Bits Bucket For July 6, 2010
Post off-topic ideas, links and Craigslist finds here.
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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Low rates aren’t helping the housing market.
Lending standards prevent many from refinancing, qualifying for mortgage. ~ CNBC
“If the money was as easy as it was three or four years ago, I’d be the richest guy in town,” says Joe Bell, a mortgage broker and real estate agent in St. Petersburg, Fla.
An odd scene has been playing out lately in the offices of mortgage brokers and bankers around the country.
Mortgage rates have sunk to levels not seen in more than a half-century — a seductive 4.58 percent for an average 30-year fixed loan. Yet brokers and lenders report not a flood but a trickle of customers.
So what’s going on?
Call it a tale of the haves and have-nots.
The haves are those who stand to save money from refinancing and have the financial standing to do so. Since mortgage rates have been low for so long, most of them already have refinanced in the past 18 months. Doing so again wouldn’t be worth the cost for most.
The have-nots? Those are the millions of Americans pummeled by the housing collapse. They have little or no home equity or no money for down payments. Or they lack the credit or steady income to get or refinance a mortgage.
cue combo in 3…2…
It really boils down to these 3 things:
Home prices, home prices, & home prices!
Three things: Money, money, money.
Yeah.
Or they are going to give an even larger home tax credit in the near future.
The lower prices screams insolvency.
Didn’t we just leave this movie?
Anyone can have a McMansion and a Cadillac truck.
The lenders and salespeople make their commission. And the bill gets stuck on the back of the taxpayer.
Voila!
Oh, and most importantly - the politicians who support this race to insolvency get paid as well, with “campaign contributions.”
Not like anonymous 50 or 100 dollar citizen campaign contributions. These are “vote a certain way or we’ll stop the spigot” type contributions.
PAC money*.
* With the Supreme Court decision removing limits on corporate contributions, are PACs even necessary anymore?I don’t think either class of people stuck with a mortgage (even if they’re not–yet–underwater) can be called “haves”. They’re all “have nots”
Maybe “halves” and have-nots …?
I would argue that even for those of us who refinanced in 2003, rates are still not low enough to make refinancing a worthwhile proposition.
Office Vacancy Rate in U.S. Climbs to 17-Year High as Jobs Recovery Slows.
~ Bloomberg
Office vacancies in the U.S. rose to the highest level since 1993 in the second quarter as the sluggish economic recovery damps demand from corporate tenants, Reis Inc. said in a report.
The vacancy rate climbed to 17.4 percent from 16 percent a year earlier and 17.3 percent in the first quarter, the New York-based research company said today in a statement. Effective rents, the amount tenants actually pay landlords, fell 5.7 percent from a year earlier and 0.9 percent from the previous three months, according to Reis.
The residential RE vacancy picture resembles the CRE vacancy picture. Got shadow inventory?
Bloomberg
Case Says U.S. Housing Starts ‘Dead Flat in the Mud’: Tom Keene
June 29, 2010, 1:52 PM EDT
By Alex Kowalski and Tom Keene
June 29 (Bloomberg) — The U.S. housing market “is still bouncing along the bottom” as vacancy rates outpace historically low construction, said economist Karl Case, co- creator of the S&P/Case-Shiller home-price index.
The S&P/Case-Shiller index showed today that home prices in 20 U.S. cities rose 3.8 percent in April from a year earlier, the biggest year-over-year gain since September 2006. Sales got a boost from a tax credit aimed at reviving the industry that triggered the worst recession since the 1930s.
While the report was “fairly positive,” Case said, home building, which has driven the economy during past economic expansions, “is dead flat in the mud.” Housing starts have been at 15-year lows for the past 18 months, and vacancy rates are increasing, he said.
…
vacancy rates are increasing, he said.
Hmmm - curious as to what his data source is. Census reports that vacancy rates are still at/near historic highs, but haven’t actually been increasing since 2008.
Nevertheless - the important thing is that vacancies are still extremely high - this will continue to exert downward pressure on prices - regardless of how low prices actually are.
The only reason prices are flat lately is because interest rates have been falling, and the tax credit. Being that neither are continuing (unless something changes), prices should resume falling right about now.
Yes. inventory ~ -d/dx price.
DC news radio (WTOP), while a good source of news, is an unabashed housing cheerleader. Recently, they had some guy from Bloomberg news on who said that house prices were going up in some areas, and the commentators said it was great news. The Bloomberg fellow said, “Well, not great news if you’re a buyer.” There was a moment of awkwardness afterwards, but the interview continued. WTOP also routinely has “expert analysis” from the heads of realtor companies and other related sorts.
Anyhoo, they’ve been reporting all day about rental vacancies in DC being at very low levels, perhaps the lowest in the country.
So rising house prices and low rental vacancies? Looks like the government policies have been effective in DC, in extracting yet more money from citizens and funnelling it to the FIRE sector.
That anecdote strikes at one of my CORE peeves. Why do SO MANY have the unquestioning assumption that higher prices are good? If you’re selling they’re good. If you’re buying they’re bad. If you’re neither, they may be either good or bad, depending on your exact circumstances.
Ugh. I used to hate that Long & Foster cheerleader they have on every week. Makes me want to call in and scream.
My brother who is a union electrician would agree…he works mostly commercial buildings & renovations well they aren’t building or renovating….its the cash side jobs that’s keeping him afloat….
I’m sitting here waiting for my favorite plumbing company (Al Coronado) to show up. They’ve been called to assist me in the clearing of a clog beneath one of my commodes.
Drain water and debris are also backing up into the bathtub that’s closest to this commode. Blecch! I’ve tried with my plunger to clear this puppy. No luck. And I don’t have a closet auger.
Sigh.
OTOH, I’ve been meaning to call the Coronado boys about another plumbing issue I’ve been having around here. One of my drains was installed without a p-trap. That’s whatcha get in an old house that was constructed before the widespread use of building codes.
Need to get an estimate on p-trap installation — and it’s an old metal pipe of some sort. That’ll be a fun job.
Back at y’all later!
I was staying in a old small cabin at a family reunion. I noticed a bit of a smell when was unpacking, which I simply attributed to it being closed up, so I opened the windows. It wasn’t until I ran the sink in the bathroom and could hear the water draining through the shower drain that I realized that the cabin had a similar problem. So I coverd the shower train with a plastic cup when I wasn’t using it.
The guy from Al Coronado ran a snake and found Some Bad Thing in my drain line. It’s gone now.
And I have an estimate on the p-trap installation. Not cheap, but these guys do a good job. Time to get on the sales trail so I can afford to have it done.
found Some Bad Thing in my drain line.
eew :/
…some bad thing in the drain line. Hey, so long as it wasn’t a C.H.U.D. http://www.imdb.com/title/tt0087015/
Jimmy Hoffa?
No no no, wmbz, you’ve got it wrong my friend. The economy is recovering. The Wall Street shills at CNBC wouldn’t say it if it wasn’t so. They have “access” you know.
Obama says the economy is recovering, so you know it must be true.
Cheney-Shrub hand-off the US economy on Jan 2009: “It’s all there, you just have to… rebuild it! See ya!, heeheheehee”
http://weburbanist.com/wp-content/uploads/2008/11/chris-jordan-katrina-trash-pile.jpg
I luvs me the liberals.
18 months later and it’s Bush’s fault. I take it then that you blame Clinton for everything that transpired up until July 2002?
Everything ever is the liberal’s fault, right Eddie? Especially their war of choice in Afghanistan. That really hosed us.
Obama-wan Kenyaobi also has charged NASA’s primary mission to be “outreach” to Muslim countries. WTF? I wish I was making that up. Whether it’s our economy or where our country is heading in general, it shows how far we’ve become unglued from reality.
“…Whether it’s our economy or where our country is heading in general, it shows how far we’ve become unglued from reality.”
You had to wait for lil’ Opie to come along?… alls I needed was to watch Shrub lower taxes for the wealthy, while starting x2 foreign Wars…while throwing in the National Guard to support the Calvary.
Agreed, the ungluing is clearly a bipartsian achievement.
when 21 people from mehikan drug gangs are killed a few miles from the usa boarder….we need these guys in AZ not afghanny
while throwing in the National Guard to support the Calvary.
Calvary? You mean cavalry? I thought only little kids got those mixed up.
Hwy, where did I say that things were great and wonderful under Bush? Nowhere. But when you have Obama putting NASA on task with Muslim outreach (its foremost mission, no less), then I think you can say, “Washington, we have a problem.”
Don’t worry, Debtin, you know you’re winning the argument when they bring up Bush, bwahahahaha!
Calvary? You mean cavalry? I thought only little kids got those mixed up.
Calvary is the Latin name for Golgotha, the place where Jesus was crucified.
Primary mission? I think you’ve been Rushed.
Rushed? If by “Rushed” you mean to refer to Charles Bolden, administrator of NASA, and Al Jazeera, then I guess you’re right. Now why don’t you watch this and tell me what it has to do with Rush? I look forward to your thoughts.
In the video below, Charles Bolden, head of NASA, tells Al Jazeera that the “foremost” task President Obama has given him is “to find a way to reach out to the Muslim world and engage much more with predominantly Muslim nations to help them feel good about their historic contribution to science, math, and engineering.”
http://www.powerlineblog.com/archives/2010/07/026682.php
No Rush involved - straight from the horse’s mouth - NASA administrator Bolden. Not the primary mission, but one of three:
“When I became the NASA administrator — or before I became the NASA administrator — he charged me with three things. One was he wanted me to help re-inspire children to want to get into science and math, he wanted me to expand our international relationships, and third, and perhaps foremost, he wanted me to find a way to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science … and math and engineering,”
- NASA administrator Charles Boldon
n the video below, Charles Bolden, head of NASA, tells Al Jazeera that the “foremost” task President Obama has given him is “to find a way to reach out to the Muslim world and engage much more with predominantly Muslim nations to help them feel good about their historic contribution to science, math, and engineering.”
The Muslim world has made substantial contributions to math, science and engineering. Take, for example, algebra. Developed in the Muslim world.
Take, for example, algebra. Developed in the Muslim world.
Yep. The word Algebra actually is derived from the Arabic word Al-Jabr, which roughly means restoration/completion.
The Muslim world has made substantial contributions to math, science and engineering. Take, for example, algebra. Developed in the Muslim world.
That’s nice, but it doesn’t really seem like something NASA should be concerned with. NASA should be working towards the future, not the past.
We know about the Romans and their numerals the Greeks and the geometry. A real mystery with all their brilliance algerbra remained latent in Greece but was discovered by a lessor civilization.
I guess I’m missing something here. What’s wrong with that?
Teehee. Educational TV channel for muslims? AlJazeerabra.
Actually, that’s a perfect example of being ‘Rushed’. In the beginning of an interview, the guy makes several very broad, generic, ‘feel good’ statements of his tasks (’get kids interested in science’), and while mentioning the one most interesting to an Al Jazeera journalist , he calls it ‘perhaps foremost’, as if to apologize for saying it last. He never says it’s “NASA’s primary mission’, which was exactly my point. People like Rush (I note the link goes to a conservative website) pull that one line out to convince their dittoheads that the ‘Kenyan/muslim president is selling us out to scary foreigners’.
If his statements have caused you to believe that ‘NASA’s primary mission is outreach to muslim nations’, then you have been ‘Rushed’. QED
“One was he wanted me to help re-inspire children to want to get into science and math, he wanted me to expand our international relationships, and third, and perhaps foremost, he wanted me to find a way to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science … and math and engineering”
Packman, thanks for the quote.
I’m not seeing anything about Aeronautics or Space in there. But why stop there? Let’s task the National Park Service with helping people find work in solar energy and get the Federal Aviation Administration to do clean water projects in Latin America.
Alpha, go to the NASA website, and type “Muslim” in the search bar. The first document that comes up (labeled “No Slide Title”) is a pdf of a slide show. Here’s the bullet points for the second page of that:
Agenda
Overview of International Cooperation at NASA
Guidelines for International Cooperation
Non-Traditional Partner Approach
Cooperation with Muslim Majority Countries
(etc.)
Mince words all you’d like; primary, foremost, whatever you’d like, and then please tell me how Cooperation with Muslim Majority Countries fits into NASA’s agenda whatsoever, whether foremost or 56th on the list. How about if it said Christian Majority Countries? I’m sure that wouldn’t perturb you one bit either.
The Muslim world has made giant strides in practical testing of high-speed jet-fuel delivery to tall occupied structures. Nobody else has successfully conducted any such tests. These people are cutting-edge pioneers in this field.
The word mincing is calling a ‘task’ of the new director the primary mission of NASA. If you can’t tell the difference, then maybe you’ve been ‘Rushed’.
The Muslim world has made giant strides in practical testing of high-speed jet-fuel delivery to tall occupied structures. Nobody else has successfully conducted any such tests. These people are cutting-edge pioneers in this field.
LOL
Only problem with those missions was the inverse definition of success - the more loss of life the more successful. Hopefully that would be still be outside of NASA’s mission goal parameters.
Alpha - your unabashed raw partisanship is just shining through more and more each day. Here’s a thought though - maybe stop digging before the earth collapses around you. You just simply cannot hope to defend this.
Too soon for such jokes? Not if they are worded as well as you did….
“The word mincing is calling a ‘task’ of the new director the primary mission of NASA. If you can’t tell the difference, then maybe you’ve been ‘Rushed’.”
I didn’t use the word “foremost”; he did. I didn’t make up the slide show, NASA did. NASA stood by Bolden’s statement that part of his mission is to improve relations with Muslim countries. OK, so now they’re backpedaling. (No surprise there). But again, what if you substituted “Spanish speaking countries” or “Hindu majority countries”? WTF does it have to do with NASA?
NASA stood by Bolden’s statement that part of his mission is to improve relations with Muslim countries.
‘Part of his mission’ is not even remotely the same thing as ‘NASA’s primary mission’, is it? Who’s backpedaling now? That’s exactly what I’m saying: They pull one line out of an interview/speech/whatever, and pretend that line signals something much larger or more sinister. When you point out that’s not what was said, or it’s out of context, you’re accused of mincing words. When the words have already been sliced-and-diced and pureed by the people feeding it to you.
Algebra came from India. So did Trigonometry, calculus, quadratic equations etc. I don’t think Muslim countries have any contribution towards science or maths. In fact no contribution other than Oil. As per Wikipedia, some scholar from Arabia learned Algebra in India wrote his book.
“While the word algebra comes from the Arabic language (al-jabr, الجبر literally, restoration) and much of its methods from Arabic/Islamic mathematics, its roots can be traced to earlier traditions, most notably ancient Indian mathematics, which had a direct influence on Muhammad ibn Mūsā al-Khwārizmī (c. 780-850). He learned Indian mathematics and introduced it to the Muslim world through his famous arithmetic text, Book on Addition and Subtraction after the Method of the Indians.”
Algebra came from India. So did Trigonometry, calculus, quadratic equations etc. I don’t think Muslim countries have any contribution towards science or maths. In fact no contribution other than Oil. As per Wikipedia, some scholar from Arabia learned Algebra in India wrote his book.
Thanks for the info, Martin. I stand corrected.
In fact no contribution other than Oil.
The Muslim countries of the Mideast preserved a lot of the writings and culture of the ancient Greeks and Romans, while we euros were going through our own fundamentalism stage, and were burning books, and the people who wrote and read them. So I guess there’s that we owe them for.
I think they also made a lot of early advances in medicine and astronomy.
The only Muslim outreach program I’d do with NASA, is load up a Space Shuttle with a few B-53s, and do a “Al-Queda/Taliban Fly-In”.
Alpha, I’m not the one doing the backpedaling — once again, the director used the word “foremost” and once again, NASA was the one with the slideshow. It only makes sense that they would come out AFTER THE FACT and say that it’s PART of the mission rather than be laughed off the face of the earth.
So, maybe you can address that, rather than saying I’m the one parsing the words, or Rush Limbaugh or whoever. Perhaps while you’re at it, please address why it should be a part of their mission at all. I’ve only posted about 3 or 4 comments thereto, but you seem to be conveniently ignoring all of that.
Sloth, it seems you should stop digging. I also recommend reading Ben Franklin’s autobiography. He has an interesting bit about how in his youth he held very strong opinions and would speak up about them. He often held his opinions so firmly that once he was shown he was wrong he was in too deep to just admit he was wrong. He would go through all sorts of ridiculous argumentation to save face. As he got older he realized if he didn’t hold strong opinions it was easy to let them go when confronted with conflicting data. I think you could use some of that.
Why don’t you man up and admit that Al Jazeera and the head administrator of NASA going on about the foremost mission of NASA has absolutely nothing to do with right wing conspiracies and Rush Limbaugh, which is what you were implying by telling the person “I think you’ve been Rushed.”
Okay, you guys got me. NASA’s primary mission is outreach to muslim countries.
OK,first step is recognizing you have a problem. Now do you agree or disagree that this should be so?
The rolling eyes emoticon really showed’em sloth!
Cool. I always wanted to see a suicide bomber explode his/her vest in space.
10% unemployment 10% underemployment 10% severe underemployment
Dept of Finance employees fired for bad credit:
http://www.federalnewsradio.com/?nid=35&sid=1995749
Stock market pointing up…all is well today
Unemployment is high. It certainly appears that it is being under-reported.
What makes me wonder is why anyone would be surprised by these levels of joblessness and underemplyment? It was the housing bubble that allowed employment levels to sink to 4% or so. When every “helper” on the jobsite “needed” a F350 dually, that proves that something is amiss. Realtors, mortgage originators, house inspectors, etc. all “needed” Esplanades, BMWs, etc., too.
Roidy
yeah and don’t forget all the booze cruises backyard BBQ, get drunk parties 40th 50 birthdays anniversaries high school college reunions my bread and butter weekend business for years some of it vanished with the cash…the rest are really cut back
oh yes the house warming parties with a dj spinning till the early morn…….
We’re noticing a BIG dropoff in the amount of backyard fireworks from the HELOC heyday of 2005. The one house across the field from us that used to keep the garage door open and the noise going all night went into foreclosure and is still for sale after 2 years.
I also noticed that here in Tucson. Not to mention the amount of flags out on display. Far fewer than in the first year or two after 9/11.
California Lenders Pitch `Budget-Impasse’ Loans to Workers Facing Pay Cuts. Bloomberg ~7-6-10
Banks and credit unions will offer zero-interest loans and other assistance to the 200,000 California government employees who may see their pay reduced to the minimum wage as a result of the state’s budget stalemate.
The Golden 1 Credit Union, a lender that caters to state workers, will offer zero-interest loans to customers whose pay falls because of the stalled spending plan, according to a July 2 statement. About 1,100 legislative aides and gubernatorial appointees whose pay was stopped on July 1 already have access to so-called budget-impasse loans, said Donna A. Bland, the company’s chief financial officer.
“We’re trying to show our support for our state-employee members,” Bland said in a telephone interview. Golden 1, based in Sacramento, the state capital, describes itself as the sixth- largest credit union in the nation with about $7 billion in assets.
Bank of America Corp., the biggest U.S. lender by assets, will waive fees and offer emergency credit-line increases and mortgage-payment help to customers whose California pay is cut, said Colleen Haggerty, a spokeswoman for the company, based in Charlotte, North Carolina.
“We could survive off our savings for a little while, but it would be a real burden on us,” said Chava Yniquez, a 49- year-old technician in the Senate printing office who has used Golden 1 budget-impasse loans in the past. “It’s a lifeline.”
Are teachers pretty much immune from this as they don’t work over the summer? Here they can choose whether to be paid over the approx. nine months school is in session or to spread it out over the year. Do Cali teachers have that option?
I’m just curious about all this. No personal stake either way.
My sister is a teacher in another state… a district she worked in gives the option of being paid larger checks through the school year or smaller checks year round… totaling up to the same salary.
Assume people choose depending on how good they are at budgeting.
How many employees does the state of Calif have? Seems to me that they must have a lot more than 200,000.
Just googled. According to wikianswers in 2005 there were 329,000 people on the state payroll, so I’m guessing that its about 350K today. I’m guessing that the ones who got yanked down to minimum wage don’t have a union contract.
LOL so the unions don’t protect workers from big business anymore, they protect them from the government!
Hey, guys. I’m going out of town again this week. Obviously not on an early morning flight. Enjoy.
Happy travels!
Been on mid-summer travel for over a week now. Can’t believe how far Mr Market has dropped while I was tuned out from the news. But for the record, the DJIA hit a recent peak of 11,258 near the end of April, then over two months time, declined to its pre-July 4 holiday level of 9,686. That is a two-month decline of
(9,686/11,258-1)*100 = -14 percent, which occurred at an annualized rate of ((9,686/11,258)^(12/2)-1)*100 = -59.4 percent.
CAVEAT EMPTOR: Invest in the U.S. stock market at your own risk.
“Invest in the U.S. stock market at your own risk.” The risk follows the prices down. My current strategy is to buy X dollars worth each time the S&P falls 5% (1000, 950, 900, etc.). That way I win either way. Either prices are going up, or I am getting discounts. See you on the other side. Not speaking to you personally, but I don’t get why more people are scared to buy when prices fall rather than when prices rise. I was hoping to hit my 1000 buy point today, but it does not look likely.
You have to buy when the market is down.That is the way to make big money.I dont feel enough fear in the air yet.when people are sh@tting in their pants that is when you buy.
I really feel the market is manipulated by the big boys.they are making good money on the downside here.When the mom and pops throw in the towel they swoop in and buy.then when everyting looks all rosy they sell it back to mom and pop.Mom and pop got swindled again thinking the economy was recovering.I wonder how mant bought at dow 11,200?Greed and fear run the market.
Yep. The two biggest ways to lose are to put it all in at once and be subject to the market whims, or get more conservative when prices are falling. The best strategy is to only play if you do not panic and have cash reserves set aside which you can gradually shift in when and if it goes down.
And when DOW hits 4000 in four years and stays there for ten…
Guess it will work for the wealthy highly employed 30 year olds who will have plenty of spare cash and time to wait out the Market
I gave up and went back to DCA, but only with about 20% of my earnings.
Oops, I meant 20% of my 401k withholding…if that much.
No need to worry about stock indices if you have a lot of money in cash and treasuries to hedge for it. The S&P index is my favorite to invest in weekly.
Bill,
Normally I wouldn’t have issues getting onboard with that. It’s just that investor’s psychological state is SO fragile right now! ( I know ‘mine’ is )
A double dip ‘could’ just be the event that sends them to the hills for good. As a number of posts this AM have already noted, we’re expecting waves of layoffs in the pub. sector. What does that say about us when even a STATE job isn’t “safe”?
Exactly. My longer post has not shown yet. The key to beat the stock market is to have a cash reserve to invest more if it goes down further. Without it, you are trapped.
We may be extrapolating only bad news into the future of the stock market. It has such a variety of industries that any new development could be significant for most stocks. The S&P ARR has been negative over the last ten years. I consider that like a slingshot being pulled back to the maximum.
Just this morning Fox Business reported the ISM index dropped down to 53.8%, which does not bode well for the stock market. Yet it’s one fundamental sign.
Also the VFINX yield is at 1.81%, up from 1.71% a month ago. I am eager for investors to flee to the exits like September 2008 through March 2009 when people pulled money out of the stocks. Panic selling is great. Cash and treasuries will stay about the same and gold will probably go up significantly like it did since November 2008. It would be a great opportunity to shed treasuries more, and follow a strategy such as Natalie’s strategy, which, by the way, is a good strategy, IMO.
if you have a lot of money in cash and treasuries to hedge for it.
And there it is again.
How do you expect us younger folk to assemble all this cash to put in treasuries? Remember we haven’t had 15 years of a steadily growing stock market for our money to grow or compound. No matter how frugal my lifestyle, how healthy my diet, how virtuous my politics, or how swimmer-like my body, I can’t put away enough for a reasonable retirement just by stuffing raw cash into a mattress. most of us just don’t make that kind of money. I need the magic of compounding from SOMEwhere, and the war of savers has eliminated all of that.
Remember we haven’t had 15 years of a steadily growing stock market for our money to grow or compound….<snip>I need the magic of compounding from SOMEwhere, and the war of savers has eliminated all of that.
Agreed. Heck, just a few years ago I’d be making some decent interest income on the cash I’ve worked hard to save over the last 10 years. Now? On $100k in cash, I get about $90/month. Not exactly something to cheer about.
That’s a nice chunk of change. But having that cash really isn’t helping me get ahead at the moment. Even if I save half of my take-home (which I am, give or take…about $30k/year), I’m not building up enough money to have decent income off of or to compound significantly on its own. I’m still incredibly dependent on my day job, and will be forever if this keeps up…
“I can’t put away enough for a reasonable retirement just by stuffing raw cash into a mattress”
Nor does one need be that ‘young’ for that plan to fail us utterly. The one thing Perma-Bears need more than anything else in the world ( is to be smarter than the rest of us! )
Even if that means nothing more than ‘you’ being a little less well off than ‘they’ are. Oh we’ll blather on about the stock market being nothing more than an elaborate Ponzi etc. etc. but don’t look toward us for the slightest suggestion for those not already at Critical Mass and cash preservation mode?
drumminj,
At 90 bucks a month, no, NONE of us are getting anywhere? I’ve posed this very question time and again so while I’m glad it’s getting some airtime, still, no solutions offered.
In YOUR case, you have the good fortune to actually sock away -half- your income! For most family folks, that’s seldom the case? Btw, the wife just called and her employer has implemented a new “Work Log” where you are now *required* to document each-and-every-thing you do during the course of the work day!
Bathroom visits etc. included. Welcome to the New Normal.
Drumminj
There are bonds and treasuries that would yield a lot better than 0.1% per month. They have been there for a while.
Try the bond search engine on yahoo. You can probably get 5% with pretty minimal risk.
When you are in your 20s and 30s you should not have to have a lot of cash to buy stocks. You should just buy stocks and stock mutual funds. Even 100% in them is okay in my point of view as long as you buy regularly to dollar cost average. You get the advantage of age over us older types. I was 100% in stocks from when I was 30 years old to 40. If I was smart I would have started buying when I was in my mid-20s when I started earning money.
When you are older like me (in my 50s) you should have a lot of money in cash.
When you are in your 20s and 30s you should not have to have a lot of cash to buy stocks.
BiLA, it’s clear you’re a fan of the market and DCA. Personally, I have no interest in playing in the casino. I choose not to participate, for the most part (I have a rollover IRA that’s mostly cash, but holds some CEF, etc). I know I’m making a decision to have a reduced potential return vs reduced risk. That doesn’t undermine the assertion that the govt’s and Fed Reserve’s intervention in the lending markets is capping interest rates at an artificially low amount, and that is KILLING anyone trying to live off (or grow) their savings.
In YOUR case, you have the good fortune to actually sock away -half- your income!
Very true, DinOR, but it’s a choice. I’ve chosen not to have kids (and likely will lose a WONDERFUL relationship because of it - that one’s still in the process of playing out). I also live conservatively, drive a 12 year old car (just changed out the plugs and wires this weekend, rather than going for a hike or something more relaxing), haven’t taken a real vacation in several years, etc…
True, it’s a luxury to be able to make those choices and bank that much money..but I’m making sacrifices to do so.
There are bonds and treasuries that would yield a lot better than 0.1% per month. They have been there for a while.
Try the bond search engine on yahoo. You can probably get 5% with pretty minimal risk.
Thanks, James. I need to spend more time investigating that. I’m getting decent rates comparatively, through Zions and Discover Bank (the high ones on bankrate.com when I signed up for the accounts).
I put 10K in an S&P 500 index fund back in February 2002. Missed the bottom by about 3 months. It’s broken even on a couple of occasions. I look back and realize I could have made much more money had that 10K been in a passbook savings account :0
Despite the fact that the S&P 500 way off its peak, there was still a ways to go.
Hence my skepticism of the market.
drumminj,
Sorry, I hadn’t stopped to think of that. Prejudice on ‘my’ part. Most bass players/drumers I’ve known over the years are pretty much laid back/take it as it comes kinda’ guys. I didn’t mean to seem indifferent.
BUT… you raise an interesting point! And is ‘this’ the America we want for younger people? Stay single and rent a daylight basement OR…. die a pauper! If those are the ‘options’ we’ve laid out for your generation then clearly we’ve already given away the store.
Sez Bill in LA: “You get the advantage of age over us older types. I was 100% in stocks from when I was 30 years old to 40.”
And you’re 50-51 now, which means you were in 100% stocks from … 1990-2000!! How convenient that you to had money in stock during one of the best run-ups in the stock market in history. No wonder you’re so flush with cash now. Do you honestly think that will ever happen within my generation (X) or drummin’s (Y)?
Please, just enjoy your good luck.
DinOR, about “single vs. family.” We had a discussion on that during the DC meetup. Sure, we could all live like Bill in LA: childless, overworked, stingy, moving every few years, always renting, always eating those tasteless veggies. With some luck, we too could be financially cushy at the end of it.
But, it seems that this lifestyle is becoming the ONLY way to financial cush. I’m not saying that we’re all entitled to pergraniteel and an Escalade, but it seems that even a modest working-class life: small house, working car, one maybe two kids, is swiftly moving out of reach. In a country that used to be great, there is not even the option of a low-level lifestyle.
“small house, working car, one maybe two kids, is swiftly moving out of reach”
Have to admit I kinda’ got a chuckle out of that little ’stipulation’ it be a w-o-r-k-i-n-g car I must say!
Yeah, then there’s guys like me ( Bill’s age ) that tried to be all things to all people and are watching retirement ( cush or otherwise ) slip away like a Cub’s September Fade.
Missed the meet-up but I assure you I’ve been exposed to what I like to refer to as The Time Machine argument many a’ time on Patrick.net. All throughout ‘03-’06 we’d get assurances that if ppl your age just quit the whining and took the plunge “All would work out just fine in 2 or 3 decades?”
Well, ‘those’ posters had Cali’s Prop 13 at their backs and some ‘normal’ economic times at their backs! I just couldn’t belive… that after a quadrupling in home values in less than 10 years anyone would have the brass to portray that as the ‘norm’. IMHO all it was, a simple matter of older homeowners not wanting to upset the applecart as they scripted their exit! “everything’ll be just fiiiine”.
‘IMHO all it was, a simple matter of older homeowners not wanting to upset the applecart as they scripted their exit! “everything’ll be just fiiiine”.’
Succinctly worded. 20/20 hindsight tells us that the same ploy was most likely in operation in late 1999 with stocks. Parabolas do reach discontinuities.
I’ve chosen not to have kids (and likely will lose a WONDERFUL relationship because of it - that one’s still in the process of playing out).
Drumminj,
You may be loosing out on more wonderful relationships. I would never have agreed to have children but it happened without my consent.
Thank God, because having children was literally the greatest thing that has ever happened to me in my life.
For what it’s worth.
Mark:
could have would have, but I was never happy in a boring dead end job. So many people love those jobs so they can put their effort into their home life and kids….
Oh don’t get me wrong, I wish I was a father of at least a son. I feel kind of guilty not following a family tradition of naming the first son William or Charles, depending on the generation. But I could not afford it. I could not afford the lifestyle my parents had. And they were a one income family, one car family, in a farm town in California. I have to have three times my net worth to get to where they were.
I refused to be a participant in the middle class squeeze - two income families where one or both have two hour commutes per day and the kids are latchkey kids and get into trouble. Not my way. I see others to that game and they are prematurely aged.
Yes I will continue eating those veggies. What else to do?
“Not speaking to you personally, but I don’t get why more people are scared to buy when prices fall rather than when prices rise.”
Japan’s stock market began declining circa 1990 and has never really recovered much after two decades of declines. I realize this cannot happen here in America, but…
Japan’s politics and economics bears little resemblance to our own. I do not find extreme examples with different factors at play that helpful without a clear correlation and accurate probability modeling based on sound economic principles. Can you point me to such modeling, and the inputs used, for review?
Comparisons to Hilter, Japan’s economic collapse, armaggeden, etc. without a clear correlation or perspective is a weak form of argument, and has lost its shock value a long time ago.
And don’t forget Japan has relatively no natural resources compared to the U.S. They are xenophobic (more racist than the U.S.) and maybe restrictions on immigration here will cause us to go further into a depression, much like protectionism in the 1930s.
Hitler
And don’t forget Japan has relatively no natural resources compared to the U.S.
There are ways to level the playing field - such as oil drilling moratoriums.
Not saying they’re inappropriate - just that they inevitably will created economic/trade disadvantages for us.
They are xenophobic (more racist than the U.S.) and maybe restrictions on immigration here will cause us to go further into a depression, much like protectionism in the 1930s.
Indeed they are.
Want to become a Japanese citizen? Well, if you’re not ethnically Japanese, prepare for a very intrusive process. I’ve heard that it includes a refrigerator inspection to ensure that your food choices are sufficiently Japanes.
“Japan’s politics and economics bears little resemblance to our own.”
Scr3w the modeling. It’s different here in America. There is no way we can face a two decade slump like the one Japan has just endured…
They are xenophobic (more racist than the U.S.)
The Japanese seem to have a love/hate relationship with the west. Even notice how anime/manga characters rarely look Japanese (blond/brunette, blue/green eyes)? And more often than not one of the main characters in the stories is a westerner.
Yet as Arizona Slim pointed out, good luck naturalizing Japanese.
LOL - I remember in the 90’s how popular the western look was in Japan - I mean really western - with cowboy boots, 10-gallon hats, and the like.
“… I don’t get why more people are scared to buy when prices fall rather than when prices rise.”
It’s best to buy AFTER prices have fallen, not DURING the price fall. That’s because know one has any idea just how far and how long prices will fall before the bottom is reached.
For those who love history, give a glance to the Market’s history as measured by P/Es. Note how many times the Market’s P/E has sold well below 10.
If you are one of those that believe this Great Recession will be the greatest contraction since the Great depression then it may make some sense to you to think P/Es will also contract to lows not seen since the Great Depression.
Patience.
know one = no one
I agree with you, but i dont think any of us will know exactly when the bottom will occur. When it turns it usually turns sharply (not long term but at least from the low). Thus, the best strategy is to establish in advance how much and at what prices you are willing to invest and stick to your plan no matter how scary it may get. This assumes you don’t need the money for at least 5 years or more.
I agree with you, but i dont think any of us will know exactly when the bottom will occur.”
Maybe when PE ratios are below 10 as Combo suggests happens from time to time.
I’m sort of trading now
It’s best to buy AFTER prices have fallen, not DURING the price fall. That’s because know one has any idea just how far and how long prices will fall before the bottom is reached.
Yes.
Even if you don’t buy exactly at the bottom - even in hindsight if a stock bottoms at $3, it makes no difference if you buy at $4 on the way down or buy at $4 on the way back up.
combotechie,
Correct, and normally it’s ‘me’ that you find trying to take up the position that we tend to get too neg. around here? What’s more is that we’ve never had a scenario where we’re bleeding Gov. jobs ( and budgets ) against what ‘looks’ like a familiar backdrop?
Yes, and not only with the Price to Earnings RATIO drop, but the denominator- the Earnings- will drop. Quite the double hit.
What is priced into a high P/E is not only current earnings but the prospect of higher future earnings.
Whenever the prospect of higher future earnings is determined by Mr. Market to be faulty then the price of the stock will come down faster than the earnings come down. That’s because the fall of earnings destroys the prospect of future earnings right along with the reality of the current earnings.
But this price decline often over does itself on the downside just as it over does itself on the upside. Price declines scare off those investors who equate Price with Value (which are most investors, IMO). This creates a great time for value investors to pick off some very ripe low-hanging fruit.
But these value investors need money to buy these values, as in those who have the cash get to buy, those without the cash get to watch.
“Those without the cash get to watch.”
+1
“Note how many times the Market’s P/E has sold well below 10.”
It seems like the P/E has dropped to below 10 in every previous crash of similar magnitude to the current one. So a logical strategy would be to put your dollars into safe parking spots until the next P/E bottom below 10, then go all in.
Sounds about right to me.
(Well maybe except the “all in” part. How about “mostly in”? Did I mention I’m a big fan of diversification?)
but I don’t get why more people are scared to buy when prices fall ??
Because the gig is rigged in favor of the big boys…They move the market all by themselves…When the Elephants dance the mice get trampled…If you are a gambler, then I say go for it…Personally I would rather “Gamble” on a sporting event…
“but I don’t get why more people are scared off when prices fall?”
Again, for most people Price equals Value. There is no concrete way for the uninformed to determine value other than by price. It the price goes up then the value must have gone up as well so one should buy more. If the price goes down then some value must have been lost an thus it must be the time to sell.
This trick cannot be performed with items that possess in the minds of people just what the price of the items should be, just what the item’s value is. It’s tough, for example, to convince a shopper that a pound of tomatoes is a good buy if its price jumped from one dollar a pound to four dollars a pound. But this trick is done with stocks all the time.
It was rigged in favor of the big boys during the 80s crash (1987). So I’m glad that did not deter me from getting into stock mutual funds.
“CAVEAT EMPTOR: Invest in the U.S. stock market at your own risk.”
Goalllllllllllllllllllllllllllllllllllllllllllllllllll:
Mr. Bear = 1
Mutual Funds = 0
Churches, nonprofits hope for share of BP payout.
BAYOU LA BATRE, Ala. — God only knows what will happen to churches and other nonprofit organizations who say they are struggling for survival because of the Gulf oil spill crisis.
Months after the Deepwater Horizon rig exploded and its well started gushing oil, the British petroleum giant says it has yet to decide how to handle claims filed by religious groups and other charitable organizations that are endangered because people can no longer afford to contribute.
Pastor Dan Brown prays BP PLC comes up with a solution quickly: He said he filed a $50,000 claim last month over lost revenues at Anchor Assembly of God. His small, storefront church outlived Hurricane Katrina and is now struggling because of the oil crisis.
Shrimpers and oystermen left jobless by the oil spill in this seafood town can barely afford to feed their families and pay their boat loans, much less give money to their church, Brown said. Giving and tithing is down by $12,000 over the last few weeks, he said, and the oil spill will cost another $38,000 in lost revenues over the next year, making up the total of the church’s claim.
“You can’t tithe what you don’t have,” said Brown, whose congregation operates a food bank and gives away bread each Sunday to help struggling families. “We’re fighting for our lives just like a business.”
Problem with this is that it is a form of double dipping. Without the oil spill the oysterman would make $30,000 and give $500 to the church. The oysterman is going to claim $30,000 of lost income from BP and lets assume he gets it. He may be more nervous about future income, however, and decide to save the $500, not give it to the church. BP’s actions caused the fear, but are they responsible for giving the church the $500 the oysterman chooses not to give?
“BP’s actions caused the fear, but are they responsible for giving the church the $500 the oysterman chooses not to give?”
You could replace “church” with “coffee shop”, “barber shop”, etc. and the question is still a valid one.
I can see BP limiting this to “first generation” claims only.
Problem with this is that it is a form of double dipping
I agree, Polly. Was going to say the same thing.
Hope BP doesn’t pay out on this, or isn’t compelled to do so.
BP Geyser–
“You can’t tithe what you don’t have,” Message to Pastor Dan Brown-Get a real job.
Many food banks have reached out to retailers (our local Trader Joes and Ralphs for example) and they have been generously donating. With many of the seafood and related business going BK, the last business I am concerned about is a church. Religion isn’t “like” a business, it is.
“Religion isn’t “like” a business.” It is not like a textbook model business where there is an actual product being produced. Rather it’s where the art of the hustle is the only way to survive. People without much useful education or skills have to rely on manipulation to transfer money from your wallet to theirs. They often target the poor, the sick and the disenfranchised - selling them false hope in return for their life savings.
selling them false hope ??
Well, I agree with you that they are “selling” but but I must disagree with the “false hope” portion of your statement…
I am not sure what religion, if any, is most on target, but I can assure you any higher power would be smart enough to judge you on how hard you tried to be a decent person rather than how much you paid to the church, or on the basis of if you even went. I am not knocking ppl’s religious beliefs, other than the possible belief that how much you pay to the Church, or which if any religion you recognize, is relevant in the end.
I am not sure what religion, if any, is most on target, but I can assure you any higher power would be smart enough to judge you on how hard you tried to be a decent person rather than how much you paid to the church, or on the basis of if you even went.
My sentiments exactly. (Thank you, Sarah!)
Of course Sarah, that assumes a just and loving God….
“People without much useful education or skills”
Au contraire, the business model of religion has been with us since the beginning of time. I think you underestimate them and their abilities.
How many other businesses tap so many pockets and are so deft at hiding the skim while the evidence is there in broad daylight?
I believe the key word here is “hope”…And I say why should having hope be false just because it came from someone of some belief…
This BP spill is a travesty, any way you slice it, no matter who is making claims. If you live on or near the Gulf, even if not close to the area immediately affected, there’s a sort of dull despair about the situation.
I, for one, hopes this breaks the back of BP and that they have to pay until there’s nothing left and that the company goes the way of the First Bank of Ancient Rome. They’re not the only oil company and it would seem there are others more prudent.
BP sucks.
Oh, and Thad Allen is useless as tits on a boar.
“I, for one, hopes this breaks the back of BP and that they have to pay until there’s nothing left and that the company goes the way of the First Bank of Ancient Rome.”
You might as well hope for the UK to sink into the ocean. BP will not become extinct over this. Remember Union Carbide and Bhopal? The name is gone, that is all. The big money was preserved. The sheep can bleat all they want, they cannot slaughter a lion.
“BP will not become extinct over this. Remember Union Carbide and Bhopal?”
Yes, I tried to deposit some money in the First National Bank of Thebes the other day. It wasn’t there anymore.
Everything goes extinct eventually. Sometimes it takes a while, but it’ll come. BP may not be slaughtered by the sheep, but younger lions always challenge the old man in a pride. BP will be consumed. The smell of oil is in the water.
Funny. England is the last bastion of the Roman Empire. BP is owned by the First bank of Thebes.
Not in our lifetimes.
England is the last bastion of the Roman Empire.
Surely the Catholic Church counts as another, and more direct, bastion? It’s not a coincidence that its headquarters are in Rome. They probably own some BP stock, too.
Funny. England is the last bastion of the Roman Empire.
Umm…. no. The Romans left England by 410, but the Empire lasted until about 480.
After 410 England was occupied by the Saxons, Angles, Gauls, etc., who were not Roman. These groups form the basis for today’s England.
This is how I like to see economists’ comments in the MSM: Short and to the point.
Bloomberg
Rogoff Says U.S. Housing ‘Won’t Come Back’ for a Long Time
July 06, 2010, 12:39 AM EDT
By Sophie Leung
July 6 (Bloomberg) — The U.S. housing market “won’t come back” for a long period, Harvard University economist Kenneth Rogoff predicted in remarks at a conference in Hong Kong.
Speaking earlier today in a Bloomberg Television interview, Rogoff said he’s not among those predicting an increase in American home prices, saying “they have further to go.”
…
“he’s not among those predicting an increase in American home prices”
Its starting to seem like the REIC, the NAR, and the FBs are just about the only ones predicting an increase in home prices these days. When the REIC and NAR populations decline further and the FBs throw in the towel, I just might get serious about buying a house.
You mean to say that the MSM is starting to get a clue?
Realtors Are Liars
“Obama is as hopeless, helpless, clueless and bankrupt of good ideas as the manager of the Chicago Cubs in late September. This “community organizer” knows as much about private-sector jobs as Pamela Anderson knows about nuclear physics.
“It’s time to call Obama what he is: The Great Jobs Killer.”
(Las Vegas Review-Journal)
www dot lvrj dot com/opinion/barack-obama–the-great-jobs-killer-97758294.html
It’s time to call CONservatives what they really are: HYPOCRITES.
Bingo exeter….They are “Big Time”…
It’s never been a better time to be a name caller. That always fixes things.
Blue Skye,
( Thank you ) and to some poor schmuck who’s UN is about to run out.., it’s certainly not helping his/her cause? If you know anything about Chi’ Town Politics, it would be altogether too apparent that make-work jobs are what we specialize in!
This is where my greatest disappointment lies. I guess I just assumed if nothing else, we’d be able to contain unemployment by that alone?
We talk about a “double dip” like it’s going to be just more of the same ( only… for a ’second’ time? ) that’s -not- what ‘I’ am seeing. Think more like Shock Wave.
We talk about a “double dip” like it’s going to be just more of the same ( only… for a ’second’ time? ) that’s -not- what ‘I’ am seeing. Think more like Shock Wave.
A realization that is slowly growing for me (I know, duh?!) is the sheer number of people who were employed by the construction industry. For decades, If you could lift a two-by-four, you could bring home $30k/yr. Not to mention all the carpenters, plumbers and masons making close to six figures.
It’s all just GONE.
And now all these guys, who for years could make a living with nothing better than a GED, are finding the world has gotten very cold.
My realization includes all the lumber and cement and appliances and copper and furniture and roads and and especially oil.
Hey now, my siblings resemble that remark!
Bill,
As a life long White Sox fan, I love the Cub bashing, but even Obama isn’t that bad. Besides, “Good Guys Wear Black”, and they’re coming back.
Lip
PS: The housing market in Phoenix has a long way to go, and eventually (IMO 2-5 years) all of these short sales are going to have to be processed. The poor banks, they just can’t keep up with the backlog.
Lip
The new frontier: ‘Covering’ conservatives” by USA Today
“We wanted to understand them,” explained editor Bill Keller.
It’s difficult to exaggerate how bizarre this predicament is. In America, self-identified conservatives outnumber self-identified liberals by 2 to 1.
But here’s some even simpler advice for liberal editors unwilling to break out of the bunker: Just try to keep in mind that these strange alien creatures are also potential customers.
IMO they (the MSM) start with the pre-conceived notion that “all” conservatives are wackos. If conservatives out number liberals, they are alienating a huge % of their potential customers and therefore it’s not surprising that Fox News has risen to prominence while other MSM outlets are struggling.
has risen to prominence ??
With who, The Choir that they preach to each day ??
sc dave,
Check out the ratings of the news channels. Ratings means viewership and $$$.
Huffington Post says, “Fox News Ratings “Crazy High” During Obama Administration, #2 Channel In All Of Cable”.
Just that a news organization thinks of people as “customers” is an affront to the First Amendment. He just pretty much admitted that they have to print “all the ‘news’ that’s fit to buy.”
News is expensive. If the government pays for the news, it’s Pravda. If the people pay for the news, it’s FOX. I see no way out of this.
No, if the people pay for the news it is NPR, if corporations pay for the news it is FOX….
The “people” may be paying for NPR, but NPR is 100% Progressive Propaganda. I want my money back.
You left wing Progressives were not complaining when CNN, MSNBC, CBS, NBC, and ABC (all corporations by the way) were the only game in town. You seem to only like capitalism and the free markets when things are going your way. If you don’t like fox news or conservative talk radio, turn the channel and get over it.
Wow! And I haven’t met one of them personally.
Conservatives have been very effective in PR and denigrating the word liberal. That’s what the 2 to 1 # tells you. Look at election results. The reality is that there are broad differences even within groups self described as liberal and conservative and within groups who identify as independents. People may have conservative views in one area and more liberal or libertarian views in another. Look at how many Tea Party accivists want Medicare left alone??
Expect lots of government layoffs at state, local level.
USA TODAY
Here’s another headwind for a sputtering job market: State and local governments plan many more layoffs to close wide budget gaps.
Up to 400,000 workers could lose jobs in the next year as states, counties and cities grapple with lower revenue and less federal funding, says Mark Zandi, chief economist for Moody’s Economy.com.
The development could slow an already lackluster recovery. Friday, the Labor Department said employers cut 125,000 jobs, mostly because 225,000 temporary U.S. Census workers completed their stints. The private sector added 83,000 jobs, fewer then expected, as the jobless rate fell to 9.5% from 9.7%.
Layoffs by state and local governments moderated in June, with 10,000 jobs trimmed. That was down from 85,000 job losses the first five months of the year and about 190,000 since June 2009.
The Southern State Strategy for the Federal Gov’t:
“Don’t,…Stop!,…spending in our state…Don’t,…Stop!,…spending in our state…Don’t,…Stop!,…spending in our state…”
July 6 (Bloomberg) — Industrial countries are embarking on the most aggressive tightening of fiscal policy in more than four decades, led by the U.S. and Britain, as governments gamble they can pare debt without strangling an economic recovery.
Rich nations will reduce their primary budget deficits, excluding interest payments, by 1.6 percentage points next year, the most since the Organization for Economic Cooperation and Development began keeping records in 1970
Austerity meets American consumer economy:
http://crazycrashes.files.wordpress.com/2007/11/1903-cannonball-express-wreck.jpg
That is actually good news.
Only if there is private employment for the people.
Yes, I agree it’s good news. It means cuts in government spending. And that is sorely needed, as well as the solution to their pension problems. We need real significant across the board spending cuts in all government spending.
It is easy to say it, and to some extent I agree since I’ve seen the sloth. But damn, my family dodged a bullet this year. My wife, who is a school psychologist in the county, just barely escaped a layoff for next school year. The county cut 23 of 90 positions in that area.
“My wife, who is a school psychologist”
My apologies for my prior inaccuracies in guessing your gender. Gheesh!
although reducing headcount helps its the pay and benefits that need to be addressed…
scdave,
Exactly, and any time the ‘axe’ comes around, it just strikes me that many pub. employees almost ‘prefer’ to take their chances at the Job Wheel O’ Fortune than give an -inch- where pay and benefits are concerned?
When what they really should be concerning themselves with is right-sizing their comp. package to the realities of the current econ. conditions. THAT is what we’ll need going forward!
I’m not sure what the proper comparison would be, since the job only exists in the public domain. There are private school psychologists, but they work on a fee-for-service basis for rich parents (~$100-$200/ hr) and for the districts. A fully employed private psychologist would far out-earn the public employee.
The issue is that the free market for these services wouldn’t support the total number of psychologists in the field, since it’s a majority of the most problematic children come from poorer families. If you are going to make an argument that then they shouldn’t exist and good riddance, then I can respect your position, but there are laws on the books that say children are entitled to a free and appropriate public education. Special education costs $$$$.
“When what they really should be concerning themselves with is right-sizing their comp. package to the realities of the current econ. conditions. THAT is what we’ll need going forward!”
I think the majority of them have already spent that future income. If they take a pay cut, they can’t make the debt payments. They have nowhere to go.
AmazingRuss,
And of that, I have no doubt. The same would go double for all the military guys ( I know ‘I’ used to think that way? )
But change it must. We need to start providing the pub. sector w/ the necessary tools to live within their means on a personal level too. It would benefit them greatly, probably be less stressful as well. Good point sir.
than give an -inch- where pay and benefits are concerned ??
Yeah…They are “brothers” until they are not…The brotherhood just got its first big test in a very long time and the brotherhood answered with a big F,,,em…Its fend for yourself time…I got mine and thats all I care about…Solidarity union my a$$…
“We’ve got the wrong people in the wrong place with the wrong skills,” said John Silvia, chief economist with Wells Fargo Securities. He said construction workers in California or Florida and auto workers in Michigan will have to relocate and retrain to find new jobs.
“As many as half the people who lost their jobs will have to find something else to do,” said Silvia.
Home building lost nearly 1 million jobs since the start of 2008, while the auto industry shed 300,000 manufacturing jobs due to plant closings. The finance and real estate sectors lost more than 500,000 jobs.
“Those are the areas with the biggest bubbles, and so it’s not a surprise that those are the areas with some of the biggest job losses,” said Scot Melland, CEO of Dice Holdings, a provider of specialized career web sites. “Many of the jobs we lost are never coming back.”
http://money.cnn.com/2010/07/02/news/economy/jobs_gone_forever/index.htm
MSM is allowing itself some gloom and doom while most people are away on vacation.
“Those are the areas with the biggest bubbles, and so it’s not a surprise that those are the areas with some of the biggest job losses,” said Scot Melland, CEO of Dice Holdings, a provider of specialized career web sites. “Many of the jobs we lost are never coming back.”
See telecom/dot-com 2001.
I worked in the biz - and saw companies like Nortel go from 100,000 to 30,000 employees within about a 3-year period. When you’ve got way too many people making stuff that there just isn’t a long-term demand for, it’s appropriate that they move to other industries. The process can be painful, but it’s necessary.
Unfortunately in the case of autos it isn’t so much that demand’s going away, it’s that other countries can make them better and/or cheaper than we can. There wasn’t really an auto-bubble, other than a relatively small coattail increase due to the housing bubble.
“Unfortunately in the case of autos it isn’t so much that demand’s going away, it’s that other countries can make them better and/or cheaper than we can. There wasn’t really an auto-bubble, other than a relatively small coattail increase due to the housing bubble.”
You’re unquestionably an adherent to the Goering/Goebbels propaganda “If you repeat a lie frequently enough, it becomes fact for the masses.”
Actually, my understanding is that demand is currently below the replacement level of 12,000,000 cars sold per year.
But what’s that replacement level based on? The number of cars sold per year has historically been well above replacement level.
Apparently 12,000,000 cars get scrapped every year, how that’s estimated I don’t know, maybe the DMVs keep track of that. Of course as frugality kicks in I wouldn’t be surprised if that number were to decrease.
During the fat years a lot of clunkers would be sold at auction and taken to Mexico. Not 12,000,000 of course. I’m guessing that a lot of those clunkers won’t be exported anymore.
In Colorado,
That has been my understanding and the practicalities of the arrangment for years. Especially w/ vehicles from the Southwest. The scrapping trade is an industry in MX.
Nowaday’s I’m not too sure.
The problem is that technology has decreased the number of jobs that are needed to produce what people with money need. Thus rising unemployment. Natural resources will become the limiting reagent in terms of cost.
Globilization exacerbated this in terms of the USA. The credit bubble was used to mask this.
There are several solutions
1. Allow unemployment to rise, and allow extreme third world type poverty to be common through out the US. The middle class will suffer from increased crime, disease. The stability of the country might be threatened as people with nothing to live for become more extreme in their protest.
2. Tax those with money and create jobs. See the rich hide their money or move.
3. Kill outsourcing of jobs and global trade, watch stock market tank and inflation rise. Increase chances of war and riots in other countries.
4.
4. Stop making education so expensive with government subsidies, so that people who are less skilled can become more skilled easier, and get jobs.
Pac:
We still have to change the laws so people on UE can go back to school for 6-12 months to get retrained…..if you dont want to go to school then you will be assigned a “internship” in your field to keep your resume fresh
I mean almost all guvmint agencies hire young college interns so why not experienced unemployed people for 6-12 months?
work 25 hours wk and your Cobra will be paid for.
Also in the case of American automakers, isn’t it fair to say the company put more time into the financial services side of the business than in product development and in protecting the brand identity of their autos? At some point that catches up with you.
IE, GMAC
“He said construction workers in California or Florida and auto workers in Michigan will have to relocate and retrain to find new jobs.”
Relocate to where and retrain to what? What sector of the economy is creating jobs and in what part of the country?
We had people uproot from the Norfolk, VA area after the Ford plant closed to go to Deerborne, MI.I think some of them had issues of potential job loss in a year after making the move.
They have to retrain to be realtors and scrapbook makers and candle-shop keepers, of course. Duh.
Imagine selling your house and uprooting your family for a construction or manufacturing job. And then construction dries up and manufacturing is outsourced…
No wonder people would rather collect UI. I’m not sure I blame them.
It’s all about the job security.
Before we married my husband was in construction. I told him no way was I having children w/o insurance in the family. Don’t know why I was so insistent. I worked at the time, and my company was self insured. I ended up paying $15/child.
But the point is he got his butt in school, earned a degree in a new and then burgeoning industry and has done quite well ever since. And yes, we did move from the coast to this less expensive area so I could stay home and we could save money.
I supposed I’m a hard a** about the issue because we’ve done it ourselves. You do what you’ve got to do or die on the vine. The whining won’t change anything.
earned a degree in a new and then burgeoning industry…
But that’s what we don’t have anymore. So it’s not really a question of getting off one’s lazy arse, or moving to where the jobs are. There are no burgeoning industries out there.
My wife works at the local library and tells me that there is no shortage of people who show up wanting to use the computers to search for a job. They often can’t get a library card because they don’t have any proof of local residency. Our area attracts these “job gypsies” because we often make those “Top 10 places to live” lists. And it is a great place to live, IF YOU HAVE A GOOD PAYING JOB, and those have been in short supply out here for the past 10 years. And the cost of living, while not California Crazy, isn’t exactly cheap either. So these folks end up moving on. There are a lot of inactive accounts at the library. I’m not sure if they ever expire.
In Colorado,
Sure you didn’t mean Oregon? LOL, wow does ‘that’ ever sound familiar! Just so many barista jobs to go around in PDX. But we’re hip, incredibly hip.
Just got confirmation from Mrs. D that several employees walked out before they would subject themselves to writing down how much time they spent in the bathroom! ( From her cell phone… DURING lunch, in the parking lot! )
One was a senior engineer that had been there for years. Certainly longer than 30 y.o wizz kid that instituted the plan. Oy vey.
DinOR,
Sounds like the wizz kid’s plan worked. “How can we reduce headcount without exposing ourselves to wrongful termination issues?” “Hey, how about we count each employee’s bathroom tissues!”
It seems like a standard, but stupid, play from the manager’s handbook. Make work unbearable enough to cause X% of the employees to quit.
It seems like a standard, but stupid, play from the manager’s handbook. Make work unbearable enough to cause X% of the employees to quit.
Unfortunately, the quitters are usually the people you don’t want to lose.
That’s why it’s a stupid plan.
Many companies cause Brain-Bleed through plans like this.
Many unemployed Americans are disappointed at the pace the Senate is moving to approve an unemployment extension bill that would extend the unemployment benefits deadline for an estimated two million Americans who watched it expire earlier this year.
A reader from Michigan, who was laid off in November 2008 after in just three companies in the past 40 years wrote, “I do not view the unemployment extension as a career, but as fuel for my vehicle, to help me and my family find its way OFF of this congested expressway of unemployment in America.”
A reader from South Carolina, who had her friend and her friend’s children live with her since the friend was denied an unemployment extension wrote, “It’s an outrage, and a shame, that our citizens-the same ones singing the national anthem on Sunday night- are being forced to wait to receive a decision on [an unemployment extension] while the congressional people get to go on a family vacation.”
“It’s an outrage, and a shame, that our citizens-the same ones singing the national anthem on Sunday night- are being forced to wait to receive a decision on [an unemployment extension] while the congressional people get to go on a family vacation.”
No, the outrage is that “our citizens” feel that they are entitled to the fruits of others’ labor simply because they have been unemployed for almost 2 years.
Really? You mean the contributions I make to the unemployment insurance pool cannot be relied upon?
Sez you? BHWHAHAHAHAHAHAHA.
Ok.
Really? You mean the contributions I make to the unemployment insurance pool cannot be relied upon?
Your statement would have merit if unemployment benefits were paid for only out of unemployment insurance pools. But we passed that point long ago; much of unemployment is paid for now by U.S. treasuries.
To expand - as of April 34 states had insolvent UI funds, and had borrowed $38.8B from the feds. Estimates at this point are for $90B total borrowing by 2013.
(Like most recent estimates I’m guessing those will prove to be optimistic)
Irrespective of the solvency of the risk pool, the sanctimonious whining about unemployment is lame. I contribute every week for years, I reap when necessary. Disbursing benefits is its’ fundamental purpose.
End of story.
But we passed that point long ago; much of unemployment is paid for now by U.S. treasuries.
Exactly.
I was on UI for a while…while it was still a pool funded by my previous employers, rather than the taxpayers.
Well, towards the end the taxpayers were chipping in $25 each week. But I took a few hours of contract work here and there (which messed up my UI benefits), which turned into me having 3 contract gigs at once, one full-time, and two others amounting to about 15 hours a week..which led to a longer-term full-time contract gig. I have no sympathy for someone not finding any work in 99 weeks, and they certainly don’t deserve to have money forcibly taken from me and given to them.
So you wouldn’t mind then if, in order to meet the shortfall, the government increased the price of UI. And subsequently companies, in order to meet these additional costs, had to lay some people off. One of those people they laid off happened to be you?
End of story.
Sorry, Exeter, but that’s not the bottom line just because you say so. Sure, it’s presumably an insurance pool that you, as a former w-2 employee, are entitled to draw from. But are you arguing that you’re entitled to it when you’ve exhausted the contributions made by your employer? I already know the answer to this one, but if that’s the case, you’re arguing that you’re entitled to the taxpayers’ money.
“Presumably”? This is you re-writing risk pool mechanics, not me. I’m not “arguing” anything, I’m stating fact.
Well, right ‘Presumably’ ( we wouldn’t ALL get laid off at the -same- time..? ) Would we?
Hence the remaining… 95% of us that still have jobs continue to feed into the system to the betterment of all. I don’t have issues w/ that.
I guess the bottom line ( and I got a -very- upsetting call from Mrs. D just this AM ) is that she’d get token benefit when compared to others that fell in the “first wave”. What grinds me is that we went about this as if it were ‘only’ a one-time-deal and the economy was just cutting the ‘fat’ anyway? Now the cupboards are bare.
Not that she got let go, she’s more ‘hacked’ off ( than laid off )
“No, the outrage is that “our citizens” feel that they are entitled to the fruits of others’ labor simply because they have been unemployed for almost 2 years.”
There aren’t nearly enough jobs for all that are actively seeking employment, by some measures 5 applicants per available job. What’s outrageous is the delay in extending unemployment. That’s never happened with the unemployment rate as high as it is now. What are these people supposed to do, starve?
What are these people supposed to do, starve?
Absolutely not… Instead of pissing away all the stimulus maintaining the status quo in Fed & State jobs we should have gone with a WPA type of investment….
“…we should have gone with a WPA type of investment….”
But, but, but…that would make lil Opie (The Non-Hawaiian) a SOCIALIST!
I agree with a WPA type plan as a lot of people are going to be out of work for a very long time otherwise and there is much work that needs to be done that isn’t getting done.
But if it were proposed, much less actually done, there would be the criticism that those were government jobs, not private sector jobs.
WPA. We need high speed 400mph trains going between all major cities. If we’re gonna blow a bunch of money, let’s have something cool to look at.
Watch this about the New Delhi airport…amazing
http://www.newdelhiairport.in/media.aspx
We should be ashamed of ourselves we cant even get a lousy 2nd ave new subway built at least 10 years late.
I’m with you VaBeeyatch. We gave f-in trillions to banks and AIG, and for what? To change a few decimal places on the credit card bill!!!
What we need is for somebody to convert those phantom trillions into STUFF. Or at least convert them to actual cash, like they did in Iraq.
“We need high speed 400mph trains going between all major cities.”
Now that is an infrastructure project I would fully support. Instead, our “stimulus” goes to community organizers and unions.
What are these people supposed to do, starve?
It depends. If it’s them starving vs preserving private property rights in this country, then yes, they should starve.
Just because other people are having a rough go doesn’t mean the government is just in forcibly stealing labor from other members of society. If you feel bad that people are starving, GIVE FREELY of your own time and money. But you have no moral basis for stealing mine.
Your mad ideology bears no resemblence to reality. It makes good rhetoric for gullible fools but it bears nothing fruitful….. unless you’re part of the ProudToBeStupid crowd aka Palinites.
Historically, the starving people do whatever it takes to get food- rampaging, rioting, etc. The ensuing disorder is way more expensive, (and more morally disruptive, if that’s your major concern), than keeping them fed. Must we relearn this the hard way?
The ensuing disorder is way more expensive, (and more morally disruptive, if that’s your major concern), than keeping them fed. Must we relearn this the hard way?
Perhaps, but that doesn’t supercede the issue of morality.
Yes, given history, it is in the best interest of those with money/jobs to give to support the folks who are down on their luck. But being in their best interest isn’t the same as forcefully taking money/labor from them, feeding it through a bloated bureaucracy, and then handing it out to the people who have made poor decisions rather than rewarding those who are trying to improve their situation
unless you’re part of the ProudToBeStupid crowd aka Palinites.
Thanks for reminding me why I have you on ‘ignore’, exeter.
Yeah. exeter isn’t going to change any minds with his name calling. At least eco and oxide occasionally make good points, and add something to the discussion.
When you can’t address the facts, run.
Well done.
Perhaps, but that doesn’t supercede the issue of morality.
It does when the mob is at your door.
Voluntary charity has no history of being sufficient to keep people clothed and fed. Ever read Dickens? That’s an example of the voluntary charity method. History is filled with others.
One could also dispute the moral equivalence of someone starving to death versus someone being taxed to prevent it by an elected government.
Ever read Dickens? That’s an example of the voluntary charity method.
I didn’t realize that fictional novels are now ‘examples’ in the real world?
Again, the presence of the mob doesn’t change the morality of a 3rd party taking my money and giving it to the mob.
But it sure makes me more likely to give to the mob directly..
When you actually get to the point in life where you earn enough money to “take”, your petty beef will have some weight.
When you actually get to the point in life where you earn enough money to “take”
Making assumptions again? But of course..and how much is “enough money to take?”
I’m pretty sure I’m well past that threshold, but please let us know at what point one makes enough to challenge the morality of wealth re-distribution.
No, you’re right. The taxpayers should always guarantee a citizen gets to keep the homes and the cars he once could afford to pay for even though now that’s no longer true and might not ever be true again.
(sarcasm)
Man and all this time we’ve lived in cheap homes just in case the breadwinner experienced a job loss so we could take care of ourselves. Where’d we get the quaint idea that was necessary? Man, I should have been over on the water.
But hey, we live in an Octomom world, people make life choices these days assuming someone else will pay for it…
Why all the bickering over politics…when the real story is Lindsey Lohan has to serve some jail time…who hoo!
————
http://abcnews.go.com/Entertainment/lindsay-lohan-back-court-face-jail-time/story?id=11095712&page=1
drumminj,
Yeah, the wife and I were talking over the 4th ( hope everyone had a great time btw ) and we thought it was fairly apparent anyone getting pink-slipped at ‘this’ point will certainly have a rougher go of it.
So many of her former co-workers have HAD those 99 weeks to effectively re-invent themselves. A luxury certainly ’she’ wouldn’t be afforded. In truth, at nigh on 2 years one could not only seriously upgrade their skill sets ( you could actually become a member of the opposite gender within that time frame? )
We figure anyone getting the Bus Treatment today, will be lucky to get 13 weeks. The State is broke.
DinOr, I think you’re right that its not going to get easier from here. This country is beyond broke. The Republicans would have dropped their objections if cuts could be made elsewhere to pay for extended benefits, but Congress as a whole was unable to make that happen.
There is no easy answers to this, and I can understand the arguments on both sides.
Unemployment contributions are typically no more than a couple bucks out of each paycheck, so I’ve got to think that a good majority of claimants get every dime back in the first six months of unemployment claims. After that… well… let’s call it what it is: a handout.
As SDGreg points out, the jobs aren’t there. They aren’t coming back for a long time. On Friday one HBBer pointed out that the best we can probably do now might be to transition these folks to welfare.
Kim,
That’s true, it’s been years… since I was a W-2 employee, but I never recall ‘my’ contribution to unemployment as being more than couple bucks every pay period?
All ‘in’ employer included, it can’t be near enough to cover 99 weeks? And any more, I really have my doubts, had there never -been- a 9/11, longest running war in our history and a debt-fueled Housing Bubble, how much of this would have unravelled ANY way!?
State and local gov’s seemed so leveraged to the hilt, one down tick in the economy and they’d have been underwater regardless?
DinOR,
“So many of her former co-workers have HAD those 99 weeks to effectively re-invent themselves.”
I agree with the sentiment. Having dated or obsolete skills isn’t a good thing in the best of times and now it’s positively fatal. But I’m not sure updating of skills is necessarily of any more than limited help under current circumstances. Is there any sector of the economy that doesn’t already have a surplus of workers?
In a more typical downturn one sector might be growing while another was shrinking. If one had worked in the shrinking sector, gaining skills in the growing sector could get you a new job. But what does one do now? Those new skills might not be helpful either now or in the future. And prior to the downturn, there were already more than a few jobs where the required education was more than what was actually needed to do the job.
I don’t see skills as being the big issue this time, at least not yet. Restructuring of the economy needs to happen first. Once that is underway, it should be more clear what skills will really be needed.
“Restructuring of the economy needs to happen first”
Yepper! And you’re absolutely right, how ‘would’ one prepare for that which remains… to be seen? Green Jobs? Hey I’d love to see it, seriously.
More than -anything- I believe it’s that very restructuring that is about the ‘only’ thing that will pull us out of this nosedive! Can you imagine ( and others here have openly wondered as well ) if -every- G.I currently around the globe were unleashed into an already saturated job market?
Even the status QUO isn’t working!
Maybe you should walk a mile in their shoes.
Personally, I am fortunate that I don’t have to worry about where my next meal is coming from or whether I can pay rent or not. But that could change in a heartbeat.
I was on UI for 4.5 months and I was one of the lucky ones — I did find work.
Maybe you should walk a mile in their shoes.
Read my post above. I did walk in their shoes. I was unemployed for 9 months up until a little over a year ago. I found what little work I could, which turned into a little more, which helped tide me over (with savings, and UI - though I could’ve survived w/o the UI since I had savings rather than a house+mortgage) until I finally scrounged up a full-time contract gig with a horrendous commute.
Now I have a better job on better terms.
Andy Grove: How to make an American job before it’s too late.
http://www.bloomberg.com/news/2010-07-01/how-to-make-an-american-job-before-it-s-too-late-andy-grove.html
I am happy to see that there’s at least one captain of industry who believes in dancing with the one that brung ya.
“Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where comanies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.
“This scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.”
There it is. Invent it here, design it here, manufacture it somewhere else. Until this trend is reversed we’re screwed.
There it is. Invent it here, design it here, manufacture it somewhere else. Until this trend is reversed we’re screwed.
Actually it’s now more like: Invent it somewhere else, design it somewhere else, manufacture it somewhere else, slap a US brand logo on it (HP, Dell, IBM, RCA, Sylvania, etc.), sell it here on credit.
We’re like the colony of a superpower. There are so many parallels.
The colonies of yesteryear provided natural resources to the home country, which added value through manufacturing, and sold the goods back to the colony and throughout the home country.
The concept is called “Mercantilism”. Also, “Beggar-thy-neighbor”.
My other half was an Engineering Mgr at Intel. He went to East Asia in 1997(ish) to do some Engineering oversight, iirc.
Great article! The problem is, does he practice what he preaches? He can make a difference, we can’t.
Can he convince Apple to stop selling out the American public?
July 6, 2010, 6:51 a.m. EDT
China on the cusp of real estate slump: Standard Chartered
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — Real estate prices in major Chinese cities are set to decline significantly in the coming months as developers grapple with bloated inventories and skittish buyers, according to recent research.
China’s leading cities could see prices plummet 20% to 30% by year’s end, while lesser-known cities could see declines of 10% to 20%, Standard Chartered Bank Ltd. said in a research note Tuesday.
“With new supply meeting a still-reticent buying public, we believe developers will be forced to cut prices,” said the bank’s analysts headed by Steven Green in Shanghai.
…
The Yankee Devil in the Details:
“…Officials may also start a trial property tax, according to state media.”
Next: HOA fees…they’re catching on quickly to Capitalism, no?
I’m still waiting for the Canadian market to pop
Not going to happen. At least not like in USA.
The canadian banks have been more responsible than US banks. It’s interesting that even without any regulations, the banks there didn’t go overboard with Ninja and subprime loans….
What? Have you seen prices in places like Toronto or Ottawa?!
Seriously. Unless someone wants you to believe that every Canadian in the city has the bestest job ever, there is a terrible housing bubble there. It just hasn’t popped yet.
What? Have you seen prices in places like Toronto or Ottawa?!
I’m a stats hound. Got any links perchance - e.g. to something like a Canadian version of Case/Shiller or FHFA stats?
House prices six times income. You can figure it out from there.
So - you’re the source of the stats?
This guy mentions it frequently, though I didn’t find the exact post.
http://www.greaterfool.ca/2010/06/23/its-different-here-2-2/
Link may show up. Read the blog at greaterfool dot ca if you are interested in a contrary view of Canadian vulnerability.
Looks like Canada is handling the bubble just like we did!
“The real charade is Canada’s preaching to the world about the strengths of Canada’s banking system — and using that “strength” to lead the opposition to an international bank tax — while giving Canada’s banks a massive bailout.
The financial media have virtually ignored Ottawa’s $200-billion low-interest line of credit to help Canada’s banks weather the recession and the Canada Mortgage and Housing Corp.’s $125-billion purchase of questionable mortgages and other rotten paper held by the banks when the crash came in the fall of 2008.”
http://www.winnipegfreepress.com/opinion/columnists/banking-smoke-and-mirrors-96958474.html
Here are some anecdotes that are pretty convincing:
http://www.crackshackormansion.com/
It depends on where you look in Canada. Some areas are more affordable than others.
It’s interesting to note from the Affordability Tables in the attached link, that on a national average, since 1985, Canada has had an affordability measure of:
38.9% for detached bungalows
43.2% for standard two-story houses
30.4% for townhouses
26.8% for standard condos
In the first quarter of 2010, those measures really haven’t increased all that much:
41.1% for detached bungalows
46.8% for standard two-story houses
33.0% for townhouses
28.2% for standard condos
On a regional basis, there have been some significant increases in select cities, however they are not representative of the entire country.
Contrary to popular belief, Toronto and Ottawa are not the centre of the Universe in Canada.
http://www.rbc.com/economics/market/pdf/house.pdf
“The financial media have virtually ignored Ottawa’s $200-billion low-interest line of credit to help Canada’s banks weather the recession and the Canada Mortgage and Housing Corp.’s $125-billion purchase of questionable mortgages and other rotten paper held by the banks when the crash came in the fall of 2008.”
How much of this “low interest LINE OF CREDIT” did they use?
Sorry packman, my reply didn’t get through the filter.
Thanks for the link Lola - lots of good info in there.
Though it’d be nice if it wasn’t all based on the stupid “affordability” measure, which is subjective. Actual price measures are more useful. Unfortunately the only good price data in there is broken out city-by-city and is only given as YoY charts, without the actual numbers. YoY charts aren’t very useful in determining where you are relative to the long-term average/trend.
On the surface it appears that Canada is roughly where the U.S. is - a modest rise in prices after the bubble-pop crash, though didn’t have quite as big of a bubble. There’s a surprising amount of variability from metro to metro - e.g. Montreal boomed in the 2002-2005 timeframe, but St. Johns actually started booming in 2008! (I’m guessing it has something to do with oil). Toronto didn’t have much of an early-2000’s boom but is now going up fast.
Thanks for the links Blue.
Looking through that greaterfool blog, one link was interesting - it shows that mortgage lending in the last 15 months in Canada has gone from $776B to $917B, with over 90% of the new debt being from the NHA MBS (Canada’s equivalent of Fannie Mae), even though the NHA MBS previously accounted for only 20% of the existing mortgage debt.
Sounds like they are indeed in the midst of a bubble, just with a lot more lag than the U.S.
Canada also offers portable mortgages (move with the person, not the house), so on some level Canadians could benefit from slightly more liquidity (turnover & mobility) in the housing market than their underwater American counterparts. However, prices got out of whack in Canada too and declines are inevitable.
Which is what they were saying in 2007, 2008 and 2009. And here we are in the 2nd half of 2010 and prices keep on going up.
Canada has everything the HBBers want….mortgages are not tax deductible, banks have high reserve ratios and no such thing as 105% interest only option ARM. And yet still y’all predict disaster.
Those tulip-bulbs had alot going for them and just could not be beat as investments once upon a time too.
I’m a simple guy. I look at median salary and then look at median house prices.
I predict Canada will pop.
Steve W,
LOL ( yeah me too ) but the fact remains the Canuck banks have been inifinitely more responsible. Their’s will be less painful than ours.
Funny bit they had on The Onion where we could fake a coup’ and nullify all our debts ( or burn the country down and collect the insurance money..? )
Wasn’t there a book about that? Small island nation is near broke, so they declare war on the US. US comes in, executes quick take-over, offers nation-building: schools, roads, industrty, jobs. Small island nation inwardly smiles, outwardly humbly accepts aid.
The Mouse That Roared?
Yes, sounds familiar, just never thought ‘we’ would have to resort to it? Maybe we could just invade Canada? I’m sure they wouldn’t mind.
WE would probably apologize to YOU for your trouble!
Canadians are a polite bunch, eh?
Lola,
Next Thursday ‘work’ for you guys? Kinda’ booked up right now…
Record high temps in DC: The country has a fever and is trying to rid itself of the nasty virus that is threatening our existence.
Awesome analogy.
(Hwy still is suffering from this housing ailment, but my eyes are at least in focus now!)
http://i660.photobucket.com/albums/uu322/RobotNine/Incredible%20Architecture/TheCrookedHouseSopotPoland.jpg
I live there. I am not a virus, I am more of a bacteria.
Meanwhile, it’s freezing in SoCal, I wore my wool sweater yesterday and am layering today. what does it all mean?
Filed under: “innovation, follows the fleece…”
UPS offers ‘luggage boxes’ as alternative to checking bags:
July 05, 2010|By Hugo Martín, Los Angeles Times
The UPS announcement came a few days after the U.S. Department of Transportation reported that the nation’s 10 largest airlines collected nearly $770 million in checked baggage fees in the first three months of the year, a 33% increase over the same period last year.
“…She conceded that airlines can usually deliver luggage faster than UPS but said luggage shipped by UPS can cost $30 to $80 less per package, depending on the route and the weight of the box.
Rosenberg noted another advantage to the UPS luggage box: A tracking number lets passengers know its exact location.
That’s something airlines don’t offer.”
If you want it delayed or damaged, UPS is great. Better is to fly one of the airlines that don’t charge for baggage such as Southwest.
“…She conceded that airlines can usually deliver luggage faster than UPS but said luggage shipped by UPS can cost $30 to $80 less per package, depending on the route and the weight of the box.
Call be dumb - but how can you save $30-80 per package, when current checked baggage costs $25-$35 each?
A nifty idea, but it simply won’t work, due to the great inefficiencies involved. You just can’t get more efficient than stuffing the luggage on the same airplane that the passenger is flying on, not having to wrap it in a box, etc.
Nevertheless it’s nice to have something to hopefully put a check on the airlines incredible. new price overheads.
“A nifty idea, but it simply won’t work, due to the great inefficiencies involved. You just can’t get more efficient than stuffing the luggage on the same airplane that the passenger is flying on, not having to wrap it in a box, etc.”
For ordinary baggage, I agree. But for some subset of passengers with unique, generally less time sensitive baggage needs, something like this might make sense. Examples might be shipping of items purchased while on vacation or shipping of some items for a business trip (e.g., presentation materials or heavy or bulky items that could be shipped ahead and sent back later).
But as direct competition for ordinary baggage I don’t see much advantage unless airline baggage fees were to go a lot higher relative to other shipping costs.
When I worked in a bike shop, we did quite a bit of packing bikes up for shipment via UPS. And, since we were near the University of Arizona, we often did this for students who were flying home for the summer.
We shipped floor plan blow ups and other sales materials to the COMDEX trade shows via Fed Ex. The sales and ops guys at one point figured out they’d do better shipping their luggage the same way. That was in the late ’80s.
” presentation materials or heavy or bulky items that could be shipped ahead and sent back later”
Another sign we are living in a depression….
My wife’s hair salon has some new thing available….some all natural hair straightening thing-a-majig so you don’t use chemicals on the hair. Price…$400 a treatment.
$400 for some shampoo, good luck with that in this hard economic time right? Wrong. There is a 3 week wait list to get the application. Someone didn’t get the memo that is the worst economy in the history of economies.
Upon hearing of this my instinct was to say WTF, $400 are you crazy woman? Then I remembered the truce. I say nothing about her hair/nails/clothes expenses. She says nothing about my golf/classic car expenses. And the marriage lives happily on.
I’ve long had a bit of an issue with the cost of women’s hair care relative to men’s.
Matter of fact, I used to go to a barber because he was so much cheaper than the ladies’ salons. That was in Pittsburgh. I’d like to find a similar type of thing here.
Is it the Brazilian Blowout? If it is, $400 is ridiculous. She needs to, at the very least, shop around. My salon is only charging $185, not that I plan to have it done. I get way more compliments on my curls than I do when I straighten it. BORING!
I thought a ‘Brazilian’ was when you had -everything- waxed. I shudder to think what a ‘Brazilian Blowout’ is.
My sister has super curly hair and did this Brazilian thing. I was shocked at the cost, and she’s pretty frugal but when you gotta have straight hair, cost I guess is not an issue. I prefer curly on sis, but she says the time she saves in combing it out makes it well worth it. Need to be careful that you don’t have the treatment which uses a formaldehyde solution,its a known carcinogen but the FDA doesn’t regulate hair products. I don’t understand acrylic nails either, the application process releases some pretty toxic fumes and it can ultimately cause fungus growth under your nails. ugh
$100K classic car vs. $400 on haircut.
Sounds like a pretty lobsided truce to me.
Well, if the hair treatments are weekly, it might add up
Women’s hair care is a racket that makes Chicago politicians blush.
I sense a global trend, let’s see how long it takes Nike to profit from its promotion…
Court throws the book at shoe-thrower:
JERUSALEM | Wed Jun 30, 2010
“This kind of incident must never happen again and this punishment is a warning to others,” said Jerusalem magistrate Shimon Feinberg, sentencing Pini Cohen, 52, for the attack.
Shouting “you’re corrupt,” Cohen threw two shoes from the spectators’ gallery at Chief Justice Dorit Beinisch during a Supreme Court hearing in January.
One hit her between the eyes and she was knocked to the floor. She returned to the bench minutes later.
Cohen said he believed he had been treated unfairly by Israeli courts in divorce proceedings.
“Just Chuck It!”
Post office announces 2-cent rate increase
Cash-strapped post office announces plans for 2-cent rate increase in January.
WASHINGTON (AP) — The post office wants to increase the price of a stamp by 2 cents to 46 cents starting in January. The agency has been battered by massive losses and declining mail volume and faces a financial crisis.
Postal officials announced a wide-ranging series of proposed price increases Tuesday, averaging about 5 percent, and covering first class, advertising mail, periodicals, packages and other services.
The request now goes to the independent Postal Rate Commission which has 90 days to respond. If approved, the increase would take effect Jan. 2.
“The Postal Service faces a serious risk of financial insolvency,” postal vice president Stephen M. Kearney said.
Kearney said the agency is facing a $7 billion loss in 2011. The rate increase will bring in an extra $2.5 billion, meaning it still faces a $4.7 billion loss.
I’d be okay with dropping back to a 3- or 4-day mail delivery schedule.
And, as for junk mail, here’s a trend: Businesses that send the stuff don’t have the, ahem, cache that they used to.
Matter of fact, I did a postcard mailing a few months back. A local solar energy contractor called me and demanded to be removed from my list, as they refused to accept such things. My lowly postcard fell below their green acceptability scale, and that was that.
My computer has a big L-3 cache
Apparently they missed the deflation memo.
Must’ve gotten lost in the mail.
This is again deflation at work
Fewer packages +
Fixed overhead +
Mandated 5 day a week service
The only way to stay solvent is to raise prices.
If the cause was inflation they would be raising prices due to higher labor, fuel, jet costs.
Why don’t they just make it an even $0.50? It would make it easier to make change. And everyone’s pretty much rounding the $0.46 up to $0.50 in their heads anyway.
“The rate increase will bring in an extra $2.5 billion, meaning it still faces a $4.7 billion loss.”
I love this bean-counting mentality. “The rate increase will bring in an extra $2.5 billion” only if customers aren’t chased away by this rate hike.
By this mentality, why not raise the price a dollar and then they would not only solve the crisis but turn the money losing operation into a profitable one.
Still the best deal in the world, to send a letter across America even for 50c!
Apparantly your view isn’t shared by enough people to make the numbers work.
It’s called the internet
Fewer bills sent or paid
Ferwer advertisements
Fewer letters with email
Still the best deal in the world, to send a letter across America even for 50c!
I can send a letter across the U.S. for free - and a lot quicker.
Ummm, packman, don’t you pay a monthly fee to your Internet Service Provider? I know for sure that I do!
Yeah yeah, I know.
However I can probably find internet service for about $15 a month, and send 2000 emails, for 1.3 cents each.
“… for 1.3 cents each.”
The USPS plan: Charge 1.3 cents for delivery, and 48.7 cents for storage.
Sam’s Club will offer small-business loans
Program will focus on minority-, women- and veteran-owned businesses.
BENTONVILLE, Ark. — Sam’s Club said Tuesday it will offer small business loans of up to $25,000 to its small business members.
The division of Wal-Mart Stores Inc., which is based in Bentonville, Ark., is testing a program with Superior Financial Group, one of 13 federally licensed nonbank lenders, and will offer $5,000 to $25,000 loans to members who qualify.
Sam’s Club says 15 percent of its business members reported they were denied a loan in a November survey. That’s up from 12 percent in April 2009.
The program will focus on minority-, women- and veteran-owned businesses.
Sam’s Club members who apply for a small business loan during the pilot will receive $100 off the application fee, a 20 percent discount and a discount on interest rates.
The program will focus on minority-, women- and veteran-owned businesses.
Isn’t discrimination illegal?
And this woman-owned business ain’t touching this fabulous offer with a bargepole. Thanks, but I prefer to self-finance.
“Isn’t discrimination illegal?”
Not in Eric Holder’s America. Especially if you’re discriminating against white males. No matter that just about every ethnic group on the planet has enslaved and been enslaved at some point going back centuries. No matter that the Civil War is long over and done with. No matter that no one living today had anything to do with the slave trade of yore. No matter that women won the right to vote a long time ago and that they are well represented in the workforce. The guy has a thirst for punishment and is fighting a battle long gone. He’s got a hammer, everything looks like a nail.
Attack Arizona, Eric, yeah, that’s the ticket. Spend all that time, money and resources attacking a state that’s only trying to protect itself in the face of severe dereliction of duty on the part of your administration. Go ahead, a-hole. Forget that there was a bloody Civil War so that the Union stayed intact and you could one day be the AG of the US and your buddy could be president. You go right ahead and undo all the work that was done and split this country about twelve ways to Sunday. You go right ahead and keep punishing the country that made it possible for you to rise well above your capabilities.
Oh, boy, I’ve really done it now, lol.
Yes you have. Shame on you for being politically incorrect in Orwellian Amerika.
I mean, how big of a moron is this guy? I mean, if Lindsay Graham could eviscerate his legal arguments for giving US citizen rights to foreign terrorists on the floor of Congress, without him even realizing it, fahgeddaboudit.
And let’s not forget that he’s only hurting his own faction by this action. A lot of that drug traffic coming across the border under cover of illegal immigration winds up harming inner-city youth as well as suburban youth. Illegal immigrant labor can and does reduce wages in the lower socio-economic rungs of American society, an area he purports to help.
Attack Arizona, Eric, yeah, that’s the ticket. Spend all that time, money and resources attacking a state that’s only trying to protect itself in the face of severe dereliction of duty on the part of your administration.
Eric’s about to learn that nothing fights back quite like a riled up state of Arizona. And, at this time of the year, our tempers are as hot as the weather.
I hope so. I hear Russell Pearce has one huge set of balls and I hope he smothers Holder with them.
I hear Russell Pearce has one huge set of balls and I hope he smothers Holder with them.
If he does, that needs to be on pay-per-view. I’m pretty sure they could fund border defense for a year with the profits.
Isn’t discrimination illegal?
only if you’re not a white male. Otherwise you’re free to be discriminated against at will.
WalMart isn’t the biggest company in the world because it does stupid things.
There is either profit to be made in these minority loans (highly suspect but possible). Or this is nothing more than PR so that when the unions come charging again, WM can use this as evidence of helping the community, or some such.
Either way, WM is a private company and if it wants to piss away $25K at a time, lending to people who will never pay the money back, have a blast.
As an evil white man myself, I don’t really care. First off I don’t need to borrow $25K. Second, if I did, WalMart would be about #61 on the list of places I’d think to go look for it.
ISM Non-Manufacturing Index in U.S. Fell to 53.8 in June.
Service industries in the U.S. expanded in June at a slower pace than forecast, indicating the economy was beginning to cool entering the second half.
The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the economy, fell to a four-month low of 53.8 from 55.4 in May. The June figure was less than the median forecast of 55 in a Bloomberg News survey. Readings above 50 signal expansion. Orders slowed for a third month and employment declined.
Companies such as Bed Bath and Beyond Inc. may find it harder to boost sales without faster job growth as government stimulus wanes. Private hiring last month rose less than forecast, consumer confidence plunged and home purchases fell, indicating the recovery from the worst recession since the 1930s is vulnerable.
“The economy has entered a soft patch,” said Richard DeKaser, chief economist at Woodley Park Research in Washington, whose forecast of 53.9 was the closest to today’s reading among economists in the Bloomberg survey. “Households are continuing to soldier on, albeit without much vigor.”
“The economy has entered a soft patch.”
How much do organizations such as this charge for such brilliant insight?
Merkel Government to Raise Health-Insurance Premiums in Bid to Cut Deficit.
Chancellor Angela Merkel’s coalition backed higher health-insurance premiums, a move some critics from her own party said will fail to curb rising health-care costs and might undermine the German economic recovery.
Coalition leaders meeting in Berlin today agreed to raise health premiums to 15.5 percent of gross pay from 14.9 percent, Health Minister Philipp Roesler said. Employers will contribute 7.3 percent with 8.2 percent paid by employees.
“We’re including everybody, workers, employers and taxpayers,” Roesler said in a statement distributed to reporters in Berlin.
The measure is part of an overhaul of health care intended to plug an 11-billion euro ($13.8 billion) deficit in the public health-insurance system in 2011. It follows Cabinet agreement on June 29 to cuts in spending on drugs to reduce soaring costs to public health-insurance funds.
Only 3.5 billion euros of the total shortfall next year will be covered by savings in administrative costs at hospitals, dental practices, through vaccinations and drug prescriptions, a Health Ministry document shows.
We’ve been told over and over here that every other civilized country has much better health care than we do at much lower cost. I wonder if minor items like 11-billion euro deficits are factored into these statements?
Yes. They still pay less per capita for better results. Those numbers don’t change just because they chose to borrow to pay for it rather than pay as they went.
Germany is in better shape than the US
The bottom line LVG
They spend half as much and get similar outcomes.
You can’t argue that. National Debts have many other contributing factors.
The current government support/help is NOT FOR THE AVERAGE CITIZEN. It is principally help to the banks, to the financial institutions.
Stop snowing ourselves - that all the setup of help are for the citizen, it’s not.
We MUST help ourselves - savings, savings, savings
Well, a big chunk of change and a few hours later, my plumbing problem’s fixed. Don’t know what clogged my drain, but it’s gone now. (Some things are better left unknown, IMHO.)
Any-hoo, I noticed some interesting activity up the street early this morn. There’s this house that was bought by a young lass who owns a local yoga studio. That was back in ‘06.
Well, she caught the eye of a local musician, and he moved in, oh, back in ‘07. We neighbors thought he was a bit manipulative. You know, one of those guys who, if you’re not awestruck by him every single minute of the day, there’s gonna be trouble. Not that he was physically abusive, it was more of the psychological kind — “You’re not being supportive!” and that sort of thing.
Well, Mr. Musician decided to follow his muse and go to California back in ‘08. He stayed there.
Well, last year, the young lass told me that she’d be following him to CA, and guess what? She had a free place to stay over there! Well, she rented her house up the street. I heard thru the grape that he was a yoga practitioner, and, AFAIK, he’s been a quiet renter.
Well, this morning, I saw quite the yard cleanup going on. Not the sort of thing that I’ve ever seen there before. Young lass was into the au natural look for her yard. Y’know, the one where pulling weeds, sweeping the sidewalk, and picking up trash is a sin.
Around here, if there’s a sudden and dramatic yard cleanup, that’s a sign that the house will soon go on the market. I can’t help but wonder if this is to raise the cash to support Mr. Musician’s career.
I doubt selling a house bought in 2006 will bring in a single buck to support doofus musician.
I agree, sfbubblebuyer.
Especially when you consider that, oh, two or three years ago, the young lass went on tour with Mr. Musician. While they were out doing the musical thing, we neighbors took care of their two cats and the house.
I hate to be so snippy and gossipy, but the inside of that house, especially the kitchen, was a mess. Apparently, the young lass and Mr. Musician weren’t into doing the dishes very often. There was a steady stream of ants coming in from outside, and they knew right where to go — to the kitchen counter and sink.
Being the helpful neighbor that I am, I offered to put a call in to my favorite exterminator, R.P. Streiff. (Those guys know how to kill bugs, trust me on that one.)
Well, that idea was nixed, as the young lass and Mr. Musician liked to keep things organic and natural.
Ohhhh-kay.
One of the cats and I struck up quite a friendship while I was tending to the house. Cat would crawl into my lap, and I’d regale it with my opinions on the state of the house, what needed to be done to make it livable, and how I thought that the young lass had overpaid for it.
Any-hoo, I think that, in addition to the landscaping cleanup of this morning, the house will need to be fumigated. Then cleaned and painted.
And, yes, I’m still smarting from the plumbing bill of this morning — been prospecting like crazy this afternoon — but at least I’m not looking at a major tidy-up to get this place ready to sell.
We just got a bid to ‘pretty up’ the yard on our house. My wife’s eyes nearly started bleeding when she saw it.
She’s a little more enthusiastic about my plan of doing minor fixes and DIY projects instead.
“to support doofus musician.”
What the &%*# is wrong about being a musician? 1) Gossip doesn’t prove that this musician is being supported by his “ladyfriend” and, 2) even if he were, artists have always had to have patrons who help [with money made on the backs of the proles] to move culture along.
The whole anti-intellectual/anti-science/anti-progress (and now anti-artist?) bent of this blog is getting to be a real drag.
Can’t we just keep beating on the REIC, knife catchers and realtwhores? With occasional beat downs to eCONomists, the FED and Goldman Sux, et al.?
MrBubble
Doh! I need to find a patron.
Investors Fear Rising Risk of US Regional Defaults
6 Jul 2010
Investors are worried that the risk of default for US local governments is growing, amid signs that some regions are facing the same type of difficulty in curbing pension and budget deficits as some eurozone countries .
The yield attached to some forms of infrastructure municipal bonds has risen relative to US Treasury bonds because of fears that cash-strapped local governments will struggle to repay these loans.
Absolute borrowing costs for regional governments remain relatively low in historical terms because of the Federal Reserve’s ultra-loose monetary policy . But any swings in municipal yields will be watched closely by investors, since they suggest that the fiscal anxieties about the eurozone could now infect the US.
“The risk in the second half of the year is that investor attention switches from Europe to the US,” said Robert Parker, senior adviser at Credit Suisse Securities, who singled out parts of California, as well as towns and cities in Illinois, Michigan and New York state as among the most vulnerable.
Justice Department Suit Against Arizona Imminent, Official Says
July 06, 2010
The Justice Department could file a lawsuit challenging Arizona’s immigration law as early as Tuesday, an official tells Fox News.
The potential court action comes just days after President Obama delivered a speech calling on Congress to tackle a comprehensive overhaul of the nation’s immigration system. In the speech, he criticized Arizona’s law and warned that national legislation is needed to prevent other states from following suit.
In the speech, he criticized Arizona’s law and warned that national legislation is needed to prevent other states from following suit.
Not to mention enforcement of the national laws that are already on the books.
Why doesn’t he just go on air and announce, “ally, ally, in come free!”
Is it me, or is Mr. Market set up for a big end-of-the-day dive?
LOL - up 55 in about 20 minutes. Pretty sure the PPT did that just to spite me.
Opens heavy green, turns red then back to green, like watching a yo-yo. Don’t where the bottom is, but we will get there sooner or later.
Cash-strapped Long Beach seeks to tax marijuana
LA Times~ July 6, 2010
Long Beach could join several other California cities in seeking to boost city coffers by taxing marijuana.
The City Council on Tuesday will consider a proposal to place a measure on the November ballot that would levy a 5% tax on medical marijuana collectives.
Another tax of up to 10% on other marijuana businesses would go into effect only if California voters also pass Proposition 19, which would legalize, regulate and tax marijuana for recreational use.
Long Beach’s proposal, drafted by the city’s Department of Financial Management, also calls for taxing medical marijuana cultivation sites at .0075 cents per square foot.
The growth of pot dispensaries — and the drug’s potential legalization statewide — has presented a rare opportunity for cities desperately searching for new revenues. Berkeley and Sacramento are considering similar measures.
United Space Alliance to lay off more than 1K workers
Houston Business Journal
United Space Alliance LLC on Tuesday said it would be cutting at least 15 percent of its work force by October.
The Houston-based space operations company said the layoffs were ordered to keep pace with its current Space Shuttle Program Operations Contract work scope and budget.
Right now, two missions remain, including one planned for later this year and one scheduled for February 2011.
United Space Alliance said that it employs about 8,100 workers. The job cuts will affect about 800 to 1,000 employees in Florida, about 300 to 400 in Texas and about 10 in Alabama. The company did not provide further specifics in a statement issued Tuesday.
“The economy is still in the gravitational pull of the Great Recession”
~ Robert Reich, former Sec’y of Labor.
Here’s a good example of why loan modifications take so long. If they happen at all.
http://www.youtube.com/user/fiercefreeleancer
Ron Paul posted this to FB fans:
“The floor vote on Audit the Fed failed 198-229. That means a lot of Democrats who cosponsored my 1207 bill voted against it when it really mattered. I’ll share a list of them shortly.”
How unfortunate.
Who will watch the watchmen?
This concept that the Fed consists of unimpeachable autocrats whose only desire is the good of the country is belied by the peccadilloes of the people already in power there, and by the frequency that Goldman Sachs alumni show up in their ranks.
Unfortunate.
Well, I hope they get to keep their pensions, other wise it just wouldn’t be fair.
How city workers pulled off alleged scam. ~ SF Gate~California Watch
It was their own Treasure Island.
Bored and unsupervised, five highly paid electricians working for the city of San Francisco spent years allegedly stealing from taxpayers during a remarkable binge that investigators say involved sex parties with prostitutes, moonlighting on city time and fraudulent billing to pay for their suburban lifestyles.
They allegedly charged the city hundreds of thousands of dollars for personal purchases, including BMW tires, lease payments on a truck and even remodeling a home in Contra Costa County’s tony Blackhawk subdivision. The men are accused of running a private contracting business on city time, collecting government paychecks while working on unauthorized jobs and billing the costs to taxpayers as well.
They also are accused of hiring prostitutes for sexual encounters at their remote worksite on the former Navy base in San Francisco Bay and stocking a private bedroom in their office suite with liquor, condoms, Viagra and pornographic DVDs.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/07/04/MNIQ1E6VOR.DTL
The obvious solution is to supply public employees with massive raises, booze, porn, Viagra, and prostitutes so they will not feel compelled to steal.
Hmm, I’m very curious about this “suburban lifestyle” Is it like Sex in the City but only with a Applebee’s rather than museum or theatre nearby?
Canadian May Building Permits Tumble More Than Expected 10.8%.
July 6 (Bloomberg) — Canadian building permits tumbled more than five times as much as expected in May, led by work on single-family houses and commercial buildings such as hotels and offices.
Permits for non-residential construction fell 18.3 percent to C$2.32 billion. Commercial buildings declined 35.2 percent while institutional buildings, such as hospitals and schools, fell 21.6 percent. Partly offsetting these declines were permits for industrial building like manufacturing plants and utilities, which rose 47.1 percent.
Residential permits decreased 5.3 percent to C$3.66 billion. Housing permits were still 35.2 percent above the level from a year earlier, Statistics Canada said.
New Loan Delinquencies on the Rise Again
CNBC ~ July 6, 2010
Just when you thought things might be turning around, the mortgage crisis takes yet another little dip to the downside.
Lender Processing Services just put out its May “Mortgage Monitor,” and some promising trends aren’t so promising anymore, specifically new delinquencies and cure rates.
While the total delinquency rate rose 2.3 percent, which is not surprising given how much is in the pipeline, the 30-day delinquent bucket jumped 10 percent. That is surprising because the that number had been coming down of late. The LPS data report says that’s because the “seasonal improvement period has expired,” but I’m not sure normal seasonal patterns really apply to this market anymore.
More likely is that home prices are not rebounding at the expected/hoped for pace, prompting more borrowers who are underwater on their loans to choose not to pay. And while the job market isn’t bleeding so much anymore, it’s not adding jobs back at the rate we need, nor is it re-instituting those full time jobs that were slashed to part-time, leaving many borrowers still “underemployed.” So the delinquency rate nationwide now stands at 9.2 percent from this particular data set, and with the rise in new delinquencies, it won’t be coming down any time soon.
How do I know this?
Because the report also finds that the “cure rate,” which is the rate at which bad loans actually get better, i.e. the borrowers start to pay again, is getting worse.
FHA 3% down loans and the willingness of Fannie and Freddie to continue to buy up toxic sludge.
The FIRE sector gets paid and the taxpayers are left holding the bag.
On PBS’s Nightly Business Report recently, it was reported that 96% of the mortgages generated in 2010 were purchased by Fannie/Freddie.
China has a <a href=”http://wasatchecon.wordpress.com/2010/07/06/chinas-massive-banking-problem/”monster bad loan problem in its banking sector that is being swept under the rug officially. The gist is that Chinese banks are reporting extremely low nonperforming loan percentages officially; but nobody believes those numbers.
Goofed on the link: http://wasatchecon.wordpress.com/2010/07/06/chinas-massive-banking-problem/
China Gov’t Data = “TrueBambooLie™”
This is pure awesome :
http://news.blogs.cnn.com/2010/07/06/70s-board-game-contains-eerie-bp-oil-spill-scenarios/?hpt=T2
BP’s offshore drilling board game! Complete with blowouts and spill cleanup!
IMO, the government and big business are not interested in truly solving any problems insofar as this economy is concerned, but only maintaining the appearance that things are improving- or at least not deteriorating any further. If millions fall off of unemployment benefits, then they will no longer count in the official numbers, and that’s an “improvement.” Now, if they could just figure a way to hide all the tent cities and shantytowns popping up…
WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal
July 6, 2010, 12:00 PM ET
Which Builders Have the Biggest Gulf Coast Exposures?
By Robbie Whelan
Tuesday dawned with many news sources abuzz about ping pong ball-sized globules of oil, or so-called “tar balls,” washing up on the shores of Texas near Galveston. That means by now every Gulf state has been affected by BP’s Deepwater Horizon oil spill.
But it’s not just state officials and tourists who should be worried about oil sheens ruining their fun: a report out Tuesday from Citigroup analysts ranks the public homebuilders’ exposure to the Gulf Coast areas affected by the Deepwater spill.
The report defines “exposure” by the percentage of the company’s actively-selling communities within 50 miles of affected areas of the Gulf Coast.
Meritage Homes Inc., has the highest exposure, with 22% of its actively-selling communities within the 50-mile radius. Meritage has 32 actively-selling communities in the Houston area out of 147 total communities in the U.S.
Beazer Homes USA, with 27 Texas communities and 7 more in Florida, is next, at 19%.
Others topping the list include DR Horton, Inc. (17%), Lennar Corp. (15%), The Ryland Group, Inc. (13%) and KB Home (11%).
Citi homebuilding analyst Josh Levin says his methodology behind the report was “somewhat crude,” but that his analysis was “correct in broad strokes” and could be a good indicator of the risks facing the country’s big builders.
“Since it is not yet known what impact the oil spill will have on the various Gulf Coast economies over the intermediate and longer term, we find it difficult to draw actionable investment conclusions from our analysis,” he wrote. “However, investors who have high conviction what those consequences will be may be able to use our analysis to help reach investment conclusions regarding individual homebuilder stocks.”
…