Bits Bucket For June 11, 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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Chaos, Anarchy To Reign If Paterson Shuts Down NY
Monday Could Be Doomsday If Budget Deal Can’t Be Reached
Shutdown Would Mean Closing Of State Parks, DMV, Courts, N.Y. Lottery. ALBANY (CBS)
Chaos and anarchy. That’s what New York Gov. David Paterson is warning if he’s forced to shut down the government in a few days.
Chaos and anarchy. That’s what New York Gov. David Paterson is warning if he’s forced to shut down the government in a few days.
The clowns in the state Legislature, now deadlocked for 71 days on the budget, are ready to take down the “big tent” and bring state government to a standstill. At least that’s what Paterson thinks.
“No one knows the full ramifications of a government shutdown,” said Paterson. “It would create unimaginable chaos around the state and the greater metropolitan areas.”
Is New York turning into California?
No border with Mexico
But all public union salaries, benefits and PENSIONS will be on time and IN FULL.
Well, you have to have your priorities straight.
What will I do if they shutdown the lottery?
I know - the NYS lottery commission probably employs about two dozen people and actually makes money for the state…
It is ALL about cutting stuff to make the citizens/taxpayers feel as much pain as possible. That way all new borrowing and taxes are justified”.
If they just had all public union goons pay 10% more for their healthcare, take a pay freeze and convert their pensions to 401K, the citizens would not feel the pain.
Aren’t there any bookies left in NYC?
They created the lottery and Off Track Betting to horn in on the bookie’s action.
The lottery is a tax on people who are bad at math.
“The lottery is a tax on people who are bad at math.”
Many play the lottery knowing full well how bad the odds are. That’s why they call it gambling.
Chaos and anarchy. That’s what New York Gov. David Paterson is warning if he’s forced to shut down the government in a few days.
In other words, a big improvement over the current situation.
We should all start to get use to Anarchy. Once the full impact of lack of funding at the city, state and federal level are felt, there will be rioting in the streets. Its coming to a city near all of us.
But there is such a thing as peaceful anarchy. Some think that America’s so-called “Wild West” period fits this description.
I used to think of anarchists as crazed crack-heads plotting to blow up bridges. Then I read Murray Rothbard (among others), and discovered that there is a long intellectual tradition promoting peaceful and prosperous anarchy.
I think it will be the Grey Panthers when they (we?) realize that the medicare benefits we have been planning on since 1964 are no longer there and that our Social Security is going to be means tested, so those of us that saved a bit will be in the same boat as those that didn’t. But all in all, us oldsters can’t cause much damage, except with our Buicks.
I would think that peaceful anarchy would be much more likely in areas of low population densities. I question how peaceful it could be with lots of people around bumping into each other. Even under the best of circumstances I assume it would be plagued by Boss/Warlord types trying to take over.
But all in all, us oldsters can’t cause much damage, except with our Buicks.
Its alright girls, I am older and have more insurance.
ala Fried Green Tomatoes- Kathy Bates!
last time to try this post.
People are up in arms that this might happen now, rather than few years from now after $billions more has borrowed and more members of Generation Greed have died off or moved away.
I’ll bet the state could get a big loan from Goldman Sachs, and a big campaign contribution for every legislator, if it agreed not to read any fine print.
“No one knows the full ramifications……….”
Hey, it worked for the banksters.
I need a pay raise to a million bucks a year. No one knows what the full ramifications of what may happen will be, if I don’t get it.
Ha! Ha! What a joke. This is NY. It gets pushed to this point almost every year.
Soros Says ‘We Have Just Entered Act II’ of Crisis (Update2)
(Bloomberg) — Billionaire investor George Soros said “we have just entered Act II” of the crisis as Europe’s fiscal woes worsen and governments are pressured to curb budget deficits that may push the global economy back into recession.
“The collapse of the financial system as we know it is real, and the crisis is far from over,” Soros said today at a conference in Vienna. “Indeed, we have just entered Act II of the drama.”
Soros, 79, said the current situation in the world economy is “eerily” reminiscent of the 1930s with governments under pressure to narrow their budget deficits at a time when the economic recovery is weak.
Soros is Greek, right? I guess he would know whether we have entered a second act of the crisis if anyone in high finance would…
No, Soros is of Hungarian Jewish origin, but he hasn’t lived there since WWII.
The reason Soros got rich in the first place is that he has a nose for dumb government policies and how to profit from them.
Thanks for the correction…
The reason Soros got rich in the first place is that he has a nose for dumb government policies and how to profit from them.
Notice that the ‘dumb government policy’ that he’s pointing to now is the reduction of government spending while the recovery is still weak.
No he has insider knowledge of how the world governments would react or their policies are going to be. That’s how Buffet makes money, that’s how Soros makes money. That’s how all the banksters or the glorious gamblers do since the days of Rothschilds.
Never believe the word they say. They are in business to make money. Just do the opposite, it might as well work for you.
When Soros makes these kinds of comments, but the farm that he has shorted something and will make a few hundred million as a result. He is the master.
Yes, but this time around, since all the rich and connected have already been bailed out, they’re going let it fail.
Coming soon to a theater near you…
Anyone that thinks these debt bullets can be dodged is just kidding themselves.
Japan PM warns of Greece-like debt crisis.
Japan’s new premier warns of Greece-like debt crisis if action not taken.
TOKYO (AP) — Japan could face a financial mess like the one that has crippled Greece if it does not deal urgently with its swelling national debt, the new prime minister warned Friday.
While Japan is on firmer financial footing than Greece because most of its debt is held domestically, Prime Minister Naoto Kan’s blunt talk appeared designed to push forward his agenda, which may involve raising taxes.
Poor Greece. They’ll be used as the example for sovereign debt crises for years to come. Always sucks to be first (e.g. like how so many scandals are xxxx-Gate now).
Poor Greece. They’ll be used as the example for sovereign debt crises for years to come
well, Argentina needed a break. It’s only fair.
Visiting old friends yesterday, I became aware of a potential boost to demand for low-end housing: Two-income households where one of the incomes is wiped out by job loss. One of our friend’s position with a major corporation has been eliminated. They bought a bank-owned foreclosure home (found it on Craig’s list!) in a nice part of the East Bay a couple of years ago. They made a lowball offer, but the UHS came back claiming there was another bid (I explained this was most likely a a scam, as the UHS offered no evidence to support the phantom bid story). Our friends upped their offer by a token amount, and followed up a couple of days later to discover the other bid had mysteriously vanished. They got the home, which was a fixer-upper due to the former owner’s (the bank’s) neglect, but they have turned it into a beautiful, if modest, 1950s vintage home in a desirable area.
Now they face with the dilemma of either struggling to stay put on less income or moving to a less expensive area where they can more easily afford the monthly payment. I am thinking lots of white collar workers facing similar difficulties may channel a considerable amount of demand away from high end (above $400,000) Coastal California housing into the low end (below $400,000) segment of the market. The implication is a flattening or perhaps near-term inversion of demand over the quality range given current seller expectations, as low end demand is buoyed up by downsizing while high end demand is largely nonexistent.
They bought a a bank-owned foreclosure home for a low ball offer SEVERAL years ago.
They had two incomes over that same time period.
Am I missing something?
1. It was still not affordable even at that price?
2. Liberating their sweat equity over those years?
3. No savings - spent every $ they made?
“SEVERAL years ago.”
‘A couple’ = 2 (literally — 2008)
“They had two incomes over that same time period.”
Yes.
“Am I missing something?”
They were move-up buyers with equity in the home they sold who bought a fixer-upper and fixed it up.
“1. It was still not affordable even at that price?”
In a nice area of the Bay Area? No.
“2. Liberating their sweat equity over those years?”
Liberating their disposable income — two incomes, one child,
and home equity from selling the first home for more than the
mortgage balance due.
“3. No savings - spent every $ they made?”
Savers — he’s Asian, and she was a high-earner, so they had
disposable income to pour into making the house far more livable
than the condition in which they bought from the bank.
Only in CA and NY would sub 400k be considered “low end.”
In Houston, sub 400K still buys you over 4000sqft.(sfr)
Low end here is 1000-1500sqft at less than 90K.
I bought a reasonably nice 3 2 probably 1600 sq ft. in a south suburb of Dallas in 1973. Long since left for greener, cooler pastures. At any rate, I found it a few months ago listed for sale at $99,900. No bubble in S. Dallas county.
That’s about an avg. fair price, although of course, it depends on the location.
dallas/ft worth has really bad shifting of their house pads and cracks can be found lots of homes, high end or not.
And with their HIGH energy costs and bad storms, would you WANT to live there?
Wait. SOUTH Dallas?! *smacks forehead*
That’s almost nothing but ghetto now! That’s WAY overpriced.
Builders Rush to Complete Houses by U.S. Tax Credit Deadline
June 11 (Bloomberg) — Construction crews for LGI Homes begin work at 4 a.m., pouring concrete slabs for houses before the heat of a Texas day. They don’t stop until 6 p.m., and usually work six days a week.
U.S. builders such as LGI Homes are on a tight deadline to finish houses by the end of June so purchasers can get a federal tax credit of as much as $8,000. Buyers had to sign a contract by April 30 and must complete the transaction by July 1 to qualify. That’s speeding up a construction process that for some builders can take five to six months.
“We have people we need to get closed by the end of the month,” said Eric Lipar, 39, chief executive officer of Conroe, Texas-based LGI Homes. “There is a sense of urgency.”
Senate Majority Leader Harry Reid proposed a three-month deadline extension yesterday amid concern that a rush of buyers created too big of a backlog. New-home contracts rose 30 percent in March and 15 percent in April, the biggest two-month gain in records dating to 1963, according to the Commerce Department. About a third of the April signings were for homes under construction, and a quarter were for those that weren’t started.
…because boy, we really NEED more houses. NOT.
Harry Reid makes it so easy to hate him.
I hope the good people of Nevada throw this punk/puke, shyster out on his skinny ass this November.
Out with Harry Reid…. in with the ChickenLady!
“Out with Harry Reid…. in with the ChickenLady”!
Not sure but I think she lost. However they could vote in a homeless wino for all I care.
I was just in central and northern Nevada - on vacation. The hundreds of defeat Harry Reid signs are impossible to miss. They’re on buildings. They’re in car windows. They’re on store fronts.
Central & Northern NV on Vacation? I home that means Reno. Been to Winnemuca, wouldn’t call that a vacation. Austin, NV, now there is a jewel. Middle of the “lonliest road in America”.
We’re talking prefabs, right? Because I can’t contemplate the quality of a house built in two weeks.
Regarding Dude’s question to me yesterday as to why do I think greenbacks will hold their value:
Because debt is being destroyed faster than greenbacks (dollars) are being printed. And I consider promised money as being debt just as much as I consider borrowed money as being debt.
Borrowed money that is not paid back and promised money this not paid out means the would-be receipiants of this money will have to somehow do without. Right now wages are being cut, I look for pensions to be next in line along with social security. And promised health benifits.
These cuts in cash outlays will result in a shortge of cash to those who thought their place in line to receive them was somehow guaranteed. Unfortunately these would-be receipiants are destined to discover that this money - a large part of the money - will not be forthcoming.
I see one person’s debt as another person’s money. If the debt is not paid off then somebody is out some money. There are trillions of dollars - tens of trillions of dollars - of debt, both in the form of borrowed money and in the form of promised money, that will never be paid out because the money is just not there.
If this money is not there then the money that is there should increase its value, increase its buying power, which means those who have money will get to call the shots in any financial transaction.
I was trying to come up with a similar explanation yesterday for why bailouts are not inflationary. If it suddenly becomes obvious that $700 bn has somehow collectively vanished from the asset side of the banking sector’s balance sheet, due to a spontaneous realization that a large number of toxic mortgages will never be repaid, then a bailout in the amount of $700 bn to paper over the losses would not be available for other expenditures which could create inflation. Additional funds beyond those needed to plug balance sheet holes would need to be added to the monetary system, and participants in the economy would have to be willing to lend and spend these, for inflation to happen.
Bingo.
I agree with this part of it, but there are a few problems:
1) Assuming that the printing presses will be turned off right about when they’ve printed up enough money to balance out all the losses. We know the FED and bankers love inflation, so why would they turn off the printing presses after papering over the losses when they can keep them running to create inflation and more bubbles?
2) Where does the Bailout money go? Definitely not into the hands of the citizens! Nope - instead it is used to drive up the prices of other things, such as the oil runup a few years ago, the current efforts to prop up housing, etc. That type of nonsense is inflationary, at least in the short term.
“We know the FED and bankers love inflation,”
My belief is that they love _stealth_ inflation—in other words, quietly stealing half of your money every 20yrs.
They don’t love rampant inflation, which is the kind that people notice and freak out about.
Freak-outs are not a quiet, orderly, distinguished shift of wealth to the bankers.
“They don’t love rampant inflation, which is the kind that people notice and freak out about.”
And the kind they crash the bond market about…
W apologized today on his New Face book page for signing the Bailout- Amazing.
Its not to hard to follow the Bail Out money. Take GM for example, they currently have a $70 billion “investment” on the books from the federal government (almost 10% of the original TARP). Assuming the other side of this was a cash infusion, a big chunk of that is still on their balance sheet, being used to fund ongoing losses. Over time, it will wind up in the hands of suppliers, employees, retirees, etc. Now assuming that they are able to replace this government investment with public IPO money as planned (PT Barnum may be right) and they bring in $70 billion of new money and they buy back the governments equity holdings, the investor money will over time be transferred to Suppliers, Employees and retirees. So long as GM continues to lose money, the equity gets transfered to its payees in some form or fashion. It is in the end a zero sum game.
This is part of the reason that US businesses are reported to be holding record levels of cash and cash equivalents.
“…why do I think greenbacks will hold their value…”
Given doubts about the future viability of the Euro, the dollar is suddenly the safe haven currency of choice.
It seems like just yesterday when that Brazilian model and assorted celebs were asking to be paid in Euros. My how time flies!
Yep, They obviously didn’t understand that the U.S. dollar is the worlds reserve currency.
That wasn’t based on economics (asking to be paid in Euros), it was politics (it didn’t hurt that the Euro was doing OK back then), just good old fashioned aniti-Americanism.
The USD is sick and mal-treated
The Euro and Yen and many others are on death beds.
Any world crisis (Iran, terrorism, China, etc.) will have people flocking to the USD. Why?
The USD has:
1. Never defaulted.
2. Never expires. Dollars from 1920 can still be used today.
4. Is the reserve currency of the world.
3. Is backed by the best military in the world.
The USD is going to get whacked with the insane debts and spending of the US government. But we are much further down the line than most others at this point in time.
#3, or is it #4, is the real reason that the dollar
is the reserve currency of choice. As long as we
have the biggest stick on the block, other nations
will do everything they can to use and protect the dollar because we are the final resting place of stability.
If the US were to implode, the rest of the world
would fall into chaos.
Yep.
But in an age where a religious whacko or two can effectively bring this country to its knees, do we really still have the biggest stick? As always we are magnificently prepared to fight the last war, but terribly ill prepared for the next.
Read Peggy Noonans column in todays WSJ. Sobering.
I will take a (Christian) religious wacko over a marxist-socialist any day of the week.
Second.
My reference is to a Islamic Whacko. At some point, in the not too distant future, they will be successful in using one of their very crude WMD’s. All of the attempts so far, I think are just probes to determine how porous our defenses real are. When it happens, the stock market will tank and commerce, what’s left of it will come to a grinding halt.
In a very real sense our Trillion dollar military, as much as I respect what it is, will be powerless to retaliate because they are not a traditonal enemy.
I think OSB thought the same thing when he sent 11 muslims to slam the jets in the WTC and the pentagon to kill as many infidels as possible…
Now think of a president like Truman and Reagan - we may just make mecca a “glass” city to send a message.
Spokaneman,
Interesting theory, and not all that far-fetched? Using dupes/pigeons to determine what levels of radiation etc. are detectable, how to work around defenses.
So here are thinking we’re “foiling” one terror plot after another when all we are really accomplishing is playing fetch. And it’s an inexpensive way to grope around and see what will give them the most bang for the buck?
We are totally unprepared. Read it and weep.
http://online.wsj.com/article/SB10001424052748704312104575299082391565318.html?mod=rss_Today%27s_Most_Popular
Yeah, but I’ve been watching the old 24’s on Netflix. I’m spring loaded and trip wired for terrorists.
But, in all seriousness, the best militiary in the world and the greatest intelligence apparatus in the world (the second is questionable these days) cannot hope to stop a few committed zelots with crude weaponary, particularly in a country with porous borders. And with the 24 hour news cycle and a largely impotent administration, it woudn’t take huge casualities to bring the economic system to its knees.
Now think of a president like Truman and Reagan - we may just make mecca a “glass” city to send a message.
Uh, the same Reagan that sent a bunch of troops on an ill-conceived mission to Lebanon, got a bunch killed by terrorists, and promptly sounded ‘retreat’, pulled them all out, and did pretty much nothing else? And traded a bunch of arms (illegally) to Iran to get our hostages back? Yeah, he was a real tough cookie. Had the Middle East shaking in their boots- with laughter.
I seem to remember the iranian goons laughing at Carter for 444 days…
Rumors were (never proven) that Reagan told those ragheads if one American hostage was killed he would bomb every iranian oil field back to the stone age and leave them in the stone age.
The hostages were released.
I always heard that he promised to trade them the weapons they desperately needed in their existential fight with Iraq (which at the time they were losing), if they held the hostages until he was president. And the fact that those weapons were traded for the hostages, directly after he became president, which has been proven beyond all shadow of a doubt, seems to favor my rumor.
Sucks when your hero is a traitor, no? But of course he was working for the greater good.
Reagan, and Iran…
Oh since no one seems to know. The Iranian’s were already in negotiations to release the hostages and realized they had made a mistake.
We were tag teaming with Osama Bin Laden, the northern alliance and had a secret airbase in Iran to shuttle arms into Afghanistan. The new government was trying to get on better terms with the US. Wasn’t entirely in control of the revolutionary faction.
Anyhow, might be 9-11 was a result of lack of support for Afghanistan after the Russian’s withdrew. We made a mess and didn’t help clean up…. among other things.
Additionally we didn’t help when Iraq went after Iran in the first place. They were still on our official shit list even though they felt they had gotten back off it.
I don’t know if I agree with any of this nonsense but the Arabic world seems to feel like there has been so much duplicity it’s not like we are not to be trusted. Part of that is a total lack of understanding of American politics and viewpoint.
A case in point for them to understand would be USSR. We spent many years helping them fight the Germans. Right after the war we put them back on the shit list. Some middle easterners don’t get that to this day. Not to mention a lot of the Arabs fought the German’s and Italian forces along side the British.
I guess our message is we are supporting you because it is practical. Till it aint.
“The USD is going to get whacked with the insane debts and spending of the US government. But we are much further down the line than most others at this point in time.”
It’s not much comfort being on of the healthier lepers in the leper colony.
Yes, well right now it looks all infladeflationary. Money keeps getting harder to come by for those of us further down on the food chain, and those at the top are still inundated with it. They are calling the shots on the price of things we want to buy with our deflating dollars. They have their thumbs on the scale.
You and I might think it’s great to have our units of money be worth more, but let’s not ignore that our share of the whole is getting smaller and smaller. Got a name for that?
“You and I might think it’s great to have our units of money be worth more …”
It’s not that I think it is great, it’s just that is how I think things are.
I’d much rather have some sort of stability, but …
There’s always the up and coming Canadian dollar …
http://www.nationalpost.com/sees+loonie+becoming+reserve+currency/3137130/story.html
The Canadian housing market today makes the worst of the US housing bubble in CA/NV/FL look tame.
And -
All the Canadian mortgages are back by the Canadian government - no need to vote on any bailouts - it is ALREADY cooked into the cake.
PS - It will pop. And soon. The Canadian banks will shove all those bad loans onto the Canadian government and the loonie will drop like a stone. There ain’t enough oil/gold in ALL of canada to repay those toxic mortgages (and ps - nearly all of canadian mortgages are adjustable too!)
For an example: Google “crack shack or mansion” in canada
“All the Canadian mortgages are back by the Canadian government …” – no they’re not
“(and ps - nearly all of canadian mortgages are adjustable too!)” – no they’re not
Source: CMHC
43% of all residential mortgages are backed by the CMHC … that’s hardly “all”.
Mortgages only require CMHC insurance if they are in excess of 80%. Thus, 57% of Canadian homeowners have at least 20% of their own “skin” in the game.
New rules that went into effect in October 2008 now require mortgages covered by government backed mortgage insurance, restrict even further loan-to-value ratios, amortization, debt loads, credit scores and loan documentation.
Approximately 48% of all residential mortgages in Canada are variable rate… again that’s hardly “all”. That percentage is dropping and will continue to drop as homeowners lock into fixed rates in anticipation of prime interest rate increases by the BoC.
Canada had far fewer exotic lending practices. Interest only, low documentation and subprime loans are a lot less prevalent.
Canadians still have high levels of home equity. In 2008, 22% of homeowners with mortgages took an average of $41 K (which is about 14% of average home value) out of their homes while at the same time having an average of 48% equity in their homes. If appreciation in home values and new home equity loans were a wash in 2009, the average Canadian has 30 to 45% equity in their home entering 2010. There would have to be a reasonably steep decline in home values before the majority of Canadian homeowners would be underwater. We’re almost half way through 2010 and this hasn’t happened. In fact, nationally, home values have increased in 2010.
Residential mortgage delinquencies in Canada in 2009 were below 0.5% of all mortgages (in contrast with 9.5% in the US). Even if delinquencies rise, the high home equity cushion will prevent levels from reaching those comparable to the US.
There is much less mortgage securitization in Canada. Banks, rather than the government, continue to own most of the mortgages they originate so they will also have to absorb the majority of mortgage defaults. And the banks in Canada are not hurtin’ for cash! They continue to earn record profits.
Add to this the expected GDP growth forecast for Canada of 3.6% and a national unemployment rate of only 8.1% (and projected to be even lower in 2011 at 7.9%), it’s difficult to put a lot of stock in the “chicken little” ravings regarding the impending DOOM of the Canadian housing market and economy.
Well that’s what happens when those at the bottom trusted those on the top when they peddled the “ownership” society.
“infladeflationary” LOL!
Blue Skye ( By Jove, I think you’ve settled the debate! )
Is that the same as breaking wind and drinking through a straw simultaneously?
That’s flatuimbibery.
but let’s not ignore that our share of the whole is getting smaller and smaller. Got a name for that?
Facist takeover ??
We’ll be distracted by war, religion, abortion, etc
But if destruction of debt is deflationary, then wouldn’t new debt - such as this therefore be inflationary?
Yes debt is being currently destroyed in the private sector - for now. However it’s also being created in the public sector - like crazy.
In the long run - which of the two is easier to scale back on?
The question is, is the Federal Reserve powerless to prevent deflation, even it is willing to create inflation. In other words, do we have a liquidity trap.
Belated thanks Combo, though you didn’t address my specific example of GD1.
WSJ Blogs
Deal Journal
An up-to-the-minute take on deals and deal makers.
* June 9, 2010, 1:58 PM ET
Mean Street: Bernanke Tells Krugman to Shove It
By Evan Newmark
Does our national liberal conscience, Paul Krugman, consider Fed Chairman Ben Bernanke a madman?
Judging by Krugman’s recent blog screeds against the G20 and other “deficit hawks” you might think so. Krugman believes it is “folly” and “crazy” to demand “fiscal austerity” given the weakness of the global economy.
“How much we spend on supporting the economy in 2010 and 2011 is almost irrelevant to the fundamental budget picture. Why, then, are Very Serious People demanding immediate fiscal austerity? The answer is, to reassure the markets…” said Krugman two days ago, as he dismissed the notion that happy markets make a happy economy.
So what did a sober and even-keeled Chairman Bernanke call for today in his testimony before the House Budget Committee?
“In the absence of further policy actions, the federal budget appears to be on an unsustainable path….to retain the confidence of the public and the markets, we should be planning now how we will meet these looming budgetary challenges.”
Got that? “Retain the confidence of the public and the markets.” Planning “now”. Not later.
In other words, to Paul Krugman, Robert Reich and the rest of the stimulus-happy Keynesians, “you can go shove it.”
…
Quick economics lesson: Flooding Wall Street with cash was a monetarist (Friedmanite) response. Not Keynesian.
From Slate:
” Federal Reserve Chairman Ben Bernanke had famously internalized the charge that the central bank had contributed to the Great Depression. (As he told economist Milton Friedman on his 90th birthday in 2002: “You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”) The frenzied response of the Bernanke Fed—guaranteeing all sorts of assets and markets, purchasing mortgage-backed securities, adopting a zero-interest rate policy, and expanding its balance sheet to $2.3 trillion—can be seen as signs of overcompensation. And from Japan’s experience in the 1990s, the Fed learned the need for speed. “
The FBI is investigating the iPad security breach. I guess they have to do something since investigating a financial crime spree dating back to the 1980s doesn’t seem to be high on their agenda.
From what I understand, the iPad data leak wasn’t even a crime. They designed a web page to return email addresses given a specific type of request. In this case, the IMEI from a phone. Someone wrote a script to generate IMEIs and harvest the data. The FBI is wasting their time.
This news might put a damper on the one-day-old stock market blowout rally:
Economic Report
June 11, 2010, 8:31 a.m. EDT
U.S. retail sales fall for first time since Sept.
Building materials, autos, gasoline sales decline sharply in May
A quintuple nine-to-one up day
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - U.S. retail sales declined for the first time in eight months in May, tumbling a surprising 1.2%, the Commerce Department estimated Friday.
…
Expect the holiday shopping season to start in mid-August, if not sooner.
First there is “back to school” spending season. I’ve never heard more media attention being given to buying school supplies than I did last August. The green shoots need all the fertilizer they can get, so I expect similar news coverage this year.
Where do you folks live? In Palm Desert area, back to school starts right after 4th of July. Even out here, it’s difficult to find a bathing suit by end of July.
That begs the question if yesterday’s China’s good export data was all fake.
Who’s buying these days?
Bad U.S. retail numbers are great for gold prices.
Can anyone come up with a rational explanation for this peculiar gold price reaction to the U.S. retail sales report? I guess there has never been a better time to buy gold…
There you go again trying to apply logic to an illogical situation.
The wait-staff might be going hungry, but there is plenty of food and booze at the poker table.
Way to many speculators in that deal.TV stations are full of realtor types pimping gold, stay away and keep your principal!
Simple - people are starting to realize that the only way government sees to fix the economic problems (vis a vis bad retail sales) is to print money. Bad economic news raises expectations of future printing. Gold of course is a hedge against that.
Bubble mentality. It works for stocks, it works for houses, it works for gold, for a while.
You are so right. It’s just the next get rich quick scheme right along with all the get rich buying foreclosures for nothing down. Those poor victims of the banks and government will now be victimized again.
Well the Fed reaction and O reaction will be flood with more liquidity and stimulus.
I’d guess we are seeing carry trade in Euro’s causing massive swings as well.
A sock puppet was saying this morning that investors should not pay attention to this report, because…It was only one month.
Stock futures retreat, point to lower open, after report says retail sales fall unexpectedly. June 11, 2010
NEW YORK (AP) — Stock futures reversed course and fell Friday after an unexpected drop in retail sales renewed concerns about the pace of a domestic recovery.
The Commerce Department said retail sales fell 1.2 percent in May. It was the first drop in sales in eight months and was well short of forecasts. Economists polled by Thomson Reuters had predicted the pace of growth would slow between April and May, but still rise 0.4 percent. The drop in sales was widespread
From what I can see, Stimulis projects began to wind down this spring. We haven’t been experiencing “growth”, rather spillover from Federal deficit spending. We seem to be heading into a “stimulis gap”.
Little TTT has it confused ‘we’ don’t tell China what to do.
WASHINGTON (AP) — Treasury Secretary Timothy Geithner told Congress on Thursday that the Obama administration is committed to engaging forcefully with China to make sure that American workers are competing on a level playing field with Chinese workers.
“We want future growth in China to result in more exports from the United States and more jobs in the United States,” Geithner said. “We want China to change those policies that disadvantage American companies.”
“the Obama administration is committed to engaging forcefully with China ”
Stop! Or we’ll yell “Stop!” again.
“Stop! Or we’ll yell “Stop!” again”.
So true, that’s all they can do is talk and China knows that full well.
The idea of the Obama administration engaging forcefully with anyone other than white US citizens is laughable.
I’ll bet Eric Holder is mildly annoyed about this spill. But I’m sure he’s determined not to let it divert him from investigating imaginary hate crimes.
By the end of Barry’s first and only term he and his group of thug wanna-bees will have things just about as screwed up as they can be.
Gotta wonder what makes people vote in one big mistake after the other. It can’t only be because they want “free” stuff, or is it?
People in other countries are watching all this, the China situation, the Gulf oil spill, Mexico’s invasion, Wall Street thuggery, etc. And all that this is proving to them is that the US is ripe for a major attack, because it is being demonstrated to them that the US will do nothing, at best. Talk about giving aid and comfort to the enemy.
“…..this is proving to them is that the US is ripe for a major attack, because it is being demonstrated to them that the US will do nothing, at best.”
This has been bothering me lately as well. When an administration finally gets into power whose only ability is to get into power (i.e. politics), …what happens when something happens????? The spill in the Gulf of Mexico has convinced me that this administration is in way over their heads when it comes to responding to a crisis. Instead of any solutions all I am seeing is the shifting of blame, who are we going to sue/who’s ass are we going to kick etc. and meanwhile the problems just get worse. They just keep talking and hoping it will all just go away or someone else will make it all better. Total lack of leadership.
The idea of the Obama administration engaging forcefully with anyone other than white US citizens is laughable.
Iraq? Afghanistan?
Wow - you all really think he’s worse than Bush? It’s like living in a parallel universe.
“Wow - you all really think he’s worse than Bush? It’s like living in a parallel universe.”
The longer he is in power, the more I think that. With Bush it was like he was just a figure head and there was a more experienced team behind him that could make decisions and act (agree with them or not!), but with these guys they seem to be running in circles. We are fortunate that the terrorists so far have been incompetent. I am not sure how this administration would act if people actually died rather than “just” oil in the gulf. I almost got the feeling that they were hoping it was worse than they thought (the whole “God must be a democrat” stuff) so they could launch some law suits, then they wake up after 50 days and Holy F— this might be serious. What do we do now????
Do you mean the ‘experienced team’ behind Bush that presided over the worst terror attacks in American history, totally blew the war in Afghanistan at Tora Bora, totally blew the Iraq war with faulty intelligence, way too few troops, and no occupation plan whatsoever, and then totally destroyed the economy? And sucked during and after Katrina? And created a hugely expensive new social security program? That ‘experienced team’?
Want in one hand and doo doo in the other…see which on gets the fullest.
Actually, China is our retail engine and well, retail isn’t doing so good, is it?
In fact, China has had some “social unrest” due to massive layoffs.
Yes, you can google it.
MAD is still alive and well.
There’s a lot of social unrest in China these days. I would venture to guess that it’s even more widespread — and more forceful — than during the Beijing student uprising in 1989.
It is. Like most people in the world, hot and cold running consumer goods and services are often coveted and sorely missed when taken away.
Our retail is connected at the hip with Chinese manufacturing.
Better watch out China, Geither might send a Strongly Worded Letter ™ next.
Gulf oil spill to lower Gulf shore property values. Gee, ya think? The “expert’s” estimate of 10%, maybe 20% is laughable, though.
http://www.businessweek.com/news/2010-06-11/oil-spill-may-cost-4-3-billion-in-gulf-shore-property-values.html
I heard that the amount that has been leaked was way underestimated, by half. The new numbers are over 2 million barrels and counting.
Absolutely, wmbz. This gets more and more surreal by the day. Yesterday’s British hissy fit was completely over the top. Oh, boo-hoo, all those poor pensioners in England who have a stake in BP are terrified they won’t be able to have bangers and mash in their golden years, and it’s all the US’s fault. Never mind the fact that many American men and a few women shed much blood for England in WW2.
Anyway, the whole BP thing is one big clusterfark. You’ve got that Coast Guard guy with the fruit salad all over his shirt relaying talking points from BP to the American public. And all sorts of useless officials going down to the Gulf to take a look and go “Oooh, ahh, how horrible, somebody should do something”.
It’s such a complete, bitter joke. I’m sure the BP folks and the puddin’ faced Brit retirees are having a good laugh at all the people cleaning off birds in the Gulf.
They say the reason for the incorrect leak numbers was because they did not have cameras with high enough resolution. So, it takes two months to round up some high res. cameras? Bull $h!t!
What’s needed is a full blown military response to this. It’s that kind of organization that is necessary. This would include dislodging Tony Hayward from his desk in Houston if he won’t go.
I might have said this before, but in watching a PBS special on WW2 the other night, during the first two years of the was hundreds of ships were sunk in the gulf. Merchant ships carrying oil and gasoline to England. The Gulf beaches were laden with oil slicks, wreckage and dead bodies. So, my question is, who cleaned up that mess and where were the enviromentalists then? Oil from the earth is unrefined and natural. Its beyond me how people can get so upset over this. Nature will take care of itself. Appears to be another crisis, Obama is using to grab more power.
As a receiver of an industrial accident, BP is no different that any other company. Accidents happen. Deal with it!
Common Terry, it was a big crazy war with big crazy mad men. You had Adolph, Joey and Winny all getting into it. Then Hiro down Japan.
When your survival is in jeopardy, you don’t spend a lot of time fretting about problems a little radio active fallout is going to cause.
The USS Arizona, famously, still weeps oil after 70 years. The fear is that the fuel bunkers which are still estimated to hold nearly 500K gallons of heavy fuel oil will eventually rupture completely fouling all of the reefs outside of the entrance to Pearl.
What would our military do? They have neither the equipment for, nor experience in, stopping oil spills.
And isn’t government the problem? I’ve been told again and again here that the best thing the government can do to fix a problem is to get out of the way and let private enterprise fix it. Guess that philosophy didn’t work out?
What are you saying, alpha? Other, non-military departments of the government have better equipment for cleaning up oil spills?
+1 alpha.
The government has nothing to deal with this disaster. I’m sure lack of funding had nothing to do with it.
You people would have a heart attack if you knew how unprepared we are for large disasters. You think NO and Katrina was a fluke?
“And isn’t government the problem? I’ve been told again and again here that the best thing the government can do to fix a problem is to get out of the way and let private enterprise fix it. Guess that philosophy didn’t work out”?
No,No,No, gubmint can fix any problem any time, that’s what they claim, time and time again. How’s that been working out so far?
I just find it odd that the same people who think government screws up everything it touches are demanding to know why the government hasn’t magically fixed the oil spill already.
LLoyds of London is not an insurance company per se’ but a very large group of wealthy individuals (names) who pledged their personal net worth to pay for the kinds of unusual risks that Lloyds underwrites, in return for very outsized returns. In the 80’s those guys took some serious hits. But, at least they understood the risks they were taking. Not saying that the British Pensioners should not share in the financial burden, but they are innocent participants in this mess.
“Not saying that the British Pensioners should not share in the financial burden, but they are innocent participants in this mess.”
I’m not arguing that point. Sure, they are innocent participants. So are many American citizens innocent participants in the economic downturn, etc. Heck, I’ve been affected by collateral damage from the economic downturn, housing crash, whatever. Investments go bad, so get over it. Happens to many people.
palmetto,
Very true ( and I have to remind myself of that every day! )
People of all stripes locally have been imploring me to “lay off” our hometown failed banker. After all he’s been diagnosed terminal!
I’m always surprised by that, the guy is close to 80. But this is part of the REIC-mentality. A REIC Life is worth more than ‘other’ people’s! They have no IDEA how heady those days were.
So let me get this straight, he’s now a ‘victim’ of cancer, but at least HE still has ‘his’ money. What are to make of all the former shareholders who’s health is now failing them ‘too’ ( only they lost every DIME they had w/ him!? )
Heh, small towns for ya. People really get uncomfortable when you publicly go after someone local. Much safer to go off on people 3000 miles away or at least at the state capitol.
We had a legislator here whose excuse for her sloppy campaigns was a disabled child, whom she sat in the front row at forums just to remind people of her special burden.
“Not saying that the British Pensioners should not share in the financial burden, but they are innocent participants in this mess.”
Of course they are, but if a pensioner is looking for a steady income stream, they should buy bonds.
BP is self insured. The only insurance they carry is the Union Jack.
In Montana,
Too funny ( and sad ) poor kid!
Yeah, and they bank on it! Oh it’s perfectly ok for them to hang it in everyone’s shorts b/c you know “they’re at least showing some “leadership” for “the community”!
there isn’t (1) local official here in our small town OR that wasn’t trying to line their pockets during the boom and now we’re all just supposed to forget about it.
While the rest of us have been rocked back on our heels ( they’re already plotting their amazing comeback! ) It’s pathetic, but I’m afraid altogether too common. We would give anything just to get life back to normal ( read pre-boom ) and they can’t have ‘that’? They want to get back in the ‘game’!
I agree. I’ve had my share of investment “wanna do-over”.
Public service New Hampshire comes to mind.
Spokaneman,
Precisely, it’s the Mulligan that never ends! We’re still being elbowed out of the way to make room for Pipedream II.
For anyone that followed the story -after- the movie, George Jung ( from the movie “Blow” ) later in life determined that his big ‘mistake’ was leaving the pot trade for coke! ( Only a drug-adled mind would think of that? )
So anyway, after walking away a free man for turning State’s Evidence, he get’s busted for going back to his “first love”. He’ll be re-released in 2014. They just won’t give up.
Wish I had been smart enough in 1973, when I first made enough money to save for retirement to just put every cent I saved into FDIC insured savings vehicles, earning whatever the maximum rate was evertime the particular saving vehicle matured. I guarantee I would have at least twice as much retirement money as I have today. Problem is, most of the places I worked over those 37 years offered a 401-K, and those 401-K’s offered only equity mutual funds and a money market account that paid a fraction of what 5 year band CD’s were paying.
In retrospect, I see that it was a racket to rope J6P, myself included, into equity funds so the traders, investment advisors and mutual fund managers could help themselves.
Live and learn, but by the time you’ve lived long enough to learn enough, its too late for the learning you’ve acquired to do you much good.
Problem is, most of the places I worked over those 37 years offered a 401-K, and those 401-K’s offered only equity mutual funds and a money market account that paid a fraction of what 5 year band CD’s were paying.
Yeah, and if you chose the money market account, you were considered to be a real chump. What’s worse, there was no equivalent of the 5-year CD in the 401-k account.
Spokane/Slim,
All true ( yeah I’ve done the math my damn self )
This is kind of why I’ve always been an advocate of participating only to the emp. match if you’re really not happy w/ your employer’s plan.
It’s a little frustrating b/c a good many posters may not realize for many years IRA’s were $166.67 a month! Whoo-hoo! One of -the- most successful posters on our local Portland Blog has bought annuities almost exclusively w/ only a smattering of commodity exposure.
The idea that somehow today’s Americans are owed something by UK pensioners because the grandfathers of the Americans fought with the fathers of those pensioners seems strange to me.
Yeah, it seems strange to me, too. Why? Because that’s not what I wrote or intended.
But the idea that we should take it on the chin in the Gulf so that one of their multinationals can fund their retirements is strange to me. The idea that we shouldn’t object and let BP do what it wants to do so those pensioners can have bangers and mash is crazy. The idea that stupid Brits should blame America for their BP generated woes is beyond insane.
My point about WW2 was maybe we shoulda just let them fend for themselves in Europe.
I did a calculation: 131 tractor-trailer fuel tankers’ worth of fuel are spewing into the Gulf every DAY.
One tanker truck carries about 9000 gallons. One barrel of oil is 42 gallons. Thus, one tanker is 214 barrels of oil.
The new leak rate is about 28,000 barrels per day. Divided by 214 is about 131. 131 fuel tankers a day.
According to Google, one barrel of oil = 5.6 cubic feet in volume.
28,000 barrels x (5.6 cubic feet / barrel) = 156,800 cubic feet a day.
That is equivalent to a 54 foot cube of oil every day.
52 days of this (the explosion was on April 20th). Total volume is a 201 foot cube of oil. 6,812 fuel tankers worth.
“A new day, a new BP f–kup.”
The back story:
How many Southern State judges have had to recuse themselves because of financial ties to shoreline real estate?
Clearing up a misconception from yesterday:
I seem to recall reading that Henry Ford had that idea: Pay the employees enough and they’ll be able to buy the cars they make.
Henry Ford definitely understood that to be a successful businessman you had to have a product that could be sold. He didn’t however make it affordable by paying his employees more - he made it affordable by decreasing the cost of the product. He did that by my massive innovation and use of production-line methods and technology. (Many people erroneously credit him with inventing the automobile, which he didn’t - he just made extensive use of the assembly line - for which he’s also erroneously credited with inventing)
Just increasing the pay of the employees wouldn’t have helped, because to be a successful company you actually have to sell product outside the company.
He also nearly bankrupted his company once everyone had bought their first car. The ‘model t’ was obsolete to 2nd and 3rd generation car buyers…
And how well does an assembly line work when there is no demand to keep it running?
Increase demand, guarantee that the expense of creating an assembly line would be recouped.
Oh he was a inventor…
Howeva… some real weird things….
from wiki…
Ford and Adolf Hitler admired each other’s achievements.[39] Adolf Hitler kept a life-size portrait of Ford next to his desk.[39] “I regard Henry Ford as my inspiration,” Hitler told a Detroit News reporter two years before becoming the Chancellor of Germany in 1933.[39] In July 1938, four months after the German annexation of Austria, the Nazi government awarded Ford the Grand Cross of the German Eagle, the highest medal for foreigners
“I regard Henry Ford as my inspiration” Hitler told a Detroit News reporter……”
Frankly, this quote would have been meaningful if he had said it to Albert Speer, instead of a “Detroit News reporter”.
And of course he made financing available….
Buying versus renting a house: I think a possible analogy is that of buying versus leasing (renting) a car. Say a Honda Civic. But in this case, the Honda Civic price is 80,000 dollars.
I know there’s the “rents” metric - can you rent it out for the value of the mortgage payment, to determine if you’re getting a reasonable value.
I’m a believer in buying stuff since in my experience, that’s the cheaper route to take. But what about buying absurdly overpriced items? I put together a spreadsheet a while ago, with a month-by-month breakdown of a 30 year loan (360 rows). Think I’ll have to break that out again and run it with the new numbers.
Which of the two can be easily financially disposed of?
30 year loan
or
a 12 month lease
(Hwy looks about and sees a sea of financial “stability”)
There is and always has been and I think always will be a “premium” attached to owning vs. renting a home. Rent vs. owning ones home cannot be reduced to the same ROI calculation that would be applied to the acquisition of a business asset, or perhaps, it can with the understanding that there is substantial “intangable” value associated with owning vs. renting a home.
It would be an interesting exercise for a MBA student to try to quantify what that premium is and to what it is ascrbied. In my own mind, its probably around 30%.
I don’t think that the “intangibles” are nearly as large as people seem to think. After all over the course of a 30yr FRM, the percentage of it that is paid to the bank as interest goes down as the percentage of principal goes up. At the same time, the equivalant rent is likely to go up. You would never expect the costs to rent and the costs to purchase to be equal in the first year. But you DO expet that eventually they will cross over, hopefully before the mortgage is paid off in year 30.
Precisely, historically, excluding the bubble years, I think most people went into homeownership with the idea that they would eventually retire the mortgage. I know I did when I bought my second, and current, and like last home (all the same place). I could have very likely have rented the equivalent number of square feet, for less than it was costing me for the mortgage payment, but even without appreciation, I was building equity, and I believed that eventually, I would be able to live essentially rent free (ignoring maintenance and PPtaxes).
I expect that homeownership, post 2010 will revert to that model: buy a starter home, move up once or twice at the most, have a financial goal to retire the mortgage by your early 50’s and live rent free until you move to the retirement villa, using the equity to fund the rent at “the home”. Despite a significant downturn in RE prices in Spokane, I still have significant equity (both appreciation equity and debt reduction equity), and have a dang cheap roof over my head. When I look at how much I would have to have in incremental savings to fund a rent payment these days (at .75%/year interest) I’m thinking the paid off house was a pretty savy move.
“I expect that homeownership, post 2010 will revert to that model”
( Just a shame we couldn’t have collectively come to that conclusion in 2003…? ) Tradition held that most of us would own (3) homes.
Fixer/Starter/Sweat Equity ( whatever you want to call it )
Move-up/Dream Home
Down-size/Ret. Home
Well the REIC saw to it that was thrown under the bus pronto and everyone here knows how I feel about it. No sooner had they changed the Cap Gains Exemption than that ‘model’ was for squares and chumps!
I too believe you’re right, and I think younger couples ( as you mentioned your daughter and her house-poor friends ) will realize that at ever younger ages!
It’s all there:…opaque, unregulated, “Bidness” as usual…
(So how many members are in the Association for Medical Ethics?)
Score:
Medical Industry = 1
ML Baseball umpire = (-1) hip
New Hips Gone Awry Expose U.S. Kickbacks in Doctors’ Conflicts:
Bloomberg, By David Armstrong
“It’s back to business as usual,” says Charles D. Rosen, president of the Association for Medical Ethics, who is a spine surgeon in Irvine, California.”
“Nothing will change until someone goes to jail. It’s a big game.”
“In the U.S. in 2010, the average price of a primary artificial hip was $7,200, more than four times the $1,600 in Germany, says Melissa Hussey, a senior analyst on the orthopedic team at Millennium Research Group, based in Toronto. In Germany nd other countries, she says, sales representatives have restricted access to surgeons.”
The financial ties between device makers and surgeons help explain why health-care costs in the U.S. rose at 2.5 times the rate of inflation in the past 10 years and account for a sixth of the economy. The $300 million works out to $300 for each of the 1 million hips and knees implanted in Americans in 2008.
The payments show how hard it is for government to hold down costs in a system where pricing is opaque and largely unregulated. In the $14 billion-a-year orthopedic device business, payments to doctors squelch competition
“These items are ridiculously expensive, and a lot of the monies in that bucket are to keep the surgeon tied to that product,” Rodine says. He figures about half the price charged for devices can be traced to funds companies pour into persuading doctors to pick their goods.
(From selling ski’s to instructing how to install a hip!)
“…John Keggi said in his deposition that he attended a Wright conference in the Bahamas and brought his wife. He couldn’t remember the dates or details, according to his deposition. Keggi said the Wright salesman at the time for Connecticut, Scott Fitzgerald, was usually in the operating room to instruct him on the installation of implants. In his deposition, Fitzgerald said that before joining Wright, he had worked in the ski industry and sold outdoor power equipment.”
Once medicare begins restricting who can have a hip replacement (your’re 70, no hip for you), the costs will start to decline. That day is coming along with lots of other treatements that are currently considered obligatory. 70 million boomers, 2 hips each, 10 year life per replacement, $20K/hip, do the math.
The replacement hip business in India and Mexico will be booming.
But hey, I’m an accountant.
Put the seniors in jail, and the criminals in a nursing home.
This way the seniors would have access to showers, hobbies,and walks, they’d receive unlimited free prescriptions, dental and medical treatment , wheel chairs etc. and they’d receive money instead of paying it out.They would have constant video monitoring, so they could be helped instantly ,if they fell, or needed assistance.Bedding would be washed twice a week, and all clothing would be ironed and returned to them.A guard would check on
them every 20 minutes, and bring their meals
and snacks to their cell. They would have family visits in a suite built for that purpose.They would have access to a library, weight room, spiritual counselling, pool, and education.Simple clothing , shoes, slippers, P.J.’s and legal aid would be
free, on request.Private, secure rooms for all, with an exercise outdoor yard ,with gardens.Each senior could have a P.C. a T.V. radio, and daily
phone calls.There would be a board of directors , to hear complaints, and the guards would have a code of conduct, that would be strictly adhered to.
The “criminals” would get cold food, be left all alone, and unsupervised.lights off at 8pm, and showers once a week.Live in a tiny room, and pay $5000.00 per month and have no hope of ever getting out alive.
Justice for all.
Or maybe we should just adopt Germany’s obviously more efficient health care system? They do outlive us, and pay less for the privilege. Beats sending gramps to jail.
But the Doc’s and the investors and executives in the for profit medical system don’t make nearly as much as here.
Rancher,
+10,000
Damn Rancher, you nailed it.
But aren’t “free market” forces and less regulation supposed to eliminate these kinds of conflict of interest dealings?
(yes, that IS heavy sarcasm you hear)
Filed under: “To lie is possibly a crime, …to be MISLED is revenue Divine!”
Controller finds DWP misled the public when it threatened to withhold funds from city:
By David Zahniser, Los Angeles Times…June 11, 2010
“Executives at the Los Angeles Department of Water and Power misled the public when they threatened to withhold $73.5 million from the city’s budget two months ago as part of their demand for a hike in electricity rates, City Controller Wendy Greuel said Thursday.”
“…It’s hard to look at these numbers and not say that the DWP was trying to extort the City Council into passing its proposed [rate] increase,” Greuel said in a statement.”
Greuel said the DWP’s actions contributed to a temporary downgrade in the city’s bond rating by Wall Street financial firms. She said the DWP did not need to have $300 million in its reserve fund, which was one of the utility’s arguments for blocking the transfer.
Greuel stopped short of saying that anyone should be fired over the incident. But former DWP Board President Nick Patsaouras said the employees responsible for withholding the money should be disciplined to show that there are consequences for the utility’s actions.
Some business leaders took a different view, saying DWP officials should be allowed to move past the refusal to make the transfer.
“Should someone be fired for it? No, not at all,” said Stuart Waldman, president of the Valley Industry and Commerce Assn.
“The DWP’s actions unnecessarily plunged the city into a fiscal crisis,” said Greuel, standing in front of the agency’s downtown headquarters. “We never should have been held hostage” by the DWP, she added.
Greuel said the DWP also misled the council and Villaraigosa, who at one point issued a policy report saying the city would be plunged into bankruptcy without the transfer. Nevertheless, Greuel declined to say whether the DWP officials deliberately lied about the utility’s financial situation.
The council ultimately approved a 4.8% electricity rate increase, which will go into effect July 1
CA deserves everything it has coming to it.
State spends $50 million on slot machines
Comptroller calls contract a ‘windfall’ for industry
The Baltimore Sun June 10, 2010
The state’s spending panel agreed Wednesday to pay nearly $50 million to buy about 1,000 slot machines for the planned Cecil County casino, overcoming the objections of Comptroller Peter Franchot, who called the contract a “windfall” for the gambling industry.
Members of the Board of Public Works were given just hours to review the deal, in which the state will spend an average of about $46,542 per video lottery terminal — an amount significantly higher than state and industry analysts say each machine should cost.
State lottery officials defended the contract, which authorizes the purchases of machines of widely varying cost from six separate manufacturers, saying it includes hard-won price reductions from the vendors. Also they stressed that the cost includes maintenance and transportation, among other expenses. But the contract shocked Jeffrey Hooke, an industry analyst who said the cost per machine should be closer to $10,000.
The logic - a bankrupt state is going to spend money it can not afford to buy machines in the hopes that will take lots of money from people who can not afford to lose it.
Remember when states worried about roads, litter and bridges?
Remember when gambling was considered immoral?
2banana,
Hard to argue. We used to kid that the Air Force did things right! Unlike the Navy ( where the port, docks and airfield were the priority ) the first thing the AF did was build the Enlisted Club, put in a swimming pool and a commissary and THEN they’d go back to CONgress and say..,
“Hey look here! We’ve got this Base and all these support facilities but we ran out of money before we put the damned AIRFIELD in!” ( So can we please have some more money otherwise everything you gave us just went down the drain! )”
If you look at it historically, it’s by and large accurate. The Navy in the early years of Cubi Point had a Mess ‘Tent” and a Hospital ‘Tent’, hell Clark AF had a freaking bowling alley!
It’s the same prin. at work here.
The Air Force is the smartest. They only send their officers (for the most part)into combat to be shot at
X-GSfixr,
We just couldn’t believe it! I went up to Clark one time for wife’s med. appt. and we were both amazed. This was in the mid-80’s.
When we got back to Cubi it was the ultimate let down. An impression made on you that young in life stays w/ you. To this day whenever some pol is stumping for “new facilities” ‘jobs’ etc. I just cringe. How much of those dollars will -ever- find their way into what the actual ‘project’ was designed for?
My experience says precious little.
But Cubi Point had a great “O” beach…beautiful white sand beach with palm trees. Clark’s in the damned jungle.
Our broke ass state, S.Carolina has been adding more lottery games, we have some many now, most people can’t even figure them out.Recently a state official said that our new Mega-Millions lotto have been a disappointment. Not bringing in the revenue they had hoped for.
Solution… Add another lotto game of course! Prue genius!
The new game is the Rich “Nature boy” Flair scratch off. Gonna separate all the rich wrestling fans from their hard earned wages.
Guess the “NASCAR” scratch off didn’t do that well?
I can’t believe I actually agree with you on something, 2banana, but yep, you nailed it.
Ah, I love Maryland!
This nonsense has been going on for about a decade now. Slots will somehow “save” our state, despite the fact that neighboring states have far more gambling AND gambling doesn’t really fix any problems - it just shuffles the money around.
After years of the circus show where the state legislature voted against slots because we had a Republican governor and then the same crop of dolts voted in favor of them once one of their party’s clowns got into power, now we get to watch them try to stick the slots in all sorts of crazy places (at local malls, etc.) vs. putting them at the bankrupt race tracks - mind you, saving the race tracks was the whole supposed reason to want slots in the first place!
In the end, we now have randomly placed slots (if any!) all of which cost a fortune and will bring in far less money than estimated… in a bankrupt state that has a grossly high cost of living. Smooth!
The people are to blame. There was a referendum on whether to allow slots in the state. Idiots voted for it, not realizing it will cause more problems than it will solve. It sucks money from those least able to afford it, and fans politicians’ profligacy. Politicians spend money because it gets them back into power.
This is the voters of Maryland’s fault (those that voted for it).
This is why cultural values are important. “A society cannot be both ignorant and free.” - Jefferson, http://etext.virginia.edu/jefferson/quotations/jeff1350.htm
I hope the voters wake up this November and don’t fall for the pillow talk of politicians.
Boeing could lay off 180 after Constellation funding cuts.
June 11, 2010 ~ The Huntsville Times
HUNTSVILLE, AL - A surprise NASA decision to invoke an obscure federal spending law to slash Constellation rocket funding this summer could cost hundreds of Huntsville workers and up to 5,000 nationwide their jobs, the space agency confirms.
The Boeing Co., which employs 300 people on Constellation here, said Thursday it will hand termination notices to an unspecified number July 2. Their jobs will end Sept. 3 unless Boeing can find slots in other programs, spokesman Ed Memi said.
The is part of the No American Left Employed act - NALE. As in, we’ll NALE the taxpayers to wall…
I love how they conveniently leave out the fact that it’s going to be replaced by another program (manned Mars missions) which will create new jobs.
FTC dodges Drudge Tax questions.
Agency head complained of ‘free ride’ for online news readers.
THE WASHINGTON TIMES
Federal Trade Commission (FTC) leaders are attempting to distance themselves from controversial proposals published in a May 24 working paper on “reinventing” the media. The report presents a suite of options through which government could step in and supposedly rescue journalism, most notably by imposing taxes.
A fee could be levied on websites such as the Drudge Report that link to the best news of the day, or a tax could be imposed on consumer electronics such as iPads, laptops and Kindles. Funds collected would be redistributed to traditional media outlets.
I find doublespeak fascinating.
“rescue” journalism……interesting example.
If a newspaper recieves federal money, wouldn’t freedom of speach be out the window, along with expression of any religious viewpoints?
and now, for the “official” news………
Right, let’s put a tax on Matt Drudge ( that ppl actually READ! ) to subsidize flunkies ppl can’t stand and wish just went away.
Ah…. 1984 all over again!
MSM news is already controlled by just 5 corporations. That’s who REALLY killed serious journalism.
Hurray for bailouts, free healthcare, and extended unemployment benefits!
I got my yearly bonus today, and I received 67% of my paycheck after Federal income, Social security and Medicare taxes!!!
Where’s the other 33%?
It really pisses me off when others pay absolutely no taxes =-/
Move to a tax-free country.
Move to a tax-free country.
It’s all black and white to you, eh?
If you don’t like high tax rates, you should leave. Rather than, say, try to rid the system of unfairness, waste, corruption, and graft.
Got it.
My point was there are no no-tax countries, and very few that have lower taxes than the US. At least very few that you’d want to live in. Do you think that says anything?
Oh, and I’m against unfairness, waste, corruption, and graft (the fruits of deregulation), too. That’s why I’ve opposed the Reagan revolution from to its inception to its current demise.
alpha-sloth,
Well, not tax ‘free’ exactly but pretty close. In the P.I ( Philippines ) there really isn’t any effective tax collection methodology for those under the radar.
And there’s lots of room under that radar. Unless you’re a major corp. or high profile earner, nobody really gives a rip! My wife and I own several small bus. and no one really bothers you.
Well, except for the local “tong” or shakedown but it’s nominal. So rather than owning (1) considerable enterprise, you just break it up. They’re working to close that off, but have been for years.
I can’t speak for the Philippines (though I notice that their per capita GDP is $3300 a year), but I knew two people who owned businesses in Jamaica during the 80s. One was forced to sell her property to a local bigwig for a song, and the other was run out of business when the local mobster directed all taxi drivers to take their passengers only to a competing store- owned by the mobster’s girlfriend. Again, not the kind of place I’d like to run a business. If you get profitable, they -will- take it away from you. Who are you gonna complain to? Especially if you haven’t been paying your taxes.
alpha-sloth,
For a great many years, that really ‘was’ the stereotypical biz “arrangement” there. But things changed slowly after Marcos was kicked out.
It’s taken a long time but ethics have improved and to be perfectly honest ( they’re in a helluva’ lot better shape than we are right now! ) Home prices have peaked, but b/c they require these odd down paymentz (sp?) there hasn’t been a collapse at all.
It wasn’t until the Koreans started arriving en masse that things began to really accelerate. Different for me there, we go way back but I would def. rec. for ppl that kind of miss their freedom? Just sayin’.
“Move to a tax-free country.”
….. and you could just as easily move to China/Russia/Sweden etc., etc.
Sweden sounds alright.
Can you name any countries (with tax rates lower than ours) that are as pleasant to live in?
How dramatic! Someone needs some coffee this morning.
I ain’t moving nowhere! I like living in the Republic of Texas!!!
The point I am trying to make is that our tax system relies on a small group of people to pay for the vast majority of taxes, which is not fair!
No, it doesn’t.
The national workforce is 156 MILLION people. 20 million poeple are out of work. 50 million are considered chronically “poor.”
Might want to check your facts next time.
As for not paying income taxes, you might want to take a look at the billionaire hedge fund managers. 15%. That’s right, 15% is what they pay.
Are you sure you’re not only counting income taxes as taxes? The reason not as many pay them is because we’ve offshored everyone’s income. There are many other taxes (sales tax, social security, etc) that are paid by much larger groups, with the wealthy often paying much lower percentages than your supposed non-tax-payers.
On the bright side - you still have city and state income taxes and property taxes still to pay!
on the plus side, Texas(where he is) doesn’t have state income tax…so that’s at least a bonus…
and I rent so I don’t have to deal with those horrendous 2 to 3% property tax rates in Texas…
and I rent so I don’t have to deal with those horrendous 2 to 3% property tax rates in Texas…
Sure you do. It’s reflected in the price of your rent.
Bret, you mean like billionaire hedge fund managers?
Home Repossessions Hit New Record High
U.S. News & World Report
Banks repossessed a record number of homes last month, an ominous sign for a real estate market that has seen demand slide substantially in recent weeks.
Nearly 94,000 properties were repossessed by lenders in May, an increase of 1 percent from April and 44 percent from a year earlier, according to RealtyTrac’s most recent U.S. Foreclosure Market Report. “We are going through the eye of the storm,” says Patrick Newport, an economist at IHS Global Insight. “Banks are taking over properties at a record rate right now.”
Paper on housing affordability in Mass and New England states in general done by the Federal Reserve Bank of Boston.
Report Here
Quick summary, we are back to early 2000’s pricing, housing affordability has improved, but has further to go because the median income household still can’t afford a median priced home. Rents have declined slightly and renting is still an affordable option for median and below-median income households.
Bottom line, either incomes on the low-to-mid end of the job spectrum start increasing (not going to happen IMHO) or more house-price declines are coming (almost assured). Nice to see the FED has finally quantified what this blog has been saying for years…
Local boat dealers finding it tough to stay afloat in wake of oil spill.
The Mississippi Press ~ June 11, 2010
A few days after BP’s Deepwater Horizon oil rig exploded April 20, three of boat dealer Keith King’s customers came in and canceled their orders, one for a triple-engine Triton saltwater fishing boat with a price tag well over $100,000.
“They said they were not going to make a deposit on a boat they couldn’t use in offshore waters,” said King, who owns Ocean Marine with locations in Ocean Springs and Gulfport.
As oil continues to gush from the busted well and push toward south Mississippi, much of the Gulf fishing waters are closed, the future is in limbo, and sales of saltwater vessels have dried up, dealers said. They’re trying to get assistance from the government and BP, but at least one dealer — Empress in Moss Point — is being forced to close its doors.
On Thursday afternoon, Empress owner Floyd Seal was at the BP claims office filling out paperwork to see if his employees and landlord could be compensated for their losses. A neon billboard at the business on Miss. 63 flashed the message “Closing store — everything must go.”
I will be surprised if BP doesn’t end up filing for bankruptcy. They will be hit from all directions, rightfully so, as should our joke gubmints response.
Don’t count on it
Half of Britain would loose their Pension.
My brother says Exxon paid their last payment for the 1989 spill recently. Only 20 years later.
And only about a quarter of the original lawsuit amount.
I was going to sell ice cream on the side of the road to people heading to the LA (lower alabama) beaches. I guess I can sue BP too. It was going to be a banner year with record profits too. I can prove it! I should be 100% compensated for everything.
So where does this stop?
My guess (4 months from now) with the well capped and/or relief wells successfully drilled and a split congress/white house…
BP is going tp start to play HARDBALL.
They will play warm and fuzzy TV commercials but anyone who wants any compensation are going to be met by a buzzsaw of lawyers.
They will delay and delay and fight and fight and ask for more and more documentations until you just go away. And then get laws passed to protect all drillers. And pass ALL of the costs to the consumers.
Especially if oil goes to $4/gallon…
2banana,
I was trying to make that very point to a friend on the phone yesterday w/ little success. Right now, people want to allow for/play all the emotional angles while the gettin’ is good.
I’m NOT saying there hasn’t been suffering down there! Not by any means, but ( for some ) this has been the equiv. of hitting the lottery. Now I realize that’s going to draw lots of fire, but think about it?
Economy is in the toilet ( you were on the verge of throwing the towel in ANY way?!? ) and… just when it looks like all is lost?
I wonder what would happen if the 24 hours news cycle began to report each Monday “700 killed in horrific week of automobile crashes” along with pictures of dozens of those crashes and maimed and broken people..
700 deaths/week are just accepted as the price we pay in society for the convenience of being able to go where we want when we want. Similarly, an eco disaster every 20 years or so, while terrible, is the price we pay for the privledge of having relatively cheap energy. And the scope of this “disaster” pales in comparison to the 700,000 people who have died in automobile crashes in the 20 years since the Exxon Valdez disaster. But those 700,000 people did not show up in the MSM. Its all a matter of perspective.
The first criteria, 2banana is that they had to be an established business for X number of years and have to provide a spreadsheet of past earnings. (I think 3 years or more)
The second is that their business had be DIRECTLY impacted by the oil spill, i.e. mostly marine based.
From the AP:
Home-improvement retailer Home Depot Inc. shares fell on Friday after the Commerce Department reported unexpectedly weak May retail sales, including a steep decline in building materials sales.
There’s our favorite word again “unexpectedly”.
Real Estate Refugee,
What!? All those “paint sales” didn’t fill the hole left by $40k backyard “makeovers”? Oh btw, what’s a koi pond going for these days. I need a new beer cooler.
I’m still batting 1000!
Schlumberger, Bristow Group assess drilling ban impact.
Houston Business Journal
As the deepwater drilling moratorium in the Gulf of Mexico sets in, companies are starting to assess the potential damage.
The 33 rigs affected by the 180-day ban charge day rates between $250,000 and $500,000 a day, adding up to somewhere in the conservative neighborhood of $10 million a day in losses.
“Thousands of workers are off the job, dozens of rigs will sit idle and companies now are invoking force majeure clauses to get out of drilling contracts,” said Jason Itkin, co-founder of the Houston-based Arnold & Itkin LLP, which is representing plaintiffs in a number of lawsuits against BP Plc.
Schlumberger Ltd. — which earned 3.5 percent of its consolidated 2009 revenue from U.S. Gulf waters, mainly from deepwater operations — said it expects to take a hit but should be fine considering its reach globally, where the effects of the 180-day moratorium will not be felt as much.
Why only 30 billion, that’s chump change now days…
Obama Renews Call for $30 Billion Plan to Boost Hiring
11 Jun 2010 | Reuters
President Obama Friday repeated his call for Congress to pass a $30 billion package to foster hiring and help tackle painfully high levels of unemployment.
“I’m hopeful the House will pass these measures next week and that the Senate will follow as soon as possible—with support from both Democrats and Republicans,” Obama said in remarks delivered in the White House Rose Garden.
After the worst recession in decades, many small businesses report trouble getting credit.
Obama’s proposal would establish a $30 billion fund to boost lending to small businesses looking to hire and expand operations by providing additional capital to community banks.
They could have paid for 1/10th of that bill if they had fixed the Estate Tax earlier.
Texas gas line billionaire kicked the bucket with an estate north of 7 billion. The gov just missed a 3+ billion payday.
This guy is mega idiot. Economically illiterate and worse a poser.
Bikinis Meet Hazmat Suits as Florida Weighs Closings (Update1)
June 11 (Bloomberg) — A sheen of oil off of Pensacola Beach, a week after tar balls from the BP Plc spill began washing ashore, may force Florida to do the unthinkable: Close beaches.
Government officials must balance potential health dangers from oil arriving on the northwest Florida coast against the prospect that banned beaches would drive away visitors and cripple the state’s $60 billion tourism business.
Their decision so far has been to keep the coastline open even as crews paid by BP work to clean up the muck.
“We are swimming in it, we are lying out right next to it,” said Emily Boswell, 27, a veterinary technician from Pensacola, after spending a day at nearby Pensacola Beach. “Why are there people in hazmat suits and we are in our bikinis?”
State and local officials say there have been no beach closings because the sand and sea remain safe.
“There’s no imminent public health issue to warrant a closure at this time,” Nancy Blum, spokeswoman for the Florida Department of Environmental Protection in Tallahassee, said in an interview.
Robert McKee, a Fort Lauderdale, Florida, lawyer representing clients suing BP, said it’s “a significant probability” that the state will have to start closing beaches. He compared the situation to “Jaws,” the 1975 movie based on the book by the same name in which a killer shark terrorizes an island resort town. The fictional town’s mayor hushes up the danger to avoid scaring away tourists.
Yes, because bars of tar are definitely as dangerous as great white sharks.
Benzene. Nasty, nasty stuff.
I bet more people die every year from the chemicals found in ‘bars of tar’ than die from great white shark attacks.
Doh - meant balls of tar actually.
And I’ll bet not - at least not on the beach, even after the 1979 Ixtoc incident.
I remember getting some tar on my feet from that one actually. A pain to clean off - but certainly not toxic.
Oh, to be a woman in this country. You literally get a way with murders……
Alabama woman accidentally stabbed brother to death while doing dishes, investigators confirm. ~ The Birmingham News
A Center Point woman who says she accidentally stabbed her brother to death while she was doing the dishes will not be charged with any crime, authorities said today.
“We had a team review of this case involving our detective, the coroner and the district attorney’s office,” said Jefferson County Chief Deputy Randy Christian. “Based on the coroner’s report, the sister’s videotaped re-enactment of the event that matched the coroner’s findings and the statement from the 12-year-old witness no charges will be filed and the death will be ruled accidental unless additional evidence arises.”
Leevon Turner, 21, died May 23 at UAB Hospital. The stabbing happened about 4:30 p.m. that day at a residence on Bond Circle.
Turner’s sister and 12-year-old nephew were home at the time. The sister told investigators her brother came up behind her and startled her.
“She quickly turned around and the knife went in his chest,” Christian said.
All the more reason to be nice to a dishwasher. We don’t like surprises, after all.
Is that like the “he accidentally fell on a knife… 15 times” defense?
……and the “warning shot thru the liver…..”
“Ms. Turner told friends she would be moving to an upscale community once she receives the proceeds from the insurance policy she took out on her brother a few months ago.”
Not that anyone cares what Plugs is up to, but he can waste money with the best of them…
Sorry Barack, I’m watching World Cup, says Biden
JOHANNESBURG (Reuters) – An unabashed U.S. Vice President Joe Biden told President Barack Obama on Friday he was sorry for leaving him behind to manage the oil spill but was thrilled to be watching the World Cup.
“I am honoured to be (here) representing the United States. The president is angry,” Biden told a group of dignitaries at the U.S. consulate in Sandton, near Johannesburg.
Biden, who arrived in South Africa with several family members about a day ahead of the kick-off to the sports spectacle, told the group not to take the U.S. side lightly.
The United States play England in their opening Group C match on Saturday and the Irish-American Biden expects to be in attendance cheering on coach Bob Bradley’s side.
Wonder if they’ll be cutting jobs in Remus next?
Layoffs are looming for city workers in Romulus
Tax hike could hold off police, fire cuts. ~ Detroit
In response to an expected budget deficit of up to $3.5 million for the upcoming fiscal year, the City of Romulus sent layoff notices to 32 employees this week.
The layoffs, which would go into effect in August, target departments citywide. Among them are two police officers, a dispatcher, five firefighters and all three recreation department employees, said Tim Keyes, the city’s economic development director.
The Romulans aren’t as crafty as we thought.
If they’re making about 110k a year each, it sounds like they found a workable solution.
Exeter, Blue Skye, and WT Econ,
I know you’ll enjoy this NY state 90 day preforeclosure notice list by county. I know I did.
http://banking.state.ny.us/pff100610.pdf
Warning: pdf
Apparently 1/2 of the 57,000 are in and around NYC, 7% are in the counties around the capitol district but Onondaga Cty was #11 w/just less than 1500 (2.6%)
Now I’d like to know what percentage of those 1500 are in the struggling areas of Syracuse proper.
Americans? We are generally referred to as “consumers”!
Heaven forbid that people should live within their means, and not spend money they don’t have, no crap they don’t need.
Americans pull back on spending in May, raising new worries that the recovery could stall.
WASHINGTON (AP) — Americans are pulling back on their spending, a trend that could slow the economic recovery if it continues.
A sharp drop in retail sales points to still-wary shoppers and could lead economists to curtail their expectations for growth.
Analysts cautioned against overreacting to Friday’s Commerce Department report. It could signal a return to modest growth after two unusually strong months fueled by tax refunds, rebates for energy-efficient appliances and higher gas prices.
The 1.2 percent plunge in retail sales was the largest drop in eight months. But excluding three of the most volatile sectors — autos, building materials and gasoline station sales — retail sales actually rose one-tenth of a percentage point in May.
no=on
U.S. Nears Racial Milestone
Whites Are on Verge of Becoming a Minority Among Newborns in Long-Expected Shift. ~ WSJ
The Census reported Thursday that nonwhite minorities accounted for 48.6% of the children born in the U.S. between July 2008 and July 2009, gaining ground from 46.8% two years earlier. The trajectory suggests that minority births will soon eclipse births of whites of European ancestry.
“The question is just when,” said Kenneth Johnson, senior demographer at the Carsey Institute at the University of New Hampshire. He guesses the demographic milestone will be crossed in the next few years, and could happen as early as 2011.
E-e-e-e-e-ek! The darkies are taking over!
I seem to recall reading that most of the world’s population isn’t what we Americans regard as white.
Sweet. Getting a piece of those minority considerations is going be nice! Scholarships. Hiring. Business loans. Housing assistance.
I’m looking forward to it!
Don’t hold your breath. If you are a “responsible american”, you will not benefit at all. Race is just the cover, it’s actually about rewarding bad behaviors in most cases.
I think we all agree it’s GOOD to be the Banksta!
Anybody else getting “Error establishing data base connection” screens every once in a while when trying to read comments or post a message here? It’s happened to me twice in the last few days. And when it happens, it’s all I can get here for a minute or two, but at the same time I can get on any other web site. Never had it happen before, here or anywhere else.
Try clearing your cache. (I don’t know if this will work, but sometimes it does for connection errors.)
Happened to me yesterday. And I thought I had a really good comment. Apparently, the database connection gods disagreed.
I cleared my cache this morning after my first cup of coffee.
*rimshot*
Nothing you can do to fix a broken database connection. It’s probably just a hiccup on the web server. Word press isn’t the most stable software.