Bits Bucket For June 23, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Still waiting for the Ben-Polly meet up
It is officially summer in DC. Got stopped and asked for directions by tourists in front of my office for the first time this season. Fortunetely, this pair had a map and a vague idea of where they were going on it. They just needed to be shown where they actually were and pointed in the right direction. Just a little extra service provided by your friendly neighborhood bureaucrat before she disappears into the air conditioned sanctuary of her cubicle.
So glad that my tea mug is safely resting on its coaster. Otherwise, you’d be owing me a new keyboard and monitor.
Glad we’re at least getting some value for our tax $.
“Got stopped and asked for directions by tourists in front of my office for the first time this season.”
I used to get that about 4 out of the 5 times a week that I went out to lunch as an intern in DC, and it was not even summer. Man wearing a suit, I guess, is obviously not a tourist, but my knowledge was limited to a three block radius of the Ronald Reagan Building.
I hear ya. I can point people toward an address most of the time, but I don’t know where all the hotels are. I live here and I don’t pursue $20 cocktails, so why would I know the hotels?
Getting stopped for directions is nothing new. I think I must look really unintimidating. Happened all over New York. Actually it happened in Paris once too.
“I think I must look really unintimidating.”
Post a pic so I can see.
Psst: The only picture we will ever see of is Polly is the all decked out in her finest Amy Winehouse dregs….slugging a few micro-brews with Ben……oh yeah!
Last time I was in DC, must have been Spring of 02, just before the WWII memorial opened, I was jogging down to the mall in the first light hours. I stopped by the Memorial and was peeking through the fence just to get a glimpse. A workman, probably one of the foremen as there was no-one else around saw me and asked if I would like to go in for a quick look. Yeah, I said, don’t know when or if I will ever be back in DC. So he let me walk around the memorial alone for about 10 minutes. It was pretty well finished though the water was not running. A thrill for me none the less, and I will always be thankful that he allowed me to do that, particularly if I don’t get back to DC.
I’ve found on several trips to DC that the locals tend to be very accomodating of the tourist types.
Tourist season started last week here in Cambridge, MA.
9 out of 10 tourists are standing in the middle of Harvard Square asking for directions to Harvard Square. When Henry Wadsworth Longfellow was alive he had a tourist stop at his house and ask for directions to Shakespeare’s house.
WASHINGTON — Private security contractors protecting the convoys that supply U.S. military bases in Afghanistan are paying millions of dollars a week in “passage bribes” to the Taliban and other insurgent groups to travel along Afghan roads, a congressional investigation released Monday has found.
The payments, which are reimbursed by the U.S. government, help fund the very enemy the U.S. is attempting to defeat and renew questions about the U.S. dependence on private contractors, who outnumber American troops in Afghanistan , 130,000 to 93,000.
The report’s author called the findings of the six-month investigation “sobering and shocking.”
Ahh mercinaries
If you make war profitable you will lots of it.
The cleverest and most devious warlords will pit the hired guns against their warlord enemies. Taken far enough, the cleverest and most devious warlords will be the only ones that survive.
There is a great incentive among the most cever and devious warlords to never have this war ended.
“If you make war profitable you will lots of it.”
It’s the ultimate mal-investment.
Eisenhower had it right.
Never get involved in a land war in Asia, period.
But second only to that, and only slightly less well-known is never to go up against a Sicilian when death is on the line!
A HA HA HA HA! AH HAHAHAHAHA*—
*thump*
I do not think that means what you think it means. Unconceivable!!!
He’s only mostly dead.
* ECONOMY
* JUNE 23, 2010
Cities Grow as Housing Bust Slows Movement to Suburbs
Several of the nation’s biggest cities saw populations grow faster last year than any year in the 2000s as the recession and housing bust kept people from moving out of state or to the suburbs, the Census Bureau said.
The city of Chicago saw its population increase 0.8% between July 2008 and July 2009, the fastest pace of the decade, according to Census data released Tuesday.
Denver, Seattle and Dallas also posted their highest annual growth rates of the decade over the period. Of the 34 U.S. cities with more than 500,000 people, 19 grew faster last year than the year before, according to an analysis of Census data by William Frey, a demographer at the Brookings Institution.
New York City, the nation’s largest city with about 8.4 million people, continued to grow steadily. The city’s population expanded 0.5% in 2009, compared with 0.4% a year earlier but down from 0.7% in 2007.
“This has been a topsy turvey decade for America’s cities where housing bubbles, credit crunches and a prolonged recession have cooled down many suburban hotspots and permitted more traditional areas to recoup earlier losses,” says Mr. Frey.
Earlier in the decade, several big cities, especially colder ones in the Midwest and Northeast, lost many of residents to warmer cities in the South and West. But a years-long decline in home prices combined with the worst recession in a generation has prompted would-be movers to stay in place, helping many cities hang onto their residents.
The housing bust has also kept many younger couples from moving to the suburbs, said Kenneth Johnson, senior demographer at the University of New Hampshire’s Carsey Institute.
The reverse trend is playing out in once-hot housing markets. In Florida, an epicenter of the housing bust, two of the state’s 19 cities with more than 100,000 people lost population in 2008-2009. Cape Coral saw its population decline 0.4% last year, a steeper tumble than Akron, Ohio, the rust-belt city that has long been losing population, including a 0.3% fall last year.
…
Yes, Florida was addicted to growth. We lived there from 1989 to 1994 (Tallahassee) and moved there again in 1999 until 2006 (Tampa Area). When I saw the photos of the housing bust in Ben’s photoblog, it really gave me the blues.
In the end, I just can’t grasp the foolishness that everyone bought into. My beloved Florida is now becoming a waste.
Roidy
Ben’s photos make real the malinvestment we’ve been talking about. The ones showing unsold houses that are already rotting away really caught my attention.
Some of his photos look like scenes from “Life after people”.
An interesting show on CNBC last night, the history of Sears Roebuck and Co. I knew that Roebuck took his money an ran, and then died basicly a pauper, but what I didn’t know is that he lost all of his money in the first Florida land bust of the late 20’s. Groucho Marx did as well.
We never learn. Well, collectively we don’t
It’s not JUST that we don’t learn, but REAL history is deliberately hidden from us as well.
Revealing that hidden history and making it accessible from generation to generation is the true power of the Internet and the biggest reason for keeping and enforcing net neutrality.
The Marx brothers made enough off vaudeville to retire, but then Groucho invested all their money in FL real estate.
Hence they had to “unretire” and make those movies for which they are so famous.
And now its lovely Gulf Coast beaches are turning into oil slicks. Thanks a bundle, BP!
Oil spill coats Florida Panhandle beaches with miles of sticky goo
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By Mary Ellen Klas and Carol Rosenberg
Miami Herald and St. Petersburg Times
Published: Wednesday, Jun. 23, 2010 - 1:16 pm
Last Modified: Wednesday, Jun. 23, 2010 - 6:36 pm
PENSACOLA BEACH, Fla. — The worst blow yet to the Florida coastline from the growing oil spill struck Wednesday morning in an eight-mile line of thick sticky goo that stained the pristine sands of this Panhandle community.
Workers spent the day raking up the chocolate-brown oil mats and tar patches that washed ashore overnight, and the state ordered road graders to lift the gunk from the once-white beaches.
Some local officials complained it was too little, too late.
“It’s pitiful,” said Buck Lee, the executive director of the Santa Rosa County Island Authority. “It took us four hours to clean up 50 to 60 feet of beach and I don’t see this stopping for a while.”
Read more: http://www.sacbee.com/2010/06/23/2843771/tons-of-waste-picked-off-beaches.html#ixzz0rjW3JaYH
Some of the most affordable housing, relatively speaking, is to be found in our older inner ring suburbs. Having driven down thousands of suburban streets during mapping projects several years ago, I can say a lot of the postwar housing stock was already then headed for a slum-like future. Teardowns are practical only on a very limited basis even in the “best” of times - let alone today. No way will they be entirely rebuilt - after all, the middle class that prompted their original creation is on the ropes.
By the time this is over my city will be arranged more like Paris than like its old postwar self. The people make the place and there are many neighborhoods and suburbs for which there simply are no people with the means to support them in their current or past incarnations. Put another way, expect to see a LOT of cars in a LOT of driveways.
You have to add in the fact that the infrastructure, as well as the housing, is reaching 50 years old.
And the local governments now have lots of retirees rather than almost none. Did those anti-tax Republican surburban governments set aside enough money to cover those promises, or just take advantage of the fact that growing communities have more and more taxpayers and relatively few public retirees?
Great points. I lived in one of the older suburbs for a while. They televised the city council meetings on cable access, and let me tell ya, they were scary!
One particular debate to replace two blocks’ worth (out of hundreds) of sewer pipe was both fascinating and disturbing. I kept asking myself, do my houseowning neighbors even know about this?
The trouble with that argument is, the infrastructure in the major cities is 100 years old.
And, at least around here, the big cities are the ones that have the huge numbers of public retirees.
When I was a kid, I remember them replacing the water pipes on my street because the wood had rotted through.
Now… I’m pretty sure the construction guy was pulling my leg (I was about eight) and that they were fixing more modern pipes, but they WERE pulling pieces of giant hollow logs out of the ground at the same time and he slowed me one.
I remember being amazed that anybody had ever used wooden pipes for water.
The wooden pipes generally lasted 100 years, which is not too bad. Newark NJ was replacing some of these when I lived there in ‘75.
Here in NYC at least, much of the infrastructure has been repaired in recent years. Of course local borrowed money has been used to do this, and as a result we are bankrupt, but that can be remedied by not paying back the loans.
In Spokane there are still areas with wooden pipes. They can be a problem if they freeze as there is no way to apply current to them to thaw them as you can with Cast Iron.
Paris, at least the idea of Paris, is a very rational way to set up a city. The wealthy and upper middle class people live in the inner city in lovely buildings with lots of parks and cafes and close to cultural resources. They may have country houses for weekends and long vacations. By actually living close to the city center, they have minimal commute times to work, restaurants, shopping and activities. Their housing costs more, but the money buys them time to spend with friends and family. Then the further out you go, the less expensive the housing. People who pay less for their housing spend more time commuting. They trade their time for reduced housing costs.
All this is very theoretical, and seems to presuppose that all the jobs (or at least all the good ones) are in the same place near the center of the city. If such a supposition were true, it would be a very rational way to set up a city, especially one which had good public transportation from the cheaper housing to the city center. I’m not under the impression that “theoretical” urban planning is all that useful.
US cities just don’t organize themselves this way. Wealthy Americans want to live in their country houses, not spend weekends there.
Another megatrend: There will be less demand for the suburbs because of changes in U.S. household composition. Simply put, there are fewer two-parent families with children at home.
What’s on the rise? Singles living alone, empty nesters, and DINKS (dual incomes, no kids). These aren’t the sorts who are looking for 3/2s in the ‘burbs.
That trend is far more prevalent on the coasts (and Arizona), I believe. I’ve been looking for that trend to hit my area of the country for years, but so far it has not. The number of children per family may be down, but very few families do not have children. At least it seems that way.
I’m single and wouldn’t mind a nice 3/2 with an inground pool with enough land for a 2000+ square foot garage/arcade
Agreed. Japan’s demographics are several years ahead of us. I read recently they are looking into developing robots to help the single live-alone alderly. Maybe a thing that we can take advantage of due to our later demographics.
I am going to have to watch “I Robot” again.
Actually, they are already manufacturing and selling those robots. The real race is for the more advanced models.
Google “japanese assistant robots” and “japanese elderly power assist”
They are light years ahead of us. Light years.
And isn’t this good for public transport prospects? Especially considering peak oil (whenever that occurs/has occurred).
Bicycles. State and local governments are going broke, and public services such as transit will collapse, but the unions will still be powerful enough to block private alternatives.
Bicycles? Yessss!!!
Just look at how behind our lousy 2nd ave subway is…maybe they will get some of it running in the next 5 years….but with all the peeps out of work there is no way they should ever have to pay anyone OT…or even top union wages….
we have the unemployed but we have no will.
In my city, the problem is that the transit agency’s management is a political favor position and they will do everything they can to maintain their monopoly.
Even worse, some of our congressmen have voted DOWN or seriously blocked and delayed mass transit system such as rail and bike paths in favor of more freeway construction.
Unions? Don’t make me laugh. I live in a “right to work” state and it’s the executives and politicians nobody else BUT the executive and politicians who are deliberately blocking improved mass transit.
Same issue in South America for those Chiquita bananas we love to eat; in poor countries it’s called graft while in rich countries it’s called consulting fees.
One more worry for banks: Wal-Mart
FORTUNE — America’s biggest banks are in retreat, tightening lending, increasing fees, and closing branches. But one company still wants to become your neighborhood bank: Wal-Mart.
While the banking sector has been in turmoil, Wal-Mart has aggressively courted customers’ pocketbooks, partnering with financial services companies to offer money transfers, check cashing and bill payments, and putting virtual checking accounts — refillable pre-paid debit cards — in the hands of more than two million customers.
The company downplays its desire to garner a banking license, but recent changes in the banking and regulatory landscape have only increased the eventual likelihood of a Wal-Mart Bank. The latest evidence that Wal-Mart plans to continue its push into financial services was the news last week that it had taken an equity stake in Green Dot, which manages the retailer’s prepaid debit cards and is currently seeking regulatory approval to acquire a small Utah-based bank for $15.7 million.
More power to them. If people want to buy cheap stuff (although their prices aren’t always the cheapest), let them.
Their entry into this market is going to wipe out those banks that are less efficient and unproductive. IMO they should worry.
Does anyone think this is a bad thing???
I see it as a symptom of Peak Wally World.
Not me. Like you said it should kill some bloated banks. Rightfully so.
I would also like them to provide some competition to health insurance companies.
Wal-Mart health insurance? Now, that would be something worth watching. Same goes for the First Bank of Wally World.
I’d also like to see more of those non-doctor’s office clinics. Here in Tucson, some Walgreens pharmacies have them. They’re staffed by nurses, and, from what I’ve heard, the care is pretty good.
I don’t have a problem with it. The last couple of days there have been posts indicating that banks aren’t going to offer free checking accounts anymore. While that probably won’t affect the savers that populate the HBB, I imagine Wal-Mart’s customer base would be affected a great deal. It could be a good business move for a Wal-Mart bank to offer its customer base free checking, simply to keep them coming back to the store.
“The last couple of days there have been posts indicating that banks aren’t going to offer free checking accounts anymore. ”
The credit union that I use in Arizona to avoid bank fees, etc. has announced an end to free checking, at least for me. In August, they plan to institute mandatory online statements (no mailed paper statements), plus a $5 monthly fee unless you use the Visa check card “non-PIN” function three times monthly. There do not appear to be exceptions for people with substantial savings in the credit union, but I will call and ask next week.
Frankly, the mandatory online statements is not something that I am a fan of, but would live with. But I will not start using a Visa debit card three or more times a month just to avoid a fee. So, either I will pay it if it will not be waived, or find another credit union.
I guess that somebody has to pay for all those $300,000 bad mortgage loans on Arizona stucco that the credit union made, including one defaulted on by my cousin about a year ago.
This is Desert Schools Federal Credit Union, the largest in the state I think.
Why not just buy 3 $3-5 items like cd’s on ebay a month and pay for it that way.?
———————–
But I will not start using a Visa debit card three or more times a month just to avoid a fee.
With Debit cards and Online bill pay, does anyone use checks anymore? I haven’t written a check in two years.
guess that somebody has to pay for all those $300,000 bad mortgage loans on Arizona stucco that the credit union made, including one defaulted on by my cousin about a year ago.
This is Desert Schools Federal Credit Union, the largest in the state I think.
Down here in Tucson, the Vantage West Credit Union just sent everyone a notice about the overdraft “privilege.”
Apparently, you are supposed to pay for the privilege of having a fee charged if you don’t have enough money in your account. This will allow you to avoid the dreaded “decline” message that the merchant sees if you don’t have enough money in your account.
Well, I think that, if I don’t have enough money in my account, then I just ought to stay home and sulk. Better than doing it in public.
Phooey on their overdraft “privilege” fee. I declined it.
Oh, I might add that, until two or three years ago, Vantage West would throw HELOC parties in the lobby. Complete with popcorn.
This was well after housing started to head south in AZ, and I found the whole idea to be revolting. I even went so far as to refuse the free bags of popcorn that the Vantage West staff would offer me.
I still write checks for all my bills and will continue to do so until they force me to stop. I love hard copies of any transaction or account statement. I guess I am just old school.
“Why not just buy 3 $3-5 items like cd’s on ebay a month and pay for it that way.?”
I guess. But I just resent the idea of having to do it every single month. I could even split up my transactions at a grocery store self-checkout. I always patronized credit unions so as not to feed the fee beast. I realize that there are much bigger problems in the world, but I just do not like it. I have considered running in the next board of directors election, but that may be overkill.
Here in Hampton Roads (Southeastern Virginia) the Wal*Marts have a Wood Forest bank branch thing in them. I googled it a while ago and it’s not Walmart as far as I can tell.
There was some interesting stuff about the lack of bank branches in bad neighborhoods in the book “Credit Card Nation.”
Old news.
Great Neighborhoods nonprofit files for Chapter 11
Minneapolis-based nonprofit developer Great Neighborhoods! Development Corp. (GNDC) has filed for Chapter 11 bankruptcy.
The nonprofit, formerly known as the American Indian Neighborhood Development Corp., cited holding costs related to sites it owns along West Broadway Avenue in north Minneapolis where its redevelopment efforts have stalled.
Great Neighborhoods built its reputation for helping to revitalize a commercial stretch of properties along Franklin Avenue in south Minneapolis. A few years ago, the organization turned its attention to the city’s north side, with plans for an ambitious redevelopment project that was to be anchored by a YWCA fitness club.
The city of Minneapolis has provided financial support over the years to the nonprofit, whose projects have often dovetailed with city’s redevelopment goals. In 2008, the city approved $568,000 towards the Broadway project: a $432,000 forgivable loan from its Great Streets program and a $136,000 Empowerment Zone loan.
Sales of New Homes in U.S. Probably Fell as Tax Credit Expired.
June 23 (Bloomberg) — Purchases of new U.S. houses plunged in May by the most in 16 years after a tax credit expired, economists said before a report today.
New-home sales, tabulated on contract signings, fell 19 percent to an annual pace of 410,000 last month, according to the median estimate of 76 economists surveyed by Bloomberg News. In order to qualify for a government incentive worth up to $8,000, a purchase agreement had to be signed by April 30.
The end of the tax advantage means the market will cool until employment picks up enough to lift incomes, brace confidence and contain foreclosures. A lack of inflation and concern over jobs and housing are among reasons Federal Reserve policy makers today may reiterate a pledge to keep interest rates near zero in coming months.
“Sales of New Homes in U.S. Probably Fell as Tax Credit Expired”
ball thrown into air will probably come back down due to the earth’s gravitational force.
sun will probably rise tommorow morning due to the earth’s rotation around its own axis.
“…the market will cool until employment picks up enough to lift incomes…”
Welcome to the world’s largest collective breath holding contest!
“Purchases of new U.S. houses plunged in May…”
The taxpayers should be partying in the streets with this news since most of these home sales are to first time buyers who paid too much, and fannie or freddie has been the only mortgage providers.
Keep going down baby!
Went and looked at rental properties in PA. Rentals for 4 bedroom’s are very high. But they are falling. I will provide examples tomorrow…
Stpn,
What’s your take on the General’s comments?
The 33% represented approximately 12,000 fewer new homes sold than last month. Inventories of new homes are at an all-time low, the sales pace is at an all-time low, affordability is generally very good.
The tax credit is a complete waste of money. It took abysmally low new home sales numbers to slightly higher new home sales numbers.
The problem with new home sales is not pricing, which is the only thing the tax credit addressed. The problem is the economy and jobs. No new permanent jobs=no new buyers. The tax credit only served to pull some buyers forward, who would have bought a home anyway, albeit a bit later.
affordability is generally very good
Not in my neck of the woods. I don’t find 270-350K for a 70s rancher in the suburb to be a “very good” on the affordability scale. This is a suburb of Portland, OR. Everybody wants to live here because it’s different - it “rains” a good portion of the year.
Yes, but new homes today (what the numbers reflect) in many markets that I see are actually priced at or below replacement cost, since builders bought the lots for less than the hard costs.
In many of these markets, it is cheaper to own than rent. That’s pretty affordable.
It’s affordable assuming you can guarantee you never have to sell and/or you are in a no recourse state and don’t care about the credit consequences of walking away and are OK with saying good bye to the downpayment. I worked hard to save that downpayment and I’m not ready to toss it away. For the low downpayment crowd, well in a recourse state, you either have to restrict your savings in protected retirement accounts or make your downpayment on the other end of the loan. No thanks.
High interest rates have to push prices down when people are already buying as much as they can afford (on the monthly payments) and credit standards aren’t going to get looser. Last time around, high interest rates coincided with more and more women entering the workforce and some wage inflation. Well, globalization is keeping wages down and unless grandma and grandpa move into the basement, most families are out of adults to send into the workforce. Where is the extra money supposed to come from? I’ll wait until prices aren’t poised to collapse before buying and I’m not all that convinced even then. I like my apartment.
What I’m saying is that generally, home prices are affordable if you have a job.
8 million fewer people have jobs than at the peak.
Given how far prices have fallen, prices falling further are far less relevant to a housing rebound than job creation.
Guest Post on Max Keiser.com: Fascism–American Style
June 22nd, 2010 by Damon Vrabel
Since we’re stuck in a monetary system that allows a tiny private sector clique to control everything (business, government, military, non-profits, schools, families, etc) by putting everyone else in debt, we’ve been living in financial dictatorship for a long time. It has been a soft PR dictatorship of Hickey-Freeman suits and Sax 5th Avenue ties, Harvard pedigrees and fratboy schmarm. But hard dictatorship has been coming out of hiding for several years, especially since 2001. Not only can the money powers steal trillions from the masses to hand over to themselves, but they can suck the military into conquering poor countries that aren’t subject to their usury vortex system, build Homeland to spy on Americans, and have the CIA assassinate US citizens.
There is no question that full-blown fascism is planned for the supposed land of the free as they try to move us into the new global system. And all the Republicans blaming Obama for it, just like the Democrats who blamed Bush, need to stop being suckers and realize how the politicians are not in charge. The money powers knew 100 years ago they couldn’t subject their wealth and power to the whims of mass political opinion…they learned well from the Teddy Roosevelt days. Ever since, they have built increasing control into the system.
Blame the politicians? Absolutely…each administration takes an incremental step for the money powers. But don’t get suckered into believing a politician from your side of the aisle playing the same old game of flipping between left and right is going to change anything. We’ve been sold on parties just like we’ve been sold on Coke vs. Pepsi–they’re the same.
Find leaders who know their neighbors, who understand the mechanics of a republic vs. empire, who understand the power of those who control all money in our system, rather than repeatedly voting for unhappy, addictive Harvard/Yale elitists who get a rush out of “system managing” the masses for the money powers. Any narcissist who thinks one dude in a distant white house can system manage 308,000,000 people should never come close to actually being in that white house. But that’s who we’ve put in that house for the last several decades.
Luckily people are now breaking free of the PR programming. The choice isn’t left vs. right. It is big vs. small, republic vs. empire.
Luckily people are now breaking free of the PR programming.
The tele/cable-cos, astroturfing “net neutrality” and the government, in the interest of “battling piracy and terrorism”, will fix the internet so that that stops happening.
Eco blames Bush.
Actually I blame Mr. Voodoo Economics Raygun. Bush just put the nail in the coffin.
“Find leaders who know their neighbors, who understand the mechanics of a republic vs. empire, who understand the power of those who control all money in our system, rather than repeatedly voting for unhappy, addictive Harvard/Yale elitists who get a rush out of “system managing” the masses for the money powers.”
This isn’t going to happen. The writer apparently knows nothing about how candidates are selected and approved and how anyone now towing the general party line is excluded form the process by a very heavy gauntlet of almost impossible “requirements” that require a very well funded organization’s resources to successfully fulfill. And that’s just to get on the ballot.
“…NOT towing…”
Harley-Davidson to cut about 200 workers.
Daily Record
Harley-Davidson expects in the next week to let go of another 200 workers as part of its previously announced workforce reductions.
This week is their last full week on the job, the company said Tuesday, and the workers who are being let go were informed either last Friday or Monday.
Also, causal workers have begun working at the local site to fill in for workers who are absent for either planned or unplanned reasons, said Michael DiMauro, local company spokesman.
The use of casual workers is not linked to job reductions, he said.
Casual workers, eh. Sounds like another name for part-time workers.
Pit the casual workers against each other and you get to beat down the employee wage and benifit costs.
Casual workers are those who show up in hiring halls or on street corners to see if they will be hired today for minimum or subminimum wage work off the books with no benefits.
1960s: “Two hours of pushing broom buys an 8 x 10 four bit room.”
2010s: Eight hours of computer programming scores my family a meal on the dollar menu and two gallons of gas.
Are you really seeing that many problems as a programmer? I’ve saw our digital group go through layoffs last year.
Still most of the people seemed to be able to find jobs.
I hear it’s hard to find people with good skills. The applicants people see are depressing (and scary.)
Before she went into politics, U.S. Rep. Gabrielle Giffords owned a chain of tire stores here in Tucson. I remember meeting her at an event during the late 1990s, and she said that there was a big problem in finding people who read and wrote well enough to complete the employment application.
Really? Seems like millions of them have jobs.
Sometimes it seems like they are the ONLY ones with jobs.
2010s: Eight hours of computer programming scores my family a meal on the dollar menu and two gallons of gas.
Not quite that bad yet, but we certainly headed that way.
We ARE there. Check out an online company called oDesk.
Who wants to ride a motorcycle built by ‘casual workers’?
Perhaps HD could design a small-to-medium size, efficient, competitively priced motor cycle that normal people can afford for practical transportation instead of flashy, gas-guzzling, bling-loaded noise makers.
They already had one. Called a Buell. Or a Sportster.
You’ll see a small, cheap, efficient Harley about the same time Chevrolet builds a four cylinder Corvette with a steel body.
Not that there’s anything wrong with that……
You’ll see a small, cheap, efficient Harley about the same time Chevrolet builds a four cylinder Corvette with a steel body.
I think that’s called the Chevy Cobalt
Or a Vega GT. Had one, not good.
Mazda did that. It’s called the Miata and sold over 800,000 units. It’s fun and highly reliable. I get 32 MPG with mine. Too bad GM failed in their attempt with the Solstice/Sky.
$15,000 toys. They will not do well with 20% unemployment.
Especially when most of their new sales are dependent on bloated trade-in values.
Having spent 15 years in the Marine Business, I still watch the industry to help me get over being out of it. Marine Max, a publicly held Multiline dealership in Florida and the S.E. is the best barometer of that business I can think of. I just looked at their latest finincial data, business went from $1.3 billion in 2007, to $585 million in 2009, and the first quarter of 10 is 20% below first quarter of 09. Hard to downsize a business for that big of a drop.
Uhh….a Fatboy starts out over $20K.
Casual workers = contract temps
The way it usually works it fire your permanent employees and then hire them back for less money through a contract temp agency.
Voila! No bennies. Less pay. Less sick days. Less vacation. No pensions!
Is “casual worker” some politically correct doublespeak for “day laborer”?
It’s PC for “temp.”
Here we go again…
Calif., Fla., other states to get more housing aid
Treasury Dept. approves plans to provide $1.5B in housing aid to Calif., Fla., 3 other states.
WASHINGTON (AP) — The Obama administration has approved five state-designed plans to help homeowners as part of a $1.5 billion effort to assist areas slammed by the housing bust.
Treasury Department officials, who spoke on condition of anonymity because the decisions had not yet been made public, said plans for Arizona, California, Florida, Michigan and Nevada had received approval.
The state plans are projected to help at least 93,000 homeowners. That’s a small part of the administration’s main existing $75 billion mortgage assistance program, which is widely viewed as a disappointment.
President Barack Obama unveiled the state assistance effort in February. Since then, state agencies have designed their own approaches, largely focused on borrowers who owe more on their properties than their homes are worth or those who have lost their jobs.
By ALAN ZIBEL The Associated Press
Posted: 12:05 a.m. Wednesday, June 23, 2010
Besides these states, the Obama administration is providing an additional $600 million in financial support to help homeowners in states with high rates of unemployment.
Those states — Ohio, North Carolina, South Carolina, Oregon and Rhode Island — have submitted plans to the Treasury Department. They are being reviewed now, with approvals expected in August.
The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis, which have met with limited success.
More than a third of the 1.2 million borrowers who have enrolled in the Obama administration’s main mortgage modification program have dropped out, officials said this week. About 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.
Yea, $1,500,000,000,000 that gets set aside for the little people.
$1,000,000,000 for the bureacracy to run the program.
$500,000,000 for the little people.
Those that qualify need an average of $200,000 to make their mortgage realistically affordable.
$500,000,000 / $200,000 for = 2,500 people
80% of the people assisted loose the house anyway.
2,500 x 20% = 500 people that really get helped.
For every person that actually realizes true assistance, the government has to spend $3,000,000,000 in their effort to get the money down the pipeline.
Conclusion: Govt is this efficient for everything that they do. No wonder we’re almost $14,000,000,000,000 in debt.
$1,500,000,000 / 500 = $3,000,000
Thank god free enterprise capitalism didn’t bring us to the brink of world wide destruction.
Oh wait…
I guess Total Government is the cure. I think I will put my name in now to be one of those neighborhood minders. I can report anyone I hear talking bad about the party. Perhaps I would event get real food and toilet paper.
Also in the article: “The Obama administration has approved five state-designed plans to help homeowners . . . Arizona, California, Florida, Michigan and Nevada had received approval. The states were picked because they experienced at least a 20 percent decline in home prices.” Many of these states were also the most overpriced based on historical pricing ratios. Without an understanding where prices should be and a continual denial that there ever was a bubble, the government is further screwing those that just want to buy a modest home to raise their family in at a reasonable price. Although Obama wasn’t solely responsible, one cannot help but think if we had someone intelligent with some character and backbone as President, things would be much different and this Country would be on the right track with unemployment falling.
And, bad news: Prices are still going down here in AZ. For the reason that Natalie spelled out:
“Many of these states were also the most overpriced based on historical pricing ratios.”
“…largely focused on borrowers who owe more on their properties than their homes are worth…”
I recently read that something like 1 million Californians have simply stopped paying their mortgages. Now assuming the mortgages used to finance this collection of 1 million California homes were ‘worth’ an average of $105,000 back in 2006 (lowball, conservative figure), and the same group of mortgages in non-payment status are worth $5,000 on average, that would be a loss to banks of $100,000 * 1,000,000 = $100,000,000,000 ($100 bn) (grade school arithmetic — just count the zeros — my kids could do it!).
Does that $1.5 bn in homeowner assistance, spread over five states, help banks and borrowers in this delinquent tranche, or is it only targeted at homeowners who continue paying their mortgages?
The program isn’t meant to help the homeowner. If the intention is to buy down the mortgage, it’s designed to get more bailout money to the banks. I don’t care what the government calls it.
Don’t you mean more bailout money to the GSEs?
I almost missed the subtly.
You’re exactly right.
(Reuters) - German’s budget savings policy risks destroying the European project and a collapse of the euro cannot be ruled out, billionaire investor George Soros said in a newspaper interview released on Wednesday.
“German policy is a danger for Europe, it could destroy the European project,” he told German weekly Die Zeit.
Soros, who earned $1 billion in 1992 by betting against the British pound, added that he “could not rule out a collapse of the euro.”
“If the Germans don’t change their policy, their exit from the currency union would be helpful for the rest of Europe,” he said.
Chancellor AngelaMerkel unveiled plans earlier this month for 80 billion euros ($107 billion) in budget cuts over the next four years — a package she hopes will bring Germany’s structural deficit within European Union limits by 2013.
Look how screwed up things are. A country that wants to institute a sound economic policy is going to be blamed for destroying the economies of the countries that don’t.
“Soros, who earned $1 billion in 1992 by betting against the British pound…”
Money that was hardly earned imo. Yes, he made the money but it was all speculation. He went all in and won the bet. People like Soros play no part in any real wealth creation for the world.
“People like Soros play no part in any real wealth creation for the world.”
Amen, Brothah! This point is, however, very difficult to get across to people. Soros and others like him are extractive and parasitic.
“People likle Soros play no part in any real wealth creation for the world.”
True that. His role in the Grand Scheme is to force discipline on a system that deperately needs it.
‘…force discipline on a system that deperately needs it…’
And in contradiction to the assertion of your post (quote included), I would argue that financial discipline plays a large part in real wealth creation.
Conversely, a lack of discipline which engenders financial folly plays a large part in wealth destruction.
Not when the new rules are “Disaster Capitalism.”
Economic colonization just doesn’t seem to play out in the long run, not in N. America and not in Europe.
wmbz,
Soros is also an oil baron, having invested $900 million in Petrobras.
It seems they are particularly well positioned if we institute the drilling ban in the Gulf of Mexico.
Hmm, wonder if that has anything to do with Uncle Opie’s stance on the issue. Stop the Drilling, let Petrobras pick up the slack, and Soros makes BILLIONS.
http://www.foxnews.com/story/0,2933,595042,00.html?mep
So they should put their own interests aside and follow us down the Keynesian rat hole?
BTW, a little hurrah, for the Brits for taking the bit in their teeth too.
It will be interesting to see how it plays out. Austerity vs. printing press.
Of course, pulling the austerity move is easier if you have a trading partner doing the printing press. Just make sure you convert their cash to hard assets as soon as you get it.
But Britain isn’t nearly as austere as we are, and their VAT is 20%. They changed their retirement age to 66 and didn’t touch national health care. We changed SS retirement to 67 years ago and don’t have national health insurance. They’re playing catchup with our austerity. Do you think the American people would permit a VAT of 20% They wouldn’t even go for 10%.
Part of the family hails from Britain. During my 1977 visit Over There, I was regaled with numerous stories about the NHS. All of them positive.
I also got quite an earful about my relatives’ needing to buy expensive health insurance for their American tour because this country doesn’t have the National Health.
Oh, BTW, these relatives were staunch members of the British Conservative Party.
Isn’t NHS in Britan about bankrupt now?
Sounds like Soros has been reading up on the history of GD1.
The city of Maywood will lay off all city employees and begin contracting police services with the Los Angeles County Sheriff’s Department effective July 1, officials said.
In addition to contracting with the Sheriff’s Department, the Maywood City Council voted unanimously Monday night to lay off an estimated 100 employees and contract with neighboring Bell, which will handle other city services such as finance, records management, parks and recreation, street maintenance and others. Maywood will be billed about $50,833 monthly, which officials said will save $164,375 annually.
“We will become 100% a contracted city,” said Angela Spaccia, Maywood’s interim city manager.
Deputies from the East Los Angeles Sheriff’s Station will begin patrolling the 1.2-square-mile city by the end of the month, said Capt. Bruce Fogarty of the Sheriff’s Contract Law Enforcement Bureau. The annual cost of providing those services for the small city is estimated at $3.6 million, Fogarty said.
At a council meeting Monday night, city leaders said they were forced to dismantle the Police Department and lay off city workers because they lost insurance coverage as a result of excessive police claims filed against the department. They also blamed years of financial abuse and corruption from the previous council.
“We’re limited on our choices and limited on what we can do,” Councilman Felipe Aguirre told the standing- room-only crowd.
Frustrated and enraged residents blame the council for the city’s predicament, and for not following an insurance agency’s recommendations, which council members had agreed to last August. The recommendations included hiring a permanent city manager.
Some suggested that city leaders should step down.
“You guys had the power to change it and you didn’t,” said City Treasurer Lizeth Sandoval, 28, who addressed the council as a resident. “You single-handedly destroyed the city.”
Sandoval, a city employee, will be laid off as part of the cuts.
Local activists, who refer to themselves as “A Group for a Better Maywood,” announced their intention to recall four of the council members: Felipe Aguirre, Edward Varela, Vice Mayor Veronica Guardado and Mayor Ana Rosa Rizo. The same group sought a similar recall in 2008 and failed.
shouldn’t they just annex the city? what is the point of running independantly?
bwahahahaha. Maywood. Gee, no one could have seen that coming.
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
Judge who nixed drilling ban has oil investments
By CURT ANDERSON and MICHAEL KUNZELMAN (AP)
“NEW ORLEANS — The Louisiana judge who struck down the Obama administration’s six-month ban on deepwater oil drilling in the Gulf of Mexico has reported extensive investments in the oil and gas industry, according to financial disclosure reports. He’s also a new member of a secret national security court.”
“…It has spewed anywhere from 67 million to 127 million gallons of oil.”
Big Oil Industry: We know what we’re doing, it won’t happen again…we promise!
I suspect that you have just made a promise that you cannot keep.
BTW, define “secret”.
Hwy,
I posted something earlier about Soros. Apparently he has invested $900 million in Petrobras (Brazilian oil co) which is well positioned to profit if the oil drilling is banned in the Gulf.
So while the judge might have THOUSANDS invested in oil, your side has a highly influential constituent that stands to make BILLIONS if the oil drilling ban goes through. Note that Soros is very influential in Uncle Opies party.
So, which is worse?
Lip
“…It has spewed anywhere from 67 million to 127 million gallons of oil.”
Oil Industry:
Don’t…Stop!,…Don’t…Stop!, Don’t… Stop!
Soros is a private investor, not a federal judge presiding over a case he has a financial interest in.
Seriously LIP?
You can’t see the difference between a judge ruling on a case he has a financial interest in and
Soros owning shares of a foreign oil company. I believe he owned the Petrobas shares far before the BP disaster.
Can you point to one instance where he has influenced the president when it comes to oil? You make a huge assumption based on no facts. Did he cause the BP disaster? Did he push Obama to propose a moratorium?? Is it not unreasonable to have a moratorium when it’s clear that regulators were sleeping with the regulated. Maybe it would be good to take a short break and evaluate the rules and how they have been enforced to prevent another disaster? What would people say about Obama if he didn’t push a moratorium and there was another oil disaster in the Gulf that could have been prevented?
Compare this to the judge and say Dick Cheney still getting paid by Halliburton and pushing through oil deregulation and a war in Iraq for oil. Handing Halliburton huge no bid contracts.
Hardly comparable.
Don’t waste your time Lip. Everyone knows there are no crooks in the progressive movement.
Associated Press
“Like many judges presiding in the Gulf region, Feldman owns lots of energy stocks, including Transocean, Halliburton, and two of BP’s largest U.S. private shareholders—BlackRock (7.1%) and JP Morgan Chase (28.3%).” Further investigations into Feldman’s financial disclosure reports show that, while he claimed less than $15,000 in Transocean stock back in 2008, he also holds shares of Houston-based Ocean Energy, Peabody Energy, Atlas Energy Resources, Parker Drilling, Quicksilver Resources, Prospect Energy, and others.”
Wow, he sure sounds impartial.
I don’t know…..
The way things are now, it makes more sense to invest in local companies that you can see first hand, rather than believe what Wall Street analysts tell you about some company halfway across the country.
At least he’s diversified……he’s got oil producers, oil drillers, oil service companies…….
Nope, no conflict of interest there.
Nothing to see here sheeple. Move along.
Out Of Prison, Jack Abramoff Works At Pizzeria
Mama Mia…what’s on the GOPOFC&CC = “The Grand Old Pimp of Fiscal Conservatives & Compassionate Conservatives” 2010 National Convention menu?
Kosher Pizza!
“Abramoff once owned a kosher restaurant in Washington, DC. He was released from a federal prison on June 9 and transferred to a Baltimore halfway house where he was expected to remain until his release, scheduled for Dec. 4″
Abramoff is the subject of a film documentary, “Casino Jack and the United States of Money”
“Out Of Prison, Jack Abramoff Works At Pizzeria”
When I heard that Gary Condit bought (and sometimes worked at) a Baskin-Robbins franchise in Arizona, I really wanted to go. But he had apparently moved on by the time I heard about it.
It’s a Wonderful World after all…
Disney World’s New Thrill Ride: Selling Luxury Vacation Homes
WSJ
* REAL ESTATE
* JUNE 23, 2010
Walt Disney Co. plans to unveil Wednesday its first foray into residential real estate in more than a decade with a pricey vacation-home development in Florida’s Walt Disney World.
It’s a risky move. Disney will offer homes priced between $1.5 million and $8 million in a state where the foreclosure rate remains among the nation’s highest. In Orlando, where brokers say home values have dropped between 50% and 60% from the peak, Disney’s pricing would put its homes near the top of the market. According to Realtor.com, the average price of new listings in greater Orlando this year is just over $243,000.
But Disney believes the market for luxury homes is rebounding. Despite adding wine-tasting events and VIP park tours in recent years, “The affluent market is an area where we haven’t offered a lot of product,” says Matt Kelly, vice president of Disney resort real-estate development.
The proposed 980-acre Golden Oak development, most recently two golf courses within the 40 square miles of Disney’s Orlando theme parks, is expected to eventually encompass 450 homes and a 445-room Four Seasons hotel.
Ummm, how many families with kids are going to be able to afford these places? And what happens when the kids get older and the appeal of Disney World wears off?
Or is this the place that the grandparents will retire to and the descendants will come to visit them?
I don’t think it’s really supposed to be for people who want to go to Disney every day. I think they’re using up excess land by building subdivisions. And instead of building cheap housing their employees might want to buy, they’re building excessive McCrapshacks.
Bellieve it or not, Disney is doing a brisk business in selling memberships in its “Vacation Club”, basically selling 30 year time shares. Apparerently they have been selling like hot cakes.
I think they ground up W.D. frozen head and have been snorting it.
Disney developments make Baptists look like party animals.
Spoiler alert!
Fed to keep rates low to aid weak recovery.
Fed will keep rates low as long as China buys USTs. Why would you up the rate of an IOU when the lender has an infinite appetite and is willing to put up with (near) zero interest?
So if you are retired you get to look forward to:
1. Low return on your CDs and other interest bearing thingys.
2. Probable pension reductions.
3. Probable Social Security and Medicare cuts.
Time to move back in with the kiddies (and leave to the world still another vacant house).
In 1999 our local paper ran a Sunday headline story (actually a series, IIRC) exhorting and cajoling seniors to go all in on the stock market. They quoted some bazillion dollar figure of how much seniors holding IRAs, CDs, and bonds had lost out on.
In 1999.
The Retirement Seminar sharks are circling where I work. They have their eyes on cashed out pensions and 401Ks and are promising ten-percent-plus returns to those who are willing (and foolish enough) to turn all their money over to them.
“The Retirement Seminar sharks are circling where I work”
They’re always chumming the waters around here. Every week there’s at least one ad in the local fishwrap for an investment or insurance or retirement seminar. However, a lot of the retirees in these parts are wily old coots. They go to the seminars for the free lunch. Although given the buffet venues where the seminars are held, I personally wouldn’t risk the ptomaine.
I had an advisor try to get me to dump my AAA and AA municipal bond fund for an annuity. Guaranteed to not go negative. But the fees, the fees! If I was to get an annuity, it would be through Vanguard. You cannot beat Vanguard for its low expenses.
However, a lot of the retirees in these parts are wily old coots. They go to the seminars for the free lunch. Although given the buffet venues where the seminars are held, I personally wouldn’t risk the ptomaine.
I went to one of those seminars back in late ‘08. It was one of those things that a couple of the neighbors were touting, and another neighbor joined the carpool.
All four of us enjoyed the free meal, but no one chose to invest one red cent.
BTW, the company hosting the seminar was Merrill Lynch, and this was during the time that Bank of America was taking them over.
Our company was just yesterday pimping the Roth(k) option they now have in our 401(k) plan.
Instead of getting pre-tax contributions, you get post tax contributions and Roth like behavior out of your 401(k). But not for employer matches. Those are taxed.
I got up and walked out of the seminar.
I wonder how many people are dumb enough to fall for it?
Dumb enough to fall for what? Roth vs. pre-tax is usually a fairly complicated question that requires future projections of gains, earnings and tax rates. We have gone with the Roth 403(b) for our retirement, which just became available for us this year. I can’t be sure it pencils out in terms of net returns (what will tax rates be in 2030?), but given the cap on supplemental contributions this effectively allows us to contribute more to our retirement.
The caps are the same, it’s just pre-tax versus post-tax. (unless you’re talking traditional Roth vs. RothK) I’m betting we’ll see more ‘consumption’ tax rather than ‘income’ tax going forward. You can’t dodge VAT tax by using Roth. Also, I’m not convinced Roth protections will be respected if we’re tax-hungry enough to have rates higher then than they are now.
Also, it’s occasionally possible to contribute enough to your 401(k) to drop a tax bracket.
Very, very few people will have retirement incomes (in inflation adjusted dollars) that exceed their working earnings, so you will almost always have a lower tax bracket at retirement unless you’re already in a very low tax bracket.
Given that the Government can and possibly will screw with IRAs, I’d rather get the benefit now.
“The caps are the same, it’s just pre-tax versus post-tax.”
–As I said, I can EFFECTIVELY contribute substantially more with Roth given that it is post tax and the absolute limits are unchanged.
“Very, very few people will have retirement incomes (in inflation adjusted dollars) that exceed their working earnings, so you will almost always have a lower tax bracket at retirement unless you’re already in a very low tax bracket.”
One word: children. We have them now and won’t have them in retirement. Huge tax benefits.
“Given that the Government can and possibly will screw with IRAs, I’d rather get the benefit now.”
No, it would be very difficult for the government to screw with IRA’s and highly unlikely.
The likely scenario: We are running substantial deficits at present, which means that we are undertaxed relative to government expenditures. Taxes will almost certainly rise in the future.
But guess what, neither of us know for sure how this will play out. So your statement that people are dumb to go the Roth route was a really dumb.
>1. Low return on your CDs and other interest bearing thingys.
I tell you, when I entered into a bunch of 3 year 5% CDs back in 2008, I figure that should be long enough to beat the low Fed rates but not long enough to lose out due to Fed raising rates in a few years. Some on HBB even thought I was nuts. But I wish now I had taken out 5 year CDs as I doubt the rate would be raise by 2011 looking at the way things are (double dipping).
My mom bought 5-year 5% CD’s with the IRA after my dad passed in 2007. He always used a Morgan Stanley broker and lost a lot, and it was a source of friction between them. She’s looking pretty smart now.
4. Lower than expected home sale price when sell it and move in with the kiddies
“when you sell it”
Which is better- inflation at 6% and interest rates at 5%, or inflation at 2% and interest rates at 1%?
After taxes, the low inflation/low interest scenario is better for seniors and other fixed income investors.
Our retirement financial model envisioned 4% average annual inflation, and a corresponding increase in each year’s withdrawals from our retirement savings. We haven’t had to increase the amount withdrawn each year, so it really doesn’t matter that we’re getting very little interest.
But seniors don’t generally buy the basket of goods that go into the reported inflation rate. Their spending is heavily weighted to health care which is going up a lot faster than other goods and services.
Their spending is heavily weighted to health care which is going up a lot faster than other goods and services.
Thanks, Polly. I had typed up a response to try to say what you just said, but much less succinctly. I deleted my post rather than spew a bunch of garbage here, so I’m glad you spoke up.
And don’t we really have 10%+ inflation and 1% savings interest rates?
Retirement? Dream on.
No, we DON’T have 10% inflation right now. We have spending records going back five years, since we retired and moved here.
BTW, the 4% inflation rate in our model was an amalgam of 3.5% general inflation and 5% medical cost inflation.
Nobody could have seen it coming!
What is with all this oil company bashing? Do we want 4 or 5 dollar a gallon gas? The population of this country has become a bunch of wooses’. Cry babies. Appalled at the spill. but still driving the suv. Upset over the bailouts, but can’t live without extended unemployment benefits. Can’t afford health insurance, but won’t give up a cell phone or cable tv. Every loser in the Gulf will be beating down the door to obtain free money from BP. Shame on this country and its citizens!
Hypocrisy is indeed the fatal flaw of most small-government conservatives. They only want to cut everyone else’s bennies. Theirs, of course, are sacrosanct. And when the oil washes up on their beaches, they want the government to swoop in and magically fix it. The same government that they wanted to shrink down until it was small enough to drown in the bathtub.
Rand Paul is a classic example. He’s a small gov Senate candidate. He’s told people they need to get off unemployment and get whatever job they can get, because, of course, unemployment is a government handout. But it turns out that Rand, who is a doctor, makes the -majority- of his income from medicare and medicaid. When pressed on this hypocrisy, he answered that he ‘deserved to earn a good living’. Sure is a big blind spot for an opthamologist. (Although he’s really only ‘certified’ by a board on which he, his father, and his wife sit. Yes, he made up his own certifying board.)
An even higher percentage of his pay will be from government funds when he takes office as a United States Senator in January. Personally looking forward to that.
Should be entertaining.
Does an eye doctor really make the majority of his income from medicare and medicade?
I seriously doubt it, for eye doctors and dentists both.
Nearly every other type of doctor, sure.
When in doubt, check it out. (Do you think the poor and elderly have fewer eye problems?)
From the Wall Street Journal:
” Tea party favorite Rand Paul has rocketed to the lead ahead of Tuesday’s Republican Senate primary here on a resolute pledge to balance the federal budget and slash the size of government.
But on Thursday evening, the ophthalmologist from Bowling Green said there was one thing he would not cut: Medicare physician payments.
In fact, Paul — who says 50% of his patients are on Medicare — wants to end cuts to physician payments under a program now in place called the sustained growth rate, or SGR. “Physicians should be allowed to make a comfortable living,” he told a gathering of neighbors in the back yard of Chris and Linda Wakild, just behind the 10th hole of a golf course.”
See? Government payments to doctors are alright, because doctors still get to make ‘comfortable livings’. The rest of us can fight it out in the pit.
Doctors have been managing at the last minute to lobby against Medicare cuts to physician payments for years now. This was the first time that Congress acted to late, so it looks like doctors will get one month of reduced payments, but then they’ll be restored. AARP and the AMA are strong lobbies.
Sorry Overdog, but young people don’t go to ophthalmologists, unless they want Lasik, for which they pay cash. They go to optometrists for glasses. Ophthalmologists make their living doing surgery for cataracts, glaucoma, laser tratment of diabetic retinopathy and retinal detachments - all problems of the elderly.
Medicare doesn’t cover dentistry. Medicaid does, but those benefits are being cut in most states. That’s unfortunate, because people with rotten teeth end up in emergency rooms with airway and life-threatening neck infections that originate in the mouth that need expensive treatment with surgery and antibiotics.
REhobbyist-
What do you think about Paul creating his own board to certify himself? Rather…peculiar, no?
But it turns out that Rand, who is a doctor, makes the -majority- of his income from medicare and medicaid.
How TF is a doctor getting paid by his patients equivalent to taking a gov’t handout? How is medicare being the source of funds diff than a private insurance company? He performs a service, and should be paid. Whether it’s medicare, or private insurance, or out of a private individual’s pocket, it’s not a handout in any way.
Your point of view is seriously skewed.
Your point of view is seriously skewed.
Oh yeah? Well skew you too, buddy!
Big Daddy Ron Paul seems to agree with me:
“By contrast, Paul’s father, U.S. Rep. Ron Paul, R-Texas, also is a doctor who criticizes deficit spending. But Ron Paul refuses to take Medicare and Medicaid funds, calling it “stolen money.” Under federal rules, doctors can opt out of the programs, which serve the elderly and the poor, respectively.”
kentucky.com
Big Daddy Ron Paul seems to agree with me:
Just because he feels it’s stolen money doesn’t mean it’s a handout for the doctor. I’m glad Daddy Paul doesn’t accept the funds, but if he did, it doesn’t mean he’s suckling at the gov’t teat…it’s the ones receiving medicare/medicaid that are (ie the patients)
Another Ru Paul apologist or just your general run of the mill hypocrite?
drummin, if Medicare is a government handout to the elderly, then it must also be a handout to the doctor who gets paid with it.
No it’s not a handout to Doctor.
Handout means getting paid for doing nothing.
Rand Paul actually provides a service to his patients and he gets paid for that. I am sure he could be more idealistic and refuse the Medicare patients. But just because some people are on medicare, why should a doctor who are foremost trained to treat ailments regardless of the person’s financial abilities refuse anyone?
It may not be hypocritical to accept it as payment (though Ron Paul thinks it is), but it’s very hypocritical to be against all government programs except those that benefit you.
though Ron Paul thinks it is
Care to back this up? Clearly Paul thinks Medicare and Medicaid programs are wrong, but where does he state it’d be hypocritical to accept them?
Okay, Ron thinks it’s immoral (’stolen money’), not hypocritical. Good point.
Alpha, it’s true that Rand Paul was foolish enough to create his own board of ophthalmology and dropped his American Board of Ophthalmololgy at least ten years ago. But he dropped it to protest the ABO’s decision to grandfather older ophthalmologists to have permanent board certification, while younger ophthalmologists would have to periodically recertify. He correctly believed that all doctors should have the same duty to maintain their certification. He did pass his boards and was ABO certified in the past.
Thanks, I asked about this in the thread above.
I wonder what effect it might have on a malpractice suit, and his insurance for such. Does board certification allow you to perform procedures you otherwise couldn’t?
Also, the grandfather clause seems like a nitpicky thing to get that angry about- otherwise why have so few other eye docs not followed suit? He had to call in his family to create a ‘board’, you’d think there’d be another competing board out there if it’s such an issue. It seems more like a convenient excuse- unless he’s just a crank. (Which may well be the case.)
Absolute rubbish!
I have seen so many anti Pauls response from you it is very hard to take you seriously. You may not notice it but you are absolutely blinded with your hate against the Pauls.
Well hypocrisy goes both ways. How about your own hypocrisy? How about the beloved government of yours actually fixing the oil fiasco and lead by an example for a change? How come the government of yours miserably failed in Katrina relief?
I know what your response would be. It was because of Bush, wasn’t it? It was Bush who personally leaked the oil and it was Bush who personally prevented the wonderful government from helping the Katrina victims. You sir are the king of hypocrisy. I suppose it takes one to know one…
Icantbelieveitsyoubutters- I actually like the Pauls. I’m glad Ron is in the House- but I wouldn’t want a House full of him, if you know what I mean. I was also hoping for Rand to win the primary, if for no other reason than to see McConnell get a kick in his goldenboys when his chosen-one lost. I hope Rand loses in the election, but if not he’ll be entertaining to watch in the Senate.
The fact that I’m skeptical about them does seem to be shocking to their wild-eyed followers/worshipers, but that’s just how the Great Sloth made me. Some of us don’t do the herd thing, it’s just not in our nature.
Some of us don’t do the herd thing, it’s just not in our nature
I love how you insinuate that those of us who like and support the Pauls are herd creatures. Nice touch.
Would it be too much to ask for you to try to make your points *without* making gross mis-characterizations of large groups of people?
Well consider me part of the Paul herd then.
I agree with you on this one butters. I won’t mention names this time but they know who they are. They cannot say one thing bad about a democrat.
Here: I say one thing good about a Democrat: Zel Miller, Democrat.
Those others are just windbags who are only preaching to the choir. In other words, they have nothing new to say. They are very predictable - BORING!
I love my SUV - it’s great for hauling my dogs, getting me up into the snowy mountains to ski or snowshoe. I don’t complain about gas prices. I’m pissed about the bailouts, and don’t complain about UE benefits. I was unemployed for 9 months and survived just fine. Re-built my savings in a matter of 3 months. Paid for my own health insurance during that time and for the next 9 months after.
I have a cell phone with no data plan. It’s 4 years old. I don’t have cable TV - just Netflix. I drive a 12 year old vehicle. I save about half of my take home salary each month.
I don’t need a lecture, thank you very much
But yes, the average ‘citizen’ of this country most certainly does.
How funny alpha sloth. They don’t even realize they’ve proved your point, do they?
I am ready to conjecture that a bottom in new home sales is coming within the next year, based on the record 33% drop in new home sales just witnessed, which were much worse than expected, and which nobody could have seen coming!
Economic Report
June 23, 2010, 10:00 a.m. EDT
New-home sales plunge 33% to record low in May
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - Sales of new homes plunged a record 33% in May to a record-low level after a federal subsidy for home buyers expired, according to data released Wednesday by the Commerce Department.
Sales dropped to a seasonally adjusted annual rate of 300,000, the lowest since records begin in 1963. Sales in March and April were also revised lower; April’s sales pace was 446,000 compared with 504,000 originally reported.
The results were much worse than expected, and economists had expected a huge 20% decline to a seasonally adjusted annual rate of 405,000.
…
Is that like…. “unexpected?”
So will this cause the gubmint to get serious and offer a 50k new home buyers credit.
New Home Sales Plunge to Record Low as Tax Credits Expire- AP
Sales of new homes collapsed last month, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer get government incentives.
Is it just me, or do others sense that the housing bubble reflation efforts have just run into a brick wall at a high rate of speed, which will lead to a spectacular collapse in the face of falsely inflated expectations that a housing bottom was already behind us?
I should add that this is the normal pattern with the collapse of historically prominent asset price bubbles. Look up the South Sea Bubble for example; Sir Isaac Newton lost a fortune on the large dead cat bounce that occurred after the first wave of bubble collapse.
“Is it just me, or do others sense that the housing bubble reflation efforts have just run into a brick wall at a high rate of speed”
Yep. Wile E. Coyote comes to mind.
Oh yah. Here comes the other shoe. Followed by a dump truck of shoes backing up to the housing market and unloading.
Beeeeep! Beeeeep! Beeeeep! (Warning signal of dump truck backing up.)
We can only hope. So far we have been disappointed.
I prefer NO tax credit and furthermore, to take away the tax deduction for mortgage interest, as well as HUD and other subsidies. By removing the subsidies, house prices will fall to affordable levels. Affordability is what we want. We also want people to pay their own way.
Bill,
Maybe you ought to share your thoughts with the ‘affordability experts’ who run Fannie Mae and Freddie Mac. It doesn’t seem like they get it…
“Affordability” in housing, preach it, Bill. We looked up the history on an average (East Ventura County/So Ca - blue collar neighborhood) and it went up $100K in 2 months, after some a-hole flipper slapped on some paint, put in some cheap cabinets, and did some misc things. No new roof, HVAC, you know, the real stuff. $5K-10K worth of “upgrades”, does not make for a stratosphere return. These flips are getting old.
I’m thinking of hanging my UHS license, so I can work to find a home before some a-hole UHS fipper gets to it. In our price range, all I am seeing are train wrecks or flips. Word around these parts is, the flippers are paying cash, and that’s why the prices have been sticky.
“I’m thinking of hanging my UHS license, so I can work to find a home before some a-hole UHS fipper gets to it.”
I’ve had similar thoughts. How hard can the UHS license exam be, given how dumb the average UHS who passed it appears to be?
The Ca UHS Exam takes a some studying, but you’ll ace it.
“a” delete/edit boo boo
I did it three years ago. Hey wipeout, I’ve been trying to get my mom to move from Ventura to Sacramento. Would you please buy her house?
Only one problem: She won’t “give it away.” 
She’ll really enjoy those… Sacramento ocean breezes!
Run Hwy, Run…
I started to look at land for sale (this evening) on the internet, toying with the idea of building a one-story Craftsmans (wrap around porch -adorable and different), but land is scarce and in the stratosphere too. Nope, hit a dead end there, too.
When did housing become such a scarce commodity? I am so sick of this. I was going to look at a “Short Sale” tomorrow, but it went contingent today. Interesting, that “Short Sale” has become a marketing gimmick, so maybe it’s best. I’m not interested in being held hostage for a deal,by a bank, either.
Signing off, hopeless renter in Thousand Oaks. (ex- homeowner)
Fed’s Next Move Is to Ease, Not Tighten, Says Michael Pento
Jun 23, 2010 Peter Gorenstein in Investing, Recession, Banking.
Few, if any, Fed watchers are expecting the U.S. central bank to raise rates when they announce their interest rate decision this afternoon. But most do expect the Fed to start tightening sometime in the foreseeable future.
Michael Pento, chief market strategist at Delta Global Advisors, is not one of them. Pento is confident the Fed’s next move will be to ease rates. “Ben Bernanke is a student of the Great Depression and he doesn’t want his tenure to be marked by the second Greater Depression,” he says. “So he will do whatever he can to boost money supply and fight deflation.”
How will he do that with rates already at 0-0.25%?
Obviously, they can’t lower rates. The Fed is also reluctant to start buying more mortgage-backed securities so soon after ending that program. The alternative, Pento says, is for the Fed to stop paying interest on excess reserves, a move that will drive banks to lend instead of sit on their cash.
Sounds like more quantitative easing is the ticket, given string pushing and rates stuck near zero.
NEW YORK (Dow Jones)–Stocks wavered early Wednesday as investors awaited word from the Federal Reserve on its latest interest-rate decision and the outlook for the U.S. economy.
The Fed’s outlook for the U.S. economy? When have they ever been right? The stock market waits for the Fed to tell it to go up or down?
Well let’s see, housing is “surprisingly” down, so I guess the Fed will only have good things to say. Then the market goes up and all is well with the world.
Nothing to see here, so move along.
What, you want stock prices to be based on GAAP and actual performance instead of emotion, manipulation and the workings of the Fed Gurus? Communist!
June 21, 2010, 11:36 p.m. EDT
White House budget chief Peter Orszag to quit: WSJ
By MarketWatch
LOS ANGELES (MarketWatch) — White House budget director Peter Orszag will resign his post next month, becoming the most senior official to leave the Obama administration so far, The Wall Street Journal reported late Monday, citing two unidentified administration officials.
The report said the president had asked Orszag for a decision before the autumn, when the administration must begin preparing the fiscal 2011 budget.
…
This is the same guy who fathered a love child with one woman and recently announced his engagement to another woman. Sounds like a real winner.
“Sounds like a real
winnerweiner.” There, fixed it for you.Orszag had a lot to do with the finances of health care reform. He’s deserting the sinking ship.
I don’t agree, Palmy. I think that they were embarrassed by Orszag’s behavior months ago and waited until now to get rid of him. He really is a little weiner - left his pregnant fiancee for a much younger and hotter ABC reporter. He has been married in the past and has two children.
“left his pregnant fiancee for a much younger and hotter ABC reporter. He has been married in the past and has two children.”
If one of my friends hooked up with a loser like this I’d slap her until she came to her senses. Why don’t women understand that a man who treats one woman like dirt will do it to the next? (And I’d slap a guy friend who was with a woman (or man
) who treated him like dirt too!)
I can’t believe nobody posted this :
New home sales plummet to record low
NEW YORK (CNNMoney.com) — New home sales plummeted to a record low in May, the first month following the expiration of the homebuyer tax credit. This snapped a two-month streak of gains.
New home sales declined 32.7% to a seasonally adjusted rate of 300,000 last month, down from an downwardly revised 446,000 in April, the Commerce Department reported Wednesday. Sales year-over-year fell 18.3%.
This is the slowest sales pace since the Commerce Department began tracking data in 1963. The prior record was set in September 1981, when new homes sold at an annual rate of 338,000.
A consensus of economists surveyed by Briefing.com had expected May sales to slide to an annual rate of 430,000.
Wow! Those economists are morons! Off by a third!
They were off by about 10,000 home sales last month (apprx 1/12 of 130,000) in a country with what, 130,000,000 total housing units?
Annualizing everything amplifies differences in estimates.
Maywood to lay off all city employees, dismantle Police Department
http://latimesblogs.latimes.com/lanow/2010/06/sheriffs-dept-to-patrol-maywood-while-city-employees-now-face-lay-offs.html
“The city of Maywood will lay off all city employees and begin contracting police services with the Los Angeles County Sheriff’s Department effective July 1, officials said.
In addition to contracting with the Sheriff’s Department, the Maywood City Council voted unanimously Monday night to lay off an estimated 100 employees and contract with neighboring Bell, which will handle other city services such as finance, records management, parks and recreation, street maintenance and others. Maywood will be billed about $50,833 monthly, which officials said will save $164,375 annually.
‘We will become 100% a contracted city,’ said Angela Spaccia, Maywood’s interim city manager.
Deputies from the East Los Angeles Sheriff’s Station will begin patrolling the 1.2-square-mile city by the end of the month, said Capt. Bruce Fogarty of the Sheriff’s Contract Law Enforcement Bureau. The annual cost of providing those services for the small city is estimated at $3.6 million, Fogarty said.”
As George Ure puts it. “A whole city has just been outsourced!”
“A whole city has just been outsourced!”
It already was, to Mexico. But that didn’t work out.
Maywood and Cudahy. Good luck.
Interesting interview on PBS last night. Judy Woodruff interviewing TARP watchdog, Elizabeth Warren. Great exchange. The bemused look on Warren’s face when Geittner’s name came up was priceless.
“JUDY WOODRUFF: And what’s your understanding of why the government — why the administration, why the Treasury Department isn’t doing more?
ELIZABETH WARREN: It is — it’s as if we had a boat that’s taking on gallons of water, and they’re trying to bail it with a teaspoon.
And, actually, I will give you an example of that. This program has now been in effect for 15 months. It has an allocation to try to deal with a very large problem. The allocation is $50 billion. And, so far, they have actually spent less than $200 million on mortgage foreclosure relief.
It is a — it is a badly designed program that, from the beginning, was too small, too slow, couldn’t be scaled up.
JUDY WOODRUFF: Elizabeth Warren, you also expressed concerns today about the number of banks that you said are dangerously exposed to commercial real estate loans. What did you make of Secretary Geithner’s answer on that?
ELIZABETH WARREN: Well, you know, he said he’s comfortable. And I’m — I just have to worry.
We have 3,000 of the 8,000 banks in the United States, by the definition of their own regulators, are dangerously exposed on commercial mortgages. We see a problem that’s coming that’s getting bigger in the years ahead. And six of the 19 stress-tested banks — just to give you an idea about concentration, six of the 19 stress-tested banks have commercial real estate mortgage portfolios that are larger than their Tier 1 capital.
This is an area — just to give you an idea, by the end of this year, commercial real estate mortgages will have shrunk in value, the property underlying those mortgages, by about 50 percent. Well, this is a big problem. And it’s a problem in our future, not in our past.
JUDY WOODRUFF: And I listened to your exchange with the secretary on that. And he didn’t seem to be nearly as concerned as you are. And is this a definitional difference here, as much as anything else? How do you explain it?
ELIZABETH WARREN: Well, you know, I do have to say, I really wish that the secretary had said, your numbers are wrong. Here’s some part of it you’re not seeing.
Instead, what he said is, the problem isn’t as bad as we thought it was going to be.
Google: PBS woodruff warren tarp. Links don’t post well.
Hi Guys:
We have a preliminary schedule for Friday the 25th. We are going to meet at the Capital Building at 10am on Friday, the exact location will be given to the people who contact Ben (or me at sd.re.b at hotmail dot com.)
Friday evening at 6pm we are going to have a meetup someplace close to Union Station. I imagine it will go on for quite a while so don’t worry about it if you are coming in late because of work or travel. Again, exact location will be sent to RSVP’ers.
Not sure yet of Saturday plans but I think they will involve some type of FB tour like we had in Vegas. Suggestions on areas easy to get to from DC are greatly appreciated.
If you have question don’t hesitate to post them on the Forum, here or e-mail me. :(Hi Guys:
We have a preliminary schedule for Friday the 25th. We are going to meet at the Capital Building at 10am on Friday, the exact location will be given to the people who contact Ben (or me at sd.re.b at hotmail dot com.)
Friday evening at 6pm we are going to have a meetup someplace close to Union Station. I imagine it will go on for quite a while so don’t worry about it if you are coming in late because of work or travel. Again, exact location will be sent to RSVP’ers.
If you have question don’t hesitate to post them here or e-mail me.
Sorry - no idea why that pasted twice. Blonde day I guess.
OT.
What an awesome game, US against Algeria in the world cup…
The world truly hates US. The linseman disallowed a perfect goal again. That makes 2 in a row now.
We just advanced to the next round. The haterz will be out in force now.
Since we are ranked #14, we should have low expectations in the next round. But this morning’s victory was sweet.
I don’t know if the WHOLE world hates us. I’m sure there are some tribal people somewhere that haven’t even heard of us.
But the linesmen certainly have, and certainly do.
Perhaps i missed it, but i thought you guys would be all over this:
“Sales fell 32.7% from the prior month to a seasonally adjusted annual rate of 300,000, the Commerce Department said Wednesday, in an unpleasant report that showed how the end of government support could affect the U.S. housing market.”
“We would be lying if we said the size of the drop was not shocking,” Miller Tabak analyst Dan Greenhaus said.
http://online.wsj.com/article/SB10001424052748704629804575324612455050700.html?mod=WSJ_hps_LEFTWhatsNews
SO … its gone from unexpected to shocking. That is from us that want a more realistic view of the market.
For some reason, a couple posts like that got filtered, making for a lot of repeat posts of some awesomely downbeat data.
One of the guys who shares my office is a relatively young family man in his late 30s. His third child was born a week ago. Has a house in Long Beach. Feels stuck. Hates L.A. His wifey loves LA. I don’t dare tell him my opinions about housing, having several mouths to feed, and so on. But he knows I “chickened out” of marriage, bailed out of real estate in the 90s and downsized my life to where I rent everything ever since. We don’t discuss those things. But he brings up RE things every now and then. One of them he brought up was today’s news of 33% drop in sales. Yup!
They will do okay as long as they both work. His wife makes good money. He makes okay money but could do better.
My own views have been honed from various data which boil down to the fact that the middle class concept was artificially inflated by the big credit bubble of the last 30 years. Without this credit bubble, people who do not have five years worth of cash savings to feed, clothe, house, and medicate themselves and their dependents are going to be hurting severely. This is why I bailed out of all obligations so that I could save money and prepare for the economic holocaust - that may or may not come.
Team Barry “we’re on it”
Inmates Get Homebuyer Tax Credits: Gov’t Report
(AP) 23 Jun 2010
Nearly 1,300 prison inmates wrongly received more than $9 million in tax credits for homebuyers despite being locked up when they claimed they bought a home, a government investigator reported Wednesday.
The investigator said 241 of the inmates were serving life sentences.
In all, more than 14,100 taxpayers wrongly received at least $26.7 million in tax credits that were meant to boost the nation’s slumping housing markets, said the report by J. Russell George, the Treasury Department’s inspector general for tax administration.
Some taxpayers received the credit for homes purchased before the tax break was started. In other cases, multiple taxpayers improperly used the same home to claim multiple credits. Investigators found one home that was used by 67 taxpayers to claim credits.
“This is very troubling,” George said. “Congress created and modified the homebuyer credit to stimulate the economy and help taxpayers achieve the American dream, not to line the pockets of wrongdoers.”
What do inmates want with tax credits, I mean, what can you buy in prison? Oh…. never mind.
“This is very troubling,” George said. “Congress created and modified the homebuyer credit to stimulate the economy and help taxpayers achieve the American dream, not to line the pockets of wrongdoers.”
I guess George never understood how such tax credits work (i.e., boost purchase prices for buyers, especially those with lower incomes, and generate revenue for bankers and speculators that made bad decisions).
Talk about NINJA!
New home sales dive 53% in West, 33% nationwide
Denver Business Journal
Sales of new homes nosedived in May, both in the West and nationwide, following the expiration of the federal homebuyer tax credit.
Sales of new houses in the 13 western states sank 53.2 percent in May from the previous month, and nationwide the decline was 32.7 percent, according to a joint report by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Nationally, it was the lowest new-home sales level since the government began keeping track in 1963. The decline was greatest in the West, although all regions of the country saw a steep month-over-month decline in new-home sales, the report says.
could this be the beginning of the capitulation phase?
I am sure what Merkel told Barry went right through one big ear and out the other.
Merkel Tells Obama Germany Won’t Heed Calls to Focus on Growth
Bloomberg) — Chancellor Angela Merkel championed German export strength as “the right thing” for her country, spurning President Barack Obama’s call to boost private spending as both leaders prepare for Group of 20 talks.
Merkel, addressing a business audience in Berlin today, said she told Obama in a phone call that cutting government debt is “absolutely important for us,” exposing a second point of contention ahead of the June 26-27 G-20 summit in Canada.
Reducing the budget deficit by 10 billion euros ($12 billion) per year “won’t put a brake on the world’s economic growth,” Merkel said, relating what she told Obama yesterday. Germans are more likely to spend money if they feel the government “is taking precautions” to ensure solid finances, she said.
Reducing the budget deficit by 10 billion euros ($12 billion) per year “won’t put a brake on the world’s economic growth,” Merkel said, relating what she told Obama yesterday. Germans are more likely to spend money if they feel the government “is taking precautions” to ensure solid finances, she said.
The Germans still remember what happened to their currency during the Weimar Republic.
Sadly, we don’t have anybody who remembers getting paid in confederate money to instill some caution in OUR government.
It’s okay, Soros chimed in on his behalf.
Gushing wide open again…
BP oil containment stopped after gas detected: coordinator ~ Jun 23
The containment system capturing oil from the Gulf of Mexico spill had to be removed Wednesday, leaving the gusher unchecked after a collision involving a robotic submarine, US officials said.
Thick pools of oil wash up along north Fla. coast
PENSACOLA BEACH, Fla. (AP) - Thick pools of oil from the spill in the Gulf of Mexico washed up along miles of Pensacola Beach overnight.
Dozens of workers used shovels Wednesday to scoop up the oil and orange-tinged sand. There were a few sunbathers at the beach, but no one was in the water.
Tar balls have been reported as far west as Panama City and heavier oil is predicted to wash ashore further east along the coast line in the coming days.
Officials also toured the beach. Gov. Charlie Crist said he called for more skimmers and was disheartened so much oil had slipped through the skimming operation.
Which are more successful, skimmers or government mortgage assistance programs?
Have I mentioned Chernobyl?
FDIC fund’s woes deepen
Call your florist. The federal deposit insurance fund isn’t coming home from the hospital any time soon, thanks to a sickly economy and the unstinting generosity of our leaders in Congress.
The Federal Deposit Insurance Corp. on Tuesday published the latest bleak prognosis for the fund it runs on behalf of bank depositors. The FDIC added a quarter to its estimate of the time it will take the fund to recover, marking the third time in two years that its so-called restoration plan has gotten stretched.
The FDIC said the fund, which is under water by about $21 billion amid a surge of bank failures, won’t reach its statutory minimum funding level (1.15% of insured deposits) for at least seven years. Even if the economy somehow muddles through the Gulf oil disaster, the still-gathering euro crisis and who knows what else, the FDIC’s estimate puts a full deposit fund recovery off till the first quarter of 2017, all else equal.
A reasonable worst case scenario.
http://www.marketwatch.com/story/how-to-profit-from-a-slipping-us-economy-2010-06-23?link=kiosk
“Retailers of discretionary goods — things that people don’t really need and are paid for with money people really don’t have — have also begun to turn pale. Why? All because the public appears to have stealthily gone on strike as job growth and wage expansion have quietly faltered.”
Charles Nenner, an Amsterdam-trained ex-physician, ex-Goldman Sachs analyst and mathematician now based in Tel Aviv:
“Nenner’s work suggests the U.S. economy will grow at a reasonably strong 3% pace the rest of this year, but then downshift to 1.5% in 2011 and then go negative in 2012 and 2013.”
“His cycles show that stocks will start to sniff out the slowdown in August and throughout the fall, and gradually begin the process of applying smaller price/earnings multiples on corporate earnings due in part to a fear of pervasive deflation. That will have the effect of launching the market on a ’slow, grinding’ path lower that may culminate below the March 2009 levels by 2012 and be punctuated by a major global armed conflict by 2013.”
“Going back to 7,000 on the Dow Jones would only take us back to historic norms in terms of mean regression, so figure there’s potential to overshoot to 5,000 to 6,000,” said Nenner, who is not a permabear or professional doomsayer.”
There will be 40% rallies along the way, as in Japan.
“All because the public appears to have stealthily gone on strike”
They make it sound like people have a choice.
Not to worry! The PTB have decided that a 75% consumer driven economy doesn’t need… consumers!
Every worse-than-expected data release has a silver lining.
Treasurys rally on record drop in new home sales
By Ben Rooney, staff reporter
June 23, 2010: 12:06 PM ET
NEW YORK (CNNMoney.com) — Treasurys rose Wednesday, with the yield on the benchmark note falling to its lowest level in a year, as investors reacted to a record drop in new home sales.
The selloff came ahead of a statement from the Federal Reserve and another big auction of US debt.
What prices are doing: The benchmark 10-year note was up 16/32 to 103-10/32. Its yield fell to 3.11%, down from 3.16% late Tuesday, hitting a 52-week low. Bond prices and yields move in opposite directions.
The 30-year bond rose 30/32 to 105-18/32 and yielded 4.05%
The 2-year note gained 3/32 to 99-28/32. Its yield rose to 0.72% from a median yield of 0.72% at Tuesday’s auction.
…
What a bunch of scared chickens…”Buk buk buk buk brrr-awk!”…”Buk buk buk buk brrr-awk!”
News alert! Feds do nothing! More at 11!
Man, I’m TOTALLY surprised!
Shocking!
Good.
At what point (if ever) will hope builder stock prices reflect dismal underlying fundamentals? So far, no matter how much “worse than expected” the news, home builder shares always go up.
UPDATE 1-Homebuilder shares rise despite sales dip
Wed Jun 23, 2010 1:33pm EDT
* Homebuilder index up nearly 2 pct
* KB Home up 4 pct
* New home sales fell 32.7 pct
NEW YORK, June 23 (Reuters) - Shares of homebuilders shook off two days of disappointing sales data to rise on on Wednesday despite a Commerce Department report that in May sales of new houses dropped to their lowest level ever.
After an initial dip immediately after Wednesday’s report came out, the Dow Jones U.S. Home Construction Index .DJUSHB recovered to rise 1.9 percent in early afternoon.
KB Home (KBH.N) was up about 4 percent at $12.36 per share while Ryland Group (RYL.N) was up 4.8 percent at $16.33.
The Commerce Department said on Wednesday that single-family home sales tumbled 32.7 percent in May to a 300,000-unit annual rate, the lowest level since the series was started in 1963. [ID:nLDE65M1WY]
In addition, anecdotal evidence shows that June has been weak as well, said Credit Suisse analyst Dan Oppenheim in a research note, citing a June survey of real estate agents showing a further decline in buyer traffic.
Luxury builder Toll Brothers Inc (TOL.N) said the same thing last week, issuing a statement that deposits were down 20 percent as high unemployment and other negative headlines such as the Gulf oil spill shook consumer confidence.
But several industry analysts said the data indicates the worst is over, creating a buying opportunity for those looking to scoop up builder shares at the bottom.
“We are encouraged by the equity reaction so far today,” wrote Ticonderoga Securities analyst Stephen East in a note to clients. “Given the significant miss versus expectations, and the media’s soap opera-esque reaction, we were braced for a more dramatic sell-off.”
…
Nope. No gaming and manipulation of stock here!
McChrystal gone. Good night and good luck, Stanley. Thanks for saying what needed to be said.
Yep and look who they replaced him with. The very guy Barry slammed back when he was a senator. Along with Plugs Bite-Me, who said his Iraq plan was not working.
So they put the fellow they called a failure back in charge. Funny how things work out.
wmbz, my Schadenfreude needle is pinned all the way over right about now. I even called my dem Senator’s office to outline my vote of no-confidence in the administration due to the events of the past few days. I pointed out that it seems the most they’re capable of is declaring war on Arizona.
In reading the various articles on the ‘net about the McChrystal situation, one of the things that McChrystal first had to confront in taking on Afghanistan was, apparently, the incredible infighting and backbiting and maneuvering among the various civilian clowns he had to deal with, including Madame Clinton, Bite-me, Holbrooke, etc. It completely shocked and demoralized him, like being thrust into a den of spitting witches. He saw there was no winning this thing.
He wanted out, and got what he wanted. But he left a warning for the American people.
Why didn’t he just quit? Would have been much more dignified.
Petraeus is a good choice. I’m surprised. I thought Obama would keep McChrystal.
“…But he left a warning for the American people.”
So did Cheney-Shrub:
“We need the US National Guard involved in these foreign Wars in order to successfully implement: “Shazam-Islam-is-now-Democracy”
General Betray-Us to save Barry now. I wonder what MoveOn thinks of this. Had it not involved killing bunch of innocent brown people, I would have laughed all week.
WaPo article: “President Obama met with the chief executives of more than a dozen major insurance companies at the White House on Tuesday to caution them against using new requirements in the recently enacted health-care reform legislation as a pretext to substantially raise premiums.”
So, provide more benefits due to The One’s mandates, but you better not raise your premiums. This guy’s taking page after page out of Hugo Chavez’s playbook.
Time to short all the health insurance providers?
Isn’t he little behind on this? Most of the health insurance companies jacked up their rates long ago. Then again, who cares about Barry and what he thinks now? He is lame duck already. Republicans might win at least on side of the house in November and here comes the gridlock. It’s time for health insurance companies to flip a bird on Barry. He won’t be able to do much.
I wouldn’t could the O-man out quite yet. He’s reminding me a lot of Reagan back in 1982. Back then, a lot of people were writing the Gipper off.
Along came 1984. An improving economy (in many parts of the U.S.), combined with a weak opponent (Walter Mondale), led to a Reagan re-election landslide. Yes, it’s true that less than half the eligible electorate voted that year, but Reagan was the winner.
I’m sure the R’s will probably do their best to come up with a weak opponent, but I wouldn’t expect Morning in America when it comes to the economy. Two years is a long time, but this Great Recession is a doozy. I predict O will have a tougher time than Reagan, even if it’s not his fault.
I’m sure the R’s will probably do their best to come up with a weak opponent, but I wouldn’t expect Morning in America when it comes to the economy.
I was living in Pittsburgh back in ‘84.
I can assure you that Morning in America did not describe the local economy. We were deep in the Rust Belt Recession.
And, IIRC, Reagan didn’t carry Pittsburgh orAllegheny County in 1980 or 1984.
Good thing those insurance companies weren’t raising rates and decreasing services and allowances already.
Oh wait…
Here’s the latest Tucson entry into the Darwin Awards competition:
Tucson police: Driver in beer run killed in crash
To which I say: I don’t care which brand you’re jackin’, no beer is worth your life.
In statewide news, we have:
Arizona Immigration Law: Immigrant Families Leaving State
The above link is from The Huffington Post. It seems that, in the comments after the story, the illegals aren’t getting much love.
And, on the national news scene, here’s an interview with closet HBB-er Meredith Whitney:
“No Doubt We Have Entered A Double-Dip For Housing”
Key point: Retail sales have been stronger only due to consumers not paying mortgages, retail sales have already topped as is.
Makes me wonder what would happen to consumer sales in particular — and economic activity overall — if there were a bank (or two) that decided, “$%^& it. We’re never going to get people to pay these big mortgages. They’re walking away in droves. Let’s just write the %$&* things down by 50%.”
Mortgage application volume fell off last week
Decline implies housing market struggling with government incentives
NEW YORK - Mortgage applications volume dropped off by 5.9 percent last week even as mortgage rates decreased, a sign the housing market is struggling with government incentives, according to a report Wednesday from the Mortgage Bankers Association.
Refinancing activity fell 7.3 percent on an adjusted basis during the week ending June 18, compared with the previous week. Purchase volume slipped 1.2 percent.
Customers looking to refinance existing mortgages accounted for 73.8 percent of total applications, down from 74.8 percent the previous week.
They could throw my azz in jail, but I would pop open and emergency exit and take the slid out. No way in hell I would have sat there.
AIR NIGHTMARE: Chaos as Newark Flight Diverted ~ Jun 23, 2010
Three hundred travelers started the summer with an airplane nightmare they will not soon forget.
Hundreds of Newark-bound passengers sat for four hours on a tarmac in a stifling cabin after bad weather diverted their flight from London in Connecticut and union regulations grounded it there.
To make matters worse, passengers said, the plane’s generators shut down for the second time, leaving them with no air conditioning and sweltering temperatures that reached 100 degrees.
Some people on the inauspicious Virgin Atlantic flight fainted from the heat, said Andrew Porwancher, of Princeton, N.J. One passenger was taken to a hospital, but airline officials said there is no evidence to link this with the flight.
“It was like four hours on the ground without any air conditioning. It was crazy. Just crazy,” passenger Beth Willan told CNN. “There were babies on the plane. And we are in dark and hot. You try to be patient but people were yelling and screaming.”
this is kidnapping and torture
what happened to that new law that maxed the time on tarmac at 3 hours?
That’s what I’m wondering.
wmbz, I’ve told my wife that I’d do the same thing- pop an emergency exit, even if it’s one that’s over the wing. After all, the engines are shut down and I think I can slide off the back edge of the wing without breaking something when I hit the ground.
My wife doesn’t want to fly anywhere with me.
“what happened to that new law that maxed the time on tarmac at 3 hours?”
It was an international flight and was exempt from the new regulations.
I used to like the British a lot more before BP and now Virgin Airlines. Revenge for decolonization?
Got oil?
Gulf oil spill: Gusher resumes full force after accident forces BP to remove cap
‘Top hat’ damaged by robot vehicle shortly after US interior secretary had praised device
…
“If you don’t like the way I drive, stay off of the sidewalk!”
Blame lil’ Opie, apologize to BP, begin drilling MORE wells below 5,000 ft…
“…It has spewed anywhere from 67 million to 127 million gallons of oil.”
Oil Industry:
Don’t…Stop!,…Don’t…Stop!, Don’t… Stop!
http://en.wikipedia.org/wiki/File:Gulf_Coast_Platforms.jpg
Filed under: WAKE UP America!…or…why did Halliburton move it’s Corporate headquarters to Dubai?
Don’t,…Stop! ….Don’t,… Stop! …Don’t,…Stop!
Hwy’s Jan 1st motto for 2010: “Keep Americans safe…protect CORPORATIONS!”
TrueHaskell & kikidee has already fired ol’ Hwy as a: “entry level cost-benefit analyst” & a “Risk Management Director”
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
&
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
BP Is Pursuing Alaska Drilling Some Call Risky
By IAN URBINA Published: June 23, 2010 (Robbie Brown contributed reporting) NYT
“…But about three miles off the coast of Alaska, BP is moving ahead with a controversial and potentially record-setting project to drill two miles (10,000+ FEET) under the sea and then six to eight miles horizontally to reach what is believed to be a 100-million-barrel reservoir of oil under federal waters.
But BP’s project, called Liberty, has been exempted as regulators have granted it status as an “onshore” project even though it is about three miles off the coast in the Beaufort Sea. The reason: it sits on an artificial island — a 31-acre pile of gravel in about 22 feet of water — built by BP.
Rather than conducting their own independent analysis, federal regulators, in a break from usual practice, allowed BP in 2007 to write its own environmental review for the project as well as its own consultation documents relating to the Endangered Species Act, according to two scientists from the Alaska office of the federal Mineral Management Service that oversees drilling.
The environmental assessment was taken away from the agency’s unit that typically handles such reviews, and put in the hands of a different division that was more pro-drilling, said the scientists, who discussed the process because they remained opposed to how it was handled.
“The whole process for approving Liberty was bizarre,” one of the federal scientists said.
In promotional materials, BP acknowledges that the Liberty project will push boundaries of drilling technology.
To reduce weight on the rig, BP has developed a new steel alloy for the drill pipe.
So much force is needed to power a drill over such long distances that BP had to invest more than $200 million in what it describes as the largest land rig in the world.
If approved, the Liberty will be the longest horizontal well of its kind in the world. BP’s production plan for the Liberty notes that drilling studies only support horizontal wells up to 8.33 miles. Any horizontal wells longer than that, the plan says, “have not been studied.”
The scientists and other critics say they are worried about a replay of the disaster in the Gulf of
Mexico because the Liberty project involves a method of drilling called extended reach that experts say is more prone to the types of gas kicks that triggered the explosion on the Deepwater Horizon.
The language of the “environmental consequences” sections of the final 2007 federal assessment and BP’s own assessment submitted earlier the same year are virtually identical.
HOW TO SELL TOOTHBRUSHES
The kids filed back into class Monday morning. They were very excited.
Their weekend assignment was to sell something, then give a talk on
productive salesmanship.
Little Sally led off: “I sold girl scout cookies and I made $30,” she
said proudly, “My sales approach was to appeal to the customer’s civil
spirit and I credit that approach for my obvious success.”
“Very good,” said the teacher.
Little Jenny was next:
“I sold magazines,” she said, “I made $45 and I explained to everyone
that magazines would keep them up on current events.”
“Very good, Jenny,” said the teacher..
Eventually, it was Little Johnny’s turn.
The teacher held her breath …
Little Johnny walked to the front of the classroom and dumped a box
full of cash on the teacher’s desk. “$2,467,” he said.
“$2,467!” cried the teacher, “What in the world were you selling?”
“Toothbrushes,” said Little Johnny.
“Toothbrushes!” echoed the teacher, “How could you possibly sell
enough tooth brushes to make that much money?”
“I found the busiest corner in town,” said Little Johnny, “I set up a
Dip & Chip stand and gave everybody who walked by a free sample.”
They all said the same thing, “Hey, this tastes like dog shit!”
Then I would say,”It is dog shit. Wanna buy a toothbrush?”
“I used the governmental approach of giving you something shitty for
free, and then making you pay to get the shitty taste out of your
mouth.”
ROFLOL!
More like a good free-market approach. Similar to the stores that give free samples of hot salsas and then charge you for a drink.
I love Little Johnny jokes, but alpha is correct. Take it from an old entrepreneur. You make far more money if you create a problem that only you have the solution to and this is the Holy Grail of almost every business.
Thanks for the laugh. Always like a good ‘little johnny’ joke.
At least banksters and Realtors™ were not the sole beneficiaries of the $8K first-time buyer tax credit. I suppose it makes perfect sense that at least some real estate investors are behind bars serving life sentences.
TaxWatch
June 23, 2010, 4:16 p.m. EDT
Prisoners, scammers profit on home-buyer tax credit
More than $27 million paid in fraudulent claims for housing break
The Fed isn’t panicking, but still getting worried
By Andrea Coombes, MarketWatch
SAN FRANCISCO (MarketWatch) — The Internal Revenue Service doled out more than $27 million in fraudulent claims for the home buyers’ tax credit on returns for 2008, including claims by prisoners serving life sentences and people who purchased their home before the credit was in effect, a Treasury Department report said Wednesday.
The IRS paid out $9.1 million to 1,295 people who were in jail at the time they said they bought a home, and 241 of those prisoners were serving life sentences, according to the report from the Treasury Inspector General for Tax Administration, which monitors the Internal Revenue Service. On average, that’s slightly more than $7,000 per prisoner.
The company is planning a luxury vacation-home development in Disney World in Florida. Vacant lots go on sale this week.
Another $17.6 million went to 2,555 people who bought their homes before the tax credit became law — averaging out to about $6,890 per person.
In other fraudulent claims, the total cost of which the Treasury inspector general was not yet able to quantify, the same home was claimed by more than one taxpayer. About 10,280 people got a tax credit for a home that also was used by another taxpayer to claim the credit, according to the report. See the full TIGTA report (PDF).
“This is very troubling,” said J. Russell George, the Treasury inspector general that oversees IRS activities. “While the IRS has taken a number of positive steps to strengthen controls and help prevent inappropriate credits from being issued, our audit found that additional controls are necessary to address erroneous claims for the credit.”
…
From today’s Zero Hedge: “Fannie Mae has just announced that it will no longer condone the same kind of irresponsible behavior that the Obama administration will soon be trying hard to codify into law, namely strategic defaulting. According to Dow Jones, bankrupt GSE Fannie Mae, announced ‘it won’t back new mortgage loans for seven years for homeowners who walk away from their mortgages although they were able to pay or did not seek a workout in good faith with their lender.’ Terence Edwards, an EVP for Fannie, after having been a recipient of trillions in moral hazard (and having a job as a result), finds out that being on the receiving end of a total lack of integrity is not quite as pleasant: ‘We’re taking these steps to highlight the importance of working with your servicer. Walking away from a mortgage is bad for borrowers and bad for communities.’ Oh, now they tell us.”
“More humor from Dow Jones, as the GSEs finally realize just how screwed they are:
“Fannie Mae said it also will sue borrowers who strategically default on their loans to recoup the outstanding mortgage debt in jurisdictions that allow for deficiency judgments.
“Strategic defaults are becoming more common, various studies show — a Morgan Stanley report pegged them at 12% of all home-mortgage defaults in February, up from “insignificant levels” three years ago. Lenders fear borrowers who “walk away” will greatly increase the industry’s foreclosure-related losses, which already total in the hundreds of billions of dollars.
“In addition, growing social acceptance of this behavior could have ramifications not only for personal credit histories and the health of neighborhoods, but also for the future of mortgage lending, according to those studying the issue.
“One possible reason the numbers are rising is some homeowners’ belief that lenders aren’t aggressively pursuing those who default, according to a report by the Chicago Booth/Kellogg School Financial Trust Index.”
“In addition, growing social acceptance of this behavior could have ramifications not only for personal credit histories and the health of neighborhoods, but also for the future of mortgage lending, according to those studying the issue.”
Sounds like only the government will be lending for the next little while, as private banks and their investors have no reason to lend in a market where borrowers can walk away from mortgage contracts with little or no recourse for the lender.
The Eurozone crisis is SO last spring (yawn!)…
Soros says Germany could cause euro collapse
BERLIN
Wed Jun 23, 2010 8:57am EDT
U.S. billionaire investor George Soros delivers his keynote speech during a Institute of International Finance (IIF) conference in Vienna June 10, 2010.
Credit: Reuters/Heinz-Peter Bader
BERLIN (Reuters) - Germany’s budget savings policy risks destroying the European project and a collapse of the euro cannot be ruled out, billionaire investor George Soros said in a newspaper interview released on Wednesday.
Germany
“German policy is a danger for Europe, it could destroy the European project,” he told German weekly Die Zeit.
Soros, who earned $1 billion in 1992 by betting against the British pound, added that he “could not rule out a collapse of the euro.”
“If the Germans don’t change their policy, their exit from the currency union would be helpful for the rest of Europe,” he said.
Chancellor Angela Merkel unveiled plans earlier this month for 80 billion euros ($107 billion) in budget cuts over the next four years — a package she hopes will bring Germany’s structural deficit within European Union limits by 2013.
“Right now the Germans are dragging their neighbors into deflation, which threatens a long phase of stagnation. And that leads to nationalism, social unrest and xenophobia. Democracy itself could be at risk,” he said.
“Germany is globally isolated … Why don’t they let their salaries rise? That would help other EU states to pick up.”
…
Feds deny part of Florida’s proposal on how to use foreclosure relief dollars, won’t pay for lawyers
by Kim Miller
The Florida Housing Finance Corporation got word today that the Obama administration has panned two pieces of its plan to use federal funding to help struggling homeowners.
The state is slated to receive $418 million of $1.5 billion awarded nationally to states hardest hit by the real estate crisis.
But just one part of the plan has been approved _ a program that will pay up to nine months of a struggling homeowners’ mortgage if the lender or bank agrees to forgive up to nine months of payments. This strategy is meant to help unemployed or underemployed homeowners while they get back on their feet.
The plans that were rejected include;
* $40 million in down payment assistance to eligible home buyers using Florida Housing’s First Time Homebuyers Program.
* $25 million to pay for legal counsel for homeowners who are in foreclosure but hope to keep their homes through mediation or loan modification or avoid foreclosure with a short sale.
The state’s Web site has the following notice.
“Unfortunately, it was determined that the proposed Legal Representation Strategy and Downpayment Assistance Strategy did not comply with the Emergency Economic Stabilization Act (EESA), which is the federal law that governs the use of federal funds allocated through the HFA Hardest-Hit program.”
Housing counseling agencies must now apply to the state to distribute the monies to citizens.
WOW! and I thought North American REIC was bad.
Link sent to me re: Sharks in China. Read the link …
http://israelfinancialexpert.blogspot.com/2010/06/special-report-secret-engine-behind.html
Local governmental officials, that are demanded from the government to produce double digit GDP growth numbers give real estate developers permits to build housing projects in return for bribes. They also get bribes in return for allowing the shark loan companies to operate under their jurastiction. some of them are active partners in shark loan businesses. For example, a party secretary of legal affairs, that controls the public security bureau, which is a court and prosecutor division of government in yongkang city, in zhe jiang province tired to run abroad using a passport in 2009 after he found out he can’t repay 60million Yuan. In li Every scheme has a ring leader who’s job is to collect money from all the participants in the ponzi scheme. When some of these ponzi schemes blow up, the party leaders always get bailed out first, and some even ask local business owners to lend them money, and then bail out their own personal fund. After that the ring leader turns himself in and gets protection from the local government.
Most of the funds that are collected in this classic ponzi finance go to local land purchases and real estate development. Part of the funds are used in order to pay back the rolling loan. The short term interest rate in this black market is very high and ranges between 20%-150% annual rate. The sources of the ponzi funds are diverse, as ordinary citizens, banks with corrupted bank officials, and state enterprises play the game.
Angry crowd gathered in the street of jishou city , in this city, 85% of households participated in the illegal fund scheme.
“…Angry crowd gathered in the street of jishou city , in this city, 85% of households participated in the illegal fund scheme.”
Forget 85%, …envision 50%,… 50% of 1.33 Billion people is how many?
Mama Mia, that’s alota “SelfTrueBeliever’s™ / “SelfTrueDeceiver’s™”
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
China = “TrueBambooLie™”
We don’t call them bribes. We call them “fees”, “permits”, and “licenses.”
I don’t get the lingering gloom. If things were that bad, why did the U.S. stock market barely drop today? It seems like now would be a good dip buying opportunity.
The Financial Times
Gloom lingers as weak Wall St sets tone
By Telis Demos in New York and Jennifer Hughes in London
Published: June 23 2010 09:00 | Last updated: June 23 2010 21:12
BST 21.10: The general market gloom continued on Wednesday, with weak US housing figures once again setting the global tone.
New home sales in the US reported a record drop last month – following the end of a government housing credit – to a record low of just 300,000 sales, or a 33 per cent drop-off from April to May.
The S&P 500 index was 0.3 per cent lower, after paring back losses. On Tuesday, the S&P closed down 1.6 per cent in a late fall on weak existing home sales data, which dropped 2.2 per cent in May.
“These data will only reinforce the notion that housing remains a sour spot for the economy and is vulnerable to downside surprises now that artificial government stimulus support is withdrawn,” said Jay Feldman, an economist at Credit Suisse.
Dropping sharply after the US housing report, the FTSE All-World stock index was down 0.5 per cent, its second day of declines following a string of 10 consecutive daily gains.
…
New home sales in the US reported a record drop last month – following the end of a government housing credit – to a record low of just 300,000 sales, or a 33 per cent drop-off from April to May.
Perhaps the traders are looking to buy houses when prices get back in line with incomes and rents.
Another RE investor on Yahoo Finance’s tech ticker yesterday predicts a 20% additional drop in RE prices. That would put a house I’m watching down to $180,000, which would be below the 2001 price. But I think the prices will fall 30% from now.
The problem is that more people will be exhausting their resources and lose their jobs when prices drop further. I could be one of them who loses their job.
Here is more evidence a housing bottom is in. Why else would mortgage bond prices be rising to ‘insane records’ if the worst was not already over?
Whoever bought the dip on these bonds before a federal guarantee was summarily slapped on them must have made a mint!
Mortgage Bond Prices Rise to ‘Insane’ Records: Credit Markets
June 23, 2010, 7:04 PM EDT
By Jody Shenn
June 23 (Bloomberg) — Mortgage securities with U.S.-backed guarantees are trading at record high prices on speculation that homeowner refinancing will fail to accelerate as supply of the bonds remains limited.
The average price of $5.2 trillion of bonds guaranteed by government-supported Fannie Mae and Freddie Mac or federal agency Ginnie Mae climbed to 106.3 cents on the dollar today, according to Bank of America Merrill Lynch’s Mortgage Master Index. That’s up from 104.2 cents on March 31, when the Federal Reserve ended its purchases of $1.25 trillion of the debt.
“It’s gotten insane,” said Scott Simon, the head of mortgage-backed securities at Newport Beach, California-based Pacific Investment Management Co., manager of the world’s biggest bond fund. “This is rarefied air.”
Data this week showing U.S. existing home sales unexpectedly fell last month and purchases of new houses tumbled to a record low underscore how borrowers’ ability to qualify for financing is limited even as rates drop. That’s good for bondholders because it means the loans backing the securities they own won’t be repaid at par at a faster pace, handing money back to investors who then must reinvest in new debt at lower rates.
Applications for mortgage refinancings are off almost 57 percent from last year’s peak reached in January even as home- loan rates approach new record lows, according to the Mortgage Bankers Association. Last week, the average rate on a typical 30-year loan fell to 4.75 percent, down from 5.3 percent in April, the group said yesterday.
…
Not only is financial reform premature, with the crisis still on the boil, but it is also D.O.A.
* OPINION
* JUNE 24, 2010
A Missed Opportunity on Financial Reform
How could Fannie Mae and Freddie Mac have escaped Congress’s attention?
By ARTHUR LEVITT
As a lifelong Democrat and public servant to four presidents, I had hoped the financial reform bill would be the best example of my party’s long-standing reputation for standing on the side of individual investors.
It’s not. The bill, already weakened by deal-making as it emerged from the Senate, has been bled dry of nearly every meaningful protection of investors.
Ironically, the authors of this bill are the same Democrats who normally would have opposed many of its features if they were in the minority. Now in the majority, these politicians are investor advocates in their press releases alone.
The Democrats had the chance to do this bill the right way. They should have been motivated by Congress’s previous failure to adopt meaningful reform, which left investors unprepared for the crisis. And they had the input of talented leaders and experts who attempted to help lawmakers deal with systemic risk and gaps in basic investor protections.
Whatever these positive contributions, Congress more than overwhelmed them with sins of commission and sins of omission. One of many bad ideas that made it into the bill: Public companies will now have a wider loophole to avoid doing internal audits investors can trust. This requirement was the most important pro-investor reform of the last decade, and it worked. Of the 522 U.S. financial restatements in 2009, 374 were at small firms not subject to auditor reviews.
But the reform bill about to be passed expands the number of small companies exempt from Sarbanes-Oxley audit requirements. When fraud is happening at a public company, small or large, investors care. Now, thanks to Democratic leadership, investors are less likely to know.
There are many missed opportunities in this bill, but these are the biggest:
First, Democratic leaders in Congress failed to revoke the 1975 law that prevents municipal bond issuers from facing the kind of regulation and scrutiny of the corporate bond market. If the municipal bond market melts down in the next few years, we’ll know who to blame.
Second, they failed to pass a meaningful majority-vote or proxy access rule for corporate ballots. Instead, thanks to Sen. Chris Dodd (D., Conn.), the Senate passed a proxy access rule that is comically useless: You need 5% of shares to get on the proxy. Very rarely do investors assemble such large stakes in any company.
Third, New York Sen. Chuck Schumer’s wise idea to let the Securities and Exchange Commission (SEC) become a self-funded agency will likely be killed by appropriators who are unwilling to give up the power of the purse.
Fourth, Democratic leaders left in place the confusing dual regulatory structure of the SEC and the Commodity Futures Trading Commission. A merger was necessary to eliminate regulatory arbitrage and corrosive bureaucratic turf battles, yet it didn’t happen.
Fifth, Senate Democrats failed to support Rep. Barney Frank’s (D., Mass.) effort to pass a new law to overcome the legal precedent of the 2008 Supreme Court’s Stoneridge decision, which allows third-party consultants, accountants and other abettors of fraud to avoid liability. Again, another sellout of investor interests.
Sixth, Congress didn’t deal with the massive problems of Fannie Mae and Freddie Mac. It’s one thing to fail to see trouble before it happens. Now, there’s no excuse. The central role played by these two organizations in the financial crisis is indisputable. Congress had a chance to fully restrict these agencies from anything but the most basic market-making activities, and it didn’t.
Finally, Democrats could have proposed a law obligating investment advisers to serve their clients’ interests above all others. That was in the House version of the bill, but the Senate punted the idea, and it’s is likely to end up kicked down the road even further.
…
Goldenmansucks sure has been very quiet “publicly speaking”, but they’re a nonstop chatter-box when it comes to “private whispering”