The Housing Bubble

Not really. Just think how easy it is to “make up money and print new money out of thin air”. Now was this so hard to understand? Need more moeny for increasing debt levels? Just decide [federal reserve-privat bankers] what is needed now to “cover up” new debt and do it. Now was that so hard? This new math, accounting is easy. Of course if you take off the rose colored glasses a couple of seconds and see “reality” then there is a problem. Perhaps the glasses are starting to come off in Greece. UK, and United States??

You forgot to add, Spain, Portgual and Italy.

I remember while driving in North Dallas, hearing on the radio that it had gone up to $1 T under Reagan.

I remember while driving in North Dallas, hearing on the radio that it had gone up to $1 T under Reagan.

So that’d be “North Dallas One-T”?

Thank you - I’ll be here all night. Be sure and tip your waitress.

I remember the 1T event as well. I remember thinking that there is no way that a 1T national debt is survivable.

Heck, maybe deficits and debt doesn’t matter at the sovergn level after all. That is James K Galbraith’s (son of John K Galbraith) position. My mind breaks down at the $billion level.

Heck, maybe deficits and debt doesn’t matter at the sovergn level after all.

I think they do matter - Greece, Argentina, Zimbabwe, etc. have all proven that. The level that can be reached before things go bad is just very dependent on the nature of the sovereignty, and really, really hard to gauge due to the complexity.

The obvious big factor is your basic debt-to-income ratio - in the U.S. this is currently at about 600%. However if this sounds bad - actually the ratio in 1933 went up to almost 1200%! There’s also that factor of “potential income” - in 1933 the government’s potential income was huge, because the economy was in shambles and had nowhere to go but up. WW2 helped a lot - our GDP skyrocketed after WW2, causing the ratio to go down from 670% to under 200%.

The currency status in the world of course is huge too. Since the $ is the largest reserve currency by far this gives us lots of leeway - and will allow our debt levels to go far above Greece’s. Likewise the size of the economy is a big factor. Japan’s debt level is far worse than Greece, for instance, but they’re not seen as a huge risk (yet).

My fear with the U.S. is that our position in the world will allow our debt levels to get far above the rest of the world - but if and when it does go bad it’ll be bad - like really, really bad. Like - complete breakdown of society bad.

My fear with the U.S. is that our position in the world will allow our debt levels to get far above the rest of the world - but if and when it does go bad it’ll be bad - like really, really bad. Like - complete breakdown of society bad.

I still don’t understand your fear. Complete breakdown of society? Why? Because of big numbers on computers or paper going away?

You said today economies are based on needs I think. These needs and means of production will go away because numbers will go away?

If most of these numbers are jive how will the default of jive completely break down society?

I still don’t understand your fear. Complete breakdown of society? Why? Because of big numbers on computers or paper going away?

Nazi Germany provides one good example of what financial breakdown can lead to. Not saying it will - but it can. IMO Argentina in the past two decades, and Greece recently, are best-case scenarios. Given the scale of the U.S. economy - I don’t think we’ll be that fortunate when it breaks down.

You said today economies are based on needs I think. These needs and means of production will go away because numbers will go away?

No the needs will not go away. However history is rife with examples of wars resulting from financial breakdowns. When war comes - other needs exist but become secondary to basic survival. Production exists but is shifted largely to military/police.

Generally this is temporary - anywhere from a year or two to decades, before things get back to a stable economy where people again work more towards improving their lives rather than just survival.

In short - the western hemisphere as a whole (now that I think about it) has been fortunate to not have a large war really since the 1800’s. I think we’ve been spoiled as such, very much gaining a false sense of security.

Sorry if I sound like a Chicken Little. I hope I’m wrong. I’m not saying that things will go this bad - just saying that there’s a significant chance they will.

Not being an economist, its hard for me to say for certain what happens, but, assuming that the interest on $12 or $15 Trillion of debt is serviced (that assumes US debt is forever rolled and principle is never repaid), at some point the amount of interest to be paid on the debt surpasses the ability of the taxpayers of the country to fund. I suppose more money can be created to deal with the shortfall, but that just devalues the rest of the currency in circulation, which has to ultimately lead of massive inflation.

James K. says otherwise, but I don’t buy the argument.

Golly gee whiz where is all the anger and worry about the consistent high unemployment we have?

If an economic collapse can lead to Nazism, then why do the Randian ‘free-marketers’ want us to let the system crash and burn now? Seems like the acknowledged dangers of a systemic crash would make us want to avoid one at (almost) all costs, no? There was more deficit spending during WW2 than the Depression.

Carter lost because he screwed up the Iran hostage situation

I think the American public would have been more forgiving if every hostage had died but Tehran ended up a smoking hole.

Don’t know what to make of your comment, but it did make me crack!

Not being an economist, its hard for me to say for certain what happens, but, assuming that the interest on $12 or $15 Trillion of debt is serviced (that assumes US debt is forever rolled and principle is never repaid), at some point the amount of interest to be paid on the debt surpasses the ability of the taxpayers of the country to fund. I suppose more money can be created to deal with the shortfall, but that just devalues the rest of the currency in circulation, which has to ultimately lead of massive inflation.

James K. says otherwise, but I don’t buy the argument.

Yes.

Thus gold at $1200+

(who’s James K?)

If an economic collapse can lead to Nazism, then why do the Randian ‘free-marketers’ want us to let the system crash and burn now?

Your answer, sir. The perfect analogy.

Sometimes the best cure for a disease is with a more benign form of the same disease.

“1802 caricature of Jenner vaccinating patients who feared it would make them sprout cowlike appendages.”

Cool!

Your answer, sir. The perfect analogy.

Sometimes the best cure for a disease is with a more benign form of the same disease.

LOL. So the ‘perfect’ analogy of allowing our financial system to fail and entering into a deflationary death spiral, is that of milk maids getting cowpox, which gives them immunity to smallpox?

One key difference comes to mind- cowpox isn’t fatal. You yourself just pointed out that economic chaos often is. A better analogy for your theory would be to give everybody smallpox, and the few, if any, that survive will have immunity.

That’s partially my point. The only time you get any kind of almost reasonable deficit is when you have a government that can’t agree on how to waste the money. If Clinton had had Dems in congress, his deficits would have been larger. Reagan had a Repubs congress and ran up deficits.

Bush inherited Repub congress, and deficits soared.

He gets Dems in congress, and they start complaining about spending. You put a Dem in the white house and deficits have gone insane.

They all waste our money. Our only hope is getting them arguing so much about how that they can’t get around to actually wasting the money.

You do have a good point and this was how the Founding Fathers intended the system to work.

polly - the Republicrat party already took over long ago. There is no viable second alternative.

That’s a bit of a snarky cop-out I know; but in general I think it’s true. We actually do write our congresscritters often; unfortunately it generally feels like pissing into the wind.

I’m not talking about regular elections. I’m talking about primaries. You might not like either choice when you are talking about the regular “party” guys in an election, but you can get someone who fits in a party on social issues (so they have a chance) and then talks sense on fiscal issues. Seriously. It is plausible. Not likely, but plausible.

Writing letters is fine, but until you get someone who actually will think independently on fiscal issues, it won’t help much.

Agree.

When I was 11 my mommy told me that “if voting could change things then it wouldn’t be legal.”

I was 11 when I realized that if you want to get ahead you have to live beyond your means and HELOC like nobody’s business because a bailout will come.

When I was 11, my mommy was desperately trying to get my brother and me into the French Foreign Legion on the buddy system.

When I was 11, I started hitting the sauce.

Anything is possible in bizarroworld

Bizzaro world happened in 1933 - more or less. Fortunately it wasn’t enforced much. The same might not be true next time.

Just define “saving” as “hoarding” in order to make saver’s jail politically expedient.

In some countries, the savers ( hoarders ) have paid for their thrift WITH their lives. ( Soviet Russia, still going on in Communist China & North Korea )…

I’m not so sure about China any more. I think businessmen have MUCH more freedom there than here. I’ve been there a couple of times in recent years (returning again this October, to Shanghai) and–at least in the cities–it seems exciting, dynamic, and FREE! People are starting all sorts of businesses with far less interference than we get here.

Where I am, in CA, there’s even a county “property tax” on business assets. Country assessors come into my office and record what they see, etc. And there are all sorts of accessiblity, EEOC, laws I have to deal with. Not to mention constant threat of patent or IP lawsuits, most of them without merit.

You may want to go to 75 or 80% LTV so you can afford some champagne and cigars for the christening. You can’t use cheap stuff at an important day like that! You need at least $500 a bottle stuff to break over the bow of your ship.

Why stop at 33 ft ? Go up to yacht-class, I say.

Ain’t enough equity in Casa Spokaneman’s neighborhood for that. This is Spokane, and I live cheap.

My nephew, the Doc, has a 48’s Bertrand that he would make me an Uncle Spokaneman special deal on. Don’t think I need that.

What about rescuing renters that are unemployed to keep them from being homeless ? This proposal is just one more way to pay the banks on non-performing assets . How are they going to insure that the borrower puts the money toward the mortgage ?

“How are they going to insure that the borrower puts the money toward the mortgage ?”

Don’t worry—they’ll guarantee that by paying it directly to the banks.

“You have obviously never been to a communist country.”

No one has ever been to a communist country because there has never been one, only dictatorships claiming communist ideals as an excuse to impoverish the working class. Communism is a really interesting idea that has no practical application.

Even with the dictatorial version of communism, it still doesn’t fit with rewarding some ‘commoners’ (delinquent mortgage holders) and not others (responsible mortgage holders and renters.)

whining and dining

LOL. Whining about what, the bouillabaisse?

to: Diogenes (Tampa, Florida)

I think that would also be an apt description of wall street too.

The little North Vietnam “leader”, i understand, consumes more French champagne than France…

That’s quite an accomplishment. Does he fill his pool with it? (That would be kind of cool.)

in the former yugoslavia and in russia, the standard of living today is far lower than it was under communism.

That would seem to me to be a very interesting comparison look into.

Ahhh…Communism. If only those Revolutionaries would have practiced real communism and not murdered and starved hundreds of millions of people. Yeah, let’s give communism a try, it sounds like such a wonderful system.

What a bunch of babies we have become in this country. Crying about how the bad old bankers robbed granny and the strawberry pickers. Those people should have more sense than to sign their life away on some pipe dream of owning a McMantion or HELOCing their home to take vacations and buy toys. So now everyone wants to throw out our whole system of government because of some greedy a$$w1pes.

How about we keep our republic the way it was designed and pass some common sense laws to protect financial markets and the public. Let’s lock up the ones who committed real fraud and let the folks who over extended themselves take their lumps and move on.

s/McMantion/McMansion/

Plenty of renters pay taxes.

In every year of my adult life, except the years when I was a homeowner, my Federal income tax was greater than the sum of all the rents I paid. (And I have been a tenant for most years of my adult life.)

Come to think of it, this year may turn out to be an exception, as I have planned my tax exposure a little better…

In order to qualify, your AGI has to be below $34,412 ($68,824 if married filing jointly). It therefore does no good for any renter who has a prayer of ever affording to buy a house in California, so it does nothing to balance out the mortgage interest deduction.

Also, the credit is a whopping $60 ($120 if married filing jointly).

Being from the boonies, I have never quite understood why upscale New York City apartment buildings still have doormen.

Being from the boonies, I have never quite understood why upscale New York City apartment buildings still have doormen.

Economies of scale makes a big difference. It’s a lot more cost-effective to have a doorman for a 1000-unit building than say a 10-unit building. Plus upscale renters can afford more luxury overhead.

Don’t get me wrong (Rio etc.) - there is some value in doormen, elevator operators, etc. Sometimes it’s nice to have someone press the button or hold the door if you have no free hands. Sometimes it’s nice to have someone to ask a question of - directions etc. Sometimes it’s nice just to have someone to talk to.

The question though is - does the person provide the same value to their customers as what they’re paid? If it’s an elevator operator getting $30 an hour to just press a button ten times an hour, then the obvious answer is no. That being the case - the economy is better off if that person didn’t have that job. But that person doesn’t have to be out on the streets - they can find or create another job. The whole “create” thing is what people seem to miss - employment is not a zero-sum game.

If that person is not getting paid $30 per hour to operate an elevator - that means that there’s $30 per hour that the hotel can use for other things - e.g. doing repair work, being a concierge, etc. - things that allow the hotel to charge more money for its nightly stays because it’s now a better hotel; or perhaps just provide a better service at the same price.

Doormen are 1) a status symbol and 2) a convenience (when they receive deliveries, let in repair people and similar services.

Also doormen provide an extra level of security since you just can’t walk in, get on the elevator and then break into someone apartment…

Perhaps. Math doesn’t appear to be their strong suit.

I think Rio’s point is that economies are for people. They are there to provide people jobs, careers, education, houses, etc. They don’ t have to change so fast that no one can keep up and adapt. I really don’t mind recessions or job obsolescence. I just mind when it looses the human touch and becomes irresponsible. Brasil is moving a little slower than we are. So what? How does that hurt? They get there don’t they?

Or am I a Communist? Funny, I don’t feel like a Communist.

Roidy

You have the cause and effect reversed.

Economies don’t create jobs. Needs create jobs. Jobs create economies.

It’s like the one garbageman “solution”. Sure, now one guy can remove all of the garbage and drive and those other two guys who used to hang on the back of the truck and get the cans can “retrain” to do things more “valuable” for society. But to what end?

All we’re left with is a system that is more “efficient” as long as you only look at the single bottom line of profit. Because any time you hear noise, energy is being wasted. It’s like the leafblower vs. the rake. Is that annoying piece of machinery really an “improvement”. Are we that much better off with tons of noise and high unemployment? Or are we just in the hole, still digging, because that’s all we know how to do anymore [see also: bailouts].

MrBubble

PS: My personal Bike to Work Day was semi-successful. I blew and tire and tube and the bike shops don’t open until 10. An hour late to work and $65 poorer… But, thinner? Doubtful after eating a free burrito on the way. Good luck those those in cities where BTWD is tomorrow! Wheels side down.

I’m sorry, but any economy that wastes its resources employing people in this fashion is stupid. NJ does this nonsense by forcing you to have your gas pumped by pump jockeys that dribble gas all over your car’s paint and generally do a sloppy job of something one can easily do him/herself.

Go too far down this road and your country starts to resemble Greece.

“Needs create jobs. Jobs create economies.”

there’s a great southpark episode that illustrates this where cartman obtains an entire theme park all to himself.

Two different things, I think, but I may have set up a straw man with the two examples I used. I agree that some jobs like pump jockey and checkout line person (I prefer to do check out myself and I don’t use gas stations) are better off done by the consumer. [Aside: where are all of the savings from not having to pay any of the workers? CEO pockets in Greenwich, CT.]

I was mainly stating an opinion that replacing human energy with fossil energy is not always “efficient” when looked at from the triple bottom line perspective as in leafblower v. rake and my garbage example. But it seems that I have overstated my argument. Point taken.

MrBubble

Economies don’t create jobs. Needs create jobs. Jobs create economies.

How about this?

Needs create jobs. Jobs create economies. Economies are to benefit people. (Not rocks or bugs)

So therefore economies should benefit people by fulfilling needs.

Some human needs:
1. Fairness (pay one can live on)
2. Honor (the honor of honorable work and work being honored)
3. Security. (a basic human need of which job security is part of)
4. Food, shelter, skills, health-care (all of which take money and the money is earned by jobs.

So yes, the economy should provide a system making available honorable jobs to the greatest amount of people who want to work.

And Americans DO want to work and they always have.

The problem with that dependency chain is that one’s basic needs now can be met by virtue of existing within the “economy”, not by jobs directly. Thus why would any one person have the incentive to have a job, if their needs can be met without one? All that’s needed in your dependency chain is for some people to have jobs. People who have jobs then are forced to work for the benefit of people who don’t have jobs. That’s immoral, IMO, as a principle.

Generalizing, of course. But the principle remains.

In my opinion one’s needs should be met by “the economy”, but by the combination of two things:

1. One’s own work/job
2. Charity (short of 1)

With 2 being private charity - IMO the government should not be in the charity business.

I think your list of four things mixes “rights” and “needs”. Governments should ensure rights - including security and fairness, but not provide needs. And “fairness” here doesn’t include “pay one can live on”. Is it really fair to pay someone that doesn’t do any work? IMO no.

The problem with that dependency chain is that one’s basic needs now can be met by virtue of existing within the “economy”, not by jobs directly. Thus why would any one person have the incentive to have a job, if their needs can be met without one?

But it’s obvious that American’s want to work and it’s obvious that their wants and needs are NOT fulfilled without jobs.

Proof: When times are good unemployment goes way down. It went down so far in the 90’s that they called it “full employment”.

In macroeconomics, full employment is a condition of the national economy, where all or nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so. It is defined either as 0% unemployment, literally, no unemployment (the rate of unemployment is the fraction of the work force unable to find work), as by James Tobin,[1][2] wiki

Unemployment always goes down during the good times. People don’t want bad times so they can be lazy.

How can this not be proof? It’s proof lies in facts, numbers and the observation of human behavior during opposing economic cycles.

(Other than that, it’s a pretty strong argument too)

Just out of curosity, where do you think private charities get there money to help people? It seems to me when people are employed there is more money given to charities, when people are unemployed charities go hurting for money.

Rio, here’s a small fly in the ointment of your argument:

Unemployment persists “unexpectedly” when unemployment BENEFITS are extended more than has been customary. One suspects that SOME of the people who can get unemployment benefits are not all that anxious to get JOBS.

But it’s obvious that American’s want to work and it’s obvious that their wants and needs are NOT fulfilled without jobs.

Not obvious to me at all, in fact I disagree.

Evidence to the contrary - median unemployment duration.

Why in the world in this recession is the duration of unemployment so much longer than in previous recessions - even when the level itself isn’t necessarily higher (e.g. U3 peaked at 10.8% in 1982)? Is there any doubt it’s because benefits have been extended so much longer this time?

I’m not so much saying that American’s don’t want to work, as that they’re not as driven to find jobs if the incentive (no pay otherwise) isn’t there. They’re a lot more picky about what jobs they’ll take, and a lot more willing to stay unemployed longer if they can’t find one that meets their expectations.

Rio, here’s a small fly in the ointment of your argument:…One suspects that SOME of the people who can get unemployment benefits are not all that anxious to get JOBS.

Of course there are always “some”. But this fact does not negate the argument that the vast majority of Americans want to work.

The vast majority of Americans want and need a job.

They are not lazy. They are not moochers. And they are not parasites and to see middle-class Americans calling their formerly middle-class compatriots those names is an illustration of the power of disingenuous, extreme right-wing propaganda.

I think the main point is that full employment is better than the most ‘efficient’ economy possible, if that efficiency causes wide-scale and long-term unemployment. China has used our desire for ‘efficiency’ to hijack and destroy our economy. Short-term efficiency is not always best in the long-term.

Why in the world in this recession is the duration of unemployment so much longer than in previous recessions -

Is there any doubt it’s because benefits have been extended so much longer this time?…..they’re not as driven to find jobs if the incentive (no pay otherwise) isn’t there.

Now you’re confusing cause and effect.

Your evidence of median unemployment’s duration does not support your points that vast numbers of the unemployed are too picky, don’t want a job or unemployment payments keeps the majority of them from searching hard for a job.

Because:
1. Unemployment benefits were extended AFTER it was apparent that the unemployed were not finding jobs. Not before. Jobs available and layoff figures were looked at too. They would not have extended unemployment payments IF jobs had been found and/or available. But there were no jobs available in the amount that could meaningfully lower the UE rate.

2. During this time the unemployed were not finding jobs they WERE “driven” hard to find jobs because they had no idea that their benefits would be extended. They did not have a crystal ball but they had a lot of unpaid bills.

Are some too picky and are some lazy? Yes but the vast majority? No way.

My god, we’re doomed.

There are no damn jobs out there right now. Even part time min wage jobs are hard to come by. And if you’ve never tried to live off part time or even full time min wage, (and you haven’t if you even suggest such a thing) you really should just keep your pampered, ignorant and sheltered self quite.

People aren’t lazy. They just aren’t stupid enough to work a job where they lose money. Would you? Then why should they?

But more than anything, there are NOT enough jobs.

That’s why the duration is so long.

I think Rio’s point is that economies are for people. They are there to provide people jobs, careers, education, houses, etc. They don’ t have to change so fast that no one can keep up and adapt. Roidy

Thank you

One thing I’ve been watching with great interest is the spread of self checkout stands. As in, you be the cashier. I’ve used the self checkouts in grocery and home improvement stores, and they work pretty well. Same for self check-in at airports.

Methinks that a lot of low-level, menial work will get automated out of existence.

…by passing the work onto the customer. The only reason I like the self-checkout is that people don’t see what I buy.

Once all products have RFID tags you will just roll the cart through the scanner and it will tally up the total of everything in an instant.

Self checkout using barcode readers is just temporary.

30 years ago, you never pumped your own gas. (Apologies to DinOr who still doesn’t).

“One thing I’ve been watching with great interest is the spread of self checkout stands”

Don’t get me started on those…

Yesterday, big supermarket, 12 checkout lines for clerks, only 3 open, 8 self checkout stands and a crowd waiting behind each of the 3 living and breathing check out clerks. Everybody HATES the self check out bandits.

I tried one of those danged self check out stands once. It tried to cheat me. The assistant manager, a supervisor and a cashier couldn’t even make it work properly while my special on butter pecan ice cream melted !

I heard they have new scanners that will allow you to not even have to empty your cart. The entire thing is scanned. No more jobs, just security. Less theft too.

Spokaneman,

Why it’s been since 1979 since my hands have touched that disease infested filthy gas nozzle! LOL.

Good points on the self serve, but I think it should be at the buyer’s discretion. Can’t tell you how many times I’ve nearly gotten hosed in the C/O line.

The wife and I have system, she checks the register while load the conveyor. Sorry guys, I told you I was cheap. On every trip, there’s a discrepancy.

What concerns me though, is the total lack of service in the “professional” world. Wholesalers used to load you up w/ glossy brochures. Well not any more! They send you emails and if you want to send it to clients, YOU print it! It’s gone viral. Everywhere you go ( you’re on your own )

I heard they have new scanners that will allow you to not even have to empty your cart. The entire thing is scanned. No more jobs, just security. Less theft too.

Only feasible to a certain extent. E.g. it’s not very cost effective to put an RFID on each apple and ear of corn. There will always be some need for manual checkout.

They already put stickers on every danged apple. It wouldn’t be any trouble to put a bar code on the sticker. And if that’s too much trouble, they’ll just seal produce up in premeasured bags and put a barcode on that, like they do for celery. Or make the customer weigh out his own stuff and put the sticker on it — I remember doing that in the bulk section in the mid 80’s.

Did I mention that I love the cash-only farmers market?

oxide,

I recall that feeling once too. I was buying for a party of sorts and had nothing but wine, beer, champagne cigars you name it.

In using your debit card, how hard is it to imagine that your Life Insurance company one day will be able to track your consumption habits etc. Especially when you opted for “non-tobacco” policies?

I think though the bottom line is that whether it’s the cashier personally or some other ’system’, someone is tracking our purchases. You know “just to better serve the consumer”.

The grocery stores digitally track all purchases to better match inventory and profit.

If you have a store discount code, it knows who you are and they DO use that info.

Your credit card company knows all about your habits and they DO trade it with other credit card companies.

Excellent Post….thats the problem in a nutshell.

So then Pondering - do you then manually write your submissions to the HBB on your machine-code web-browser, using flip switches for each zero and one? Or do you allow a machine - your computer and the browser software - to do the work that used to be done by humans?

Exactly how far do we go back? E.g. do we forgo the use of tractor harvesters that can harvest 150 acres in a day, and use a hand scythe at 0.3 acres in a day? Do we go back to the caveman days when rocks were used?

In other words - the theory that automation causes unemployment is incredibly, incredibly wrong.

Dude, having a bunch of people thinking up creative new ideas is a good thing. Even if productivity is low.

Shyt, we need all those people redirected to work on things like transitioning from an oil based energy system to something else.

Our big problems are debt and pricing issues along with manipulation.

People complaining about abundance… oye… oye vey.

I’m hitting my head on the desk now. Please make it stop.

Marie Antoinette couldn’t quite grasp this problem of an economically destroyed populace either.

I tend cook a lot more than most guys because our mom made made the guys do their share if they were gonna eat and I hate starving. I only cook on gas and with HD stainless steel.

I can operate and have some knowledge of just about every common toy in a kitchen although I’m far from being an expert chef.

However, I have never, ever operated a POS mechanical automatic dishwasher although nearly every place that I lived has had them. The brains totally wasted their time, expertise and technology if they thought that they made that idiot machine for me.

I am the automatic dishwasher. I am faster, do a better job and still use flour sack cloth towels and put everything away like mom taught me !

To hell with those space-wasting mechanical automatic dishwashers.

I think maybe, just maybe, that a hypermegaliberal like Rio

What’s going on with you James? Lately you’ve upped your uncivil name calling and straw-men counters.

“Scum”, “Losers”, “Hacks” “(insert something scary)liberal” are names I’ve seen you use against at least 6 posters lately after they out-argued you in a polite manner.

Where did you learn these tactics of debate James? Do you think name-calling and straw-men will lead people to respect your posts, you or your points of view more?

Why should we have any labor saving devices at all? Why not harvest wheat by hand? Heck, we went wrong with the plow.

Only 3 BS straw-men in 3 sentences James? That’s it? Three? If you use complex and compound sentences you can fit more in maybe.

Then he mixes it with labor trade issues which are what he believes are the root causes of all the madness.

Close but not quite James. The labor and trade issues are a symptom of but not the root cause of the madness.

I know it’s complicated James, but maybe if I explained it so you’d understand, you’d just get mad and call me another name.

I am the automatic dishwasher. I am faster, do a better job and still use flour sack cloth towels and put everything away like mom taught me !

You go, mikey! (All the best from another auto-dishwasher.)

Gee I’m the complete opposite. My dream kitchen is to have TWO dishwashers (screw the granite counter tops). One clean one dirty.
Think of all the saved cabinet space!!!

To tell you the truth I’m surprised that the idea hasn’t caught on.

Interesting idea.

Time for y’all to break out your old copies of Thoreau’s Walden.

Is life about productivity, efficiency, amassing as much crap as possible, growth for the sake of growth, etc…..

Capitalism as we know it (consumerism, endless growth, trashing the environment) brings out the worst and most base instincts in humans.

Can’t we just please evolve already?

Art, music, philosophy, family, friends.

I was going to type out some kind of answer… just not suffering fools well these days Rio.

Brazil has implemented these economic changes much more slowly than the USA and the disruptions have been less severe socially and economically.

You mean like 2000%-inflation-per-year kind of “less severe”?

If you’re talking post-1999 - the jury’s still out. It usually takes a few decades for significant economic changes to see their full effect - e.g. the way much of today’s problems were brought about due to FDR’s policies (e.g. creation of Fannie Mae, etc.). In about 20 years Johnson’s policies (e.g. Medicare) will begin to bear “fruit”. Probably about the same time Reagan’s deficit spending will also begin to bear “fruit”. (Though at least in his case we got something for the money - the fall of the USSR)

You mean like 2000%-inflation-per-year kind of “less severe”?

Yes, less severe than the USA economic and societal restructure going on now. We have to consider where Brazilians and Americans came from and where they are going economically and as a society–the trends.

Brazilians learned how to live with that inflation better than one would have thought. That’s why I keep saying currency collapses don’t end worlds. Brazilian banks make USA banks look like criminal enterprises now.

And Brazil did not lose such a large percentage of their middle-class as we did. In fact in the past 20 years their middle class has increased by 35 million people. What are our figures in the USA? We lost not gained.

I know Brazil pretty well for a Gringo and have followed the lives of many of them since the mid 80’s.

I visited Brazil in 88, 93, 94, 95, 97,98, 00,01, 02, 04, 05, 06, I’ve done business with them since 86 and lived here since 2008.

I would say since 86, Brazil has progressed some while the USA has regressed and I am not being severe in my judgment and I still love the USA a lot more than I’ll ever love Brazil.

I would say since 86, Brazil has progressed some while the USA has regressed and I am not being severe in my judgment and I still love the USA a lot more than I’ll ever love Brazil.

Having lived in the USA since way before 1986 I very much disagree that we’ve digressed, at least in terms of standard of living. I would submit the HBB as just one minor example - the internet after all was created here.

Nevertheless I would agree that we’re definitely on a downward trend in a lot of respects; it’s a very subjective thing of course.

Let’s not forget that the U.S. largely provides a monetary and a military safety net for the rest of the world as well.

In other words - WITHOUT US YOU’D BE NOTHING!!!

(OK - so just kidding on that last thing )

Hasn’t the per capita debt level in Brazil been skyrocketing the past few years?

Perhaps they are headed for another round of hyper inflation?

The FED short-circuited the markets and sent out false signals that there was a surplus of savings, which there was not. In fact, the savings here were going negative. And the borrowing and buying frenzy were underway. This led to MASSIVE malinvestments. That is where we are today.

Thwack! (A nail just got hit on the head.)

I agree Diogenes . If the Fed Chairman would just look at
History he would see that it was jobs and manufacturing and
demand that took us out of the great Depression ,in part because of the war machine that kicked up . Just flooding money into the economy to fix bottomless pits of losses does
nothing but keep the money in the culprits hands to lie another day to fleece more .

What possible value does Synthetic derivatives have in a Society except giving the gamblers one more casino game to play by manufactured assets ,or just one more leverage game . This isn’t productivity .

The false value creation of real estate inflated values just created fake money and fake demand ,no different than the
derivatives and credit default games of Wall Street .

Wall Street has gotten use to making money out of thin air by being market makers of nothing by gambling games of leverage . Oh ,just rate the CDO’s as AAA investment grade and we can base all the Casino games on that faulty premise .On the one hand they say that all the big players knew what they were doing and in another breath they say that nobody saw it coming .

It was a Obstruction of Justice bailing them out and it had nothing to do with keeping the credit markets flowing but it had a whole lot to do with preventing Discovery of their
rotten bad faith Ponzi -schemes . Wall Street gambling middlemen cannot be lenders . Wall Street stock market/lending machine is just suppose to be a reflection of a productive society that allocates funds accordingly to demand and real needs .

To bad the Fat Cat Market Creators weren’t put on the chopping block because this just extends the games and keeps this Society in the wasted motions territory to keep faulty systems alive ,creating new bubbles . Wall Street Entities demand their rigged Casinos and absurd profits and watching Politicians even listing to them after what they did demands throwing all these bum out except a few of them .
This is really a outrage .starting with Paulson and his demand for a blank check and immunity while the Fed was giving emergency loans for full value on junk paper was every entity
that was involved in the Great Gambling Casino . Oh, and if anybody think that those Kangaroo Courts of Congress weren’t just shows for the public ,than look at how that has translated into to big to prosecute or break up or ignore their bribes and lobbying.

Diogenes,

Valid points all, but I think WT and I are on perhaps a bit of a different wavelength here? What I’ve been attempting to sort out here over the last few days is:

Assuming such a thing as a Housing Bubble never existed! Just, never existed, how much Global financial turmoil would we be in anyway?

What portion of the blame lay at the feet of the REIC ( and granted there’s plenty ) and what degree of blame falls directly on gov’t mismanagement?

Would the disconnect between capacity & demand occured even had there BEEN no free/cheap money? Would the American worker be any ‘less’ screwed had median home prices ( and by extension ) MEW extraction to support lifestyle never materialized?

The MEW extraction followed a run up in credit card debt. A huge increase in government debt occured at the same time. There is debt all over the place.

No doubt that ultra-low interest rates fueled an asset price bubble.

But as for spurring excess consumption and debt, I think there are only two explanations. For many the consumption isn’t excess, and they are borrowing because their real incomes have fallen. Or it is the project of a consumption culture, as lots of folks borrowed at 18 percent to keep spending.

But as for spurring excess consumption and debt, I think there are only two explanations. For many the consumption isn’t excess, and they are borrowing because their real incomes have fallen. Or it is the project of a consumption culture, as lots of folks borrowed at 18 percent to keep spending.

Recall that back before the 1980s, it was pretty tough to get a credit card. You had to be, ahem, affluent with good credit. The debt pushers hadn’t started on everyone else yet.

Would the disconnect between capacity & demand occured even had there BEEN no free/cheap money? Would the American worker be any ‘less’ screwed had median home prices ( and by extension ) MEW extraction to support lifestyle never materialized?

Sorry i didn’t get in on the prior discussions. My blog time has been limited lately and i have a lot to get done before the end of the day, mostly outside in fix-it land.

My perspective is that without the cheap money, NONE of this could happen. It is all based on credit creation. Without the cheap loans, people would not have HELOC’d. What would have been the incentive? You have a 7% home loan, the new rate is somewhere between 6 and 8. It will cost you thousands in “costs” to get a loan. It will be tacked onto the price of the loan, making the loan a LOT more costly. It is a bad deal. But if mortgage rates go to 4%, or 3% or you get a 1% rate for 6 months, then the incentives change.

Most particularly, if the mania didn’t get going, and the house had only “appreciated” 10% in the past 5 years, and they were trying to pay down the loan, how much “equity” would the have to “re-capture”??? It is after all, only increasing the DEBT load. It is not free money, which many people felt that it was.

The lowering of interest rates causes prices to go up, all things being equal in a fixed-income world (short term fixed in the sense that you probably won’t get a 20% raise next year). It makes the higher priced house equal the same payment. But, having just gone through the stock market melt-down, this was SAFE, and everyone was looking for safety……..and the FED made “safe” investments pay NOTHING. What can you do?? Where can you get a return on your money?
REAL ESTATE. It always goes up, after all, and it’s tangible.
You have something to show for your (or someone else’s) money.
Once the frenzy go going, and the Ratings Agencies assured everyone that even the crappiest loans were “secure”, then without some constraint on lending, it was a no-holds barred rush to the bid wars. I remember them. Do you?
You just couldn’t pay to high a price, because, after all, prices were going up 20 to 30% a year and if you didn’t buy, you’d be priced out forever. Suzanne researched it.
David Lereah said it was a sure thing. Your local broker said it was the best investment………….blah, blah, blah.

This frenzy gave the BANKERS a fee frenzy for making securitized gambles. The best part for them was that the Regulators (Greenspan) said if they managed to dump the paper on someone else, rather than hold it in their vaults, they could re-loan all the money and not hold any reserves in the event of default. That created a whole new market for insurance on the AAA loans….and derivative heaven.
More fees, more transactions, more profits, no down-side.
Until the collapse.
Now the FED holds the bad loans, the banks rig the markets, get free “interest” on an arbitrage play with borrowed money and book huge profits while holding losses of the accountancy forms, all at the behest of the Federal Government in the the form of the TReasury dept. and the Federal Reserve, a PRIVATE banking CARTEL.
Who will pay the losses? The US taxpayer. Unfortunately the FED will need to print up some money for them, too, because there just isn’t enough money in the universe to cover all the loses in Derivative Hell.
Chess anyone?

“you probably won’t get a 20% raise next year” LOL

Ya’ think? But Suzzane said… Very most excellent post Sir. It’s obvious everyone from HD employees to contractors, MB’s etc. ( and even the people that built Cobalt boats ) were going to benefit.

Others, I’m not so sure about? We’ve documented the growth in Gov. actually outstripping prop. tax revenues so clearly new hires at the State ben. as well.

I guess the reason it’s even important to me, is that, it wasn’t really anything remotely like a ‘Godsend’ on the way ‘up’ and it’s been total HELL on the way down. I know coked up MB’s definitely feel it was worth the ride.., but some guy that mgd. a golf course? A route driver for Sierra Springs Water? Auto mechanics?

Where’s the line here?

The future belongs to those who sell under $5000 cars.

For now. I still remember the late 70s and how people were thinking the same kind of thing, and how fast it turned back around once things started to improve.

The future belongs to those who sell under $5000 cars.

I wish they’d sell them here. $20k+ for a car is an absolutely insane amount of money.

$20k+ for a car is an absolutely insane amount of money.

And that’s the main reason why Yours Truly doesn’t own a car.

I wish they’d sell them here.

Are you already buying the cheapest possible car here? I don’t like the content in the cheapest cars we already have available, so I’m imagining that the odds of me buying a $5000 car are low…at least as long as there are used models of far better cars available for similar prices.

Where’s my check…….I betcha it’s in the Kenyan National bank in Barry Soetero savings account.

The ultimate in “fairness” and “equality” is described in the short story “Harrison Bergeron” by Kurt Vonnegut, Jr. It’s a quick read.

www dot tnellen dot com/cybereng/harrison.html

I like this tail of fairness.

“The ultimate in “fairness” and “equality” is described in the short story “Harrison Bergeron” by Kurt Vonnegut, Jr.”

That short story left a big impression on me when I was a young’un… Thanks for the reminder, Bill…

Too funny packman. Love the lyrics of “The Trees”

Slim,

Good for them! I have a modest home gym but it’s hard to stay in shape during an OR winter ( which lasts until… well, today! )

My daughter is really into fitness and says there’s really no reason you can’t be more or less healthy until the day you leave. Sounds a little far flung to me too, but it’s one of those ‘good lies’ you should keep telling yourself for as long as possible.

her who?

“a pervasive pattern of grandiosity, need for admiration, and a lack of empathy.”

her who?

I’m sorry, when I read the above quote I thought you were talking about Ayn Rand.

Sfbb,

Pffftt. Ya’ think? Unfortunately it’s the third rail of Cali politics. But at some point we have to take a serious look at that.

I’m all for re-instating the deductibility of c/c int. and auto loan int. We can do away w/ MID ( 2nd home MID ) 2nd Mortgage MID etc. but it won’t happen overnight.

We need an orderly phase out and retreat. Our commingling of discretioanry purchases ( read debt ) and housing debt was an experiment that failed miserably.

They could also change prop 13 to start collecting commercial property taxes.

Which is why I’m a big believer in impact fees for developers. IMHO new construction SHOULD pay for the capital expenditures assosiciated with the infrastructure it needs.

LOL! Why, is there a fear the lake is running dry? Even here drizzly OR we were slapped w/ water rate hikes. ( Dude, it only rains 10 mos. out of the year here? )

Huh ?…sorry, I busy was rolling out the rain barrels and chasing those greedy thirsty birds away from the bird bath.

mikey,

Don’t laugh! I’m seriously thinking about doing catchment. I doubt the City ( and I was referring to the City level here ) will do a ‘thing’ to reduce my monthly bill but I can have a ball quenching every pesky bird in town!

Jim A.

Uh, yeah.

ET-Chicago,

Been a long time since I’ve lived there, so perhaps “I” am missing the point? OR has ample water resources, and when you consider L. Mich. could flood the entire state of IL several times over..?

It’s not the scarcity we’re dealing w/ on an immediate basis. It’s all… the middlemen, city employees.., and really some crumbling infrastrucure. They can’t even drain the aquaduct from Upstate NY for fear the only thing holding it together IS the water pressure itself.

If we can’t do the inspections ( we live w/ the leaks )

Sorry, but folks in the Exurbs have every bit as much a ‘right’ to clean water as anyone else, don’t they. No offense but the -last- thing we need right now is “tough talk”.

Nascar ?

Wasting a day watching a bunch of funny painted cars speeding around a bent circle while sucking beer with the sweaty Deliverance folks just isn’t my thing.

In the old days people went to bars,
these days they go to NASCAR
sucking beers and T*tties.

i would much rather hang out with “deliverance” folks than those stupid looking debt burdoned horse racing wannabes with their double breasted jackets and stupid little hats.

sorry…i meant stupid big hats.

Ticket sales are down. TV ratings are down.

There’s no such thing as NASCAR “racing” anymore. It’s all about the “show”, and selling stuff.

That would be cool.Maybe even one race a year of purely stock cars.

The technology is nascar these days is incredible.I happen to repsect the engineers, mechanics etc that work on these cars.It is about the competition to me.There are so many variables that come into play.The sport has really changed from the good old boy days.

“Technology in NASCAR…..”

Thanks for giving me the best laugh of the day.

Under the skin? Steel tube chassis that are only marginal improvement from the cars built in 1972. Engines still running carburetors. The only “improvements” are in the car’s ability to take damage when being bashed together.

It isn’t racing when half of the races are decided on “pit strategy”, and who comes out in the lead on the last pit stop.

One of my older HS friends in the Carolina’s had a fairly ragged looking black 1954 Ford. Looked stock except for good rubber.

I believe that it had a 1958 352/300 Police Interceptor Engine in it and the instillation was done and maintained by an sharp ex-Layfette Ford racing mechanic out of Fayetteville, NC.

We doubled dated with g/f’s a lot. Just a bunch of clean cut lost HS kids, in flat tops and poodle dresses, cruising through the quiet Carolina nights and dirt roads un-noticed or bothered by anyone. Occassionally, you’d swear that you’d hear some ‘glass” rattling.

Hey, it beat working on a nasty, dirty turkey farm in the summers.

The ugly bodies are made of steel. There isn’t a single part of the car that is interchangeable with a street car. Nothing. Watching paint dry is more exciting than Nascar if you ask me, and I like racing.

If you get a chance, go to a regional/national SCCA race, and watch the “American Sedan” class race.

American “pony cars” from 1979-present. Stock uni-bodies and suspension attach points, so tire sizes are kinda limited to what fits in the stock wheelwells.. Five liter engines putting out 400-500 horsepower, backed by (mostly) Borg-Warner T-10 four speeds”. No ground effects or aerodynamic aids. Road courses, so there is a lot of hanging the tail out in turns.

They are a hoot to watch. And they are pretty fast. Talked with a guy from Chicago who owns one. Says you can build a pretty good car for $20-25K. And you don’t really care of you are competitive, because they are such fun to drive.

Sounds fun X-GS. Problem is that’s still not my thing. My thing would be a variety of much-closer-to-stock cars that you see on the street (I like AWD and turbos), which I’ll be the first to admit would be impossible to make “fair”. What I like would be fun for about a year or so until it got popular enough to bring in real money, at which point it would get totally out of control. So unfortunately what I’d really like can’t exist because money would corrupt it.

SCCA club racing is what I like to do X-GS. I’ve got an old Porsche 911 that runs in GT2. Do you race?

As long as it’s done right now, today; immediately!

Instead of In God We Trust, it also has to say Mission Accomplished.

Superman III with Richard Pryor was about a computer genius who was rounding up the pennies and adding to his bank account.

A very rich Brazilian who lived through Brazil’s inflation said Americans should get rid of the penny when they prey it out of our cold dead fingers.

He said getting rid of smaller value coins accelerates inflation.

prey it out of our cold dead fingers.

Pry, not prey.

But he did have a funny accent….

Personally I think getting rid of the penny, and probably the nickel, would be a good thing. Rather than accelerating inflation I think it will help serve to spotlight the inflation we do have, which will (hopefully) in the long run serve to lessen it.

And I’m a coin collector.

And history demonstrates that it will eventually come to that extreme. It always does. The PTB always delude themselves into believing that “it’s different this time”.

Not so fast, polly. To prove the point, here’s another true story from the Arizona Slim File:

When I was biking around the USA, I spent an overnight in a western Tennessee town that was the home of a genuine hero. Name was William Robert Haas (his friends called him Billy Bob), and he was a Southern Airways pilot.

On November 15, 1972, his plane was hijacked. The hijackers weren’t the most organized of fellows. They commanded Haas and his copilot to fly the plane to various destinations in the United States and Canada, and, finally, to Havana, Cuba.

At one point, the hijackers toyed with the idea of ordering a dive-bomb attack on the Oak Ridge National Laboratory. With the intention of scoring a direct hit on the nuclear reactors. This is where the notion of flying a commercial jet into a reactor came from. Almost happened to Captain Haas, his crew, and the passengers.

Oh, I should also mention that the hijackers shot the copilot. (He lived.)

When the plane finally touched down in Havana, the hijackers expected a hero’s welcome. After all, they were finally free of the United States, which they’d grown to hate.

They couldn’t have been more wrong. The flight crew and the passengers were given a red carpet welcome by none other than Fidel Castro. Haas was quite impressed. As were the crew and the passengers. They flew back to the United States a day or two after they landed.

As for the hijackers, they were whisked off the plane and into Cuba’s notorious “cuatro por cuatro” jail cells. Didn’t take too much living in four square feet of space before they were begging to be extradited back here.

Cuban doctors get paid more to be tour guides.

Interesting story, Slim, but I think hijackers are a slightly different thing.

I was just thinking that a fully trainined American doc who could offer to work for a hospital serving the European and Canadian tourists (or even as an on the spot resort doc) in exchange for not being sent back to the US for running out on student loans, might have a chance to negotiate a deal. Not that Cuba is an unlimited haven for US criminals or anything like that.

Half a million bucks is a lot of money.

Who uses Solo cups these days anyway? Why not just throw trash into the streets, light tires on fire and take a dump in your living room. Yes, it’s jobs being lost to Chinidia so that CEOs can pad their fur-lined pockets with lucre, but it’s making crap out of fossil fuels to use once and throw away. What a waste.

Like the sarcasm Rio.

Maybe a waste, but the disposable cup market is huge.

And what else would you suggest be used for your take out? At least the plastic can be recycled, unlike styro. I personally miss the paper and wax cups.

Yep, damn lazy employees. It’s all their fault!