in place growing already….sheesh what a desert.
In Montana
I noticed the lack of trees too. Even in established areas, the maintenance becomes an issue, so they either cut them back (fugly stumps) or they take them out.
I like trees. They make an average neighborhood look luxurious. My fav is when they canopy the street, and you drive through a tree tunnel. That’s my dream neighborhood.
I like trees. They make an average neighborhood look luxurious. My fav is when they canopy the street, and you drive through a tree tunnel. That’s my dream neighborhood.
—————–
Amen!
Didn’t you grow up in the Valley, too? I think that might have something to do with it. My DH and I were both born and raised there, so we’re used to the nice, single-story homes with sufficient yards and lots of beautiful trees!
Down here in San Diego, everyone cuts their trees down!
I grew up in a little corner of southern New Jersey where all the streets were under canopies of trees. Most of the trees are still there, though sadly many are ash trees and thus the emerald ash borer will eventually kill them all… But there is nothing like this effect - to drive along with trees overhead and on all sides! It was great growing up, too: so many big trees everywhere.
Housing is so expensive in Maryland I have serious doubts I’ll ever be able to buy anything here at this point, but even if I had infinite money, I’d hate to buy in those cramped, treeless, new subdivisions. And their blight sticks around since there’s no room for trees there will *never* be trees there as long as the grossly oversized McMansions are left standing. Blah…
I certainly hope you get the opportunity to buy, PTM. As it stands, the bubble was never able to fully deflate, so those prices you see are still likely to be “artificial” prices.
We feel the same way about the ugly new developments: lifeless, towering, monstrosities that are all colored the same and have no character whatsoever.
“I thought CO had been going through a downturn longer than most areas?” For a city of its size Denver is one of the most overpriced cities in the United States. Downtown they want $400 plus psf for a condo on the train tracks. I find suburban Denver even more despressing as the natural landscape is brown and barren, and the architecture is dull and boring, a sea of cheap stucco boxes. The problem with the small yards is compounded by the lack of trees as suburban Denver never had natural forest like cities along Coastal US.
The lack of trees in that area really bothers me for some reason. Very nice otherwise, though.
Yes, the city is rather clean and there are still snow capped views in early Summer. You can get more space, trees and scenic beauty in Evergreen, but its at least an hour rush hour drive if you work in the city which can wear you down. There are much worse places to live. My only real problem with it is the lack of bodies of water and forest, dull architecture, and small lots (much of which as to do with the fact that given the landscape utilities are difficult to put in place and suburban areas emerge as concentrated special districts). There are scattered cluster communities surrounded by large amounts of barren open space (which if you into mountain biking may be ideal for you).
I’ve always thought of living in the flatter areas outside Denver would be a little bit like being Moses: being able to see the promised land but not being able to get there.
Denver gets 16 inches of rain/year. Contrast with Ohio, which is ~37. You can’t plant a forest in Denver.
Tim tebow will make all well in denver.Buy now!!!!!!
As a U of Florida graduate and a devout Gator fan, I can tell you that Tim Tebow will be the greatest tight end the game has ever seen.
Eh, not too much different from Norfolk, VA during the bubble days. Prices have come down some, but not enough.
“The dining room view is the neighbors siding less than 10 ft away. No thank you, I will rent. I thought CO had been going through a downturn longer than most areas?”
b..b.. but Suzanne researched this and found that just yesterday, the great GF and FB Herds, were slashing and dying to present multiple bids on these 300-800k POS for that dynamic, panoramic view of their neighbor’s pink vinyl siding only 10 ft away.
Ugh….those bitter renters on Ben’s HBB with brains and money are never satisfied.
FWIW, that’s one of the pricier parts of metro Denver, but I guess you don’t want to live in Aurora. A LOT of people commute to Denver from Ft. Collins/Windsor/Loveland/Greeley because the prices are much lower.
But the other posters are right, Denver is way overpriced, especially when the lower wages and lack of good paying jobs is factored in.
When Co and Denverites finally wise up and get their heads out of their you know where. Get rid of the illegals and your wages will go up.
I thought CO had been going through a downturn longer than most areas?
Colorado had their bubble in the late 90s and has just been hanging onto the gains by their finger nails since then. For them the 2000s “bubble” was in the form of prices not going down like they otherwise would have after the tech bubble burst.
I remember that. Lots of hiring in CO in the mid 90’s and shack construction and sales was on fire.
Yeah, one of those was mine. I had a house built in 1997 and it had appreciated by over 50% by 2000. Flat ever since then, I sold it in 05.
Ex-colleague of mine sold his house in Boulder in a week. It was in the $475K range. He was kind of stunned it happened so fast and was in a panic since he had nowhere to move. He put his house on the market thinking he’d have time to look for something new. He ended up putting his things in storage and renting a furnished townhouse while looking. Not sure how long that will last, knowing his wife I can’t imagine she’s happy in that situation.
Postage sized lots aren’t my taste. But if you don’t want to spend every weekend mowing, trimming, pruning, etc, it makes sense.
Yup, Boulder is still insane. I rented for a few years, but since it looks like this is going to take a long time I decided to buy a doublewide 1/2 mile from work and wait it out there.
Very good move, Carl.
$150/ft would be a DREAM here in San Diego!!!
That price/sf couldn’t buy you a methlab-crack-condo in the ‘hood over here!!
My father just bought a foreclosed, 1960’s era CBS house in Titusville, Florida for 49K. It is 1400 sq ft or $35/sq.ft. Needs a lot of cosmetic work.
That price is 1989ish.
I was out in Denver a few weeks ago and found that houses were more expensive than I expected (I was looking in neighborhoods like Capitol Hill, Congress Park, Cherry Creek, Washington Park), but certainly a much greater value for the money than you get in Silicon Valley, where the price per square foot starts at about $400 in a modest neighborhood without too much crime. So $150/square foot sounds like a great bargain.
But of course the right comparison to make is cost of renting versus owning. A 2000 square foot house in Silicon Valley rents for maybe $2500/month on average. What’s the comparable rent in Denver?
By the way, from what I can see looking at Denver listings, it seems very common to include the basement in the square footage. Thus very modest looking bungalows which from the outside look like they are maybe 1200 square feet will be listed as double that or more. So I wonder if the “real” price per square foot in Denver isn’t more like $300, assuming one doesn’t consider the basement as a proper living space. California houses don’t usually have basements, so you don’t see people trying that stunt here. E.g. I’ve never seen anyone try to include the garage space in the square footage.
Sounds like Maryland.
We have 60+ year old 3 bed, 1 bath, no AC, no driveway dumps selling for $250,000+. It is madness! I don’t care how “rich” the state is; there’s no excuse for bottom of the line housing costing 4x to 5x the median household income for the county. The Fed and banks seem to be winning this one in that they may not be able to reinflate the Bubble, but they can keep prices high (and thus their losses low or never realized) forever.
I’m in the waiting room to purchase causeway tickets for the shuttle launch this May. Anyone in the area planning to attend?
Is that the final shuttle launch? Some friends here were talking about tripping down to Florida to catch it. The issue is that if the flight is delayed, then it could take a few days to see it.
It’s the second to last launch. There’s a launch scheduled for June, but now I hear it’s being delayed a few months due to an equipment change in the payload.
I live close enough that we watch them from the front yard. I’m kinda jaded, but they are spectacular if you’ve never seen one.
I remember watching the first shuttle launch (well, okay, it was on TV, but you get the idea.) I never expected that as nation we’d see the last launch without anything to replace it.
Oh, well… I still have a video of the Ares 1-X launch to think about what might have been… NASA’s budget of $16 billion for the new Moon rocket was “too much” but spending a few trillion to bailout banks and keep housing unaffordable is perfectly fine and “vital for our economy.” Right…
Blago-Obama. Interesting stuff.
http://www.nbcchicago.com/blogs/ward-room/The-Six-Secrets-You-Need-to-Know-From-the-Blagojevich-Filing-91848634.html
Old news. But good find.
PR will only get you so far in life.
Time to tear down the wall around Goldman?
Steve Eder - Analysis
NEW YORK
Tue Apr 20, 2010 5:47pm EDT
…
MORE THAN A PR PROBLEM
Eric Dezenhall, the CEO of Dezenhall Resources, a crisis management firm in Washington, said Goldman’s problem is “much broader than a PR problem.
“You are dealing with some very fundamental things,” Dezenhall said. “I don’t think that better PR is the antidote for what Goldman Sachs is facing.
“They are facing certain institutional, cultural realities that are colliding with a time in history that’s put them at ground zero of a witch hunt,” he said.
The SEC charge that Goldman failed to tell clients information about a subprime mortgage securities product that it sold them in 2007 and that then blew up during the financial crisis, is its latest problem.
Goldman had cultivated an image as being a cut above its Wall Street rivals by always putting clients first. The SEC case has led investors to question whether that regard for the customer has changed.
Dezenhall said he would advise clients facing Goldman’s predicament to take a close look at their own corporate culture — and even consider opening up.
“It has never been in the company’s self-interest to openly communicate,” Dezenhall said. “It has been in the company’s self interest not to communicate.”
Guy Chipparoni, a public relations specialist with the Res Publica Group, said organizations that often face crises end up with a “bunker mentality” that is not conducive to repairing an image.
“The media hates a vacuum,” Chipparoni said. “If you don’t put something in there, they are going to fill it for you. You have got to feed that beast in a manner that’s conducive to your long-term strategy.”
Goldman should be able to figure that out, Chipparoni added. “They are pretty smart.” (Reporting by Steve Eder)
‘“They are facing certain institutional, cultural realities that are colliding with a time in history that’s put them at ground zero of a witch hunt,” he said.’
Joey called the investigation of Gollum a ‘witch hunt’ in one of his mouth-foaming diatribes yesterday. Labeling the investigation of what has the outward appearance of high level fraud and corruption a ‘witch hunt’ is a pretty lame straw man if ever there was one.
Millions of people borrowed more than they could ever hope to repay, and the loans eventually failed, and the economy crumbled.
The only rational explanation is it was the work of the devil!
——
There is an obvious, irrational explanation: A widespread mania.. but that’s boring.. and we won’t get to cheer as someone is burned alive at the stake.
If laws were broken by financial sector firms in their efforts to exploit or even fuel the mania, do you believe the perpetrators should be summarily exonerated, as “no one could have seen it coming”?
You know full well laws were certainly broken by people signing liar loans, for instance. And it’s proving nearly impossible find financial firms legally culpable of anything.
You are on a Crusade. Don’t pretend the law matters to you.
“You are on a Crusade. Don’t pretend the law matters to you.”
And what’s the matter with a crusade if they’re guilty?
“Don’t pretend the law matters to you.”
The blackest of pots are the best at spotting black kettles.
“And it’s proving nearly impossible find financial firms legally culpable of anything.”
And outright lie.
Ever hear of Google News, joey?
Liar. Just whose sock puppet are you, anyway?
People blinded by preconceived notions and possessing no solid evidence make the worst prosecutors.
…and the worst defenders.
“You are on a Crusade. Don’t pretend the law matters to you.”
If not for the law, we’d have to hunt down these crooks ourselves. I think the law will treat them better than we would.
All alone, or in twos
The ones who really love you
Walk up and down outside the wall
Some hand in hand
Some gathering together in bands
The bleeding hearts and the artists
Make their stand
And when they’ve given you their all
Some stagger and fall after all it’s not easy
banging your heart against some mad buggers
Wall
Stop bangin’ on my wall, ya darn hippies! I’ll call the cops…
How could such noble beings who “do God’s work” (or perhaps the work of some nameless, forgotten god of greed?) be attacked based upon their actions?! How unfair! Don’t people know that Goldman’s stranglehold on the face of America is vital to our health for reasons that cannot be explained? Yeesh!
Greek minister: Aid will come in time to avoid default
Ryan Vlastelica / Reuters / 26 APR 2010
Greece remained in focus a day after a Greek official said an aid package would help avert a sovereign debt default, though signs grew the package may have to be bigger. The situation in Greece has weighed on equities in recent weeks
Greek 2-year at 13%!!
Must be a really good bailout.
And this is a lesson that our politicians should take to heart. The appetite for bonds can evaporate much more quickly than they can hope to adjust to. We’re not Greece, but at the rate that we’re adding to debt levels, we certainly CAN exhaust the willingness of other to lend us money. And because we’re not Greece, there will be NO white knight to bail us out temporarily while we try to get our house in order. At that point, high inflation, high taxes AND draconic cuts will be the only way forward.
If this is what it takes to get those draconic(sp) cuts, then I’m all for it… Starve the beast. We refused to do it willingly, government was allowed to grow far larger than we can manage, and it might get done despite our laziness, complacency and selfish interests.
—-
Not to correct a typing / spelling mistake.. i just enjoy searching words and stuff:
Draconic refers to dragons.
Draconian comes from the Athenian lawmaker Draco, known for making harsh laws. It now means being strict or severe.
—-
The Draconian constitution
The laws he laid down were the first written constitution of Athens. So that no one would be unaware of them, they were posted on wooden tablets, where they were preserved for almost two centuries…
The constitution featured several major innovations:
Instead of oral laws known to a special class, arbitrarily applied and interpreted, all laws were written, thus made known to all literate citizens…
The laws distinguish between murder and involuntary homicide.
——-
However, lots of punishments for relatively minor offenses included slavery or death, so they were pretty harsh, and he got that reputation..
Oops, a typo. I think that we all agree with the principal of written laws. But the fact that Draco became associated with overpunishment just because he wrote down existing laws and the associated punishments shows the importance of a degree of forbearance and mercy when applying them.
true.. just to continue the discussion..
My retort would be that if you take forbearance and mercy too far, you encourage law breaking.
Society as a whole and the criminals’ victims in particular then pay the price of crime, instead of the criminal.
Not principal. Principle.
My retort would be that if you take forbearance and mercy too far, you encourage law breaking.
Then why do you call for such mercy and forbearance on Goldman? Special ‘big boy’ loophole in your philosophy?
Goldman Sachs.. found guilty in the Court of Alpha-sloth and awaiting execution.
“If this is what it takes to get those draconic(sp) cuts, then I’m all for it… Starve the beast. We refused to do it willingly, government was allowed to grow far larger than we can manage, and it might get done despite our laziness, complacency and selfish interests.”
An interesting theory, but dying governments don’t go away quietly. Much like a doomed star that has exhausted its hydrogen fuel (tax dollars, easy money, etc. in this case), the government will expand and bloat itself outward, swallowing up the planets that once depended upon it for life, and destroying them (though they had nothing to do with the star’s situation.) In the end, this effort is futile: nothing can reverse the exhaustion of the nuclear fuel at the star’s core. Smaller stars go out with a whimper - their layers cast off into space. Larger ones explode and take out everything near them after their core has turned to iron, an element which cannot be fused with a net gain of energy. We’re heading towards the “iron core” at the rate things are going…
Something about the way he promises that those who bet against his country will lose reminds me of Fannie, Freddie, Lehman, et al a few years ago.
There is a fungus amongus.
http://news.nationalgeographic.com/news/2010/04/100421-new-fungus-cryptococcus-gattii-deadly-health-science/
Thats a ugly bug…
Mushroom walks into a bar, goes up to a table of attractive women, says, “Hey! I’m a fun guy!”
Good thing I move my lips when I read or I wouldn’t have gotten that.
None of them took a lichen to him.
Heads up.
Don’t believe the hypha!
The Richmond Register
Your Local News Source Since 1917
Too big to jail?
Don McNay Special to the Register
RICHMOND — The Securities and Exchange Commission is receiving media kudos after filing a fraud lawsuit accusing Goldman Sachs, the giant investment banking and securities firm. A Los Angeles Times headline trumpeted, “Goldman Sachs case could help Obama shift voter anger.” A McClatchy news service headline blares, “Message to Wall Street: SEC is back on the job.”
Before I join the chorus of media cheerleaders, I have to ask the Peggy Lee question, “Is that all there is?”
I’m not a lawyer, but my understanding is this: the SEC filed a civil lawsuit. It’s a lawsuit, not a criminal action. No one is going to jail. No one is going to be dragged off in handcuffs.
…
As Ronald Ricker pointed out in a Huffington Post piece, Goldman was given $12 billion in taxpayer bailout money in 2008. A year later, it paid out $19 billion in bonuses to their employees.
Sounds like a great place to be on the payroll.
The Goldman story gets worse.
One of the most unusual moves during the whole bailout fiasco was the bailout of AIG. AIG is an insurance company. Insurance companies are regulated by states, not by the federal government and, certainly, not by the Federal Reserve Board.
On September 16, 2008, the Federal Reserve, an organization designed to provide liquidity for banks, announced that the Federal Reserve Bank of New York was giving AIG an $85 billion line of credit. AIG has gotten billions more since then.
The Secretary of the Treasury at that time was Henry “Hank” Paulson. His previous job had been head of Goldman Sachs. The Federal Reserve Bank of New York was headed by Timothy Geithner. He took Paulson’s place as Secretary of the Treasury.
Shortly before the AIG bailout, Paulson let Lehman Brothers, one of Goldman’s biggest rivals, go into bankruptcy. There was no bailout money for Lehman. There was not even a shotgun marriage/merger, like the one Paulson arranged with Morgan Stanley and Chase.
When all the dust settled, Paulson’s former rivals and chief competitors at Lehman Brothers were out of the game. All while AIG stayed in.
It gets even worse than that.
A very complicated part of the bailout was related to companies that were “counterparties” to AIG. Counterparties were financial institutions that AIG owed money to. Goldman Sachs and other companies receiving money from government bailouts got even more government money as it was funneled back to fully pay AIG’s claims, 100 cents on the dollar.
Taxpayers put up all the money and got none of the rewards. It was a multi-billion dollar windfall for Goldman Sachs and the other AIG counterparties.
…
It could be that Paulson and Geithner were truly innocent guys just doing their jobs.
It could be that Ben Bernanke is really a genius and truly deserved to have his picture slapped on the cover of Time Magazine as “Man of The Year.”
It could be that everything wrong at Goldman was contained to a 31 year-old Vice-President.
And it could be that the moon is made out of green cheese.
Just don’t ask me to believe it.
I’m skeptical of what Washington and Wall Street are doing. After a lifetime of hearing government statements such as, “Watergate was a third rate burglary,” “Oswald acted alone,” “Iraq has weapons of mass destruction,” and “I did not have sex with that woman,” I have a right to be.
We’ve been told that Goldman Sachs is too big to fail.
Now I wonder if they are too big to jail.
Don McNay of Richmond, an award-winning, syndicated financial columnist, author and Huffington Post Contributor, is a lifetime member of the Million Dollar Round Table. He is the founder of McNay Settlement Group, a structured settlement and financial consulting firm. Read more about Don at www dot donmcnay dot com.
I thought the SEC took almost everything to private arbitration, and court rarely entered the picture.
Don’t care about the criminal charges. You have a lower standard of evidence along with GS employees unable to invoke the fifth.
The civil suit will also allow people to go after the bank employees personal assets.
Plenty of potential discovery.
Finally the bankster’s reputation will be forever sullied by the results.
All in all, I’m pretty happy with a good civil case killing them with liability.
Hopefully finding one cockroach out on the kitchen floor will lead to a hunt for the cockroach nest hidden behind the wall.
..Counterparties were financial institutions that AIG owed money to..
That is such a crock-by-omission.
AIG published the list of counterparties. It included a lot more than financial institutions.. Among the many types of counter-party, AIG owed lots of money to small communities in every State in the union.
“AIG owed lots of money to small communities in every State in the union.”
Who cares about chump change? The important question is how much did Gollum rake in?
How much?
Asking questions one doesn’t already know the answer to could prove to be dangerous. Debate 101.
I think not.
Goldman’s share of AIG bailout money draws fire
Paritosh Bansal - Analysis
NEW YORK
Tue Mar 17, 2009 7:44pm EDT
NEW YORK (Reuters) - American International Group(AIG.N) funneled over $90 billion of taxpayer bailout funds to various U.S. and European banks, but the biggest beneficiary was politically connected Goldman Sachs Group Inc (GS.N).
Suspicions of potential conflicts of interest and favoritism have been fueled by $12.9 billion AIG paid to Goldman Sachs — where then-Treasury Secretary Henry Paulson had previously worked as chief executive — in the months after the insurer was rescued by the government last September.
…
Related News
* Outraged Congress eyes tax on AIG bonuses
Tue, Mar 17 2009
* U.S. House aims AIG bonus legislation by next week
Tue, Mar 17 2009
* AIG 2008 bonuses spawned 73 millionaires: Cuomo
Tue, Mar 17 2009
* Recession-weary Americans outraged by AIG bonuses
Tue, Mar 17 2009
* U.S. Congress must tackle “too big to fail” problem
Tue, Mar 17 2009
* AIG outrage dominates U.S. insurance hearing
Tue, Mar 17 2009
* Grassley backtracks on AIG suicide comments
Tue, Mar 17 2009
* Conn. AG doubts AIG bonuses required by state law
Tue, Mar 17 2009
* Sen. Schumer threatens huge tax on AIG bonuses
Tue, Mar 17 2009
* Morgan Stanley should scrap $3 billion bonuses: senator
Tue, Mar 17 2009
Masters of the Universe…they can all go to hell.
But I just hope people don’t neglect to learn personal financial lessons out of this debacle, in the rush to pillory the high-profile pigs.
$12.9 billion to GS? That’s a lot i suppose, but is it enough to claim that funneling money to GS was the primary focus of saving AIG?
AIG owed and paid $52 billion in GIA’s (Guaranteed Investment Agreements) ..held primarily by municipalities but also by other entities such as hospitals, universities, housing agencies or similar issuers of bonds…
That’s 4 times what GS was paid..
Maybe small communities aren’t financially saavy? Some of the small communities were as far away as Finland and Norway.
* BUSINESS
* APRIL 25, 2010
Investors Lost, Goldman Won on WaMu Deal
By CARRICK MOLLENKAMP And SERENA NG
Washington Mutual Inc. and its Long Beach Mortgage Co. subprime-lending unit rang up one of the worst failures in U.S. history. Left in the wake were billions of dollars of soured loans and questionable lending practices.
But when times were better, the two companies had a powerful partner on Wall Street: Goldman Sachs Group Inc.
Beached
Recently released emails and other documents, including securities filings, show how Goldman, considered one of Wall Street’s most elite banks, built its mortgage business by closely working with lenders such as Washington Mutual and Long Beach, two firms that “polluted the financial system” with souring loans, according to a Senate review of Washington Mutual on April 13.
“Long Beach…was not a responsible lender,” Sen. Carl Levin (D., Mich.), chairman of the Senate Permanent Subcommittee on Investigations, said in his opening remarks April 13. “Its loans and mortgage-backed securities were among the worst performing of the subprime industry.”
Goldman declined to discuss its business with Washington Mutual or the communications in the emails released by the Senate panel.
Goldman was one of several Wall Street firms that helped sell bonds backed by Washington Mutual loans. Over the weekend, the Senate subcommittee released internal Goldman emails, including one showing that the firm made a $5 million trading profit by betting against securities Goldman sold in a Long Beach bond offering that lost money for its investors, raising a potential conflict with its clients. On Tuesday, the panel plans to question Goldman executives in a separate hearing.
The emails and others like them highlight “the importance of transparency, the importance of things being in the open, the importance of it being known who is in a position to benefit from what,” senior White House adviser Lawrence Summers said Sunday on CBS’s “Face the Nation.”
Much has been written about Washington Mutual’s failure. In September 2008, the Seattle lender was forced to sell itself to J.P. Morgan Chase & Co. at the height of the crisis in the largest-ever U.S. bank failure. But there has been less scrutiny of the ties between Washington Mutual and Goldman, which emerged stronger than rivals after the mortgage market’s collapse.
…
* May 10, 2007: Goldman and WaMu underwrite bonds backed by $532.6 million in mortgages.
* May 16, 2007: WaMu unit says $49.3 million in loans are worthless.
* May 17, 2007: ‘Good news,’ Goldman trader writes in an email, ‘we make $5mm’ because the firm shorted the bonds.
Given the prospect of a Greek bailout, anyone sharp enough to invest in their debt over the next little while might look like a financial genius after things settle down again. The uncertainty surrounding any crisis provides opportunity for those able to see it and pounce on it.
===========================================================
* The Wall Street Journal
* APRIL 26, 2010, 8:22 A.M. ET
Cost of Insuring Greek Debt Soars
By KATIE MARTIN And MICHAEL WILSON
LONDON—Hopes that Greece’s formal request for international financial aid might help stabilize the financial markets are proving short-lived Monday, with the cost of insuring Greek debt against default soared to a new record.
The euro also took a dive, after briefly rebounding from a 12-month low of $1.32 against the dollar Friday after Greece officially requested the financial aid promised last month by euro-zone finance ministers and the International Monetary Fund.
As Monday trading got off in earnest, though, concerns over the lack of detail on how this aid will be implemented shoved the euro below $1.33 against the dollar.
Meanwhile, after a brief pullback at the outset of trading, the cost of insuring Greek government bonds against default rocketed to a fresh record, as credit default swaps for five-year Greek sovereign debt jumped to 7.13 percentage points. That means investors now judge Greece to be at greater risk of default than Pakistan and Ukraine. Only Argentina and Venezuela command higher CDS levels.
It now costs $713,000 a year to insure $10 million of Greek government bonds for five years, from $614,000 at Friday’s close, according to CMA DataVision.
Before the Greek government called for help Friday, those costs had hit highs of near $655,000, up from $250,000 at the start of 2010. Fears that debt strains could start to take hold more forcefully in other strained euro-sone nations are also apparent, as Portuguese five-year CDS levels have soared above three percentage points for the first time. That level stood at 2.79 percentage points at Friday’s close.
The pressure was also clear in the cash bond market, with the gap in yields between 10-year debt from Greece and Germany—the euro-zone’s most solid borrower—swinging out to a new record of 6.11 percentage points. That yield spread stood at 5.63 percentage points after Greece asked to activate the aid package Friday.
Analysts had already said they expected the euro’s bounce to be short-lived. Now it appears the so-called relief rally has already run its course.
Markets also registered concern over the apparent disagreement within Germany’s coalition government over the process and speed of providing Greece with up to €8.4 billion ($11.24 billion), Germany’s share of the €30 billion European Union package.
“Greece asking for the aid package is the start of the uncertainty, not the resolution,” said Ian Stannard, a currencies analyst at French bank BNP Paribas in London. “It opens up a whole new can of worms in terms of the implementation of the aid. It may be that the rebound has run out of steam already,” he said.
Last week before the federal tax credit expires. Buy this week, or pay less later.
I saw a realtor on the corner this weekend twirling a sign pimping the last days of 8k tax credit.
I’m sure the new campaign will be runaway inflation and higher interest rates around the corner. That is all they talk about when I go to open houses. They tell me things like people don’t know how important it is to buy now before interest rates rise, which has already started. I turn around and say thank you for reminding me I should off from buying for now, as I am an all cash buyer. They look at me as if I am from another planet.
Good post Natalie. The NAR has had EVERYTHING going their way for sometime now. They got their credits, Low interest, Socialized mortgages, bailouts etc…
All they have to show for it is a bump in the low end. Bears are a patient lot, and we will have our day in the sun.
Yep. So many of us have waited this long, there’s very little reason for us to capitulate while all the manipulation is going on.
While we might feel defeated thus far, how long can it be before things finally go the right way?
Seems like all prices should drop $8000 overnight.
Not just drop $8,000, but 32-40k when you factor in the leverage.
Yep, ’cause for most people, buying is constrained by:
1.)The Downpayment
and
2.)Howmuchamonth?
As actual downpayments start to be required the leverage level goes down, and monthly payment ceases to be the only constraint on buyers.
I don’t get this whole leverage argument. For example, if they use it as an FHA 3.5% DP, this also be seen as $228k worth of leverage. ($8000/.035)
To me, an $8k incentive is just that. Why is leverage being factored in?
Say I have $7K for a down payment. Most I can buy is $200K if I need a minimum 3.5% down to get a mortgage. Govt throws in another $8K. I now have $15K for a down payment which means I can now buy a $428K house with 3.5% down.
That’s why leverage is factored in.
I get that part, that it allows one to buy MORE house than they otherwise would.
Let’s say you have $8k total and it is used as the DP. At 20%, that’s a $40k house. If that $8k goes away, I’m guessing you’re not going to get the house for $0. Nor would the $228k house lose $228k.
I see how prices will fall once the incentive goes. But I still don’t see how a house is going to drop $40-228k once the incentive goes away, which is what people seem to be implying.
I think you are right Sleepless unless I am also missing something. Once you get passed the 8k dollar for dollar drop (even though not everyone qualifies for the full amount I think it is close enough at the lower ends to value it between 6k and 8k, and probably closer to 8k when you factor in things such as frenzy activity and the bidding wars they create), the “extra” leverage amount prices must fall to reach equilibrium is a guessing game. No one can give an accurate chart as to the exact amount prices need to fall to reach equilibrium as a result of the impact of less demand for more house resulting from renewed downpayment constraints and the deadening of the must buy now frenzy. Too many variables and variations. However, I do think it is fair to say 8k plus.
I’m in the camp that says the $8K tax credit increases spending power by $40K (if using 20% down) to $228K (if going FHA).
Haven’t we seen enough already to understand that the extra buying power does NOT benefit the buyer. The sellers will raise their prices to compensate for the additional spending power (not buying power).
Most of all, with the 3.5% FHA loans and $8K tax credits **that can be monetized and used for the down payment,** buyers with NOTHING down can now spend up to $228K as long as the sellers offer to cover their closing costs (which is happening very regularly, BTW). This add people to the buyer pool who otherwise would never have qualified to buy a home without the credit and FHA loan. This drastically increases demand, and this will absolutely have a very powerful effect on pricing.
They won’t drop 8000 overnight.
Sales will fall off a cliff. Then prices will fall. So I’d give it a month or two.
“They won’t drop 8000 overnight. Sales will fall off a cliff. Then prices will fall. So I’d give it a month or two.”
If the last drop was any indication and I think it is, it will take longer than a month or two for prices to fall. Sales will drop sharply. Over time more people will walk away. Down the line there will be more substantial price declines, nominally.
Of course, if the various measures to encourage house buying are extended, it will push the next decline somewhat into the future, not indefinitely however.
I predict it will take 6+ months for prices to drop.
The last few months have seen a big jump in sales thanks to the $8K. Not only that but even sellers who didn’t sell saw a jump in interest for their properties as well. This changed the mindset of the sellers. They didn’t sell but instead of getting 1 or 2 potential buyers a month to look, they had 7 people look in April, for example.
That seller is now thinking, the market is improving. He won’t be ready to lower the price any time soon. He has new confidence, driven by reports in the MSM of a bottom, an end to the recession, a rising stock market. Good times are here again!
Only after several months of getting back to 1 or 2 buyers a month have passed, will the seller start to think maybe the market hasn’t turned after all. And even then many will still believe that things are just around the corner from getting better.
Anyone looking for 20% price reductions this summer will be disappointed.
Here in Tucson, I’ve seen quite an uptick in the number of “for sale” signs this spring. I think that a lot of this ticking is being motivated by that ticking clock that will go bong-bong-bong at midnight this Friday, but, hey, that’s just me.
One of my clients appears to be one of these sellers. She and her husband have listed a house that husband has owned since at least the early 1990s. He’s up in his 80s, I don’t know about the state of his health, but I suspect that the two of them are downsizing their inventory of possessions. The rental house a few blocks away from where they live being one of them.
Client and hubby initially went the FSBO route, but then they signed with an agent who specializes in their (Sam Hughes) nabe. House has been sporting a “sale pending” sign, so that may be a good omen. I hope so, as this client has really been on a tight budget of late.
Could it be illegals are packing and going. Once the writting was on the wall they left.
The Financial Times
Why bets on synthetic CDOs must be banned
Published: April 24 2010 03:00 | Last updated: April 24 2010 03:00
…
A synthetic CDO requires someone to be “short”, and the “long” investors knew this. It is thus highly debatable whether there was any legal obligation to disclose the name of the “short” investor to potential buyers.
But was it a sensible thing to do? Does the public have any interest in investment banks behaving like this? The answer to both questions is “no”.
The sum effect of this transaction was to increase the risk and instability of the financial system. The banks who accepted the bet were more exposed than they had been in the first place. Caveat emptor might apply. They were big financial institutions. But why allow banks to make such bets at all?
This is not wisdom after the event. Synthetic CDOs seemed absurd at the time. The fact that anyone thought such deals made sense was symptomatic of the psychology that attended the credit bubble.
…
“Why bets on synthetic CDOs must be banned”
I don’t care if someone wants to bet on CDOs, as long as it is done in an environment like Vegas. And this is what Wall Street should be relegated to, a system that doesn’t affect the wider economy.
“And this is what Wall Street should be relegated to, a system that doesn’t affect the wider economy.”
How would you get that without ending too-big-to-fail — i.e., chopping up the TBTF Megabanks into smaller, competitive, non-systemically risky pieces that don’t threaten to bring down the entire global economy if one of them fails?
This is all about vertical monopoly. A bank does business products on all levels from checking accounts to borrowing from the Fed and lending to the Treasury. Profitable divisions support the failing divisions.
Sometimes you get an inherent conflict of interest which effectively amounts to insider trading (cf. Paulson hedge fund/Golden Sacks). But other than that, I say let the banks do it…as long they are either all inside or all outside regulated space, and as long as they don’t become big-enough-to-need-a-bailout. It all comes back to that word Monopoly.
Isn’t monopoly illegal under the Sherman Antitrust Act?
No, not if you have a franchise from the government.
ISTR that the government action against vertical monopolies is even less common than against horizontal ones. Arguably, that makes sense, since at a conceptual level, the primary victims of vertical monopolies are the shareholders of the companies that are subsidizing the other companies in the supply chain, rather than customers suffering from reduced competition at any particular level of the supply chain. There have been a few exceptions, like movie theateres where vertical monopolies have been broken up, but they seem to be the exception rather than the rule. Although proposed “net neutrality” rules can be seen as an attempt to break up/prevent a vertical monopoly.
“And this is what Wall Street should be relegated to, a system that doesn’t affect the wider economy.”
How would you get that without ending too-big-to-fail
How about repealing the Glass-Steagall act for REAL this time– i.e. getting rid of the FDIC! Then taxpayers wouldn’t be on the hook for the banks’ shenanigans.
How about repealing the Glass-Steagall act for REAL this time– i.e. getting rid of the FDIC! Then taxpayers wouldn’t be on the hook for the banks’ shenanigans.
Isn’t it a little more complicated than that?
Repeal Glass-Steagall “for real” without a host of other reforms / modifications (either regulatory or deregulatory), and you’re simply removing consumer protections without providing for corporate oversight. The corporate side doesn’t necessarily need to be “regulatory” to be effective — what about removing financial accounting loopholes and the ability to engage in off-books sleight-of-hand? What about requiring adequate capital reserves? As it stands, your idea would benefit financial entities at the expense of the average citizen.
How much of that was a factor with GS though? They only recently even became a bank holding company, and certainly weren’t using any significant amount of FDIC-insured funds to do their playing with.
I think the far bigger factor is simply the massive incestuous relationship of GS, the U.S. Treasury, and the Federal Reserve. Investors knew they couldn’t lose much because of that relationship - GS is the ultimate TBTF entity - not because of its size but because of its ties.
That’s a key thing I think people are missing with this bank bill. I think a key amendment would be a requirement that no one person should ever be allowed to work for any two of:
- A private bank or investment house
- The Federal Reserve
- The U.S. Government
Pick one of the three, and that’s all you’re allowed for the rest of your life. No shuffling between them allowed, since that creates massive conflicts of interests.
P.S. In My New World, that’ll be a rule. Well, except in My New World, there won’t be a central bank, so the rule would just apply to the banks and the government.
Also this rule could easily be applied to pretty much any industry. E.g. you’re not allowed to work for Exxon and then go work for the Energy dept., or vice versa. True regulation should be a pure government-pitted-against-industry relationship, with no back-scratching deals that are inherent in employment moves.
Just a thought off the top of my head. Not sure if it would really work well or not, but it seems like it.
A great rule
Banks will do what they do with Congressmen.
They will offer them jobs in lobbying firms after they finish their time at the FED.
“I think the far bigger factor is simply the massive incestuous relationship of GS, the U.S. Treasury, and the Federal Reserve. Investors knew they couldn’t lose much because of that relationship - GS is the ultimate TBTF entity - not because of its size but because of its ties.”
+5 for the graf, +10 for the bolded part. Nice command of the Engliah language.
True regulation should be a pure government-pitted-against-industry relationship, with no back-scratching deals that are inherent in employment moves.
Yes, ideally, it’s an adversarial relationship.
We’ve seen problems across the board — agriculture, finance, food safety, pharma, biotech, energy, defense, you name it — when the private/governmental divide becomes too porous (or, in some cases, exists in name only).
“I think the far bigger factor is simply the massive incestuous relationship of GS, the U.S. Treasury, and the Federal Reserve. Investors knew they couldn’t lose much because of that relationship - GS is the ultimate TBTF entity - not because of its size but because of its ties.”
+5 for the graf, +10 for the bolded part. Nice command of the Engliah language.
Thanks - I aim to please.
(so you aim too, please… at least that’s what I saw written on a bathroom wall once.)
P.S. may want to work on your command of the Engliah (sic) language.
More like the command of my left pinky, but oh well.
ET, the point is that there would be much less NEED for “oversight” without the government guarantee. Why would you give a flying bleep about a bank’s capital ratio, if you are neither a depositor, shareholder, nor a taxpayer on the hook for the loss? Let the people with a financial interest in these things, be concerned with them, instead of bureaucrats in DC pretending to look out for the “common interest” while surfing porn sites.
And packman, I don’t know about the situation with Goldman, but abolishing the FDIC would remove a major link between banks and gov’t. There are other links, to be sure, but this would be a big step towards a saner economy.
but this would be a big step towards a saner economy.
If a ’saner economy’ means bank runs and people somewhat regularly losing everything they’ve put in a bank, then you’re right.
Get rid of the FDIC?
Are you insane?!
Thank you, eco and alpha.
If anything, the FDIC is one of the few entities I would keep.
Like others have said above, we need to separate the entities that are strictly “gamblers” or investors from those that are systemically important or are backed by taxpayers/govt.
I also agree with the problem being the ties vs. the size.
“How would you get that without ending too-big-to-fail — i.e., chopping up the TBTF Megabanks into smaller, competitive, non-systemically risky pieces that don’t threaten to bring down the entire global economy if one of them fails?”
I don’t see it working that way. Competition forces all of them to race to the bottom, so they tend to all do well together and all crumble together.
They need to be smaller and regulated. The S&L crisis taught us that small size alone doesn’t preclude a system-wide breakdown.
The S&L disaster only taught us that banks were jealous of the action the S&Ls were getting.
“But was it a sensible thing to do? Does the public have any interest in investment banks behaving like this? The answer to both questions is “no”.”
The public, the taxpayers, and their government should have “NO interests” in these damned investment banks other than to see that they are well segregated, managed and tightly regulated as to pose no further national security risks or threats to the United States economy.(threat them like those weird NV whorehouses)
These investment banks (Wall Street Casinos) should have never been allowed obtain or have been granted commercial retail bank status or FDIC protection like our commercial/retail business banks in the 1st place.
End of story.
They constantly confuse the function of Investment Houses with the FDIC insured Banks . The bail outs of the Investment Houses and
Insurance Companies were viewed on the same level as the more regulated Banks ,but the regulated banks were selling to the middlemen of the Investment houses who were leveraging at 30 to 40 times without proper reserves . The Insurance Companies that were making credit default swap bets didn’t have the reserves to back their bets . The point is that the so-called regulated FDIC insured Banks became just as unregulated in that they sold to these highly leveraged Investment house entities ,who sold to the suckers .
. You just have to go back to why they enacted Glass-Steagall so many years ago to prevent the lending sector from confusing it’s role and having a conflict of interest ,or confusing the regulated with the unregulated or confusing casino investment with lending.
Investment houses like GS ended up defining the lending market ,which turned into a Casino of Fraud and High Leverage ,without
any regard to even underwriting loans and preventing fraud and
no problem with false creation of value by that breach in underwriting and faulty loan product ,as well as mis-rating the actually securities ,and mis-allocation of the money supply . When all attempts to prop up the real estate market failed ,there she blew .
The purpose of a investment is to have it increase in value or produce a certain yield by betting on it . The purpose of lending is
to determine the current value of a asset and make a loan based on the borrowers ability to repay at a certain yield without any concern for future value . If you try to combine the two worlds you will get faulty lending because the Investment house will make faulty loans (especially if they are unregulated ).The bail outs were really for the Investment Houses/Hedge Funds and Insurance Companies because they didn’t have FDIC to bail them out . Additional toxic paper was transferred to other bag-holders .
This scheme of the Feds in combination with the Treasury (Hank Paulson ) to all of a sudden combine entities so they could qualify for bail-outs as if they were regulated like regulated banks is a joke. The Feds giving emergency loans to these entities for months leading up to Tarp insured that the public would be forced into bailing out the Investment houses and insurance Companies
because they would of defaulted on those Fed Loans . It’s also a joke because many of those loans have not been payed back .
The entities that got bailed out didn’t turn around and free up the credit markets and provide loans ,the government had to do that also ,so the bail outs were simply to keep the Investment House Casinos alive and prevent the discovery of that corrupt casino and the fact that lending was just one big game of breach of fiduciary duty by the unregulated ,highly leveraged ,non-transparent entities that abused lending and created the biggest fake creation of values in real estate . These entities had no regard for the money supply mis-allocation of funds to real estate and refinances.
I think Hank Paulson said to Congress that all these entities are going to default on the Fed emergency loans ,so your going to lose the money anyway ,so you have to bail us out . Prior to the Fed action of giving these emergency loans ,the taxpayers were in the position of saying go BK you dirty scum and lets see where the chips fall . They wanted to prevent discovery of the big Casino
and how these games warped lending and values of real estate .
To even called these Investment Houses lenders is the joke of the Century . I’m not even going to get into the role the Insurance Companies played in this financial meltdown .
+ a billion, Wiz!
Updated April 24, 2010
Goldman Sachs + Greed = Disaster
By Liz Peek
- FOXNews dot com
Americans are disgusted by the greed, the self-dealing, the out-sized bonuses, the arrogance and insider culture of our financial houses.
Will the SEC prevail in its civil lawsuit against Goldman Sachs? It doesn’t matter. The suit brought against the firm has already caused considerable harm to the Goldman franchise, whether or not it is successful. It will likely embolden other claimants who lost money during the financial crisis (and who didn’t?) and who may now expect Goldman — and also its competitors – to be held accountable. Moreover, the suit has already accomplished its main mission: to justify and personalize President Obama’s ongoing assault on “greedy” bankers.
Only by blasting Wall Street can Obama hope to win over populists angry at his government’s dangerous spending spree – a campaign vital to his party and to his ambitions for a second term. Passing “financial reform” legislation is not enough; most Americans are not interested in the subtleties of commodities trading venues and the FDIC’s role in dismantling large firms. They may not be following the details, but they’re pretty sure that the bill under discussion is about as oblique an attack on future financial crises as the health care bill was on rising medical costs. In short, more fluff over substance. They want blood, and no firm is a more appealing target than prosperous, arrogant Goldman.
Sadly, the once-great Wall Street behemoth has served up more than enough garbage to poison public sentiment. The deal in question, in which Goldman sold clients securities which had been purposefully assembled to present an unusual degree of risk, so as to allow a favored short-selling client a huge win, stinks to high heaven. Whether or not Goldman can wiggle through these charges, the suit makes more believable the persistent rumors that Goldman traded and acted against the best interests of its clients.
…
“Sadly, the once-great Wall Street behemoth has served up more than enough garbage to poison public sentiment.”
Why sadly? These scum got fabulously wealthy while imploding the economy, condemning millions to long term unemployment or underemployment. Incredibly maddening, not sad.
“Whether or not Goldman can wiggle through these charges, the suit makes more believable the persistent rumors that Goldman traded and acted against the best interests of its clients.”
There’s a a wall of smoke coming from the forest and GS execs are standing next to the forest holding flame throwers. Why would it be hard to believe rumors that they were involved? The rumors have obviously been true for a long time. The only thing that’s changed is we now have more solid evidence of their complicity in the misdeeds.
Bring all the civil suits imaginable. Good luck finding a sympathetic jury.
<”Americans are disgusted by the greed, the self-dealing, the out-sized bonuses, the arrogance and insider culture of our financial houses.”
Everyone but the Eddies and joeys of this country… and who apparently have never heard of Marie Antoinette.
Goldman Sachs + Greed = Disaster
By Liz Peek
hey ecofeco.. Who is that Liz Peek? Could it be the wife of CIT’s CEO, Jeffrey Peek? … bemoaning the greed and bonuses of the “financial houses”?
i would’a sworn CIT was somehow involved in finance.. filed chap 11 because it went so deep into subprime.. got a few billion in TARP money..
but maybe I’m mistaken..
Was I talking about Liz Peek?
just thought you’d appreciate the heads-up but hey.. fine. Quote whoever you like.. no skin off my nose..
Then I appreciate it. Thanks.
Correcto, They are too busy watching MTV , Dancing with the Stars, NFL draft and other assorted pap. Their friends at the coffee shop with a 6th grade public education will tell them about the election and how to vote.Welcome Obama.
Outside the Box
April 24, 2010, 12:01 a.m. EDT · Recommend (11) · Post:
Trust no one
Commentary: Goldman case shows Wall Street’s true colors
By Howard Gold
NEW YORK (MarketWatch) — We’re still feeling the aftershocks from the bombshell complaint the Securities and Exchange Commission filed against Goldman Sachs Group Inc.
Though the case is a long way from being resolved — and appears to have some big legal weaknesses — several things are clear by now. The once untouchable Goldman (GS 156.65, -0.75, -0.48%) has suffered a severe blow to its reputation. The SEC has taken a small step to restoring its own once-good name.
This politically polarized case (which got through a divided Commission by one vote) has been a shot in the arm for the Obama administration’s efforts to get financial reform through Congress. And more big Wall Street firms may be in the SEC’s crosshairs for doing similar things to what Goldman is alleged to have done.
If so, this is going to be the biggest scandal to hit Wall Street since the dot-com meltdown, and the SEC’s actions will be seen as the sharpest attack on a major firm since then-New York Attorney General Eliot Spitzer sued Merrill Lynch back in 2002.
But even after the worst financial crisis since the 1930s, the Wall Street banks have won victory after victory in their lobbying efforts and have paid their undeserving minions rich bonuses, which have really stuck in the public’s craw.
…
Keep in mind that principle seems to be that there is NOTHING WRONG with creating financial instruments that are designed to fail from the get-go. The legal question seems to be at whether you are obliged to tell the purchasers that one of the people giving input into what mortgages to add to the pool had a vested interest in seeing the bonds default.
You seem to hear a lot that “The purchasers of these bonds were big banks and smart investors who coulda/shoulda read the prospectus. Buyer beware.” But of course many of these banks and pension funds either already have or are likely to get bailouts of one form or another.
“The purchasers of these bonds were big banks and smart investors who coulda/shoulda read the prospectus. Buyer beware.”
I’ll bet may were public employee pension funds run by politicians who receive campaign contributions from Goldman Sachs. Which means, as a taxpayer and would-be public service recipient, I am in fact the buyer. How the hell was I supposed to beware? No one asked by approval.
Yep. And of course the South East Podunk policeman’s, fireman’s and teacher’s retirement fund was adminstered by George, the County-Executive’s cousin. Not the sharpest knife in the drawer, but a nice guy who we need to find a job for.
“Keep in mind that principle seems to be that there is NOTHING WRONG with creating financial instruments that are designed to fail from the get-go. The legal question seems to be at whether you are obliged to tell the purchasers that one of the people giving input into what mortgages to add to the pool had a vested interest in seeing the bonds default.”
If you have any kind of Superior position over another party envolved in your creating, assisting or enforcing the creation a contract that is inherently fruadulent or even an unconscionable unfair contract under the eyes of the law, you should expect to see a whole array of lawsuits and Mac Trucks coming down the pike at you.
(disclaimer: I’m not an attorney although I do say some really weird stuff on Ben’s HBB…Please check with your Mom or your better 1/2 before you believe anything that I say)
“Goldman case shows Wall Street’s true colors”
You with the sad eyes
don’t be discouraged
oh I realize
it’s hard to take courage
in a world full of people
you can lose sight of it all
and the darkness inside you
can make you fell so small
But I see your true colors
shining through
I see your true colors
and that’s why I love you
so don’t be afraid to let them show
your true colors
true colors are beautiful
like a rainbow
Show me a smile then
don’t be unhappy, can’t remember
when I last saw you laughing
if this world makes you crazy
and you’ve taken all you can bear
you call me up
because you know I’ll be there
And I’ll see your true colors
shining through
I see your true colors
and that’s why I love you
so don’t be afraid to let them show
your true colors
true colors are beautiful
like a rainbow
-Cyndi Lauper
Spitzer liked brunettes and Woods wanted blondes. Bring back Spitzer.
Whirlpool 1Q profit more than doubles, sales rise
Whirlpool 1st-quarter profit more than doubles as sales of its appliances improve April 26, 2010
BENTON HARBOR, Mich. (AP) — Whirlpool Corp. said Monday that its first-quarter profit more than doubled as sales of its appliances improved both domestically and abroad.
The world’s largest appliance maker also lifted its 2010 earnings forecast above Wall Street’s expectations on its quarterly performance.
Its stock gained $7.89, or 7.7 percent, to $110.11 in premarket trading. The shares have traded between $37.24 and $102.42 over the last year.
Whirlpool, which sells Maytag, KitchenAid, Jenn-Air and its namesake brand, earned $164 million, or $2.13 per share, for the three months ended March 31. It earned $68 million, or 91 cents per share, a year ago.
Cash-4-appliances must have really boosted sales as retailers ordered big shipments to meet anticipated demand. Without a housing recovery (which will never happen in this lifetime) demand will only dwindle.
Know a couple of people who bought new appliances only because of the incentives.
Wampum4Washers.
Dough4Dryers
Credit: JeffSaturday
Here in AZ, one can use God’s dryer (the sun). I do, and it works pretty well. I’m careful to hang my laundry in a shaded area, rather than direct sunlight, as that tends to fade colors in a hurry.
The efficiency of the new ones is the draw for me. My water and elect bills dropped when I got a good LG front loader. Good for the planet, good for the grand kids. And w/18 mo. no interest at best buy, they pay for themselves in 3 years. I bought one before I bought a big arse flat screen. I still dont have one.
LG = Lightweight Garbage (China’s cheesiest crap quality)
LG’s Korean –
I actually like Samsung and LG a lot. When I bought a window A/C unit, the brand was Zenith. I was elated to find that it was actually made by LG.
Unfortunately, I’m old enough to remember well the original trade name of this Korean company - Lucky Goldstar. It was smart of them to change it to “LG,” IMO.
Hey Chip! Good to see you again.
“Good for the planet, good for the grand kids.”
That is soooo 1960’s. Please join the me generation where “mah personal libbity” is the only thing that’s important!
Texas just jumped on the ‘appliance rebate’ bandwagon: http://www.seco.cpa.state.tx.us/arra/rebate/index.php
Ok tell me how many people lost their jobs when they closed plants in ohio and Illinois and shipped the jobs to a brand new facility in Mehiko????
http://www.rtoonline.com/content/article/May06/WhirlpoolMaytag051006.asp
http://www.inthesetimes.com/article/1790/
Seems like all of a sudden everyone has better than expected earnings.Somehow I think this market is totally rigged.The herd is getting set up for slaughter again.
But don’t most household appliances wear out after 10-12 years (avg), and need replacing? Many people wait until the appliances totally die, but a lot of people replace them in the few years leading up to the expected death.
I think the recent spike in sales is due to pent-up demand. The demand came from the 6-12 months that Americans closed their wallets, following the start of the financial crises. People started crawling out of their shells some 6 months ago and I guess they are replacing those old applianced that they were planning on replacing in the previous 12 months.
Shortly after I moved in, I had to replace the washer-dryer that was thrown in with the purchase of this-here casa. Seems that the W/D’s motor had taken to leaking oil into the washtub, and that was a $400 repair.
So, I took a deep breath, bit the bullet, and forked over $600 for a new front loader washer. As for the dryer, I decided to just use the sun, which we have in great abundance. I like the front loader quite a bit — it’s given five years of problem-free service. I like that in an appliance.
Pent up demand and necessary purchase demand is my bet as well, CincyDad.
No. Guys remember last year was epic bad so this year is going to be a substantial gain.
Also as someone else mentioned they shipped the jobs to lower paying ones in mexico.
All the China made appliances from bubble McMansions failed already?
Where are they making Maytag now? They closed the plant in Iowa and some of the workers even wandered up here.
Maytag doesn’t exist anymore. It’s now part of Whirlpool.
As such. Their product lines more or less still exist, though are being merged into Whirlpool’s products.
I didn’t really answer your question, but thought I’d throw that info into the mix.
An increase that only benefits it offshore locations and the remaining small suppliers still here.
Most Stressful Jobs in America
10. Real Estate Agents
“Real estate agents and brokers work long, erratic hours, spending much of their showing properties to clients. They must be extremely independent, and able to handle sales quotas and deadline pressures. Because they work in an extremely competitive field, successful agents and brokers are expert salespersons,”
How can they compare a Real Estate agent to a surgeon, cop or firefighter?
Stooopid
Imagine trying to make a living in an occupation where demand virtually dried up over night.
Or if you cannot imagine it, rent yourself a copy of Glengarry Glen Ross.
There are MANY other professions that have dried up and none of them are on the list.
How about candle maker? Expensive candles were booming during the previous 10 years, but nowadays, few people spend 50 bucks on a candle… It must be stressful not to have anyone buying your products…
Im sorry but 50 bucks for a candle is ridiculous.I have a hard time paying 20 bucks for a yankee candle.
It costs 50 bucks if you pour or dip it yourself in a specialty shop. The candle shop — along with the pirate store and the strawberry picker — are running HBB gags.
Go for the new reed diffusers. Much safer.
Problem with the reeds is there’s no way to turn them off. I don’t like constant scent in my surroundings. Right now in the desert, we just finished citrus blossoms and are now on to blooming jasmine. Sunset time is delicious. I know they don’t belong in the desert.
Most bottles come with a stopper. Take the reeds out and put a cap on.
I’d rather have the constant scent than constantly worrying about fire. A few years ago, one my tealights — the kind with the colored candle in the clear plastic — caught on fire because the plastic is flammable. I haven’t lit a candle since.
Like the butcher, the baker, the candlestick maker
Rub-a-dub-dub…
But the Glengarry DVDs … are only for closers!
Somebody said once that they saw it on the airplane….Gee about every 5th word would be dubbed over. Of course the movie to see about Stock Brokers would be Boiler Room.
It’s like watching Scarface on network TV. 1.3 f-bombs a minute are hard to overdub.
Or if you cannot imagine it, rent yourself a copy of Glengarry Glen Ross.
An excellent suggestion. The entire film is dripping with tension.
One of my favorite movies. Alec Baldwin is so good at being bad & Jack Lemon is a wonder.
Or if you cannot imagine it, rent yourself a copy of Glengarry Glen Ross.
More cost effective to buy it, isn’t it?
(packman ducks)
See if your library has it. Borrow it.
Yes, I know. Your taxes support the library, so the DVD isn’t exactly free.
Privatise the police. If they complain, off them. No witnesses eh?
I’m not even a big fan of cops and firefighters. Once you figure out their Defined Benefit retirement it leaves a bad taste.
Much of what they do can be privatized.
Much of what they do can be privatized ??
+1…Which prompts the question, Why don’t we ??
Cause if you’ve had to deal with lowest cost Wackenhut contractors, you’ll take real police any day.
Bingo
Also, I don’t want any private company to be able to obtain warrants. I also don’t want a police force that can never do anything but stop crimes in progress because they can’t get warrants. Also, even if they stop a crime and catch the perp, holding them is ‘kidnapping’ when done by a private company. And there’s no way in heck you want private companies to be able to detain people without it being illegal. Law Enforcement is not something that you can contract out to a private company without endowing private companies with abilities far beyond any level of sanity.
Would you want Blackwater writing you a speeding ticket?
So much to go after in this post but I will just choose one;
Would you want Blackwater writing you a speeding ticket ??
Got it…We need $10,000. a month police to write a speeding ticket..
Cause if you’ve had to deal with lowest cost Wackenhut contractors, you’ll take real police any day.
Making law enforcement a privatized, for-profit endeavor? Yeah, that’ll turn out great. I can just picture law-ignorin’, trigger-happy Blackwater — oh yeah, they changed their name because of all the bad publicity to Xe Services — employees providing “safety” to America’s streets.
As for privatized fire/rescue services, take a look at the endemic corruption in the privately-owned 19th century fire squads, and it’s easy to see why we made that a governmental function.
As for privatized fire/rescue services, take a look at the endemic corruption in the privately-owned 19th century fire squads, and it’s easy to see why we made that a governmental function.
Here in AZ, there’s a private fire/rescue company called Rural Metro. I seem to recall, shortly after I moved to AZ, that a fire broke out in the Phoenix area. It was very close to a Rural Metro station, but they didn’t put it out. Why not? Because the fire wasn’t in an area served by Rural Metro.
I live in the City of Tucson, have taken lots of emergency preparedness courses taught by Tucson Fire Department people, and have also attended critical incident stress management classes with TFD people. To a man and woman, I’ve found them to be first-class professionals, and I’m proud to have them serving me and my fellow Tucsonans.
As for privatized fire/rescue services, take a look at the endemic corruption in the privately-owned 19th century fire squads, and it’s easy to see why we made that a governmental function.
———————-
Exactly. What the “anti-taxers” don’t seem to understand is that we HAD private fire departments — usually operated by insurance companies.
If you didn’t have the right insurance, they let your house burn down…and your neighbor’s house…and his neighbor’s house…
——————
Like AZ Slim posted above, our public firefighters and police officers are very professional and extremely well-trained. The departments can pick the cream of the crop because of the generous benefits packages.
I’ll bet you a million bucks that when it comes to YOU or a family member, you’ll want to have the services of a public police officer or firefighter over a rent-a-cop or entry-level firefighter (which is what you’ll get if you underpay and get high turnover).
Cause if you’ve had to deal with lowest cost Wackenhut contractors, you’ll take real police any day ??
You sound like a Union pitch man selling fear…
I don’t want a privatized police force. I also don’t want a unionized one with defined pension plans that the taxpayers are on the hook for indefinitely. In fact, there are a few things ALL unions (especially public unions whom the taxpayers are on the hook for) need.
We need federal laws on Unions that allow for the following :
5% of the workforce can be fired at will, with appeals available if you’re fired and not in the bottom 10% ‘performance’ wise.
No Defined Pensions Ever. All pensions are turned into 401(k) programs. Put their retirement in their own hands just like When you retire, you get what you got in your plan. Ongoing pay at any percentage of a base salary is ridiculous.
No political contributions from any Unions. They can recommend individuals contribute, but that’s all. And by recommend, I mean recommend, not “recommend” with threatened reprisals. (This is part of a larger “remove as much lobbying as possible” need.) This should be combined with “No political contributions from any Company” laws.
Well, scdave, if you knew anything about history, it was tried in the the 19th and early 20th century and it didn’t work.
One example was private firefighters would show up to put out the fire and literally get into a brawl with another firefighting company and the building would burn to the ground and/or salvage all remaining possessions as payment for services.
And that’s on a good day.
And yes, the other major issues were gross violations of civil rights. For some reason, business seems to think they are exempt from the Constitution and Bill of Rights.
Um, a private company able to obtain warrents or able to decide who’s houses to save and who’s to let burn? Unless one wants to live in some sort of “Shadowrun style” dystopic future, I’ll pass.
“PLUNDER” by Steven Greenhut
I just finished reading this and recommend it to everyone on this list. A thorough expose of the
unions and government love fest to fatten their
pensions at the expense of the taxpayer. It will
make you sick. And ANGRY.
It will make you sick. And ANGRY ??
Apparently not with Va Norfolk above…
Thank god the corporations weren’t doing this.
Oh wait…
-1. Tried in England and failed miserably.
People, keep your eyes on the prize. All of these cops and firefighters and FBs and union leaders are small potatoes when compared to the morally (but certainly not fiscally) bankrupt CEOs and Wall Street thugs and thieves. Keep a laser focus on that anger, otherwise you’ll just keep ‘em warm.
Exactly. And at least they provide SOME benefit to society when compared to the bankstas, who, uh, who… make the world safe CDOs and fraudulently rates financial instruments!
HOORAY!
Well said, Mr. Bubble.
The PTB are trying to keep the plebs’ anger directed at each other — like rats on a sinking ship.
ALL workers are in this together. The sooner we grasp that, the better.
The entitlements are completely ridiculous for firefighters and cops. A friend of mine’s older brother retired from the police force in podunk Nevada and gets almost $80k per year. He’s 55. So, the taxpayers are forced to pay him, and everybody like him, this salary for another 20+ years. It’s totally unsustainable.
I was responding to the call for the privatization of police and firefighters, which I believe is not a good idea. It was tried before, failed and became public. Entitlements area different animal which is being dicussed below. They are unsustainable without higher taxes, but I am still reserving my anger for the few thieves who took much of the pile: banksters and crooked CEOs, etc.
MrBubble
“10. Real Estate Agents.”
Only ten?
Not high enough. I’m rooting for them to move up the scale, I’d like to see them move up to number one.
Go NAR!
The New Fat Cats
There are two Americas, just not his two (the rich and powerful versus everyone else). The real divide today is, on one side, the 20 million people who work for state and local governments and the additional 3 million who’ve retired with fat pensions. On the other, the rest of us, roughly 280 million Americans.
*In Contra Costa, California, the final salary of one fire chief, 51, was $221,000. He was given an annual, guaranteed pension of $284,000. Another chief, 50, whose final salary was $185,000, got a pension of $241,000.
*Governor Christie of NJ cited two tales in February when he declared a state of fiscal emergency in New Jersey. One retiree, 49, paid “a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments and health benefits.” A retired teacher paid $62,000. She’ll get “$1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime.”
* In New York, a pensioner in the state retirement system received $641,000 in state payments in a single year. He was a triple dipper. He had a pension of $261,000, the highest in the state. He had a post in the state university system in which he made $280,000. And he was paid $100,000 a year as a consultant for the agency from which he’d retired, the teachers’ retirement system.
What’s so bad about working for the State?
This is the reason the states are broke.too many chiefs and not enough indians to support it.
A government of the public unions, by the public unions and for the public unions.
We fought a revolution for it – don’t cha know. It is their constitutional right!
Now get back to work in your small salary, meager benefits and no pension job. The taxes you pay will help these public servants in their very golden years…
And if these government need more money to pay for this insanity – they can just raise your taxes. And if that is still not enough - obama and the democrat will bail out these unions putting your children deeper in debt.
What a system…
Now get back to work in your small salary, meager benefits and no pension job. The taxes you pay will help these public servants in their very golden years…
———————-
And these people would have a small salary, meager benefits and no pension because…?
It’s because these idiots bought into the LIE that “unions are bad.” They believed that they were above union membership, and that union workers were “lazy.” They are the lazy, apathetic idiots who ride the coattails of the few remaining union members who stand up for workers’ rights. These few remaining union members are the only thing holding up the middle class in the U.S. and keeping us (barely) from becoming a nation of third-world workers.
Only fools decry the value of unions. If unions perish, we all perish.
You would need 5-mil or more in a 401k to have a “safe” rate of return to earn that kind of pension…Just ……g obscene…
Welcome aboard Brett! Ahrg.
Get ready for attacks from the left wingding contingent that believes we can get by with working for 10 years and then everyone collects benefits forever.
The public employee unions might try to pay you a visit as well.
Retire at 49! What the heck.
Get ready for attacks from the left wingding contingent that believes we can get by with working for 10 years and then everyone collects benefits forever.
What’re you talking about?
left wingding contingent that believes we can get by with working for 10 years and then everyone collects benefits forever ??
I would venture a bet that a very high percentage of Union Police and Firefighters lean hard to the right politically but hard to the left when it comes to their pay…
“I can hire one half of the working class to kill the other half.” - Jay Gould
Divide and conquer - way to do the bidding of our financial overlords.
Yes, there are undoubtedly abuses and instances of unreasonable pension payouts and whatnot around the country, but these are small potatoes compared to the malfeasance in the FIRE economy. To say that the “real divide” is between, say, a small business owner on the one hand, and some guy who works at the county clerks office on the other, is ridiculous.
Prevent the FIRE economy from sucking away our wealth and there is enough money for a decent salary, benefits, and pension for all working Americans. State employees just have what MOST Americans used to have back before they got screwed out of it.
Sorry Bub. I posted something similar, but less good, above. They are experts at the divide and conquer, ’tis true.
No dude. The mass of these pension payouts are nearly unfathomable.
As gov Christy is pointing out: you let people retire very early and have unlimited benefits and the numbers are stagering.
Not small potatos at all.
Crisis is somewhat worse at this time due to the financial meltdown.
However, it isn’t going to work out if we have an uncompetative tax structure that benefits too many govt employees.
Most of the state govts that are in trouble are in trouble because of the crazy payouts. It has to end.
I’ll agree that tens of billions of dollars in California to fund pension programs is a lot of cash. But the problem (if there is one) is systemic and spread over a lot of people. So singling out a few high-ups in various cities making the 200K that they receive because of “the market always goes up” mentality and tons of bad assumptions by the gov’t just doesn’t compare to the millions that a very select few people are stealing in and around Greenwich, CT.
Getting mad that some police chief is now only making 475 times less than the average CEO rather than 478 times less isn’t my bag. That’s just, like, my opinion.
MrBubble
Like all those Scandinavian countries that are about to collapse because they give their citizens loads of benefits?
Prevent the FIRE economy from sucking away our wealth and there is enough money for a decent salary, benefits, and pension for all working Americans. State employees just have what MOST Americans used to have back before they got screwed out of it.
He-e-e-e-ey, Bub Diddley! (I agree with you. Now if I could just type Bo’s great bass line…)
Bump, bump, bump, buh-daaah, bump
Thank you for the beat, alpha-sloth!
Mr Bubble,
You can look at the Stanford U report on the Calpers system.
They are 500 Billion in the hole all on their own.
And those “rare” fat cats, they are all over all the little podunk municipalities. So multiply the numbers by tens of thousand to represent this. Not to mention the big time politically connected fat cats that worked for 1-2 years to get one of several pay checks for life.
That is just California.
This is easily as large as the entire housing bubble mess.
And this little beauty is dwarfed by the SS nightmare.
Amen, Bub!
I think it is so wrong that the liberal media focus on our leaders doing God’s work in the finance industry when at least 20 liberal gubmint workers are making decent money off of us taxpayers.
It’s time for a Tea Party. Tea Party on! Yeah! Whoooo!
+1
Most government retirees that I know are NOT making fat bank.
The real unsupportable costs are the political favor business contracts and sub contracts.
And why, WHY does this subject of picking on the working folks keep coming up time and time again around here?
Was it the working stiffs of America union that stiffed us for +$1 TRILIION?
I believe that’s “trillions” with an “s” eco.
BTW, some would argue that the prevalence of artificially low interest rates over this past decade is a large part of the reason the pension plans have taken such a hit. They had to get into riskier investments just to stay afloat.
The FIRE sector took down the pension funds, not the govt workers.
Exactly.
Again, some around here are trying to deflect the blame from where it rightfully belongs.
Pension Pains: States Cut Benefits to Skirt Massive Funding Shortfall
Illinois Teachers Complain; California Latest State to Push for Pension Reform ~ ABC News
Dan Montgomery doesn’t have many kind words for his elected officials. The high school English teacher from Skokie says Illinois politicians spent years neglecting their obligations to the state’s public pension funds and now want workers to foot the bill.
Consumer Reports retirement expert Greg Daugherty’s tips for retirement.
“It’s terrible,” said Montgomery, who has been teaching for 17 years.
Illinois recently cut benefits and raised retirement ages for public employees in order to cover a $78 billion shortfall in its public pension fund.
“We really fought it, but in the end they did it anyway,” Montgomery said.
States around the country are beginning to face the necessity of reforming their public pension systems, after the financial crisis took a bite out of already inadequate savings and put a seemingly insurmountable gap between assets and the benefits that governments had promised their workers.
Illinois is one of the most recent states to tackle its shortfalls, with a reform that the government says is expected to save taxpayers more than $200 billion over 35 years.
Skokie says Illinois politicians spent years neglecting their obligations to the state’s public pension funds and now want workers to foot the bill.
Illinois recently cut benefits and raised retirement ages for public employees in order to cover a $78 billion shortfall in its public pension fund.
The question isn’t if, but when will they do this to social security and medicare?
At least SS is pay as you go (yeah, in theory there’s a “fund”, but we know what that’s worth). We will probably continue to see benefits erode and retirement ages go up.
The public employee pensions are supposed to be backed by investments made over the years. If those investments aren’t there, then they are in deep doo-doo.
When you have the head of the janitors union, SEIU, with a 3rd grade education, as a director of PERS, No wonder they are $500 billion in the hole. Get some guys from GS !!!
Social security is a easy fix…Just raise the minimum age for the benefit…Medicare is the elephant in the room…
Medicare is the elephant in the room…
Yes. Google various info and you’ll find that Medicare funding is in far worse shape, in terms of future $$ impact.
Additionally it’s a heck of a lot less politically expedient to cut Medicare benefits than SS. You can ask people to retire later in hard times and they may go along, but you can’t ask them to not get sick, break their hip, get cancer, etc.
True, but it’s also easier (less onerous) to bail out Medicare than Social Security, since Medicare costs only 1.45% of a salaryman’s paycheck, versus Social Security at 6.2%. (Assuming the salary is below the $106,800 cap for SS.)
In Ohio, for University Professors, (and other state employees in one way or another), they are raising the employee contribution from 10% of salary to something like 13% of salary, and the Universities’ contributions from 10.5% to about 15% over the course of the next few years. Also expanding the #years used to calculate the ‘final pay’ from the avg of 3 highest earning years to 5 highest earning years.
(the official approval of these proposed changes has been tabled until after the November elections, but it’s all been in place for about the past year or so)
From the Mall to the Docks, Signs of Rebound
The New York Times
PORTLAND, Ore. — The docks are humming again at this sprawling Pacific port, with clouds of golden dust billowing off the piles of grain spilling into the bellies of giant tankers.
Shoppers at a Gap store in Manhattan. Retail sales increased by 9.1 percent in March at established stores compared with a year earlier, according to Thomson Reuters.
“Things are looking up,” said Dan Broadie, a longshoreman. No longer killing time at the union hall while waiting for work, instead he is guiding a mechanized spout pouring 44,000 tons of wheat into the Arion SB, bound for the Philippines.
At malls from New Jersey to California, shoppers are snapping up electronics and furniture, as fears of joblessness yield to exuberance over rising stock prices. Tractor trailers and railroad cars haul swelling quantities of goods through transportation corridors, generating paychecks for truckers and repair crews.
On the factory floor, production is expanding, a point underscored by government data released Friday showing a hefty increase in March for orders of long-lasting manufactured items. In apartment towers and on cul-de-sacs, sales of new homes surged in March, climbing by 27 percent, amplifying hopes that a wrenching real estate disaster may finally be releasing its grip on the national economy.
piles of grain spilling into the bellies of giant tankers
“Things are looking up,” said Dan Broadie, a longshoreman. No longer killing time at the union hall while waiting for work, instead he is guiding a mechanized spout pouring 44,000 tons of wheat into the Arion SB, bound for the Philippines.
Oh goodie, we’re exporting our food. That is definitely good news for the umemployed.
Show me the jobs!
RE: shipping trade.
My commute is either by bike over the Golden Gate or by ferry when I am lazy. Since last year, I have seen both an uptick is the number of container ships and the amount of cargo on those ships. I don’t get it, but that’s some (nearly valueless) anecdotal “evidence”.
MrBubble
IMHO, it’s the anecdotal evidence from many diverse people on this blog that make this blog so valuable.
Thanks for the anecdote. It’s good info.
There has been an uptick in port traffic from all published reports. Exports have recovered more than imports, though we are still running bad deficits.
The situation seems to be normalizing.
I suspect that much of the US is becomming inexpensive. Wages and space through out the midwest are getting much more affordable.
Hence, it is likely we will see a manufacturing boom in about 4-5 years.
The problem is if we strangle everything trying to pay those unpayable debts or make uncompetative tax structures. That or make some strong protectionist moves. Either would derail any potential recovery.
We really ought to be looking at tax structure to help the job situations. That and other regulatory problems.
I felt like I was reading a 1930s PR media release trying to convince everyone all is well. ‘Clouds of Gold Dust’, ‘Shoppers are snaping up’, ’stock market seems so relaxed’ and ‘wrenching real estate disaster may finally be releasing its grip’.
Actually the article gave me the creeps. Maybe I needed to put on my tinfoil hat to believe.
I read some of the 1933-35 newspaper headlines myself through our central library archives, and I too must need a tinfoil hat. It sure does seem like a rhyme, doesn’t it.
Nothing but the usual spring bump.
Happens, oh… every year.
Look for DRYS on the stock exchange.
Reposting a link to this article from yesterday about the ratings agencies - lots of good info in there.
Seems like there’s something missing though. Krugman correctly points out that there’s an inherent massive conflict of interest in the current ratings’ agencies setup - where the institutions who are issuing the various securities are the ones who pay the agencies to rate them.
I’m struggling to understand - why don’t there exist ratings agencies that do not use this revenue model - that instead get their revenue entirely from the customers of these ratings? There are tons of entities that use these ratings - thousands of municipalities, investment houses, and even individual investors. Seems like these entities would flock to such an independent ratings agency, because of the inherently less corrupt, and therefore more accurate, nature of their ratings.
What’s preventing this from happening?
Disclaimer: this may seem like a bit of a rhetorical question, and at some level it is - i.e. referring to SEC regulation/promotion of the big agencies (primarily the big 3). However it seems like there’s more to it than that. My impression is the SEC management (e.g. NRSRO status) is somewhat weak, and that if municipalities (e.g. especially big ones such as the state of CA) really wanted to make sure they were making good decisions that they’d use other agencies instead, and SEC be damned.
I think that the answer is in your question “There are tons of entities that use these ratings - thousands of municipalities, investment houses, and even individual investors. ” What you have, in principle, is a rating that is easy to communicate, but a complicated judgement call to come up with. It is difficult to come up with a business model for charging to get access to these ratings that will survive the rampant pirating of your ratings that would go on. It’s hard enough to sell music online at $1-$5 a song. Imagine how difficult it would be to charge $20-$50 for a simple letter grade. Or say, $10k for annual access to all your ratings? Because GOOD ratings would require a bunch of man-hours by skilled people. They won’t come cheap.
Hmmm… yeah I think you’re right. The problem is that, as you say, this “output” of the ratings agency is a very small bit of information, that requires a lot of effort to create. Once the information is out, it’s out - even if you tried to hide it with non-disclosures, it probably just wouldn’t work - it’s just too easy to spread this information around.
So - another train of thought I just had. I’ll start at the beginning. What if the ratings agency, instead of saying “we’re rating Bond XYZ at AAA”, didn’t actually name the security they were rating, but just provided some generic number to it; say “53″. So - Bond 53, as rated by Joe’s Rating Agency, is AAA. How would one then know how to invest in Bond 53?
What this would mean is that the entity doing the rating would actually have to act as a intermediary in the actual purchase of the security itself. They’d have to collect the money and purchase the security from the investment firm that offers Bond XYZ on behalf of the buyer.
That would be kind of tough to do though, and seems like it would be fraught with all kinds of problems. Here we have the ratings agencies themselves actually acting as trading firms. Doesn’t seem like a good idea.
However - this begs the question: Why not actually have the securities firms rate their own securities?
Now we have absolutely no conflict of interest. Basically the ratings are just advertising. Unlike consumer product advertising - the firm actually doesn’t want to “over-advertise” - make something appear better than it really is, because then when the customer doesn’t make as much return as they thought - they now distrust the securities firm, and move to use someone else.
The main problem here is that there can still be a level of “false advertising”, where a firm decides to go out in a blaze of glory - build up trust over a number of years, rate something way higher than it should be rated, in order to pull in lots of business, and then collect the proceeds before eventually going belly up.
However there are laws and regulation against false advertising. If something is blatantly wrong (e.g. someone offers a power drill that claims to be 16 amps, but turns out it’s only 5 amps), then they get punished for fraud. Same thing would have to be true of the securities firms - e.g. if they offered a AAA ultra-safe bond security, but under the hood was a bunch of junk subprime, then they would be subject to SEC fines on the front end, or lawsuits on the back end.
Guess the problem is the devil’s in the details. Many MBS, even prime, could actually have been considered AAA, but that are now not so due to the housing crash. In such a case would a securities firm be open to lawsuit? Hard to tell.
Part of the problem is the dang government and Fed meddling in the housing market (and all markets). If there weren’t so many unknowns driving changes in the markets, it’d be a lot easier to model and predict things.
Anyhow - still seems to me like a valid and perhaps better model would be to actually let the securities firms do their own rating. At least that eliminates the conflict-of-interest element that exists with the ratings agencies today.
If you made a profit of $100 mil and were fined $5 mil, bango, no sweat GI.
Easy
If you want to sell your bonds you pay a fee into a pool. Then randomly approved rating agencies will be selected to rate your bonds. They will be paid in part with these same bonds that they must hold to maturity.
Good idea, measton.
I’m as ignorant as they come regarding the ratings agencies, however I’d think it would be impossible to say if you’d buy something without knowing the rating ahead of time. If someone says “find me some AAA rated bonds with the best return”, I’d assume they wouldn’t be paying to rate every single issuance they’d consider.
Banks wouldn’t be able to get things rated without buyers, and buyers wouldn’t pay to have something rated without knowing it would get a high rating, and no one wants to pay to rate something only to find out it’s garbage.
Maybe using a system similar to the new real estate appraiser pool would work.. but I have no idea how you’d determine a fair cost.
and buyers wouldn’t pay to have something rated without knowing it would get a high rating
Actually I don’t think that’s true. While some entities (e.g. pension funds) have strict criteria of only buying AAA - others (e.g. individual investors) will readily buy lower rated securities, knowing that they’re higher risk but will yield higher return under the right circumstances.
packman, you are struggling to understand because you still haven’t grasped just how “rigged” everything is while maintaining the appearance of objective neutrality.
It’s all about being an insider.
In sheer dollar amounts, we live in the most corrupt nation on the planet.
“Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their ‘right’ to choke down a McDonalds burger than for their constitutional rights”
~Pravda
Thanks, Pravda. How’s that Pootang workin’ out for ya?
Yeah, it’s Pravda. But they are sadly correct.
Do they deserve extra credit for being correct while smashed on vodka?
Joey’s hinting at a larger issue, and that is the former Soviet bloc’s huge problem with alcohol abuse. It’s well beyond anything we’ve ever experienced in the States. And, IMHO, it will cripple them going forward, if it isn’t doing so already.
no.. I was illustrating the pitfalls of stereotyping people.
I no more adhere to the drunk Russian stereotype than I do of the carefree, stupid American stereotype.
I didn’t get your illustration, for I saw only verity in those two statements. Most Americans don’t know their @sses from a hole in the ground w.r.t. their government, taxes, rights, etc. and alcohol abuse in the former SSR is rampant. Just though that you were making a funny.
Well, mrbubble, I suppose you have personal knowledge that most of the people you know.. your family.. at work.. whoever you socialize with don’t know their asses from a hole in the ground.
I mean.. you must know somehow, and it’s not just what you imagine, or read in Pravda.
Well joey, we know you!
More OPEC oil output needed if prices hit $100 plus
OPEC member countries would need to pump more oil to prevent a rally in oil prices above $100 from hurting the global economic recovery, said Kuwait’s oil minister on Sunday.
Oil is well below the $100 a barrel mark, settling at just over $85 a barrel on Friday. For a month, oil has traded over the $70 to $80 level that many in OPEC have pegged as fair. But there was room for more upside before the producer group would respond.
“If it’s sustained above $100 that would damage the economic recovery,” he said. When asked if OPEC would boost supply to prevent that, he replied “I would say so.” said Sheikh Ahmad al-Abdullah al-Sabah.
“OPEC member countries would need to pump more oil to prevent a rally in oil prices above $100 from hurting the global economic recovery.”
Actually, “OPEC member countries would need to pump more oil to prevent a rally in oil prices above $100 from convincing lazy, shortsighted Americans from shifting permanently to conservation, alternative energy technology, and new domestic supplies. As soon as the conservationists are made to look like fools and the new energy technology companies and domestic drilling projects are bankrupted, it’s on to $300 per gallon!”
I guess I’ll just have to keep driving my electric car or riding my bike.
I monitor REO lists of various geographic locations daily. It appears the suckers, empty pockets and tire kickers are lining and signing up for indentured servitude pre-expiration of $8k tax credit as the inventories are falling at the most rapid pace I’ve seen yet.
It’s @$#%@#ing sickening.
It appears the suckers, empty pockets and tire kickers are lining and signing up for indentured servitude pre-expiration of $8k tax credit as the inventories are falling at the most rapid pace I’ve seen yet.
But what happens after the expiration of the tax credit? Will the government sweeten the pot again, or will we see more market deflation and despair?
They sweetened the pot on Christmas Eve, by giving that unlimited sugar plum to Fannie and Freddie, both of whom have been very good little children since the days of bad boy Franklin Raines.
However, F&F purchases would only support current mortgages, not stimulate new ones. I think the last of the stupid cash has been well and truly wrung out — especially since support of the current mortages keep prices up and prevents the smart money from stepping in.
The government is working against itself.
“I think the last of the stupid cash has been well and truly wrung out —”
It’s not stupid cash. It’s borrowed money howmuchamonthers who couldn’t give two flips less how they get into a shack, so long as they’re in. Weak hands, empty pockets, howmuchamonthers and stupid people but I don’t see any cash involved, stupid or not.
It’s worthy to note.
Patience, grasshopper. We are at the low point in the Credit Suisse recast graph. There’s a $15 billion wave of Option Arm’s due to recast in fall 2011. I suspect these were the Primes who cashed out their primary residence for Escalades boats and boob jobs. They may even recast sooner because they hit their loan balance limit before they reach the end of the grace period time.
Thank you for the dose of reality.
I’ll wager a substantial percentage of these stupid bastards with empty pockets will default given the prices they’re signing up for.
It is going to be a while before anything actually happens in the market place. Recast in Fall 2011 means a probably REO in 2012 spring… that may or may not hit the market till summer.
Unless there are other mormatoriums/red tape thrown in the way.
From what we have seen the houses are not getting on the market till 1yr after failure. Then the banks sit with them at high prices for a long time or slow bleed them. Might change… banks could potentially move quicker.
We are also going to have echo failures of people that bit off too much as investments for a while. Could easily keep going for another decade.
That peak is always moving with refinance. So, we are seeing accelerated recasts of AltA this year, right now. When that turns to inventory? Probably not till next winter.
The real-a-tor we have been talking with, tells me this AM that he signed 3 contracts over the weekend. Based solely on the expiring 8k.
Yep, this was the last weekend for the 8K
Things should nose-dive pretty rapidly from here - I’m thinking that mid-July should be the “come-to-Jesus” for Sellers who didn’t get a Contract last weekend
Yep, let them sit there another 10 weeks or so…
Really? Surprise him in his office and tell him you want to see copies of the 3 deals..
No, he’s probably right.
Things are flying off the shelf here, too — and at staggering prices.
In California, there is a narrow window where buyers can get the $8,000 tax credit AND a state credit (payable over three years, if you have CA income tax obligations that meet or exceed $3,333/year), for a total of $18,000. You have to have a signed contract by April 30th (for the federal credit), and close after May 1st (for the state).
The market is still on fire.
In my area Poway, San Diego one guy at a moving sale told me he wants to sell his house and buy a mobile home while he can still get the 6K house buying credit. Older guy.
He said they will still have a 10K credit but only for new homes
I think I’m moving again anyway, back to were I started from in 2006 Ventura county CA my landlords will not be pleased but the lease is up june 3 and they are already pushing me to sign up for another year. with a 50 a month increase in rent.
we will see very soon now whats going to happen
Many people don’t treat it like one, but the terms of the new lease is just an offer. Give them a counteroffer.
Like any seller, they start out high just in case the renter has the guts to counter, and it leaves them room to negotiate.
They are all hurting for tenants and the worst and most costly thing that can happen to them is to lose a good one… months of vacancy.. money and effort needing to be spent painting and refurbishing the place, etc.
Lowball them… Be nice about it, show some sympathy for the poor rental market and high vacancy rates, but explain you’ve been toying with the idea of moving out of the area for quite some time…
Good advice, Joey. My former landlord raised the rent by a small amount each year, less than 3%. Rent was $0.80/sf in what turned out to be the final year. Unfortunately, he didn’t see the tide turning or he might have been lowering the rent instead of raising it. Along came another landlord with an equally nice place for $0.50/sf and I was gone.
What is there to justify any rent increase, unless you’re in an area with new jobs or pay raises?
cactus-
Nice to hear from ya. Some parts of Thousand Oaks feel/look like Van Nuys. Wait until you see all the ethnic stores that sprung up on Thousand Oaks Blvd. It’s an eye opener!
This area is reminding me of the valley in 1983, when we escaped to Ventura County. The pattern is set.
Oh, and Moorpark has really grown up. The commercial building blew our minds. We moved out of Mountain Meadows in 1998. Had not been back until this Saturday. Anyway, I welcome you and your family back home.
It is so sad to hear what’s happening to T.O. That used to be such a nice place! Is it still at the top of the “safest city” index?
Google “Rising rents.”
During the S&L disaster, there many dead cat bounces.
It took 4 years for things to stabilize. We’re only in year 2. (yes, yes, technically year 3, but for practical purposes, only year 2)
The property bubble lives on — in China!
Monday April 26, 2010
Bloomberg
I’ll Tell You When Chinese Bubble Is About to Burst: Andy Xie
April 25, 2010, 3:22 PM EDT
Commentary by Andy Xie
April 26 (Bloomberg) — “My maid just asked for leave,” a friend in Beijing told me recently. “She’s rushing home to buy property. I suggested she borrow 70 percent, so she could cap the loss.”
It wasn’t the first time I had heard such a story in China. Some friends in Shanghai have told me similar ones. It seems all the housemaids are rushing into the market at the same time.
There are benefits to housekeeping for fund managers. China’s housemaids may be Asia’s answer to the shoeshine boy whose stock tips prompted Joseph Kennedy to sell his shares before the Wall Street Crash of 1929.
Another friend recently vacationed in the southern island- resort city of Sanya in Hainan province and felt compelled to visit a development sales office. Everyone she knew had bought there already. It’s either buy or be unsocial.
“You should buy two,” the sharp sales girl suggested. “In three years, the price will have doubled. You could sell one and get one free.”
How could anyone resist an offer like that?
The evidence in official-corruption cases no longer involves cash stashed in refrigerators or starlet mistresses in Versace clothing. The evidence is now apartments. One mid-level official in Shanghai was caught with 24 of them.
China is in the throes of a vast property mania. First, let me make it perfectly clear that calling China’s real-estate market a “bubble” isn’t denying China’s development success. As optimism is an essential ingredient in a bubble, economic success is a necessary condition. Nor am I saying that prices will drop tomorrow. A bubble evolves and bursts in its own time. When it is about to burst, I’ll let you know.
…
Over in America and Europe, we’ve been doing the financial manias for centuries. For China, this is an initiation experience, and they are about all in.
I wonder if, after things go blew-ie, that there won’t be massive social unrest in China. Seem to recall such a thing happening in Albania shortly after it became un-communist. I think the troubles were started by a ponzi scheme that went awry.
A Great Leap Backward? There are some precedents.
Arandell cuts union workers’ pay 21%
Journal Sentinel
The shakeout in the fiercely competitive commercial printing industry continues as Arandell Corp. enacted an across-the-board 21% pay cut for its 600 unionized workers in Menomonee Falls.
Arandell, the second-largest commercial printer in Wisconsin behind Quad/Graphics Inc., took the move earlier this month after months of bargaining with its union, said John Kuhnmuench, Arandell vice president of human resources.
“If your pricing isn’t competitive, you obviously are not going to get the business,” Kuhnmuench said.
Arandell, which operates a 600,000-square-foot printing plant in Menomonee Falls, specializes in high-end retail catalogs. Its clients include Brooks Brothers, Jos. A. Bank Clothiers, Macy’s, Saks Fifth Avenue and mail-order merchants.
Because its fortunes are tied to consumer spending, Arandell felt the chill as retail spending plunged with the mortgage meltdown and credit crisis of the past two years.
Privately held Arandell declined to reveal financial details. But Quad/Graphics unveiled an extensive snapshot of the U.S. commercial printing industry in a filing this month to the U.S. Securities and Exchange Commission.
For every green shoots good news recovery story, there’s one of these out there. Continued cuts in salaries and jobs.
In addition to the aforementioned quote about competitive pricing, there’s another trend on the loose: It’s the movement of communication from printed to electronic form. Just look at your own behavior. Remember reading the newspaper? I’ll bet you’ve switched to reading the news online. Ditto for bill-paying. There’s a lot less paper being slung around in that arena.
I could go on, but you get the point.
Print will still be around, but it won’t be as widely used.
Report: Alabama manufacturing jobs down 7% in last year
Birmingham Business Journal- April 26, 2010
Employment in Alabama’s industrial sector dropped nearly 7 percent in the last year, according to a new report.
The 2010 Alabama Manufacturers Register, an industrial directory, reported the state lost 21,132 industrial jobs and 306 manufacturers since March 2009, a decline of 6.8 percent over the year before, said a news release
But, despite the loss, Alabama is still home to 5,751 manufacturers that employ 308,772 workers.
“It’s a perfect storm of negative conditions,” says Tom Dubin, president of Manufacturers’ News Inc., which publishes the directory. “The country has suffered deep losses in manufacturing employment due to automation and technology, outsourcing and the recession, while the faltering housing market has affected industries such as wood products, furniture and building products.”
Birmingham remained the state’s leading industrial city, holding 33,286 manufacturing jobs, which is down 9 percent from the previous year. Huntsville’s industrial employment increased by 1 percent, while Mobile saw a 9 percent drop and Montgomery had a 5.4 percent drop.
Deflation continues.
How are we going to pay all that debt again?
2 Chicago state reps: Bring in the National Guard
Two state representatives called on Gov. Pat Quinn Sunday to deploy the Illinois National Guard to safeguard Chicago’s streets.
Chicago Democrats John Fritchey and LaShawn Ford said they want Quinn, Mayor Richard Daley and Chicago Police Supt. Jody Weis to allow guardsmen to patrol streets and help quell violence. Weis said he did not support the idea because the military and police operate under different rules.
“Is this a drastic call to action? Of course it is,” Fritchey said. “Is it warranted when we are losing residents to gun violence at such an alarming rate? Without question. We are not talking about rolling tanks down the street or having armed guards on each corner.”
What he envisions, Fritchey said, is a “heightened presence on the streets,” particularly on the roughly 9 percent of city blocks where most of the city’s violent crimes occur.
Weis previously identified those “hot spots” and said he plans to create a 100-person team made up of selected and volunteer police personnel to respond to crime there. If guardsmen were to assist police, they could comprise or contribute to that force, Fritchey said.
So far this year, 113 people have been killed across Chicago, the same number of U.S. troops killed in Iraq and Afghanistan combined in the same period, Fritchey said.
Two state representatives called on Gov. Pat Quinn Sunday to deploy the Illinois National Guard to safeguard Chicago’s streets … What he envisions, Fritchey said, is a “heightened presence on the streets,” particularly on the roughly 9 percent of city blocks where most of the city’s violent crimes occur.
Paranoia.
Overkill.
Funny, the official stats say violent crime in the city is down 15% this year (as of March 2010). Yeah, we know stats can lie, but the two reps are relying on official stats, too.
Stats don’t lie, people do…with stats.
I stand corrected, sir.
i haven’t listened to Limbaugh in years.. but years ago he had murder statistics showing many communities in the USA were more dangerous than Iraq’s war zones.
Ironically, they coincided with many of the most vocal anti-war politicians turfs.
First you expect us to believe you and this BS and then believe that idiot?
Joey(Thing #1)…. you know no bounds.
You got me all wrong exeter. Nobody knows better than I that your beliefs are utterly impenetrable.
The martyred Saints’ faith in God pales in comparison.. the suicide jihadist’s trust in Allah is put to shame.
Me convince you of anything? Hey.. get serious. I’m only human.
So much for defending your Rash Limbaugh nonsense. You ran from it like you run from all your other phony bs.
Well done Thing#1. You met our expectations once again.
what’s there to defend.. facts are facts.
in 2008, 314 U.S. soldiers died in Iraq; 509 people were murdered in Chicago alone.
lots more where that came from but, as i just stated so eloquently (imho), far be it from me to try and convince you of anything.
The Iraq death toll is in excess of 800,000..
More of your good work Thing#1. It’s what we expect from you .
Daley,Durban and the rest of the Dem retards. All you have to do is bring back ‘Right to Carry’. Nothing makes me feel as secure walking down the street as packing with 6 wad cutters in my .44 mag.
Can’t defend yourself and frightened to the point of packing iron. And we’re supposed to be surprised?
Sorry, exeter, but I’m with pismo on this one. Having been a crime victim, there is nothing in the world that can convince me to support gun bans. You can yell, or if you’re lucky you can call the police, but chances are slim anyone’s going to be there to help you when TSHTF. Your only chance is to be able to overpower your enemy, and the only way for most people to do that is to be armed.
Umm… “defend yourself” - against a bunch of murderous thugs who have weapons? Really? Are you advocating that everyone should be highly trained in hand to hand combat vs. allowing gun ownership?!
Mortgage fraud incidents rise 7 pct last year
Report finds fraud still a problem for mortgage industry; incidents rise 7 percent in 2009
MIAMI (AP) — Incidents of residential mortgage fraud increased last year, a sign that scammers are still targeting the industry despite more diligent efforts to find and report such activity.
The number of mortgage fraud reports among loans made in 2009 grew 7 percent, a smaller increase than the 26 percent jump seen the previous year, according to a study released Monday by the LexisNexis Mortgage Asset Research Institute.
Since the housing boom, lenders have tightened their underwriting standards, requiring larger down payments, stronger credit histories and reliable proof of income. Law enforcement agencies also have created investigative teams to fight mortgage fraud. These efforts should make it harder for consumers and industry professionals to commit mortgage fraud.
The slower growth rate is being attributed to better reporting and policing for fraud activity, but there’s more to it. The report also said more scammers are using technology to access information and allow them to remain anonymous by using the Internet.
“It remains critical for those in the mortgage industry to reassess their processes, work together by sharing information and reporting incidents of fraudulent activity, and ready themselves for more complex schemes in order to continue the fight against mortgage fraud,” said Denise James, a co-author of the report.
Since the housing boom, lenders have tightened their underwriting standards, requiring larger down payments, stronger credit histories and reliable proof of income. Law enforcement agencies also have created investigative teams to fight mortgage fraud. These efforts should make it harder for consumers and industry professionals to commit mortgage fraud.
Hasn’t there been quite an effort to ferret out the fraud associated w/ the soon-to-expire homebuyer tax credits? I seem to recall hearing that quite a few tax credit applications were later found to be fraudulent.
Does this go under green shoots? Hey, growth is growth right.
By allowing unqualified buyers to purchase homes they cannot afford, mortgage fraud is good for pushing up home prices, and higher home prices are a green shoot.
Computerized Front Running: Another Goldman-Dominated Fraud
Monday 26 April 2010 by: Ellen Brown, t r u t h o u t
While the SEC is busy investigating Goldman Sachs, it might want to look into another Goldman-dominated fraud: computerized front-running using high-frequency trading programs.
Market commentators are fond of talking about “free market capitalism,” but according to Wall Street commentator Max Keiser, it is no more. It has morphed into what his TV co-host Stacy Herbert calls “rigged market capitalism”: All markets today are subject to manipulation for private gain.
http://www.truthout.org/computerized-front-running-another-goldman-dominated-fraud58865
Remember when this was making the rounds on the news a year or two ago, and then…nothing?
As a vegetarian, I feel a little bit above the fray.
As a deflationista, I am a little perplexed.
Carnivores’ dilemma
“The cycle in hog production has turned,” Smithfield Chief Executive Officer C. Larry Pope said on a March 26 conference call with analysts. “We have been through a long period of prolonged losses in the live-production side of the business while at the same time I’ve been able to make gobs of money by exploting poor whites, poor blacks and now illegal immigrants that I have imported into the country. We’ve been talking about that for a long, long time. We are seeing a period in which our costs are going down, wages are going down, quality is going down, labor practices are going down, animal husbandry is a joke and our hog prices are moving up. I’M ONNA BOAT!”
Fixed that for you.
MrBubble
From Rasmussen re: Arizona illegal alien law
“A new Rasmussen Reports telephone survey finds that 60% of voters nationwide favor such a law, while 31% are opposed. Seventy-seven percent (77%) of Republicans support the law along with 62% of voters not affiliated with either major party. Democratic voters are evenly divided on the measure.”
We all know that Republicans are all klansmen. That’s a given and one would expect those ‘messican haters to approve of the law. But who could have thunk that 62% of Indies and 50% of Dems are also brown hating klansmen too?
Or maybe, just maybe, people from all walks of life and political leanings are sick and tired of 20 million illegals flouting the law.
“Or maybe, just maybe, people from all walks of life and political leanings are sick and tired of 20 million illegals flouting the law.”
Amen, brothah! (or sistah, as the case may be). I’ve been calling my state reps today and demanding similar legislation in Florida.
The situation is completely surreal. Hundreds, maybe thousands of these folks and their perverted advocates demonstrating and protesting to demand rewards and sanction for being criminals.
If something draconian isn’t done and done right now, we can look to be ruled by this mob of criminals. Head ‘em up, move ‘em out, rawhide. What disgusts me is how, through propaganda, this has been turned into a “Hispanic” issue. My “Hispanic” next door neighbors are majorly pissed off about the situation. Because of how out of hand illegal immigration and ID theft is, they have to get re-issued birth certificates. But, they’re the silent majority of “Hispanics”. That’s the sad thing.
We need a wall, not a fence on the border. With gun turrets on top.
Years ago, a good friend had a landscaper who was born and raised in Mexico, but who came to this country and was quite proud to become one of us. Legally, of course.
My friend, who was no fan of illegal immigration, warned me NOT to get Frank started on the subject. He was even more white-hot angry about it than she was.
Not unlike the anger of financially responsible people who are witnessing the almost endless bailouts of the irresponsible over the past few years.
Ah, ladies, you have a real treat coming your way. Embrace the rich, cultural experiences of “duh-versity”. Rhymes with “puh-versity”.
http://www.examiner.com/x-35821-Immigration-Reform-Examiner~y2010m4d24-Illegal-aliens-now-committing-rapto-in-the-United-States
Unfortunately the fat assed gas&douche bags in D.C. could not care less about the illegal alien problem. The open door look the other way policy has been going on for far to long, but nothing has come of it, other than endless crapola out of the cesspool.
I will believe any serious policy change when I see it, until then it’s all just plain political BS.
Although your wall with gun turrets sounds like a good start to me.
Post sharp shooters with Barrett 50 calibers in the turrets.
Well, since we seem to be so enamored of all things Chinese, why not a Great Wall? The Great Wall was built by China for the express purpose of keeping out invaders and illegal immigrants, lol.
Members of Fedgov, legislative and executive, are too pre-occupied with sex, apparently, to enforce laws. Reform is not needed, enforcement is.
How in the world can you advocate pointing guns at hungry women and children?
Easy….you just don’t lead-em as much……..
Sure they can come in, as long as you invite them all to stay at your place.
For the most part, sympathy for illegals is inversely proportional to your physical proximity to them.
Liberal, Greenwich, Connecticut Bleeding hearts like them….a lot better than those of us out here in Flyover that have to deal with them (and the issues generated by them) every day.
The immigration thing is touchy…
….but honestly, if I lived in a place where I could not make enough money to feed my kids and there was drug-related violence with gangsters killing innocent people - I WOULD LEAVE, TOO!
I have trouble wrapping my mind around people who refuse to leave violent, drug-infested ghettos. If your neighborhood, or town or city went all to hell, wouldn’t you go where the jobs and the food and the safety was? What if your country turned to shit and it wasn’t safe to stay?
The poverty and corruption in Mexico is staggering. I wouldn’t want to live there.
Does our providing them with an escape hatch not allow the problems in Mexico to fester and get worst? Maybe if they had to stay, they’d be encouraged to help straighten out their own mess. After all, they’re a fellow New World country with plentiful land and natural resources. Why are they so screwed up? Why can’t they fix it?
Exactly, alpha.
Perhaps they need to **take care of the problems** in their country. I’m sure Americans would be much more sympathetic if they wanted us to assist them in fixing the problems where the problems occur (in Mexico). We do not want the problems brought to our country.
Or maybe, just maybe, people from all walks of life and political leanings are sick and tired of 20 million illegals flouting the law.
I think you’ve hit the proverbial nail on the head, Ki. And, on a related note, there was a huge ICE-led raid on several shuttle companies.
If you’ve been in southern AZ, you’ve no doubt seen these shuttle vans. They ply the Nogales-Tucson-Phoenix route, and let’s just say that they’re not transporting tourist grandmas from Iowa for a little south-of-the-border shopping in Nogales, Sonora. Nor are they taking airline passengers up to Sky Harbor Airport in Phoenix. What they’re carrying are illegal immigrants, most of whom come from Mexico, but some from as far away as China.
Predictably, there was quite a bit of indignation over this raid, much of it from the immigrant rights crowd. However, if you read the online comments in our local fishwrap, they were of the “It’s about #$%&-ing time!” variety. These shuttles have been operating quite openly for years, and the operation that’s taking ‘em down is called In Plain Sight.
i haven’t read up on the ins and outs of that legislation, but i saw an interview with Brewer and she said the law only gives AZ coppers the same authority the Border Patrol already enjoys.
If true, how any of the feds, including BO, could fault AZ for passing it is beyond me.
Carolina Nurseries has told its 335 employees that the sprawling Berkeley County [South Carolina] wholesale plant facility will close unless it can secure new funding to repay a bank loan, according to a story in the Charleston Post & Courier.
“We issued a WARN Act to our employees, giving them 60-day notice of possible unemployment,” company president J. Guy said late Friday. “One of our lenders is requesting to be paid off. We have been actively looking for new monies.”
Contacted by GIE Media’s Horticulture Group, Carolina Nurseries’ director of marketing communications, Tom Kegley, said the company is looking at options to avoid having to close the business, which dates to 1911. “We’re still fighting, and I am hopeful this can come to a good resolution for us,” he said.
Though spring sales have been good, Guy said a drastic slump in sales last year during the steep recession hurt the 686-acre facility on the edge of Moncks Corner along U.S. Highway 52.
“This is our lives. We don’t want it to happen,” he said. “We are doing everything in our power for it not to happen. We have dealt with Hugo and snow storms and everything else. We can deal with a banking disaster.”
Although there is a targeted closure date of June 21, Guy hopes no one will have to be terminated.
A fellow I know in the landscaping business told me that he had his credit line cut in half recently by his bank, along with an interest rate increase. Said he’d been on time with note payments for over 25 years. He is holding his own in his business, but is now out shopping around for additional access to money.
..along with an interest rate increase…
well, someone has to pay for the strategic walk-aways and other losses, and that someone is us consumers… directly or indirectly.
I’ll betcha money that he finds some other institution that would be thrilled to have him as a customer. And, sooner or later, most likely later because banks are slow learners, his former bank will realize that driving the best customers away is not good for business.
- Last hired means first fired - and for 8,500 teachers that could be exactly what happens if planned layoffs take effect. MYFOXNY.COM
Peter Borock from Educators for Excellence believes that seniority matter but that its not the only thing. What kind of teacher they are should also be taken into account.
Borock thinks seniority rules will decimate schools where much of the faculty is young.
For its part, the city is trying to overturn seniority rules.
Schools Chancellor Joel Klein says seniority protection is an outdated system and that teacher performance is what should determine who gets laid off first.
People like the United Federation of Teachers President Michael Mulgrew believe that seniority laws matter for a very important reason. Without them experienced teachers can be laid off simply because they’re more expensive.
The issue isn’t going away anytime soon. California is considering eliminating seniority protection, Arizona already has, and a bill was introduced in the New York Legislature in Albany in early April.
The teachers union says that any bill that gets rid of seniority will be fought tooth and nail.
“The teachers union says that any bill that gets rid of seniority will be fought tooth and nail.”
Shocker!!
Age discrimination is a very real problem. Like it or not, seniority helps protect more vulnerable, older workers.
Sometimes, job discrimination makes good sense.
“First-graders should not be forced into the classrooms of teachers undergoing sex changes. Religious broadcasters and faith-based summer camps should not be forced to hire cross-dressers. Women should not be forced to share bathrooms with people with male body parts who say they want to be females. Yet those are some of the likely results if Congress passes H.R. 3017, the so-called Employment Non-Discrimination Act (ENDA), which is due for a vote this week by the House Education and Labor Committee.”
~ Necessary Discrimination
With Congress pretending it can smooth out all the disparities of life America is in danger of being micromanaged to death. If an employer chooses not to hire a male who insists upon using the women’s bathroom because he thinks he’s “a female trapped inside a man’s body” that should be the employer’s decision, not that of Congress.
I will say that I am surprised there hasn’t been any more ‘noise’ about the 8k tax credit. I thought it would have been pushed for hard by the NAR etc…
very suspicious..
Regarding that expiration, the other day some NAR spokesman actually said “It’s time for housing to stand on it’s own two feet.” (very nearly the actual words.. if i didn’t ace it.)
something may be cooking.. but what.. a soon-to-be-announced new program?
They are totally happy to let it expire for a few months while homes stagnate on the market.
Then add another when the attention span has been diverted that the last temporary credit just expired six months ago.
I agree with (and have even promoted) that strategy of letting the FB’s and anxious buyers sweat it out. It encourages them to willingly make concessions and get the deals done.
But that defeatist statement by a NAR rep and apparent silence by the MSM makes me think another credit (or something) has already been finalized, and only a few insiders know about it.
They’ve been running almost non-stop ads about it around here.
Ads promoting it or ads lobbying for its extension? In the DC area I’m not seeing either, really.
Not here in S.C. except hurry and sign a contract this week, before the 8k runs out. I really thought that it would be extended. If the credit has been responsible of a rash of sales, then the brick wall is just around the corner.
I didn`t think it would be extended untill after the 30th. Too many fish would get off the hook. Here is a quote from the comments in The Palm Beach Post at the bottom of the Palm Beach County home sales leap 23 percent arcticle.
“What happens to us who have a current pending contract to purchase but b/c of the slow bank responses we can’t close on or before 06/30? Is the govt going to extend the date??”
Waiting to close on short sale
12:52 PM, 4/22/2010
Same here. I have spoken to a few realtors who basically had a “use it or lose” it attitude and who took it as matter of fact that it was going to expire.
IMO, the thing to watch is the next 6-12 months of housing price declines, at which point I think the next “Save Our Housing” lobbying effort will kick off in search of another incentive.
“I have spoken to a few realtors who basically had a “use it or lose” it attitude
A long time ago a very wise man told me, if someone tells you “take it or leave it” you leave it. His advice has served me well.
IMO, the thing to watch is the next 6-12 months of housing price declines, at which point I think the next “Save Our Housing” lobbying effort will kick off in search of another incentive.
Bingo! I think this is exactly what they plan to do. Sales will fall, and price will follow…and another round of “let’s save housing to save ourselves!” will start anew.
Don’t talk to aliens, warns Stephen Hawking
THE aliens are out there and Earth had better watch out, at least according to Stephen Hawking. He has suggested that extraterrestrials are almost certain to exist — but that instead of seeking them out, humanity should be doing all it that can to avoid any contact.
The suggestions come in a new documentary series in which Hawking, one of the world’s leading scientists, will set out his latest thinking on some of the universe’s greatest mysteries.
Alien life, he will suggest, is almost certain to exist in many other parts of the universe: not just in planets, but perhaps in the centre of stars or even floating in interplanetary space.
Hawking’s logic on aliens is, for him, unusually simple. The universe, he points out, has 100 billion galaxies, each containing hundreds of millions of stars. In such a big place, Earth is unlikely to be the only planet where life has evolved.
“To my mathematical brain, the numbers alone make thinking about aliens perfectly rational,” he said. “The real challenge is to work out what aliens might actually be like.”
If they have the science and technology to be able to visit Earth, they “be like” more than able to kick our stupid, inbred, drooling monkey azzez.
I wondered where Pelosi and Reid came from ?
Earth is unlikely to be the only planet where life has evolved.
Theoretical physicists prefer to gloss over stupid questions like “Did life evolve?” and go straight to theorizing in how many places it probably evolved.
But it’s only a question for the stupid, is why.
You’re not stupid, so please enlighten me.
Did life evolve on Earth? If so, how do we know it did, and what was the mechanism?
Or did some aliens plant it here? (I hope this is the correct answer because I’ve always been fond of it.)
Yes it did.
Science is how we know.
You either understand this or you don’t.
Someone once said that there are two kinds of people in the world: those who know the 2nd Law of Thermodynamics and those who don’t. And if you don’t, you should have never gotten your high school diploma, let alone pretend to be an expert on anything.
Was there any question that Thing#1 actually graduated HS?
Isn’t it possible that life from outer space (not saying “space aliens” specifically) somehow came to land and thrive/evolve on Earth?
“Don’t talk to aliens, warns Stephen Hawking”
Crippled body, crippled mind. –Plato
Senate Panel Previews Electronic Health Technology
April 26, 2010
(CNSNews.com) – The Senate Committee on Aging last week offered a preview of the government’s future role in health care, showing how Americans will interact with doctors and other health care providers. The demonstration offers a glimpse at an overlooked effect of health care reform.
The effort, loosely called e-Health or e-Care, combines health-care technology with 21st-century Internet connectivity. It will allow doctors to interact with their patients through innovations such as video chats, telephone health checkups, and home-health monitoring devices that relay data over wireless Internet connections.
“The development of the broadband network and health information technologies has the potential to truly transform health care and simultaneously enable better outcomes and lowering costs,” said Sen. Susan Collins (R-Maine).
One of the new health technologies on display last Thursday was an automatic drug dispenser that can monitor and adjust medication dosages wirelessly, allowing doctors to tailor dosages of drugs such as insulin without having to schedule in-person visits with patients.
“What we’re talking about, folks, is using a device like this one,” Sen. Ron Wyden (D-Ore.) said, as he displayed the small device. “It attaches to the patient’s skin and is loaded with drugs that are administered in the exact way that the doctor prescribes – wirelessly.
“That means that a doctor can vary the doses based on the information the doctor is receiving [from the monitor]. The patient doesn’t have to go in to the doctor and then the pharmacy to change his or her prescription,” he said.
The data recorded by such devices would be automatically uploaded to a patient’s electronic health record, which could then be reviewed by a doctor from a computer or smart phone, allowing the doctor to monitor a sick patient in almost real time.
“This device here connects to other devices that measure a patient’s blood pressure and glucose [sugar] levels – things that any doctor treating a diabetic patient wants to know about,” Wyden said. “It wirelessly uploads this data to an electronic medical health record that is monitored by a health care professional.”
The key to the new health care technology is broadband Internet connectivity, Wyden explained, because new technologies such as home monitors and new methods such as video conferencing require high-speed connections.
Come on guys&gals send them a check, they will do the fiscally responsible thing, their track record shows this.
Holy Cow, The Treasury Is Taking Online Donations To Pay Down The Debt
Joe Weisenthal | Apr. 26, 2010
As far as we know, this is nothing new, still it’s pretty remarkable. The Treasury is taking online donations to pay down the debt. (Via SquareFeet)
Read more: http://www.businessinsider.com/holy-cow-the-treasury-is-taking-online-donations-to-pay-down-the-debt-2010-4#ixzz0mFNSK5tP
http://www.businessinsider.com/holy-cow-the-treasury-is-taking-online-donations-to-pay-down-the-debt-2010-4
The gov. got my “donation” on the 15th.
Post block Monday, eh?
Appraiser: Lake Worth prop values fall 23 percent; county average down 12 percent
By Jennifer Sorentrue Palm Beach Post Staff Writer
Posted: 11:24 a.m. Monday, April 26, 2010
Property values throughout Palm Beach County have plummeted an average of 12 percent over the past year, according to an early estimate released by Property Appraiser Gary Nikolits.
Twenty-one cities fared worse than the county average. Lake Worth saw the sharpest drop, with its tax base plunging by 23 percent, according to the estimate.
Towns in the central part of the county saw the worst declines, with Greenacres, Lantana, South Palm Beach and Palm Springs all seeing their taxable values fall by at least 20 percent. Lake Park in northern Palm Beach County also saw a 20 percent drop.
The values determine how much property tax revenue local governments can expect to receive in the next budget year. To close the shortfall, many governments will have to make deep cuts in services or hit homeowners with tax increases.
None of the county’s 38 municipalities saw property values go up last year, the estimate showed.
The Goldman Casino Do investment banks do anything that helps America anymore?
By Eliot Spitzer Posted Monday, April 26, 2010, at 5:34 PM ET
Slate Magazine
The furor around the Goldman case offers an opportunity to consider Wall Street’s most profound, and entirely ignored, crisis. Now that we are seeing the inner workings of the products that Goldman is marketing,<b< we must ask whether what Goldman and others investment banks do deserves the huge public subsidies they have received. Do they do anything that has any real social value?
In the traditional model, investment banks are thought to serve two critical functions. First, they are financial intermediaries: They are the conduits for transferring savings to those sectors of the economy that need capital. They fulfill the essential function, the economists tell us, of efficient allocation of capital. That is where their initial public offering and other capital-raising functions come into play. They enable productive companies to access the capital markets so they can grow their businesses. Second, they are supposed to be market makers that provide liquidity and stability in the markets to permit the free flow of capital on an ongoing basis.
The question that must now be asked is: Are investment banks doing that? Are they doing the things that merit public support at all? Or are they just running a casino with products that have no great social utility? The regulators, legislators, and investigators have not focused on the fact that the fundamental business of banking has changed from capital allocation to, essentially, gambling.
1. What percentage of Goldman’s capital is dedicated to proprietary trading, as opposed to capital formation for client companies?
2. What percentage of Goldman’s profits derives from proprietary trading, asset management, and prime brokerage activities; and what percentage comes from capital formation for client companies?
3. What percentage of Goldman’s profits derives from marketing and trading derivatives, specifically the synthetic CDOs that are at the heart of the SEC investigation?
4. What percentage of Goldman’s capital has been invested in U.S. government securities over the last year, essentially taking advantage of an interest arbitrage between Goldman’s cost of capital and the rate being paid on Treasury bills?
5. How much income did Goldman derive from bets against products it marketed?
6. How much capital—debt and equity—have Goldman and the other major investment houses raised for their clients over each of the past five years?
7. How much capital have they invested overseas in foreign-based companies—especially through private equity funds?
This is just a starting list.
i hope it’s just a starting list because none of those 7 things is even remotely illegal..
“Do investment banks do anything that helps America anymore?”
1) It is apparently possible to do completely useless things which are nonetheless legal.
2) The fact that investment banks may have ceased providing a useful role in the U.S. economy certainly does not preclude the possibility they engaged in myriad illegal acts.
His personal “issues” notwithstanding, I love Eliot Spitzer.
This just in from South LA: Flipping makes a comeback. Head-scratcher quote from the article:
“Two days before, Clamagirand paid $180,000 for the lender-owned home on Second Avenue, six blocks east of Crenshaw High. His plan is to spend $45,000 on repairs and sell the house for about $320,000.”
Ohhhh, that’s gonna leave a mark.
Mr. Booket, a 44-year-old heating and air-conditioning repairman, owed $300,000 on his three-bedroom home in Aberdeen Township. His house was one of thousands that wound up in a pool of mortgages that were referenced in the so-called collateralized debt obligation, or CDO, which Goldman created for Mr. Paulson. The hedge-fund manager invested heavily in a form of insurance that could yield huge gains if the borrowers grew unable to pay.
In 2006, Mr. Booket got hit by a car while riding a motorcycle from a late-night party, was unable to find much work and couldn’t pay the bank. In October 2008, he lost the house to foreclosure and plans to move out by next week. He says he bears no grudge against Mr. Paulson and Goldman.
http://finance.yahoo.com/loans/article/109380/the-busted-homes-behind-a-big-bet?mod=loans-home
==================================================
Feel sorry for Mr.B and his situation but WTF , he lived 2 yrs rent free??
Shorting is EVIL, especially when Gollum does it: “Screw the clients; this sucker is going down, and we are manning the life boats.”
The Financial Times
Goldman accused of ‘net short’ on loans
By Stephanie Kirchgaessner in Washington and Francesco Guerrera in New York
Published: April 26 2010 22:08 | Last updated: April 26 2010 22:08
Congressional investigators on Monday accused Goldman Sachs of taking a “net short” position in the US mortgage market in 2007 that enabled it to benefit from the bursting of the housing bubble.
The assertions set the stage for Tuesday’s testimony by Goldman officials including Lloyd Blankfein, chief executive, before the Senate permanent subcommittee on investigations. The panel has conducted a 16-month probe into Goldman’s trading positions, and whether it was working for or against its clients.
Goldman has acknowledged that at times in the 2007-08 period, it bet against mortgage-backed securities to reduce its exposure to the US housing market. But it said it lost $1.2bn on mortgage-related trades in those years and has denied that its trading positions conflicted with its activities with clients.
The Senate investigators said they had uncovered evidence that Goldman had a “net short” position in the housing market in 2007. They cited documents including a presentation by Craig Broderick, Goldman’s chief risk officer, in which he describes how the bank made profits in the residential mortgage market during the second and third quarter of 2007.
“Starting early in ’07 our mortgage trading desk started putting on big short positions . . . and did so in enough quantity that we were net short, and made money . . . as the subprime market weakened,” the document said.
A September 2007 financial summary presented to Goldman’s board stated the bank had strong results that year because of its “overall net short” position in the mortgage market.
Democrat Carl Levin, chairman of the Senate panel, said on Monday: “These short positions didn’t represent clients’ positions, they represented major bets that the mortgage business was in for a major decline.”
…
More FT video
EDITOR’S CHOICE
In depth: Goldman Sachs - Apr-23
Goldman releases internal paper trail - Apr-25
John Gapper: Senate throws wrong book - Apr-26
Gillian Tett: E-mails on a sector out of control - Apr-25
Defiant Blankfein set for Senate showdown - Apr-25
Goldman response in full - Apr-26
Again, they are barking up the wrong tree. The fact that they were shorting mortgages has NOTHING to do with the financial crisis.
They are trying to divert our attention.
There may never be a better time again to buy Greek bonds — provided you can find a seller who is willing to part with their holdings at current market values. Bond holders should sell now, or get locked in to worthless assets forever!
The Financial Times
Short View: Greek bond yields
By Aline van Duyn
Published: April 26 2010 20:45 | Last updated: April 26 2010 20:45
Bond traders are already calling it “Black Thursday”. Greek bond prices plunged and yields soared, after it emerged last Thursday that Greece’s deficit was worse than it had said it was. Any trust that was left was shattered. The impact continues to be felt – bond prices plunged and yields soared again on Monday.
Indeed, to all intents and purposes, the market for Greek government bonds stopped working last Thursday. It has become almost impossible to trade, with volumes very low.
This can happen in debt markets. It usually means that the value of bonds will fall even further, as buyers stay away. Think back to the financial crisis and the breakdown in trading for asset-backed securities. It was not until the Federal Reserve announced a programme to boost buying of such securities – a scheme worth up to $1,000bn (£647m) – that some confidence returned. There was finally a buyer of last resort.
There are potential buyers lurking in the background. Greek bond traders say the investors that are fishing around tend to be emerging market buyers or those specialising in distressed debt.
Plenty of investors are dusting off their sovereign debt restructuring handbooks. Most of the precedents are from emerging markets. The chances of avoiding a restructuring – which can mean pushing debt payments into the future or forcing investors to take a loss or a “haircut” – look slim. Already, Greek two-year bonds yield more than any sovereign in the world – Argentina and Venezuela included.
The market dynamics can become hard to manage. Traders are worried about the impact of “trapped longs” – investors, such as banks, that have to unload their lossmaking positions and use any improvement in prices to do this. Similar concerns may force selling of some other eurozone bonds. As a result, prices can quickly plunge again, making a sustained improvement difficult.
…
EDITOR’S CHOICE
In depth: Greece debt crisis - Apr-26
Greek bond markets plunge again - Apr-26
Athens set to accept reform for €45bn - Apr-26
Global Insight: An exercise in cat-herding - Apr-26
Editorial Comment: Merkel’s Greek struggle - Apr-26
View of the day: Hanz Lorenzen, Citigroup - Apr-26
P.S. As evidenced by the collective shoulder shrug of U.S. stock market investors, the Greek debt crisis is fully contained.
What does Greece need.. around $50 Billion? That doesn’t seem like enough to be concerned about after what we’ve been through.
The bigger worry would be the mayhem if Greece were denied help. Since there is no rational alternative to bailing them out, that too is of little concern.
Medium term Greece probably needs about $200 Billion.
And an enema.
* MARKETS
* APRIL 26, 2010
Pressure Piles Up on Greece
A Wall Street Journal Roundup
Financial markets upped the pressure on debt-ridden Greece, as investors remained skeptical about its long-term solvency despite assurances that a rescue loan will keep it from defaulting on its obligations in as soon as just over three weeks.
While the immediate fear is driven by Germany’s grudging attitude toward bailing out Greece, some economists think Greece’s growth prospects are so weak the government won’t not collect enough taxes to be able to pay its bills years down the road. Worsening the country’s plight is rising yields, which Monday neared double digits. The country’s finance minister called current rates for raising funds “prohibitive.”
European Central Bank President Jean-Claude Trichet speaks with Wall Street Journal Global Economics Editor David Wessel about the financial crisis in Greece and the future of global financial reform.
Uncertainties over the bail-out plan for Greece and the risk to other debtors leave yield spreads wider, CDS costs higher and the euro weaker. Forecasts for parity or less don’t seem so strange now.
“When the question at issue is whether we can borrow, one realizes how difficult a position the country is in,” Greek government spokesman George Petalotis said.
Analysts had said they expected the market’s relief over Greece’s formal request for aid on Friday to be short-lived. Indeed, any such feelings appeared to be over by Monday, as the cost of insuring Greek debt against default soared to a new record, the country’s stock market fell for the fourth consecutive session and the euro weakened. Worries also spilled over yet again to other members of the 16-nation euro bloc with big debt loads.
Analysts suggested the pressure is likely to remain, even if Greece gets the money to repay a €8.5 billion ($11.37 billion) 10-year bond that matures May 19.
Monday, Germany remained reluctant to quickly provide Greece with up to €8.4 billion, Germany’s share of the €30 billion European Union package. The International Monetary Fund is to provide another €15 billion.
Instead, analysts suggested that Germany, the biggest single national contributor to the aid package, may wait to move on approving its share of the bailout until after May 9, the date of a crucial election in North Rhine-Westphalia, its most populous state. Chancellor Angela Merkel on Monday said Athens must be prepared to accept more tough measures “not just for one year, but for many years” to bring its finances into order, and that talks over aid conditions could continue into May.
Greece’s willingness to deliver on its promised austerity measures over the longer term also is a concern among investors. The European Union’s statistics office last week announced that the country’s budget deficit equaled 13.6% of gross domestic product, well above the government’s 12.7% estimate and EU rules of a 3% ceiling.
Greece’s Finance Minister George Papaconstantinou looks at reporters Sunday during a news conference at the IMF headquarters in Washington.
“Greece asking for the aid package is the start of the uncertainty, not the resolution,” said Ian Stannard, a currencies analyst at French bank BNP Paribas in London. “It opens up a whole new can of worms in terms of the implementation of the aid.”
…
The Wall Street Journal
* LAW
* APRIL 26, 2010, 11:50 P.M. ET
Suit Claims Goldman Failed to Disclose Probe
By VANESSA O’CONNELL
NEW YORK—A Goldman Sachs Group Inc. shareholder filed a lawsuit Monday against the bank, accusing the firm of failing to disclose a Securities and Exchange Commission investigation.
A Goldman Sachs shareholder files a lawsuit Monday against the bank, accusing the firm of failing to disclose a SEC investigation. Plus, Senate Democrats agree to kill a provision from their derivatives bill that would have allowed Berkshire Hathaway to avoid a significant financial hit; and WSJ’s Melinda Beck and Laura Landro preview their pieces on the sun and your health.
The lawsuit, filed in federal court in Manhattan, asks for class-action status on behalf of other Goldman shareholders.
It is the third known case to be filed against Goldman Sachs since the SEC filed civil charges against the bank on April 16. Two other shareholder lawsuits were filed Friday in New York Supreme Court in Manhattan.
A spokesman for Goldman Sachs didn’t immediately return a message seeking comment.
In its case, the SEC has alleged Goldman didn’t tell investors in a structured financial product tied to subprime mortgages that hedge fund Paulson & Co. helped select the underlying portfolio of mortgages and had bet against the performance of the product. The transaction at issue in the SEC case was in early 2007 and is one of several so-called “Abacus” transactions.
The shareholder complaint filed Monday revolves around the so-called Wells notice that Goldman received sometime in the summer or fall of 2009 from the SEC relating to the Abacus transaction.
A Wells notice is a notification from a securities regulator that it intends to recommend enforcement action and affords the respondent an opportunity to explain why such an action is not appropriate.
The lawsuit, brought by shareholder Ilene Richman, alleges that Goldman Sachs executives failed to reveal that the company had received a Wells notice.
“Goldman chose not to issue a Form 8-K alerting investors to this event and later even omitted this information from its Form 10-Qs, while updating ‘Legal Proceedings’ as to other cases,” the complaint alleges.
“As a result, investors were unaware the SEC was even investigating ABACUS 2007-AC1,” the complaint said.
The lawsuit also names Goldman Chief Executive Lloyd C. Blankfein as well as its CFO David Viniar and its president and COO Gary D. Cohn.
…
The Wall Street Journal
* REVIEW & OUTLOOK
* APRIL 27, 2010
Pension Bomb Ticks Louder
California’s public funds are assuming unlikely rates of return.
The time-bomb that is public-pension obligations keeps ticking louder and louder. Eventually someone will have to notice.
This month, Stanford’s Institute for Economic Policy Research released a study suggesting a more than $500 billion unfunded liability for California’s three biggest pension funds—Calpers, Calstrs and the University of California Retirement System. The shortfall is about six times the size of this year’s California state budget and seven times more than the outstanding voter-approved general obligations bonds.
The pension funds responsible for the time bombs denounced the report. Calstrs CEO Jack Ehnes declared at a board meeting that “most people would give [this study] a letter grade of ‘F’ for quality” but “since it bears the brand of Stanford, it clearly ripples out there quite a bit.” He called its assumptions “faulty,” its research “shoddy” and its conclusions “political.” Calpers chief Joseph Dear wrote in the San Francisco Chronicle that the study is “fundamentally flawed” because it “uses a controversial method that is out of step with governmental accounting standards.”
Those standards bear some scrutiny.
The Stanford study uses what’s called a “risk-free” 4.14% discount rate, which is tied to 10-year Treasury bonds. The Government Accounting Standards Board requires corporate pensions to use a risk-free rate, but it allows public pension funds to discount pension liabilities at their expected rate of return, which the pension funds determine. Calstrs assumes a rate of return of 8%, Calpers 7.75% and the UC fund 7.5%. But the CEO of the global investment management firm BlackRock Inc., Laurence Fink, says Calpers would be lucky to earn 6% on its portfolio. A 5% return is more realistic.
…
“California’s public funds are assuming unlikely rates of return.”
AKA an actuary’s favorite lie…
This is EXACTLY why the pension funds are having problems. The artificially low interest rates this past decade pushed pension plans into ever-riskier investments — which caused most of their losses, and prevented them from earning a more reasonable rate of return.
The pension funds were super-funded before the stock market crash, and that’s when they offered overly-generous pensions to the public employees (and I do favor re-evaluating that).
Still, the problems with the pension funds can be placed squarely at the feet of the Federal Reserve and all the criminals in the FIRE industry.
+1 CA.
The untold really big downside to low interest rates - it kills the business plans of things like pensions. The same thing probably applies to SS and Medicare trust funds, who are getting a lot lower returns than they expected in their US treasury investments.
The good news is - interest rates won’t get any lower.
Let’s hope rates can’t get any lower! I feel for the pension funds. We’ve been chasing yield around for far too long, and we’re now getting maybe 1-1.5% on our savings. This absolutely sucks!!!!
It’s great the foreign knifecatchers are rushing in to throw away their wealth on the slowly-collapsing U.S. commercial property market. What they contribute to our national treasure will stay here after they run away from their failed real estate investments.
* NEW YORK
* APRIL 27, 2010
Foreign Buyers Crowding In
By MAURA WEBBER SADOVI
Foreign investors are leading the way as New York’s commercial real-estate sales market shows signs of coming back to life.
German investor Aby Rosen acquired landmarks such as Lever House.
German, Mexican and Israeli investors have won the bidding in many of the most high-profile deals over the past 12 months. For example, GLL Real Estate Partners of Munich recently paid $41.9 million for about 14,000 square feet of retail space in a SoHo building designed by Pritzker Architecture Prize-winning architect Jean Nouvel.
Meanwhile, Mexican billionaire Carlos Slim is under contract to pay $140 million for an 11-story New York City office building at 417 Fifth Ave., according to a person familiar with the matter. And last year Israeli investor IDB Group paid $330 million for HSBC Holdings PLC’s New York office tower.
New York City property has long appealed to foreign buyers in both good and bad markets, but they have been more likely to outbid domestic buyers in tough times, sales experts say. That’s because overseas bidders tend to put a higher premium on cash flow than their American counterparts, who are more focused on the chances that values will climb.
“Safety is often something foreign buyers are looking for,” while “some domestic money may be more opportunistic,” said Matt Bronfman, managing director of Jamestown Properties, a private-equity firm in Atlanta that buys U.S. real estate on behalf of German investors.
…
Carlos Slim.. could afford to bail out Greece all by his lonesome..
Net worth around $54 billion.
$140 million for some cool Fifth Ave digs.. chickenfeed.
Labor Launches Campaign Against Whitman
California labor leaders are launching their biggest grass roots campaign ever to try to paint Meg Whitman as a corporate lackey who will run California like Wall Street.
KCBS’ Doug Sovern reports
Likely Democratic nominee for governor Jerry Brown can’t compete with Republican frontrunner Meg Whitman\’s campaign million, but he can fight her on the ground, with help from the thousands of labor activists who typically campaign for Democratic candidates. Art Pulaski and the California Labor Federation are kicking off their earliest and most expensive campaign effort ever to stop Whitman.
Meg Whitman is running for governor for one reason,” Pulaski says. “To do Wall Street\’s bidding.”
There’s a new website, Wall Street Whitman, which looks like the Wall Street Journal, revealing what Pulaski says is the truth about Whitman’s tenure on the board of Goldman Sachs and her agenda for a “hostile takeover” of California.
“She’s certainly not conveying the truth about who she is,” Pulaski says.
Goldman clients chafed at firm’s self-interest
Steve Eder and Dan Margolies
WASHINGTON
Mon Apr 26, 2010 7:15pm EDT
WASHINGTON (Reuters) - Some clients of Goldman Sachs Group Inc complained the investment bank was putting its interests ahead of theirs, according to emails released by U.S. Senate investigators on Monday.
The concerns appear to undercut Goldman’s insistence that it has lived up to its heritage as a client-centered firm, and did not bet against clients to whom it sold subprime mortgage-related products.
“Real bad feeling across European sales about some of the trades we did with clients. The damage this has done to our franchise is very significant,” one Goldman employee wrote in October 2007 to Daniel Sparks, a former head of the mortgages department at Goldman.
In another email, an employee comes back from meeting with clients and prospects, and reports the concern that Goldman was “good at making money for urself (sic) but not us.”
Nevertheless, the employee went on to say the lure of doing business with Goldman would keep clients coming back.
Another document shows a Goldman employee boasting of decisions that were unpopular with clients but saved the investment banks hundreds of millions of dollars.
The emails and other documents were released ahead of a hearing Tuesday before the Senate’s Permanent Subcommittee on Investigations into the role of investment banks in the financial crisis.
Goldman Sachs Chief Executive Lloyd Blankfein, in written testimony for Tuesday, said his firm did not have a “massive short” against the housing market and “certainly did not bet against our clients.”
“We have been a client-centered firm for 140 years and if our clients believe that we don’t deserve their trust, we cannot survive,” said Blankfein, who will appear with six other current and former Goldman executives.
…
Johannesburg Times LIVE
Bank ‘boasted’ about its mortgage gamble
Apr 25, 2010 11:20 PM | By Reuters
Top executives of Goldman Sachs Group, which former Reserve Bank governor Tito Mboweni will join soon as an adviser, boasted in late 2007 about how much money the investment bank was making betting against risky mortgages, according to e-mails released by a US senate panel on Saturday.
The e-mails, released ahead of tomorrow’s hearing of the US senate’s investigations subcommittee on the origins of the financial crisis, come as the bank battles a Securities and Exchange Commission fraud suit.
Financial regulation legislation due to go to the senate today could be bolstered by the e-mails.
In a November 2007 e-mail, Goldman Sachs chief executive Lloyd Blankfein said: “Of course, we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts.”
In e-mails from October 2007 on the performance of deteriorating second-lien positions in a collateralised debt obligation, Goldman Sachs executive Donald Mullen said: “Sounds like we will make some serious money.”
The SEC suit charges that Goldman hid vital facts on a subprime mortgage-linked security from investigators. The sub-committee is due to hear from Blankfein and other Goldman executives on the role of investment banks in crisis.
Sub-committee chairman Carl Levin said that the e-mails showed Goldman “made a lot of money by betting against the mortgage market. Investment banks such as Goldman Sachs were not simply market-makers. They were self-interested promoters of risky and complicated financial schemes that helped trigger the crisis,” he said.
Goldman spokesman Lucas van Praag said the sub-committee “cherry-picked four e-mails from almost 20million pages of documents and e-mails provided to it by Goldman Sachs. It is concerning that the subcommittee seems to have reached its conclusion even before holding a hearing.”
Van Praag said Goldman’s 2007 and 2008 profit and loss statements showed “conclusively” the firm did not make a “significant amount” in mortgages. “What it does show is that we had net losses of over
$1.2-billion in residential mortgage-related products. We obviously could not have been significantly net short since we lost money in a declining housing market.”
Goldman says it did not act against clients’ interests. A briefing paper prepared by Goldman for tomorrow’s hearing says that, in 2007, Goldman executives debated the direction of the sub-prime residential market. Some were sure it would crash.
The Wall Street Journal quoted a March 2007 e-mail from Fabrice Tourre, a bond trader and the only individual defendant in the SEC suit, as saying sub-prime borrowers would not last long. Daniel Sparks, a former head of the mortgages department at Goldman, and Tourre, are among those due to testify to the sub-committee.
“According to Sparks, that business is totally dead, and the poor little sub-prime borrowers will not last so long!!!” Tourre wrote to his girlfriend, the journal reported.
…
Greek 2-year bonds at 15% this morning. Ouchie. They were below 5% just four weeks ago, and below 8% just last week.
(ignore this - I posted it before I saw the Greece thread above)