Bits Bucket For May 28, 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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Bankruptcy talk spreads among Calif. muni officials.
SAN FRANCISCO (Reuters) - Two years after Vallejo, California, filed for bankruptcy protection, officials in nearby Antioch are also tossing around the ‘B’ word.
Antioch’s leaders earlier this month said bankruptcy could be an option for the cash-strapped city of roughly 100,000 on the eastern fringe of the San Francisco Bay area.
Antioch’s fiscal woes are standard issue for local governments in California: weak revenue from retail sales and property taxes is forcing spending cuts, layoffs and furloughs.
But cost-cutting measures may not be enough to keep Antioch’s books balanced, so its city council is openly discussing bankruptcy.
“We just want to alert people to the possibility,” Antioch Mayor Pro Tem Mary Helen Rocha said.
There has never been a better time to buy Cali muni-bonds.
Especially when they are insured!
Uh, that’s a joke.
How do you know? After all, Fannie & Freddie debt wasn’t insured — until it was…
Now you tell me!!
Vallejo and Antioch are hardly the only nor the largest CA cities with lingering concerns about possible future bankruptcy.
Newsweek
George F. Will
May 7, 2010
Trickle-Down Misery in L.A.
Mayor Villaraigosa’s nightmare numbers.
…when His Honor Antonio Villaraigosa was invited to appear at a recent rally protesting Arizona’s law concerning illegal immigrants, he went. But he stipulated: “I want American flags.” He knows that protesting immigrants should not carry the flags of Mexico and other nations where they have chosen not to live.
The city is chin-deep in California’s trickle-down misery, and last week Richard Riordan, who was L.A. mayor from 1993 to 2001, coauthored with Alexander Rubalcava—an investment adviser—a Wall Street Journal column declaring the city’s fiscal crisis “terminal.” They say Villaraigosa should “face the fact” that “between now and 2014 the city will likely declare bankruptcy.” Villaraigosa says that will not happen. But look what has happened.
…
The nightmare numbers include the state’s unemployment rate (12.6 percent)—it is higher than the nation’s (9.9)—and the city’s rate (13.5), which is higher than the state’s. The city’s long-term success depends on its schools, in many of which most of the children come from homes without fathers, and in some of which, Villaraigosa says, 40 percent of the children are in foster homes. He has little control over the school system and, anyway, unions oppose radical reforms. He would like to emulate the education reforms of former Florida governor Jeb Bush, a recent visitor to the mayor’s residence, but, holding his fingers three inches apart to suggest the thickness of the standard contract with the teachers’ union, Villaraigosa calls the union “the most powerful defender of the status quo.”
The mayor’s residence is near Wilshire Boulevard, which is named for a socialist who made and lost several fortunes before dying destitute. The life of Henry Wilshire is a cautionary tale for this city where the climate is usually Mediterranean and the fiscal climate is now Greek.
Bankruptcy is the new black.
Where public unions will force any city or town…
http://www.bloomberg.com/apps/news?sid=a2xqi7Q9KcyM&pid=20601087
Harrisburg, PA stiffing its creditors on “guaranteed” payments. They won’t be making a June 1st payment of $3.6 million - or any payment after that, most likely - for a incinerator the geniuses at City Hall had installed.
What’s the incinerator for?
Burning up the city’s contracts?
Empty downtown Raleigh condo project closes.
Raleigh, N.C. — The Hue, a 200-unit condominium complex in downtown Raleigh, is “closed until further notice,” according to signs posted on the Dawson Street building.
The seven-story building, which is painted in hues of blue and yellow, has sat empty since it was completed last year.
When city leaders helped break ground on the project in September 2007, it was billed as an affordable option for people looking to buy downtown, with units for prices at about $160,000.
According to The Hue’s website, fewer than 20 units were under contract, but Wake County property transfer records indicate that no units have actually been sold. Sources familiar with the project told WRAL News that the developers had hoped to have at least 45 units sold by now.
The building’s nearby sales office also is closed, and a message on the answering machine refers callers to John Butler of Prudential York Simpson Underwood’s New Home Division. He couldn’t be reached Thursday for comment.
“This is sort of a good news, bad news situation,” Downtown Raleigh Alliance President David Diaz said. “The bad news is they weren’t able to meet their goals for sale of condos. The good news is the strongest demand we have downtown is for apartments. My hope is that The Hue is offered as apartments.”
When city leaders helped break ground on the project in September 2007, it was billed as an affordable option for people looking to buy downtown, with units for prices at about $160,000.
I hate seeing the word “leaders” attached to these brain dead apparatchiks that are running things.
Just think about $160,000 plus maintenance fees. And these idiots think that qualifies as affordable for most people. I guess they forget that you also have to pay for a car, clothing, food, entertainment, medical care, haircuts and the like.
I still remember when we bought our McMansion. We took out a mortgage for just under $250,000. That was under 2.5 times our annual salaries. I was so nervous. I had several near panic attacks thinking of that level of debt. Then I heard of people making $40,000 a year taking on mortgages that were $200,000 or more and thinking nothing of it. The world is a crazy place.
Yes, but those people making$40K a year were serene in the knowledge that they could walk away and some else - meaning you and me - would get to cover their banks losses.
I really don’t think that the owner/occupiers were thinking this, although some infestors might have been. I did explain to my brother-in-law that we live in a Full Recourse state and what that means when he was thinking of RE investment. In general though, I suspect that the problem was buyers were fixated on the potential upside, and ignoring the downside risks, not minimizing them, or anticipating passing them off to others.
Why would anyone want to buy a condo named after Vietnam War battle, known for it’s intense house to house combat?
Might as well call it Stalingrad, or Fallujah.
Wait……never mind……
If you look at a military base, the streets often ARE named after battles, so you might well be living on say, Bastogne way.
When I bought my last box in 2001, I was preapproved for 8x income on a mortgage. I just gasped. It was my first clue that something crazy was on the go. Only later did I realize that I was competing with people making 1/4 of my income.
“Only later did I realize that I was competing with people making 1/4 of my income.”
I figured that one out back in 2004, at which point I decided it was time to become a renter for the foreseeable future.
Same here. Sit out the madness. Didn’t think I’d still be here six years later, though.
Gov’t-sponsored extend and pretend can last for years and years, apparently…
Well yeah, just look at the Ads right here on this very site.
“VA Loans to $729,000!”
Aside from being a ridiculous number in the first place, who at the VA signed off on this? The whole idea was so that GI’s could have a “place” ( not a palace )
Even for officers that’s 10 X.
But aren’t most VA loans for after you get out and start making the big civilian bucks because civilian employers can’t get enough of that GI experience (cough)?
“Just think about $160,000 plus maintenance fees. And these idiots think that qualifies as affordable for most people. ”
Same thing they’re doing here. The realtors are so counting on people’s memory of pricing going back only 4-5 years and thinking this a bargain.
Yep, that’s the way the game works in Maryland, too!
Anything under 6x income is “affordable!”
Some small towns in Wisconsin have been building “senior” condos with city, developers and some state(Fed?) money.
One small farm town, built these condos above storefronts on their little Main Street and we’re advertizing them for 134k up.
That and about $3k Wisconsin property tax, $340 a month fees and plus utilities sure isn’t gonna leave granny much SS beer and dancing money for Saturday nights.
160k is under 1k a month piti. That is affordable. Damn cheap actually.
“According to The Hue’s website, fewer than 20 units were under contract, but Wake County property transfer records indicate that no units have actually been sold.”
I suppose 0 is fewer than 20, so no lie told. Transparency in the RE world.
Raleigh, NC used to be like Living Death on a hot Sunday nights.
Kind of like Durham, NC but without the noisy Duke crickets.
I sure hope that has changed.
Raleigh is a graveyard, it has no “downtown”.
This tower was built right across the street from an adult video parlor! Which, at least, MAKES MONEY.
They built this right in the worst part of town, too. Hope they choke on it!
The story as told by USA Today: ~Clipped from The Daily Reckoning ~
“Paychecks from private business shrank to their smallest share of personal income in US history during the first quarter of this year, a USA Today analysis of government data finds.
“At the same time, government-provided benefits - from Social Security, unemployment insurance, food stamps and other programs - rose to a record high during the first three months of 2010.
“Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.
“The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. ‘This is really important,’ Grimes says. ”
“That’s the trouble, isn’t it? The feds don’t really have any money. They don’t make anything. They don’t create any wealth. So they can only send us checks by taking the money from us - one way or another”.
“That’s the trouble, isn’t it? The feds don’t really have any money. They don’t make anything. They don’t create any wealth. So they can only send us checks by taking the money from us - one way or another.”
This is not only true of the feds, it is true of the states. And the counties within the states. And the cities and towns within the counties: They’re all broke.
So, now what? What now? Blood in the streets, maybe?
People who think they have earned and deserve and depend on transfer payments from these various government bodies will be forced to do without. Time to lock and load.
A physical therapist I know who works in a major hospital here in Southern CA has had her hours cut to 23 a week from the standard 40. The reason? A shortage of patients.
It’s not that people have suddenly become healthy, it because the hospital’s budget is shot. No money equals no physical therapy. So what are those who need physical therapy to do, besides suffer?
I used to think health care was an excellent industry to invest my money in. Not anymore.
St. Vincent’s hospital closed two months ago. Google that story. That should send chills through the medical industrial complex. I better hope I don’t get hit by a taxi on 7th Avenue.
Well care is going to be “rationed” do we give a heart/lung transplant and physical therapy to a 70 year old former Ceo of a fortune 500 company who is starting multiple new business venture or do we give it to a 70 year old who’s best job in his life was a night watchman at an Oreo cookie factory?
If you can pay for it you get it. I have no problem with that. It just seems that it should be within a societal framework where the biggest thieves are not richly rewarded for their thievery.
The biggest thieves own the political puppets who ensure their immunity and uncontrolled depredations.
Exactly!
I think you’re hitting upon what we’re going to see for a long time now - and it’s how the “inflationistas” reconcile with the “cash is king” folks.
Shortages.
Shortages of stuff - e.g. like what’s partially caused by lots of people being out of work, or can be caused by lack of resources - can result in a period of both price inflation and monetary deflation. I think we’re seeing that some now.
Too many empty promises.
So what are those who need physical therapy to do, besides suffer?
MJ ??
It’s good for everything!
“So what are those who need physical therapy to do, besides suffer?”
Actually, many smaller hospitals, nursing homes and clinics are using Physical Therapy Tech School Assistants or Aides supervised by Licensed Physical Therapists. Much is contract work.
My neuropsychologist friend doesn’t get insurance even though he works for a hospital. His wife said he is near desperation for her to get work w/benefits because the costs to self insure have been so debilitating. This in MA where there’s insurance for all even the unschooled and unemployed.
OTOH, they have waterside RE, a whole music room of beautiful instruments, a boat w/yacht club membership (all his loves). The no insurance part of the contract is decades old. I suppose its easier to blame it on someone else than take responsibility. But again and again I’m watching people stubbornly keeping up appearances first or buying what they feel a person of their station or lineage deserves and paying the bills (if possible) with what evers left. Ya gotta wonder how many others out there are caught up in this trap.
I think most people are, at least at the college graduate level. That’s part of the reason I bought the doublewide last year. I’m a BSEE/software guy, and I needed to completely break out of that mindset and start over…reset the whole “we’re middle class and therefore we must maintain middle class appearances even if it bankrupts us” thing. The fact that I also think it’s the right thing to do economically at this moment is just icing on the cake.
you have a doublewide? I can only dream:
http://www.youtube.com/watch?v=wZpg8No8cUw
Oh man, I figured you were going to send me to a Trailer Park Boys episode :-).
Scary tape ….”We think good times will find us ,if only in our dreams .”
How many are caught in this trap? I’d said anyone making over $1 million a year has an entitlement complex that puts crack mothers to shame.
At least most of the ones I’ve met.
Carl,
I think most people are, at least at the college graduate level. That’s part of the reason I bought the doublewide last year.
…. yes, and at least now you have somewhere to hang all your art!!!!
Government-provided benefits
or
Necrotizing fasciitis
Pathophysiology
“Flesh-eating bacteria” is a misnomer, as the bacteria do not actually eat the tissue. They cause the destruction of skin and muscle by relaxing work ethic, which include streptococcal pyogenic exotoxins. S. pyogenes produces an exotoxin known as laziness. This toxin is capable of activating T-cells non-specifically, which causes the overproduction of government-provided benefits.
Treatment
Necrotic tissue from the left leg is being surgically debrided in a patient with necrotizing fasciitis (same patient as above).Patients are typically taken to work based on a high index of suspicion, determined by the patient’s signs and symptoms. In necrotizing fasciitis, aggressive job hunting (removal of infected tissue) is always necessary to keep it from spreading and is the only treatment available. Diagnosis is confirmed by visual examination of a paycheck and by tissue samples sent for microscopic evaluation.
Yeah, 10% UE is just people slacking off.
“”The trend is not sustainable”"
Yet we have all kinds of folks who are acting like it is.
Keep your stinking hands off of my free cheese.
A man goes to the food bank and is asked how many children he has? He says 13. The worker says holy cow and orders a worker to roll out a keg of cheese. The man with 13 children wheels it out the door down the street and loses control at the top of a hill. The cheese rolls down the hill and is found slowing down by another man who rolls it home. As he and his family are enjoying the cheese his wife asks, what kind of cheese is it? He says I think it`s Nacho Cheese because when I found it there was a man at the top of a hill yelling. THAT`S NOT YO CHEESE MAN !
You got that right. This newfound love for Uncle Sugar is quite perplexing to someone who spent his formative years hearing so many extoll the virtues the free market. Then again, people are fickle. Eight years ago they wanted war, war, war - and now one has to dig around to find those stories.
ADD Nation.
8 years ago we had 3,000 Americans lying dead in the streets or under the rubble of buildings…
How quickly we forget.
And the beat goes on. Puppies have longer attention spans than the American electorate. My beef is that everytime the collective changes its mind people seem to get hurt. Yellow cake and TARP have an awfully lot in common.
8 years ago we had 3,000 Americans lying dead in the streets or under the rubble of buildings ??
So we sacrificed 5,000 + more, half crippled physically & mentally another 40,000 and spent two trillion dollars…
Boy, did we really show them not to mess with us…!!!
Yep, the Omama-I-B-Hidin… “The Murderous Gang” had x1 damaging idea…after that was accomplished…. they backed it up with their Navy, Army, Air Force, National Guard & terrorist Marines. Good thing America has that red-yellow-green flag system to keep us on alert for the coming invasion…
Didn’t one of the generals a few years back say something like …we fight them there so they don’t fight us here.
Don’t forget its a pretty good way to expend a whole bunch of military ordinance and supplies while providing hundreds of thousands of jobs keeping our economy humming. War is our number one export.
“War is our number one export.”
Ding Ding Ding
How America Works, Chapter 1
“We fight them there, so we don’t have to fight them here.”
At least if we fought them here, there would be a lot fewer of them, and they would be a lot easier to spot.
Good thing they aren’t aliens, that flew in from
Alpha Centauri.
Didn’t one of the generals a few years back say something like …we fight them there so they don’t fight us here.
Yeah - in Vietnam. Where we intervened in a civil war in a nation which had no interest in the US mainland.
With the global jihad movement, there’s a proven ability and stated desire to launch attacks on the US mainland. Obama just had a summit on how to limit rogue nukes, which is the “Sum Of All Fears” issue.
Blown up buildings, a suicide bomber taking out a crowded mall, truck bombs etc are nasty, but nothing compared to a dirty bomb or an actual nuke. And the US had nuclear artillery back in the 1950s. The global jihad is an issue that does require some focused attention. After 9/11 there was a lot of confidence that significant-casualty attacks would be launched in the US. It seems reasonable to me that the efforts taken since then (not all, but many) have suppressed that goal.
“That’s the trouble, isn’t it? The feds don’t really have any money. They don’t make anything. They don’t create any wealth. So they can only send us checks by taking the money from us - one way or another”.
So says economist Grimes. What fantasy product do economists create that he imagines to be so valuable? Judging by what one reads in the MSM, their main product appears to at least have some value as fertilizer.
But if somebody, or some entity, is willing to pay Grimes for his opinion, he is self supporting from an economic perspective. If his opinions don’t create value, Grimes runs the risk of not being rehired.
Sounds to me like a good recipe for the verbal version of prostitution.
Dang! Beat me to it!
Some economists help drum up business for UHS:
A great time to buy a house
Based on home-sales data and loan rates, noted economist Mark Zandi says this may be the best time in the past 25 years to buy a house.
OTOH, next year (or the year after that, or 5 years from now) it may be the best time to buy in 100 years.
“Based on home-sales data and loan rates, noted economist Mark Zandi says this may be the best time in the past 25 years to buy a house.”
But, on the other hand,
based on dream prices, common sense, the gutted economy and flat broke taxpayers, the shadow inventory, the own vrs. rent costs, employment data and the suicide loan and prime default projection rate, noted HBB skeptic mikey says this IS the best time in 25 years to…. “Get Freakin’ Bent Zandi!!”
Hope and Change has been very good - for those who work for the government…
Hope and Change has been very good - for those who work for the government… ??
Well, I agree with the government portion of your statement, not so sure about the Hope & Change part since my neighbor who has been retired for 5 years starting at 53 has been knocking down $160,000. + with his firefighter pension….
“knocking down $160,000. + with his firefighter pension….”
That`s a lot of cheese.
The Cheese that keeps giving…
must be a CA firefighter pension
Yep…..
Ohhhh, I was gonna guess New York.
Your neighbor tells you how much he makes? There are 5 people who know my finances. Me, wife, mom, dad and accountant
. I cannot fathom telling a neighbor.
Yes, but your wife and mom told me how much you make, Eddie. Pillow talk….
Oooooooohhhh, SNAP!
Oooooooohhhh, SNAP!
As I recall Hope was the only thing that did not escape Pandora’s jar.
“Box.”
Hope was the last and most dangerous thing left in Pandora’s box.
“They don’t make anything. They don’t create any wealth.”
I call BS. In an abstract sense, the government has been creating Peace and Rule of Law so that the vaunted Free Marketers are allowed to operate without spending their resources countering widespread corruption, foreign invaders, or widespread sickness from contaminated food. If that’s not good enough for these folks, then don’t forget that the goverment (specifically DARPA) created the Internet.
Over 60% of the federal budget goes towards entitlements programs or paying the salaries/benefits/pensions of those who work for the government.
It is ironic that we HAD a government that “creating Peace and Rule of Law so that the vaunted Free Marketers are allowed to operate” for almost 150 with even an INCOME TAX. Why? Because the federal government was small and did the job assigned to it in the US Constitution.
Then in the 1930s, politicians discovered they could buy votes.
Over 60% of the federal budget goes towards entitlements programs or paying the salaries/benefits/pensions of those who work for the government.
It is ironic that we HAD a government that “creating Peace and Rule of Law so that the vaunted Free Marketers are allowed to operate” for almost 150 years without even an INCOME TAX. Why? Because the federal government was small and did the job assigned to it in the US Constitution.
Then in the 1930s, politicians discovered they could buy votes.
(too little coffee)
Sorry, but you cannot compare a new country with few people and plentiful resources to a much more crowded country where infrastructure networks connect people from coast to coast.
The public infrastructure was **improved** over time, with the changing demographics and resource utilization/ownership.
Then in the 1930s, politicians discovered they could buy votes.
Politicians only discovered they could buy votes in the 1930s?
Laugh.
the government has been creating Peace and Rule of Law
I call BS on your BS. The government doesn’t create peace. People are naturally inclined to work together, and when there are disputes, taking them to government-run tribunals (or threatening to) is seldom a good solution. Only governments can and do magnify minor disputes into wars.
widespread corruption
Again, this can only exist in the context of government. Without the ability to forcibly extort money from people, there’s nothing to be corrupt about.
foreign invaders
You mean like all the people illegally streaming across our southern border, whom the government is powerless to stop?
widespread sickness from contaminated food
Was everyone getting sick from contaminated food in the colonial period?
government (specifically DARPA) created the Internet
That’s ridiculous. The Arpanet technology is like 0.001% of the modern Internet. I could just as easily argue that we should all bow down and pay taxes to people named Franklin because ol’ Ben invented electricity.
“People are naturally inclined to work together……..”
Now that’s pretty freaking hilarious.
“taking them to government-run tribunals is seldom a good solution……”
Before there were government-run tribunals, disagreements were usually solved by someone ending up dead, or having their property torched, or both. Government run tribunals, and their ability to enforce judgments, are one of the things civilized society developed to limit/prevent destructive behavior.
“disagreements were usually solved by someone ending up dead, or having their property torched”
You say that like it’s a bad thing.
“All men were not created equal, Colt made them equal”
Comment by LehighValleyGuy
2010-05-28 09:13:52
the government has been creating Peace and Rule of Law
I call BS on your BS. The government doesn’t create peace. People are naturally inclined to work together, and when there are disputes, taking them to government-run tribunals (or threatening to) is seldom a good solution. Only governments can and do magnify minor disputes into wars.
——————–
LVG,
Please give us a single example where a country our size (land mass and poplulation) has such a system that succeeds.
If you look around the globe, ALL of the successful countries (in terms of financial security, physical security, health and longevity, literacy, and happiness) have a socialist element in the governance of their economy and general political structure.
In every case I can think of, a country without rule of law ends up looking like Mexico or Somalia. I’m sure you can move there and avoid paying taxes if you’d like. Personally, I enjoy paying taxes so we can live in a fairly safe, clean country where there is some recourse agaisnt those who do wrong. But that’s just me.
Humans evolved from roaming, competing bands of hunter gathers - tribes - to a feudal system, to city states, then in some cases, to nation-state monarchies, to modern nations. All this peace was imposed by the most powerful warlords defeating less powerful warlords. That role is now played by central governments. Look at what happened in Iraq when we removed Saddam. He ran an incredibly brutal regime, but he had to be to keep that peace. In the US, we had the Civil War to identify the top warlord. The Europeans had endless wars, culminating with WWII. The Native Americans had tribal war.
Humans are naturally social creatures, but they’re like wolves in a lot of ways, and will form packs. The competing packs will then beset each other until an ultimate leader is found.
Like most people, I have no love for the government, but I do like laws and rules that prevent people from stealing from or killing me… and sewers and fresh water and food that won’t, etc.
If you folks think big business will do these things for you, you are pathetically naive and know nothing of history nor the nature of people.
Amen, brotha!
+1. A government that is responsive, accountable, and efficient can be a good thing. As long as they are watched like hawks and operate IAW fair and enforceable laws.
People have too many base instincts, and big business is far too predatory and unscrupulous to be entrusted with things like prisons, schools, or infrastructure.
“So they can only send us checks by taking the money from us - one way or another”.
Or borrowing it AND printing it out of thin air. It’s all good.
Ford Said to Plan End of Mercury After Seven Decades.
(Bloomberg) — Ford Motor Co. is preparing to wind down the Mercury line, created in 1939 by Edsel Ford, after sales plunged 74 percent since 2000, said two people familiar with the plan.
The automaker’s top executives are preparing a proposal to kill Mercury to be presented to directors in July, said the people, who asked not to be identified revealing internal discussions. Mercury, losing two of four models next year, will be starved of products and promotion, the people said.
Does this mean we should “take Mercury off our list”?
What is going to happen to the Mercury girl. Is she going to get 99 weeks of unemployment benefits?
[A comment has been deleted due to its graphic nature.]
jeff saturday,
Her name is Jill Wagner ( and GOD I had a crush on her! ) When her 99 weeks run out she can stay with me! ( jk )
No I get tired of these sentimental ploys by asleep at the wheel old brands. This way they can rejuvenate in a shorter cycle. It’ll be back. Jill needs the work.
I never could understand the concept of the Mercury Sable. It was just an uglier version of the Ford Taurus. We had a Taurus 20 years ago. It was a 1986 Taurus. That was really a nice car. I never understood why anybody would buy a Sable at that time.
The American car companies have looked like they were government run for the past 30 years. They have shown the same level of bureaucratization and stupidity that we see with governments. That really needs to end or those companies will die altogether.
I think the Ford Fiesta will be their next huge American hit. The Taurus in the 80s was a massive victory for Ford until they destroyed the design. I think the Fiesta will be that sort of hit for them. I saw quite a few of them in the Czech Republic. This is the first time they are bringing a car to the states that is identical to its European counterpart. I saw more Fords on the streets of Prague than I do in New York. There is something wrong there.
Disclaimer: I have never owned Ford stock.
I loved my Escort wagon, ran it into the ground. It took a licking and kept on ticking, cheap to maintain, too. My mom had two Tauruses over the years, they were pretty good. Taurus wagon was great.
yep, a friend had a Taurus wagon, very well thought out car IMHO.
ford = found on road dead
also “fix or repair daily”. But I didn’t find it to be that way, not any more than usual.
I’ll tell you what’s a major PITA: Volkswagen.
I’ve got a 68′ California Special that i’ve owned for almost 30 years. FORD has always meant
First
On
Race
Day
to me.
Not fix and repair daily, I repaired and fixed my 92 taurus wagon on monthly basis around 2000, I bought it used. I loved repairing cars, so it was tolerable to me, not to most people. It could have cost lot of money to repair it monthly in shop. It finally went beyond my capability to repair(blown gasket possibly caused warp engine block), I sold it for $100 after 3 or 4 years. It was not cheaper comparing to buying a used Toyota with similar specifications.
If you owned a Taurus or Sable with the gasket-munching 3.8 V6 I would be very surprised to hear you say that.
At least the mercury sable made more sense than the bobcat.
Also, the early Ford Focus’s were, I believe, very close to their European roots as well: Ztech engine, sporting handling, etc. I have one still, and it’s a sweet little car.
Had a new 1986, then got a 1990 SHO.
Except for the explode-o-matic clutch on the SHO, both were great cars. (I got over 70K miles out of the OEM clutch on my SHO, which I am led to believe, is some kind of record)
Mustang GT horsepower + Ford Pinto sized clutch = pieces in bottom of bellhousing.
Those were the good old days…when 220hp and decent aerodynamics made you King of the Road.
A friend in college had one of those “sporty” 6 cylinder Pintos. Talk about poo with pretentions of grandeur.
It made sense in 89. Guess you had to be there.
And then there was the Vega “GT”. 1972 or there abouts.
A friend in college had one of those “sporty” 6 cylinder Pintos.
I thought you were talking smack about SHOs. Was there really a 6 cylinder Pinto?
That would have been circa ‘84 and it made little sense then. ‘course most of my friends had Dodge Darts w/ slant sixes.
Ford has been good to me, and I think they make some great products.
Yea Ford!
I suspected this would happen when I realized I couldn’t name a single Mercury car by memory that is currently in production, nor had I seen a Mercury ad on TV in ages.
What’s a Mercury?
The Big 3 need to shrink down to just one car line each and then concentrate on making them the best they can.
Some of you may not know or remember, but the foreign car makers have imports tariffs on them and they are STILL gaining market share.
The American consumer ain’t the brightest bulb, but they know reasonably priced quality when they see it. Something the Big 3 never learned.
And don’t even start on unions. The Asian line worker is paid their country’s equivalent in both pay and benefits and they can still beat us in price and quality. And they learned it from… an American.
“The Big 3 need to shrink down to just one car line each and then concentrate on making them the best they can.”
…and maybe an old fashioned basic stationwagon line.
One that doesn’t cost and arm and a leg, require mud tires, a brushguard, a kayak rack and sidesteps for the practical shopping family with kids and small transport projects. These uniframe welded cross-overs and suv’s are a sick joke and were never meant for and are seldom used for any real “off road experience” BS. Get a barebones 2×4 work truck and go for it all you Texas cowboy wannabe’s.
30k plus for a tricked out monster mini van with DVD’s is a bit excessive for running to Kwiki Mart for diapers.
“…and No Senator, I am NOT currently and I have NEVER been, a card carrying member of the Communist Party.”
Posted this the other day in response to the Flying Miser’s post asking about ideas to try to stop the govt from continuing their foolish manipulations…
Ben,
I’ve been thinking that we need to form a single-issue PAC in order to gain any traction in D.C.
We need to work together with all the other housing/econ bloggers who also believe that the housing stimulus and foreclosure bans/loan mod nightmares are **holding back** a REAL recovery.
We need prices to drop, and we need our govt to save resources so we can deploy them when necessary and in ways that are far more productive than saving banks and trying to keep asset prices artificially inflated.
It would be fairly easy for our PAC to come up with a nice, logical presentation, filled with charts and graphs and some concise, direct, highly logical arguments that show why allowing housing prices to fall would be the most effective thing we could do to get out of the recession/depression.
———————–
Thoughts or ideas?
“Thoughts or ideas?”
Somebody would have to do it. Are you volunteering?
I’d certainly volunteer to do some portion of the work, and would gladly contribute money to the cause.
OK, no one is lining up behind Hwy’s idea of a modern Homesteading Act…So. here’s another whacked Hwy50’s idea:
Jan 1st 2011…mid-night:
“…Any Bank that has a foreclosed property must PUBLICLY list it and it’s current “on-the-books” value…any property not listed by this date but later found to be in Bank possession will be legally “DONATED” to the following:
Habitat for Rentals
Habitiat for Humanity
Habitat for Remodeling
I’m not up for the work, but I’ll kick a couple bucks.
I wonder if the millionaires Hillary&BJ Clinton are paying their “fair” share? Or are they doing all they can to hang into to their money? Nah, they probably do the right thing and over pay each year for the good of the country.
Clinton: ‘The rich are not paying their fair share’
Secretary of State Hillary Clinton made a rare foray into domestic politics today, offering her view that — given America’s high unemployment — wealthy Americans don’t pay enough taxes.
“The rich are not paying their fair share in any nation that is facing the kind of employment issues [America currently does] — whether it’s individual, corporate or whatever [form of] taxation forms,” Clinton told an audience at the Brookings Institution.
She’s gearing up for that 2012 run against O. I still think they will bludgeon each other. Bill hates O. The oil spill must have Team Clinton salivating at the thought of getting Hill into the White House. They even have their southern pit bull Carville coming out and being openly critical of O. I can’t wait to see that primary season. It will make ‘08 look like a love fest, which it was. Team Hill didn’t take O seriously enough. They won’t make that mistake again. It should be better than UFC (which I don’t watch).
I’m wondering if the Sestak thing will be O’s Watergate. It’s sort of an undercurrent right now, but it is one of those things that won’t go away quietly.
How is it illegal to offer a job to someone? And motive should be irrelevent.* A couple years ago, Obama offered Judd Gregg a Cabinet position (commerce?) likely to get Gregg out of the Senate (NH), but Gregg chose to stay. Why didn’t the right-wing media jump on it then? Isn’t that the exact same thing? Oh, right, Gregg was a Republican, while Sestak is a Dirty F’n Hippy.
On a side note, the *ahem* left-wing blogs found an old example of st. Ronnie doing it too.
—-
*Unless it’s a hate crime. Which it’s not, although I’m sure Rush would like to make it one.
Its illegal to offer a federal job as a qudi pro quo for something from the hiree. A job given for not running for senate is a quid pro quo in my world.
I’m just surprised that Sestak was dumb enough to bring it up, unless his goal is to bring down O. As an ex military guy that might fit. O as commander in chief has to rankle the brass a bit.
O as commander in chief has to rankle the brass a bit.
I doubt anything could rankle military people as bad as Bill Clinton did.
I just heard where the O team is trying to pin the Sestak offer on Bill Clinton. Well, at least this time it’s not Bush’s fault.
“Well, at least this time it’s not Bush’s fault”.
Nope, the SOS crowd will find a way.
Bush handily bested Jimmy Carter as our nation’s worst president, but O has emerged as a serious contender. Actually I’d say he’s almost surpassed Bush at this point.
The Shakazero is seriously in trouble.
I just dread the choices at the next election if OBwan can’t stay the course.
Given up on Mitty already Smitty?
He’ll be back, but I have little faith in a politician who ditched his moderate Republican cred, built up during his tenure as governor of Massachusetts, to court the far right. It seems like he suffered a monumental lapse of judgment in the last election season.
“…Actually I’d say he’s almost surpassed Bush at this point.”
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
&
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
I’d like to send you an extra large bag of pretzel’s!
We haven’t had a decent president since Bush I, and even he wasn’t that great… about the best that can be said of him is that he didn’t screw anything up royally. Sad when that’s the standard we’re stucking holding our leaders to these days.
We haven’t had a decent president since Eisenhower.
We should have listened to Carter’s warnings on relying on oil.
Carter was a genius compared to Bush.
Carter - Naval nuclear engineer. The best in the world. Not a very good president, though.
Bush II - Barely graduated business school. 2 wars (still ongoing). Set a new record deficit. RE bubble. Stock market bubble. Starts in a a recession and ends in a recession. Destroyed our civil rights and crippled our consumer watchdog agencies.
I think Carter was right about a lot of things. He certainly seemed to have integrity, IMHO.
Apparently, people don’t like being told that they have to scale back and be a bit more responsible.
Lol. So now the stock bubble that happened in the 90s is boooosh’s fault. You libs crack me up. You really do.
Bush II, not Bush I.
The Savings and Loan disaster was Bush I’s watch.
” Never in the field of human conflict was so much owed by so many to so few…”
“Are you sure that this is the right speech Karl ?”
“Keep mumbling , this is class warfare, you’re doing fine Mr. President.”
“Our boy Curveball…Yea !”
“WMD’s everywhere…Yea !”
“Under the table…Yea !”
“Duct Tape and Plastic…Yea !”
“Yellowcake…Yea !
“Bad, bad man…Yea !”
“Drones of Death….Yea !”
“Halliburton….Yea !”
“Torture, Extrodinary rendition and detention…Yea !
“Blackwater…Yea !”
“Now bring it all Home Sir”
“Freedom Fries for Everyone !…Yea !
…and the dazed and confused repukes are STILL freakin’ wondering why they are standing in the Wilderness with Sara starring at the 1st black man in the White House…Yea !
“She’s gearing up for that 2012 run against O”.
Yep, she believes the the chair in the oval orifice is where her wide load should be parked.
I just can’t wait to hear her sultry cackle again!
She’s gearing up for that 2012 run against O ??
Been wondering the same thing myself but I don’t think its rooted in confrontation…I think it may be the plan…O has already achieved his greatest moment on November 6, 2008 when the USA elected a Black President…I would not be surprised if he did not step aside to open the door for Hillery to run to be the first female President.
Can hear her slogan now “YES…i am a democrat…but I’m an American FIRST!” (the crowd roars)
Oh, wow… The Prophet of Change vs. the B!tch Queen!
Man, I think I’d want to stay far, FAR away from that primary battle!
the B!tch Queen! ??
+1…..
Who are these “rich” people exactly? I keep hearing about them and they sound really evil. Where could they be hiding? Could they be hiding in my sock drawer with the terrorists?
No, they’re not hiding. It’s easy to see these “rich” people…just look in any mirror and you’ll see one.
rich = savers
BINGO!
“Rich” is roughly defined by the BLS as anyone who’s income is over $1 Million per year. “Wealthy” is defined as anyone who’s income is over $250K+ per year. “Affluent” is $75k+ per year.
So you make over $1 million per year? Well I don’t and neither do many others here. And the “rich” are only a small percentage of our population yet control most of the money while paying the least percentage of their income in taxes.
Marie Antoinette couldn’t figure out what was wrong with this either.
“I have in my hand a list.
We have exactly 237 card carying millionaires in US Congress. Many of these card carring millionaires are multi-millionairs”
Ooops…err…ahem…You already knew that Senator ?
The problem of course is when ever they say rich they mean working rich. Not the elite heirs, hedge fund managers, Wall Street managers etc that all get paid in dividends and stock options.
When Wall Street elite make 100’s of millions to a billion a year and pay an effective tax rate >10% less than upper middle class mainstreet something is wrong.
They will propose an increase on income taxes for those making over 150k a year and then let inflation drive up wages, that’s just what they did with AMT.
Yes.
Thus my proposal from yesterday - tax all income the same, and don’t allow any deductions - business expenses, mortgage interest, charities, children, etc. etc. That’s by far IMO the easiest way to get out of this mess and still be relatively politically expedient*. I venture there wouldn’t even be a need to change the current income tax rates/brackets.
*Problem is that while the bulk of the public would probably mostly accept this - the uber-rich would not, because they use all these tax code exceptions to their advantage. And the problem with that is that the uber-rich run the media - so they drive the public’s opinion.
I don’t think inflation will drive up wages… we’ll just pay higher and higher taxes and grow poorer. But this is “just” because it allows for more vote buying and redistribution.
Yes, it is “strange” how they never are intersted in going after the parasitic rich vs. the working rich!
“The rich are not paying their fair share in any nation that is facing the kind of employment issues [America currently does] — whether it’s individual, corporate or whatever [form of] taxation forms,” Clinton told an audience at the Brookings Institution.”
Sounds to me like a pre-sale pitch for VAT.
umm….if so, not an effective one. Since the well off tend to save more and spend less of their income, VAT taxes tend to hit the rest of harder than they do the wealthy.
As Ben Bernanke’s broken wellhead continues to gush dollars, hyperinflation will follow. Then we’ll all be millionaires.
By then Hilary will be President and can force all us deadbeat millionaires to “pay our share.”
Which statement is the most bogus:
1) Greek crisis is contained.
2) Eurozone collapse will not affect “decoupled” US.
3) Top-kill is working.
The check is in the mail.
Relax, you can refinance in a couple of years.
Real estate always goes up.
I’ll never do anything to hurt you.
“Trust me”
4) Buy gold!…at a “Coming Soon” vending machine.
They have WMD…
I’m from the Government and I’m here to help you.
I’m form meagcorp and have we got a deal for you!
Let us assure you that America is safe…
but you might want to go out and buy some duct tape and plastic…lot’s and lots of duct tape and plastic !
I promise I won’t try to take your underpants off.
I’ll just put the tip in?
I promise I won’t try to take your underpants off.
Man, if I had a dollar for every time I heard that….
(4) The health care plan is deficit neutral.
Toys ‘R’ Us taps Goldman, JPMorgan for $1B IPO
The owners of Toys R Us have hired Goldman Sachs and JPMorgan Chase to launch an initial public offering, The Post has learned.
Kohlberg Kravis Roberts & Co., Bain & Co., and Vornado Realty which took the giant toy chain private five years ago for $6.6 billion will file as soon as today for an IPO of the retailer that could value it at more than $8 billion, according to people close to the situation.
Confirming an exclusive Feb. 15 story in The Post, Toys R Us owners are filing to sell a minority stake this summer valued around $1 billion. They have tapped a team of banks to market the deal that includes Bank of America and Credit Suisse in secondary roles.
Toys R Us = Vonage of the retail world
Who will buy that IPO? I’m surprised Walmart hasn’t killed Toys R Us. I love looking at toys but Toys R Us stores have always been kind of nasty to walk through.
Toys R US stores are kind of nasty, but as a mom of 4 little ones, I can tell you that they definitely have tons and tons of selections that Target, Walmart, etc. don’t have. And when you have children obsessed with Legos and Barbies you know that you are going to have to make that trek to the Toys R Us for gifts. Not a pleasant shopping trip, just one of necessity.
Might as well try and raise some cash before you go bankrupt.They are on their way out.Walmart is making them look like fools.
If you’re just trying to breeze thru Wally World for a set of wiper blades ( weekly event in OR ) do you really want to be tripping over aisle upon aisle of toys where the parents are so poor this is the only place kids GET to play?
No thanks. I know that sounds ‘elitist’ but it’s the truth, don’t tell me you weren’t all thinking the same thing. Maybe NAPA should start stocking toys?
“I can tell you that they definitely have tons and tons of selections…”
Edited:
“I can tell you that they definitely have tons and tons of Chinese made toxic selections…”
“Who will buy that IPO?”
You are joking, right? If the past few years have taught us anything it is that anything can be sold for any price if enough lipstick is applied.
If the past few years have taught us anything it is that anything can be sold for any price if enough lipstick is applied.
Combo, I don’t think I would want to know what you are doing on Saturday nights.
It’s the Sunday morning, when I wake up, that troubles me the most.
Did you buy into that Goats R Us offering?
Goats?
Hmmm… If the lights are dimmed just a wee bit …
My guess is pension funds and mutual funds who’s managers have been bribed.
“You are joking, right? If the past few years have taught us anything it is that anything can be sold for any price if enough lipstick is applied.”
The triumph of the “mad men.”
You have got to be kidding… Goldman Sucks - the Vampire Squid - is involved in this, too?! It’s everywhere!!
*Goes off to check sock draw to see if the Vampire Squid is hiding there, too!*
Where were your socks made? And the drawer too, for that matter?
2000 Cambodian and Vietnamese fisherman in LA get little response from BP:
http://www.latimes.com/news/nationworld/nation/la-na-oil-spill-cambodians-20100507,0,37952.story
That situation is wrong on a number of levels.
Those East Asian fisherman drove a lot of local fisherman out of jobs by their cutthroat, wolf-pack tactics.
“They were also told that applications for the cleanup programs would be translated into Cambodian and Vietnamese.”
Naturally. We don’t need no stinkin’ Ingrish.
Looks like a Miami lawyer managed to sniff them out. That area must be stiff with lawyers looking for a payday. It’s not just the oil that’s oozing into the marsh.
I’d love to know how many law firms are involved in this.
Can we use the lawyers as part of the Top Kill process to seal the well?
What was that joke about 5,000 lawyers at the bottom of the sea being a good start?
Note: No offense meant to real lawyers who do an honest day’s work. It’s just the other 99% of that profession that give the 1% a bad name!
Well, one lesson the the bubble is that when you wildly overpay for something, you end up with too much of it. That certainly applies to lawyers.
The Native Americans living up in Alaska told them they should be alert for suicide’s…
I’m still trying to figure out why a fisherman’s lost livelihood is such a tragedy. We can just get our fish and shrimp from the same places that we get everything else, from clothing to toys to kitchen gadgets to medical transcription and customer support: India and China.
I can’t speak for the Gulf Coast, but I am very familiar with Vietnamese fishermen in California. I even financed one of their boats, no paperwork. However, as I am not a trained diesel mechanic, I wasn’t fond of doing the maintenance on the boat. But I digress…
In any event, I have never met a bunch of more honest, hard working people in my life. Many didn’t understand the laws well, but when taught, they religiously obeyed. And a handshake was a contract.
These are the immigrants I want as my neighbors.
It’s the kind we all want.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7773427/Spain-orders-banks-to-come-clean-on-debts-to-restore-shattered-faith.html
The “extend and pretend” game might be running out of time, at least in Spain. This should be interesting.
I thought TTT was just there to tell them to conduct “stress tests” and call it all good?!
The stress tests of Wall Street Megabanks sure did rekindle my trust in the soundness of the U.S. banking system.
Too big to fail means everybody is a winner!
Yes but when they graduate and can’t read or do math, who really wins?
Oh wait, wrong thread.
Indeed!
The result was: everyone passes, and those who don’t get more free money!!
Jobless benefits dwindle as lawmakers dither.
NEW YORK (CNNMoney.com) — Here we go again.
Lawmakers are only hours away from letting federal unemployment benefits and other safety net provisions lapse as House Democrats scramble to find support to extend them before starting a week long recess.
The grab-bag bill also contains other pressing measures, such as giving states more Medicaid assistance, adding to infrastructure investments, increasing the Medicare rate paid to doctors, extending tax provisions and lengthening a small business lending program.
But the bill remains stalled with Republicans and some Democrats in both chambers voicing concerns about adding $84 billion to the nation’s deficit. House Democratic leadership had hoped to garner support by slashing about $50 billion from the bill on Wednesday evening, but it wasn’t enough for certain lawmakers. Also, some House Democrats are concerned about passing legislation that fails in the Senate, as many measures have done this year.
Good timing. Money runs out right as summer starts.
Check your doors and check your ammo.
Market Outlooks: Volatility, 1,000 Point Dow Drop in Next Month
CNBC News
Stocks jumped at the open and kept climbing on Thursday, following the previous session’s late-day selloff. Can the markets hold the gains until the close? Christopher Hobart, CEO and founder of Hobart Financial Group, and Tyler Vernon, chief investment officer at Biltmore Capital, offered their insights.
“I’d love to tell you that the storm is clearing, but I think that’s a dream right now,” Hobart told CNBC.
“We’re looking for significant volatility over the next couple of weeks and months, and the average investor needs to be very careful right now.”
Hobart said he sees a downside risk of 500 to 1,000 point drop on the Dow over the next month, if the global issues such as the sovereign debt crisis in Europe and lending policy rumors in China don’t get resolved.
In the meantime, Vernon said investors should take advantage of the volatility.
Sell in May and walk away…
That advice was especially good in 2009!
“1,000 Point Dow Drop in Next Month”
That’s just silly. You can’t predict that sort of thing.
If you disagree, show me who predicted the 1000 pt Fat Finger Boy move, or the subsequent slow grind down by 1000 points over the lusty month of May.
“…In the meantime, Vernon said investors should take advantage of the volatility.”
Beats a Passbook Savings account…
A little levity going into the weekend…
In her radio show, Dr Laura Schlesinger said that, as an observant Jew, homosexuality is an abomination according to Leviticus 18:22, and cannot be condoned under any circumstance. The following response is an open letter to Dr. Laura, penned by a US resident, which was posted on the Internet. It’s funny, as well as informative:
Dear Dr. Laura:
Thank you for doing so much to educate people regarding God’s Law. I have learned a great deal from your show, and try to share that knowledge with as many people as I can. When someone tries to defend the homosexual lifestyle, for example, I simply remind them that Leviticus 18:22 clearly states it to be an abomination … End of debate.
I do need some advice from you, however, regarding some other elements of God’s Laws and how to follow them.
1. Leviticus 25:44 states that I may possess slaves, both male and female, provided they are purchased from neighboring nations. A friend of mine claims that this applies to Mexicans, but not Canadians. Can you clarify? Why can’t I own Canadians?
2. I would like to sell my daughter into slavery, as sanctioned in Exodus 21:7. In this day and age, what do you think would be a fair price for her?
3. I know that I am allowed no contact with a woman while she is in her period of menstrual uncleanliness - Lev.15: 19-24. The problem is how do I tell? I have tried asking, but most women take offense.
4. When I burn a bull on the altar as a sacrifice, I know it creates a pleasing odour for the Lord - Lev.1:9. The problem is my neighbours. They claim the odour is not pleasing to them. Should I smite them?
5. I have a neighbour who insists on working on the Sabbath. Exodus 35:2 clearly states he should be put to death. Am I morally obligated to kill him myself, or should I ask the police to do it?
6. A friend of mine feels that even though eating shellfish is an abomination, Lev. 11:10, it is a lesser abomination than homosexuality. I don’t agree. Can you settle this? Are there ‘degrees’ of abomination?
7. Lev. 21:20 states that I may not approach the altar of God if I have a defect in my sight. I have to admit that I wear reading glasses. Does my vision have to be 20/20, or is there some wiggle-room here?
8. Most of my male friends get their hair trimmed, including the hair around their temples, even though this is expressly forbidden by Lev. 19:27. How should they die?
9. I know from Lev. 11:6-8 that touching the skin of a dead pig makes me unclean, but may I still play football if I wear gloves?
10. My uncle has a farm. He violates Lev.19:19 by planting two different crops in the same field, as does his wife by wearing garments made of two different kinds of thread (cotton/polyester blend). He also tends to curse and blaspheme a lot. Is it really necessary that we go to all the trouble of getting the whole town together to stone them? Lev.24:10-16. Couldn’t we just burn them to death at a private family affair, like we do with people who sleep with their in-laws? (Lev. 20:14)
I know you have studied these things extensively and thus enjoy considerable expertise in such matters, so I’m confident you can help.
Thank you again for reminding us that God’s word is eternal and unchanging.
Your adoring fan,
James M. Kauffman, Ed.D. Professor Emeritus, Dept. Of Curriculum, Instruction, and Special Education University of Virginia
PS. It would be a damn shame if we couldn’t own a Canadian
+1 wmbz going into this Memorial Weekend…
PS. It would be a damn shame if we couldn’t own a Canadian
Hell, yeah. I need slaves who can drive both a Zamboni and a riding mower.
Alls I’m going to say is:
I suspect that Dr Laura Schlesinger & Ann Coulter have a tattoo in exactly the same place…
He is scary, Ann Coulter that is.
I have never listened to Dr.Laura Shitslinger, but she does sail, so she can’t be all bad.
There really isn’t enough smiting now a days.
What Recession?
===============
Income growth outpaces spending in April
Total personal income rose by a seasonally adjusted 0.4% in April to an annual rate of $12.27 trillion. Adding to the sense of strength, income in March was revised upward to a 0.4% gain, compared with the prior estimate of a 0.3% increase.
Incomes were in line with expectations.
After-inflation, after-tax disposable incomes rose 0.5% in April. This is the largest increase since May 2009.
Almost as if the recession bas been over for a year or something. Damn those liars in the media.
Someone needs to let those 20 million on UEI and the recent 200,000+ who just got laid last month and the 500,000 who are about to lose their UEI that their income has risen!
Is this a great country or WHAT?!
“…laid OFF..”
Dammit!
Wait! 0.4%?! Zero point 4 percent? ZERO, POINT 4 percent?
Break out the beer! We’s gonna partay! Woohoo! (but just ONE beer, we’re on a budget ya know)
Consumer spending flat in April for lowest gain in 7 months, incomes post tiny increase.
WASHINGTON (AP) — Consumer spending was stagnant in April while incomes posted a tiny advance, signs that the economic recovery could slow.
The flat spending level was the weakest showing in seven months, according to the Commerce Department report. Economists had expected a 0.3 percent rise.
Personal incomes rose 0.4 percent, slightly off expectations.
More people are holding on to their money, the report noted. The savings rate rose 3.6 percent in April. The rate had fallen to 3.1 percent in March, the lowest reading since October 2008.
Consumer spending is closely watched because it accounts for 70 percent of total economic activity.
The unchanged level of spending came despite a 0.6 percent rise in March. It also was flat despite a 0.4 percent rise in April retail sales.
“The lesson here is that relatively strong retail sales numbers do not guarantee robust consumption,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics, noting that retail sales account for only two-fifths of spending.
“work ahead…expect delays…”
0.4% increase in personal income isn’t going to stimulate jack.
You make 50K, you just got an extra $200. What is that these days? One night at the movies?
Want a loan modification? Get your paperwork ready. ~ May 28, 2010
NEW YORK (CNNMoney.com) — Attention delinquent borrowers: If you want to get into the Obama administration’s mortgage modification program, you’d better have your paperwork ready.
New Treasury Department guidelines go into effect on June 1 that will require loan servicers to verify applicants’ income and financial hardship before placing them into trial modifications.
This will make it much tougher to get temporary relief from unaffordable mortgage payments. But if you make it into a trial modification, you’re more likely to get long-term assistance, providing you send in your check on time.
“This will allow people to have more certainty that the modification they want will materialize,” said Suzanne Boas, president of CredAbility, formerly the Consumer Credit Counseling Service of Greater Atlanta.
What about all those people who”stated” their income?Can they use somone elses income?
“What about all those people who”stated” their income?Can they use somone elses income”?
Yes, the gubmint is coming out with a new program(details to be announced) that allows a person to use another persons income in the event they lied on their previous application.
Pretty funny comments, but seriously, I think that’s exactly where this is going. I don’t have issues with people that borrowed within ( what they ‘thought’ was their means ) and then had a lay-off etc.
This should snare a large percentage of bluffers and put an end to their little shell game. It’s a big part as to why prying these clowns out and into short sales will allow the healing to begin.
If they can prove they voted straight Democrat, income requirements can probably be waived.
Isn’t this discrimination against liars?
I thought the Obama administration was against discrimination.
“You can’t cure debt with more debt. And if you can produce the stuff in unlimited quantities, then it’s not money – that is, not if your definition of money is something you can use to efficiently hold and transfer wealth.”
~David Galland
YOU CAN’T BORROW YOUR WAY OUT OF DEBT
by James Quinn
jeff saturday,
Whatever are… you talking about? We did exactly that for a decade. When your mtg. was at an oppressive 7% and your PITI was 2k a month, you could re-fi, pay of ALL your bills ( for awhile anyway ) and thru the magic of Alan G. walk away with a lower payment and some CASH to boot!
That is borrowing your way out of a liquidity crisis. Doesn’t do anything to fix the debt.
We’ve done exactly that the last 30 YEARS.
There is no more gold/assets in the vault. The bankers are simply printing more and more receipts/claims for those assets.
Bernanke is not the people’s friend. He is a central banker. He is the friend of the bankers, bought and paid for. His job is to protect banks period.
Sure there’s gold in the vault. Problem is if the fed wanted to use it to pay off the debt it’d have to be sold at $36,000 per ounce. There might be an issue finding buyers at that price.
I forgot, what was your Dollar $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ estimation of the price for AMERICA?, and I mean everything pal, the whole Kit & Kabootle,… right down to the last Chinese made man-hole cover & even the stamp collection in the Smithsonian…
Until you can provide it, no PayDay loan for you….
I’d sell you a couple ounces @$36,000.
I heard that they are moving the US Armor Training Center and School at Ft. Knox, Ky along with all personel and equipment to Ft. Benning, GA.
All 180 big tanks will be out of there by end of the year. You know what this means ?
“FREE GOLD for Everybody !”
US to Halt 33 Exploration Rigs in Deepwater Review
CNBC 28 May 2010
The U.S. government ordered a temporary halt to drilling at 33 deepwater exploration rigs on Thursday, part of a broader response to the massive BP oil spill that threatens efforts to tap offshore fields seen as crucial to increased U.S. oil output.
The move may potentially delay project development plans by companies like Chevron [CVX 74.11 -0.25 (-0.34%) ] in the Gulf of Mexico, where rising production has helped offset shrinking domestic onshore supply.
We’ve got to get consumers, consuming! Now get out there and buy something you don’t need.
Consumer Spending in U.S. Stalls, Savings Increase (Update2)
May 28 (Bloomberg) — Consumer spending in the U.S. unexpectedly stalled in April as Americans used growing wages to rebuild savings.
Purchases didn’t increase for the first time since September and compared with a 0.3 percent increase projected by the median forecast of economists surveyed by Bloomberg News, Commerce Department figures showed today in Washington. Incomes climbed 0.4 percent for a second month, and the savings rate rose for the first time in four months.
“We’ve got to get consumers, consuming! Now get out there and buy something you don’t need.”
Figures you’d throw your support for the Tobacco Industry…
I need some new sneakers. If I find a pair I like at an OK price, I’ll buy two pairs so I don’t have to go shopping for them again for a while. Is that enough sir, or would you like something else?
Piffle.
Now 2 PLASMA TVs? That’s patriotic!
To follow up on yesterday’s stock market valuation discussion, here are what I think are some interesting charts.
First - a more up to date version of the P/E chart.
The earnings denominator there is based on a 10-year average of earnings. Earnings tend to be quite volatile of course - going up during booms, and down during busts. Stock market investors (not speculators) ideally try to look past that, at the more general longer-term earnings forecasts, and thus at a macro level a smoothed-out version of the earnings over time is good, thus the 10-year average. This is what Robert Shiller does when presenting his long-term P/E ratio.
Looking at that chart - it appears that the stock market valuation is about right - perhaps slightly high, but at just below 20 long-term P/E it’s not too far above the long-term average of 16.
Here’s the problem though. The 10-year average itself is, at least in my opinion, very over-inflated due to the housing bubble. The housing bubble started in 1997, and really was in full swing for a long time - very high for about the 8-year period from 2000-2008. Since house prices were high, a lot of extra equity was withdrawn and pumped into the economy - on the order of $3-5 Trillion or so. This doesn’t include the additional money being pumped into the homebuilders themselves.
Thus as a result corporate earnings themselves reached record levels - by far. They were in record territory for about 4 years actually, and higher-than-normal territory for about 6 years, until plunging to near-record-lows in 2009.
But then note what happened - they shot right back up - fast. Really really fast. Here’s a chart of YoY change in earnings. Not too too incredible, until you expand it out. Wow.
What explains this huge turnaround in earnings in 2009/2010? Simple - this (the dark red line), and this..
What that means is that - unless those two things continue (which aren’t planned), the current level of earnings is not sustainable - because the underlying fundamentals of the economy - the debt load, the foreclosure levels, the unsold housing inventory - have not improved a bit. They’ve stopped getting worse, but they haven’t improved; they’re still at record-bad levels. Now there is a lot less home equity available for the economy to tap into and feed those once-again-inflated corporate earnings. The only place they’re coming from is stimulus - i.e. the TARP, the $862B stimulus package, and the $2T or so of Fed money creation. But all of that is going away over the next few months; officially at least.
Thus unless some more really, really big new “emergency” meaasures are put in place - like on the order of $2 Trillion or so at least - that corporate earnings line is going to go right back down to 30 or below again, and thus going forward the P/E ratio is going to continue going up and up and up - even if stock prices remain level. Note that I’m not proposing that we do this stimulus, just saying what we’re in for. I personally think allowing another crash is the most appropriate action for the long-term health of our economy; we need to unwind our excessive debt, not add to it.
Well hmmm - not really sure what happened with those first two charts. Trying again…
First the updated version of the P/E chart.
… and now the 10-year earnings average chart.
I think PE can stay high if interest is near zero ??
if that changes watch out
Interest Rate that is
Do you mean PE (price/earnings) or just earnings?
IMO keeping interest rates near zero will not keep earnings high. It’s increasingly becoming just pushing on a string.
Reason is because in a Keynesian world it’s not actually low interest rates that promote economic activity (by encouraging borrowing). It’s interest rates that are lower than recent history that promotes economic activity.
The problem is that even though rates are extremely low right now - they’ve been extremely low for about 6 of the last 10 years. People have gone so far into debt they simply can’t borrow any more, even at extremely low rates (generalizing here).
Thus while historically low rates have promoted economic growth - this time they haven’t, and won’t. What’s promoted growth the past few months has been the Fed money creation and new (forced) federal government debt and spending.
Raising rates will be suicide. What meager borrowing that’s happening right now will cease. The only entity that will be able to borrow any more is the federal government.
P/E ratio a function of many things, not just an inverse relationship with interest rates. Tax rates, regulatory environment, global peace, etc., all influence how much an investor is willing to pay for $1 of earnings. Stock market rode a wave of deregulation, declining tax rates, and the end of the cold war in the 80’s and 90’s. Now all those variables going in the other direction. We have been experiencing declining P/E multiples with declining rates for the past 10 years. Secular P/E expansion and contraction cycles are usually long cycles, think 20 years, so multiple contraction can continue for awhile.
It’s Not a ‘V’, It’s Even Better, Altucher Says: Look for New Highs by 2012
May 28, 2010 by Peter Gorenstein in Investing, Recession. ~Tech Ticker
The debt crisis in Europe likely spells slower growth across the Atlantic. China is taking steps to put the brakes on its runaway economy and the U.S. housing market still looks weak. There’s seemingly plenty of reasons to be a stock market bear, especially after the run we’ve had over the last year.
Nonsense, says James Altucher, president of Formula Capital. The economy and market will continue to surprise, he tells Aaron in this clip. In fact, he’s calling for a ‘checkmark’-shaped recovery, stronger than the ‘V’ we hear so much about. “The debate is over, it’s already been a V, now the question is, does it continue? I think it does,” he says.
Why is he so confident?
* — The job market is improving. “We’ve seen temp workers go up for seven months in a row,” the fastest pace since 2004. Average pay and hours worked are up and the U.S. added 290,000 jobs last month, the biggest jump in four years. Plus, he notes, “jobs in self-employed positions and start-up businesses have jumped by 1.9 million in the past four months.”
* — Car sales are up by 25% in April compared to a year ago. “How did Toyota have 27% year over year car sales increase?”
* — Pending home sale are up 21% year over year.
Altucher is confident all this will translate into record profits and an all-time high on the S&P 500 by the end of next year. “I know people are going to laugh,” but the proof is in the pudding, he says.
LOL.
Sorry, but using very-surface-level empirical data to make a case of future economic growth just makes you look stupid - really, really stupid. See my above post for a much more in depth view.
Yes the stock market may go up - but if it does it won’t be due to any improvement in economic fundamentals, it’ll be purely due to speculation/inflation.
And car sales up 25% is also due to speculation?
If you’re going to cherry pick selective data, I’ll one up you every time Eddie. Car sales are down 22% vs. two years ago, and 31% vs. three years ago.
Not to mention I wasn’t talking about car sales - I was talking about the stock market, and Altucher’s even more general idiotic comment about a “checkmark” recovery.
Nevertheless - car sales are currently at 11M per year. In order for it to be a checkmark recovery, in the “car sales measure”, they would need to hit at least 18M per year, since they ran in the 17.0 - 17.5 range for 8 years before the crash. Talk to me when that happens. I guarantee it won’t be any time in the next 5 years.
packman,
I watched a bit of the interview. The man did have a point. There was a time when we thought Roubini was a ‘crackpot’. ( Now “I” didn’t but, many )
Altucher was making some of the comments sort of tongue in cheek. That we’re now in such a tailspin ( emotionally ) that we wouldn’t know a sliver of good news if it hit us over the head?
Oh I’ll agree with you there. But saying the economy will recover stronger than before just because you believe Roubini-types go overboard is a bit like claiming someone’s like Hitler if they don’t meet Mother Theresa standards. He extends the “we ignore good news” principle to a very illogical conclusion.
Beachfront property on the Gulf. Pa-TANG!
http://www.dailyfinance.com/story/real-estate/louisianas-beach-front-real-estate-devastated-by-oil-spill/19494748/
I can see how the stench of crude would discourage a potential buyer, even if the oil hasn’t washed up on the beach.
Over the putrid stench of crude I smell a federal “catastrophe-credit” coming to allow FBs to pay the lender in full on these uderwater properties. Just wait - can’t have any more stress on the banks don’t you know.
I certainly understand why people are canceling their vacation rentals, but selling your house because of the spill makes no sense to me. It will get fixed and the area will get cleaned up.
“Not surprisingly, the calls are from people calling her office to cancel their summer rentals or put their homes on the market. Not one of the calls is from anyone interested in buying the 100 or so homes she has listed. It’s a full-blown real estate disaster that is affecting properties along the entire Gulf of Mexico”.
Beautiful View — Until You Smell the Crude
“We aren’t selling a thing,” she says. “I haven’t had one closing since this whole thing happened.”
Buy when everyone is selling, right?
The beach may be nasty for asummer or two. But it will be cleaned up. And if you can buy a beach house today from a desperate seller and carry the costs you could make a killing when selling after the mess is cleaned up.
If only I WANTED a beach house in LA, I’d be in the market in a flash.
“The beach may be nasty for asummer or two. But it will be cleaned up. And if you can buy a beach house today from a desperate seller and carry the costs you could make a killing when selling after the mess is cleaned up.”
LOL, you really believe in the nonsense about mopping all the oil off thousands of square miles of ocean ? I used to work for Baker International contracting to Amoco. We spilled a lot of oil and had workboats with booms to “contain” it, but trying to mop rapidly spreading oil from the ocean is an utter waste of time. The boats and booms were for appearances only. And the oil doesn’t just magically vanish in a year or two. The beaches and water around the Scillys are still a mess almost 45 years after the Torrey Canyon disaster.
An agent never met a reason for churn that they didn’t like. Oil spills, hurricanes, white flight, you name it - as long as it leads to commissions.
Exactly.
The stock market is having a rough day at the end of a volatile month, but at least the oil price is “improving.”
PPT better have their beepers on hand today. Looks dangerous.
Yea… I’m sure they have fully loaded golf carts, with satellite communications, and a Rodney Dangerfield golf bag.
It didn’t then, but it might now - 12:51 EDT
Whoa - looks like they got back from lunch and did some work, but then took off for happy hour a few minutes too early.
Yep, looks like some profit taking.
My Friendly Neighborhood Realtor sent his monthly missive today (late, very late!), and for once he sounds somewhat reflective and almost rational for a few moments … while still pumping the “it’s a great time to buy” meme:
With the tax credit in the history books, it’s a good time to ask, “What should I do now?”
If you’re a buyer who was in the market prior to April 30, you’ve answered an important question. It’s not just about finding the right deal. It’s about finding the right home. The fact is buying a home today is a longer-term proposition than it was a few years ago, and a home has to work for you not only as a place to invest but as a place to live. From that point of view, $8,000 probably isn’t a make or break. Of course that doesn’t mean the right deal isn’t out there – especially with today’s low mortgage rates and plentiful inventory.
If you’re a seller now is a good time to step back and evaluate pricing and positioning. With the increase in recent transaction volume, there are more comparable sales today than six months ago. If your home has been on the market for a while, it’s a good idea to revisit the comparative market analysis. But it’s also important to point out that we at @properties do not subscribe to the notion – as some brokers do – that sellers need to fill the government’s role as a provider of homebuyer subsidies by automatically dropping asking prices or offering cash credits.The market needs to stand on its own, and we believe it can and will.
Way to play both sides, I betcha that guy juggles three or four girlfriends with ease.
Dumb observation of the day:
Gold was priced around $300 an oz a decade ago, now at $1200 an oz. This translates into a 75 percent dollar devaluation in gold terms.
Why is it that the gold bugs expect further devaluation from here? Isn’t 75 percent enough to last us for a while?
Who decides if 75 pct is enough? You? Me? Politicians? Central bankers? Who made all the bad money policies to fund two wars with deficits while simultaneously cutting taxes? Who is spending even more moneys via deficits and outright printing to save all the bad money policies of yesteryear? Who is pretending to fix a broken financial system?
The price of gold reflects lies, deceits, and a broken monetary system. It reflects a fundamental distrust of the political, monetary, and economic intelligencia.
The price of gold reflects lies, deceits, and a broken monetary system. It reflects a fundamental distrust of the political, monetary, and economic intelligencia.
If it goes back down to, say, $500 or $600 per oz., what does that signify? That the lies and deceits are gone? Happy days are here again?
It depends on who is selling.
I see no more reason to buy gold at its all time high, than to buy houses at their all time high.
(In the interest of full disclosure, I just recently broke even on some Maple Leafs I bought thirty years ago)
I see no more reason to buy gold at its all time high, than to buy houses at their all time high.
It’s worth noting that while housing was recently at it’s all-time high, even in inflation adjusted terms - gold isn’t; in 1980 it hit $1750 in inflation-adjusted value.
Acknowledging that, in hindsight, gold was indeed in a huge bubble in 1980. It is now as well - if the government can get its fiscal house in order.
The ironic/odd thing about gold back then is that gold plummeted before the government debt started going to the moon in 1982.
Curious whether I am the first to point out the 75 percent dollar devaluation relative to gold, or is this discussion happening elsewhere?
Please post references if you can find them…
Why is it that the gold bugs expect further devaluation from here?
Your answer sir.
Consumer sentiment, inflation expectations rise.
May 28, 2010
NEW YORK (Reuters) - Consumer sentiment rose a bit in May from April but stayed roughly unchanged from levels reported since February, while the one-year inflation expectations climbed to the highest since October 2008, a survey showed on Friday.
The final May reading on the overall index of consumer sentiment was 73.6, up from April’s reading of 72.2 and up slightly from the preliminary May reading of 73.3, according to the Thomson Reuters/University of Michigan’s Surveys of Consumers report.
Analysts polled by Reuters had predicted a final sentiment reading of 73.3 for May. The sentiment readings for February and March were also at 73.6.
The one-year inflation expectation index rose to 3.2 percent in May — the highest level since October 2008 when it was 3.9 percent — from 2.9 percent in April. The five-to-10-year inflation measure rose to 2.9 percent from 2.7 percent.
Long term treasury yields suggest otherwise.
“Expectations?” I just saw 20% increases at the grocery store last week. Just who, and where, are those lucky SOBs who aren’t seeing insane price increases?
Here it is: New bill gives Federal loan guarantees to homebuilders.
http://www.washingtonwatch.com/bills/show/111_HR_5409.html
Well it’s about time! No builder should have to stand on it’s own ability and merit, if they fail, we pick them up. Sure encourages are great desire to be the best at what you do…Knowing you can’t fail!
H.R. 5409, To establish the Residential Construction Loan Guarantee Program to guarantee loans made to eligible home building companies for viable building projects
That last phrase ought to disqualify the entire home building sector from loan guarantees.
Cripes.
The easiest way to implement a “no one left behind” policy is to simply make sure that no one progresses.
We’re screwed.
Automakers rely more on 0% financing to close deals ~ USA TODAY
On this Memorial Day weekend, one of the biggest three-day sell-a-thons of the year for auto dealers, shoppers are being offered zip, nada, nothing — at least when it comes to interest rates.
More automakers are offering 0% financing as a way of closing deals with recession-weary customers, seeing the reduced payments as a more powerful come-on than cash back and other incentives.
The percentage of vehicles purchased with 0% in March hit a record of 22.4% of all new car deals financed, Edmunds.com reported. In April, it remained high at 17.8%.
Among automakers offering lucrative 0% deals this month on various models are General Motors, Ford Motor, Nissan, Volvo, Volkswagen and Toyota.
When my current car dies, I might switch to zip car just to avoid having to go car shopping. Just the idea makes me wince. Please note there is a zip car parking spot appoximately 5 yards from my current building…..
I’ve been using them for years. I love Zipcar.
Comment by polly
2010-05-28 12:27:38
When my current car dies, I might switch to zip car just to avoid having to go car shopping. Just the idea makes me wince. Please note there is a zip car parking spot appoximately 5 yards from my current building…..
I’ve been using Zipcars for years, they are great. Also, get a bicycle that will take a rack and panniers.
The hurricane prognosticators are full of glee, with a warmer Atlantic and el nino out of the picture, they are hoping to right this go round.
Commodities surge after hurricane warning. ~ FT ~ 5-28-10
Oil and natural gas prices surged on Thursday as the US government said this year’s hurricane season could rank among the most active to date, comparable to years that brought such devastating storms as 2005’s Katrina and Rita.
The US National Oceanic and Atmospheric Administration estimated the June 1-November 30 season was likely to bring 14-23 named storms, with eight to 14 strengthening to hurricanes. “If the 2010 activity reaches the upper end of our predicted ranges, it will be one of the most active seasons on record,” the agency said. This is in stark contrast to last year, the quietest in 12 years.
Because of globull warming / climate change, etc. every year will be worse than the previous year in this regard. Except when it isn’t, in which case it will generally be ignored. How often do we still hear about the record-breaking 2005 season that proved globull warming was creating super hurricanes and we were all going to die in a storm? Now, how often do we hear about years like last year where practically nothing happened?
It’s the same with how every year is “the warmest on record” in some way, shape, or form, even when it clearly isn’t.
Then, there’s also the fact that big hurricane seasons make for better ratings and more funding for weather-related science, news, etc.
All that being said, it wouldn’t surprise me if it was an active year, despite all the marketing that tries to make every year into an active one.
“It’s the same with how every year is “the warmest on record” in some way, shape, or form, even when it clearly isn’t.”
Do you have data for that, or are you just looking outside your door?
Broken record:
Forecasters: 2009 to bring ‘above average’ hurricane season
Canada won’t fall victim to foreclosure wave: Financial PostFriday, May 28, 2010
DBRS said in the report that Canada will continue to fare well in comparison with its neighbour to the south when the Canadian housing market corrects itself and interest rates rise. Getty Images DBRS said in the report that Canada will continue to fare well in comparison with its neighbour to the south when the Canadian housing market corrects itself and interest rates rise.
Canada’s housing market won’t fall victim to the type of foreclosure wave the United States saw, according to a new report by debt-rating firm DBRS Ltd.
DBRS said in the report that Canada will continue to fare well in comparison with its neighbour to the south when the Canadian housing market corrects itself and interest rates rise. That’s because lending practices here are much more sound than in the U.S.
“The likelihood of us having the kind of situation they had in the U.S. is extremely low,” said Jerry Marriot, managing director of structured finance at DBRS. “It’s a combination of the lending practices prior to the peak in 2007 - they were more restrained, so there were better underwriting practices in Canada. We also think there are a number of factors in the Canadian market which have lent themselves to more prudent lending.”
It’s definitely different there.
This past weekend I went to a Home Buyer’s Expo here in Anne Arundel County, Maryland. It was a surreal experience.
1) On the plus side, there was at least *some* admission that there was a Housing Bubble by some of the realtors, title companies, lenders, etc. who were there. Not a lot of admission, of course, and “now is the best time to buy!” was the mantra, as expected.
2) Some arm of the couny is starting to build smaller, affordable green homes… in the over $300,000 range. Mind you, Anne Arundel county median household income is only a bit over $60,000 a year. A strange definition of “affordable.”
3) The county offers 0% loans of $5,000 to first time homebuyers that only have to be paid back when the house is sold. The insane part: the loans are available to households with 2 people making up to $98,000 a year, and to folks who make over $100,000 a year if there are 3 or more people in the household.
This is madness: why is the government offering money to people making 50% more than the median household income? And why is it you need to make that much money or more to be able to afford a house in the county?! Oh, then there’s the leverage involved; we all know that $5,000 will be leveraged at least 5 to 1, thus jacking up the price of houses by $25,000 or more. Madness… we’re lending out money to virtually everyone to make housing more “affordable” by increasing the prices?!
Needless to say, I won’t be buying anything soon!
It’s GOOD to be the Banksta.
Ask yourself who do these high prices benefit.
Gonna need a bigger bailout, the new “mini” stimulus won’t be enough.Perhaps we’ll hit $15 trillion before labor day. Uncle sugar can’t say no.
Thousands of job losses possible if federal funding expires
Governor Ed Rendell urges members of Congress to fund the American Jobs and Tax Loopholes Act. Governor Ed Rendell begs for money.
HARRISBURG - Thousands of Pennsylvania jobs could be lost if the federal government doesn’t pass a certain bill. Governor Ed Rendell on the road in Washington, D.C. to urge the passage of The American Jobs and Closing Tax Loopholes Act.
The legislation has a bunch of different parts, but the part most crucial to Pennsylvania is the matching Medicaid funding that comes from the federal government. Without it, Pennsylvania would lose $850 million, leading to a bigger budget crisis.
Spain loses AAA rating from fitch according to Bloomberg.
So that’s what’s behind the action just before 1:00 EDT. Was wondering, because it was supposed to be a mellow day.
Sovereigns are the only entities that can recapitalize banks. If your money is purportedly safe in a bank and your government cannot or does not have the ability to raise money to recapitalize your country’s banks, your savings go ‘poof.’ Central banks can buy the government time of course.
However, if you were able to escape with your moneys why put it back in the same bank, country, or currency? We are not the only buyers of gold. There is global demand, other countries, other governments, currencies, central banks, and so on.
Down, down, down the wabbit hole…
market pulse
May 28, 2010, 12:52 p.m. EDT
Stocks slide further after Fitch cuts Spain’s debt
By Claudia Assis
SAN FRANCISCO (MarketWatch) — Stocks slid further after Fitch Ratings cuts Spain’s debt ratings to AA+. The Dow Jones Industrials Average (DJIA 10,151, -107.85, -1.05%) fell 145 points to 10,109 on Friday, while the Nasdaq Composite (COMP 2,251, -26.98, -1.19%) declined 31 points to 2,246 points and the S&P 500 (SPX 1,090, -12.80, -1.16%) lost 16 points to 1,087.
…
Related stories
* U.S. stocks falter on tepid economic data (10:54a)
* Fitch downgrades Spain’s ratings to ‘AA+’ vs ‘AAA’ (12:52p)
* Stocks fall more on Chicago manufacturing index (9:57a)
* Rally sets U.S. stocks on track for weekly gain (May 27)
It’s a financial sector rout on the closing day of May.
Happy Memorial Day to all!
And happy summer trading season to all stock market bulls!!!
Financial Stocks
May 28, 2010, 1:43 p.m. EDT
Bank stocks add to slide after Spain debt rating lowered
By MarketWatch
SAN FRANCISCO (MarketWatch) — U.S. financial stocks added to losses Friday after Fitch Ratings cut Spain’s sovereign debt, resurfacing the same worries about Europe’s financial outlook that have rattled bank stocks for the losing month of May.
The Financial Select Sector SPDR Fund (XLF 14.70, -0.31, -2.07%) dropped 1.8% in thin trading ahead of the long holiday weekend after surging 4.5% during Thursday’s rally.
Bank of America (BAC 15.83, -0.35, -2.16%) shares lost 1.8%, J.P. Morgan Chase (JPM 39.57, -0.85, -2.10%) shares fell 1.8% and Citigroup (C 3.97, -0.05, -1.18%) shares fell 1.2%.
Financial stocks, which had faltered earlier on lukewarm U.S. economic data, slid further Friday after Fitch Ratings downgraded Spain’s long-term foreign and local currency issuer default ratings to AA+ from AAA. Fitch anticipates Spain’s economic recovery will be slower than other countries’ economies with AAA-rated sovereign debt.
The Financial Select Sector SPDR exchange-traded fund is on track for a loss of about 8.8% for the month of May. This will be the first down month for the XLF since January, when it fell 1.5%, according to data from FactSet.
The ETF, which tracks the financial stocks in the S&P 500, is also on track for the worst monthly loss since February 2009, when it lost 17.7%.
“The credit recovery trade carried momentum through April, partly driven by improved economic and earnings reports, but also by short covering,” said Keefe, Bruyette & Woods analysts in a research note Friday.
“As the saying goes, however, investors began selling in May as economic concerns increased, driving risk markets lower,” KBW said. “For the year, the banks remain in positive territory although risk tolerance appears to be waning over the near term.”
…
Las bankos mucho broko…
But not the Bankstas!
Nails it!
Clarke and Dawes ask the million dollar questions ABC News Australian Broadcasting Corporation.
http://www.youtube.com/watch?v=thSTpGnWEAs
That is a classic clip. Well worth the watch.
Just watched it again…Even better the 2nd time…
That’s the first time I’ve seen it. Very good!
finance.yahoo.com/banking-budgeting/article/109679/the-fed-and-the-may-6-flash-crash?mod=bb-budgeting&sec=topStories&pos=5&asset=&ccode=
Back to markets. Think of every investor holding a risky position. Then think of all of these investors together in a big herd.
When imitative behavior starts happening in markets en masse, expect funny things to happen to liquidity. All you need to know about market dynamics—as I learned as a Chicago pit trader—is that market prices always adjust to the level where market-makers see balanced two-way order flow between buyers and sellers. All market-makers want to do is buy at the bid price, sell at the offer price, and at the end of the day go home unscathed. When there are only buy orders, for instance, expect market-makers to be unwilling to sell to those buyers until the price has adjusted to the point where they see roughly equal buyers and sellers again. To expect them to do anything else is to imagine them as charities.
So when you combine imitative behavior with noncharitable market-makers, there will be seismic waves from time to time. What makes our current system particularly prone to global ruptures is that hair-trigger traders have crowded into exceedingly risky bets. Why would that be, with the crash of 2008 so fresh in traders’ minds?
This type of alignment among investors in risky positions is precisely what the central economic planners at the Federal Reserve intended when, in response to the historic credit collapse, they commanded interest rates to zero and signaled that they would prop up all risky assets.
The profitability of an investment is simply its return on capital beyond the cost of that capital. It is against this spread that investors must assess risk. So when the Fed distorted the cost of capital following the 2008 collapse by lowering it for many by roughly 2% (to about 0% for banks), it had the same effect as the 2% higher aggregate dividend yield for stocks or higher credit spreads for investment grade bonds. Suddenly what was toxic looked cheap.
The Fed lured everyone to buy everything and anything that was risky—and did so itself with outright purchases of risky assets like mortgage-backed bonds. Anyone eager for easy profits fell right in line, bidding up dangerous assets like clockwork. Sensing safety in numbers, the herd quickly followed, and in no time the market had consumed the Fed’s gifted 2% profit spread and then some.
All in all, it seemed like an impressively engineered recovery. In reality, it was an ephemeral illusion caused by distorting investors’ assessment of risk. Despite what zero interest rates were signaling, savers flush with cash weren’t flooding the capital markets and credit wasn’t expanding.
“All market-makers want to do is buy at the bid price, sell at the offer price, and at the end of the day go home unscathed.”
What if market makers have so much sway that they can drastically alter the equilibrium price?
That’s exactly what they do. If you or I sat in the catbird seat where we could see total demand and total supply at any given moment, we could easily alter price by adjusting supply or demand, or rather choosing a side, momentarily even.
What’s more, this is precisely what investment banks did with MBS securities. Worse, they were able to construct the very securities they later manipulated. Not only were they able to short other members like New Century in the home loan distribution channel, they were able to short the securities originating from it, and even synthetic securities derived from it.
Without Merkley-Levin, nothing changes. The game stays fixed.
“If you or I sat in the catbird seat where we could see total demand and total supply at any given moment, we could easily alter price by adjusting supply or demand, or rather choosing a side, momentarily even.”
Wouldn’t that be a violation of the Sherman Antitrust Act, which makes price fixing illegal?
Wouldn’t that be a violation of the Sherman Antitrust Act, which makes price fixing illegal?
Actually no, because it’s only illegal under that act in the case of collusion. Having a catbird seat view and acting on it isn’t necessarily collusion.
Theoretically (in a perfectly fluid market) every time you make a stock purchase or sale you alter prices, in fact.
“Having a catbird seat view and acting on it isn’t necessarily collusion.”
Wouldn’t said firm with such a high catbird seat view need to be a monopoly cartel, in violation of the Sherman Antitrust Act?
Whatever became of competition in America, anyway?
Competition is for the little people.
Well I figured the catbird seat thingie was just theoretical moveidom, like if somehow one of us had happened to overhear a drunk Ben Bernanke telling a buddy in a bar all the secret plans of the real colluders, or maybe given a one-time gift of omniscience from God, or perhaps just invented a time machine or something.
Heck even the real colluders of the world don’t have a total demand and supply view (though GS and JPM appear to be pretty dang close, based on their Q1 trading success!)
That being the case - I believe yes you are right - such a catbird seat in the real world is collusive, and indeed they do regularly practice price fixing. Proving it is another thing; getting them prosecuted for it yet another further; doing so and actually surviving would be quite miraculous indeed.
“Competition is for the little people.”
Good point.
Corollary: TBTF is for the big people.
Socialism for the rich, no holds barred capitalism for the rest of us.
“Wouldn’t that be a violation of the Sherman Antitrust Act, which makes price fixing illegal?”
LOL! Bankers call ‘price fixing’ market making. Seriously, if you had a big enough balance sheet, which they do, you could temporarily move markets any direction you wanted. What’s more, if a regulator told you and other members in the industry that such and such securities would look favorably on your balance sheet, you could really move prices. Further, if said regulator has a proven record of rescuing the industry when trades go bad, there really isn’t much risk in moving the market.
My company’s stock trades at such low volumes that when I was buying it today in blocks of about 100-300, I could watch the price tick up by 2-3 cents on each purchase.
I wasn’t buying a ton, but I was making the price swing a few cents on a $15 dollar stock.
Now imagine what the big boys can do on low volume days. That’s why you get low volume, high volatility days.
No, NOW imagine an unlimited balance sheet (the Fed) buying the S&P to manipulate the market.
Now everyone knows why Barry and BJ had lunch last week. Had to get their lies straight. Since BJ stated sometime back that Barry would have to “kiss his ass” if he wanted anything from him. I wonder which cheek Barry kissed, left, right or did BJ want it down the middle?
EXCLUSIVE: White House asked Bill Clinton to talk to Joe Sestak about Senate run. ~ The Washington Post
Senior White House advisers asked former President Bill Clinton to talk to Joe Sestak about whether he was serious about running for Senate, and to feel out whether he’d be open to other alternatives, according to sources familiar with the situation.
But the White House maintains that the Clinton-Sestak discussions were informal, according to the sources. The White House, under pressure to divulge the specifics of its interactions with Sestak, will release a formal statement later today outlining their version of events, including Clinton’s involvement.
Nothing untoward happened. This is the most ethical and transparent Administration ever. Nancy Pelosi said so.
Need mo tax dollars…
Mental health group can pay only half wages.
RALEIGH,N.C. — The state’s oldest and largest mental health advocacy group is in such deep financial trouble it cannot fully pay its workers.
A memo sent this week to the more than 200 employees of the Mental Health Association of North Carolina says they will receive paychecks today for only 50 percent of what they have earned.
Christine Foppiano, the interim executive director of the Raleigh-based association, declined to speak Thursday about problems at the group, which receives tens of millions of dollars in taxpayer money to provide housing and services to about 2,500 people who are mentally ill or developmentally disabled.
“I really can’t make any sort of comment on our financial situation,” Foppiano said. “I believe the note speaks for itself.”
In other news about ruptured state budgets…
It was reported this week that the famous Buckingham Fountain, known to many from its weekly appearance in the opening credits of Married with Children - will not open after repairs as scheduled for the Memorial Day weekend kickoff of summer. Why? The state of IL could not come up with its share ($4 M) of the repair money.
It was reported this week that the famous Buckingham Fountain, known to many from its weekly appearance in the opening credits of Married with Children - will not open after repairs as scheduled for the Memorial Day weekend kickoff of summer.
Whhhhhat? That’s heresy. Can’t they fire a few handfuls of teachers, firemen, and bureaucrats to make up the difference?
On a related note, have you checked out the (free) music scheduled for Millennium Park this summer? Wow. Whoever’s programming the concerts is doing a great job. But I wonder how much all that will cost us?
Well at least they should be uniquely well equipped to handle depression and anxiety. In theory, anyway.
Make them all TBTF to gain popular acceptance to save and perhaps control them. Seems like the plan. Worked here.
May 28 (Bloomberg) — Caja Madrid, Spain’s second-biggest savings bank, and five smaller lenders began talks on a possible merger as banking combinations accelerate ahead of a government rescue-fund deadline.
The Madrid-based lender with assets of about 190 billion euros ($235 billion) is in talks with Caja Insular de Canarias, Caixa Laietana, Caja de Avila, Caja Segovia and Caja Rioja over a combination under a Bank of Spain-endorsed model in which they would merge some central functions, the lender said in a filing to regulators today. The merger would combine lenders with total assets of about 228 billion euros, according to data from the Spanish savings-bank association, known as CECA.
Private prison in Watonga closes
The Diamondback Correctional Facility in Watonga closed Thursday. The private prison housed about 2,000 inmates from Arizona, but officials there chose not to renew the contract with the Watonga prison, leaving about 300 corrections workers jobless or transferred elsewhere.
The Diamondback Correctional Facility in Watonga shut down Thursday.
NewsOK.com
WATONGA, OK — Count this city as one of the only in the world that wants its criminals back.
Not back on the streets, but back in the private prison that until Thursday was Watonga’s biggest employer.
Now it’s empty.
The Diamondback Correctional Facility shipped its last prisoners away Thursday and shut down, leaving a hole in the city economy and more than 300 corrections workers jobless or transferred to private prisons elsewhere.
The prison industrial complex is right up there with factory farming when it comes to creepy.
Another spinoff of “privatizing” government.
Husqvarna to close Beatrice, Neb. mower plant and cut nearly 400 jobs, operations moving to SC ~ The Associated Press
Outdoor power equipment maker Husqvarna AB said Thursday that it plans to close its southeast Nebraska mower plant and move operations to Orangeburg, S.C., later this year.
The changes will jeopardize 390 jobs at the Beatrice, Neb., plant. They are part of a larger reorganization Husqvarna announced last fall.
The Swedish company says final assembly operations will end in Beatrice during the second half of 2010. It wasn’t immediately clear whether all the Beatrice jobs would be eliminated, and Husqvarna officials did not immediately respond to a message left Thursday afternoon.
Husqvarna is one of the largest employers in Beatrice and has had some operations there since 1999.
Ironic. Mowers cut green shoots.
Iraq Bank Robbers Drug Guards, Steal $5 Million
Associated Press
BAGHDAD — Robbers stole $5.5 million from a bank near the Iraqi city of Najaf on Friday after a policeman drugged fellow bank guards by slipping sleeping medication into their tea, police and government officials said.
Loay al-Yasiri, a provincial official in charge of security for Najaf, said the robbery took place at dawn at the state-run Al-Rafidain bank in the town of al-Mishkhab, about 20 miles south of Najaf.
A local police official and a bank official said a policeman who was guarding the bank offered cups of tea laced with sleeping medication to four guards at the bank late Thursday, knocking them out for the night.
The robbers took off with more than six billion Iraqi dinars, about $5.5 million, while the guards slept. The policeman who offered the other guards the drugged tea escaped with the thieves.
The official said not a single shot was fired and no one was hurt. The bank was just yards away from a local police station.
Wait, we’re supposed to be building Iraq in our own image. Some contractor got the lesson plan wrong. You don’t rob the banks. The banks rob you!
Happy FDIC Friday!
* BUSINESS
* MAY 28, 2010, 6:14 P.M. ET
Three Banks in Florida Are Shut
By RANDALL SMITH
State and federal regulators closed three banks in Florida, bringing the nationwide total of failed institutions so far this year to 76, with 13 of them in Florida.
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