Bits Bucket For May 5, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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The SF Chron posted an article about the most expensive house on the market in the US. At $150 million listing price, this place in LA fails to overwhelm me. It belonged to some guy named Spelling who made daytime soap operas.
The late Aaron Spelling, who brought us such important works as Melrose Place and Dynasty, left behind his wife, Candy, who now perhaps finds this palatial estate a touch large for her needs. And as part of Yahoo! and Walmart’s latest “Make Your Home a Haven” campaign, Candy Spelling turns blogger, doling out advice we’d love to follow– if only we had an obscenely rich dead husband– on how to make your home a haven. (Hint: cash and way too much of it!)
I don’t think I’d want a place like that in LA. I’d rather spend it on an estate in Sonoma county instead.
Fact: The place is paid off!! Candy (wife) says that Aaron never believed in having a mortgage.
Actual rich people almost never have mortgages. People with a ton of money and assets but an equal ton of debt are not rich, as Nicholas Cage and Ed McMahon(sp?) found out.
They have mortgages if it provides a tax advantage to their personal corporation.
That’s not a mortgage, it’s a tax shelter.
A sweet, sweet tax shelter.
And personal corporations also allow write offs for clothing (”no really, it’s a uniform”), food (”business meeting catering”) transportation (”of course my new Rolls is a company car, Duh”) and entertainment and business trips (”this is always how we close the deal.”)
As I’ve said, only the stupid rich pay full taxes. The smart ones know that complaining works also.
linky http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=62652
That home theater is pretty slick
The place has no mortgage on it!!!
Aaron Spelling did not believe in mortgages.
Smart guy.
Aaron Spelling’s house resembles a Romulan Bird-of-Prey from above.
You’re right it does look like a Romulan Bird of Prey from the top.
So does his wife.
“Aaron Spelling, who brought us such important works as Melrose Place and Dynasty…”
Having lived (yoot) down the street from CBS Studios (Studio City), I could not resist a comment relating to the fact Spelling didn’t find a cure, invent something that changed history, or discovered something relating to The Theory of Relativity, or compete with Shakespeare. My God, I need a puke bag. I still get a kick out of Burke’s Law, but let’s get serious here about his accomplishments. What a freakin puff job.
I think the “important works” sentence was a failed attempt at sarcasm. Unless you think “Da plane! da Plane!” is culturally important.
Say what you want, and I’d agree with you, but the man did make one thing: Money.
Cassandra
Yeah, the guy lived a magical life, and his money was impressive. The one thing I can say about Bill Gates and Warren Buffett, is that they want to make a difference in the world, not just build a big fancy estate. I have more respect for Gates and Buffett.
I grew up poor. I learned at least one thing in life. Do what rich people do, especially old rich people. There is a reason they are rich, there is a reason they are old.
Overheard at a rich guy’s funeral:
“How much did he leave?”
“All of it!”
Cassandra
My husband is 1 of 10 kids. I am 1 of 5. We both went to college, working our way through, living at home. Money is a great tool. I’ve had a blessed life until recently. When the shtf, we were lucky enough to have lived basic lives as youngins and know what’s important in life. Health is #1, everything else is gravy.
Yuck. Faux french.
Went by that place on a trip to LA about 6 mos ago. They make the lot seem big in the pics. Seemed a lot (pun, intended!) smaller to me.
I guess I missed the sarcasm. Sorry people. It’s just that I am familiar with the over inflated egos in “the industry”.
I imagine that they probably needed a shack that large so they wouldn’t meet, bump heads and damage massive egos.
Why the new Arizona Immigration Law isn’t going to work, as much as we would like it to (and it isn’t because people are having their constitutional rights violated, assuming that you care about the “rights” of people who shouldn’t be here in the first place).
(Disclaimer: Any views/opinions below are mine alone, not that of my brother, who is a member of an ICE agency…..
Talked with my brother, who works for one of the agencies that “controls” illegal immigration, when the subject of the new Arizona law came up……got an education of how things work at grunt level, and why Arizona may have some “issues”.
-They get called in when the immigration status of someone the police arrests is “suspect”. If the guy is charged with something, the state has him, then the ICE gets him, and typically deports him.
-Whether to charge an “undocumented immigrant” with illegally being in the country is totally up to the policy of the local US Attorney. Evidently, every illegal arrested in Texas gets charged with something, even if it is just entering the country illegally.
-Illegals in California, OTOH, don’t get charged with anything; they get sent back, no harm-no foul, unless the have a warrant for a violent crime in Southern California.
-As far as charging Americans with hiring/transporting illegals? Law doesn’t apply to businesses with under 10 people (which is why you see the loudly announced raids on meatpackers, but nothing is done to the roofing contractor that has 6-7 of them on his crew). Or the smuggler with fewer than 10 in his van.
And, to actually get a conviction, they have to have evidence that the employer KNEW they were illegal. Which is why employers are studiously keeping their blinders on, to avoid KNOWING FOR SURE that they are using illegals (and you just know that there are thousands of attorneys out there giving legal guidance on how to avoid “knowing”).
And now for the real kicker…….
-Mexico only takes back THEIR citizens, and only IF they want to take them back. They have a formal handover procedure, set up with the ICE. If Arizona detains illegals under Arizona law, and tries to give them back, they may find that Mexico won’t accept them……in which case, Arizona is going to have to figure out what to do with them.
The situation is totally FUBAR……he related to me how many of the illegals the catch are illiterates from southern Mexico, who speak some sort of cross between Spanish and Central American Indian. The Mexican Federales conduct entrance exams, to determine if the ones we are sending back are actually Mexicans, or are Guatamalans/Nicaraguans/Costa Rican/Godknowswhereans.
A lot of them don’t know what a “state” is, much less which one they are from. All they know is they want to stay as close to the US border as they can (IOW, in Mexico). So now, we have our guys “coaching” the illegals on how to pass the “I’m a Mexican Citizen” entrance exam.
Another sign that the USA is too fooked to fix. Like many other things, the Federal government doesn’t want to fix the problem for any number of reasons, and any effort by an individual state to address the situation by itself is doomed to failure, if the Feds aren’t interested in supporting them.
So basically, another reason why we are screwed. We might as well just throw in the towel, throw open to borders to anyone, and everyone who can get here, legalize drug use, deviant behavior of all kinds, and redirect/save our law enforcement establishments for dealing with the carnage……and when the situation is totally beyond anyone’s control, the whole mountain of crap will collapse. Then we can start over, like the Germans and Japanese did in 1945. We can start with “English as a second language” classes.
As usual, the banksters have equipped themselves to survive in such a scenario. They have the bucks to afford security guards, fences, dogs, bullet-proof limos, etc……and be able to GTFOO Dodge, if it really hits the fan.
I was planning on staying out of the house buying market, but I’m reconsidering…. I need about 20 acres, with high ground and clear fields of fire. A river/stream nearby, with clean water, and sandbars to fill sandbags would be nice. And/or a well, with drinkable well water. Maybe a koi pond. And squirrels to feed, in case I need an alternate protein source…..
“What do you call a guy with more than ten squirrels?”
“A rancher”
Some interesting insights into how border enforcement is actually working (or not).
Feh. Where there’s a will, there’s a way. Just dump ‘em back over the border, forget Mexico’s stupid procedures, they sure don’t follow ours. Don’t we have an island down by Puerto Rico we can use to re-locate the offenders? Put ‘em there, inform their country of origin to come get ‘em. Bring ‘em into Cancun, or Cozumel in ships. Let the world see Mexico rejecting the people they claim to be so concerned about.
Are there any Hispanic people out there who support the Arizona law? I haven’t seen any, regardless of party, including Cuban Americans. This tells me that they detect racism in the law.
Why doesn’t Arizona hire a bunch of cops to guard the border? Everybody would support that idea.
My wife is half hispanic, originally from Huntington Beach CA with a hispanic last name and speaks spanish. She cheers the AZ law, as does her whole family.
——————————–
Why doesn’t Arizona hire a bunch of cops to guard the border?
——————————-
Because the Arizona border with Mexico is 200-400 miles long. How many cops you gonna hire to cover that? Every person in the state?
Build a wall, it has to be be cheaper than a freeway. Pay the illegals $5 and hr to help or make the ones you catch work for free on it. Ahhhhh, the irony!
Until businesses get tough on hiring illegals, this is all smoke and mirrors for the dumb public to eat up after watching American Idol and listening to Rush/Hannity/Beck.
Much talk about the unpopularity of Arizona’s recently passed SB 1070. But is it really that unpopular? Check out this pie chart.
Either build a wall 10 ft. thick, 60 ft. high, and 30ft. deep, or annex Mexico. Those are the only two options in the end. Which is easier?
How come it seems more like they’re annexing us?
seems like 2 rows of 16′ with razor wire in the middle and tops will work, not too expensive unless they hire Halliburton. We need the jobs. then set up some cameras to monitor.
Too much line to protect from wire cutters. You need something that can be maintained with armored bulldozers.
“”This tells me that they detect racism in the law.”"
So what? I detect racism from the Hispanic Cuacus and LaRaza and MEChA and all the other anti white groups.
+1
This is what I don’t get. Where in the law does it say any thing about race? Last I heard, there were an estimated 50,000 ilegal Irish nationals in the US.
Why are the not deported? Can’t find them. They speak the language (sort of) and they obey the law. No reason for suspicion. I’ll not snitch of that kind of illegal. If you speak the language, even badly, and obey the law, does anybody care about your immigragion status?
“Are there any Hispanic people out there who support the Arizona law?”
My wife who is a naturalized US citizen born in Mexico is fully in favor of the Arizona law. She was a benificiary of the Reagan amnesty, so one would think she’d want another one, but she can see the wholesale degradation of our state and nation due to unfettered immigration.
BTW, she was brought to the US as a minor child, and didn’t want to come.
All of my **legal** immigrant friends from Mexico are very much against illegal immigration.
After all, the legal immigrants are the ones most affected by the depressed wages, “racism,” etc. that are the result of illegal immigration.
Saw a 60 Minutes episode..where illegals were dying in the American Canal(CA border with Mexico)..there were no ladders to get out of canal..so about 600 illegals ended up downstream feeding the fish, clogging up the dam..60Minutes was lamenting we need those ladders..and some have been put in ..like every 500yards..and they that is not enough..laments 60Minutes
This country is done..
Can’t you just put the ladders on the Mexican side so they climb out back in their country? I think the death penalty for trying to get in the USA is a bit harsh of a punishment.
Put ‘em there, inform their country of origin to come get ‘em. Bring ‘em into Cancun, or Cozumel in ships. Let the world see Mexico rejecting the people they claim to be so concerned about.
Hear, hear!!!
Why do the southern Mexicans want to stay on the Mexico side of the border? Or is that where they want to be deported to?
The Mexican police give a hard time to illegals coming into THEIR country (most of who are trying to get to the US border). They don’t want to be flown back to Guatemala, and be forced to run that gauntlet again.
And we don’t want to pay for their transport back to Guatemala. So they fake being Mexicans, where they are just dumped on the street in Tijuana.
Evidently, “Guatamalan Spanish” is different than “Mexican Spanish”, which is different than “Spanish Spanish”. Sort of like English vs. Australian vs. USA English. (I remember taking an online test once that accurately predicted what region of the USA you were from, just by the way you used your vocabulary).
I related this story to show that thanks to lawyers and various other weasel, there are no “quick, easy” solutions to anything in the US anymore. There is a large percentage of the population that draws a paycheck making the rest of the populace jump thru hoops…….lawyers, entire HR and Safety departments, OSHA, etc
OSHA is a prime example. They don’t have the time/will to concentrate on the demonstratably most dangerous jobs (like coal mining, for example). But they spend all kinds of time trying to coerce small business into hanging their legally required safety posters, and (for example) spending $50,000 plus for a “fall restraint system”, for the (maybe) 2-3 times a year that I have to work 6 feet off the ground.
What is stupid is that they want you to secure this system to the hangar structure. Is the structure strong enough to hang my fat a$$ off of? Don’t know, hangar structure wasn’t designed for that. Nobody wants to eyeball it and call it good, because they are accepting the liability for it. So now you need to pay a structural engineer to come out and certify that the building is strong enough to hang a fat-azz mechanic off of it.
Latest thing in the aviation business is developing a “Safety Management System”. I’m the only guy that turns wrenches on this thing day to day, and have managed to work on my own, with no QC follow up for 10 plus years with no issues. Mainly by knowing what items to prioritize, and working the complex/mistake prone tasks at times when I’m fully alert (like pre-flighting the airplane the night before an 0-dark thirty departure).
Doesn’t matter……the mandate/requirement that we write an “approved manual” on how I’m supposed to do things safely is coming down the pike sooner rather than later. Which will either require me to work on that instead of working the airplane, or hiring a “consultant” (getting paid a ridiculous fee) to come in and write one for us.
Interesting post X=GSfixr.
To hear that the Fed Gov’s methods are FUBAR doesn’t surprise me and your solution about finding 20 acres is interesting.
Maybe an RV would be a good idea for a while, then you could move it around to where the hunting is the best.
I don’t know of any areas in this country where 20 acres is affordable anymore, unless it’s some far flung location labeled as “recreational” with little to no economic viability in terms of farming, etc. The 20 acre parcels I see for sale are priced so extraordinarily high that they offer no return on investment, unless it’s building monstrous Mcmansions or condos for buyers with stated income loans.
Used to be a day when you’d just ship them to some God awful place, like Austrailia. Oh wait, that turned out to be a pretty nice place. Maybe we could buy a sinking island in the S. Pacific. Or ship them to Antartica with a blanket and a case of beans.
It’s really hard to be nice, but still get them out.
Oh and squirrel aint so bad, a little tough. Never been hungry enough to eat koi.
Just think of the immigration trouble we have in the US if Canada had the same type of Gov’t as Mexico…all those French-Canadian women trying to get a job as a maid @ a Motel 6 in Maine.
Okay,
Now that we’re all wired up on morning coffee and frauds, here’s a new big time racket to raise your blood pressures.
The Child Care Center rip-off artists in Wisconson and the idiot State bureaucrats that allow, regulate and supervise it.
It’s a follow up article of an award winning investigative series that involves the wife(mate?) and friends of one of our most notable mortgage rip-off/murderer/HD Thugs. It’s EZ and really big money. I suspect that this is a nation-wide problem to some degree in other cities and states.
There is a link to that series of artcles, they are long and detailed but scary, informative and have you wondering why everyone in this scam isn’t sporting orange and handcuffs.
U.S. agents seize records from day care center
Milwaukee site has ties to woman at center of billing investigation
By John Diedrich of the Journal Sentinel
Posted: May 4, 2010 |(32) Comments
The Investigation
Ongoing Journal Sentinel investigation details how parents and child-care providers work in cahoots to easily scam the $350 million Wisconsin Shares program. Read the series and ongoing coverage
* Winner of the 2010 Pulitzer Prize for Local Reporting
As the criminal investigation into day care provider Latasha Jackson continues, federal agents have raided a center with ties to Jackson, seizing computers, attendance records and other documents.
FBI agents searched the Executive Kids Early Childhood & Learning Center on Thursday, according to a search warrant made public this week. The center collected more than $2 million in public money since 2005, with the owner billing for children who weren’t attending, according to workers and parents quoted in the documents.
http://preview.tinyurl.com/2626vkd
“The Gladneys also live in Menomonee Falls. Jackson’s mansion there burned down in a December fire that investigators are calling suspicious. An investigation into the fire continues, according to the Wisconsin Department of Justice.”
All righty then… place your bets ladies & gentleman…
Those that wager the homemoaner was behind & underwater + at least x1 Heloc, get in line behind Hwy50
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
Latasha, eh?
A real badger visited the Milwaukee Post Office the other day. He didn’t “Go Postal” either. The story is funny because it looks like the mailmen were calling everyone from Cops to DHS to come and get this “bad boy”. It looks like they finally got the right man to sweep up the little guy.
They can be really, really mean but this personable fellow reacted quite well to a few friendly taps on the butt with a broom and a stern reminder that he was on tresspassing on Federal Property.
Some guy got some really great video this.
(it appears that no Wisconsin badgers were tasered, molested or seriously aggrieved during the making this video)
Story
http://tinyurl.com/24×5z4f
YouTube video
http://www.youtube.com/watch?v=UvzeRX-Wfq4
Know who the original Wisconsin Badgers were? They were the Cornishmen who came to work the mines in southwestern Wisconsin. They worked like, well, badgers, and that’s how they got their name.
+1. All of my ancestors immigrated to southwestern Wisconsin to be miners or dairy farmers.
However, we learned that miners received their nickname because they lived in the holes that they dug into the ground in search for lead. Why bother throwing away your money on rent?
Yup. Living in holes to save money. That sounds very Cornish.
Yup…they mined the lead and now they’re dead.
A lot of people in America had holes put in them from the lead mined from Galena, Il. and Mineral Point, Wi areas.
On the Television show “How States Got Thier Shapes” a couple of weeks ago, the host said that Ohio and Wisconsen territories were haveing a bit of a dust up over which territory got Toledo (they wanted the port). The Ohioans referred to the Wisconseners as s
Stinking Badgers. The Wisconseners being a bit contrarian by nature, adopted the name as a thumb in the eye of the Ohioans.
BTW, that show is quite interesting and answered a lot of questions I had about state boarders.
Badgers? We don’t need no stinking badgers!!
That’s wierd. Wisconsin and Ohio don’t border each other by at least a hundred miles.
That’s wierd. Wisconsin and Ohio don’t border each other by at least a hundred miles.
That’s nothing. Florida and California don’t border each other by well over 2,000 miles!
Do you mean Michigan? Wisconsin isn’t even close to Ohio.
Thanks, very informative. I’m with you. I say we not only legalize all drugs and prostitution, we cut all social welfare spending. Any illegal who commits a crime (after all victimless crime laws have been erased) should mean the country from which they leave should be charged for incarcerating the criminal. The illegals should depend on charities and will turn to Catholic charities. Anyone who wants to help pay for the health care and education of illegals should start writing checks. Don’t force the rest of us.
This is the open border solution.
The problem with Catholic Charities is, they get some godawful billions of dollars from the gubmin. I’ve heard as high as 9 billion, but I think the actual figure is more like 2 billion. Think about that. What’s all that money for and how is that separation of church and state?
Two comments and a two caveats:
I think that by mandate the money is only given towards “non-religious” functions of the charity (e.g. feeding people, building schools and hospitals, etc.) and not evangelical. I know this is true at least of Bush’s faith-based initiatives, though I would imagine it’s probably a general rule.
This is also true for other religious charities - the government gives a lot to protestant as well (not sure about non-Christian religions but I would image at least some).
However that being said - I would imagine there’s no way such an organization completely separates their charity vs. their evangelical activities.
And FWIW - though I’m very much in favor of such charities, I’m also against government giving money to them. It’s not government’s role.
I wrote Catholic Charities in our town to let them know, while they were taking care of all the anchor babies/children at Christmas with really cool presents, their illegal parents were buying Escalades, Suburban, and other nice vehicles, living lifestyles of yuppies, and sucking the taxpayer, while working under the table. I said they should help out the Americans, who really need help. Thanks palmetto, I didn’t know we taxpayers were frunding CC.
Excuse this comment, but that culture is primitive, morally bankrupt, and they don’t deserve to be here. It’s a slap in the face of our military, who serve or die for this country.
Fixer,
I’m working my 40 acres that has everything you mentioned. To wait and do something when reality is plainly evident isn’t in my cards. Many protein sources here. Saw two elk on my property yesterday. Too many deer to count.
Mexico only takes back THEIR citizens, and only IF they want to take them back. They have a formal handover procedure, set up with the ICE. If Arizona detains illegals under Arizona law, and tries to give them back, they may find that Mexico won’t accept them……in which case, Arizona is going to have to figure out what to do with them.
Mexico is not the only country that has operated this way.
I’ve already regaled you with some of my family story. The Cornish side left during the 1800s when Cornwall’s economy collapsed. According to my aunt, people were starving to death, so going away was what they had to do.
Anyway, the British Empire wasn’t sorry to see us go. To this day, the Cornish and other Celts are looked down on by the English. As my aunt so aptly puts it, if you tell people that you’re on the other side of the pond to visit Cornwall, they look at you like you’re going over to the wrong side of the tracks.
Yes, they’ll welcome the descendants of the diaspora (and our Yankee tourist money) back for a little visit, but that’s it. Cornwall’s economy is still in the dumpster, so it’s not like we can go back and make a living there.
If the Celts gave us that stupid “Riverdance” bullchit, I don’t blame the Brits for looking down on the Celts……..
What’s with that crap? Above the waist, rigidly at attention; below the waist, a flurry of flying feet. Annoys the crap out of me…….
But I digress………
Not only that, we Celts also gave you the bagpipes!
Bag pipes are cool. I can live with bagpipes.
(Google “Edinburgh Military Tattoo)
Now, what’s the tiebreaker?
Up tomorrow……..a rant on Texans.
I don’t blame the Brits for looking down on the Celts
Hmm - aren’t Celts kind of a subset of Brits? I think you mean “English” looking down the Celts right?
I always get confused by the Brits/Celts/English/Irish/etc relationships. I think “Brits” refers to all people that are on the larger of the two British Isles (with the other island being Irish), which includes the Welsh and Scots, which are considered Celts (along with the Irish and even some French) - right?
Above the waist, rigidly at attention; below the waist, a flurry of flying feet.
We celts like that style of dancing because you can dance and drink at the same time.
Yeah, but whenever I accidently run across it on TV, it’s always a bunch of pasty, pre-pubescent Irish-looking chicks, who aren’t drinking anything.
Under 21 y/o girls/women ceased being “hot” to me when I had 2-3 of my own, and their friends, hanging around the house.
Now it’s a tossup, on who is a bigger pain in the azz; them, or the loser boyfriends they keep picking up at the pound, and dragging home.
Now, alpha, shame on you, giving away our Celtic secrets like that!
This is pretty much the story of how every empire falls.
Some by military defeat, other from invasion by barbarians, usually imported by the ruling class.
Yes, where there’s a will there’s a way. But that’s the trick isn’t it? And we aren’t seeing the will, are we?
“What do you call a guy with more than ten squirrels?”
“A rancher”
Do gophers count?
I find it amazing that you all are able to keep the conversations going after all these years. I try to read a bit off the HBB each week and response infrequently when enticed or inspired. Many of you that are daily, or very frequent, contributors must be retired or somehow superhuman. Anyway, to all of you thanks for the years of knowledge, insight and entertainment!
I don’t know if you’d call me a “frequent” contributor, but, unfortunately, I’m most certainly NOT retired.
I’ve discovered that sleep is quite overrated and often start my work day at 4AM. That makes for plenty of time to blog; it’s amazing how much extra time you have when you start that early! 
Of course, as I type, I’m about to go “nose down” into my 3rd cup of coffee.. More caffeine - STAT!
I would guess that the HBBer average age is 50+. I’m close to retirement. When I was younger and building my career and raising kids I had no time for stuff like this.
Yeah we’re all 50+ anti-boomers.
Yeah, count me as an anti-boomer. Born in late ‘57 and I still get excited whenever I see a classic ‘57 Chevy.
For the record, I was born in 1961, Ben, having met him, would appear to be a bit younger. Folks I have met from the blog were generally younger than I. This crowd may not be as old as you think.
“For the record, I was born in 1961, Ben, having met him, would appear to be a bit younger. Folks I have met from the blog were generally younger than I. This crowd may not be as old as you think.”
Yes, but I thought you were younger than that too, so maybe HBB’ers just LOOK young.
I’m 87* BTW.
*Or at least feel that old.
When I was establishing my career, there was no Windows, no internet, no HTML. I wrote letters to the editor of my town newspaper occasionally. That was the closest we had to a blog before Mosaic was available.
Actually it seemed nicer to not have cell phones but only landlines. I get a kick out of seeing people that have a phone up to their ear and talking while walking. They make me wonder if they feel so unworthy of being alone with themselves that they just have to talk with someone? This is what makes me nostalgic for the days without cell phones.
It surprises me more that not only do they have to talk with someone, but that there’s a person at the other end of the line who wants to talk with them. For hours, about…? I’m the talkative type and even I’m totally tapped after an hour or two.
Maybe the wireless coms and the trash mags are in cahoots. The tabloids furnish J6P with Kardashian/Gosselin/Woods and Verizon cashes in on mass talk/texting.
Whenever I see someone walking through the grocery store with a cell phone, I have this to say (to myself): “There’s someone making money on that call. And it’s not you, Mr. or Ms. Cell Phone User.”
I saw a report where a large number of people in public were actually pretending to be talking to someone on their cell phone when there was nobody on the other end. Pathetic. I never talk on my phone in public. I consider it rude behavior.
Er, if I’m on the cell phone at the grocery store, it’s either because I forgot something someone wanted me to pick up (yes, and I lost the list) or they are out and do you want an alternative or some client I desperately need to talk to. (I work for myself and clients are notoriously flaky)
But both instances are rare.
Echo,
I have the better half text me the list.
I’ve only lost the phone a couple of times.
Talking is faster than texting.
“They make me wonder if they feel so unworthy of being alone with themselves that they just have to talk with someone?”
I think they’re just really intimidated being out in the actual world. People might laugh or stare at them, etc., or think they’re weird, sort of like a big high school campus.
Agree 100%.
I think It’s a crutch for the socially inept people. I can’t believe how many people are texting and walking around the office building. Almost everyone is looking at their cellphones all the time. I have tried and failed making an eye contact or starting a conversation in those long elevator rides.
Pathetic!
Future generations may have the cell phone body, with a hunch and longer neck. I just got the HTC Incredible PDA, so I cant say much. So much information at my finger tips why did I bother with a MA? You dont need a brain any more, just the ability to find info.
I don’t text much. But I have found it useful in certain circumstance. Any thing that doesn’t require a response. “Remember: meeting at 2:00″ Is a good example.
“I get a kick out of seeing people that have a phone up to their ear and talking while walking. They make me wonder if they feel so unworthy of being alone with themselves that they just have to talk with someone?”
I have noticed this at lunch time in restaurants. People will sit by themselves talking on the phone the entire time. I guess this is one way to “do lunch”. I usually read if I can’t find someone to go with. Sometimes I wonder how many “missed” relationships/ friendships are due to having to have constant contact with their support group. I wonder if cell phones increase or decrease the number of relationships one has in their life?
Sometimes I wonder how many “missed” relationships/ friendships are due to having to have constant contact with their support group. I wonder if cell phones increase or decrease the number of relationships one has in their life?
I think it’s a very effective way of broadcasting their insecurity. And it says to me, “Stay away from this person, as he/she will be very high maintenance.”
Got that right. Been on few of those dates……
“I get a kick out of seeing people that have a phone up to their ear and talking while walking. They make me wonder if they feel so unworthy of being alone with themselves that they just have to talk with someone?”
The cell phone says,”I’m an important person”. Even homeless the people have them now.
I got out of college in ‘71 and went to work for Frito Lay in thier accounting dept. In those days four desks shared a phone, computer input was by punch cards (40 operatiors 24 X 5), and the computer (IBM 360) occupied about 20,000 sq ft of office building space.
The only Windows we had were on the side of the building.
Wow! I graduated college in ‘83. I’m impressed they even had computers in ‘71. The days of leather floppy disks.
In 1970, somebody turned me loose with a US Gobbermint Control Data Corporation CDC 6600 series (think early Cray Super Computers)
Yeah, like mikey was supposed to KNOW what the damned thing did !!
I frankly am quite surprised we still have so much to talk about these days, as it has been common knowledge that the real estate bubble popped for about three years running now. But then who could have seen our government’s hair-of-the-dog real estate bubble reflation efforts coming?
Gov’t bungee cord…it works, until… it doesn’t.
It definitely seems to have mostly morphed into an “aftermath” board. Thing is - the aftermath seems to have as much or more to talk about than the bubble itself (unfortunately, in most cases). It’s definitely not a “well I guess that’s over - let’s finish cleaning up this mess” (contrary to what much of the MSM would have one believe) kind of aftermath.
My focus has very much shifted towards sovereign debt problems, which have been thrust to the forefront as a result of the housing crash. I think they would have happened eventually anyhow - the housing bubble just provided the big push.
It’s definitely not a “well I guess that’s over - let’s finish cleaning up this mess” (contrary to what much of the MSM would have one believe) kind of aftermath.
Yeah, it’s hard to clean up the mess in the morning when some of last night’s partiers are still sleeping and hanging around and looking for food.
maldonash,
Thanks for the nice post and your weekly visits. Please join us and speak up whenever you have the time.
It’s also a great compliment to Ben Jones, his blog and his cat herding abilities to keep us in line.
Supermouse (ret)… aka, mikey
I believe, for some of us, it’s our drug. Some of us are addicts.
+1. I’ve tried getting clean. Not happening.
No kids. Hate TV. Hate most modern “entertainment.” Work for myself.
Los Angeles on the Brink of Bankruptcy ~ WSJ
Los Angeles is facing a terminal fiscal crisis: Between now and 2014 the city will likely declare bankruptcy. Yet Mayor Antonio Villaraigosa and the City Council have been either unable or unwilling to face this fact.
According to the city’s own forecasts, in the next four years annual pension and post-retirement health-care costs will increase by about $2.5 billion if no action is taken by the city government. Even if Mr. Villaraigosa were to enact drastic pension reform today—which he shows no signs of doing—the city would only save a few hundred million per year.
I’m shocked, I tell you, shocked.
Anyone have an idea what LA bankruptcy would look like?
It looks a lot like Tijuana.
er, Tiajuana.
“Tiajuana! Where everybody has a good time!”
what is “Tiajuana”?
Oh NM. I get it. We’re supposed to pronounce TihWUANA..
Tia Juana = your Aunt Joan.
I live in Aunt Joan. Has a nice ring to it.
Sounds icky to me.
Juana is Jane, no? You never hear of anyone smoking mary joan.
LA already looks pretty similar to Tijuana.. What’s the difference if they BK or not?
I was also curious what the mechanics would be. Nobody gets paid, what happens? No garbage pick-up? Wild West in the streets due to no cops?
I think a lot of gubmin workers everywhere are going to find themselves without a pension in the future.
“Wild West in the streets due to no cops?”
and that is different from now how?
The whole purpose of a bankruptcy is to allow current operations to continue while a plan is implemented to deal with long term debt and other contractual obligations. From that standpoint, I would imagine that current services might improve.
It would look like the protests in Greece, but there would be more Mexicans and white people with face-lifts and boob jobs.
where can i get tickets?
Blood in the streets.
Better cancel that Disneyland trip!
Disneyland is not in LA.
Do yo think the riots will stop at city limits?
Remind me again, whose idea was it to send our National Guard to fight in a foreign war?
National Guard are useless when it comes to dealing with urban unrest. Just ask anyone who lived through the LA riots or Katrina.
And I thought it was Ben and the AZ HBB Purple Haze Filter that was slowing me down…sorry Ben, it was the old Ma Bell Gang.
AT&T agrees to settle lawsuit over slow Internet speeds
By Rick Barrett of the Journal Sentinel
Posted: May 4, 2010
“AT&T Internet customers, past and present, could soon be eligible for money aimed at settling a lawsuit over DSL service speeds.
At the heart of the case are complaints that the company put artificial caps on subscribers’ lines, making it impossible to reach the maximum advertised Internet speeds.
People were not getting the speed they paid for in their digital subscriber line plans, said Patrick Perotti, an Ohio attorney who sued AT&T Inc. last year on behalf of thousands of the customers, including Wisconsin residents.
AT&T has agreed to settle the lawsuit for a maximum of about $100 million, or less depending on the number of claims filed nationwide, according to Perotti…”
http://tinyurl.com/353476k
“AT&T denied the lawsuit’s allegations but has since stopped capping DSL speeds.”
Good for the people that fought the fight and won the lawsuit. The customers should get the service for which they’re paying.
I dealt with that kind of crap from Cox Cable for about a year. Fast service, then painfully slow service for about a year, then fast service again. It was never their network or so they claimed. I probably had about a half dozed tech visits. They tested everything, changed cable, even changed connectors. It was stupid. In the end, once the network problems were fixed, the speed returned.
I called my internet cable provider and complained. My arguement was, that I pay for 6meg down 24×7. I’m getting half that (or less), I argued I should pay half. They actually complied and credited my bill for half. I thought that fair. But I still want 5+ down, but in my rural area, no amount of money will seem to buy it.
The bandwidth is available, I know for a fact. The Company just isn’t buying enough, and I told them so. I used to work for a local ISP. We had 100mb down to the desk top, so the “it’s not available” arguement doesn’t get much traction with me.
As I’m reading this I’m pondering… I have DSL with AT&T/SBC. It has been a great service and the help desk gets to you rather quickly. Speed has been very high most of the time. I watch streaming HD off netflicks all the time.
I wondered if the slow downs were due to some kind of software capping at times they expected peak traffic. That would be intentional and to ensure people are getting some minimal level of service.
Might be the points where they used the cap were too conservative and unnecessary? There isn’t much of a reason for them to do this, once you have the capacity in place the additional use doesn’t cost you anything.
This sounds more like some kind of technical problem and the lawsuit is bogus. Maybe there was some incompetence OR the very specialized, read bug ridden, software control was too simple.
My big problems tend to be with my PC and worms. Plus my blueray wifi link drops out a bunch.
Been ordering streaming movies from blockbuster too. Works perfectly.
I am considering going to ATT universe and F/O with the higher bit rate. Course I don’t see the need since I’m already getting better than 5MB/s out of the service.
yeah demand for band width doesn’t hold much water with me. How much demand is there at 03:00? That’s when I have the problems. (OK, I keep weird hours)
Exactly. My slowdown was 24/7, not just at supposedly peak times. Then the explanation was that the peak speeds were just that, you wouldn’t necessarily get them all the time. I was never getting them. I was paying for 10 Mbps and usually never getting more than 2, sometimes only 500 kbps.
Those of us a bit older remember the arrogance of the phone companies before there was a choice of calling services . They put government agencies to shame , letting you know they were in charge , and did they ever charge . Why , it was even illegal to own your own phone , you had to rent it by the month . I’ve loathed monoplies ever since
Those of us a bit older remember the arrogance of the phone companies before there was a choice of calling services
As far as I can tell, it hasn’t stopped.
The difference now is that the phone companies are going to be arrogant right up to the point where they file chapter 11..
Their business model is broken; they realize this, but really don’t see the way forward. Verizon tried with FIOS, which is certainly a sustainable model; but the rest are just mired in a death spiral. Cable is ripping their user base away, and, at the same time, the other telcos (like Verizon) are killing them with cell phones. Their only hope is to be the high speed Internet provider of choice. And, to date, they’ve made almost no strides in that direction; cable is (in almost all areas) dramatically faster than any offering from the telcos.
I don’t see their business model moving forward; I really don’t. It’s almost like a “hope that people just keep paying us” model. They have no competitive advantage other than that they were there first, and there’s plenty of consumers who don’t care, and will continue to be fleeced by the telcos.
I was talking to a friend the other day who mentioned a “long distance bill”. I kind of just laughed, I haven’t even seen a long distance bill in YEARS, and probably never will again. This is the kind of thinking that those at the telcos still have… Until that changes, they continue to slide into oblivion.
I like my Clear internet service. It has the advantage of using neither my local telco nor my local cable company.
Dennis,
I’ve never heard of that service. What is it?
4G hotspots could “save” them if they play their cards right… Good coverage, no limits on data, and a decent price will get me thru the door. We’ll see.
It used to be called “Clearwire” but they changed the name to “Clear” when they went 4G WiMAX.
Clearwire was started by Craig McCaw of cellphone fame, with investments by Intel and Motorola.
www dot clear dot com has a coverage map.
Verizon tried with FIOS, which is certainly a sustainable model; but the rest are just mired in a death spiral.
==============
What?? FIOS was the least sustainable model for internet service the telcos rolled out from a business perspective, and as such, Verizon has ended rolling FIOS out to new cities for the time being and greatly rolled back neighborhood expansion.
IOW: If you don’t currently have FIOS, you won’t be getting it for perhaps a very long time.
I forgot to add:
There is the 10%-20% contingent who complains that their internet is too slow, but the other 80% doesn’t care and doesn’t want to pay for something they don’t use, so speedier & speedier internet generally is not a marketable selling point.
This is why Comcast is buying NBC. To control content, which is a marketable selling point.
What?? FIOS was the least sustainable model for internet service the telcos rolled out from a business perspective, and as such, Verizon has ended rolling FIOS out to new cities for the time being and greatly rolled back neighborhood expansion.
IOW: If you don’t currently have FIOS, you won’t be getting it for perhaps a very long time.
Hmm - you piqued my curiosity. I used to work on that service, as an equipment manufacturer. I’m curious why you would consider it unsustainable.
My though would be that current delays may be in prep for rolling out of the next gen technology - GPON (previous was BPON); perhaps it got delayed. The two aren’t compatible, so the more BPON they deploy the more long-term problems will exists due to the incompatibility (e.g. having to maintain two sets of equipment instead of one).
Because it costs VZ in the neighborhood of $600 per house to deploy (project cost was over $20bb) , and is priced the same to the customer as other cheaper to install and buildout options.
$20bb for around 4mm customers. $5000 expenditure per customer. It’s gonna take a while to make that back at $125 per month.
I think teleco’s are a bit like the newspapers. Their customer base is typically 50+er’s who either don’t have cell service or keep the land line out of habit. I include myself in that group. Even though we have cell service, having a land line just seems proper. Same with the newspaper, the information is available a lot more quickly in electronic form, but we get used to walking out to the box every morning its a hard habit to break. As use oldsters fade away, land lines and newspapers (and most print media) will disappear.
Because it costs VZ in the neighborhood of $600 per house to deploy (project cost was over $20bb) , and is priced the same to the customer as other cheaper to install and buildout options.
$20bb for around 4mm customers. $5000 expenditure per customer. It’s gonna take a while to make that back at $125 per month.
Installation costs are different than maintenance costs. Your comment “not sustainable” would normally refer to maintenance costs, which are quite a bit lower than for copper (primarily since copper wears out faster than fiber, particularly since it’s more often deployed overhead).
A 5-year payback period actually is not unreasonable at all for telecom investment.
P.S. I see articles talking about the Verizon halt of FiOS expansion. Interesting. I wonder if GPON had problems then. Or perhaps it’s just a case of “low hanging fruit” - once all that’s picked it gets less cost effective to go after the higher fruit, especially in our current recession.
I’m not breaking down the costs. It’s not sustainable from a business perspective. You can’t spend that much getting customers, because AT&T, Direct TV, Cox, etc, can simply drop price and undercut you even farther. From a tech perspective, FIOS was a great idea, but the financials just don’t support it yet.
If your acquistion costs are going to be that high, then you need to have a higher price point to support that, but so far FIOS does not.
IE: They are building a BMW M3 network but are only able to charge Kia Rio prices for it.
I think they’re main thinking is that they’d make a bunch of money long-term via add-on services, like VoD. Problem is their VoD still sucks - not a very good selection, and no ability to download and then watch later. So I think so far at least they’re making a lot less money on it than they thought they would when they planned the whole thing.
Price-wise though they’re great - somewhat lower prices for the same service vs. Comcast.
Yep, Clear (Clearwire)
They are going to destroy the telcos and put a big dent in the cable companies.
Wireless cable speeds… everywhere. Your car. The park. The stadium. Metro only for now. But everywhere inside that metro area. Low monthly price and NO usage cap. And it’s not in the future, but here NOW.
I’ve been following this development for years. It’s a serious game changer.
They are going to destroy the telcos and put a big dent in the cable companies.
IMHO, that day can’t come soon enough.
I’m loving the part about low monthly price without usage caps. And the fact that this game changer is here NOW.
Yeah, I still can’t do business with AT&T. I still hold a grudge.
AT&T is merely the name of the company. It’s actually SBC in drag.
And SBC is Southern Bell in drag.
Ah, a man who knows his stuff. Our household was an AT&T household, then an Ameritech household, then a SBC household, and now an AT&T household again.
I hope all those people who argued for the break up of AT&T in the early 80s realize how many lawyers, brokers, consultants, and politicians cashed in on that deal. Had AT&T been left alone, a lot of those critters wouldn’t have made the money they did. Think about that when you pay your phone bills, America!
I was not born with a fancy tv camera cell phone gadget attached to my umbilicle cord. I don’t need that and my only need is a plain phone and a cheap plan. I was driven insane and didn’t sleep well due to the old time pagers and hardline call-in requirements from being on call in the business and medical fields.
Mikey’s cheap, handy-dandy, non-important person cell phone plan:
1. Get everybody he knows to sign up for some sort of Verison Cell Phone Plan of some kind and wait…
2. Take his kids disgarded Plain Jane cell phone in and pre-pay $100 minutes a year and an activation charge with a new simm card and new phone number(you bring in your own equipment-who needs to buy a fancy expensive new phone and plan that’s more complicated than a old VCR with smaller buttons?)
3. Guard that new cell number well, give it out to friends and family that are ONLY on some kind of Verison phone plans. Don’t use it or make calls unnecessary out-going non Verison calls unless of an emergency or you recognize a valid Verison incoming phone number.(That costs big money per day and call plus defeats the cheap part of the handy dandy plan)
4. Recieve and make Verison calls all over America 24/7 non-stop to everyone that you know for about 27 cents per day with no additional charges.(no answer-let it ring, they can’t afford to cancel their contract because of you)
5. Don’t EVER give your Mom or your talkative little sister that phone secret phone number regardless of what cell plan or company they may have.(that’s a biggie)
6. Keep mikey’s basic plan secret….ooops !!
I was prepaid for years. Loved it. When my prepaid usage finally equaled the same as the cheapest contract plan, I switched over.
Got a free new phone, no money down and a better deal overall.
Buy a disposable, throw it away often, or when ever you make a call to authorities. Pay cash, plan ahead. Dear God I’m paranoid.
“…you had to rent it by the month”
They’ve improved! Now they have the “2 year Service Agreement”
Oh, it was legal to own your own phone, but you weren’t allowed to connect it to their network. They would periodicly test the voltage drop on the line when the phone was ringing to see whether a customer had installed an extension contrary to the terms of their contract.
Which is why if you had a “bootleg” phone, you disconnected the ringer. Weren’t we clever?
Hey, I’m still using an old zinc-bodied WE 302 at home, but I’m a bit of a Luddite.
We have a little museum in the Spokane Valley and among some other interesting artifacts is a working electromechanical telephone exchange switch, from the days when making a phone connection was essentially connecting twisted pairs of wires from caller to receiver.
They have two dial phones and as you dial, you can watch the switch move bi-directionally to make the connection. Fascinating to watch, at least for me. Mrs. Spokaneman lost interest very quickly.
Its also interesting to watch parents of kids under say 12, explaining how to use a rotary dial phone.
yes, and open the ear piece side of the handset and clip the resister, so the phone can’t be used as a bug
I bet every person defrauded gets a few coupons and the lawyers get millions.
You would win that bet.
I just received notice that I get $35.00 in a class action settlement because the lawnmower mfgr overstated the horsepower rating of a lawnmower I bought 15 years ago. Who thinks this crap up, and more importantly what judge would certify it as a class action? The mower worked just fine for 15 years. Bet the lawyers made a bundle.
Who thinks this crap up
Lah-yahs
Like bankers - the necessary-but-way-bigger-than-should be overhead facet of society.
Hey, I’m all for those class action lawsuits. Deception is all-pervasive in advertising and companies almost never get called on it. But if there’s even a slight chance of facing a lawsuit, it might prod them in the direction of greater honest.
What do you think has a greater chance of curbing Wall Street predatory behavior: the asleep-at-the-switch SEC and regulators who are in bed with the banksters, or lawsuits?
yeah,years ago I got a check, in a class action suit against Remington. The Remington 870 ( 12 gauge shotgun). I threw the check away. The 870 is one of the best made things I own. Morally, I could not accept the money. When I bought the 870, it was one of the best deals I ever made.
Love my 870 also!
Yes, when he’s old enough (he’s only 9) I look forward to giving the 870 to my son. Seems the only proper thing to do.
My dad passes down a 16gauge to my brother. Brother used it until it literally fell apart. I remember using it. It was a real POS, smoke came out of strange places when fired.
Crisis Panel to Probe Window-Dressing at Banks ~ NYT
It’s an open secret on Wall Street that many big banks routinely — and legally — fudge their quarterly books.
But now Washington is taking a hard look at a range of maneuvers that help banks dress up their financial statements, and raising some uncomfortable questions about banks’ bookkeeping.
The techniques in question, which are normally relegated to the shadows of finance, are expected to be thrust into a public spotlight on Wednesday by the federal committee that is investigating the causes of the financial crisis. The Financial Crisis Inquiry Commission is expected to focus most sharply on the way banks slim down their balance sheets before reporting their results and on loans they receive from entities like special-purpose vehicles and hedge funds, which are allowed to operate with little public disclosure.
But I thought these accounting tricks were the entire basis of the Recovery(TM)?
I’ll mention again that I think that this sort of chicanery is incentivized by the fact that stock prices are too high and based on future appreciation, rather than dividends received. Companies engage in earnings “smoothing” because of the perception on Wall Street that retained earnings will be used on something useful, and used by the company that will enhance productivity or growth and therefore to a greater net worth. But while you can play accounting games for a good, long time before getting caught, you can’t really fake dividends. Those checks get cashed.
The first Good Accounting Practice that needs to go is that “deferred interest” nonsense that allowed banks to book fully amort payments when they were really only receiving the minimum neg-am nut.
That would require a complete elimination of accrual accounting. Or a special rule saying that accrual accounting doesn’t apply to those mortgages - which would pretty much eliminate them as a product. Hmm…this gets more and more interesting as I type.
The title should be “Washington is PRETENDING to take a hard look at window-dressing at banks.” Both parties are wholly owned subsidiaries of our too-big-to-fail banks and their Wall Street cronies.
Right Sammy its more like pretending . I guess they think their
Kangaroo Courts are convincing . The Politicians have more than enough evidence that the financial systems were corrupt and rigged .
They keep talking about Banks paying off Tarp while they ignore their knowledge that these entities were given trillions in short term loans they haven’t paid back . AIG hasn’t paid anything back (most likely never will ).
Pulte pares 1Q loss and now expects profit in 2010
Pulte posts narrower loss on fewer charges, expects to report a profit in 2010 May 5, 2010
NEW YORK (AP) — PulteGroup Inc., the largest U.S. homebuilder, says it slashed its loss in the first quarter as it took fewer charges for inventory impairments.
Pulte cut its loss to $12.5 million, or 3 cents per share, from $514.8 million, or $2.02 per share, a year earlier. Revenue rose 75 percent, to $1.02 billion from $583.9 million. The latest quarter includes results from Centex Corp., which was acquired last fall.
Analysts expected a loss of 22 cents per share and $1.18 billion in revenue.
The Bloomfield Hills, Mich., company says home sales rose 77 percent from a year ago. Pulte says the value of its backlog doubled and it now expects to turn a profit in 2010.
Homebuilders have reported strong improvements in the first quarter due to federal tax credits for home buyers, low mortgage rates, and lower home prices.
Again I ask, with U6 at 17%, and the avg person who is still employed but with frozen wages, who ARE these people who can buy homes?
http://usawatchdog.com/bernanke-admits-printing-1-3-trillion-out-of-thin-air/
Now that the banksters have unloaded $1.3 trillion in bad subprime mortgages onto the Fed (and from there unto taxpayers), they can free up more easy credit for people who aren’t seriously concerned by the prospect of walking away if they get underwater.
The only reason Bernanke is admitting it is because of the proposals to audit the Fed . I don’t think he is going to want to disclose who got the money however because that would puke people out .
Actually a lot of people estimate the figures to be a lot higher than 1.3 trillion . But, if the Fed has this kind of power to put
Americans in debt to this degree ,without permission from Congress ,than I would say the Fed has to much power . I think
Bernanke abused power myself ,along with his side-kick Henry Paulson . Making loans to insolvent entities ,is no different than
just giving them money . It would be like given a big loan to a
sub-prime borrower knowing they can’t pay . The bail out clean up crew did everything that would increase the costs to the taxpayers . And than when you see this entities flaunting their bonuses when they should of been BK it gets really insane and unjust . I call Bernanke a traitor and Hank Paulson was just trying to protect himself and his friends .
Yesterday drove by a new billboard sign by a local realty company. It has just 5 words in capitals:
{Name of realty company} BUY REAL ESTATE NOW!
Also, in my town a house went up for sale that had been sold 2 years ago. Checked the records and it sold for $250K. Foreclosure proceedings were started at the beginning of the year when the owner got a small second mortgage from a local bank. Current asking price is $259K.
Realtors are always pimping thier product.Do not listen to a word they say unless you would like to be broke and on the street.
Buy, Buy, BUY!!!
Housing only goes up! (or, stays nearly flat at an artificially sustained price while salaries crash - whatever!0
Now is always the best time to buy. The NAR says so. And Suzanne’s research validates it. Remember, they value you as a client.
Sammy-
The uhs value you so much, they take classes to learn how to “mirror” you. They also offer a class for overcoming objections using active role playing. Being a good actor is part of the business model.
Three dead in Greece.
I just don’t see government workers in the US hurling Molitov cocktails. Maybe in a few years, when they have given up all hope of owning a McMansion where they can store their Hummer and Coach purses.
http://www.google.com/hostednews/ap/article/ALeqM5iXUJvBknZVGqsBenIusBgBvWj5WQD9FGM6000
Riots over austerity measures have been forecast by HBBers for years. The question will be: When will this come to the U.S.?
We have tens of trillions of dollars of debt to pay for, including social security and medicare. There is no way we can pay for it the next thirty years.
I can imagine some people preparing their parachutes by getting rid of a lot of material possessions and doing the Aladinsane thing - overseas wealth in gold, and just hopping over to New Zealand when severe austerity measures come to the U.S.
For people who are considering fleeing the ship, better not burden yourself with real estate. Homeowners/landowners are the low hanging fruit to be plucked for paying the debt - debt slaves.
“Homeowners/landowners are the low hanging fruit…”
You ain’t just whistling Dixie. Kinds lifts the shroud off that “ownership society” bull, eh?
Police and firefighters who face constant budget cuts and erosion of their benefits are going to be highly motivated to help out those stingy ingrate taxpayers.
Wait until unemployment benefits run out and they can’t feed their family. Wait for the VAT tax and inflation.
Unemployment and rapid inflation/taxation on a collapsing middle class will indeed bring people to the streets, even in the US.
True story: A coworker’s ex-boyfriend just got pinched for robbing five banks in our northwestern suburbs. She said that according to the guy’s sister, he had just lost his job and has two little kids. No kidding, she just told me this twenty minutes ago! There’s a pic of the guy during one of the hold ups all over the local news outlets. No, he didn’t use a ski mask.
And that terrorist - Faisal Shazad or whatever, got his house foreclosed and lost his house, went over to Pakistan for a few months, got an apartment, and then tried to blow up Times Square…
Son of a former Pakistani Air Force pilot, well-to-do family, both him and his wife college degreed.
Very chilling that people who one day have a lot going for them end up in heavy debt and then take it out on society for their stupid choices.
Son of a former Pakistani Air Force pilot, well-to-do family, both him and his wife college degreed.
Very chilling that people who one day have a lot going for them end up in heavy debt and then take it out on society for their stupid choices.
One of these things is not like the other 5 million people also getting their houses foreclosed on.
How many millions of people who make irresponsible choices like buying a house they can’t afford, are going to actually accept responsibility for their mistakes and clean up their act? They’ll find it easier to blame the banks, the government, etc. - not that they’re blameless, but the FBs who signed the mortgages bear ultimate responsibility. Very few are “victims.”
“Very chilling that people who one day have a lot going for them end up in heavy debt and then take it out on society for their stupid choices.”
Very chilling indeed. I see so many around me drowning in debt, family included. I began a program about a year ago where I slowly drop hints that I too am broke and have a lot of debt….Don’t want to be the first one shot or the first stop for a “temporary” loan
Many people will resort to desperate measures to feed their families, etc. I can’t imagine what it must feel like to have young children, and zero income or money.
What I can’t imagine is having to face my young kids through a prison Plexiglas and explain how I screwed them over by committing a crime that got me incarcerated and ruins my future employment prospects. That’s a piss-poor excuse for a father.
Don’t get me wrong- I don’t even remotely condone robbery.
Greek 2-year bonds pushing 15% again.
I’m sure all the unexpected expense of the ramped-up police force doesn’t help.
What was the joke yesterday?
Illegals not only do the work Americans don’t want, but the protesting and rioting as well.
During the LA riots a third of the looters they arrested were illegals.
Those were anarchists throwing the molotov cocktails, not government workers. They will riot and destroy things on any pretext.
Rich Getting Richer?
“The sales increases included BMW-branded cars, motorcycles, the Mini and the ultra luxury Rolls-Royce, which had its best first-quarter results ever as sales rose more than 60 percent with 279 cars sold, including 158 new Rolls-Royce Ghosts.”
http://finance.yahoo.com/news/BMW-posts-4241-million-Q1-net-apf-3525142752.html?x=0&sec=topStories&pos=3&asset=345eda24860b6d13229703be7cc25cbf&ccode=rd
Bailout-fueled bonus money has to go somewhere, doesn’t it?
These sales certainly aren’t driven by job gains. Must be by obscene bonuses to bankers who haven’t managed to crater their companies (and what’s left of the fragile economy) yet.
Yet.
Well that’s to expected when you have socialism for the rich and no holds barred capitalism for the rest of us.
“We” got what “we” voted for. Plain and simple. You don’t like it? Quit voting for Republicrat fraudsters.
Posted this really late yeserday: Ben, what do you think - this is your area?
“The foreclosure crisis catches up with a wealthy, exclusive community in Arizona that once considered itself immune.”
http://realestate.msn.com/article.aspx?cp-documentid=23875607&Gt1=35006
The wave of the option Arm continues. Forclosures are way up in the beach areas out here. Still nothing hitting the market yet.
Wait till winter.
“The wave of the option Arm continues. Forclosures are way up in the beach areas out here. Still nothing hitting the market yet.”
Even the USDA AAA Prime FB meat is contaminated.
“Wait till winter.”
The wave of the option Arm continues.
Yes. As a side note - mortgage rates are still incredibly low, part and parcel with treasury rates, which are down yet more today. This is despite the supposed end of the Fed’s purchase of these securities.
IMO there’s a very concerted effort to keep rates very low until after the final ARM reset wave is done, in mid/late 2012.
“IMO there’s a very concerted effort to keep rates very low until after the final ARM reset wave is done, in mid/late 2012.”
I thought most of those ARMs would reset annually after the initial period, not just once. In other words, the “reset wave” is not really ever “done”, just pushed into the future. They only way we ever really get “done” with them is if they get re-fi’ed to a fixed.
Higher rates eventually will still lead to significant pain, and the pain is being extended down the road.
There are many variants of ARMs. I don’t know the details, though I think many only reset once or twice.
A couple of years ago I also thought the wave would just continue moving out - however from observing the changes to the wave chart over the past couple of years (e.g. the one put out occasionally by T2 partners), it appears that even though it is moving some, it’s mostly static. Option ARMs for instance only reset once, after 5 or 10 years.
However a lot of the option ARMs reset prematurely, which can happen if a house goes too far underwater.
Personally I don’t think the ARM resets will have that huge of an impact on foreclosures - partly since I think the wave isn’t as big as most people think (many of those resets will never happen due to foreclosures that are already in process, or people that have refi-ed out of the ARM), and because interest rates are going to remain low for a long time still - yeah they’ll reset to a higher-than-before rate, but not as high as it might have otherwise been in a normal economy.
Tax receipts are coming in higher than expected?
The government claims its cutting back on its public auctions due to higher than expected tax receipts. Green shoots everywhere!
Drowning in home debt
(Money Magazine) — A transfer in 2005 landed Air Force major Richard Hallbeck, his wife, and two kids in Southern California smack in the middle of the real estate bubble. Home prices in the area had doubled in the past five years and were still climbing. So the Hallbecks swallowed hard and bought an $845,000 four-bedroom in a suburb of Long Beach.
The $3,800 monthly payment was high but affordable on two incomes. (Laurie, now 37, worked as a claims adjuster.) And they figured the market was so strong that when they had to move again, they’d at least break even. “Our house actually appraised over what we paid for it,” Richard, 42, recalls wistfully.
Since then, area sale prices have fallen 26% — when properties sell at all. Meanwhile, the recession cost Laurie her job, and the payment on the couple’s adjustable-rate mortgage will jump $800 in July. Next year Richard will face mandatory retirement from the Air Force, and his pension will be a third of his current $117,000 income.
http://money.cnn.com/2010/05/05/pf/home_debt.moneymag/index.htm
- swallowed hard and bought an $845,000
- The $3,800 monthly payment
- appraised over what we paid for it
- Richard, 42…Next year Richard will face mandatory retirement
- third of his current $117,000 income
this country if FUBARed.
IS not if.
IIRC if you don’t make one star by 40 years any of the services will retire you.
How is he just a major at age 42?
How do majors pull in $117K a year?
Base pay is almost 7k/per month. Plus housing allowance/separate rations, adds up quickly.
Old Army brat here. Dad would not considered buying during his first 20 years and his MOS didn’t move much.
Could have been prior enlisted. Started out as a lowly E-1, got a college degree after a while and went to Officer Training School or ROTC while in College. Then you make the jump to officerland as a freshly minted 2nd Lt.
Usually you need to be passed up for promotion twice before being retired (mandatory retirement).
Perhaps too much stress related to their family’s housing and budget predicament to focus on his job…
“…adjustable-rate mortgage…”
Gotcha!
I doubt they are making 300K a year, which is about what it takes to afford that much house. That’s really the problem here; not so much his retirement looming, the likely never could afford this house to begin with.
Next year Richard will face mandatory retirement from the Air Force, and his pension will be a third of his current $117,000 income.
Either he gets a lot of extra money for living in a high cost of living area, or this number comes from one of those goofy things the military gives out that shows the “true value” of your pay and all your benefits. When I was a SGT making 1k/mo, they always told me I was really making something like 40k a year. I’m sure my barracks room had a high “street value”, but still… :-).
My area is full of military folks that get transferred in for a year or two, who buy houses. It’s funny seeing all the $400K+ places listed (often for rent) as officer houses on craigslist.
“Nationwide, about one in four home mortgages are now underwater, meaning borrowers owe more than their places are worth. No surprise, California and other bubbly states — Nevada, Arizona, and Florida — lead the nation.
While a bevy of new federal programs aim to help, underwater owners who want to move still face uncomfortable choices: Postpone the move and continue sinking money into a pit; sell for a loss, forfeiting the down payment and some savings to close the deal; desperately try to enter into a short sale; or simply walk away and face the consequences of foreclosure. If you (or your kids) are in this situation, here’s how to think about the options.
Keep on keeping on
If you don’t have to move and can afford the payments, it probably makes sense to soldier on and wait for housing prices to recover, says Denver financial planner Ross Schmidt. Moody’s Economy dot com projects that prices in 61% of metro areas will return to recent peak levels by 2015.”
Well if Zandi and company say prices will return to peak levels by 2015, then it must be so. It is different here in the good ole U.S.A. than in Japan, where their epic early 1990s real estate bust led to a period of two straight decades of price declines with no real estate recovery yet in site as of 2010. That cannot happen here, because our government will not allow it. Period.
You missed the fine print at the bottom - where they also predict a nuclear war that will wipe out 39% of of metro areas.
Cry me a river, Dick.
That’s Major Dick to you.
LOL!
Apparently, bailouts are not as politically popular in Greece as they are in the U.S.
Three Dead in Fire As Strikes Grip Athens
Greece was paralyzed by a nationwide strike, with at least three people dead after sporadic incidents of violence broke out, in what is seen as a key test of the government’s ability to shepherd through tough austerity measures.
Greece does not have the money to bail itself out. They have agreed with the EU to impose severe austerity measures in turn for being bailed out by Europe.
Ironically Greece may be the first nation to recover from debt and become one of the most capitalist nations if the tax hikes are removed after 2012. The citizens are protesting now, but will turn to bargaining, and eventually acceptance of change.
The Greeks always had some light-footed champion:
http://www.youtube.com/watch?v=oyuefjAuqOw
..Greece does not have the money to bail itself out…
Greek debt is limited by the rules of the European monetary union. Greece can’t print new money.
anyway, it just occurred to me how similar those mandated debt limitations are to being on the gold standard when the economy goes south..
We (USA) for instance, needed (i think) 10 cents worth of gold to print one new dollar, and eventually maxed out. The result was a serious decline.
——-
Just as countries who were among the first to drop the gold standard were the first to recover from the Great Depression, the first euro-nations to get out of the EU might be the first to recover.
Following that line of thought, if Greece does withdraw from the EU, and assuming the rest of the EU countries eventually fall into depression, Greece could be first to recover.
..and there might be investment opportunities in there someplace..
Greece is the RECIPIENT of the EU bailout. Which keeps multiplying every week. Greek citizens are enraged at their corrupt politicians who got them into this mess, while ignoring their own part in condoning and participating in corruption and voting in the con men who got them into this mess. But most of the actual violence is the work of a few hundred anarchist thugs.
Out of a nation of 11 million people only about 27,000 managed to go out into the streets to show their “outrage.” Most of those were from the Communist public labor unions (is there any other kind?).
* MARKETS
* MAY 5, 2010
Bailout Fails to Calm Europe
By TOM LAURICELLA And NEIL SHAH
International stock and bond markets sank Tuesday, dashing hopes that a weekend deal to bail out Greece would calm investors and stop the government-debt crisis from spreading.
…
“It’s Kabuki theater,” said John Brynjolfsson, chief investment officer at hedge-fund manager Armored Wolf. “They describe this bailout as a done deal, but it’s not a done deal.”
That was highlighted by officials in Germany and Slovakia, who continued to cast doubt on whether Greece would be able to live up to its commitment to implement austerity measures to rein in its deficit—steps that are required for the European Union to hand over the bailout money.
In Slovakia, a new entrant to the euro zone, Prime Minister Robert Fico said he doubted whether Greece would be able to go through with the austerity measures outlined.
“Personally, I don’t believe that the Greek parliament will be able to approve the restrictions,” Mr. Fico said.
…
Ignore pessimists who are trying to use these silly jobs numbers to cast aspersions on the burgeoning U.S. economic recovery.
* TODAY’S MARKETS
* MAY 5, 2010, 9:23 A.M. ET
Stock Futures Stay Weak After ADP
By KRISTINA PETERSON
NEW YORK—U.S. stock futures slipped after a possible downgrade to Portugal’s debt overshadowed a report showing a slight increase in U.S. private-sector employment.
[pan0505] Bloomberg News
Traders work on the floor of the New York Stock Exchange in New York yesterday, as U.S. equities tumbled the most since February and European stocks erased their 2010 gain.
Following the report from payroll giant Automatic Data Processing, Dow Jones Industrial Average futures fell 45 points, while Standard & Poor’s 500 index futures shed five points and Nasdaq Composite futures declined eight points. Prior to the data, Dow futures had been down 33 points, while S&P futures had slipped four points and Nasdaq futures declined six points.
Changes in futures don’t always accurately predict early market moves after the opening bell.
Futures slipped after credit rating agency Moody’s put Portugal’s credit rating on review for a possible downgrade, citing the “recent deterioration of Portugal’s public finances as well as the economy’s long-term growth challenges.”
That overshadowed the report from ADP, which said private-sector employers added 32,000 jobs in April, more than the 20,000 expected by economists surveyed by Dow Jones Newswires. On Friday, the government will release its key monthly jobs report for April. Economists expect the unemployment rate to stick at 9.7%, where it was in March.
On Tuesday, the U.S. stock market sank broadly in its biggest one-day drop since Feb. 4 as investors worried over whether Greece’s debt crisis could spread to other European countries.
…
32,000 more jobs.
whoopee
They only need to add 450,000 EACH MONTH to get back to where we were BEFORE the recession and keep pace from there after.
I’ve seen a huge proliferation of sign-wavers outside just about every retail place in town. I wonder how many of these new “jobs” were similar positions?
Take a wild guess.
Ignore the gloomsters, and buy the dip. I expect the DJIA to be back above 11K by day’s end today. With a strengthening economic recovery underway, all bad economic news should be interpreted as a buy signal.
Indications
May 5, 2010, 8:55 a.m. EDT
U.S. stock futures turn lower following Tuesday’s battering
U.S. stocks fall sharply in sympathy with Europe
By Steve Goldstein & Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stock futures turned lower Wednesday after the previous session’s battering on further worries over the health of the euro zone, with Moody’s Investor Service warning Portugal could be downgraded again.
Marginally higher early in the morning, futures for the major indexes slid as the early hours progressed, falling further after the ADP report found private U.S. employers added 32,000 jobs in April.
“As has been seen from the initial claims data, net firings have ended but the pace of hiring, while improved, still remains muted. Friday’s government payroll report will include public sector census workers and the estimated total job gain is 189,000, 100,000 of which is expected to be private sector jobs,” wrote Peter Boockvar, equity strategist at Miller Tabak.
S&P 500 futures fell 5.3 points to 1,167.1 and Nasdaq 100 futures fell 9.5 points to 1,960. Futures on the Dow Jones Industrial Average fell 50 points to 10,842.
…
More flight to safety? I think treasuries went up in price! Guess mortgage rates will go down again as well. I expect the money to flow into stocks as well.
I suspect people are getting out of the Euro.
Also read the USA is footing the lion’s share of bailout money for greece through the IMF.
George Soros is rumored to have shorted the Euro. It wouldn’t surprise me if the rating agencies are in his pocket and will arbitrarily downgrade the PIIGS to hasten the Eurozones financial meltdown.
Greece update: We receive 5 Athens channels here in Cyprus and the broadcasts consist of nothing but wall to wall riot coverage. 3 dead so far, protesters attacking motorcycle police, buildings burning and tear gas fills the air. The anchors and reporters on the ground sound very nervous and shaken. My Greek is not too great but some of the words like “cataclysmo” don’t need much of a translation. All that and the euro has dipped to $1.28. Portugal is next.
Last week when we flew to Crete my wife and I had to be escorted through a protest at the Hiraklion airport. Wither Greece.
IIRC the euro was at $1.50+ a few months back.
“Wither” Greece…. best Freudian slip of the week.
“The anchors and reporters on the ground sound very nervous and shaken.”
Keep an eye peeled for Goldman; rumors suggest high probability of a disguise that resembles a goose.
“Portugal is next.” Yikes!
Yikes! (Hwy leaves to survey his port inventory…)
Should get cheaper. I’m looking forward to better prices on all my European vices.
‘Summer’s here and the time is right for affordable pastis, yeah’
“Portugal is next.”
Then Spain
Then Ireland
Then Italy
Then the UK
I wonder which step in this progression will the the one that unhinges the stock market beyond anything the PPT can muster?
I’d be more worried about WW3 if this happens.
Me too. The last time Europe went through vicious austerity plans to please “the markets” and service unpayable debts we ended up with some nasty pieces of work - Hitler and Mussolini.
The UK is having elections tomorrow. It will be interesting to see who wins, not that it changes anything.
Someone around here mentioned a few months back about seeing lots of idle railcars sitting on sidings in places like Idaho.
It turns out that railroad companies have to pay leases just to store these idle cars.
The stalled economy offered Boise one silver lining: $915,349 in lease payments from Union Pacific for storing its idle cars on the city’s idle railroad track….
The idea came from a brainstorming session on what to do with the 18.2 miles of city-owned tracks. It was one of the first things John Brunelle did when he joined Mayor Dave Bieter’s economic development team in 2008 - a time when rail use was plummeting along with the economy.
He asked Union Pacific if the company needed to store rail cars - and it turned out the economy had sidelined many of its rail cars and the company didn’t have a place to put them.
linky http://www.idahostatesman.com/2010/05/05/1178812/idle-rail-cars-generate-cash-for.html
That would be me. I noticed the rail cars while driving through Idaho heading to Canada last year.
Maybe they can house the city’s homeless in the railroad cars as part of the deal.
Don’t worry about what is happening in Europe. Any risk of contagious panic spreading across the pond is fully contained.
Euro Continues to Slip Along With Stock Indexes
By DAVID JOLLY and JUDY DEMPSEY
Published: May 5, 2010
The euro fell again Wednesday along with indexes in Europe and Asia as German policymakers pushed Parliament for quick passage of the Greek bailout, warning that failure to do so could set off a “chain reaction” of debt crises around the Continent.
And indexes on Wall Street were also poised to open lower, after falling 2 to 3 percent on Tuesday.
The sense of spreading gloom was compounded by news that Moody’s Investors Service had put Portugal on review for another possible credit downgrade. While Moody’s expressed some confidence in the country, noting that “the government’s debt is neither unsustainable nor unbearable,” it said the review reflected “the recent deterioration of Portugal’s public finances as well as the economy’s long-term growth challenges.”
The concerns were reflected in the market even before the announcement: Portugal sold 500 million euros, or about $650 million, of six-month treasury bonds at an interest rate of 2.955 percent Wednesday, about four times the 0.739 percent it paid in March for a similar offering.
The European Union itself warned of “high uncertainty” surrounding the region’s economic recovery, even as it revised its growth forecast for this year upward, to 1 percent from 0.75 percent for the entire 27-nation bloc.
For the 16 countries using the euro, the European Commission predicted economic growth would be 0.9 percent this year, up from the 0.7 percent it forecast in February, mainly because of improvements in exports.
“We must now ensure that growth will not be derailed by risks related to financial stability,” the union’s Economic and Monetary Affairs Commissioner Olli Rehn said in a statement.
Despite the rescue package of 110 billion euros or $144 billion that the European Union and International Monetary Fund offered Greece on Sunday, there are concerns that the crisis could turn into a full-blown European banking disaster that could choke off credit to businesses and consumers at a time when the Continent’s economy remained fragile. Foremost among the worries is the possibility that Spain, a country with an economy that dwarfs Greece’s, might also come under pressure.
Defending her decision to support the bailout before the German Bundestag, Chancellor Angela Merkel said the rescue plan was “about nothing less than the future of Europe and the future of Germany in Europe.”
…
Bust the trusts, and restore competition to the U.S. banking sector. Banks have too much market power, and the financial sector has become a cancer within the bowels of the U.S. economy. We need to cure the cancer before it finishes killing our national competitiveness.
Investment Banking
Bill Drops Fund to Shut Failed Banks
May 5, 2010, 2:23 am
Leaders of the Senate Banking Committee said Tuesday that they had reached an agreement to limit the likelihood that big banks would be bailed out by taxpayers. But liberal Democrats said they also would push aggressively for an array of proposals that could force some of the nation’s biggest banks to reduce their size.
The tentative agreement to limit the chances of future bailouts came as the Senate delayed for another day its initial votes on amendments to legislation to address the causes of the 2008 financial crisis, Edward Wyatt and David M. Herszenhorn report in The New York Times.
Aides to the committee chairman, Christopher J. Dodd, Democrat of Connecticut, and the panel’s senior Republican, Richard C. Shelby of Alabama, said the two senators had agreed to scuttle a $50 billion fund proposed by Democrats.
The fund, which was opposed by the Obama administration, drew criticism from Republicans who had warned that it would promote rather than prevent taxpayer bailouts of failed financial companies.
Under the deal, the Federal Deposit Insurance Corporation would finance the liquidation of failed financial companies, using a new credit line with the Treasury Department backed by the failed company’s assets. The money would be recouped later through the sale of assets, with shareholders and creditors forced to take losses.
Mr. Dodd said he was confident that some important disagreements had been resolved, and would perhaps put to rest any further debate on how to prevent companies from being branded too big to fail.
“I’m satisfied, as I believe my colleague from Alabama is, that we’ve reached an agreement on the too-big-to-fail provisions,” Mr. Dodd said on the floor.
…
We live in a service economy. Finance is a very large part of that service economy — at one point 40 pct of S&P earnings.
Politicians have a huge dilemma: protect finance and keep jobs and the appearance of a growing economy or shrink big finance further and lose jobs and watch further economic contraction.
All we need is more payday advance stores so the rich can get richer.
“Politicians have a huge dilemma: protect finance and keep jobs and the appearance of a growing economy or shrink big finance further and lose jobs and watch further economic contraction.”
They need to both break up large financial institutions and the financial services sector as a whole also needs to shrink. The economy might be better off with a much smaller financial services sector that facilitates the functioning of the economy rather than leeches off it.
Smaller, more competitive lenders might be less prone to casting money into the sea, especially if the GSEs’ and Megabank, Inc’s subprime mortgage lending sump pumps were permanently moth balled.
Some dilemma. They will do what their corporate masters tell them too. If that means mass layoffs and future hyperinflation from printing-press dollars, so be it.
The FIRE sector has created MAD, Mutual Assured Destruction.
There will be only one ending to their power. The usual historical one.
http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html
Chris Dodd, the number one recipient of campaign funds from Freddie Mac and Fannie May in the lead-up to the housing bubble burst, is the absolute last person (other than Barney Frank) who should be heading up banking “reform.” What a farce. This will only strengthen the Fed and streamline the mechanisms for passing private (bankster) debts onto the taxpayers.
No, keep the FDIC out of it ,unless its a regulated bank . Come on ,a credit line with the Treasury Department to help them go BK . We all know what those credit lines with the Treasury are all about . What about Companies that are so insolvent that in spite of assets they still own billions . You know they keep coming up with these bogus proposals that are nothing more than the taxpayers paying for the sins of corrupt Corporations in another form . They just want to institutional bail outs . If they are to big to fail ,than they need to be broken up . The real truth is that the games they play are to big to fail and to risky and leveraged to fail .
Have you noticed that the TBTF don’t want their casino games taken away from them, or their stupid ability to leverage in the unregulated
markets and do their Global money schemes . I don’t find it very convincing that they demand their right to play the high risk unregulated markets like the Brits do . So,what ,let them do the high risk stuff ,we don’t need that shit . Just because a couple of mad hatter conn artist came up with some new casino games with exotic instruments that make them undeserved high profits ,in part because the risks are off the charts, doesn’t mean we need to give them the right to continue on with these TBTF games .
Lets start thinking in terms of TBTF games (rather than institutions )which is really the essence of why the problem became so costly .
So lets say we limit how much each institution can be in net gaming worth ,but still all the institutions play the high leverage games at the same time . Breaking them up will not be effective because the games could BK all the smaller institutions at the same time . Its the games they are playing that is the problem . Come on you guys ,we don’t owe these culprits anything . Go back to the more conventional games of the past and lending standards and that is the solution . Sure Wall Street Bankers will make millions instead of billions like they did in the past ,but who cares .They blew it ,and they will blow it again if allowed .
Its just like the new-fangled lending didn’t work ,neither does their ‘high leverage Casino games work.Put these retard crook conn artist financial innovators that don’t care what damage they do in their place . They have no social value because its all about making money by fleecing or ripping off or leveraging ,playing a high stakes games where if they lose its ,oh well it wasn’t my money ,bail me out .They are also all about creating fake wealth in a Ponzi-scheme way .
Common crooks on the street have been doing their book since the dawn of man and we are going to institutional this stuff ,no way .
If you were ever going to listen to the old Housing Wizard ,listen to me now .
Life in the Corporate States of America:
Our local electric company, ComEd, has made our beleagured state legislature a proposal: Freeze electric rates above market value for five years - guaranteeing ComEd profits - and ComEd will pay the beseiged and bankrupt state $500 M at this critical time.
A corporation knows the state is on the ropes. They have a captive customer base. If this passes this is backdoor taxation and taxation without representation.
Expect more tricks like this around the country as the search for cash goes on. No matter how you slice it, the case for houseownership is weakening fast. Once precedents are set they are hard to undo - especially with the corporations and gov’t in cahoots. Prices aside, the carrying costs of ownership are poised to soar. Mobility might just be one’s best tactic to cope.
Look on the bright side, our forebears had to brave the frontier and pray crops didn’t fail, or they had to cross oceans and leave family forever. All we might have to do…is rent.
Do you have a link? There are a few folks to whom I’d sure like to send this info.
Link forthcoming. It might take a while. It’s on Crain’s website.
Here ya go:
http://www.chicagobusiness.com/cgi-bin/news.pl?id=38097
Thanks. That is unbelievable. Bribery is alive and well in America after all.
Los Angeles City just had the DWP withhold a transfer payment of $73M because the first round of utilitity increases failed to pass the city council vote. On the second try it passed, and the DWP transered the $73M to the city coffer. The DWP was whining the increase was necessary. I see that as a tax increase, not a utilility increase.
“utility”—opps!
It’s what I’ve been trying to tell you Kim.
The other thing I’ve been trying to tell you is this is not an isolated incident.
All of this will get added to an already nasty tax burden. IIRC, residents of the City of Chicago face one of, if not the highest tax burdens anywhere in the country once federal, IL and City (property and sales) are added up. The burbs have it a little better, but not by much, and perhaps not at all in high spending school districts like New Trier and Lake Forest.
Finally, the “TrueAnger™” Greeks at least have the right “Target” in sight…
They’ve gone from “move-your-money” …to …”take the money”
By DAN BILEFSKY and JUDY DEMPSEY
Published: May 5, 2010 NYT
ATHENS — Demonstrations against tough new austerity measures in Greece turned deadly on Wednesday, as three people were reported to have died inside a bank building set ablaze by protesters. The reports of deaths came as workers across Greece went on strike over deep spending cuts and new taxes aimed at staving off economic collapse.
Default begins to look good compared with public service collapses and tax increases.
As it will for most U.S. states and cities. Got Munis? I don’t.
They are running at an 8.5% deficit already. Even if they default completely on the debt (presumably preventing them from borrowing more at least for a while) they will have to increase revenue and cut services just to live on what they have available.
Not that it won’t happen, but it isn’t going to make everything better.
Firebombing a bank and killing three employees is your idea of “the right target”? Maybe Greeks need to look in the mirror and level with themselves about how they got into this mess.
The fish may rot from the head first, but Greek voters, like their American counterparts, have been aiding and abetting the political sleaze and corruption that got them into this mess.
I have to say your right Sammy IMHO .
Imagine waking up one morning and the government tells you there is no money left in your retirement account, you have to take a 20 pct pay cut, your taxes are going up, and you can’t retire at the age you were once promised. That’s Greece — the result of bad money policies. Could it happen here in America?
May 5 (Bloomberg) — Greek demonstrations against government austerity measures turned deadly when three people were killed after protesters set fire to a bank in central Athens.
It will happen in America. State unfunded pension obligations are $3 trillion. Fed unfunded obligations are $30-50trillion. That means the amount you would have to collect from every household in America today to get these plans fully funded amounts to $300K to $500K per household. How many households in America could afford their share of the bill? The bottom line is the same decisions will have to be made here.
And you know who’s to blame for this? The American people. They voted in these corporate-owned swindlers who promised something for nothing. When the reckoning day comes due Americans have only themselves to blame.
“A society cannot be both ignorant and free.” - Thomas Jefferson (paraphrasing).
The only difference is, does it happen all at once like over there, or a little at a time, like over here?
Come on people, the trajectory of our standard of living should be obvious by now! Plan, prepare, and act in the best interest of you and yours.
What if we used Big Finance to colonize financial markets around the globe (where they make stuff or take things out of the ground used to make stuff) and recycled the earnings here to the US, then used the earning to buy the products they produced abroad, would that lessen the blow? Could this be part of an individual’s plan?
Depends on the individual. It’s working swimmingly for some.
Good advice edgewaterjohn… if you still have money and a decent paying job.
For millions here, it’s already too late.
Not will it happen, but when will it happen.
It’s already happened. For millions. Just not to everyone… yet.
Already. Happened.
Right ,I got cut on a pension ,and some of my friends did to .
In the private sector its a lot easier for them to cut you than
in the government sector I think . I got some other funds that were due to me that I’m looking at court documents right now
that I’m going to get screwed out of no doubt on a BK of a Company ,especially because of the sneaky way they set up these situations to have a bunch of loopholes .
But I’m not bitching because some people are worse off than me .
My nephew keeps calling me because he can’t even find a job ,and he has two kids to support ,and he didn’t even buy a house during the boom .
A lot of people have had losses and they wonder why the American people are discontent with the Bail Outs to the Fat Cats .
I don’t know why the Fed Chairman thinks that wasting a lot of money putting money into that rat whole of the corruption industries was the answer . If you look at Great Depression number I ,what brought us out of it was job creation . You don’t have to create jobs by destructive things like War ,you can do it by constructive things . I would rather go into debt by this sort of enterprise ,rather than the path the Powers have
chosen . It would also help bringing our manufacturing back as well as our outsourced jobs . You can’t have a jobless recovery
IMHO .
All the wasted money going into these stupid attempts to prop
up the crashing RE market when you have so many foreclosures
is stupid . And all this price fixing that keeps prices up in certain industries is another result of the Monopoly effect .
That situation today where those people died in Greece as a
result of the riots is very tragic . I don’t like these non-peaceful forms of protest . I see the potential for things really heating up ,if people start hurting enough they feel that they have nothing to lose ,and than you have fake protesters that just try to hijack something like that . Martin L. King and Gandhi were highly effective in the peaceful way they would protest . Not doing business with businesses that you believe are corrupt are another form of protest or boycotting ,voting is another form of speaking your opinion .
I think it’s going to happen. It will occur state-by-state. California will probably be the first of the states. Riots and stuff. Decades of debt. But I don’t think we’ll see riots this year. Maybe in 2012 after the banner year of resets.
Bond ratings will fall and interest rates will rise. There are pockets of the USA where the majority of people have lived within their means. Even some rural places in California.
The national guard is going to be very active. And maybe even armed services will have to be called back home from distant police activity to protect US citizens from each other. I’ll be back in Arizona when the going gets tough.
Some states appear to have lived within their means, have low debt per capita and good bond ratings, but have huge unfunded obligations. I live in one of those states, Minnesota. The market will eventually catch on. Unfunded obligations are a form of off-balance sheet financing, ala Enron or “repo 105″ at Lehman. By not funding the pension plan the state is really borrowing from those pensioners. Unlike most issuers of securities, states have really no disclosure requirements, are exempt from SEC rules for issuers of securities, and are not required to follow GAAP accounting. Municipal finance is a sham. Here is a link so you can check your state, http://www.forbes.com/2010/01/20/global-debt-bomb-business-wall-street-debt-10_land.html Enjoy!
Bill,
The National Guard have such restrictive rules of engagement that they won’t be much help against urban rioters. They’ll come down a lot harder on law-abiding armed civilians who are trying to protect their property - look at the lessons of Katrina.
The wealthy will ride out the storm in well-guarded enclaves and gated communities protected by private security forces. The average city dweller and their families are going to be left to the tender mercies of thugs and predators.
Yeah you may be right. I don’t know which is worse, living out in the country with too bad an aim to defend myself with a gun and potentially having some accidental health issue requiring EMTs to arrive within five minutes (but they are a one hour drive away)…or living in the scenario of an urban jungle and no cops to protect me.
Maybe there are other options than the boonies or a big city?
This is the story about a man named Jeb , poor mountainer could barely keep hs family fed, then one day while he was shootin’ fer some food…
Greenland Oil Rush Looms as Exxon Eyes Cairn’s Bet:
By Marianne Stigset Bloomberg
“After six failed attempts by explorers in Greenland over the past 30 years the rush is on as global warming eases Arctic exploration and because of dwindling resources in areas such as the North Sea. For Greenland’s 56,000 inhabitants, largely dependent on shrimp exports, petroleum may also bring wealth and allow more independence from Denmark, which has held sway over the world’s largest island since 1721.”
“Oil exploration in Greenland is very closely tied to independence, so there’s enormous local support,” said Truls Gullowsen, head of Greenpeace in Norway. “The area of the 2010 licensing round is very complicated, it’s very far up north, there’s lots of ice, lots of natural resources and very far away from any form of support should things go wrong.”
“Greenland will in August announce the winners of 14 blocks in a 150,000-square-kilometer area in Baffin Bay, more than doubling its available acreage after holding regular rounds since 2002. The areas are north of the 67th parallel, where oil has been seen seeping out of rocks along the shoreline
Cleaning up a sea otter is one thing, but cleaning up a polar bear?!
You’re gonna need a bigger scrub brush…
I wonder if there are any old video’s in Greenland’s local libraries, they town folk might want to watch: “Local Hero”
“Greenland Oil Rush Looms as Exxon Eyes Cairn’s Bet:”
Does it snow there in winter?
TPMDC
Sanders Concerned White House May Kill Fed Audit Amendment
Brian Beutler | May 4, 2010, 3:40PM
Sen. Bernie Sanders (I-VT) has rounded up an impressive, bipartisan array of cosponsors to an amendment he authored requiring an audit of the Federal Reserve. Just today, he added Sens. Jeanne Shaheen (D-NH) and Maria Cantwell (D-WA) to a list that includes 12 Republicans, seven Democrats, in addition to Sanders himself.
In the past, a different version of legislation opening up the fed to audit received 59 votes–one shy of the 60 required to break a filibuster. But eight of the Republicans who voted no are now cosponsors of Sanders’ amendment. That should mean it’s a shoo-in, right?
Not necessarily.
“Am I concerned that some of the most powerful and wealthiest people in the world are in opposition to my amendment, people who have run the United States Congress for decades?” Sanders asked reporters rhetorically before a caucus meeting today. “Do I have any worry about that? Yeah. I do.”
“Do I think we’re going to get a vote? Yes. Do I think we have a chance to get 60 votes? Yes.”
When I asked, though, whether he worried that the White House might succeed in peeling away Democratic support for his amendment–just as they did during the health care debate vis-a-vis a popular drug reimportation amendment–Sanders acknowledged it was a real possibility.
And indeed, it’s early to assume that prior support for the idea of auditing the Fed will translate into a vote for Sanders’ amendment.
“I’m looking at it,” Sen. Claire McCaskill (D-MO), who voted for a similar provision in the past, told reporters today. “But I think it may have more potential to politicize the Fed than it does opportunity to really change anything that average Americans are looking for.”
…
I’d be curious to hear from some of our Dem partisans on the board here. Why are so many key Dems opposed to a Fed audit (noting that it otherwise does have broad bipartisan support)?
If you recall -
Mel Watt’s gutting
Chris Dodd’s opposition
I’d be curious to hear from some of our Dem partisans on the board here.
I wouldn’t.
Nothing is harder to open than a closed mind.
Especially when you have no arguments.
I’d think they will harp about Phil Gramm and G-S act.
Not that a bunch of democrats were ringing the bell in oposition or anything like that.
They know who their masters are.
In their world you an intellectual snob eliete, wealthy class dealing out needed care to the poor and helpless OR your the poor and helpless in need of mother government to take care of you.
THe gentle arms of mother government are always there to take care of you.
Anyhow, those asshats want to be like Europe and all their socialist utopian visions. Never mind we spent the better part of a century outperforming their utpopian visions. Never mind history of Rome and any lesson we might learn. Certainly we are doing a good job picking up the zenophobia.
Ah well, the vision of the forefathers has been discarded and is dying in our own time.
Free healthcare and NFL tickets for all.
And a trip to Las Vegas!
Maybe free food and housing too!
We spent the better part of a century outperforming their utpopian visions because we had bombed them into the stone age.
Never mind we spent the better part of a century outperforming their utpopian visions. Never mind history of Rome and any lesson we might learn. Certainly we are doing a good job picking up the zenophobia.
Yea but it’s more complicated than that and we’re fed a lot of BS too.
Why Europe Will Win Newsweek
Forget the conventional wisdom. European firms are faster-growing, more profitable, and better at globalization than their American rivals.
It’s become a truism that America is full of “can do” people and companies, while slow-moving Europeans are more likely to offer a “yes, but” when faced with challenge. American firms set the bar for corporate excellence, or so the story goes, coming up with the hottest new products and ideas, and then doing the best job of selling them in every corner of the planet. While the U.S.-generated financial crisis has, of course, tarnished the patina of American banks, it really hasn’t dented this idea about the supremacy of the American multinational, or the American corporate model. Indeed, the worries about Europe’s ability to compete on an ever-tougher global playing field have only been heightened by the fact that, post-crisis,
Europe is still trailing the U.S. in economic growth, even as it tries to stem its own high-profile problems like the threat of sovereign default in Greece, sky-rocketing deficits, and a plunging euro.
But as is so often the case, a close look at the numbers tells a different story. Contrary to the widespread cliché of American dynamism versus European economic stagnation, over the past decade Europe’s top companies have beaten America’s (not to mention Japan’s) by an often substantial margin. Despite the rise of China and the rest, Europe has held roughly steady, at about 17 percent, its share of world exports since 2000, while America’s has fallen by more than a third, from 17 to 11 percent—a crude but significant indicator of global competitiveness.
http://www.newsweek.com/id/236598
Heh! I like it when james goes all archie bunker.
Doesn’t look like there’s any Dem partisans around, so I’ll stand in just to give you guys a target. Let’s see…where to begin…
The history of ancient Rome is one long illustration of the dangers of concentration of great wealth in the hands of the few.
The most socialist countries of Europe (Scandinavia) seem to be doing a lot better than the rest.
What is ‘zenophobia’? Fear of the Greek philosopher Zeno? I always liked his paradoxes. My fave: To go anywhere you must first go halfway there. And to get there you must first go halfway there. And to get there, you must first go halfway there, etc, etc…Therefore there is an infinite amount of tasks to accomplish to go anywhere. Since it is impossible to perform an infinite amount of tasks, movement is impossible. An illusion.
Why would the founding fathers be in favor of our current health care system? I thought they liked things that worked well, didn’t fear change, and were rational rather than traditional. That would make them favor universal health care.
Why do some Dem congressmen oppose auditing the Fed? I suppose some are bought-and-paid-for due to our current (republican defended) political campaign finance shitstem. Others may legitimately fear politicizing the Fed. It’s really not outlandish to think that might occur, if you give Congress that power. I find it surprising that people who are so surly about Congress in general think that Congress being able to audit the Fed will somehow make everything hunky-dory. I personally favor auditing the Fed, but I’m not nearly the jaded, everything’s-a-scam conspiracy theorist as others are who also favor it.
Nothing but static packman…
I’d be curious to hear from some of our Dem partisans on the board here. Why are so many key Dems opposed to a Fed audit (noting that it otherwise does have broad bipartisan support)?
I am not a Democrat but the answer is simple and obvious. It’s because the Democrats are in bed with the corporate masters just as the Republicans are.
This fact represents the Democratic party’s great betrayal of the middle-class.
Why are so many key Dems opposed to a Fed audit (noting that it otherwise does have broad bipartisan support)?
The answer is simple and obvious. The Democratic Party is in bed with the corporate/super rich masters just as the Republicans are.
Which means there is no party now looking out for the middle-class, social justice or American jobs.
Why are so many key Dems opposed to a Fed audit (noting that it otherwise does have broad bipartisan support)?
Because the Democratic Party is now controlled by the corporate/super rich masters just as the Republicans are.
Sorry! 3 posts from me in a row! lol That was weird because I wasn’t hitting the send button and the posts kept disappearing.
(I guess they were posting)
Is that your final answer?
Anyone who is still a partisan for either party in 2010 is a brain-dead moron. Both parties are two hairy ass cheeks around the same stinking bunghole: predatory capitalism. Both parties are on the make and on the take. They deserve neither your votes nor your support. There are individual candidates in both parties who buck their sleazy, corrupt leadership, such as Ron Paul and Alan Grayson. Bernie Saunders may be a socialist, but he’s a man of integrity and principle and on this issue he deserves our active support.
How is Ron Paul, who favors no regulation whatsoever, against predatory capitalism? He just shares the libertarian ’somehow the Free Market will take care of everything’ viewpoint/fantasy.
Simple - he realizes that the greatest predation can be achieved via excessive and inappropriate corporate-driven regulation, and makes his decisions accordingly.
the greatest predation can be achieved via excessive and inappropriate corporate-driven regulation
Is he that unaware of American economic history?
I am still unclear why the Fed believes monetary policy independence would be compromised by an audit. Monetary policy is pretty damn boring, anyway, when the central bank is pushing on a string and rates are held indefinitely at zero percent.
By contrast, non-monetary policy questions, such as what financial oligarchs may have played a direct role in the Fed’s allocation decision to protect the assets of the super-rich and the bonuses of Megabank, Inc managers while throwing Main Street under the bus, would doubtless be of great interest to all Americans. Why can’t a list of audit questions be drawn up that excludes any monetary policy questions which the Fed believes would compromise its independence?
I am still unclear why the Fed believes monetary policy independence would be compromised by an audit.
My take is that is that their statement as such are a complete smoke screen, and that the reverse is true - that an audit would actually reveal that it’s monetary policy is not independent at all, and is in fact driven by the megabanks. An audit would actually force monetary policy independence, which they don’t want.
The other thing the Fed might not much welcome is any level of scrutiny of their allocation decisions. So far as I am aware, the scope of monetary policy does not include using the printing press to make some groups of society wealthy while allowing other groups to bear the costs of Wall Street gambling folly or to
suffer impoverishment.
With all the leveraged bets that were made on real estate always going up, I am guessing the positive wealth effects of de facto bailouts on the top one percent of the U.S. wealth distribution were huge. Perhaps as part of the audit, one of the many economists at the Federal Reserve Board could prepare an economic impact analysis of the wealth effects of the Fed’s myriad post-Fall 2008 bailouts on different tranches of the U.S. wealth distribution, so that all Americans could better understand their redistributional effects.
Along similar lines, it would be nice to know to what extent the Fed directly supports U.S. stock prices. So far as I am aware, such a policy would greatly benefit the very small segment of the U.S. wealth distribution which owns the lion’s share of corporate assets, while implicitly taxing the remainder of the wealth distribution (or at least holders and users of the currency) to pay for the reverse-Robin Hood wealth transfer.
It would also be highly informative to know how and to what extent the Fed coordinates policy with the WH (e.g. the Treasury Secretary). This would shed light on the question of whether the Fed is truly as independent as they like to claim.
“…an economic impact analysis of the wealth effects of the Fed’s myriad post-Fall 2008 bailouts on different tranches of the U.S. wealth distribution, so that all Americans could better understand their redistributional effects.”
Mr. Bear are you suggesting that the US Treasury came up with the”Great Bailout of 2008″ and presented that plan and it’s dire consequences to Cheney-Shrub…or was it the other way around? I thought ALL Policy & “Decisions” flowed from top to bottom from the “I’m the Decider’s” East Wing rose garden…guess we’ll find out when Shrub’s “Legacy” book comes available Nov. 13th
Perhaps a little ‘harm’ to the institutional borrowers would serve well to drum the moral hazard out of the banking system that has recently been hard-wired into psyches by the bailout measures taken in the wake of the Fall 2008 meltdown. I am perpetually flummoxed by a policy which automatically qualifies banks that cast money into the sea for bailouts. No reasonable person could possibly agree with this policy.
UPDATE 2-Fed asks US court to revisit bailout ruling
Mon May 3, 2010 6:14pm EDT
Related News
* US Fed appeals order to release bailout documents
Mon, May 3 2010
* Fed seeks rehearing by entire Second Circuit
* “Irreparable harm” possible absent reversal, Fed says (Adds Fox Business Network comment)
NEW YORK, May 3 (Reuters) - The U.S. Federal Reserve on Monday asked a federal appeals court to reconsider its ruling ordering the central bank to disclose records on emergency lending programs to banks that were bailed out by the government.
A three-judge panel of the U.S. Second Circuit Court of Appeals in New York had on March 19 ordered the Fed to release details of programs it began in late 2007 to shore up and avoid a meltdown of financial markets.
Bloomberg LP, the parent of Bloomberg News, and News Corp’s (NWSA.O) Fox News Network had sought details of the programs under the federal Freedom of Information Act.
In its request for the entire 10-judge Second Circuit to reconsider the case, the Fed said the original panel erred in not excusing it from having to disclose borrowers’ names, loan amounts and loan dates for transactions at its discount window and from its emergency lending facilities.
The Fed maintained that releasing such information could stigmatize participants in both programs, perhaps causing a loss of confidence that could lead to bank runs and even the demise of various borrowers.
“The real-world consequence of the panel’s decision will be serious, perhaps irreparable harm to the institutional borrowers,” the Fed said.
…
“…erred in not excusing it from having to disclose borrowers’ names, loan amounts and loan dates for transactions at its discount window and from its emergency lending facilities.”
Geez, they’re kinda defensive don’t ya think?
One succinct interpretation of what happened between 1998 and 2008:
1998 - LTCM gets bailed out, teaching leagues of Smartest Guys in the Room that the Fed bails out too-big-to-fail firms which incur gambling losses of a magnitude which threatens the entire global economy.
1998-2008 - More TBTF firms than you can shake a stick at spring up and make absurd gambles on the assumption that, since their failure would jeopardize the survival of the global economy, the Fed will step in and bail them out if their gambles result in losses.
2008 — “Too big failed” for some firms, and succeeded wildly for others which were the beneficiaries of TARP and other bailout measures.
The question of who got bailed and why seems like a good one for the Fed auditors to take up.
Yeah but the Fed just gives money to the Treasury, who is really the one that decides who gets bailed and who doesn’t. The Fed doesn’t get involved in such petty details.
Right? Right?
Dorgan, Grassley plan amendment to call for Fed audit
By Vicki Needham - 05/05/10 03:50 PM ET
Two senators are planning to offer an amendment to financial regulatory reform legislation calling for an audit of the Federal Reserve to determine which financial institutions received financial help.
Sens. Chuck Grassley (R-Iowa) and Byron Dorgan (D-N.D.) said Wednesday that the Fed’s unwillingness to share the information about its emergency lending programs despite federal court rulings prompted the amendment.
The Fed has said it will appeal the rulings, the last one in March, calling for transparency on how much and under what terms for financial firms received trillions in assistance.
Grassley is already one of 20 co-sponsors on a similar amendment offered by Sen. Bernie Sanders (I-Vt.).
“The Fed refuses to disclose this information to the American people so we are taking Congressional action to determine how the Fed has used these trillions of dollars,” Dorgan said in the joint release.
The Fed has taken on more than $2 trillion in mortgage-backed assets in the past couple of years. The final Fed purchase was concluded at the end of March.
“The Fed has gone beyond was was viewed as its historical authority in the last two and a half years without any transparency or accountability,” Grassley said. “Our amendment changes that by making the Fed’s emergency loan authority subject the light of day.”
In 2009, the two Senators worked with a bipartisan group of 11 lawmakers to force the Fed to disclose the information.
FWIW - not all “audit the fed” amendments are created equal. The devil is in the details. There have been many - and Ron Paul even voted against one of them, since it was so watered down.
I have no clue about this new one - just saying.
“Right? Right?”
Good non-monetary-policy for the auditors to sort out…
“Channeling” is a pleasant euphemism for lending discrimination.
Republicans seek to end credit channeling by Fed
WASHINGTON
Tue Apr 27, 2010 7:08pm EDT
WASHINGTON (Reuters) - An alternative financial regulatory reform package crafted by Senate Republicans seeks to draw a brighter line between monetary and fiscal policy, according to a document obtained by Reuters on Tuesday.
In its battle against the financial crisis, the Federal Reserve used its emergency lending powers to support the housing market and markets for student loans and credit card loans, among others.
A number of top Fed officials, most vocally Philadelphia Federal Reserve Bank President Charles Plosser, have expressed discomfort with allocating credit to specific sectors of the economy, which they see as veering into fiscal policy in a way that could threaten the central bank’s independence.
Senate Republicans blocked a sweeping overhaul of banking rules for a second straight day on Tuesday as they sought to extract more concessions from Democrats eager to crack down on Wall Street.
In a section of their reform proposals titled “End Credit Channeling by the Fed,” Republicans would require the U.S. central bank and Treasury Department to delineate where and when emergency lending would amount to credit channeling.
“This is to address concerns growing out of the recent financial crisis that the Fed chose winners and losers through the choices it made regarding the allocation of credit,” the document said.
…
Related News
* WRAPUP 2-US Senate faces fresh vote on bank rule reform
Tue, Apr 27 2010
* Fed’s Hoenig: U.S. must lead reform
Tue, Apr 27 2010
* Factbox: Major financial regulation reform proposals
Tue, Apr 27 2010
* Fed’s Hoenig: U.S. must lead reform
Mon, Apr 26 2010
* Financial reform bill stumbles in Senate
Mon, Apr 26 2010
..The Fed maintained that releasing such information could stigmatize participants in both programs, perhaps causing a loss of confidence that could lead to bank runs and even the demise of various borrowers.
I don’t know how the Fed’s resistance to opening their books could be explained more plainly than that.
Any politicians who force the issue know they will be held responsible for the consequences, so I doubt it will happen…
That’s not to say they won’t pander to the few of us who care about it by continuing to demand it be done..
“…and presented that plan and it’s dire consequences to Cheney-Shrub…or was it the other way around?”
Shrub’s ‘deer-in-the-headlights’ Fall 2008 performance on national teevee will live in memory for the rest of my days on the planet: ‘This sucker is going down.’
Exactly.
They don’t want anyone poking around into their crooked affairs. They are a den of vipers and thieves.
I think the “we are lending out money at zero percent interest with little expectation of it being paid back cept’n when the treasury shows up with a big pile of fresh bills” policy is best left behind closed doors.
Don’t want people to think we are just printing the money kinda randomly.
Todd Harrison
May 5, 2010, 9:59 a.m. EDT
Will Europe order a code red?
Commentary: The world attempts to handle the truth
By Todd Harrison
NEW YORK (MarketWatch) — European Central Bank Council member Axel Weber said Greece’s fiscal crisis is threatening “grave contagion effects,” according to published reports.
Grave danger; is there any other kind?
Readers of Minyanville should be well versed in overseas risk. Professor Peter Atwater pointed to Eastern Europe as a sub-prime borrower over a year ago. Read Minyanville’s “Eastern Europe, Subprime Borrower.”
Todd Harrison
April 28, 2010, 12:01 a.m. EDT
Goldman Sachs: the poster child for class warfare
Commentary: The other side of the V-shaped recovery
By Todd Harrison
NEW YORK (MarketWatch) — The most profitable investment bank in Wall Street history is in Washington this week, defending itself against allegations of fraud.
Goldman Sachs Group Inc. (GS 150.82, +1.37, +0.92%) recently crushed their quarter but the earnings weren’t another run-of-the-mill, hit-it-to-quit-it news item. This story is so much more than that; the company is somehow symbolic in the grand scheme of the socioeconomic sphere. You won’t find a topic more polarizing than Wall Street and no firm represents those vices and virtues more prominently than Goldman Sachs.
More than a year ago, I wrote “War is Hell,” as the financial markets morphed into a matter of national security. The government saved the system — or, perhaps, a system — but did so at a profound cost with a litany of unintended consequences.
The deterioration of the middle class was evident then, masked by the lower dollar and skewed by the spending habits of a slimming margin of society. That burgeoning class war is now front-page news, cumulative both in cause and effect. Read Minyanville’s “War is Hell.”
That’s why the SEC allegations are so far-reaching. This isn’t about high-end hedge funds anymore — it’s about pension funds, public trust, and faith in the system. In the eyes of John Q. Public, it’s about justice and redemption; what remains to be seen is whether that takes the form of class-action lawsuits and one-time write-offs or pitchforks and torches and tricky tri-fectas.
…
The destruction of the middle class began with “voodoo” er supply side economics.
In other words, Reagan.
Wake up Patriots! 90% of American’s are parasite moochers! 9.7% of Americans are trying I guess but only 0.3% of American’s are the real deal producers!!
Shut Up, Tea Partiers, We’re On the Same Side … Sort Of Counterpunch dot org
And the tax issue, dear Tea Partiers, is where we should be on the same side. No taxes, at least for 90% of us. But we keep bickering, and the country’s super-yacht owners keep smiling. They are our common enemy. The wealthiest 1% of Americans, who have been the beneficiaries of the largest redistribution of income since the Great Depression, want the poorest 90% of us to believe that ANY tax will hurt EVERYONE.
The neo-American-Revolution wealthy have deflected attention away from themselves and toward government. As Ronald Reagan famously stated, “government is the problem.” But government deregulation turned out to be the problem. Perversely, many of us in the poor 90% still believe in Reagan’s words.
Twenty-five years of shrewd financial strategies, government deregulation, and tax cuts have allowed the richest 1% to TRIPLE their incomes, AFTER TAXES, while the bottom 90% has seen their share drop over 20%. According to IRS figures, the richest 1% took in about 6.5% of America’s total income in 1980. In 2006 it was about 19.5%. That’s a TRILLION dollars a year, one-seventh of America’s total income.
Here’s another way to look at it. Since 1980 our country’s productivity has steadily risen, with total income doubling approximately every 10 years. According to Internal Revenue Service figures, total adjusted gross income (AGI) for the U.S. in 1980 was $1.6 trillion. By 1991 it was $3.5 trillion, and by 2006 $8.1 trillion. If the bottom 90% of America had shared in this prosperity at a level consistent with 1980 incomes, they would be making $45,000 a year instead of $35,000.
Imagine what a middle-income family could do with an extra $10,000 a year.
We need a progressive tax. No new tax on 90% of us, but gradually steeper taxes on the people above that level (those with earnings over $250,000) who have benefited from financial system redistributions, government deregulation, and tax cuts. We would not be ’spreading the wealth,’ a term often attributed to Obama’s ’socialist’ tendencies, but instead ‘correcting the 30-year flow’ to the rich.
http://www.counterpunch.org/buccheit04232010.html
Wrong
AMT already pounds those making 250-500k a year. It’s the top 0.1% that are the wealth strippers.
We need to tax all income as wages, no more hedge fund managers paying 15% effective tax rates. Dividends, stock options, 0% interest loans and all the other perks should be taxed like wages.
Instead of or in addition to increasing the top two tax brackets we need to add 2 or 3 tax brackets. People earning 250k a year pay much more than people paying 25k a year but people making 250mil/year pay a lower effective tax rate than people paying 250k.
AMT needs to be adjusted be adjusted for inflation and hit the banking class.
Until 1913 there was no income tax in America. None of that so called “progressivism.” In 1913 the income tax amounted to about 1% of the average income. Very inoccuous, no?
Rio, ask yourself how America got by for over 130 years without taxing 10% of the country?
I’ll answer: Because America did not have all these bureacracies and social welfare programs, which are mostly unconstitutional anyway.
America DID NOT get along for 130 years without those social and regulatory agencies.
Unless you think child labor, monopolies, no rights for women, no consumer safety laws, violent and dramatic swings in the economy, slavery and violent racism, etc., were “getting by.”
Rhetorical question because apparently you do.
How about: Because we were a nation of self-sufficient farmers instead of a bunch of defense-industry engineers?
Finally the producers catch a break.
Top 1% Increased Their Share of Wealth in Financial Crisis By Robert Frank WSJ
Many economists and journalists, myself included, assumed inequality would decline during the global financial crisis.
The rich tend to be the bi-polars of the economy, reaping the most when times are good and losing the most (on a percentage basis) during busts.
Because of the declines in wealth at the top, inequality has fallen in most of the past few recessions, only to widen again when economic growth resumed. What is now called the Wealth Gap narrowed spectacularly during the Great Depression, taking more than 40 years to widen markedly again.
But what some are calling the Great Recession is proving to be different. New calculations by Edward Wolff, the New York University economist and an expert on U.S. wealth statistics, show that the top 1% actually held onto its share of national wealth in the crisis, and may have even gained a bit.
According to his analysis, the top 1% held 34.6% of all national wealth in 2007. By Dec. 31, 2009, they held 35.6%.
Meanwhile, share of national wealth held by the bottom 90% fell to 25% from 27%.
The reason is that the wealthy benefited disproportionately from the rebound in financial markets. Their wealth generally is mostly in stocks and businesses, the values of which have surged since the depths of the crisis.
http://blogs.wsj.com/wealth/2010/04/30/top-1-increased-their-share-of-wealth-in-financial-crisis/
For you “New Yawk”-ahs, Urban Survivalism
http://nymag.com/nymetro/news/trends/6283/
Actually this topic is very interesting to me, since I love living in big cities
Street crime is the real threat, that fear of an attack is unwarranted and leftover hyperbole.
Here we have a significant population of twenty and thirty something rubes who still think it’s a good idea to wander about drunk and/or displaying precious electronic baubles (iPhones) at night. Increasingly they are being targeted by thugs and seem to be astonished about it.
Conspicuous consumption is out kiddies. The city is a living being and always changing. The urban party of the last twenty five years is ending. Now they need to hope they can find buyers for all those granite bedecked playpens!
I like the idea of fading in, of being mediocre. The VP at this company just bought a brand new Porsche. The cars outside are Lexus, Infiniti, Audi, Mercedes Benz, BMW brands. I like it that way. I park my humble Toyota economy car among them
I heard an ad on the radio for a Rich Dad seminar coming up here. I’d like to go just to see what they’re selling and scoff, though they probably make that psychologically hard to do.
Anyone know what their game is?
Anyone know what their game is?
Getting you hooked on buying their books, audio courses, seminars, etc.
Oops, just realize they’re one of Ben’s advertisers.
I did Google and find out….heheheh.
Same as Donald “Pucker Lips” sTrump, only with better hair…
Getting you hooked on buying their books, audio courses, seminars, etc
That’s Robert Kiyosaki’s main money maker. Sad.
He’s following his own advice by owning his own business, which is books telling you to own your own business. Very insightful.
One word: library.
It’s different here - not.
“In one case, a house in the Bearspaw district of Calgary was bought for nearly $900,000 and in three years, its value was inflated to $2.3 million, a profit of $1.4 million for the alleged fraudsters. An Edmonton house is alleged to have netted the scheme nearly $180,000.
During its investigation, bank investigators seized records that showed millions of dollars from the alleged scheme have been transferred to such countries as Lebanon, India, Saudi Arabia, the United Arab Emirates and Pakistan.”
http://www.cbc.ca/canada/calgary/story/2010/05/04/mortgage-fraud-bank.html
Housing fraud funding terrorists?
Wait until the Somali Pirates learn how to do this trick…oh, wait…
Homes can be lost by mistake when banks miscommunicate
Last November, Michael Hill of Lexington, S.C., finally got the call he’d been waiting for. Congratulations, a rep from JPMorgan Chase told him, your trial mortgage modification is approved. Hill’s monthly payment, around $900, would be nearly halved.
Except there was a problem. Chase had foreclosed on Hill’s home a month earlier, and his family was just days away from eviction.
“I listened to her and then I just said, ‘Well, that sounds good,’ ” Hill recalled. ” ‘Tell me how we’re going to do this, seeing as how you sold the house?’ ” That, he found out, was news to Chase.
Millions of homeowners face losing their homes in the continuing foreclosure crisis, but homeowners often have more than the struggling economy and slumping house prices to worry about: Disorganization within the big banks that service mortgages has made a bad problem worse.
Hill was able to avoid eviction — for now. Chase reversed the sale by paying the man who’d bought the home an extra $19,500 on top of the $86,000 he’d paid at the auction. But other homeowners say they lost their homes because the communication breakdown within the banks was so complete that it led to premature or mistaken foreclosures.
http://www.usatoday.com/money/economy/housing/2010-05-05-foreclosures05_CV_N.htm
Most people don’t know that inter-department/division/unit rivalry is common in big corps. This is the cause of many problems and often leaves J6P crushed in the middle.
So many companies are often their own worst enemy.
LISBON, Portugal (AP) — Portugal, striving to avoid becoming the next victim of Europe’s debt crisis, was put on standby for a credit rating downgrade on Wednesday even as the government managed to raise some euro500 million ($654 million) on the bond markets.
Moody’s Investor Services warned it may downgrade Portugal’s Aa2 debt rating in the next three months, a week after its rival Standard & Poor’s cut its rating and stoked market concerns that the crisis in Greece was spreading to other financially troubled countries in the eurozone.
“You cannot solve a problem of too much debt and too much spending with more debt and more spending — it defies comprehension.”
~Jim Rogers
I guess Mr. Rogers never heard of the hair-of-the-dog hangover cure?
Yes, rational man has reached the highest state of enlightenment only in the past few decades - just ask an academic. Oh the failings of our ancestors! They had wars and depressions because they could not attain the higher state of being as embodied in our current and recent business leaders, elected officials, and Federal Reserve chairmen.
Rejoice one and all, rejoice that we get to walk the earth with such giants!
More like giant dinosaurs.
Massive Oil Spills Key to Recovery
“In all, about 7,900 people are working to protect the shoreline and wildlife, and some 170 boats are also helping with the cleanup.”
Now that’s job creation! A few more environmental catastrophes and we could have full employment. Everyone break windows!
http://finance.yahoo.com/news/Giant-box-could-be-key-to-apf-2775787950.html?x=0&sec=topStories&pos=1&asset=4f554ead7a41b0482fc93fa669162a57&ccode=mp
I wonder if they’ll subtract off the number of jobs lost in the restaurant industry, due to their seafood costs going through the roof and having to lay off people and/or lose business from higher menu prices. Or the number of jobs lost in the seafood industry itself. Or the recreational boating industry. Etc. etc.
Probably not, since that’s not nearly as easy to count as standing on the shore counting off boaters as they go out the inlet for the big cleanup each day.
I bet the majority of those people “working” to protect the shoreline are actually volunteering. There will be no positive net job number out of this.
I see a Black Swan flying low over head!!!
I read today that after the Exxon Valdez disaster our bought and paid for congress passed a law capping damages in cases like this to 75 million. Yet another example of privatize the gains socialize the losses, and remove any liability from corporate America.
After all the aliens died at the end of the War of the Worlds the economy must have gone into overdrive!
The company (BP) offered the idled fishermen a onetime payment of $5,000 to use their boats and labor to deploy booms to contain the spill. But, in exchange, the fishermen had to waive their right to sue BP for damages resulting from the spill. And, to add insult to injury, if they damaged their boats while deploying the booms, BP would not cover the damages.
The fishermen were thus presented with the choice of sitting idly by, unpaid, while oil ruined their catch, or helping protect their livelihood while also agreeing not to hold BP responsible for their potentially devastating losses.
sfgate.com
Great.
If I owned a big law firm, I’d swoop in with a promise of $5,100 to each fisherman as winnings in a class-action lawsuit, then sue the hell out of BP. ($75 million cap be damned)
I’m not anti-big-oil, but I do think they need to pay for any and all cleanup costs when the screw up. If it bankrupts them, then so be it - guess they should’ve been more safe and/or had better accident insurance.
These situations have to be handled very carefully. They are greasy, dirty, slimy, foul-smelling, and slippery scum and the oil spill is really nasty too.
Yes.
Not trying to paint lawyers as saviors of course, but there are cases where they can be a necessary evil.
Banks: You’re friend in need, your friend indeed…
Guess MegaBank Inc. has no fear of the “Move-Your-Money” citizens…
Metro Atlanta / State News 6:59 p.m. Saturday, May 1, 2010
Suddenly, bank account was gone
Couple learns the hard way of bank’s ‘right of setoff’:
The Hugheses took out the loan with Wachovia, they said, because they had banked there for about 10 years. They also have home and car loans there.
Such one-stop banking, or “relationship banking” has increased over the past 30 years and is something consumers should consider fully, says Kathleen Day of the Center for Responsible Lending, a nonpartisan research and policy agency. Often, consumers can get better service and lower interest rates this way.
It seems there was confusion on both sides. The bank called the woman’s student loan.
Oh. I thought the takeaway here was don’t do saving and borrowing at the same place…or move $$ to another bank once you get the loan.
After several rounds of calls and faxes to prove she graduated in May 2009, not December 2008, as the bank believed, and a last-ditch application for a deferment, she thought things were settled. Then in January, the bank apparently wrote off the loan, meaning it was sent to its collections department. She began receiving bills for the total amount, plus interest and fees: $11,338.60.
By April 1, the Hugheses’ checking account showed the bank deducted $140 in overdraft fees, even though it still held $4,302. The next day, the bank registered an “account transfer, zeroing out the account, and then charged $245 more in overdraft fees.
A few days after that, the Hugheses received a letter from Wells Fargo saying they were eligible for “a considerable settlement reduction” on the loan. The next day, yet another letter advised them the bank had exercised its right of setoff. The balance of the loan, nearly $7,300, is still due.
——-
She had absolutely no warning..
America Needs to Stick to “Clean” Enterprises
“Dirty” business such as oil drilling, pumping, and refining should be outsourced to dirty, poor, third-world countries because Americans are too good for such work and have proven themselves quite inept at the trade. USA needs to concentrate on Financial Market Manipulation and big-money scams and ponzi-schemes which has proven to be an area of industry where we Americans really excel and represent the cutting edge of the business. Financial money-shuffling and pyramid-scheming are ecologically-friendly activities and the landscape could be cleaned up and beautified if all industry of any kind were to be moved offshore permanently. I urge you to contact your local corrupt representative to push legislation on the “Clean up and Scam” bill that is currently being drafted in our sleazy government.
So you’re saying they canceled the “Getting Down and Dirty in the Wall Street Trenches” episode of Mike Rowe’s Dirty Jobs?
“GoldenmanSucks”…or… “True Value Hardware”
Decisions, decisions… which pays better?
True Value does not require the sale of one’s soul to the Devil upon hiring. Goldman has a better Chrismas party.
Hwy50 “True Value” store greeter:
“So, what kinda nut & how big of one are you lookin’ fer today?”
They ALL require the sale of one’s soul to the Devil upon hiring.
It’s a rare one that doesn’t.
This global real estate bubble looks like it is here to stay.
==========================================================
May 5, 2010, 6:14 a.m. EDT
RBS says Hong Kong’s property bull market has ‘peaked’
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — Hong Kong’s property market appears to have reached its high tide mark, according to research by the Royal Bank of Scotland.
Asset prices in the city’s residential market likely to ease slightly throughout the remainder of the year, although sideways movement is more likely than a sudden decline, according to an analyst with the bank.
Prices in the city should end the year with a 5% gain, though that equates to a slight easing from current levels, which are up about 8% since the start of the year, RBS analyst David Ng said in a research note entitled “The peak is here.”
“Cooling measures and prospects of mediocre GDP growth are dampening liquidity-driven sentiment,” said Ng in the report released Tuesday.
…
Permanently-high plateaus and rainbows and unicorns! Globalized utopia has finally arrived for everyone. We made it! Thank you, Goldman Sachs.
Another “soft landing” no doubt.
We need to send David Lereah over to Hong Kong to tell them about what happens next.
Now to find a good MF or ETF that shorts China. I too see it crashing.
ETF that shorts China = FXP
anyone got any others?
Funny, I bought FXP this morning. Still looking for more…
Faber knows China!
Not one mention of China’s “TrueBambooLie™” either!
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Confessions of a Bull Market Cynic:
“My name is Simon Maierhofer, I am a bear and I am prepared for what might be coming.
It’s not just the cold hard unemployment numbers that concern me, it’s the negative feedback loop created by a lack of jobs. Jobs are money. Without jobs there is no money, without money there is no economy.
Without consumers willing to spend, there is also no real estate recovery. If there is no real estate recovery, how will banks deal with all the toxic assets on their balance sheets?”
http://finance.yahoo.com/news/Confessions-of-a-Bull-Market-etfguide-2027238896.html?x=0
“how will banks deal with all the toxic assets on their balance sheets?”
The old-fashioned way. With accounting tricks and massive taxpayer bailouts.
They say that cynicism is bad for the heart, but I find it to be quite invigorating.
“Ever since I gave up hope, I’ve felt much better!”
“I used to be an apathetic cynic.”
“I’m so poor, I can’t even pay attention.”
I used to be conceited but now I’m perfect.
Well I am “blissfully happy” now. Another trailing stop hit today. I lost 5% in two years. Doh! But the remaining money is in cash. I’m not good on individual stocks. So I take emotion out of the equation and rely on trailing stops. My dollar cost averaging on stock mutual funds has paid off far more than any of my individual stocks. Buy and hold is indeed out. But the jury is out on “buy regularly.”
I agree, when the S & P goes up by over 75% you certainly have to think a major drop (more than correction) is in store. Trailing stops and DCA take the emotion out of stock investing. If the stock price is trending down, it will most likely continue down.
Durn good to be near 45% in precious metals and government securities at this stage of the game.
Here is some recommended reading for busy banksters and the puppets who work for them:
Magazine Preview
The Moral Life of Babies
All photographs taken at the Infant Cognition Center at Yale University.
By PAUL BLOOM
Published: May 3, 2010
Not long ago, a team of researchers watched a 1-year-old boy take justice into his own hands. The boy had just seen a puppet show in which one puppet played with a ball while interacting with two other puppets. The center puppet would slide the ball to the puppet on the right, who would pass it back. And the center puppet would slide the ball to the puppet on the left . . . who would run away with it. Then the two puppets on the ends were brought down from the stage and set before the toddler. Each was placed next to a pile of treats. At this point, the toddler was asked to take a treat away from one puppet. Like most children in this situation, the boy took it from the pile of the “naughty” one. But this punishment wasn’t enough — he then leaned over and smacked the puppet in the head.
…
Most 1-year-olds aren’t yet familiar with the guillotine. Sounds like he’d have at least considered it if he’d have known about it.
People often say life isn’t fair, but they’re wrong.
In nature, if you find a better way to live, nature lets you keep your rewards. This includes successfully predicting or preparing for natural disasters.
But man will punish and hurt someone who finds a better way to do things. Eventually, that someone may prevail and be rewarded, but not before needlessly suffering.
Closing in fast on a $13 trillion public debt.
$12,927,020,546,327.13
See the thirteen cents at the end of the number? I wonder how many dollars of interest will accrue over the years until that thirteen cents is paid back.
“See the thirteen cents at the end of the number?”
Boy, that’s gonna push the “TrueAnger™” PeeParty tea toadlers to the extreme…
It was actually $12,948 B the day before, so hey - we’re on a roll! We showed a 1-day surplus!
Seriously though - it’s amazing how much the debt jumps around. Long term is the obvious trend, but the short term bounces are in the 10’s and even sometimes 100’s of billions of $$, over the course of just a few days.
Pension reform: don’t blame workers
It’s all the rage these days to blame the economy’s woes on public workers, whatever the facts are, no matter who the culprit really is
05.04.10 - 12:21 pm
By Larry Bradshaw and Roxanne Sanchez
OPINION Members of Service Employees International Union Local 1021, who make up about half of all San Francisco city employees — the lowest-paid half — are currently at the negotiating table with the Mayor’s Office working out a deal to give back $100 million toward the city’s deficit over the next two years. Last year our members gave back $48 million.
Now San Francisco Public Defender Jeff Adachi is proposing a new charter amendment to make city workers pay huge increases in their pensions and health care coverage. Never mind that he draws no distinction between the highly paid managers and the lower paid workers, between those feeding at the trough and those who toil to make and fill the trough. It’s all the rage these days to blame the economy’s woes on public workers, whatever the facts are, no matter who the culprit really is.
Wall Street speculators crashed the stock market, causing workers’ pension funds to lose billions and wiping out their other retirement savings. The losses require local and state governments to spend more to keep the funds solvent. So who do Gov. Arnold Schwarzenegger, Republican gubernatorial candidate Meg Whitman — and Adachi — blame? The victims: the workers.
Insurance companies continue to raise premiums on health care coverage, making money hand over fist. They use those funds to lobby against reforms, from single-payer to the public option. When they win, the costs of continuing to cover workers and their families continue to escalate. Who do Schwarzenegger, Whitman — and Adachi — blame? The victims: the workers.
In an op-ed piece published last week in the right-wing Republican blog FlashReport, Schwarzenegger came out in support of a SB 919, a measure that would significantly increase employees’ contribution to the pension fund and decrease their pension payments upon retirement.
Whitman, who is spending millions of dollars of the money she made at Goldman Sachs in quasi-legal transactions, is proposing to not only double employees’ contributions to their pension fund and reduce the benefit, but to increase the retirement age and eliminate the defined pension benefit for new hires.
…
The only people who blame the workers are fascist tools.
Good find Cantankerous Intellectual Bomb-thrower.
Oops, I meant to to say “Wall St. sock puppets.”
“It’s all the rage these days to blame the economy’s woes on public workers, whatever the facts are, no matter who the culprit really is”
There is another way to look at it. When you had housing prices going up like a run away forest fire, unions got cost of living adjustments that put their pay way outside the worth of their services. Now with RE prices heading down, wages should too. It should work in both directions within the government complex. Private companies can make the adjustments quickly by firing and hiring later at a reduced cost. Being union and a
government worker should now insulate you from the real world.
How about CEO’s on Wall Street??
fire the government administrator, keep the workers (even though they work half as hard as private industry) I want my parks clean!
It would seem, salinasron, you’ve missed all the concessions, permanent layoffs and pay cuts unions have had to take over the last 15 years.
http://www.redstate.com/erick/2010/05/04/it-was-mitch-mcconnell/
Republican sleazebag and Wall Street whore Mitch McConnell’s machinations to install another Establishment GOP and Wall Street errand boy in the Senate instead of Ron Paul’s son, Dr. Rand Paul.
From Mike Whitney at The Smirking Chimp (dot com):
“The [neo-con] American Enterprise Institute is helping the Federal Reserve develop a strategy to dump $1.25 trillion in mortgage-backed garbage on the U.S. taxpayer. If the toxic transfer goes forward, the losses will be greater than all of the other bailouts combined. This is really big and it will require public vigilance to make sure the plan does not succeed.
There’s nothing fancy about the AEI’s strategy; it’s a straightforward “no frills” ripoff. Bernanke buys the toxic assets and non performing loans from the banks (which he’s already done) and then transfers it to the GSE’s (Fannie Mae and Freddie Mac). It’s that simple. The Fed merely acts as a middle man to create a paper-trail long-enough to confuse the public about what’s really going on. And, what’s going on is another sleazy looting operation. Here’s an excerpt from the AEI’s web page by the eerily-named “Shadow Financial Regulatory Committee” which explains what’s going on:
“Freddie and Fannie have been placed in conservatorship and the Treasury has confirmed that their debt is now guaranteed by the U.S. Government. This means that their debt is essentially identical to Treasury debt. The Treasury could simply issue Treasury debt to Freddie and Fannie with the offsetting accounting transaction being an IOU to the U.S. Treasury. Freddie and Fannie could then swap the acquired Treasury debt for MBS held by the Federal Reserve. This transaction would have several desirable features. It would place housing debt on the books of Freddie and Fannie where it belongs and remove the Fed from financing U.S. housing policy, which is appropriately a fiscal policy and not a monetary policy function. This would also help to re-establish Federal Reserve independence from the Treasury and fiscal policy. Finally, it would free the Fed to device strategies to reduce its balance sheet by engaging in more traditional asset sales in the much deeper Treasury market where the pricing impacts would be smaller and would accommodate a more rapid reduction in excess reserves.” (”Mortgage Backed Securities in the Federal Reserve’s Portfolio” Shadow Statement No. 294, American Enterprise Institute)
So, there it is in black and white; the committee believes that dumping the red ink on the public would have “several desirable features.” Indeed. It would move the bank’s private losses off the Fed’s books and onto Freddie and Fannie’s “where it belongs”. That would remove the Fed from any further obligation.
Naturally, the Fed will need a way to cover its tracks, so the AEI recommends that they ratchet up the fear of inflation. That said, we can expect the Fed to mobilize its allies in the media to launch a public relations campaign that focuses on the imminent (and imaginary) threat of hyperinflation. That will create the diversion Bernanke needs to carry out his trillion dollar sludge-dumping operation.
According to the Wall Street Journal, Fannie and Freddie’s total debt outstanding, at the end of 2009, was already a whopping $8.1 trillion, which is slightly higher than “the $7.8 trillion in total marketable debt outstanding for the entire US government.” The off-balance sheet debts of the GSE’s have mushroomed since the beginning of the financial crisis, because the banks and other financial institutions have used the two mortgage giants as a toxic recycling center for their sour investments. Bernanke’s ginormous transfer of red ink just follows that same pattern.
It’s a shame that congress can’t figure this stuff out. As an agent of the big banks, Bernanke is merely acting as one would expect. He saved the banks from nationalization and kept their political and financial power intact. He also usurped congress’s authority over the purse-strings by purchasing the notorious toxic assets and dabbling in fiscal policy. Now he’s putting the finishing touches on another behemoth swindle so he can clear the Fed’s books and resume the arduous task of bubblemaking.
Isn’t it about time that congress wake up and smell the coffee?”
“The [neo-con] American Enterprise Institute is helping the Federal Reserve develop a strategy to dump $1.25 trillion in mortgage-backed garbage on the U.S. taxpayer. If the toxic transfer goes forward, the losses will be greater than all of the other bailouts combined. This is really big and it will require public vigilance to make sure the plan does not succeed.”
Fed audit committee, are you paying attention?
And this toxic mortgage cleanup was supposedly the reason the TARP was passed. If the toxic assets are still sitting out there on the banks’ balance sheets, then how did they misuse the bailout funds?
IN related news the beast must be fed again
WASHINGTON (AFP) – Troubled US government-backed mortgage firm Freddie Mac on Wednesday asked for an additional 10.6 billion dollars from the Treasury Department to cover losses.
Announcing a 6.7 billion dollar loss in the first quarter, Freddie Mac said it would need the new funding by June 30 this year.
The Washington-area company has already received more than 50 billion dollars in taxpayers cash to cover losses from toxic assets.
and they said they would need more soon.
We should open up our boarders to the Greeks. We need more of them now.
Luckily the GSE budget limit of $400 bn was eliminated on December 24, 2009. Thus they can pour unlimited sums of tax dollars down the real estate rat hole.
‘Don’t drink alcohol, have sex or even hold hands’: Foreign Office advice to keep Britons out of jail in Dubai ~~ Daily Mail Reporter
British tourists and expats working in Dubai have been given a ‘Dos and Don’ts’ list in a bid to keep them out of jail.
The Foreign Office warns that drinking alcohol, sharing a hotel room when unmarried and even holding hands could land visitors in trouble because of strict Muslim laws.
Britons are more likely to be arrested in the United Arab Emirates - the federation of which Dubai is a part - than anywhere else in the world.
The Foreign Office website warns that there is a ‘zero tolerance for drugs and alcohol’.
It adds that arrests can arise from financial offences, such as bouncing cheques and offences against the laws relating to culture and morality.
Possession of even the smallest amount of illegal drugs can lead to a minimum four year jail sentence. Care should also be taken about the import of prescription drugs and some over-the-counter drugs.
Britons can find themselves facing charges relating to cultural differences, such as using bad language, rude gestures or public displays of affection.
British nationals should also be aware of the UAE’s strict laws banning sex outside of marriage.
The embassy website warns:
* Alcohol is only allowed in licensed restaurants, pubs, clubs, private venues. And to drink at home, you must have a special alcohol licence. Alcohol can only be consumed by over 21s.
* Drugs are strictly forbidden, and even having a residual amount in your bag or on clothing could result in a four-year jail sentence. Even if you are importing prescription drugs you may need to get permission from the UAE authorities first.
*Sex outside of marriage is illegal and sharing a hotel room could land you in a police cell.
Read more: http://www.dailymail.co.uk/news/article-1271718/Dont-drink-sex-dance-Dubai-travel-advice-list-Brits-jail.html#ixzz0n5xhl3lo
Dubai is a Disneyland for Jerry Fallwell types. It’s like being in church every day. I think I woul rather drink cod liver oil right after every meal.
Another turd removes itself from the cesspool…
Powerful House chairman David Obey to retire
WASHINGTON (AP)
Rep. David Obey, a leading liberal Democrat and chairman of the powerful House Appropriations Committee, said Wednesday that he will retire at the end of his term this year, dealing Democrats defending their majority another blow in an election season of voter discontent.
“There is a time to stay and a time to go,” the Wisconsin lawmaker told reporters. “And this is my time to go.”
Speaking of turds that plug up the toilet, here ya go:
Joe the Plumber is elected to party office in Ohio:
“…won one of nearly 400 seats on the local Republican Party committee in Ohio’s Lucas County.”
“…He was held up by the GOP as an example of the middle-class worker who would be hurt economically by an Obama presidency.”
Boy I tell ya, Lil’ Opie, he really set back Joe the Plumber’s opportunity to buy that plumbing “bidness” didn’t he?
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
By JOHN SEEWER, Associated Press Writer
We should pass a law that politician cant be attorneys. I want to see engineers running the country!! And maybe comedians.
Dear god, no! Not engineers. Are you insane?! The only people who know more about how to suck the life out of a party are Baptists!
OMG! What if they’re Baptist engineers! Noooooo!
Happy Drinko De Mayo!
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Spokaneman:
my kids found an old rotary phone. since it had no buttons, they couldn’t figure out how it worked. Finally they did figure it out and called my cell. They found it fascinating. So I told them to hang up, and I’d call back. When they answered they were laughing. They said the bell scared them.
This could be an excellent metaphor for proper lending guidelines.
April 2008,… remind me again who had over-sight for this Gov’t agency?
Oh, and there’s those words again: Oil Industry / sex / “upgraded ethics training”
“The MMS rule change, made in April 2008, says that Gulf rig operators are required to file a blowout scenario only if one of five conditions applies.
For example, an operator must provide a blowout scenario when it proposes to install a “surface facility” in water deeper than 1,312 feet. While Deepwater Horizon was operating almost 5,000 feet below the surface, Salvin said the project did not meet the definition of a surface facility. The MMS official agreed.
“The production platform is what’s considered a surface facility,” Salvin said. “This was an exploratory well, not a production well.”
Brendan Cummings, a Joshua Tree, Calif.-based lawyer for the Center for Biological Diversity, said the exploration plan submitted by BP for Deepwater Horizon failed to adequately analyze the project’s oil spill risks. Cummings has filed a notice of intent to sue the government over another offshore drilling operation, by Royal Dutch Shell in Alaska.
“The technology used on the now-sunken Deepwater Horizon oil rig in the Gulf was supposed to be the most advanced in the world, including various mechanisms to prevent or cap a blowout,” Cummings wrote in the filing. “None of these mechanisms worked, and the state-of-the-art technology completely failed to stop the spill.”
In its 2009 exploration plan, BP strongly discounted the possibility of a catastrophic accident. Similary, Shell’s environmental impact analysis for its Beaufort Sea drilling plan asserts that the possibility of a “large liquid hydrocarbon spill … is regarded as too remote and speculative to be considered a reasonably foreseeable impacting event.”
The Deepwater Horizon disaster is not the first time MMS has been criticized as too close to the oil industry.
In 2008, the Interior Department took disciplinary action against eight MMS employees who accepted lavish gifts, partied and - in some cases - had sex with employees from the energy companies they regulated. An investigation cited a “culture of substance abuse and promiscuity” involving employees in the agency’s Denver office.
MMS workers were given upgraded ethics training.”
Simple: Dismantle the whole industry. We pay too much in taxes to useless agencies.
Guess who? Halliburton strikes again…in Australia!
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Oil spill in Timor Sea is causing ‘massive marine disaster’ :
Anne Barrowclough in Sydney, The Times online
“Millions of litres of oil are pouring into the Timor Sea from a well that ruptured more than two months ago, according to environmental campaigners.
The first scientists to survey the effects of the damaged rig 125 miles (200km) off the coast of West Australia described it as an environmental disaster and compared its long-term effects to those of the Exxon Valdez spill near Alaska in 1989.
Attempts have been made to clean up the slick with dispersants but scientists are concerned that this will, in fact, add to the toxicity levels.
The leak, more than a mile and a half under the surface of the sea, has proved difficult to plug, despite three attempts by PTTEP to do so.
Gilly Llewellyn, who led a WWF team on a three-day survey of the slick, told The Times: “We were in an area that is teeming with marine life and we literally found ourselves in a sea of oil that reached as far as we could see. It was sickening, because we were seeing dolphins surfacing in the oil and birds feeding in it.”
Er, you should have checked (or posted) the date on that story. It happened last August.
Holy cow, not again! What are the odds?
Top anti-gay Christian activist and minister, George Alan Rekers, linked to gay escort
BY Neil Nagraj
DAILY NEWS STAFF WRITER
Wednesday, May 5th 2010, 12:18 PM
A “general” for the Christian right — and vocal advocate for gay-to-straight conversion-therapy — has been accused of gallivanting around Europe with a gay hooker.
Baptist minister George Alan Rekers, a co-founder in 1983 with James Dobson of the right-wing Family Research Council, was spotted leaving Miami International Airport on April 13 with a 20-year-old he met on a gay escort site, the Miami New Times reports.
Contacted by the newspaper, Rekers claimed he was ignorant of his traveling companion’s profession when he hired him to accompany him on a 10-day European vacation.
“I had surgery,” Rekers told the Miami New Times, “and I can’t lift luggage. That’s why I hired him.”
He allegedly maintained he learned he was traveling with a prostitute halfway through their trip, but did not deny he’d met the man on Rentboy.com, a Web site for connecting gay escorts with clients…
This is so predictable, it’s not even funny.
I love it!
Illustrates again that the gayest people tend to be publicly the most homophobic.
“What are the odds?”
The odds are that all the vociferous opponents of alternative lifestyles live those alternative lifestyles they claim to hate most.
Now this is good stuff.
Never say never, Bert.
April 14, 2010, 1:48 p.m. EDT
Big banks should be broken up, Fed’s Fisher says
Too-big-to-fail is too-big-to-manage or supervise
By Rex Nutting, MarketWatch
NEW YORK (MarketWatch) — Large financial institutions should be dismantled before their risky behavior creates another financial and economic crisis, a top Federal Reserve official said Wednesday.
The largest banks and pseudo-banks are too big to supervise and they are too big to manage, said Richard Fisher, president of the Dallas Federal Reserve Bank. The costs imposed by these banks are greater than the benefits society gets from having them.
“The risk posed by coddling TBTF [too-big-to-fail] banks is simply too great,” Fisher said at a conference about creating a new financial structure. “A truly effective restructuring of our regulatory system will have to neutralize what I consider to be the greatest threat to our financial system’s stability” — large financial institutions.
At some point, large banks don’t have efficiencies of scale, Fisher said, but “disefficiencies of dysfunctionality.”
“There are limits to size and to scope beyond which global authorities should muster the courage to draw a very bright, red line,” Fisher said. “I think the disagreeable but sound thing to do regarding institutions that are TBTF is to dismantle them over time into institutions that can be prudently managed and regulated across borders.”
“The existence of institutions considered TBTF exacerbated a crisis that has cost the world a substantial amount of potential output and a whole lot of employment,” Fisher said. The world has lost more than $60 trillion in output because of the 2008 crisis, he said.
It would be better to have “an international accord to break up these institutions into ones of more manageable size,” Fisher said, but “if we have to do this unilaterally, we should.”
Fisher spoke at a conference sponsored by the Levy Economics Institute of Bard College in honor of economist Hyman Minsky, who taught that an unfettered financial system would inevitably create asset bubbles and subsequent financial crises. Markets are efficient only at creating crises, he said.
Minsky’s ideas have gained new respect after the collapse of the dot-com bubble and the housing bubble proved how prescient he was. Four other top Fed officials are scheduled to speak at the conference, as well as former Fed Chairman Paul Volcker.
Across the globe, regulators, lawmakers and academics are debating the lessons of the global crisis that followed the massive credit bubble. They are trying to figure out how to re-regulate the banks in ways that will prevent future crises without hampering global economic growth.
In Congress, lawmakers are working on legislation that would create a financial regulator whose job it would be to monitor the banks for emerging imbalances that could pose systemic risks. The new law would also provide a way to euthanize large financial companies that are too large or complex to be dealt with under traditional bankruptcy.
These provisions are an attempt to solve the problem of “too big to fail.” During the 2008 crisis, large banks were bailed out by taxpayers around the globe, as regulators were faced with the ugly choice of protecting the banks or seeing the global economy fall into a deep depression.
Breaking up the largest banks, as suggested by Fisher, is not on the table in the congressional discussions. It will never happen, said Bert Ely, a banking consultant, who also spoke at the conference.
Rex Nutting is Washington bureau chief of MarketWatch.
I love this guy’s perspective. Buy stocks now, and join the lemming herd as they race off the edge of the nearest cliff. And enjoy the ride down to the ground.
P.S. It might not be too late yet to pull out your recent gains.
John Prestbo’s Indexed Investor
May 6, 2010, 12:01 a.m. EDT
The bull market is coming to an end
Commentary: History suggests the Dow’s move is halfway done
By John Prestbo
NEW YORK (MarketWatch) — The bull market for U.S. stocks will continue until the autumn of 2011. That’s the good news. The bad news is that in 18 months or so the Dow Jones Industrial Average will be at roughly 11,100, or slightly below the level it reached in April.
You might think I’m sticking my neck out to make a prediction like this. In fact, I am not predicting anything. Rather, I am simply projecting historical averages from the Dow’s (INDU 10,868, -58.65, -0.54%) 114-year track record onto current trends.
Mean Street columnist Evan Newmark explains to Money & Investing’s Dennis Berman why things may not be great in the U.S., but America is looking relatively good compared with conditions in Greece and the U.K.
The purpose of this exercise may be considered whimsical by some people, but to me it is a way of establishing a kind of baseline expectation. The market may — and probably will — deviate to one degree or another. Meanwhile, we have a sense of what history suggests is reasonably possible.
…
Is it too late to reconsider the theory that stock prices always go up?
From the Financial Times:
INDICES
FTSE 100 5,342 -1.28%
S&P 500 1,166 -0.66%
Eurofirst 300 1,023 -0.95%
Nikkei 225 10,701 -3.22%
Shanghai Comp 2,802 -1.94%
P.S. Didn’t the Nikkei 225 top out at about 39,000 or so, back in late 1989?
According to Wikipedia:
The Nikkei average hit its all-time high on December 29, 1989, during the peak of the Japanese asset price bubble, when it reached an intra-day high of 38,957.44 before closing at 38,915.87. Its high for the 21st century stands just above 18,300 points. In January 2010, it was 72.9% below its peak.
But don’t worry — this cannot happen to the U.S. stock market indexes, which always go up, over the long run.
Had you all realized the Greek protests have continued already for five months running? Has the U.S. MSM some how managed to avoid mentioning this ongoing Greek populist uprising, or have I merely not been paying attention?
The Financial Times
Athens protests erupt into violence
By Kerin Hope in Athens
Published: May 5 2010 12:38 | Last updated: May 5 2010 20:17
Greek prime minister George Papandreou has vowed to push through draconian economic measures demanded as part of a €110bn rescue package for his debt-burdened country despite the death of three people during demonstrations
Three Athens bank employees died on Wednesday in a blaze started by a petrol bomb thrown as the city erupted into violence during a march by tens of thousands of striking workers angry at deep spending cuts.
George Papandreou, Greek prime minister, called the deaths of the two women and one man who became trapped in the branch “a murderous act”.
He said he would not be deterred from pushing through unpopular public spending cuts and tax rises demanded as part of the €110bn rescue package agreed with Greece’s eurozone neighbours and the International Monetary Fund.
The fire broke out in a branch of Marfin Popular Bank. Officials said the three employees died of asphyxiation. Firemen rescued several other workers.
The attack came amid escalating anger over a new round of austerity measures launched by the socialist government in return for emergency loans to tackle Greece’s debt crisis.
Mr Papandreou told parliament: “We were all deeply shocked by the unjust deaths of these three workers who became victims today of a murderous act …This is where uncontrolled violence and political irresponsibility leads us.”
But he said the government would not be swayed from its plan to try to bring the public finances under control. “We took these measures to save jobs, protect families, households and workers,” he said.
The deaths were the first in five months of regular street protests against the government’s austerity programme. A spokesman for ADEDY, one of the unions organising the march to parliament, said he regretted the deaths but that the protests would continue.
…
EDITOR’S CHOICE
Gillian Tett: A ‘Bear Stearns’ moment? - May-05
In depth: Greek debt crisis - May-05
Pressure on ECB to think the unthinkable - May-05
Merkel appeals for Greek support - May-05
Lex: The euro - May-05
Slovakia’s distaste for Greece aid - May-05
* The Wall Street Journal
* ECONOMY
* MAY 6, 2010
Crisis Deepens as Chaos Grips Greece
By SEBASTIAN MOFFETT And ALKMAN GRANITSAS
Demonstrators smashed shop windows, overturned garbage bins and set fire to at least two businesses.
ATHENS—Greece’s fiscal crisis took a new turn to violence Wednesday when three people died in a firebomb attack amid a paralyzing national strike, while governments from Spain to the U.S. took steps to prevent the widening financial damage from hitting their own economies.
U.S. Treasury officials have been quietly urging their European and International Monetary Fund counterparts to put together a Greek rescue plan more quickly to contain the damage, it emerged Wednesday, as U.S. policy makers worry the continent’s problems could undermine a U.S. recovery much as U.S. housing woes hammered Europe in 2008.
In Spain, rival political leaders came together Wednesday with an agreement that aims to shore up shaky savings banks by the end of next month. Banks in France and Germany, which are among Greece’s top creditors, pledged to support a Greek bailout by continuing to lend to the country. Investors, meanwhile, are pouring money into bonds of countries seen as less exposed to the crisis, from Russia to Egypt.
Anxiety over the euro-zone economies sent the euro down to about 1.29 to the dollar, its lowest level in more than a year. The Dow Jones Industrial Average fell for the second straight day, losing 58.65 points, or 0.54%, to close at 10868.12.
Greece’s 24-hour nationwide general strike brought much of the country to a standstill, closing government offices and halting flights, trains and ferries.
At the same time, tens of thousands of protesters marched through Athens in the largest and most violent protests since the country’s budget crisis began last fall. Angry youths rampaged through the center of Athens, torching several businesses and vehicles and smashing shop windows. Protesters and police clashed in front of parliament and fought running street battles around the city.
Witnesses said hooded protesters smashed the front window of Marfin Bank in central Athens and hurled a Molotov cocktail inside. The three victims died from asphyxiation from smoke inhalation, the Athens coroner’s office said. Four others were seriously injured there, fire department officials said.
A police spokesman said eight fires in Athens office buildings and bank buildings had been brought under control.
Later Wednesday, black smoke billowed from fires on one of Athens’s main shopping streets. Glass shards and smoldering garbage littered the sidewalks.
Greek Prime Minister George Papandreou condemned the violence. “Everyone has the right to protest,” he said in a statement to parliament. “But no one has the right to violence and especially violence that leads to the death of our compatriots.”
Wednesday’s protests were sparked by Greece’s weekend agreement to adopt austerity measures in exchange for a €110 billion ($143 billion) bailout loan from the European Union and the IMF. Unions challenged Greece’s parliament, which could consider the measures as soon as Thursday, to vote them down.
The general strike marks the broadest challenge to date to the government of Mr. Papandreou, which is pressed to pass the austerity legislation to unlock bailout funds to meet a debt payment later this month that it otherwise couldn’t meet.
The protests also brought out many Greeks who were resigned to belt-tightening. Their unhappiness at the cuts was matched with rancor toward a generation of politicians who they say spurred the crisis with decades of corruption, kickbacks and accounting legerdemain aimed at obscuring to the EU the true level of Greece’s annual deficits.
“For 30 years the Greek people have been held hostage,” said Periandros Athanassakis, 48, a garbage collector in Piraeus, the port near Athens. “Those who stole the money should pay.”
…
Cockroach Theory strikes Eurozone:
Is Europe facing a ‘Bear Stearns’ moment?
By GillianTett
Published: May 5 2010 19:18 | Last updated: May 5 2010 19:18
Is Europe facing its own “Bear Stearns” moment? That was the question hanging over the markets on Wednesday as the sense of uncertainty spread.
A few days ago European leaders unveiled a joint package with the International Monetary Fund that was supposed to bring the market crisis to a halt. Since this came to €110bn ($143bn, £94.5bn), many policymakers thought – or prayed – it would be big enough to smother the market fear.
Instead, the fear seems to be worsening. The price of bonds issued by Portugal and Spain slumped on Wednesday amid rumours that those countries might soon be forced to tap the IMF for aid too.
Tales also circulated that some Greek, Spanish and Portuguese banks are being shut out of the interbank markets due to concerns about counterparty risk. Even normally sanguine officials could be heard uttering the “c” word: contagion.
Marco Annunziata, chief economist of Unicredit, captured the mood of many market observers by stating that “contagion pressures continue to rage unabated”, since “the flames have rushed through the firewall of the IMF/EU programme for Greece”.
On paper, this may strike some observers as a trifle odd. After all, the fiscal position of countries such as Portugal is not identical to that of Greece, and the €110bn aid package that has been unveiled for Athens is unprecedented in its scale.
Moreover, Greece is just a tiny part of the European Union. If the entire country were to vanish under the sea tomorrow, the global economy would barely even shudder.
However, that is precisely why the potential parallel with Bear Stearns is so fascinating. When that bank imploded in the spring of 2008 it also represented a pretty small part of the financial system as a whole. However, its impact was well beyond its mere size.
That was partly because Bear – like Lehman Brothers six months after – was linked with numerous other entities via a complex web of dealings that few people understood. The ripple effect was thus significant, but unknown.
But the second reason why Bear had so much impact was that its implosion tipped investors into uncharted psychological waters. Before 2008, most investors found it hard to imagine that a Wall Street bank could collapse; afterwards, however, once-unimaginable scenarios became frighteningly easy to depict. A mental rubicon had been crossed, which left investors unsure about what the limits to any crisis might be.
Something similar is playing out now. On Friday European governments thought – or prayed – that the €110bn number was so big that it would reassure the markets. In reality, though, it might have had the reverse effect, since “the big number might have just showed people there was a much bigger problem than they knew about”, as one policymaker says.
…
Attribution: That is an excerpt from a Financial Times article.
The Financial Times
A bail-out for Greece is just the beginning
By Martin Wolf
Published: May 4 2010 20:13 | Last updated: May 4 2010 20:13
Desperate times; desperate measures. After months of costly delay, the eurozone has come up with an enormous package of support for Greece. By bringing in the International Monetary Fund, at Germany’s behest, it has obtained some additional resources and a better programme. But is it going to work? Alas, I have huge doubts.
So what is the programme? In outline, it is a package of €110bn ($143bn) (equivalent to slightly more than a third of Greece’s outstanding debt), €30bn of which will come from the IMF (far more than normally permitted) and the rest from the eurozone. This would be enough to take Greece out of the market, if necessary, for more than two years. In return, Greece has promised a fiscal consolidation of 11 per cent of gross domestic product over three years, on top of the measures taken earlier, with the aim of reaching a 3 per cent deficit by 2014, down from 13.6 per cent in 2009. Government spending measures are to yield savings of 5¼ per cent of GDP over three years: pensions and wages will be reduced, and then frozen for three years, with payment of seasonal bonuses abolished. Tax measures are to yield 4 per cent of GDP. Even so, public debt is forecast to peak at 150 per cent of GDP.
In important respects, the programme is far less unrealistic than its intra-European predecessor. Gone is the fantasy that there would be a mild economic contraction this year, followed by a return to steady growth. The new programme apparently envisages a cumulative decline in GDP of about 8 per cent, though such forecasts are, of course, highly uncertain. Similarly, the old plan was founded on the assumption that Greece could slash its budget deficit to less than 3 per cent of GDP by the end of 2012. The new plan sets 2014 as the target year.
…
ARBEIT MACHT FREI
* The Wall Street Journal
* ECONOMY
* MAY 5, 2010
Moment of Truth for U.S. Productivity Boom
By JUSTIN LAHART
GREENSBORO, N.C.—As the long recession lifts, American businesses are grappling with a big question: Are we working smarter, or simply working harder?
The answer will say a lot about the strength of the economy in the coming years.
Fearing for their jobs, American workers are scrambling to produce more for every hour of work. Call it the hustle factor. At the same time, new machinery and new ways of doing things are boosting productivity. Call it the brain factor.
Both forces are at work: Productivity in the fourth quarter 2009 rose 5.8% from a year earlier, the biggest jump since 2002. Unlike recent downturns, when productivity shrank and then rebounded, it kept growing throughout most of the past recession.
Now the question is whether the biggest gains have come from hustle or brains.
An important indicator comes Thursday when the Labor Department releases first-quarter productivity figures. Economists polled by Dow Jones Newswires estimate productivity rose at a 2.5% annual rate, less than half its 6.9% growth rate in the fourth quarter.
Most economists think it will be harder to sustain gains built on working harder. If productivity slows over the coming quarters—say, falling back closer to its 50-year average growth rate of 2.1%—it has big implications. Lower productivity actually should reduce short-term unemployment because companies have to hire more workers to do the same amount of work.
It’s a different story over the long run. One reason the U.S. enjoys a high standard of living is that its workers have historically been among the world’s most productive. They make more goods and services per hour than workers in most other countries—and get higher wages in return. If productivity growth slows here, wage growth is likely to be anemic.
“I think that most of this [productivity increase] is temporary and it’s particularly dramatic because a lot of people were scared,” says Dale Jorgenson, a Harvard University economist who expects productivity growth to slow to 2% over the next year.
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