Bits Bucket For July 17, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
July 17, 2010
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I am happy to report that my personal unemployment rate has plummeted from 100% to 0%. I am so grateful.
Now go fire up your coffee pots.
Congrats!
Every time I want to complain about my job I think to myself, it could be worse I could be looking for one.
Yep, my dad used quote an old adage: “I complained because I had no shoes, until I saw a man with no feet”.
And then I said: “Hey, can I have your shoes?”
Work for yourself and you’ll never be unemployed again. Depend on someone else for a job and you most likely will be.
You mean like Realtors and Mortgage Brokers?
And lawyers, mechanics, dentists, doctors, vets, consultants, chefs…
Most doctors, lawyers and mechanics that I know are employees. The notion of a doctor owning his parctice is a quaint one, but the truth is that most practices are owned by big health care corporations. Most independent chefs are dirt poor and wind up working for hotels or for someone like Emeril or Wolfgang puck.
Talk to my self-employed engineer ex-brother-in-law, who has lost most of his clients to the economy. Talk to the lawyers here in Sacramento, who are losing clients left and right. Even dentists are losing money, because so much of their practice is cosmetic (cash.)
I’m a happily employed doctor. The time I spent in private practice was mostly about trying to make money. Now I don’t think about it unless a patient complains to me about their bill, and the constant appeals to insurance companies, which all doctors do, self-employed or not.
Talk to friends, family, neighbors and coworkers…… just don’t talk to EddieTard.
You have a good point there.
Now how about that stock market?
Gonna hit 12000 any day now! Don’t get left behind!
What about it?
Oh you mean because it was down yesterday? 8 up days, 1 down day. I’ll take it.
I think cnn summed it up Eddie
Poof! Week’s stock gains erased
http://money.cnn.com/2010/07/16/markets/markets_newyork/index.htm
Easy come, easy go…
The odd thing about yesterday’s action is that there was no evidence present of late-day intervention, like we saw on, say, Thursday this week. Rather, the market went into a swoon and kept on swooning.
Is a regime change perhaps underway with respect to stock market stabilization policy (or a move to end it)?
Between flash crashes, high frequency trading, big trading desks not losing money on a single day in a quarter, and government plunge protection, it doesn’t seem like the stock market is a reliable, independent measure of value.
“…it doesn’t seem like the stock market is a reliable, independent measure of value.”
That’s why I recommend to anyone who owns a modern textbook on asset valuation that they should burn it. The content is irrelevant to explaining asset prices under a government sponsored price fixing financial management regime.
I returned to self employment after being laid off in 2008. I have already replaced 75% of my previous employed income, which may not seem that great, but I could not get a job paying 75% of my previous income today either …
I like to tell folks I have been cubicle free for over a year and a half now, and I will NEVER go back!!!
“I like to tell folks I have been cubicle free for over a year and a half now, and I will NEVER go back!!!”
Were you a professional, e.g., engineer, lawyer, etc.?
I enjoy everything about self employment except collecting the receivables. Being single, no problem, but raising a family is serious business with expenses that often can’t wait. The family man needs a steady job with benefits, and side work to pay for the toys and vacations.
Yeah, I do some freelance work and submitted my invoice about a month ago and when I saw my “employer” a couple days ago– just returning from vacation– about my check, he said he was broke. Only had $60 bucks in his wallet and owed everyone money. I was p’o'd. I know he’s good for it, he has a large payment coming in next week, but all the same, I was counting on that money to pay for some house maintenance (now deferred). So, you do have to be able to roll with the punches when you freelance. I could not swing it if my husband didn’t have a steady paycheck.
I could easily pare back my expenses were it not for a stay at home mom and two children, and I wouldn’t need a career job either. The problem with a real job is that it also comes with expenses, e.g., nice clothes, constant haircuts, nice teeth, etc., and most of it comes out of after-tax money.
Computer programmer …
The secret I have discovered is to maintain a very simple cash based business model. I do mostly computer repair work these days, schedule 2 - 3 jobs a day and collect a check or credit card payment on completion. Very simple, easy going and I am generally wrapped by 3 in the afternoon.
The bigger picture … I now have time to work on my own projects which have far greater long term potential.
Great job! Judging from personal experience (and bad memory), finding employment when there are next to no jobs is one of life’s toughest experiences…
I used to get 30-40 job offers a week.( 1 week i got 84 offers) .ya know be your own boss make $100K the first year from a fortune 500 company paid benefits car allowance, health insurance…
But now even the spammers have given up..the last week I got ..less then 10….we are in very deep doo doo
You know when the spammers are too poor or lazy to spam, the end is near.
Almost all spammed job offers wind up trying to get you to participate (unwittingly) in check cashing fraud, usually under the guise of being a “payment processor” or some such. This is where a check or wire transfer is sent to you, and you take a portion and send it somewhere else via Western Union. Once that’s done, you are notified that the check is bad or the wire transfer is fraudulent and you wind up on the hook for the money you sent away. Bad business for the suckers who fall for it.
Egg:
Also include Pre-Paid Legal, Avon, Quixtar, Bankers Life, all commission only fluky flaky paychecks
Great news Bubba.
Continuing the debate about “markets” and as to whether or not they are animate, ecofeco said you can’t separate the game from the players. True, without players, there is no game. Or is there? I have an old Monopoly game gathering dust in a corner. It is not a game, actually, it is the game board and pieces. But people call it a game, when in fact there is no game until people start playing.
Or, a flea market open only on the weekends. When it is closed, it is not animated. It’s just a building with a bunch of booths and stuff, just sitting there. In fact there is no “market” until people start buying and selling.
It is a construct, animated or not, by individual people. But it, in itself, is not an animate object, anymore than a marionette is.
You can’t communicate with a market, a corporation, a government. You can talk to individuals participating in these constructs. Maybe. Ever try to get a response from a corporation when you have a problem? The corporation won’t talk to you, write you, etc. You’re trying to talk to an individual within the corporate construct. And half the time the individual you’re getting a response from is not the individual you had hoped to address. It’s a secretary, an administrative assistant, a Congressional staffer, someone else animating the marionette.
Well said palmetto.
There is an old saying that too name something is to have power over it. In this modern day and age, we have been bombarded with so much commercial advertising and wholly made of mumbo jumbo jargon we have forgotten the true words and meaning of things.
We have mistaken the map for the terrain. And yes, it is deliberate, though nothing new.
Here on Long Island, overpriced inventory continues to grow and buyers continue to dry up, at a time of year when inventory usually shrinks.
Seeing the same thing here in Los Angeles.
Downtown inventory of condos is really growing at a good pace. Newer listings are coming on at lower prices which indicates that sellers are getting it.
in San Jose, truckers are without work and taking taxi cab jobs in between their LD hauls. Imagine one of those Ice Trucker guys showing up to take you to the airport.
That would be cool.
“Imagine one of those Ice Trucker guys showing up to take you to the airport.”
That’d be a big improvement.
Credit score below 500? No FHA home loan
NEW YORK (CNNMoney.com) — The once wide-open doorway to homeownership closed a teensy bit more this week when a key government agency announced a proposal to no longer allow mortgages for borrowers with very low credit scores.
The Department of Housing and Urban Development said that it intends to require borrowers to have scores of at least 500 to qualify for FHA-insured loans. The agency has not required a minimum score before.
Are you even breathing below 500?
I know, funny thing about lending money to people with lousy credit.
500 credit score is garbage.I wouldnt loan my money to anyone with a score <700.The govt is still doing subprime loans.
Isn’t Subprime Sam pretty much the only subprime lender left in the game? (It helps to have the ability to stay in business while perpetually losing money…)
“Isn’t Subprime Sam pretty much the only subprime lender left in the game? “
If the underlying asset is overvalued you’re most likely correct.
Something distasteful about trying to keep an economy going by capitalizing on the lower rung and those less educated, forward thinking. The g*ds made human beings with eternal (stupid) optimism, desire to move forward, and the ability to work and work and work. Government is capitalizing on that basic DNA of human nature and I think it stinks. Let em work until they drop dead - all for the sake of the US economy. Wonder what would happen if everyone decided “enough”.
Why do you assume deadbeats are less educated and poor? That is a very elitist attitude don’t you think? May I remind you of this…
“LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.
The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.”
A government that expressly targets the needy (define needy as you like) to further its economic standing is bad form.
Any countries come to mind that that misuse their most vulnerable?
You may not be breathing below 500, but I’ll bet there are a lot of people breeding below 500.
+1 LOL! Too bad it’s true!
WSJ Article this week:
“Fannie Mae said its low down-payment initiative requires borrowers to put down $1,000 or 1% of the purchase price, which/ever is greater. The mortgage company said it faces limited financial risk because the loans are made through state agencies, which have a solid underwriting history and are on the hook to buy back certain loans that go bad.
Credit-card issuers mailed 84.8 million offers of plastic to U.S. subprime borrowers in the first six months of this year, up from 43.7 million a year earlier, estimates research firm Synovate. Nearly 8% of loans for new cars in the latest quarter went to borrowers with the lowest range of credit scores, up from 6.2% in 2009’s fourth quarter, according to J.D. Power & Associates and Fair Isaac Corp.”
So much for the myth that unless you have stellar credit nobody will loan you any money. Can a fico score even go below 500? That’s like the SAT where just filling out the name gave you 300 points. I think being alive gets you to 500 for fico scores. So I suppose it’s good that lenders will no longer loan money to the dead.
you can’t even get a decent used car for only 1000 down. This is nuts.
“Fannie Mae said its low down-payment initiative requires borrowers to put down $1,000 or 1% of the purchase price, whichever is greater. The mortgage company said it faces limited financial risk because the loans are made through state agencies, which have a solid underwriting history and are on the hook to buy back certain loans that go bad.”
Fracking liars. Since states are generally broke at the moment, I don’t get how their underwriting history counts for squat. But then the GSEs have carte blanche from Uncle Sam to throw as much of U.S. tax payers’ money as they want down the mortgage lending rat hole, so perhaps there is nothing to worry about here?
This is just another wealth transfer program from the taxpayer to the FIRE sector.
It pays to have well-paid-for politicians. They dance like marionettes. I’m still chuckling about that clown who apologized to BP during some hearings on the Gulf leak.
In the financial reform bill, I heard on some Friday evening politics show (Inside Washington or Washington Week In Review), that 500-some pieces of legislation will have to be written as a result of the Dodd-Frank bill.
This country really needs to turn out the regulatory-captured politicians before they loot the treasury again.
“Credit score below 500? No FHA home loan”
1) What share of FHA loans were previously issued to those w/ credit scores below 500?
2) How much has the share of the prospective buyer pool w/ credit scores below 500 increased since the onset of the Second Great Contraction?
Is it possible that requiring buyers to have a FICO above 500 is a defensive move that will allow them to claim, in the future, that they reformed their standards?
You have to have a lot of collection accounts or recent bankruptcy to be there! We are talking about a person who has probably never paid a bill on time in their lives at 500!
Court finds in favor of Chiang, employees to receive full pay
Sacramento Business Journal
A Sacramento County Superior Court judge denied the governor’s request to order State Controller John Chiang to pay many state employees the federal minimum wage, the latest in a two-year standoff.
Judge Patrick Marlette’s decision is the latest battle between Gov. Arnold Schwarzenegger and Chiang, whose office issues paychecks to 240,000-plus state workers.
About 200,000 faced earning $7.25 per hour — or $290 per week — since their bargaining units had not reached a deal with the governor last month.
The governor took the action in order to preserve cash as he and state lawmakers attempt to address a $19.1 billion shortfall for this current fiscal year. The cash-strapped state is looking at aggressive cost-cutting efforts to control spending, including possibly curbing payroll and programs statewide.
Friday furloughs ended last month, but the governor soon announced the federal minimum wage proposal in order to preserve cash.
But Chiang, a Democrat, said he would not follow the governor’s order unless the court demanded. The state 3rd District Court of Appeal found in favor of Schwarzenegger’s order, but Marlette’s ruling Friday delays the issue until July 26, with a full hearing next month.
Is there something about the east and west coasts that make them stupid?
The whole country has plenty of stupidity, as illustrated by how easy it is to get them to blame each other rather than really think about the root cause of their problems. And every group can easily see the stupidity in all the other groups except their own.
Sad but true.
Divide and conquer.
United we stand. Divided, we’re chumps.
Nebraska governor orders furloughs to save $3.5M
LINCOLN, Neb. — Nebraska Gov. Dave Heineman on Friday ordered more than 11,000 state employees covered by union contracts to take two furlough days by the end of year, a move he says is needed “to avert as many layoffs as possible.”
Heineman pointed to state revenues that lagged official projections by $76 million in the fiscal year that just ended, and worries revenues may fall short again this year, when ordering the furloughs. He said the furloughs will save the state about $3.5 million.
“As a result of the downturn in revenue and in order to avert as many layoffs as possible, it is prudent for the state to take additional action now,” Heineman said in an e-mail to state employees. “Wages represent the largest cost for most agencies, and it is necessary to implement employee furloughs as the next appropriate step.”
The repubs like less government (so they say, but I call bs), I guess they’re going to get it in many states without having to pass any bills.
Peak government?
goverment bubble bursting? Government bubble blog?
That is the bubble I want most to burst. I hate big government.
Don’t you work (er, I mean ‘independently contract’) for the big, bad government? Or, to be more exact, for its military/industrial complex? Be careful- if your political beliefs were ever implemented, you’d be out of a job.
Over 75% of the US population gets their pay directly or indirectly (contracting) through the US government. When it’s the biggest game in town do you become noble and live like a pauper because you hate government? Or do you make the best of what there is?
What if I was born in Russia in 1959 and had the same opinion? When 99% of the income earned was in government work do I starve or do I survive?
I gave up on voting. I cannot persuade you Alpha, a lover of big government, to hate government. Even if I did, you would swing back to your current love of Stalinism. So I may as well take the direct approach and save money the government does not take from me.
75%? I don’t think so. Got a link to back that up?
“Over 75% of the US population gets their pay directly or indirectly (contracting) through the US government.”
US GDP $14.5T
Govt spending $3.7T (of which $0.5T or so is interest paid to foreigners and expenditures in foreign countries like stuff bought for military bases overseas from foreign suppliers) leaving $3.2T
3.2 out of 14.5 is not even close to 75%.
Direct or indirect. Most obvious is defense contracting (Raytheon, NG, Boeing, General Dynamics, Rockwell Collins, Rockwell Intl). Then you have small subcontractors to the contracting.
Next category is involvement in home mortgages. Most of this is now nationalized. So the banking system is mostly a government enterprise.
Next category is health care. One of the most regulated industries where a lot of the work is indirectly government-involved.
NASA has its private industry subcontracting.
The US is becoming more and more socialist. Canada has recently for the first time become a freer market economy than the U.S.
Also don’t forget the US constitution mandates that government must provide defense in some form. Either in the form where employees of the government provide weapon systems or where government opens up to private enterprise to compete to provide weapon systems. Whichever way, Alpha’s taxes will pay for it. It’s part of the Constitution.
Nasa is not mandated in the constitution. Nor is Medicare.
Okay not 75%.
58%.
http://tinyurl.com/2ftx64a
“Economist Gary Shilling has calculated that 58 percent of the population is dependent on the government for “major parts of their income,” including teachers, soldiers, bureaucrats, and other government employees; welfare and Social Security recipients; government pensioners; public housing beneficiaries; and people who work for government contractors. By 2018, Shilling estimates, an astounding 67 percent of Americans could be dependent on the government for their livelihood. The implications aren’t comforting.”
Thanks Bill. Good find.
58% I can buy. Although I think that includes all levels of gubmint not just fed. Even so that is incredible
I’m not sure how you categorize employees “who work for govt contractors”. If a company does 30% of its business with the govt are all employees considered to be dependent on govt for their income? And since pretty much every Fotune 500 company is bound to have a govt contract or two, in theory everyone who works in corporate America is a govt employee
You’re welcome!
Good observation. I was wrong on another point. It’s all levels of government, not just the federal level (the U.S. government).
If a company does 30% of its business with government, it it sometimes a specific division that does its work with government and that entire division gets a government check whether directly or indirectly.
There was libertarian author a few decades ago, perhaps Robert J. Ringer, who said once more than 50% of the voters get their primary income from a government check (directly or indirectly) we lost the war for small government.
Question: If the 42% find out that they are shouldering the burden (the incomes of the other 58%), what will happen?
They will shrug.
If their local government can make ends meet with just 2 furlough days for their employees, I’d say that’s doing pretty well.
Not real hardship on the employees and no real disruption in public services.
Well, the Palmster has to go run a few errands, but I’m just gonna apologize in advance for a rather wordy post that hasn’t shown up yet, on “markets”. I dunno WTF I’m talking about anyway, but I was trying to respond to ecofeco and Catank.
Right-To-Die Billboard Causes Uproar In N.J.
Final Exit Network Says It Provides Guidance To Adults With Painful Illnesses, But Many Residents Upset With Ad
The message on a billboard in New Jersey is stirring up a lot of controversy.
It centers on whether a person suffering from a painful disease has the right to take his or her own life.
The billboard looms over a busy section of Route 22 in Hillside, facing the eastbound lanes. Some drivers said they are confused by the message.
“My Life My Death My Choice. So what does that mean?” Hillside resident Steve Leo said.
The Final Exit Network paid for the advertisement that reads “My Life My Death My Choice” and offers a website. The national non-profit group said it provides guidance to adults who suffer from illnesses that are so painful that they want to end their lives.
~~This will be hotly debated. It always is. Reason and logic dictate that a person “owns himself” and ought to have some say about the conditions of his/her exit from life. If they do not relish languishing uselessly in a near vegetative state they should be made as comfortable as possible and allowed to perish on their own terms. That seems compassionate to me, although there are many people who insist that if you’re terminally ill you should be kept going on life-support machines for an extra few weeks until life finally drains from your body and your last dollar is drained from your pocketbook.
You got that right wmbz draining the last insurance dollar out of the semi deceased.
Something like 80% of your lifetime of medical costs are spent during the last year of your life. There’s no such thing anymore as a natural death.
Oregon passed the Death with Dignity Act 14 years ago. I’m not sure if I would have the guts to use the law, but it’s good to know it’s there, if and when the need arises.
Control of your own body is the ultimate sovereignty issue.
It should be nobody’s business but your own.
Control of your own body is the ultimate sovereignty issue ??
Not as far as the neocon’s are concerned…
Terri Schiavo collapsed on February 25, 1990, resulting in 15 years of institutionalization. Terri, diagnosed as being in a persistent vegetative state
In March 2005 President Bush returned to Washington D.C. from a vacation to sign legislation designed to keep Terri alive.
Neoconservatives (most Republicans) are by no means individualists.
I have my long term care insurance policy, issued by the venerable firm of Smith and Wesson.
I’ve had a ‘hunting trip’ pre-scheduled with my father for many years now should the need ever arise.
And yes he’s on board.
SV, just make sure that there are no individuals (heirs, family members) who would disagree with your dad’s plan. I don’t want you to end up in jail. I heard of a case once where the sibling who wanted the whole inheritance ratted on the caring sibling who administered the medication that resulted in the parent’s death.
RE,
Good advice.
Maybe I’ll have to pencil in a couple more folks for the trip.
Just kidding, of course.
Ha! Can I send some of my relatives too?
People who have never had to live chronic pain and debility that medicine can neither cure nor relieve, have no idea what it’s like.
Well the great fear is that somebody else will be making the decision. Whether it’s the insurance companies, or “death panels,” or the T4 committee, nobody wants somebody else deciding that their life is not worth living. And, unseemly as it is, cost IS part of the equation. But with the medical technology that we have today, we have to make the decision on whether to “pull the plug,” on extraordinary measures every day.
The “death panel” thing cracked me up. When doctors and hospital personnel have meetings with families, they are trying to help them to come up with a plan for a family member who has been stuck in the ICU for a long time and doesn’t have an advanced directive or living will. Usually every family member has a different idea of what should be done. I have participated in many family meetings - they ask questions with every one present - that way everyone gets a consistent message. Much better than each sibling calling the doctors and interpreting the message differently. Some families want everything possible to be done. Other families want their loved one removed from the ventilator.
In my experience, the sibling who wants everything possible to be done usually is the most estranged from the family. I think that they hope that their parent will recover so they can repair the relationship. But that’s just my opinion.
A living will and advance directive would help enormously.
A friend works in a funeral home, and the disagreements don’t stop after the loved one dies.
This Final Exit program helps people commit suicide. I think that people who want to commit suicide should go ahead. I can imagine some rare individuals who are quadriplegic or so disabled that they can’t open a bottle of Tylenol. They might need some help from some Kevorkian type.
That said, everyone should discuss their preferences with a person they choose as their medical decision maker in the event of a catastrophic illness or accident. Your doctor or medical center have nice booklets and paperwork that go over the different types of life-sustaining procedures to help you make an educated choice. I chose my son, who is rather heartless, like I am, and I am sure will abide by my wishes. My dear husband loves me and depends on me so much, and would have a hard time carrying them out. Get it in writing. It’s very easy - you don’t need a lawyer, just a witness/notary.
Regulators shut down banks in Florida, Michigan, So Carolina; 96 US bank failures this year.
WASHINGTON (AP) — Regulators on Friday shut down three banks in Florida, two in South Carolina and one in Michigan, bringing to 96 the number of U.S. banks to succumb this year to the recession and mounting loan defaults.
The Federal Deposit Insurance Corp. on Friday took over the banks: Woodlands Bank, based in Bluffton, S.C., with $376.2 million in assets; First National Bank of the South, based in Spartanburg, S.C., with $682 million in assets; and Mainstreet Savings Bank of Hastings, Mich., with $97.4 million in assets.
The FDIC also seized Miami-based Metro Bank of Dade County, with assets of $442.3 million; Turnberry Bank of Aventura, Fla., assets of $263.9 million; and Olde Cypress Community Bank of Clewiston, Fla., assets of $168.7 million.
Why do they always cite the assets, but never the liabilities?
The WSJ article on this subject also listed each bank’s deposits, which are the primary liability.
Strange isn’t it. A bank’s loans are assets and its deposits are liabilities.
No stranger than the fact that the money is being borrowed and lent at the same time.
History no, Business yes—hard times drive students to money-making degrees.
The Business Review (Albany)
Caitlyn Collins set aside her dream of becoming a filmmaker to pursue career as a dermatologist.
The 18-year-old Rotterdam resident will study biology at Union College in Schenectady this fall, the same school where her best friend plans to earn a degree in neuroscience.
“I like shooting video and the creativity of filmmaking, but there aren’t a lot of jobs in that field and I know I need a job so I can support myself,” Collins said.
The recent graduate of Rotterdam-Mohonasen Central Schools is one of a growing number of college students who are shying away from liberal arts programs in favor of degrees more likely to lead to a high-paying job.
I teach at a small university. My teenage boys are getting college age. If I am going to spend that much money to educate these two guys, I want them to make a decent wage, be good educated citizens of the US, and be good parents. If I get that, then I am a successful human being and father.
A successful education does those things. One of my favorite people - Jackie O. - said about parenting: “If you bungle raising your children, I don’t think whatever else you do matters very much.”
I wonder what Jack Welch thinks about Jackie O? I note that Welch’s kids hate him.
Roidy
I note that Welch’s kids hate him.
And this is a man that the media touts as being a “success”.
Maybe Jack disowned the bottom performing 10% of his offspring every year?
He’s a dirty old man. And the young woman for whom he left his wife is stuck with the dirty old man and got what she deserves.
Funny that they present a business degree as a “money making” degree. You don’t learn anything useful in those programs. A liberal arts major is just as good a management trainee as any business major. Sure, a business major might be able to calculate net present value, but he never will once on the job. The accountants and the finance majors do all the “skilled” work.
And for those who believe that the holy grail lies within a quick and dirty “health care” job, they minght be in for an unpleasant surprise.
Well, it depends upon what you mean by “liberal arts”. Classically that meant grammar, dialectic, rhetoric, geometry, arithmetic, astronomy, and music. Later on it was grammar, rhetoric, logic, geometry, arithmetic, astronomy, and music.
Most liberal arts students I’ve seen NEVER take college level mathematics classes, and few hit the hard sciences either.
I was shocked when I asked my nephew what kind of classes he took to get his journalism degree. I presumed it was heavy on history and economics. Wrong.
I think most liberal arts programs require at least some college-level math, and some hard sciences. I’m sure some programs don’t, but they are the exceptions. The whole point of liberal arts is that it’s a broad education, therefore some math and hard science is almost always called for.
Minimal at my state U - one college level class. Of course that blows the minds of many slackers. Wahhh, why do I have to take this??? How will I use it in REAL LIFE?
At some level, I’m not really sure what is meant by “college level,” math. Calculus is a 100 level, freshman course. Shouldn’t the prerequisities for freshman classes be considered remedial?
Calculus is a standard high school subject in most european countries.
Don’t blame the universities.
Personally I think it’s a waste. Best course of action is get a degree in something you like and get top grades. Investment banks and top consulting companies don’t care what your degree is, it’s your GPA and the quality of the school that matters.
2 years after working at an IB or Deloitte, PWC, etc, then you get the MBA.
FWIW only about 15% of Fortune 500 CEOs have a business undergrad degree.
I agree, Eddie. If you get good grades and do well on admissions tests, you can go to any professional school.
The cycle completes. I remember in the mid 80s jobs were still scarce because of a lot of boomers competing for work. I changed my mind several times about what I wanted to major in but ended up thinking of money. So I ended up majoring in something where I could get the best pay. Fortunately I took a lot of liberal arts classes along the way beyond the core elective requirements: several more literature classes, several more history classes, and so on.
Software development has been and still is a great field for me. I was such a purist (or geek) that in 1982 I paid $4,000 for an Apple II plus computer system, printer, floppy disk drive, monitor, and modem when I could have bought a brand new Mustang for $6,000. But I made good use of that purchase.
BiLA,
Ahh the old days. I remember that my first PC had a 25 meg HD.
My first PC had NO hard drive.
I’ll beat y’all…..the original Kenbak 1 computer
http://www.youtube.com/watch?v=lxsdL_OWumw
Nielsen ran an electronics school in Charleston SC
Wow! That reminds me of the MITS Altair 8800. Good find.
I didn’t really messing around with PCs until the Timex, Tandy, Coleco, Atari days. My first was a Xerox (IBM) PC with 2 floppies and 64k RAM.
Little known fact: What was called the IBM PC was actually invented by Xerox.
The Apple II plus had 64k-bytes (that’s only 65536 bytes, folks!) of ram also. My uncle had a Radio Shack TRS-80 with a cassette tape form of I/O in the early 80s.
I remember the TRS-80; they use to call it the
“Trash-80″.
I remember scoffing when my boss decided to put a hard drive in the PC we used at work. “We’re spending more than $100 to save me 3 minutes loading DOS every morning? THAT’S an efficient use of taxpayer money.” Of course most of our work was done on dumb terminals.
I remember the whole building including the main frame computer jocks in 1980 scoffing at an employee who said that someday everyone would have a personal computer at home and at work. I wish I could apologize to him now.
Bought an Apple II (no +, plus wasn’t out yet) in 1979 for $1500, 16k RAM, no drive. I used a cassette tape recorder for storage and an old tube TV I found for free at a garage sale. The $1500 was almost my total savings from delivering a newspaper route for 2 years. I was 16 years old. I didn’t get my first (used) car until I was well into graduate school at around 23 years old. I rode bike, took the bus, or got rides from “rich” friends. (BTW, my real name is also Bill.
I went to an outstanding medical school (UCSF) and my classmates included many English, arts, music, and history majors. We had attorneys, too. You can major in anything you want and apply to medical school. You just need a year of chemistry and physics (passing the AP exam would cover these requirements), organic chemistry, biology, biochemistry, and usually calculus (believe it or not, our medical school got rid of the calculus requirement several years ago - don’t get me started.) It’s easy to major in whatever you want and still fulfill pre-med requirements. Medical schools like diverse students, not just biochemistry or biology majors.
The impact of the 2009 first-time home buyer credit plus Bernanke’s quantitative easing of MBS purchases comes across loud and clear in Rich Toscano’s price-per-square-foot graphs for San Diego.
Too bad that there is next-to-no demand at these artificially inflated prices.
San Diego Median Home Price per Square Foot, June 2010
Illinois: Our very own Greece?
Governor of cash-strapped Illinois, Pat Quinn.
By Tami Luhby, senior writer
July 14, 2010: 12:11 PM ET
NEW YORK (CNNMoney.com) — Just two weeks after Illinois Gov. Pat Quinn chopped $1.4 billion from the budget, the cash-strapped state is turning to the debt markets to get it through the fiscal year.
On Wednesday, it plans to raise $900 million through Build America Bonds to fund its first capital program in more than a decade. The money will be used to improve roads, bridges and schools.
And this debt issuance is only the beginning. The state plans to raise $1.3 billion in short-term notes next week and $1.4 billion in debt related to tobacco settlement funds in November.
And, the state plans to turn to the debt markets to fund $3.7 billion in pension obligations in December, if the state legislature approves. The state already sold $2.4 billion in pension notes in January.
States don’t traditionally fund their pensions with debt, but the practice frees up other money that can be used for operations, said John Sinsheimer, Illinois’ director of capital markets.
…
Would it be ok to shorten your screen name to CIBT, or “Quarrelsome Intellectual”, at least. I liked GetStucco, by the way. In all its double meaning.
CIBT doesn’t quite keep alive the spirit of this wonderful Op-ed piece. Perhaps it is time to retire the handle, now that the Goldman wrist slap settlement is “in the bag.”
Op-Ed Columnist
The Goldman Drama
By DAVID BROOKS
Published: April 26, 2010
Between 1997 and 2006, consumers, lenders and builders created a housing bubble, and pretty much the entire establishment missed it. Fannie Mae and Freddie Mac and the people who regulate them missed it. The big commercial banks and the people who regulate them missed it. The Federal Reserve missed it, as did the ratings agencies, the Securities and Exchange Commission and the political class in general.
It’s easy to see why this happened. People who make it into the establishment work and play well with others. They are part of the same overlapping social networks, and inevitably begin to perceive the world in similar, conventional ways. They thrive in institutions where people are not rewarded for being cantankerous intellectual bomb-throwers.
Outside the establishment herd, on the other hand, there were contrarians who understood the bubble (which was the easy part) and who figured out how to take counteraction (which was hard). Michael Burry worked at a small hedge fund in Northern California. John Paulson ran an obscure fund in New York. Eventually, there were even a few traders at the big investment banks who also foresaw the imminent collapse. One of them was “Fabulous” Fabrice Tourre of Goldman Sachs.
If this were a Hollywood movie, the prescient outsiders would be good-looking, just and true, and we could all root for them as they outfoxed the smug establishment. But this is real life, so things are more complicated. According to Gregory Zuckerman’s book, “The Greatest Trade Ever,” Burry was a solitary small-time operator far away. Paulson was cold and diffident.
And as for Fabulous Fab, he seems to be the product of the current amoral Wall Street culture in which impersonal trading is more important than personal service to clients, and in which any product you can sell to some poor sucker is deemed to be admirable and O.K.
…
WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal
* Need to Sell Your House? Cut the Price
* Cost of FHA Mortgage Set to Rise for Some
* July 15, 2010, 2:18 PM ET
Trouble Ahead? Housing Inventory Rises in Many Markets in June
…
Compared to one year ago, the June inventory in the 27 markets covered by ZipRealty was up 2.1%. Western markets saw the biggest month-over-month uptick in inventory, rising by 10.5% in Las Vegas, 9.4% in San Diego and 7% in Orange County, Calif.
Compared with the previous month, inventory fell in just one of the markets covered by Zip, declining by 1.5% in Jacksonville, Fla.
Inventory could continue to rise over the second half of 2010 as more banks take title to homes through foreclosure. More than seven million households are behind on their mortgage payments or in some stage of foreclosure.
Meanwhile, demand appears to have fallen sharply in the months following the expiration of the tax credit. New home sales fell to a record low in May, while pending sales were down 30% from April. Mortgage rates remain near 60-year lows, and yet demand for home-purchase loans fell to a 14 year low last week, according to the Mortgage Bankers Association.
“So when does it make sense to lower the price? Trulia’s Tara Nelson offers the following five tips:
* Multiple listing agents have recommended listing the home at a lower price.
* Feedback from the buyers’ agents suggests the home is overpriced.
* The home isn’t getting any showings, even though it’s marketed well.
* The home has sat on the market far longer than other homes in the area.
* There’s been multiple offers, but they’ve all been significantly under the list price.”
*you WANT to sell it.
Looking on the bright side of pessimism, at least Peter Cecchini is not calling for the Dow Jones Industrial Average to drop below 1000, as permabear Robert Prechter is.
By contrast to the 90 percent drop needed to get the DJIA down from 10,000 to below 1000, a drop in the S&P500 to below 1000 would entail a percentage decline of (64.88/1064.88)*100 = 6.1%
‘T’would be a mere flesh wound. Fat Finger Boy could take the market down this far by midday, and the PPT could bring it all the way back by day’s end.
* The Wall Street Journal
* TODAY’S MARKETS
* JULY 17, 2010
Optimism Fades, as Do Stocks
Dow Industrials Plunge 261.41 Points as Consumer Sentiment, Earnings From GE and BofA Disappoint
By DONNA KARDOS YESALAVICH And STEVEN RUSSOLILLO
After resisting for much of the week, the stock market finally toppled under a barrage of disappointing economic news and mixed earnings reports.
The Dow Jones Industrial Average on Friday sank 261.41 points, or 2.5%, to 10097.90, its lowest since July 7. It was the worst one-day selloff since June 29. The Nasdaq Composite Index fell 70.03 points, or 3.1%, to 2179.05, its lowest since July 8. The Standard & Poor’s 500-stock index fell 31.60 points, or 2.9%, to 1064.88.
Every Dow component was down. The least-bruised names were relatively defensive companies like AT&T and Procter & Gamble, each down about 1%.
The worst performers were Bank of America and General Electric, down 9% and nearly 5%, respectively. Each reported second-quarter earnings that beat Wall Street forecasts, but also declines in revenue at an inopportune moment, just when the economy seems to be losing momentum.
The latest evidence of that came from the University of Michigan, which reported its consumer-confidence index dropped in July to its lowest level since last August. Economists expected a much smaller decline.
The report followed a string of downbeat data throughout the week, including a second consecutive monthly decline in retail sales, which caused research firm Macroeconomic Advisors to cuts its estimate of annualized second-quarter economic growth to 2.1% from 3.2%.
Until Friday, the stock market had weathered the bad news, thanks to some solid earnings reports. Many observers had hoped that the market had put in its lows for the year during its late-June swoon.
But Friday’s selloff erased all of the gains the market had made during the week and left its future course again in doubt. The Dow ended the week down 1%.
After an optimistic start to the week, stocks are deep in the red Friday as big name companies like Google, GE and Bank of America feed concerns about the pace of earnings growth. An undertone of discouraging U.S. economic data as well as the potential fallout from financial regulation is also weighing on stocks. Paul Vigna, George Stahl and Drew Dowell discuss.
“There is a high likelihood that we’ll see quite bit of weakness going into the end of the year and into 2011,” said Peter Cecchini, chief strategist at BGC Capital. “The S&P below 1000 by the end of the year would not be surprising to me.”
…
An aggregate drop of less than 7% would not be surprising in a period during which markets are moving 3% a day? Way to go out on a limb. I personally hope it does as I have buys placed at S&P at 1000 and every 50 point drop from there (although not for the S&P index). Although I encourage people to get back in a little, I only encourage them to do so with a plan to buy more if and when prices drop signficantly so they will not be trapped.
So you encourage people to throw good money after bad. Interesting.
Hee hee hee! I got out on Wednesday!
Paying attention to this blog has saved me thousands and allowed me to preserve my retirement savings. Thanks all!
Credit & Money Management
Foreclosures Drop, but Shadow Inventory Remains a Worry
Kiplinger News
July 15, 2010
The number of foreclosure filings made on residential properties slid 3 percent between May and June, foreclosure listings website RealtyTrac says - yet the nation’s swelling ranks of troubled homeowners remains a concern.
“While the foreclosure problem is being managed on the surface,” RealtyTrac CEO James J. Saccacio said, “a massive number of distressed properties and underwater loans continues to sit just below [it], threatening the fragile stability of the housing market.”
Indeed, it appears that the foreclosure situation is being mitigated. The number of filings made in the first half of 2010 - 1.65 million - was 5 percent below the foreclosure total in the second half of 2009.
Yet the home loan delinquency rate edged up 2.3 percentage points between April and May, according to mortgage data aggregator Lender Processing Services. Two months ago, 9.2 percent of mortgagees were delinquent - and that number could rise in an atmosphere of stubbornly high joblessness.
With so many troubled loans on their books, banks may remain unwilling to lend. A dearth of activity in the real estate sector could, in turn, depress both new-home construction and housing prices.
…
The LA Times
California job climate stagnant in June
The state unemployment rate fell slightly to 12.3%, but 27,600 jobs were lost as census positions expired, an EDD report says. Some economists fear a double-dip recession unless jobless benefits are extended.
Those economists should be fired.
Oops. Let me expand.
With or without the extensions, we are going to have a “double dip”. I’ve pointed out the many similarities between now and the S&L disaster. It took 4 years for that one to bottom out and the employment situation took just as long. It was worse in the states that were stupid.
So the “double dip” will actually be just a continuation for J6P. Only Wall St. will see a dip.
“I’ve pointed out the many similarities between now and the S&L disaster. It took 4 years for that one to bottom out and the employment situation took just as long. It was worse in the states that were stupid.”
But you’re not up for re-election.
Price cuts galore on mega-mansions
NEW YORK (CNNMoney.com) — For deep-pocketed plutocrats purchasing trophy homes, times are good. There is a glut of mega-mansions on the market — at deep discounts.
On Realtor.com alone there are currently 6,610 listings of houses with interiors larger than 10,000 square feet.
“Buyers are not used to having this amount of inventory,” said Russ Filice, an agent with Sotheby’s International Realty, which represents many ultra-high-end properties. “The options are greater than ever.”
What’s surprising is that these homes are starting to move again. “Maybe not quickly, but they’re selling,” Filice said.
The super-wealthy fled the mega-mansion market in the wake of the Lehman Brothers collapse in the fall of 2008. But with the stock market recovering and real estate markets stabilizing, they’re ready to deal again. But only if the price is right.
The $100 million home
“The super wealthy were watching and waiting,” said Jonathan Miller, a New York-based appraiser, who follows real estate in Manhattan and the Hamptons. “It’s always been my feeling that the high-end market comes in waves. I looked at the Hamptons in 2009 and you just weren’t seeing trophy property sales. Now you are — but not at the prices you saw during the boom.”
A 48,000-square-foot home in Bel Air, Calif., was recently reduced by $13 million to $72 million. A 16,000-square-foot nouveau Mediterranean in Las Vegas went to $11.9 million from $14 million. And a 15,000-square-foot Dallas domain is down to $15 million from $17.5 million after more than two years on the market.
Don’t like those prices? There are plenty more to choose from. So many homes started during the boom, when owners were flush, were not completed until the bust, when owners’ fortunes had changed. And they’re ready to unload them.
“A number of people back in the 2003, 2004 and 2005 boom built very large homes,” said Philip White, president of Sotheby’s International Realty. “Then, with the adjustment in the economy, it proved to be too much house for some of them.”
In Alpine, N.J., developer Richard Kurtz broke ground in October 2007 on a home for himself. He calls it Stone Mansion, a 30,000-square-foot spread with 12 bedrooms, 15 full baths, a screening room, wine grotto and indoor basketball court. The house was finished just a couple of months ago.
Between then and now, Kurtz decided to buy a house in Florida and sell the Stone Mansion. Asking price: $68 million.
A house near Orlando has been under construction for more than three years and is not done yet. Business has been slow for owner David Siegel, who also owns Westgate Resorts, so he is putting his house on the market.
The 67,000-square-foot house sits on 10 acres and is called Versailles because it incorporates many of the design features of the French palace. Siegel hopes to get $100 million if the buyer wants the 67,000-square-foot property finished.
Or he’ll take $75 million as is.
“But with the stock market recovering and real estate markets stabilizing, they’re ready to deal again.”
Did anyone else happen to see Inception last night?
It brings to mind U.S. financial market journalism: All the characters move in and out of dream worlds…
Dow was at 6K. Now it’s at 10K. That’s not recovery to you? I guess our definitions of recovery differ. To me a 67% increase in 16 months meets the criteria.
Not as impressive as a 0.25% earned in a checking account but still, not too shabby.
Dow was at 14K. Now at 10K. That’s recovery to you?
I guess we can all agree to apply our own preferred definitions…
And it just might go back down to 6K.
recovery - 1. gradual healing (through rest) after sickness or injury
2. the act of regaining or saving something lost (or in danger of becoming lost)
Recovery…6K to 10K
14K is irrelevant. If you want to live in the past, be my guest. It has **recovered** from 6K to 10K (actually 11.3K in May).
As I have said here several times I was out of equities long before it hit 13.5K (not 14K). You make money by what you think will happen next not by reliving what has already happened. And right now we are in a recovery. I don’t really care if the dow was at 140K at some point in the past. I care about where it will be in 3, 6, 9 and 12 months from now.
Maybe you have a different strategy of investing based on what has already happened vs. what will happen. Good luck with that.
You’re being too hard on him, Eddie. I, like you, got out of equities in 2007 when the Dow hit 13000. I went to bonds in my retirement accounts, and then to cash six months ago. I bought individual stocks in late 2008 (Ford, Alcoa, USBank) and sold them late last year. I don’t think we’re out of the woods yet, and will not go back into stocks until I’m confident that economic recovery is in the works. You think that stocks will be higher in the coming year. A lot of people don’t.
I’m older than you are, and have a nice nest egg that I can live on for the next 30 years if need be. What’s right for you isn’t necessary right for everyone.
P.S. We only keep enough dough in our checking account to pay current expenses.
I always think a bit differently, but wont the homebuilders be the first to recover when we hit bottom assuming they dont have too much spec inventory? Isn’t it an industry with lower overhead where you just lay ppl off until demand rises and those with cash can get deals on land prices they can develop later? Also, with all the layoffs, they can just cut pay and still find qualified workers not to mention deals on materials that constitute excess inventory from the boom days.
All homebuilders need are customers willing to fork over scarce money to buy newly built houses instead of buying on the cheap one of thousands of already built houses that are now sitting empty.
You wouldn’t believe that number of ppl that paid 100k or more for newer colors, tile and appliances, worth about 20k, not to mention that older homes in certain periods are better constructed. It sounds too dumb to be true that there are millions of people that passed up higher quality homes on bigger lots with mature trees because they had wallpaper, funky carpet and white appliances that they deemed “outdated” only to pay much more for less. I have to admit I know some personally.
I have to admit on Friday I bought a small amount of XHB and intend to buy a little more on each 10% drop. Sure I felt dirty, but also a bit exhilarated by breaking all the rules. That is about as badass as I get.
“…but wont the homebuilders be the first to recover when we hit bottom assuming they dont have too much spec inventory?”
1) They have too much spec inventory (particularly of land bought at bubble-era prices).
2) Their stock prices evidently propped up until fairly recently; e.g., Toll Bros was persistently stuck on $20/share right through the collapse of the GSEs, the collapse of Wall Street, and the collapse of the broad stock market from DJIA = 14K down to 6K.
Only recently has evidence emerged that plunge protection of home builder shares has been ended. How they qualified for special protection of their prices, who did it, how they did it and whether it was legal to fix their prices are questions which may never be answered.
Eyeballing that Toll Brothers chart from Fall 2007 onwards suggests that the share price was propped up on the $16-$20 range from Fall 2007 forward, right through the crisis to the present day.
Buy Wall Street sponsored builders now if you don’t mind holding a nonperforming investment for a few decades going forward.
“The super-wealthy fled the mega-mansion market in the wake of the Lehman Brothers collapse in the fall of 2008.”
Ten thousand square feet….(yes, I realize some want to have it six times bigger)….
This reminds me of this (in short, finances still seemed excellent for Wall St people, as of last October):
“Geithner Aides Reaped Millions Working for Banks, Hedge Funds”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=abo3Zo0ifzJg
Dataquick reported a 5% year-over-year increase in house prices in my area (Sacramento.) I see that as a positive sign, because higher end houses are appearing on the market in greater numbers and there are lots of price reductions. I predict a blood bath this winter.
What’s worse: Facing down a $19 bn budget gap square in the eye, or limping along with no budget?
California has no budget, new governor to inherit mess
By Jim Christie
SAN FRANCISCO | Thu Jul 1, 2010 6:36pm EDT
SAN FRANCISCO (Reuters) - California’s next governor — whether it be Democrat Jerry Brown or Republican Meg Whitman — will almost certainly inherit a budget mess this November, given the ominous beginning to the fiscal year on Thursday with no spending plan or hope of one soon.
The capital of Sacramento greeted the absence of a spending plan with yawns since state leaders have failed to approve one in time for the new fiscal year in 19 of the past 25 years.
Republican Governor Arnold Schwarzenegger and leaders of the Democrat-led legislature are wildly far apart on how to close a gaping shortfall estimated at more than $19 billion.
There is no immediate effect from the lack of a budget as the fiscal year begins, but State Treasurer Bill Lockyer this week raised the specter of California being forced again to issue IOUs if it runs out of cash.
“It’s absolutely critical that the governor and legislature quickly adopt a budget that’s free of hope-and-a-prayer math and legal clouds. Every day without a credible plan brings us closer to deterioration of the State’s credit rating and the humiliation of IOUs,” Lockyer said in a statement.
BUDGET TRICKS
Recession, the housing slump, battered financial markets and a state jobless rate topping 12 percent have cut hard into state revenue, and few see a credible budget in the works.
Orange County Supervisor John Moorlach expects one-time measures, such as accounting tricks that push payments to later years, in any budget plan and says that makes November’s election critical: “This will be one of those inflection points in California history.”
…
Like so many other governmental bodies, lets just kick this can down the road and deal with the problem later.
How long can the US and the states continue to do this?
I think that we should hold our elected officials responsible for the fiscal mess that we’ve created. How? How about cutting their retirement benefits if the agencies don’t balance the budget?
“How long can the US and the states continue to do this?”
Apparently, the answer for California is something like ‘at least for a decade.’ Do you remember Gray Davis, and how Ahnold defeated him by promising to never get California into debt again?
How’s that working out?
This is exactly why we need public funded elections so Ahnold can tell the putrid servants to take a pension cut or go find another job….
The government’s done so well at keeping its financial house in order, I’m sure it will do a GREAT job in deciding which candidates are worthy of campaign funds.
Everybody gets the same amount…say $1 per registered voter..25 cents in round 1 and 2 and 50 cents round 3….yes even the commies and socialists get $$$ and all will be included in the local debates..
Then you winnow it to the top 5 in the 2nd round then the top3 never less then 3 running for the office and all get the same $$$ no pacs no personal donations…nothing
I can’t believe I’m defending Arnold, but he tried to cut state workers’ pensions from the minute he got into office. He just stupidly went after nurses. If he had succeeded, we wouldn’t be in the mess we’re in now.
“California’s next governor — whether it be Democrat Jerry Brown or Republican Meg Whitman — will almost certainly inherit a budget mess this November”
No matter who is elected they will whine about what they “inherited” just like our current cry-baby-in-chief.
Yeah but Jerry Brown will complain about a mess he inherited from former Governor Jerry Brown.
I remember that when Jerry Brown ran for President he touted the balanced budget amendment. I think that I’m going to gamble on him - only an independent-minded Democrat can push the California legislature into cutting state expenses. I think that Meg Whitman would be in worse shape than Arnold is, because he was popular to begin with, and she’s not. Of course, I could be wrong about Brown. Thank goodness Gavin Newsome wasn’t nominated.
CA MUST FIRST fix it’s illegal immigration problem or nothing will ever change.
And as far as I can see, they are not going to do that. Look for more years of pain in that state with riots possible.
Well, we all know that would be “illegal” as that’s the Fed Gov’ts job (now that really is a job Americans won’t do, at least those in the employ of the federal government)
Eco,
This state (Ca) is already too far gone.
Let’s just rename it Baja Oregon and be done with it.
Anybody that wants the job of Governor of CA is too dumb to be qualified to be Governor of CA.
From the land of total delusion…
Three Million Imaginary Jobs ~ WSJ
The White House says the stimulus worked beyond even its hopes. Seriously.
It may be that the last people in America who believe that the $862 billion economic stimulus of February 2009 created millions of net new jobs are Vice President Joe Biden and the staff economists in the White House. Yesterday, President Obama’s chief economist announced that the plan had “created or saved” between 2.5 million and 3.6 million jobs and raised GDP by 2.7% to 3.2% through June 30. Don’t you feel better already?
Where is hiring strongest? Businessweek.com ranked the 100 largest metropolitan statistical areas, based on Manpower’s data about businesses’ Q1, Q2, and Q3 hiring forecasts. So far this year, WASHINGTON DC has shown the strongest overall employment outlook, followed by San Antonio and Greenville, S.C. Employers display the worst employment outlook in Las Vegas, Reno, Nev., and Detroit.
In Manpower’s survey, 23 percent of Washington area employers plan to increase staff levels in the third quarter, while 4 percent plan to decrease employment and 69 percent envision no change.
Washington DC is the ONLY metropolitan area in which the number of advertised job vacancies in May (201,000) was greater than the number of unemployed (184,600), according to the Conference Board.
By contrast, the New York area had 298,700 online job ads in May — highest among the nation’s metro areas — yet the supply of jobs does not meet demand. The region counted 828,400 unemployed people, an 8.7 percent jobless rate, according the U.S. Bureau of Labor Statistics.
To all DC residents: Isn’t it great to live in the belly of the monster???
We’re Number Three! Palmy, take notice.
What is South Carolina doing right to pull themselves up? I understand that they have one of the highest unemployment rates of in the US.
Baghdad Biden
“The whole aim of practical politics is to keep the population alarmed, and hence [eager] to be led to safety.” ~H.L. Mencken
“The whole aim of practical politics is to keep the population alarmed, and hence [eager] to be led to safety.” ~H.L. Mencken ??
“The whole aim of practical politics is to keep the population alarmed, and hence [eager] to be led to safety.” George W. Bush
The whole aim of libertarian politices is to keep the population armed, and hence NOT eager to be led to safety.
I’ve always found gun ownership to correlate strongly with a paranoid mindset that lives in fear of both the government and ‘the mob’. Such people are very easily led to supposed safety by adept demagogues (and ‘momma grizzlies’). “Hell take your guns away if he gets elected!”
BTW- I support the second amendment (and I don’t much trust the gov or the mob, either), but that doesn’t alter my views about the mentality of many gun owners. It’s only logical that the paranoid would make up a large portion of gun owners- they’re scared.
Seems like you could make the same argument about HBB readers. Sometimes fear is the correct response to a situation.
“Paranoid” is a harsh word. Let’s just say concerned instead.
I always buckle my seatbelt even though the odds of an accident on a given day are tiny. Is that paranoid or just being prepared?
I keep a fire extinquisher in my kitchen even though the odds of a grease fire on a given day are tiny. Is that paranoid or just being prepared?
I have a CCW and carry when I’m hiking even though the odds of a cougar/wolf/coyote/bear attack are tiny. Is that paranoid or just being prepared?
Why would it bother you if people are able to protect themselves?
Ther are many reasons why people own guns, I have a freind who is an attouney and never knows if some ex-client or defendant or plaintif is going to go nut-so.
I keep my freind and his sons around, short barrel and loaded, just incase some crazy tries to break into my home. The sound of the rack of 12 gauge is undeniable.
It has nothing to do with being scared, only to protect myself if needed.
What are your options should someone enter your home?
I was always concerned that my sons would kill each other by mistake. Now it’s just inertia and lack of time - plus most of the people I know who shoot have hearing problems. And in a few years I hope to have grandchildren, who, like their fathers, would be likely to goof around and kill each other. So I’ll never own a gun. The one time we had a break-in, we ran out the back way, yelling our heads off. They left.
I subscribe to the KISS theory.
I strongly believe in the second amendments right to bear arms.
Your soon to be confirmed Supreme Court Justice does not.
Unless there is a dramatic shift in the political landscape, I suspect there will be an attempt to confiscate one’s firearms within my lifetime.
I think that sounds paranoid, SV guy. Democratic politicians in general support the right to bear arms. The only bans in existence are in towns like Chicago and DC who have lost a disproportionate number of youngsters to shootings. And they haven’t been effective. The best cure for crime is prosperity. Plus the addition of Kagan will keep the status quo: 5 conservative and 4 liberal justices. And don’t forget that liberals are complaining that she’s not liberal enough.
Time will tell. Hopefully i’m all wet on this one.
Immigrant deaths in Arizona desert soaring in July
PHOENIX (AP) - The number of deaths among illegal immigrants crossing the Arizona desert from Mexico is soaring so high this month that the medical examiner’s office that handles the bodies is using a refrigerated truck to store some of them, the chief examiner said Friday.
The bodies of 40 illegal immigrants have been brought to the office of Pima County Medical Examiner Dr. Bruce Parks since July 1. At that rate, Parks said the deaths could top the single-month record of 68 in July 2005 since his office began tracking them in 2000.
“Right now, at the halfway point of the month, to have so many is just a very bad sign,” he said. “It’s definitely on course to perhaps be the deadliest month of all time.”
From Jan. 1 to July 15, the office has handled the bodies of 134 illegal immigrants, up from 93 at the same time last year and 102 in 2008. In 2007, when the office recorded the highest annual deaths of illegal immigrants, 140 bodies had been taken there through July 15.
Color me indifferent. I guess it creates jobs for the M.E. office.
Being a coyote sounds like a great racket if you have no morals.
Collect cash up front for smuggling illegals. Lead them out into the desert, and then desert them without any water. No witnesses to your crime.
“He must be good, none of clients get caught and deported.”
Army suicides hit record number in June.
Thirty-two soldiers took their own lives last month, the most Army suicides in a single month since the Vietnam era. Eleven of the soldiers were not on active duty. Of the 21 who were, seven were serving in Iraq or Afghanistan, the Department of Defense said.
Army officials say they don’t have any answers to why more and more soldiers are resorting to suicide.
“There were no trends to any one unit, camp, post or station,” Col. Chris Philbrick, head of the Army’s suicide prevention task force, told CNN. “I have no silver bullet to answer the question why.”
Last year, a record-breaking 245 soldiers committed suicide. The Army seems on track to surpass that number this year, as 145 soldiers have taken their lives in the first half of 2010.
“Army officials say they don’t have any answers to why more and more solders are resorting to suicide.”
It figures.
Well they realize their life is doomed…they have no options its the military or walmart and nothing in between
We have a winner.
Plus they realize that the whole “fighting for freedom” thing was a lie.
I guess a few do escape and get their college paid for.
The vast majority are doing just fine and not suffering any long-term effects. Many derive huge benefits from serving. But we need a better monitoring system to detect depression/suicide, if we’re planning to continue these incredibly long deployments.
How does typical gulf war deployment compare to say, WWII?
‘£500-a-week? I can earn more on benefits!’, unemployed driver tells stunned haulage boss. ~ Daily Mail Reporter ~ 17th July 2010
A haulage boss was left stunned after an unemployed driver rejected the offer of a job paying more than £500 a week so he could remain on benefits.
Graham Poole, the managing director of a 23-wagon fleet in Rochdale, offered the job to the man who had been out of work for 18 months only to be told told it was not enough to have him come off government handouts.
The man turned the job down claiming he could get more money on benefits by ’sitting around at home’.
Shocked: Graham Poole, the managing director of a 23-wagon fleet, who offered the job has criticised the benefits system
Shocked: Graham Poole, the managing director of a 23-wagon fleet, who offered the job has criticised the benefits system
Furious Mr Poole said: ‘What is wrong with this country. I was offering him more than £500 a week before tax.
‘It is no wonder that so many people are out of work when others are allowed to blatantly refuse to work because their benefits are higher
‘When he came along for the interview, he seemed like the right person for the job, and that is why he was offered it.
‘But what annoyed me most was the way in which he rejected it by saying he could get more on benefits by sitting at home.’
Not knowing anything about cost of living over there, all I can say is, only an idiot (or the desperate) takes less pay for more work.
I guess, if you know the benifits will never run out?
In California the maximum unemployment benefit is $450/week if you make $46,000 per year. So if you can feed your family on $23,000 per year you may as well live off 99 weeks of unemployment. But you’ll probably never again qualify for that $46,000 job, unless you spend some of that money on retraining.
I live in Los Angeles.
Benefits of a non-materialist life: after I got laid off I was able to cover my half of our family expenses out of that $450/week and never touched my savings. I didn’t start earning from my freelance work for 6 months, and it was another 6 before I was making enough for EDD to stop paying me UI entirely.
Were fortunate in that my wife has stayed employed the whole time. Her salary is about half what I was making; she was able to keep saving money and operating normally, while I temporarily curtailed both saving and nonessential spending.
It really helps to not buy into the lifestyles they try to sell you on TV. Rent apartment, reliable used car, motorcycle, mass transit, live close to work, buy useful and durable things… You can do it even in one of the most expensive cities in the world during a major economic crash. We have a $150K+ net worth with only a variable few thousand in carefully managed debt. Most people we know either live hand to mouth or are heavily indebted and underwater on their mortgages.
You just have to live a little “smaller,” is all.
There were post above about the deep hole California and Illinois are in.
For as long as I have been measuring the data, their tax burden as a share of income has been in the vicinity of the national average, in Illinois case even lower. Arizona is screwed because its taxes are near the bottom. All those states could help their budget problems by raising taxes.
Meanwhile in New York we have a budget crisis AND the highest tax burden in the country AND massive debts. Other states have their heads in the sand. We are buried up to our necks, and this recession is an out of control lawnmower.
tax burden as a share of income has been in the vicinity of the national average ??
Include all the fee’s & fines and I think California easily would be the highest…
“fee’s & fines”
I have a $500+ traffic ticket for rolling through a right turn on red, caught on electronic surveillance camera, which suggests you may be right. I asked my FIL, a Utah attorney, to guess what the fine would be on my infraction, and he thought maybe on the range from $100-$200.
The state has turned to outright theft from its citizens in a desperation effort to patch up the budget.
“The state has turned to outright theft from its citizens in a desperation effort to patch up the budget”.
That’s all they know to do, gotta keep the fat cats, fat! What we need are more rules,laws and gubmint regulation. Perhaps a new “program” to counsel red light runners,of course we’ll need a traffic counseling czar.
Where was that, in UT or CA?
What I notice is that especially CA drivers don’t give a damn about speed limits, and I often wish they’d be fined through the wazoo.
“I have a $500+ traffic ticket for rolling through a right turn on red,….”
A co-worker of mine was issued a ticket for the same thing in Gilroy, Ca. If I remember correctly I believe the fine was $485 +/-.
I was recently pulled over by a CHP on the freeway. I’m doing 63 in the slow lane on a crowded freeway and he picks me. I honestly think I shamed this guy into just leaving without writing a ticket.
Total BS stop.
It’s more about the revenue than public safety at this point. The Oakland PD just announced that they will only respond to major calls from this point forward. Appears to be payback for a recent round of layoffs at the department.
We have only begun to experience the economic struggles on the local level. The Federal debt always seems to be, at least to me, far removed from my everyday life. The local budget issues will affect each and every one of us on a daily basis.
There will be a day of reckoning with the Federal debt as well, imo.
“All those states could help their budget problems by raising taxes”.
All states have two choices, increase revenue, by raising taxes. Or reduce their spending by cutting. When times are tough you reduce your out go, period.
I realize it is a foreign concept to the majority in the gubmint, and many people. Cutting out the fat that is in every states budget, and reducing the size of so many unnecessary money wasting “programs” is fought by nearly all involved.
So the common plan is to simply raise taxes, and fees. Death by a thousand cuts.
P.S. Uncle Sugar could always print up a few extra trillion and pass it out to all these poorly managed states, as long as they do as instructed. The line would form instantly!
Never going to happen. Those brother-in-law, political favor, no bid, non referendum contracts are essential to re-election!
They can’t raise taxes in Colorado without a directvote by taxpayers (guess what, it doesn’t happen very often).
I A vocal minority wants to repeal TABOR, but as the Magic 8 Ball would say: “Don’t count on it”
Yes the smart states should increase the tax burden to 100% and increase the goverment expediture to 200% or more of what they are currently spending.
They will spend thier way into greatness!!!
Stephen Spruiell over at the NRO Corner is starting to get it….
…noting how much longer the unemployed are tending to stay unemployed in this recession compared to previous ones. Each covers interesting ground, but none touches on the idea I’ve been most curious about, which is how much of this can be explained by falling house prices and concomitant restraints on labor mobility.
If you look at state-level unemployment rates, you find that the states with the biggest housing bubbles are concentrated at the high end of the chart. And not all of that unemployment is related to job losses in construction, either. Nevada, the state with the highest unemployment rate, has seen a 2.5 percent increase in that rate since May of 2009, meaning that things are still getting worse — much worse — long after most of the jobs related to the collapse of house prices were lost.
He goes on to cite some statistics about the impact of immobility on unemployment during the 1990-1991 housing downturn.
Linkey linkey
http://corner.nationalreview.com/post/?q=M2RlMWZjN2VjZjQ0YjZkYTQ4YWZkYmRkYzM3OTFiYTA=
“…which is how much of this can be explained by falling house prices and concomitant restraints on labor mobility.”
Do you think the many generations of geniuses in our federal government who have mutually agreed that all Americans should own houses gave a moment’s consideration to the deleterious impact of this policy on labor mobility?
I don’t think so.
Often government programs were launched at a time when things were different. Not that many decades ago it was common to have Japanese-style “lifetime employment” with US corporations. My dad’s sister’s FIL wrangled a job for my dad with AT&T back in the early 1940’s. My dad had lifetime employment with that firm, taking lavish early retirement in the 1970’s. For him home ownership was a no-brainer.
Times are different now but the government wonks haven’t figured that out.
I don’t think that private pensions have ever been lavish. My dad retired from Ford Motor in 1984 - salary topped out at $68,000. His pension was $2200/month after 30 years. They lived on it just fine combined with their savings and SS. They only owned two houses in their lifetime, the California retirement house was paid for within five years. When he passed away they cut the pension to $900/month for my mom, and she is doing fine.
If state pensions were based on 40% after 30 years, or 30% after 20 years, instead of 90% at age 50 (police, fire, prison guards and some other state workers in California) we wouldn’t have the deficit problem. Grey Davis permitted it, and thanks to unions and lawsuits, it will stay until the state dies or the people revolt.
No, private pensions were lavish for the so-called “greatest generation”. My dad’s salary topped out at $40K per year, and upon retiring in his 50’s in 1978 got about $35K per year. With COLAs he quickly earned more in pensions than he did working for AT&T.
PLUS he got 100% paid fee-for-service medical care which also covered his expenses after he turned 65.
Man tries to pay tax with 200,000 pennies
QMI Agency
Should people be allowed to pay taxes with pennies?
RIPON, Que. - A Quebec man, fed up with his skyrocketing property taxes, carted more than 200,000 pennies down to City Hall to pay his bill. But he was denied, and asked to simply cut a cheque.
Normand Czepial of Ripon, Que. — less than an hour’s drive northeast of Gatineau — arrived at City Hall on Wednesday with a children’s pool filled with 213,625 pennies.
Czepial’s property tax bill reportedly rose by nearly $4,000 dollars last year to $6,400. Czepial tried to pay with pennies to protest the hike.
Ripon Mayor Luc Desjardins was surprised to see the stunt, but had to tell Czepial to find another way to pay his bill.
Under the Currency Act, nobody is obliged to accept more than 25 pennies as payment for any product or service. Normand Czepial, unfortunately, was 213,600 over the limit.
So much for the HBB plan to use partitions and rent out McMansions.
New York is cracking down on tennant-installed partitions.
As the city aggressively enforces a long existent but widely ignored code, walls are falling across Manhattan, radically altering the housing landscape for scores of young professionals. Thousands of renters are being told that the walls that have been put up over the years without approval from the Department of Buildings must come down. And new renters are being informed that if they wish to divide a space, they will need to rely on bookshelves or partial walls that don’t reach the ceiling.
Linkey linkey
http://www.nytimes.com/2010/07/18/realestate/18cov.html
Skating closer to deflation
* Tom Petruno
* Chart: Consumer price index Chart: Consumer price index
With the U.S. economy clearly slowing, a broad-based, sustained decline in prices becomes a bigger risk. The consequences could be dire.
By Tom Petruno Market Beat
July 17, 2010
Imagine a world where prices of all sorts of goods and services just keep moving down.
Your weekly grocery bill shrinks. Your hairstylist gladly accepts 15% less, just to get the business. At long last, movie theaters even stop gouging you on popcorn.
Good times? Sure — until your employer cuts your salary or fires you to cope with the need to reduce prices. Suddenly, the economy is in the grip of a vicious spiral, as falling consumption forces prices lower, driving unemployment up, which in turn drives consumption and prices down further.
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That’s the deflation scenario that has, yet again, become one of the hottest topics on Wall Street.
Fear of a broad-based, sustained decline in prices — the textbook definition of deflation — was rampant at the height of the credit crisis in late 2008.
That concern faded last year as the economy and financial markets recovered. By early this year many big investors were warning of the opposite risk: They saw the continued ballooning of government budget deficits, and central banks’ easy-money policies, as setting the scene for an eventual surge in inflation.
Now, we’ve come full circle: With the U.S. economy clearly slowing, deflation worries have revived.
“The U.S. economy is at the doorstep of deflation,” Nomura Securities economist Zach Pandl warned clients in a lengthy report this month.
…
And the result of deflation? Unpaid debt, and lots of it! I reckon that when this is all over some 90% of all debt currently held will go unpaid.
I noted that anyone (company, person or government) holding any appreciable amount of debt at the time of the 2008 crash is in huge trouble.
That debt is getting harder and harder to service as the economy slowly circles the drain!
“when worries about the economy began to intensify. Rally attempts have just given way to more selling, as on Friday, when the Dow industrials slumped 261 points, or 2.5%, to 10,097.”
Lower lows and lower highs. WS is now going bearish. The US is (was) a 70% consumer economy. They pay off the trips to the malls and overpriced McMansions and deflation/recession/depressions result.
I’m not surprised. I am nervous.
Roidy
The Economist magazine, in its March 13th 2010 issue, page 80, had an article entitled, “The Inflation Solution”. Some excerpts (it’s behind a paywall on the web):
“It has long been considered a scourge, an obstacle to investment, and a tax on the thrifty. It seems strange then, that inflation is now touted as a solution to the rich world’s economic troubles. At first sight, the case seems compelling. If central banks had a higher target for inflation, that would allow for bigger cuts in real interest rates in a recession. Faster inflation makes it easier to restore cost-competitiveness in depressed industries and regions. And it would help reduce the private and public debt burdens that weight on the rich world’s economies.
The orthodoxy on inflation is certainly shifting. A recent IMF paper co-authored by the fund’s chief economist suggests that very low inflation does more harm than good. …
[...]
In principle, a modest dose of controlled inflation might work wonders. … Inflation certainly helped reduce America’s government debt burden after the second world war, but far more of the shrinkage came from strong GDP growth and primary budget surpluses. …
[...]
A burst of unanticipated inflation that was not expected to last would be a salve to the most troubled rich economies, but it is not something that can be easily engineering. Even so, how much regret would even the most hawkish central banker feel if inflation rose above 2% for a while without making bond investors nervous? The best policy may well be to talk tough about inflation while keeping interest rates low for as long as possible.”
The ONLY deflation going on is wages and houses.
I’ve explained this before:
Since we adopted voodoo, er, supply side economics thanks to Raygun, the rule is that you raise price when times are good because of lack of supply and you raise prices when times bad are because of lack of income. And you ALWAYS cut wages no what.
“…no matter what…”
Too bad the Fed’s highly successful War on Savers discourages American households from doing anything to fix their personal retirement savings shortfalls.
The scary state of retirement savings
Michelle Singletary
Thursday, July 15, 2010
The nonpartisan Employee Benefit Research Institute regularly delivers the dreadful news of how unprepared so many Americans are for retirement. The findings give you a chill, much like seeing an image of the iconic black-robed, scythe-carrying personification of death.
But that chill is needed. Washington-based EBRI continues to be at the forefront of sounding the alarm that we ought to be more aggressive in preventing people from falling into poverty in their senior years.
In 2003, the institute developed its trademark “Retirement Readiness Rating” to assess retirement-income prospects for American workers. The 2010 findings, released this week, show that a large percentage of people, including high earners, are likely to run out of money 10 to 20 years into retirement.
“This is old news to those of us that spend our lives thinking about it, but surveys and focus groups and conversations with family tell us that people have not absorbed it,” said Dallas L. Salisbury, EBRI’s president and chief executive. “So, like water-drip torture, there is no such thing as getting this out too many times.”
Nearly half of baby boomers born between 1948 and 1954 and now between the ages of 56 and 62 are at risk of not having enough money in retirement to pay for basic expenditures, EBRI reports. For those born between 1955 and 1964 (now 46 to 55), the percentage who are likely not to have enough money was calculated at 43.7 percent. It was 44.5 percent for Generation Xers — people born between 1965 and 1974 (now 36 to 45).
The institute defines the retirement shortfall as not being able to meet minimum expenses, including uninsured costs associated with a nursing home or home health care. After 10 years of retirement, 41 percent of Americans with low pre-retirement income will probably be struggling to meet their expenses.
As I said, this is chilling news.
…
I read one account that most people in their 50s and 60s have far less than $100,000 in savings. That includes tax deferred retirement accounts and other savings.
That’s very grim. Even worse is people in their late 30s and 40s who are not saving. In a few years there will have to be a radical change in social security. The people now in their late 30s and 40s will probably have to work to the age of 75 to get any checks. Or they might not get any social security at all. They should have been saving diligently with the idea of social security not being available at all for them.
Their priority should not be into buying real estate, but saving for retirement. The entitlement crisis is going to turn the social fabric upside down.
That’s because they don’t and NEVER DID have the money to save in the first place.
I’m sick of hearing about how the boomers stole everything. The boomers didn’t steal anything, Wall St. did. And they stole from everybody. Only a blind idiot can’t see this.
And it’s been ongoing for the last 30 years.
The voters for the government we had the last 40 years stole everything. Their agents are the government at all levels.
58% of the American public get a major portion of their income from some sort of government check. It may be too late for us to go to a society based on liberty, which is what we had in the first place.
What is certain is gold though. Buy it, bury it, hide it.
Six wolves and four sheep are voting on what’s for lunch these days.
There were many causes, but the fact remains that the average person got screwed out of a decent living and could not save for retirement because they just flat out could not find a job that was secure and paid well.
Wall St. could be thought of as the devil that tempted and enabled the debauchery. But the people have no one to blame but themselves for the acts of indulgence that led to their demise. You don’t have to go into debt over things you don’t need and can’t afford simply because someone allows you to. But most people seem incapable of doing anything else. Rather they lack any patience and are willing to pay an impossibly high premium for instant gratification. It is the human condition that is at fault for both sides of the equation, the greedy crooks on Wall St. and their willing “consumer” victims.
The fact that they include home health care and nursing home expenses in their calculations implies that maybe retirement savings aren’t as bad as they imply. Nobody except the rich saves for home health care or buys long term care insurance - they’re too expensive. They just hope for the best and if they’re unlucky, they end up in a Medicaid nursing home.
Next stop for the DOW should be around 9800, at least that’s my guess.By years end who knows, but it will be lower, not higher IMO. Unless some fictitious better than expected news pops up, and the PPT fires off the turbos. Pump, baby, pump.
DOW is irrelevant, except it makes for a nice news bite when it crosses a multiplier of 1,000. S&P has been what traders have been watching for years. 1040 is the next support; if we break it goes to 980.
National Review: Straight Talk On Fannie and Freddie
by Duncan Currie
The financial-overhaul legislation lacks any serious reform of housing giants Fannie Mae and Freddie Mac.
The financial-overhaul legislation lacks any serious reform of housing giants Fannie Mae and Freddie Mac.
July 16, 2010
Duncan Currie is deputy managing editor of National Review Online.
Here’s one thing you won’t find in the 2,300-page financial-overhaul legislation that passed the Senate Thursday afternoon: any serious reform of housing giants Fannie Mae and Freddie Mac, the longtime “government-sponsored enterprises” (GSEs), both of which have been in federal conservatorship since September 8. Last summer, the Congressional Budget Office (CBO) estimated that the cost of subsidizing the GSEs would amount to $389 billion through 2019. This figure accounted for “substantial losses on the entire outstanding stock of mortgages held or guaranteed by Fannie Mae and Freddie Mac at that time.” In January, the CBO updated its forecast, projecting a total price tag of at least $373 billion through 2020. By comparison, it now expects the much-maligned Troubled Asset Relief Program to cost just $109 billion.
Those numbers help put the GSE bailout in perspective, yet they tell only part of the story. Fannie and Freddie currently own or guarantee roughly $5.5 trillion worth of mortgages — over half the residential market. If these liabilities were included in the federal budget, Americans would better appreciate the true fiscal impact of rescuing the GSEs.
But Fannie and Freddie are not counted in the budget, a maneuver “worthy of Enron’s playbook, except not quite so hidden,” as Bloomberg columnist Jonathan Weil has written. Their exclusion “makes a joke” out of the U.S. balance sheet, says former SEC commissioner Paul Atkins. The argument for bringing them on budget became even more compelling in December, when the Obama administration removed a cap on their Treasury Department credit line, essentially giving the GSEs a blank check. A few months later, after House Financial Services Committee chair Barney Frank (D., Mass.) suggested that GSE debt obligations were not backstopped by the federal government, Treasury spokeswoman Meg Reilly affirmed that “there should be no uncertainty about Treasury’s commitment to support Fannie Mae and Freddie Mac as they continue to play a vital role in the housing market.”
In other words, the GSEs enjoy a government guarantee, as they have for many years. Before their 2008 collapse, that guarantee was implicit; now it is more straightforward. Fannie and Freddie are fully controlled (and mostly owned) by Washington; their mortgage activities are sustained by U.S. taxpayers; and their bonds are widely considered to be as safe (or nearly as safe) as Treasury bills. Despite the housing meltdown, demand for GSE-issued securities has recently been soaring. “The perception that these bonds are guaranteed by the U.S. government,” notes The Wall Street Journal, “has been a lure to many foreign investors.”
…
Government accounting is fabulous
Not reforming Fannie and Freddie is criminal however.
Well, these are the results of having bought-and-paid-for politicians. When that politician started apologizing to BP during the hearings on the leak, I thought it made perfect sense - he’s catering to his masters.
John Boehner talking about credit becoming more difficult to get as a result of Dodd-Frank is an unfortunate joke. But, he too is catering to his masters, blissfully ignoring the fact that runaway credit (and of course, the core issue, the separation of lenders from repayment risk) was a core cause of the mortgage crisis and the resultant financial troubles.
“But Fannie and Freddie are not counted in the budget, a maneuver “worthy of Enron’s playbook, except not quite so hidden,” as Bloomberg columnist Jonathan Weil has written”.
Where the hell are all the big evil corporate hating libs on this? Fat assed Freddie and Fannie, Fwank&Chrissy’s favorite get to keep skating. They are gubmint owned, period.
Maybe you’re having a problem with selective vision and hearing because I’ve heard both sides complaining about Fannie and Freddie since Franklin D. Raines “misplaced” $12 BILLION and demanded his $100 MILLION retirement.
“…blissfully ignoring the fact that runaway credit (and of course, the core issue, the separation of lenders from repayment risk) was a core cause of the mortgage crisis and the resultant financial troubles.”
Anything which cannot go on forever will stop.
– Herbert Stein –
My little spendthrift city has come up with a new way to waste money. They are affixing little 3″ green & blue, plastic “eco” discs to the tops of all storm drains. They read, ” No Dumping - Leads to Waterways”.
WTH does that mean? No dumping of what? Motor oil, toxic chemicals, fecal matter? Just a waste of time and money, but some little turd downtown feels better about their effort to save the planet, and their useless job. But hey we’re green! Now let’s all hug.
You are WAY behind the times. San Jose used a template and paint to so label the storm drains starting around 1985!
Boise is cheap. They are soliciting “volunteers” to go around and affix those discs to storm drains.
We are always behind the times and trends, but you may be able to update our city hall with the latest happenings, for a large fee of course!
They will gladly pay, it ain’t their money.
OK then your city should follow the example of Boise-area Greenleaf ID and pass a similar city ordnance.
http://www.id-ord.com/archives/15
Can I get your town to pay me for making the suggestion?
“Can I get your town to pay me for making the suggestion”?
Sorry, our current mayor & council would pee their pants and assume the fetal position, if you showed them that ordinance about evil people killing guns.
They are looking much more for the “it takes a village” type policies. The sweet and nice ones.
Great poster idea. Show a photo of the citizens of Greenleaf assembled en masse, all holding their piece. And the captions: “It takes a village……to eliminate criminals.”
Whenever a local government does something daft, you should immediately suspect FEDERAL intervention.
Mayhaps your city got some injunction aginst it for violating some sort of Federal clean water regulation.
Actually, when you see something like that, you should look for a “best practices” paper that someone presneted at a conference 2 or 3 years ago. That is enough time for an executive to put it on their accomplishments list that they use to justify getting their bonus. It is much more likely to be about money than regulations.
But hey we’re green! Now let’s all hug ??
A lot of morons think a storm drain is like a sanitary sewer, and they dump all sorts of crap down them, not realizing that it usually goes straight into a nearby creek (and often, from there, into the local drinking water). If you can stop some of them from doing so, that more than makes up for the small expense of painting or sticking a warning on the sewers. Some people, of course, won’t care, but there are plenty of people who are unaware of the difference b/n storm and sanitary sewers. The actual expense of posting the warnings is minimal, which is why most places have had them in place for years. (Of course, if your philosophy is that everything the government does is a waste, then you will disagree.)
(Of course, if your philosophy is that everything the government does is a waste, then you will disagree.)
Not everything that government does is a waste of time, it needs to go back to it original tenants as outlined in the U.S. constitution, period!
As to spending/wasting thousands of dollars on some stupid ass plastic discs in the “hopes” that may sway someone who is “dumping” into the storm drain, is just that, a waste pure and simple. If Jethro, Willie, Jesus, or Leroy are going to pour 4 quarts of burnt motor oil down the storm drain, no feel good sticker will stop them, or give them a change of heart.
It does however make bleeding hearts feel like they are making a difference, so they can tell their friends over a glass of Chardonnay.
P.S. Don’t forget about those people out there, that when you tell them not to do something, they will do it out of spite.
+1
We have a Dolphin warning logo on our storm drains– people often care more about animals than people–since whatever toxic waste is dumped into the storm drain ends up at our local beaches. And it’s not just some airy-fairy do-gooder campaign, when the beaches are closed due to pollution it costs local tourist-driven businesses a lot of money. I remember when I was a kid people used to throw bags of trash out of their car windows on the freeway. There was trash everywhere. Then the state started putting up those signs announcing $100 litter fines and trash throwing stopped in a hurry. I have no problem paying taxes for signs to curb people’s dirty habits, because it personally benefits me. Go to Mexico and you’ll see what happens when there’s no tax money devoted to pollution control.
If it makes you feel any better,wmbz, my city used volunteers to stencil the “no dumping” message on sewers. My son and I volunteered to do it one summer. Just a little spray paint and a stencil.
Alan Greenspan now says Congress should just let the Bush-era (i.e. Greenspan-written) tax cuts expire.
Congress should let the George W. Bush-era tax cuts of 2001 and 2003 expire to help trim the mushrooming budget deficit, former Federal Reserve Chairman Alan Greenspan says.
Tax rates will automatically revert to pre-2001 levels, unless Congress changes the law by year’s end. President Bush proposed the tax reductions to pull the economy out of its slump at the time.
And Greenspan’s support helped convince Congress to approve them.
However, Greenspan now feels differently.
Linkey linkey
http://www.moneynews.com/StreetTalk/alan-Greenspan-Congress-Bush-Tax-Cuts-Lapse/2010/07/16/id/364848?s=al&promo_code=A4CC-1
Guess there was a flaw in that theory too.
Something Lingering in the Lingerie? Bed Bugs Hit Victoria’s Secret
Under where? Talk about unmentionable.
Victoria’s Secret had to close for a few hours this week after a bed bug sighting in the store on Lexington Avenue at 58th Street.
The lingerie retailer released a statement on Friday saying: “As a proactive measure, we tested our Manhattan stores. When we found small, isolated areas that may have been impacted, we immediately took action to resolve the situation.”
The buggy discovery at this underwear retailer follows recent exterminations at Manhattan locations of Abercrombie and Fitch and Hollister. Not to mention thousands of complaints from New York City residents that these little nocturnal pests have been creeping around with increasing regularity.
“They’re hard to kill,” said Lou Sorkin, a leading bug expert at the American Museum of Natural History.
New York health officials say the good news is bed bugs are not particularly dangerous, because they don’t spread disease and up to 30 percent of humans don’t feel the bites one bit.
That’s small comfort for Upper East Siders who’ve seen a rash of bed bugs in the high-priced co-ops of East End Avenue, among other tony addresses.
“This woman I know couldn’t sleep,” said writer Lisa Birnbach. “Because she felt they were around her. It’ll turn anyone into a lunatic. And great for our real estate values. Thanks alot.”
Divers find 200-year old champagne in Baltic wreck
Associated Press ~ Now that’s some vintage bubbly.
Divers have discovered what is thought to be the world’s oldest drinkable champagne in a shipwreck in the Baltic Sea, one of the finders said Saturday. They tasted the one bottle they’ve brought up so far before they even got back to shore.
Diving instructor Christian Ekstrom said the bottles are believed to be from the 1780s and likely were part of a cargo destined for Russia. The nationality of the sunken ship has not yet been determined.
“We brought up the bottle to be able to establish how old the wreck was,” he told The Associated Press. “We didn’t know it would be champagne. We thought it was wine or something.”
Ekstrom said the divers were overjoyed when they popped the cork on their boat after hauling the bubbly from a depth of 200 feet (60 meters).
“It tasted fantastic. It was a very sweet champagne, with a tobacco taste and oak,” Ekstrom said.
The divers discovered the shipwreck Tuesday near the Aland Islands, between Sweden and Finland. About 30 bottles are believed to be aboard the sunken vessel.
Ekstrom said he is confident of the champagne’s age and authenticity, but samples have been sent to laboratories in France for testing. “We’re 98 percent sure already because of the bottle (we found),” he said.
Swedish wine expert Carl-Jan Granqvist said each bottle could fetch euro50,000 ($68,000) if the corks are intact and the sparkling drink is genuine and drinkable.
“If this is true, it is totally unique,” said Granqvist, one of the experts contacted by Ekstrom and his team. “I don’t know of any other (drinkable) bottle this old. I’ve never even heard of it.”
Granqvist said he had seen pictures of the bottle, and it had languished in near-perfect storage conditions — in the dark at a constant cold temperature.
“If it’s the right atmosphere outside, and inside the bottle the cork is kept dry in the middle; it keeps itself,” he said.
According to French champagne house Perrier-Jouet, a subsidiary of Pernod Ricard, their vintage from 1825 is the oldest recorded champagne still in existence.
I returned recently from a meeting in Sweden combined with a short Baltic cruise. At the Vasa museum in Stockholm I learned that because the Baltic is less salty than the ocean, sunken ships there are much better preserved. Very interesting!
Tunku Varadarajan, whose byline used to appear in the Wall Street Journal, has mulled over that strange resolution that emerged from the annual meeting of the National Association of Colored Persons criticizing the Tea Party for “racism.”
“The NAACP … has thrust itself into the headlines by voting, at its annual meeting Tuesday, to censure as ‘racist’ the Tea Party movement. This controversial public rebuke … has opened up a raw, new racial front in the run-up to the November elections. In effect, the self-congratulatory, post-racial Obama camp is reaching for the crudest weapon in the Democratic arsenal: the racial blunderbuss.”
And what do we make of Al Sharpton’s complaint yesterday, “Why won’t the leader of the Tea Party denounce racism?”
The race pimp bigot, Reverend Sharpton overlooks an important point. The Tea Party doesn’t have a “president,” “chairman,” or other individual called “leader.” Spokespeople from several individual Tea Party groups have, however, fired off public responses to the NAACP resolution.
This is the only worthless card these fools have to play, it ain’t working this go round.
Heck Jesse Jackson vowed before the 2008 election that he was going to “castrate” that Uncle Tom Barack Obama. Everyone seems to have forgotten that little outburst, especially the Secret Service. Doesn’t the SS normally investigate ALL outstanding threats to the President?
I wrote a haiku about it.
Jackson’s switchblade cuts
Scrotal sack of Barry O
Nuts fall to the ground
Oh I remember it well, the MSM conveniently forgot it though.
Jesse AKA the baby’s daddy wanted to cut Barrys nuts off.
Thanks for the laugh.
Jesse and Al are the worst thing that could have ever happened to racial awareness and equality.
Yeah Imagine what would happen if black people were harassed and sued for stealing music?
The record industry RIaa doesn’t sue black people. You never hear anyone in Gary IN , Camden NJ, or harlem, or oakland getting sued for $20,000 a song…
Or any colleges that get money from the united negro college fund…nope its university of idaho or minnesota or washington or boston with a 2% minority
The lady that was sued and lost for $220K, the racial makeup of her hometown was 96% white 2% black and 2%American Indian…so it was a fluke she was sued (Am Indian)
Daimler, BMW Sales Surge on `Bottomless’ Appetite for German Luxury Cars.
Daimler AG’s E-Class Mercedes-Benz, Bayerische Motoren Werke AG’s new 5-Series and Volkswagen AG’s revamped Audi A8 are attracting wealthy buyers in the U.S. and China, prompting the German carmakers to boost deliveries.
Daimler raised a full-year forecast yesterday after second- quarter profit beat analysts’ estimates. BMW, the largest luxury-car maker, this week lifted its 2010 sales and earnings projections. Audi’s first-half increase in vehicle sales beat those of both BMW and Daimler.
“The Chinese appetite for German nameplates is absolutely bottomless,” said Sascha Gommel, a Frankfurt-based analyst with Commerzbank AG. “There are more than 900,000 millionaires in China and many of them are bursting to show off their wealth.”
The German carmakers are posting gains in China, which passed the U.S. last year as the biggest auto market, as new models attract buyers. BMW has said the new 5-Series is sold out, while Audi is benefitting from the new A8 sedan. Daimler’s Mercedes-Benz aims to add market share with an extended E-Class sedan, its first vehicle for Chinese consumers.
There are specialty tours, where wealthy Chinese get to drive a Porsche for ten days on the German Autobahn and over alpine passes. Some of the participants were women. The participants of this special group tour were interviewed. They loved the cars and the driving, but they found Germany very boring, otherwise. Part of the tour package consists of premium hotels. Ten thousand dollars a pop, IIRC.
Prisoners ‘poisoned’ by bad egg mayo sandwiches set for £500,000 compensation windfall. ~ Daily Mail Reporter
Prisoners made sick after eating dodgy egg mayonnaise sandwiches at Wandsworth Prison are set for massive compensation payouts after justice chiefs admitted responsibility this week.
More than 300 prisoners at Britain’s biggest jail - which holds 1,665 - went down with food poisoning in September last year.
Dozens of prison wardens also suffered from suspected salmonella poisoning after eating the canteen sarnies.
Lawyers acting on behalf of the prisoners said that a report by the prison’s infection-prevention team had admitted being responsible for the poisoning, meaning inmates can claim between £1,000 and £5,000, depending on how badly they were affected.
A prison source said that prisoners were vomiting ‘all day and night’ after eating the dodgy sandwiches.
He said: ‘It affected about 300 of our prisoners and quite a few of the prison wardens.
‘They suffered from stomach cramps, vomiting and diarrhoea and had to be seen by the prison doctors.’
More government layoffs loom in Pennsylvania as hope for federal Medicaid money fades.
Gov. Ed Rendell is beginning to doubt that Pennsylvania will receive $850 million from the federal government that it counted on to balance this year’s budget.
Without that money, layoffs at all levels of government, as well as teachers and emergency workers, could soar far above the 1,000 layoffs Rendell said would likely come under the state’s $28 billion budget.
During budget negotiations last month, Rendell remained steadfast in saying that he believed the federal money for Medicaid would be approved. Others said they believed the money was always in question, and now Rendell is beginning to doubt it will materialize for Pennsylvania — a scenario he called “Armageddon.”
Modern nations’ unrealistic views of retirement is relatively new.
http://www.economist.com/blogs/freeexchange/2010/05/pensions
For most of civilisation the average person worked until they became too sick or feeble, or died. According to Dora Costa’s book on the history of retirement, in 1880’s America more than three-quarters of men over 64 and half of 85-year olds still worked. When people did retire they had little wealth and often were dependent on relatives. The growth of retirement was driven by changes in the labour force (a move away from family farms and toward production and services), new social norms (which made retirement the expectation and created a critical mass of retirees), and financial incentives (income from state pensions and private pensions from employers). The introduction of state pensions was significant because it provided retirement income for everyone (including those too poor to save). This allowed elderly people to cease work and not be dependent on their families. To this day, many people rely on state benefits as their primary source of retirement income.
In late 19th-century Germany, Otto von Bismarck first introduced the concept of receipt of a state income after a pre-specified age. But keep in mind—he set the retirement age to 70, well beyond the average life expectancy then. Twenty-seven years later that age was lowered to 65. It’s extraordinary that the 65 retirement age seems to have stuck, or even been lowered, while life-expectancy has steadily increased. This means each generation gets successively longer retirement. Retirement, like other post-industrial inventions like electricity or television, has become a luxury we’ve come to expect and rely upon. Like consumption of other goods, as technology advances and we become wealthier, we expect more and better retirement. This is not entirely unreasonable. Western countries have more wealth than before and better technology to save, invest, and redistribute income. There is no need to go back to the work-until-you-die model. But this does not mean current retirement expectations are reasonable either, especially when so many depend on the government to provide their retirement income.
Yeah, they used to say same thing about slavery, child labor and women voting. Along with rules on medicine and paying for overtime.
“Unrealistic” was the exact word they used. Every, single, time.
So we should kick grandma and grandpa to the curb, huh? Nice. Real nice.
Well… it is “unrealistic” if we’re going to have a system where Robber Barons end up owning most of the wealth.
No, but it’s true that now that the life expectancy is 80, we should continue to raise the Social Security age. We did it in the 80s and we can do it again. We must. And don’t worry about kicking grandma and grandpa to the curb. You know that changes always apply to the coming generations.
So a healthy 66-year old working is the equivalent of slavery and denial of voting rights? Able-bodied people doing useful things are people who have been “kicked to the curb”? Bizarre.
There is no need to go back to the work-until-you-die model. But this does not mean current retirement expectations are reasonable either, especially when so many depend on the government to provide their retirement income.
This is bull. Most people ARE NOT LIVING LIKE ROYALTY on their retirement.
And what alternative is the author offering? Why none, of course. Because there isn’t one based on our current Soviet Corporatist economy.
The decimation of millions of jobs and wage cuts over the last thirty years, making it impossible for the average person to save money, is EXACTLY what SS was created to mitigate.
People CAN’T save, or choose not to? The simple fact is that we make more, we spend much more, and we save less than people did 60 years ago.
Exactly!
Cable TV, direct TV, HDTV, large screen tv, iPhones, iPads, ISPs, ocean cruises for high school students, Lexus cars driven by engineers, frequent flier miles for kids!, mcmansions, RVs, jetskis, and so on.
In my mid-20s I had an old television and no cable TV. A landline phone, but no cell phone. I drove to visit my parents, and the car was a $1,000 beater. In high school there was no field trip, the only trip was a bus trip to Disneyland on grad night.
We have a lot of room to downsize. I certainly do! This is what makes renting in a declining housing price scenario very nice. A studio apartment, my road bike, and my mountain bike are all I really would consider essential. You can even store dried food and jugs of water in a studio apartment. I can pay $500 per month rent for a very good quality studio apartment in my former zip code, a very nice neighborhood.
Got to have all the toys…. and look like we are worth more..
Now I don’t want to sound too callous either. It IS more difficult to save when you’re living in that lower 40%. When replacing the radiator on the car that you need to get to work instantly burns through all your savings it IS hard to save for the long term. But I have no real sympathy for those who DO make good money, but spend so close to their margins that they still can’t save.
Ten years ago people in the private sector were retiring in their 50’s because they thought they could use their house as an ATM. Now they’re back to work and will work until they’re in their 70s.
The decimation of millions of jobs and wage cuts over the last thirty years, making it impossible for the average person to save money, is EXACTLY what SS was created to mitigate.
Um, ISTR that SS was created more than 30 years ago. A more fundamental problem with your statement is that government programs do not create wealth. If the average person can’t save, government can’t make money appear magically. The problem has to be addressed some other way.
Can’t wait till we get Barry care, no one would ever profit like this under the watchful eye of gubmint.
NHS doesn’t care about cost of drugs’: Firms accused of profiteering by raising prices ONE THOUSAND per cent
UK Times
In June 2008, the cost to the NHS of a packet of 10mg hydrocortisone pills was £5. Today, the NHS is paying £44.40 for the same course. The main supplier of the drug is a small pharmaceutical firm called Auden McKenzie, based in Ruislip, North-West London, which sells 60,000 packets a month to the NHS.
But it’s government health care! And according to every study ever done, health care is much cheaper and better everywhere else than it is here, thanks to the magic of government! Measton told me so, it has to be true!!!
As James Bond he had a licence to thrill – now Pierce Brosnan has a licence to chill in this amazing £6.5 million ‘eco palace’.
The newly-built mansion on the Malibu beachfront has so many solar panels that the actor will be able to heat the house, outdoor pool and guest cabana and still sell electricity back to the local grid.
All water will be recycled on site in a purpose-built plant, and there is also a waste disposal system, custom-built £250,000 energy-saving lighting and a solar-powered revolving compost heap.
Mission complete: Pierce Brosnan’s Malibu mansion will boast the latest environmentally friendly innovations
Irish-born Brosnan, 57, hopes to move in by Christmas with wife Keely Shaye Smith, 46, and their sons Dylan, 13, and Paris, eight.
A source familiar with the house told The Mail on Sunday: ‘Pierce and Keely have always been dedicated environmentalists and they were determined that their dream home would set a new standard in being eco-friendly.
‘All the windows are non-glare, insulated glass and there is a centrally controlled climate and lighting system that will automatically turn off the lights if a room is left vacant for more than five minutes.
Eco warriors: Pierce Brosnan and his wife Keeley plan to move in to their £6.5million eco-pad by Chirtmas this year
Eco warriors: Pierce Brosnan and his wife Keeley plan to move in to their £6.5million eco-pad by Chirtmas this year
‘The climate control will automatically adjust various rooms to maximise energy savings. It’s an eco palace.
‘Pierce has been actively involved in every single aspect, right down to choosing the natural recycled wood for the kitchen benches and the low-flow toilets.’
Neighbours on Malibu’s Broad Beach include Cher, disgraced film star Mel Gibson, Steven Spielberg and Goldie Hawn.
Along with the eco-technology, the house is packed with gadgets to make Bond proud.
There is a state-of-the-art security system with pressure sensors and infra-red lights, directly linked to the local sheriff.
The Brosnans will have sweeping views of the Pacific from the massive master suite, his-and-her bathrooms, a private spa and sauna, gym, solarium, library and high definition screening room.
In the garage there are spaces for his Lexus hybrid vehicle and less-than-carbon friendly but very 007-style £75,000 Maserati Gran Turismo sports car.
Being eco-friendly is affordable, if it’s cheap (to you) to spend £250,000 on energy-saving lighting.
This holier-than-thou rich eco BS drives me nuts.
I don’t know, Bill. He’s not hurting anyone. I wish I could afford to do the same thing. Especially when it’s a 101 degrees today and my air conditioner is running. A good friend who makes more money than I do built an energy efficient house and he sells electricity back to PG&E.
“So long as the people do not care to exercise their freedom, those who wish to tyrannize will do so; for tyrants are active and ardent, and will devote themselves in the name of any number of gods, religious and otherwise, to put shackles upon sleeping men.”
-Voltaire
Apollo’s Hotel Company Innkeepers USA Is Said to Prepare Bankruptcy Filing.
Innkeepers USA Trust, a hotel company owned by Apollo Investment Corp., is preparing to file for bankruptcy, according to two people with knowledge of the plan.
The company, a real estate investment trust with stakes in 73 hotels in the U.S., may file as soon as today, said one of the people, who asked not to be identified because the information is private.
Steven Anreder, a spokesman for Apollo Investment, declined to comment. Dennis Craven, Innkeepers’ chief financial officer, didn’t immediately reply to a voicemail and an e-mail sent outside regular business hours.
Apollo Investment Corp, which is managed by an affiliate of New York private-equity firm Apollo Global Management LLC, bought the company for about $1.5 billion in June 2007, at the peak of the buyout boom and just before property prices started to tumble. Innkeepers USA, based in Palm Beach, Florida, said in April that it didn’t make some monthly interest payments on its debt and may miss future obligations.
Another Johnson & Johnson drug plant gets flagged
NEW YORK (CNNMoney.com) — Johnson & Johnson, already under fire from the government over deplorable conditions at a Pennsylvania plant that makes children’s pain and cold drugs, is now being cited for problems at another one of its drugmaking plants in the state.
A plant located in Lancaster, Pa., was recently inspected by the Food and Drug Administration and failed to receive a clean bill of health, according to the company.
The Lancaster facility received what is called a “Form 483.” A Form 483 is issued after an FDA inspection yields unsatisfactory results for compliance with regulations or a violation of good manufacturing practices.
That’s OK. The Robert Wood Johnson Foundation gives heavily to PBS so complaints against J&J will be swept under the rug.
Why the Self-Employed Might Owe OfficeMax a 1099
Small businesses and self-employed workers, look out: There is a blizzard of new tax paperwork on the horizon.
The reason? To help fund the health-care changes, lawmakers passed a provision aimed at stopping cheats responsible for a big chunk of our “tax gap,” the $300 billion-plus of revenue lost to tax evasion every year.
Starting in 2012, businesses could have to file hundreds of millions of new 1099 information reports with the Internal Revenue Service. The forms will be due whenever a firm buys more than $600 a year in goods or services from a vendor, even when the vendor is a giant company like Staples. They are designed to stop people and businesses from underreporting income.
The new rules drastically expand current reporting requirements, and they apply to all businesses. But critics say the compliance burden will fall squarely on the shoulders of sole proprietors and other small businesses, plus small nonprofits and local governments. The rules even could affect people who work from home.
The new provision took many by surprise when it passed in March. Some members of Congress now favor its repeal. So does the American Institute of CPAs, even though the rule would raise fees for accountants. Taxpayer Advocate Nina Olson recently questioned whether the new law’s burden is “disproportionate” compared with its benefits.
To see how the new rules make a difference, consider this hypothetical case: Susan owns a restaurant, and last year she wrote a $2,000 check to a freelance plumber. Because the plumber was unincorporated and her payment greater than $600, she owed the IRS a 1099 report. But she didn’t have to file a different report for the $1,000 she paid to a big-box store for sinks and materials.
Under the new rules, Susan would now have report the sink payments. In fact, she will have to file 1099s with the IRS for each vendor who supplies goods or services totaling over $600 a year, whether the payments are for forks, food supplies, paper napkins or consulting. That will mean tracking small payments throughout the year to see if the total is greater than $600.
What if Susan instead runs a catering business out of her home and deducts more than $600 in utility payments for the business? The answer is unclear, but Bill Rys, tax counsel to the National Federation of Independent Businesses, fears that the law’s wording could force her to give a 1099 to her utility.
The potential new record-keeping “is making my accountants cross-eyed,” says Pat Felder, the co-owner of Felder’s Collision Parts, a regional auto-parts supplier in Baton Rouge, La., that employs 25 people. For example, several times a year Ms. Felder may throw a steak cookout for her staff after a good month, spending $300 for meat. Under the new law, she says, “We’d either have to track those purchases or buy from somebody else, just for tax reasons.”
It gets worse: If the vendor won’t supply his tax ID number, then the payer is supposed to stand in for the taxman by withholding 28% of the payment and sending that amount to the IRS.
Both IRS and Treasury officials have stressed they want to minimize the compliance burden that the new law poses to small firms, and the IRS is now taking suggestions.
Commissioner Doug Shulman has announced one way for firms to cope: Pay for goods and services with a credit or debit card, and a taxpayer can skip the 1099 filing. This has led some wags to call the new provision the “credit-card support act.”
Jim Henderson, president of Dynamic Sales, a St. Louis-area contractor-supply firm with six employees, doesn’t find the IRS’s safe harbor welcoming. “They want to me to charge things to a credit card, but I get better terms from my vendors,” he says. Some allow him up to 90 days to pay with no interest.
To be fair to Congress and the IRS, there is method in what may seem to be madness. Estimates show that more than $100 billion in taxes are evaded annually by small, nonfarm businesses underreporting their income. This category is one of the largest single sources of leakage in the tax system.
Ms. Olson favors narrowing the tax gap as well. But she wonders whether the new reporting provision will be effective compared with the burden it creates. Will the IRS have the human and computer resources to use its new information? Only firms with more than 250 vendors must submit information electronically, so the agency will be inundated with paper forms. “I’m afraid we won’t be able to tell what we know,” she says.
“There is such a thing as too much information.”
http://online.wsj.com/article/SB10001424052748704913304575371033842971968.html?mod=WSJ_PersonalFinance_PF4
So long as the FHA, FRE and FNM are pumping govt guaranteed loans into the housing market, I don’t see how claims that extraordinary help from the government has ended hold water.
Economic Preview
July 18, 2010, 12:01 a.m. EDT
Housing outlook clouded by expiration of tax credit
Bernanke will be grilled by Congress about further policy steps
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — For the first time in more than two years, the U.S. housing market is standing on its own, without extraordinary help from the government.
It hasn’t been pretty. Following the expiration of the home-buyers’ tax credit, home building, home sales, and home prices have fallen. It could be months before a clear view of the housing market is revealed.
In the coming week, four major housing indicators will be released. Although everyone expects the numbers in the medium-term to be consistent with a very weak housing market, economists are more uncertain than usual about which way the latest numbers will swing.
The other big newsmaker of the week will be Federal Reserve Chairman Ben Bernanke, who will go to Capitol Hill for two days of testimony about the economy and what should be done to make it better.
The Fed has marked down its economic forecast and there’s talk that the Fed could try more unconventional policy moves if the economy weakens further. Bernanke will surely be asked about what the trigger would be for further easing, and the lawmakers will want to know what, if anything, Congress should be doing.
Housing
The big housing number of the week will come on Tuesday when the Commerce Department reports on housing starts for June. Starts dropped 10% (including a 17% drop in single-family houses) in May after the deadline for the tax credit expired at the end of April.
The median forecast of economists surveyed by MarketWatch calls for a further 2% decline in starts in June to a seasonally adjusted annual rate of 583,000, which would bring new construction back to the levels of last summer, well above the record low of 477,000 in April 2009, but about 75% below the peak of 2006.
The median forecast hides a wide divergence of opinion, with forecasts ranging from 525,000 to 620,000.
“There is very little demand for housing of any kind,” economists at Capital Economics wrote. “New construction activity will remain quite depressed for some time,” said Meny Grauman, an economist for CIBC World Markets.
Some economists are slightly more upbeat about June’s figures. “The decline may have overshot the mark,” wrote Peter D’Antonio, an economist for Citigroup Global Markets, who nonetheless agrees that “the housing market remains weak.”
“The noise associated with the credit has made assessing the housing market difficult,” D’Antonio said.
Homebuilders themselves say they are very pessimistic about the market going forward. The home builders’ sentiment index fell from 22 in May to 17 in June. Economists think it may have fallen back to 16 in July.
On Thursday, the National Association of Realtors will report on June’s home resales. Economists are looking for a 9% drop in existing-home sales to a seasonally adjusted annual rate of 5.15 million, with estimates ranging from 4.48 million to 6.20 million.
…
MarketWatch consensus
See economic calendar
date report Consensus previous
July 19 Home builders’ index 16 17
July 20 Housing starts 583,000 593,000
July 22 Jobless claims 450,000 429,000
July 22 Leading indicators -0.3% 0.4%
July 22 Existing-home sales 5.15 mln 5.66 mln
From the Editors of American Banker
JPMorgan Chase Driving a Harder Bargain in Mortgage Short Sales
JPMorgan Chase & Co. is taking a hard line with some borrowers who want to sell their homes for less than they owe on the mortgage and avoid foreclosure.
Last month the third-largest mortgage servicer began notifying certain borrowers in preapproval letters for the so-called short sales that they will remain on the hook for the amount of debt not covered by the proceeds.
The lender’s tough new stance is a sign that even as they work with troubled borrowers, lenders are trying to recoup as much as possible.