Bits Bucket For July 19, 2010
Post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
From today’s The Energy Daily, (subscription only, so no link)
—–
The massive financial reform bill, which now awaits President Obama’s signature, gives the Commodity Futures Trading Commission (CFTC) broad new authority over the $450 trillion privately traded derivatives market to force most derivatives, or swaps, trades to be cleared on commercial exchanges or clearinghouses. The bill also subjects large-volume swap traders to meet strict margin requirements to ensure they won’t default on their obligations.
While some officials said they remain concerned about changes to the bill made by House-Senate conferees that removed a Senate-passed provision that would have clearly eliminated any margin requirements in derivatives transactions by energy companies and other, non-financial companies seeking to hedge their commercial risk, others pointed to a June 30 letter by two key Senate chairmen to their House counterparts that clarifies congressional intent on margin requirements.
…“The legislation does not authorize the regulators to impose margin on end users, those exempt entities that use swaps to hedge or mitigate commercial risk,” Dodd and Lincoln said in the letter. “If regulators raise the costs of end user transactions, they may create more risk.
——–
Could somebody please translate the bolded part for me? I get lost in all the negatives. Is “margin” in this case sorta like those 30:1 reserves?
From what I can tell, energy companies wanted margin requirements to apply just to financials, not to energy or other companies. But they didn’t get what they wanted; the law still applies to all companies. However, Dodd says that the new regulation under the new law will allow energy companies to hedge risk with swaps, because energy companies need the source of revenue. Did i get it right?
And if so, I guess that means that Golden Sachs will suddenly turn into an energy company, probably with some greenwashing for the PR value.
Could somebody please translate the bolded part for me? I get lost in all the negatives. Is “margin” in this case sorta like those 30:1 reserves?
Yes.
I’m struggling to understand that other statement from Dodd:
“The legislation does not authorize the regulators to impose margin on end users, those exempt entities that use swaps to hedge or mitigate commercial risk,” Dodd and Lincoln said in the letter. “If regulators raise the costs of end user transactions, they may create more risk.”
The spin Dodd is attempting is incredible. While I’m generally a free-markets person - the notion that margin restrictions increase risk by virtue of increasing costs (????) is just - insanely stupid.
Yes margin restrictions may increase risk, but only by virtue of creating an illusory security blanket - certainly not by increasing costs.
It’s painfully obvious whose back pocket Dodd and Frank are in. They’re making very bad excuses for letting the banks off the hook.
Pack, it’s the Energy Daily, so they don’t care about the banks. I guess energy companies are going to be exempt from most of the margin regulations, because energy companies use the profit from swaps as capital to do more business. (Banks just pocket the revenue as end profit.)
Dodd wants to keep the cost of swaps down by exempting energy companies from margin regs. If an energy company weren’t allowed to make money from swaps and use it as capital, then they’d need to borrow capital — that’s the “commercial risk” — which I guess is riskier than the swaps themselves.
Hmmm - I get the “end user” differentiation (I misread initially). However we’re talking about CDS, not actually futures trading, are we? Are the futures contracts themselves called “swaps” as well? I’ve never heard the terms used as such, though I am very much a layman.
I was thinking it was referring to margins on credit swaps, in which case the “end user” would still be a financial company; not an actual commodities consumer, would it not?
packman, I thought what he was trying to say was that if margin requirements were too onerous, that end-users might be discouraged from hedging their risk, and thus end up holding more risk as a result. That actually sort of makes sense to me.
See above - is the “end user” in this case referring to the actual commodities consumer, or instead to the seller of CDS, which would be a financial company whose “commercial risk” isn’t based on the commodities themselves, but on the success of the companies that use those commodities?
If it’s referring to the actual commodities user, then I misread it and you’re right. However I didn’t think such transactions were called “swaps” but instead just called “futures contracts” or the like.
That’s my take on it, too. They’re trying to discourage gambling with derivatives without discouraging legitimate users of derivatives from hedging their risks.
The only problem is that it is pretty much impossible to distinguish a speculator/gambler from a hedger in a derivatives market.
In order to do so, you have to figure out whether their business or their other holdings fundamentally have the opposite risk that they are trading. In other words, you can buy either end of a contract for legitimate hedging reasons, or for speculation reasons. Distinguishing one from the other is pretty much impossible. Even someone who has a legitimate reason to hedge in a particular direction can do so to an extreme (e.g. more than compensating for their existing risk), and thus is in a speculative position.
This is what I get (just from what you provided, no additional checking):
There used to be a clear statement that no “non-financial” companies that were hedging risks related to their commercial activities did not have to have any margin at all (like an airline that sells tickets 6 months in advance wants to make sure that they will be able to buy fuel when they need it at a price that won’t make the already sold tickets hopelessly underpriced so they get a contract to buy jet fuel at a particular price in 6 months).
That provision was eliminated, presumably because the conference committee was worried that the language was too broad and might be misused by financial companies (perhaps by creating non-financial subsidiaries), to do speculation with no margins. It sounds to me like they were worried they had created an Enron-transaction enabler in the bill. So, instead of hashing out what they really needed to say to allow actual commercial enterprises to hedge commercial risk in the bill and not cover the speculators too, they have put that off on the regulators who can take a number of months to do the research and figure out how to say it properly so that airlines can do what they have to but AIG can’t sell gazillions of dollars of credit default swaps with no reserves to cover the losses.
The rest points out that the legislative history that the regulators will work from tells them that they aren’t supposed to interpret the elimination of that part of the bill as a reason to require margins from actual commercial hedging. They are just supposed to take the time to get the exact language right themselves. Also, if regulators put out the regulations and see that there is a glaring loophole that allows financial firms to speculate, they will be able to fix it without requiring a legislative fix.
Thanks for the explanation polly.
Seems like just simply a transparency requirement would suffice. Allow the companies to operate at whatever margin level they want - the investors just have to be aware of the risks associated with them.
That being said - the problem with that is that we could end up with a SobOx scenarios where just the overhead of producing all the data becomes burdensome, especially for small and medium-sized companies.
It’d be nice if we could actually trust companies to maintain reasonable margins for the various assets on their own, but as we see there’s no incentive for that, given the extensive bailout precedents.
(Yeah I know - got pretty soap-boxy there)
When you let them operate at whatever margin level they want, they make huge bets that they can’t pay off when they lose. And that crashes the system, bringing down businesses that had nothing to do with the bets.
And this occurred again and again before we had any sort of government bailouts, too, so that explanation doesn’t fly.
Seems to me that much will be left to regulators, which means that there will be lots of opportunities for funny business. We’ll see if wrongdoing in the future can be punished on the basis of this legislation. That would be the only deterrent.
When you let them operate at whatever margin level they want, they make huge bets that they can’t pay off when they lose. And that crashes the system, bringing down businesses that had nothing to do with the bets.
When you borrow from a business making such bets, or you lend to a business making such bets, then you can’t claim you had “nothing to do with the bets.”. Ignorance is not an excuse. If you don’t know what a company’s up to, you should either:
A. Not do business with them
B. Be willing to accept the risk
C. Hedge the risk
And this occurred again and again before we had any sort of government bailouts, too, so that explanation doesn’t fly.
We’ve had bailouts since at least the early 1930’s. What timeframe did you have in mind?
The bets they have made have someone else on the other end that expects to be paid. When those on the other end don’t get paid, they often go broke as well, and don’t pay off those they owe, who had nothing to do with the original bet, nor any reasonable way to know they were at the mercy of these bets. The effects then cascade onto other firms who also had nothing to do with the original over-leveraged bets. The idea that the average business person would have to extensively research the finances of everyone they do business with is not conducive to economic activity.
GD1 hit when Hoover was president. No one at that time had any realistic expectation of a bailout. Same with the Long Depression, and countless other busts throughout the 19th century.
Those 19th century busts, including the mythically-named “Long Depression” were generally far shorter in length than the ones since bailouts started in the 1930’s. I can’t speak for the bailout expectations during the GD - but bailouts did happen.
From wikipedia:
In the United States, economists typically refer to the Long Depression as the Depression of 1873–79, which followed the Panic of 1873. The National Bureau of Economic Research dates the contraction following the panic as lasting from October 1873 to March 1879. At 65 months, it is the longest-lasting contraction identified by the NBER, eclipsing the Great Depression’s 43 months of contraction.[4]
—
And it all happened before bailouts.
The problem is that NBER uses prices as their primary measure of contraction - not actual economic output. Despite the fact that money supply stopped going up then, and prices went down during that period - actual economic production went up significantly. Thus the myth. Goods produced and consumed increased at a rate of 4.7% per year - look up higher in that Wikipedia article.
A myth promoted by inflationists; that equate price reduction with recession.
As with all the regulation, they must also make sure that regulators don’t lose their jobs or be negatively impacted by stopping prohibited behavior.
Imagine if a regulator at the MMS tried locking down some of the excesses.
There are lots of regulators. What we need are protections for those regulators. From the politicians who are paid off by the companies being regulated, and by agency heads who are buddies with the politicians.
Seepage on the floor of the Gulf, apparently. They may have to open that gusher.
And so it goes.
Seepage of what? They never said.
Oil and methane.
Depressing.
“Thad Allen, said early Monday that government scientists had gotten the answers they wanted about how BP is monitoring the seabed around the mile-deep well, which has stopped gushing oil into the water since the experimental cap was closed Thursday.
Late Sunday, Allen said a seep had been detected a distance from the busted oil well and demanded in a sharply worded letter that BP step up monitoring of the ocean floor. Allen didn’t say what was coming from the seep.”
I went looking for the link to the article I read last night about the methane, but can’t find it, sorry.
What else could it be?
What a mess.
Uh, what is the danger of methane escaping from the ocean floor? I can understand the danger of crude oil, but not the danger of methane.
Here’s an article on methane. http://www.helium.com/items/1882339-doomsday-how-bp-gulf-disaster-may-have-triggered-a-world-killing-event
The danger of methane escaping from the sea floor: (from the article above)
by Terrence Aym
251 million years ago a mammoth undersea methane bubble caused massive explosions, poisoned the atmosphere and destroyed more than 96 percent of all life on Earth. [1] Experts agree that what is known as the Permian extinction event was the greatest mass extinction event in the history of the world. [2]
55 million years later another methane bubble ruptured causing more mass extinctions during the Late Paleocene Thermal Maximum (LPTM).
The LPTM lasted 100,000 years. [3]
Those subterranean seas of methane virtually reshaped the planet when they explosively blew from deep beneath the waters of what is today called the Gulf of Mexico.
Those subterranean seas of methane virtually reshaped the planet when they explosively blew from deep beneath the waters of what is today called the Gulf of Mexico.
That’s one of three theories of what happened then (during the “great dying” extinction event 250M years ago). It’s a valid theory, though has drawbacks, e.g. (from Wikipedia):
However, the pattern of isotope shifts expected to result from a massive release of methane do not match the patterns seen throughout the early Triassic. Not only would a methane cause require the release of five times as much methane as postulated for the PETM,[11] but it would also have to be re-buried at an unrealistically high rate to account for the rapid increases in the 13C/12C ratio (episodes of high positive δ13C) throughout the early Triassic, before being released again several times.[11]
Not that it couldn’t happen or didn’t - but IMO it’s misleading to state that this is what did happen then. It’s a tentative theory at best; the other two being a meteor impact event and extreme vulcanism.
other two being a meteor impact event and extreme vulcanism.
Spock?
Nice to see the PETM get thrown around on the blog. The jury is still largely out on the causes of the end-Permian extinction, but we’re zeroing in on the PETM. Methane appears to be the leading culprit. A potential fly in the ointment was explained to me by Dr. Paul Koch at UCSC. The isotopic signals found near (in time) to the PETM do not correlate with the amount of methane (potentially in methane clathrates) that would be needed to cause such a C12 excursion. Granted, I was drinking some cervezas at the time and wasn’t taking notes, so there you go.
Also, other hypotheses have been expounded such as this one. I think, just my opinion mind you, that continental uplift will have end up being recognized for producing even more long term global paleoclimate change than is currently thought. More data should become available in the next year or so…
MrBubble
Oil and methane.
Earth farted.
Atlas Farted
and then shrugged with a slightly embarrassed expression. Because he just couldn’t help it, with all those humans poking around with their drills and pipes.
mud butt
Seepage of lies, apparently.
Was this seepage unexpected?
Not for me, although I was hopeful. And pressboard had an excellent analysis of the pressure gauge when the cap was first put in place.
Seepage means there is a high probability that the integrity of the metal shaft in the well is compromised. Therefore, oil and methane are being forced into the rock strata and seeping out in other locations. That can become catastrophic because you can create a situation where the leakage can never be stopped. Very high risk game.
Should be just another week or two until the relief wells do their thing, isn’t it? About two weeks ago the first one had actually reached the bottom destination - I think there were just 3-4 more weeks required to cut over into the main well and prepare for pumping in the new sludge.
To add to that - I’m surprised the media isn’t covering that like a hawk. E.g. the first step was to put some kind of resonance device - magnetic I think - to detect exactly where the main well was relative to the bottom of the relief well. They should have done that by now I thought.
Of course the media isn’t covering it. It’s not good news for Obama, therefore it is ignored.
But did you hear that they got a new puppy and Michelle is growing veggies in the White House backyard? Oh oh and they go for ice cream too.
Not everything’s about Obama, Eddie.
Did Sewage Sludge Lace the White House Veggie Garden With Lead?
Wed Jun. 17, 2009 9:25 PM PDT
In March, Michelle Obama delighted locavores when she planted an “organic” vegetable garden on the White House’s South Lawn. For years, Alice Waters, Michael Pollan, and other sustainable food activists had been pushing the idea as a way to reseed interest in do-it-yourself agriculture. Less than two months later, the National Park Service disclosed that the garden’s soil was contaminated with toxic lead, and the plot’s educational value took on a new flavor as the New York Times and other papers discussed how to make urban backyards that are laced with old lead-based paint safe for growing kale and cauliflower. But those stories might have fingered the wrong culprit.
Starting in the late 1980s and continuing for at least a decade, the South Lawn was fertilized by ComPRO, a compost made from a nearby wastewater plant’s solid effluent, a.ka. sewage sludge. Sludge is controversial because it can contain traces of almost anything that gets poured down the drain, from Prozac flushed down toilets to lead hosed off factory floors. Spreading sludge at the White House was a way for the EPA to reassure the public that using it as a fertilizer for crops and yards (instead of dumping it in the ocean, as had been common practice) would be safe.
Katrina was all about Bush, Bush, Bush.
But with the oil spill the name Barrack is never to be mentioned.
I see.
Eddie secretly loves Obama. That’s why he cannot stop talking about him.
Eddie secretly loves Obama. That’s why he cannot stop talking about him.
I thought he just had to bang on Obama x number of times per month to get his paycheck. Looks like he got a little behind, and now he’s firing at him wildly to get his numbers for the month up.
Katrina was all about Bush, Bush, Bush.
But with the oil spill the name Barrack is never to be mentioned.
I see.
If you can’t tell the difference between a man-made disaster that’s happened about three times in US history and a natural disaster that’s happened hundreds, if not thousands of times, then you’re really not getting out enough.
Not only that lavi, but apparently they can’t distinguish between responding to natural disaster and helping vicitims, for which the government has an entire AGENCY set up, and performing a nearly impossible technological feat, for which the government has little capability.
And also please distinguish between hordes of people who are dying without food or water or sanitation, as opposed to hordes of businesses who “lost their livelihood” for a year or two.
(This is not to excuse the miserable lack of prevention on the part of MMS.)
If you can’t tell the difference between a man-made disaster that’s happened about three times in US history and a natural disaster that’s happened hundreds, if not thousands of times, then you’re really not getting out enough.
OK I’m certainly not one to blame Obama for the oil spill, but I wouldn’t exactly try to present Katrina as something routine like that. It was, by a factor of 3, the most expensive disaster in U.S. history - natural or otherwise. While we won’t have a decent total of the costs associated with the oil spill for a long time yet, it’ll certainly be roughly on the same scale, and probably somewhat less than Katrina.
Not to mention that Katrina itself was a disaster that was not preventable - the oil spill was.
However that said - it’s stupid to try to blame Obama for the oil spill, or at this point even to reasonably blame him for any of the response or lack thereof. Eddie - the claim that “the name Barrack (sic) is never to be mentioned.” is ludicrous. He’s taking tons of heat, IMO far more than is justified - and this is from some who’s by no means an Obama fan. People naturally want to find a scapegoat whenever something really bad happens, and the sitting president is a natural target. I will continue to blame Obama for tons of things for years to come - but the oil spill and its response generally won’t be one of them.
The hypocrisy is amazing. Obama didn’t lift a finger for at least 30 days to help out with the oil spill and he’s given a pass because, well what can he do about it? After all he’s merely a human being and not an expert in oil spill containment.
Bush on the other hand was being crucified for not doing enough 48 hours after Katrina because he had this secret ability to suck up the water and throw it back into the Gulf but chose not to do it.
Just like we give Obama a pass for vowing up and down not to tax anyone making less than $250K when 100% of people making less than $250K will pay more tax starting Jan 1, 2011. But why quibble with pesky facts?
Here it comes….
Obama’s debt panel recommendations from the top man on the panel:
“At the same time Bowles would like to see the establishment of a consumption tax. He didn’t say what kind of consumption tax he might favor.”
But only for those making under $250K a year right Barry? After all you did swear up and down that anyone making less than $250K wouldn’t pay “a dime more in taxes”. But that was so 2008 right Barry?
I’m in favor of a consumption tax, so long as the income tax is wiped out, never to return.
But Washington wants shrimp AND lobster.
A dime is not what it used to be. Besides, we need more taxes to continue to fund your recovery.
we need a consumption tax to ease the hearts and minds of the chinese wallet.
as long as they think we are gonna pay it back…then they will keep lending. it’s that CONfidence thing again.
It seems to me that a consumption tax would put China out of business. Imagine standing in Wal-Mart looking at a shiny bauble and thinking “but I have to pay consumption tax on that.” It’s an incentive not to buy.
In the short-term yes, but in the long term eventually that money has to be spent; no reason why it won’t still be spent on Chinese baubles.
Introduction of a consumption tax wouldn’t reduce spending, it would just delay it. It’d be nice if we would have done that from the start instead of income tax, then we wouldn’t have this problem.
If the tax is factored into the price, people won’t think about it at all.
Like the UK VAT tax at 17% (now 20% I believe).
“we need more taxes to continue to fund your recovery.”
I see you graduated from the Nancy Pelosi school of economics where they teach that taxing people = creation of wealth.
As opposed to the school where printing mass amounts of poofmoney = creation of the wealth.
Yes. Either you will borrow up to your eyeballs to buy stuff and keep our wheeles greased, or we will turn you upside down and shake out your pockets. Either way, all your monies are ours.
So Alpha Sloth, you truly believe that more taxation is more wealth? I’m curious to know how that works. I pay $1 to the govt. The govt takes that $1 and gives it to you. I went to a private school where I was taught 1+1=2. I assume you went to a publik skool where they taught you new math. The new math where 1+1= whatever you want it to be as long as you feel good about yourself. So I’m curious to know how using new math $1 from me to the govt to you ends up being more than $1 we started out with.
Did they teach you about the velocity of money in your private school?
C’mon EddieTard……. I want to see you stamp your feet. Do it…
DO IT!!!
Excreter,
How can you honestly defend this? Obama said he would not raise taxes of those making less than $250K. He is breaking that promise.
He lied, plain and simple.
Rational people can see this. Partisan hacks can’t.
Either you are a partisan hack or are too obtuse to understand what is happening. In either case, major fail, dude.
+1
Wasn’t Obama going to be really transparent and have stuff online to be looked at, etc., too?
Agree. Excreter’s mind is so closed and self-righteous it’s unreal. It’s funny to watch him attempt to defend the indefensible.
On the other hand, I often notice that when people challenge you with good data you disappear and don’t reply…why is that? Lots of your arguments would go better for you if you didn’t disappear when the heat gets turned up.
I am rarely presented with data to refute anything I say. I am presented with opinion masked as data.
Example:
Me: The rich pay more than their fair share of taxes:
Data: No they don’t, Warren Buffet says his secretary pays more in taxes than he does and he’s a billionaire, so that means the rich don’t pay taxes.
If someone presents actual data from an independent source - ie IRS, Labor Department, OECD, etc - and not some left wing organization, I’ll respond to it.
There’s really nothing to defend as it is a recommendation by a tax panel, not policy and therefore another EddieTard strawman.
You go girls….
There’s really nothing to defend as it is a recommendation by a tax panel, not policy
Exactly. The partisan blinders are worn by those who can’t read and comprehend a simple article.
Careful…. Eddietard will beat you with his purse.
Excreter is as usual blinded by the blue Dem light. If you think these “recommendations” won’t be enacted you’re slower than I thought.
The new health care *is* a new tax on all US citizens. That is the crux of the administration’s legal theory that the Federal government has over the states that are suing to block it (the power to tax).
Plenty of new taxes under Obama, some stealthy, some overt, all throwing the middle class under the bus.
How did he break any promise? Has the recommendation become law?
You really shouldn’t play with fire around your straw man fear mongering.
Only Tards would play with fire near fools fuel.
The Economist
Municipal finances
There goes everybody
A Californian city takes the most drastic step so far
Jul 8th 2010 | Maywood
MAYWOOD is a tiny city in Los Angeles County, just south of downtown Los Angeles, where almost everybody is Hispanic. Two or three families are squeezed into most of the single-family homes with cheerful, toy-strewn yards, and locals say with a certain pride that if all are counted Maywood’s square mile or so is the most densely populated area west of the Mississippi. The place is blue-collar and modest but well-kept and welcoming. People especially like the new medians separating lanes on the main drag: a gift “from Obama”, as the mayor, Ana Rosa Rizo, calls them, since they came with federal stimulus dollars.
But those medians are about the only sign of economic help for Maywood, which, on July 1st, became the first municipality in California, and perhaps anywhere, to have no employees at all, after laying off nearly 100. The few clerks doing business in Spanish in Maywood’s small art-deco administrative building are now independent contractors or on loan from the neighbouring city of Bell. All Maywood’s police have been laid off. The three or four police cars patrolling the streets are driven by deputies of the county sheriff.
“It was either this or bankruptcy,” says Ms Rizo. All Maywood’s revenues have been falling. Property taxes are down as houses are reassessed at a lower value. And funding from the state has been frozen or cut as California confronts a $19 billion hole in its own budget. Like many local governments—mainly cities, counties and school districts—Maywood has therefore been running deficits on its tiny budget of $10m. Sooner or later, says Ms Rizo, there was going to be a crunch.
…
The other extreme is declaring bankruptcy. This was the approach taken by Vallejo, a blue-collar city east of San Francisco, in 2008. It has a particularly severe case of a very common problem in California and the country at large, which is that the pensions promised to its police and firefighters were not only over-generous but also based on wildly optimistic investment assumptions. So the city chose bankruptcy in the hope that it might be able to restructure some of those pension promises. Whether it succeeds remains to be seen.
Maywood also considered bankruptcy, but did not like the idea. “Our future would be in the hands of a judge,” says Felipe Aguirre, a council member. He wants it to be in Maywood’s hands. That said, outsourcing clearly has its limits. School districts (which in America are run quite separately from municipalities) for example, can hardly rent teachers from neighbouring districts, so lay-offs are now invariably making classes larger in public schools. But for city governments, whose main tasks are to keep streets clean and safe and which need to survive the worst times since the Great Depression, “we’re a model,” reckons Mr Aguirre.
United States
“It has a particulary severe case of a very common problem in California and the country at large, which is that the pensions promised to its police and firefighters were not only over-generous but also based on wildly optimistic investment assumptions.”
Promises and “wildly optimistic investment assumptions” go hand-in-hand. If a city is to pay its employees in promises (rather than in hard cash) then it needs to shop around for some advisors that will spin the numbers in such a way that will give credence to these promises.
Amazingly a city doesn’t have to look very far to find such advisors in that swarms of these advisors will be crawling out of the woodwork like a bunch of cockroaches.
Advisors = brother-in-law, political favor, no bid contract jobs. One of the main problems to begin with.
“But for city governments, whose main tasks are to keep streets clean and safe and which need to survive the worst times since the Great Depression, “we’re a model,” reckons Mr Aguirre.”
Yes, you are. A model for what’s coming.
You make 15 - 25% of the NET PROFIT on every deal you bring in!!! Hurry, hurry, this gig WILL NOT LAST
http://tampa.craigslist.org/hil/rej/1850658334.html
Yeah, net profit. Which is realized only when they sell the property, if they sell it.
Coffee’s for closers.
WHAT’S MY NAME?!
A recent Economist article suggests that gold may have peaked.
But why is it tanking today? I would think the Friday U.S. stock market selloff would have only served to stimulate demand for The Precious™.
The Economist
Gold
Store of value
Low returns on other investments and fears about the world economy have caused the price of gold to soar. Don’t count on its continued rise
Jul 8th 2010 | Delhi and london
ON THE kind of hot, sultry day in which the brutal Delhi summer specialises, the attractions of lingering languidly over gold jewellery in air-conditioned comfort are easily understood. Yet customers are thin on the ground in the jewellery section of the Central Market, an unruly hive of commerce in the middle-class district of Lajpat Nagar. “Business has never been this slow in the 14 years that I’ve run this place,” complains Mrs Anand, owner of Hans Jewellers. Lajpat Nagar’s jewellers estimate that sales are down by 40% or more on a year ago.
In a typical year India soaks up perhaps a quarter of all the gold mined in the world. Now, however, not only are people not buying; more and more of them want to swap their gold jewellery for cash. Jyoti Pal, a shop assistant, reckons that these days about as many people come in to sell as to buy. Suresh Hundia, president of the Bombay Bullion Association, goes further: “There are only sellers in the market at these prices and most jewellers are buying back only old jewellery.”
…
“Now, however, not only are people not buying; more and more of them want to swap their gold jewelry for cash.”
Soon coming to a neighborhood near you: Cash strapped gold hoarders unloading their stashes to get some very scarce and very desireable cash in a desperate attempt to pay their bills.
Cash: The Ultimate Financial Solution.
It isn’t the man on the street with a stash in the rose garden that moves this market. Regular people will sell in despair after the price crashes anyway. IMO, it is like the oil market, speculator driven not demand driven. Maybe wne the Fed is done stimulating the banks, they will have less $ to speculate with. I guess that means never.
Wow, I think I read earlier on this blog that Indians are major buyers of gold. If they’re not buying, that would appear to portend a major drop in gold.
Indians are major decentralized buyers of gold. If there is a fundamental signal in the gold market, it comes from Indian purchasers (or sellers).
Lots of decentralized sign-spinning gold-buyers in my neck of the woods.
Seems to me that indicates a sign of a bubble about to pop, would one agree?
Of course the item being sold in this case is dollars. So therefore it seems like good time to get out of dollars, and into something else - like gold.
Would be nice for the gold bubble to burst and the price to fall. Because that would be great for the stock market. For gold to fall means an end to the flight to safety.
You doomsters cannot have it both ways. You hate gold prices going up and you think stocks are overvalued.
IMO it’s because Fed’s been remarkably silent about further stimulus/QE - only slight whispers. The main reason is that, like in Japan, there seems to be an endless supply of treasury buyers. Despite the skyrocketing debt, yields are at record lows, aside from the brief pop down after the fall ‘08 crash.
As long as there are willing buyers, there’s no need to create more money for them; thus there will indeed be no inflation.
IMO at this point it’s all sawdust in the gearbox.
Not true
What are the goals of QE
1. Finance Gov -
2. Pump money into the system to avoid deflation
The fact that people/countries are buying treasuries takes care of goal #1 but not goal #2.
The bigger problem the FED faces is if the GOP blocks spending, unemployment benefits etc. QE will do little to push money into the system. It may make people move money from treasuries paying 0% but this won’t be as effective as direct gov spending to drive inflation.
Not sure exactly what you’re disagreeing with. Would you honestly propose that QE (actual or expected) doesn’t contribute to price increases in gold?
W’regards to:
QE will do little to push money into the system.
It depends on what you include in the system, and over what timeframe. The banks of course have collected and stashed the bulk of the latest rounds of QE; mostly simply to avoid the massive writeoffs that they would have had to have taken due to MBS losses. If you include this as part of “the system” then yes it very much has pushed money into the system.
It’s all intertwined - there’s no brick wall between the bank’s reserves and the general money supply. Interest rates are at all-time record lows right now because of the QE. As a result home prices are up over the past year - i.e. inflation. If this QE hadn’t happened, mortgage rates would be way higher than they are, and home prices would have continued to plummet - i.e. deflation.
(P.S. I prefer the latter scenario. Unlike most people I think deflation is a good thing, and not to be avoided.)
I guess I was disagreeing with this statement
As long as there are willing buyers, there’s no need to create more money for them; thus there will indeed be no inflation.
Willing buyers of treasuries does not negate the FEDS reason to create money. I suspect it increases their desire to create money so that everyone else is forced to put their cash into stocks, houses etc to find yield. Of course their running up against the limits when people are willing to invest in treasuries for no yield and a fair amount of risk.
Willing buyers of treasuries does not negate the FEDS reason to create money. I suspect it increases their desire to create money so that everyone else is forced to put their cash into stocks, houses etc to find yield. Of course their running up against the limits when people are willing to invest in treasuries for no yield and a fair amount of risk.
Where would they point the QE though? The big banks are setting record profits right now. The first big round was due to threats of total collapse of these banks - do you really think people will buy that now? I doubt it.
I supposed some other emergency could be used to justify another round of QE directly to corporations - e.g. an energy crisis could prompt a bailout of energy companies. However I would think that would still go through the treasury though, and not directly from the federal reserve to the banks the way the MBS purchases did.
Where would they point the QE though?
The easiest and quickest way to get it into the system is to give it to the unemployed. They’re not going to sit on it, or use it to speculate on commodities. They’ll spend it.
That’s the beauty of UE benefits during a depression- they ain’t no unpushable string, quite the opposite. (And I know many here hate the unemployed ’slackers’, but I feel a lot better about them getting it than some Wall Street fatcat.)
So you’re proposing that we change the mechanism by which we give unemployment benefits - giving them money directly from the federal reserve and bypass the treasury?
Just so I’m clear.
While I personally would prefer that to the current mechanism - I don’t see it as politically or logistically feasible.
Where would the y point the QE? The only place they can, ie treasuries. I don’t think they can legallly helicopter drop cash w/o the gov ramping up spending but maybe I’m wrong.
The only mechanisms for QE to inject money into the system that I know are.
1. Increased gov spending - GOP putting breaks on unemployment and congress seems to be pulling back on spending. So FED can’t inject as much as it wants now.
2. Driving investors away from treasuries by driving down there yield.
#2 is failing if investors are purchasing more treasuries. #1 is I’m sure much weaker than the FED would like.
So you’re proposing that we change the mechanism by which we give unemployment benefits - giving them money directly from the federal reserve and bypass the treasury?
No, I’m proposing that the Fed buy gov bonds from the gov (instead of from banks in traditional QE), and the gov uses this money to pay UE benefits.
This would bypass the ‘trickle-down’ problems inherent in giving the money to the banks to loan out, that occur when no one wants a loan who can afford to pay one back (ie when ‘pushing on a string’), so the banks just sit on the money, give it to themselves in bonuses, or use it to speculate.
UE benefit receivers will promptly spend it, pushing it into the active economy, which is where the Fed should want the money to be- that’s how you get inflation going.
Trying times call for creative solutions.
Pretty sure the Fed’s treasury purchases (i.e. as listed “monetary authority” - $776B worth) are direct, not through the banks. There’s a separate line item in the flow-of-funds report for bank-owned treasuries, which are $181B worth.
Not sure your point. In traditional QE the Fed prints money and buys assets, such as government paper and bonds, from banks and similar institutions. This pumps money into the system, but it’s then stuck in the big boyz’ pockets.
I’m suggesting the Fed buy government bonds from the gov, thus providing the gov with money to pay UE benefits, which as I’ve pointed out are about as direct and quick a stimulus as there is.
Perhaps there are more technical ways to do this, I’m just an amateur suggesting a way to pump money into the system and increase its velocity, which would seem to be the gov’s and the Fed’s goal. Print it up, and give it to the unemployed. And fund more small business loans, etc. Get the money to the people, not the fatcats.
Cameron Raids Dormant U.K. Accounts as Minister Attacks Banks
Jul 19, 2010
U.K. Prime Minister David Cameron announced plans to use “hundreds of millions of pounds” from dormant bank accounts to fund community projects, while Business Secretary Vince Cable said lenders “ripped off” customers.
Cameron said he will press ahead with a proposal set out in the coalition government’s program to establish a “Big Society Bank” to finance moves by charitable groups and not-for-profit companies to take over jobs currently done by the government.
“These unclaimed assets, alongside the private-sector investment that we will leverage, will mean that the Big Society Bank will over time make available hundreds of millions of pounds of new finance to some of the most dynamic social organizations in our country,” Cameron said in a speech in Liverpool, northwest England, today.
Use it or loose it.
What exactly is a “dormant” bank account? No activity for a year? for three months? Who decides?
Bloomberg article about this says that in the UK bank accounts are considered dormant if there is no activity for 15 years. Sounds like accounts where the owner died and the kids and/or creditors never found the account. Also, the UK passed legislation in 2008 explicitly authorizing this or at least something very like this.
I opened a savings account for each of my kids and didn’t put anything in them for 2 years. The accounts went to dormant status.
Our very active savings and checking accounts were with the same bank and we lived in walking distance to the branch. They didn’t try very hard to check if the money was actually abandoned or not. (M&T Bank)
What happened then (if you don’t mind saying)? Just curious.
When we moved and I went to my local branch to change addresses and move some other accounts around we discovered the problem. I promptly closed the accounts and took the money elsewhere.
I’ve had the same thing happen to me.
It’s why I say that your money is not your money. Wall St. thinks it’s their money.
I’ve had problems with M&T and junk fees. I love how they just reach into the account and take the money.
I had a bank account at Barclays in ‘96. Because I wasn’t actively using it, it became dormant. The thing that amazed me though was that my account number was actually given to someone else, and this is normal!
I had to complete a form for them to research the $1,000 I still had in there. After 2-3 months, they found it and refunded me the money.
“These unclaimed assets, alongside the private-sector investment that we will leverage, will mean that the Big Society Bank will over time make available hundreds of millions of pounds of new finance to some of the most dynamic social organizations in our country,” Cameron said in a speech in Liverpool, northwest England, today.
Holy crap - that statement just reeks, even from way over here across the pond. Has society really become so dumbed down as to be bought off with such a weak justification as financing “some of the most dynamic social organizations in our country”??? LOL.
I have no problem with truly “dormant” resources - i.e. from people who have died and have no heirs, becoming public property; there’s really no other reasonable way to handle it. But making a statement like that to justify it though just makes me want to puke. Why is it any more noble to use these funds for “dynamic social programs” than just regular tax money - and vice versa - what difference does it make if this money is used to create nuclear weapons vs tax money?
“Has society really become so dumbed down as to be bought off with such a weak justification as financing “some of the most dynamic social organizations in our country”??? LOL.
Yes! Without a doubt.
It was pretty much a rhetorical question, sadly.
Dormant accounts in the US also end up with the government if no real owners can be located. The process is known as “escheat” which is a handy search term for law in your jurisdiction.
I’ve had this happen to me. And thousands of others in this country.
I’ve told you that your money is NOT your money. If your account shows no activity for roughly 10 years, the “bank” TAKES IT. The same thing can happen with your safety deposit box.
So when you folks make jokes about money under the mattress, you should realize that your grandparents knew the truth.
Years ago, when I was visiting relatives in England, we were driving by a very busy plant nursery. My relatives told me that the man who owned it was a Dutchman, and, during WWII, he buried his money in his back yard.
IIRC, the back yard money was what he used to get out of Holland and into England. And, if you know the English the way I do, they’re rabid gardeners. So, a busy plant nursery is a good nursery.
Recommendation: Get a nice three ring (D-ring, not O ring) binder and keep the information about your accounts in it. Get a hole punch. Ditto for retirement accounts. I’ve discovered it to be an excellent way to keep up with all the administrative information they send.
Bernanke Dodging Lawmaker Jabs on Rates Holds Back Treasuries
It’s an election year and unemployment is high. Congress’s response? Give the Federal Reserve a break.
Lawmakers who will question Fed Chairman Ben S. Bernanke this week during his semiannual report on monetary policy say in interviews they recognize he has little left in his arsenal after reducing the federal funds rate on overnight loans among banks almost to zero and buying $1.7 trillion of securities to lower mortgage costs.
Instead, Democratic Senator Jack Reed says he wants Bernanke to use his “bully pulpit” to pressure Congress to make up for declines in spending by states and municipalities. Republican Senator Mike Johanns says Bernanke should urge President Barack Obama to “quit hammering businesses” with policies such as tighter financial regulations that may restrict employment. Politicians say they also want the Fed chairman to help reverse a drop in loans to small businesses, which account for more than half of U.S. job creation.
“… they recognize he has little left in his arsenal after reducing the federal funds rate on overnight loans among banks almost to zero and buying $1.7 trillion of securities to lower mortgage costs.”
What are these guys talking about? I thought there was no macroeconomic budget constraint.
These guys will say whatever they think will gain them politicial advantage.
Incumbency has become a science. It seems that anyone who would risk their position for truth-telling, putting the good of the country before their own, or God forbid, actual leadership, is considered a chump.
“Eliminate all of the Bush tax cuts, including the tax cuts for low- and middle-income Americans, and you would reduce the debt by perhaps 10% — assuming you didn’t cripple the economy in the process. Tax the rich? That won’t get you there either. In fact, according to the Congressional Budget Office, in order to pay for all currently scheduled federal spending would require raising both the corporate tax rate and top income tax rate from their current 35% to 88%, the current 25% tax rate for middle-income workers to 63%, and the 10% tax bracket for low-income workers to 25%”.
Feh. Sweep the board and re-set.
QE QE QE QE QE
So we could wipe out the debt in one year?
Investors set record buying U.S. Treasury securities
July 19, 2010
For the first time since the government started collecting the data, central banks, mutual funds and U.S. banks are buying more government securities at Treasury auctions than Wall Street’s bond dealers.
Foreign and domestic investors bidding directly at note and bond auctions bought 57 percent of the $1.26 trillion in Treasurys sold by the government this year, up from 45 percent in 2009 and as little as 32 percent for all of 2008, according to government data. Bids compared with the amount of debt sold, the bid-to-cover ratio, rose 18 percent from a 14-year high in 2009, according to Treasury data.
And despite all this flood of money moving from equities to treasuries, the stock market isn’t at 2,000 because… ????
Because stocks are at a permanently high plateau.
I wonder how much of the money is coming in from treasuries that are maturing (or other fixed income instruments). I’d bet it’s a lot.
Halliburton 2Q profit jumps 83 percent
Surge in natural gas drilling boosts Halliburton 2Q profit 83 percent.
NEW YORK (AP) — Halliburton Co. said Monday its second-quarter profit soared 83 percent as natural gas drilling activity picked up in the U.S.
The results beat Wall Street expectations, and its shares rose 5 percent in premarket trading.
Halliburton is the first of several companies connected to the Gulf oil spill to report second-quarter financial results. The company, which was hired by BP to seal the Macondo well before it blew up, has seen its stock tumble 17 percent since the April 20 explosion.
The U.S. ban on deepwater exploration will cut into company profits. But Halliburton has been able to boost earnings anyway through its land-based business, particularly operations involving horizontal drilling of shale gas deposits.
New American Patriotic Corporation trend: Move Headquarters to Dubai, then make profits $$$$$$$$$ off of USA Blood & Disasters.
Mystery trader buys all Europe’s cocoa
Even Willy Wonka might struggle to use this much chocolate. Yesterday, somebody bought 241,000 tonnes of cocoa beans.
The purchase was enough to move the entire global cocoa market, sending the price to the highest level since 1977, and triggering rumours and intrigue in the City.
It is unclear which person, or group of traders, was behind the deal, but it was the largest single cocoa trade for 14 years.
The cocoa beans, which are sitting in warehouses either in The Netherlands, Hamburg, or closer to home in London, Liverpool or Humberside is equivalent to the entire supply of the commodity in Europe, and would fill more than five Titanics. They are worth £658 million.
Analysts said it was very unlikely that a chocolate company, such as Nestle or Kraft, or even their suppliers, would buy such a huge order in one go and that is was probable that one or a number of speculators, possibly hedge funds, had attempted to corner the market. By doing this, they would have control of the entire supply in Europe, forcing the price yet higher.
I don’t find this sort of crap very funny, traders frigging with commodities just to make a buck. OK, I can do without chocolate, but when it happens with fuel, etc., it really pisses me off. This sort of thing shouldn’t be allowed in markets, IMO.
I hope whoever bought the cocoa drowns in it. Or gets it stuffed up his arse. Wait’ll it starts happening with water, or even air.
Reminds me of the Hunt Brothers and what they did to the price of silver - and what the price of silver did to the Hunt Brothers.
Yeah that’s I was thinking too.
I hope whoever’s doing this this gets burned bad.
P.S. I’m curious as to how in the h*** something like this could remain secret. It’s not like there aren’t probably thousands of companies out there that buy cocoa wholesale. Can they all somehow be told “just send your money to this new account, or else we’ll pay you a ‘visit’, if you catch our drift.”? Likewise on the supply side.
“I’m curious as to how in the h*** something like this could remian secret.”
This part of the art of price manipulation:
1. Quietly buy up a corner of a market.
2. Leak information that a market has been cornered. This leak will trigger a buying stampete of speculators wanting to get in on the upcoming price move.
3. Wait until the buying is at fever pitch then unload to knifecatchers all the way down as the price drops.
Also …
manipulators will use the MSM as a tool. The MSM is always looking for stories to keep their ratings up: A good manipulator will supply the MSM with all the stories it needs.
You can bet large end users such as Hersheys and Nestles are hedged well in advance. So the folks that will be hurt are the smaller businesses/manufactuters and (hopefully) the trader who attempted this stunt.
Thus it might be that Hershey and Nestles are responsible. Drive the little guys out of business.
Unless its a dire plot — the buyer is then going spray all the cocoa crops with melathion.
I read too many suspense novels.
OK, I can do without chocolate
Bite your tongue!
I was dreaming of a FB campaign going viral overnight telling people to avoid cocoa products with the masses jumping on board as a way to get back at the people who play these games. I’d love to see payback be a bitch.
Yesterday, somebody bought 241,000 tonnes of cocoa beans.
The real Precious.
Sounds like the work of Count Chocula!
“Builder confidence in the market for newly built, single-family homes declined for a second consecutive month in July to its lowest level since April of 2009, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. The HMI fell two points from a downwardly revised number in the previous month to 14 for July.”
www nahb org/news_details.aspx?sectionID=134&newsID=11078
Obama’s Bull Market Intact as Midterm Gridlock Signals Gains
July 19 (Bloomberg)
Growing dissatisfaction with U.S. President Barack Obama before this year’s elections is good news for stock investors, if history is any guide.
The Standard & Poor’s 500 Index has surged 48 percent on average starting in the second year of each U.S. presidential term, measured from its lowest level through the high the next year, according to data going back to 1928 compiled by Bloomberg. That compares with trough-to-peak gains of 38 percent in other years.
An advance this year would come after Obama already presided over the biggest rally during the start of a presidency since Franklin D. Roosevelt in the 1930s. Bets on Intrade show a 54 percent chance Republicans will take control of the House, enabling them to block Obama’s policies. That may help prevent a bear market after equities tumbled as much as 16 percent in the past two months, says billionaire Kenneth Fisher.
“I envision a rally from before the midterm elections,” said Fisher, who oversees $35 billion in Woodside, California, as chief executive officer of Fisher Investments. “Markets love gridlock. What the market wants to see is no change: less legislation that engages in changes in taxes, spending, regulation or property rights.”
“TrueDoNothing™ / “TrueObstructionists™ / TrueGridLokers™”
Fiscal Conserative / Compassionate Conservative / TrueBeliever’s™ / TrueDeceiver’s ™ / TrueHypocrite™” / “TruePatriot™ / TruePurity™” …and their “short story” of how to hand millions of Americans plentiful JOBS & restore real estate with rapidly increasing EQUITY in less than 19 months.
Starting in Nov 2010:
Plan A: Give Billionaires liquid $$$$$$$$$ liberty
Plan B: Give Millionaires $$$$$$$ reduced tax liability
Plan C: Remind the middle class of their PATRIOTIC duties & willingness to endure generational financial suffering, liberate / oxygenate: FEAR Policies
Plan D: Ignore the poor, throttle the weak
Plan E: Privatize social security
(Ha, if anyone wanting Hwy’s vote can deliver escrow in x3 pages and forces cable / satellite Co. to provide “a la carte’” programming, they can have my vote at this go ’round.)
Otherwise, I’ll stick with most of the democrapts for now, at least they tend not brand you as anti-American / un-patriotic for voicing your opposition to fear-mongering foreign wars of opportunity.
June unemployment climbs to 14.2% in Nevada. ~ Jul 19, 2010
Nevada’s unemployment rate ticked up two-tenths of a percentage point to 14.2 percent, with an estimated 193,300 out of work.
At the national level, the unemployment rate declined to 9.5 percent from 9.7 the previous month.
This is a good sign, since a national economic rebound is a prerequisite for improvement in Nevada.
But with stimulus dollars running short and private employers thus far sitting on the sidelines,expectations for near-term economic growth have diminished somewhat of late.
Why is it that some GROUP always wants to build a LEGAL fence between private citizens exercising their own free choice in a free market based in the land of freedom?
How Sonoma Wineries Thrive While Many Cut Prices, Sell Property
Review by Elin McCoy / July 19 (Bloomberg)
CARE Act:
The dark cloud hovering over direct selling, though, is H.R. 5034, the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act of 2010, a wholesaler-backed bill introduced in Congress in April that now has 126 cosponsors. Last week’s planned hearing was postponed indefinitely. If the bill passes, it could put an end to consumers buying wine directly from wineries, now legal in 37 states thanks to a 2005 Supreme Court ruling.
“If it passes, it would be an unmitigated disaster,’’ Haserot says. “It would crush small wineries instantaneously.’’
Gov of by and for large corporate interests.
You have problem with Corporate Communist Capitalism©®™, comrade?
I dare them to try this with farmers’ markets.
And I thought that the Supreme Court ruling only dealt with shipping wine across state lines?
Actually go back and read the text of the 21st Amd., repealing Prohibition. In order to get the votes to pass it, they had to insert “section 2″ which basically takes traffic in alcohol out of the “commerce clause” and gives state laws priority over federal laws. Any law that Congress passes presuming to regulate interstate or intrastate commerce in alcohol is now presumptively unconsitutional.
Didn’t they withhold highway funds from states to force them to make the drinking age 21?
Here’s an article from the WSJ about how country roads are reverting from asphault to gravel in many places.
Paved roads, historical emblems of American achievement, are being torn up across rural America and replaced with gravel or other rough surfaces as counties struggle with tight budgets and dwindling state and federal revenue. State money for local roads was cut in many places amid budget shortfalls.
In Michigan, at least 38 of the 83 counties have converted some asphalt roads to gravel in recent years. Last year, South Dakota turned at least 100 miles of asphalt road surfaces to gravel. Counties in Alabama and Pennsylvania have begun downgrading asphalt roads to cheaper chip-and-seal road, also known as “poor man’s pavement.” Some counties in Ohio are simply letting roads erode to gravel.
Here in Idaho we’re ahead of the game….many of our country roads never got paved to begin with. For example, the two roads each going to the small towns of Yellowpine and Atlanta have never been paved. The 100+ mile Owyhee scenic backroad has never been paved either.
Linkey
http://online.wsj.com/article/SB10001424052748704913304575370950363737746.html
“…The 100+ mile Owyhee scenic backroad has never been paved either”
Dang you DennisN…”‘nother cat-out-the-bag”
Cat? What cat? You mean this one?
http://www.blm.gov/id/st/en/fo/owyhee/special_areas/Owyhee_BCB.html
meow, meow…
http://tracksuitceo.files.wordpress.com/2009/03/worlds-ugliest-cat.jpg
Geez I only have pretty kitties living with me.
Condoleezza - all black female shorthair.
Duke Wayne - orange tabby male shorthair.
Nobody dares mess with The Duke or Condi.
country roads are reverting from asphault to gravel in many places.
Sweet! Now if we could get the same thing to happen with the interstates, railroads, and airports, we could start to make some real progress in this country. We could deed the land back to the rightful owners, cut way back on wasteful energy consumption, and re-invigorate local farming and manufacturing. Maybe there’s hope after all.
This is a good idea. Roads should be paved according to traffic use, not political favor make-work. This might free up money and resources for repairing other roads that really need it.
I’ve driven on plenty of tar/gravel roads. There is nothing wrong with them for back-roads at all.
Obama Omits Jobs Killed or Thwarted from Tally:
Caroline Baum - Jul 18, 2010 ~ Bloomberg Opinion
Can you believe they’re still touting that silly metric?
When I heard last week that the White House would be announcing the number of “jobs created or saved” as a result of the 2009 American Reinvestment and Recovery Act, my first reaction was embarrassment.
Imagine how Christina Romer must feel. The chairman of the President’s Council of Economic Advisors was dressed in a cheery, salmon-colored jacket, a complement to the upbeat news she had to deliver on July 14. The $787 billion stimulus enacted in February 2009, which subsequently grew to $862 billion, increased gross domestic product by 2.7 percent to 3.4 percent relative to where it would have been, and added anywhere from 2.5 million to 3.6 million jobs compared with an ex-stimulus baseline.
http://www.bloomberg.com/news/2010-07-19/obama-omits-jobs-killed-or-thwarted-from-tally-caroline-baum.html
Banks are ripping us off with rates up to 3,650%, says Cable. ~ UK
Banks are ripping off customers with sky-high interest rates on overdrafts of up to 3,650 per cent, an investigation will claim tonight. The BBC Panorama programme, to be screened this evening, lifts the lid on the crippling interest rates which are costing bank customers a fortune.
One of the worst offenders, it says, is Halifax, part of Lloyds Banking Group, which is 43 per cent owned by the taxpayer. Business Secretary Vince Cable told Panorama that banks were penalising millions of customers with a poor deal.
He said: ‘Consumers have been ripped off, get a very bad deal, and are affected very much by the complexity of a lot of financial transactions that are not transparent.’ Mr Cable has been a long-standing critic of banks, many of which are handing out multi-million pound bonuses to bankers.
As much I stand up for J6P, the fact remains that sheep are meant to be fleeced and until people vote with their feet, they get what they deserve.
The problem though, is the eventual backlash.
We’re #2…Go China!
China Passes U.S. as World’s Biggest Energy Consumer. ~ WSJ
China is now the world’s biggest energy consumer, knocking the U.S. off a perch it held for more than a century, according to new data from the International Energy Agency.
The Paris-based agency, whose forecasts are generally regarded as bellwether indicators for the energy industry, said China devoured 2,252 million tons of oil equivalent last year, or about 4% more than the U.S., which burned through 2,170 million tons of oil equivalent. The oil-equivalent metric represents all forms of energy consumed, including crude oil, nuclear, coal, natural gas and renewable sources such as hydropower.
This is a good thing, as China depends heavily on coal. I’m proud of us.
The path to 1.38 Billion energy consumptive consumers is right on course,…rapidly heading downhill… around the curve… & picking up STEAM!
Note since we consume chinese goods we are really consuming the energy as well.
Yes, but that get listed under helping foreign countries to recycle their toxic poisons while at the same time controlling the cult of “MyPet”
Approval of Obama drops to 28 percent in new Arizona poll.~ Aznet
PHOENIX - Most Arizonans no longer think Barack Obama is doing a decent job as president.
A new Behavior Research Poll released Sunday shows that nearly four out of every 10 Arizonans now rate Obama’s performance as poor or very poor. That’s up 5 points from the same survey taken in January.
What’s different is that the number of those who think he’s doing an excellent or good job has plummeted.
Three months after taking office, fully 51 percent of Arizonans gave Obama positive ratings, even though the state went for hometown favorite John McCain in the 2008 election.
A year into office, that had slid to 40 percent. But by the time pollster Earl de Berge conducted this latest survey, between June 30 and July 11, only 28 percent of Arizonans were willing to say they like the job he’s doing.
According to de Berge, much of that slide tracks with a separate poll he does asking Arizonans about their views on the economy and current job market conditions.
“As might be expected, those who think the job market is static or worsening have the least favorable view of his performance,” de Berge said.
And another hbb prognostication comes to be!
Remember before we even knew who’s name would be on the parties’ tickets, never mind who the election winner would be, we were saying this would be a single term presidency. Not saying the man has done anything to help himself. Recent polls indicate most American (not just hbbers) feel we’ve been set up. Apparently most have at least a vague idea something is very wrong. We’re all just watching him blowing sunshine and getting more and more angry.
Roubini told him last week to stop treating us like children and admit how bad it is. We’ll see.
And another hbb prognostication comes to be!
Don’t mistake the first midterm elections for the re-election campaign. The party holding the presidency almost always loses seats in the first midterms. And quite often get re-elected anyway.
If these “cash strapped” cities had done this years ago, they may not have had this problem.
Cities Rent Police, Janitors to Save Cash. ~ WSJ
Faced with a $118 million budget deficit, the city of San Jose, Calif., recently decided it could no longer afford its own janitors. So the city’s budget called for dropping its custodial staff and hiring outside contractors to clean its city hall and airport, saving about $4 million.
To keep all its swimming pools open and staffed, the city is replacing some city workers with contractors.
“These are cases where the question is being asked, ‘Is this a core service at the city level?’ ” said Michelle McGurk, senior policy adviser to the San Jose mayor.
After years of whittling staff and cutting back on services, towns and cities are now outsourcing some of the most basic functions of local government, from policing to trash collection. Services that cities can no longer afford to provide are being contracted to private vendors, counties or even neighboring towns.
And there goes another middle class salary with benefits replaced with illegal labor making 3 bucks an hour and sending half of this home to mexico
Many “cash strapped” cities have long since contracted out services. The problem is it’s usually as a political favor and the price increases each time the contract comes up for renewal.
“The reason there are so many problem banks right now isn’t because they were poorly managed,” said Davis, who is also an Appalachian State University banking professor.
Professor Davis… Meet… Professor Bear
Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)
Regulators list 40 North Carolina banks as ‘troubled’:
The number of N.C. state-chartered banks in trouble increased 74 percent since October, as delinquent loans and declining real estate values took a toll.
By Stella M. Hopkins / Charlotteobserver /Posted: Sunday, Jul. 18, 2010
“The reason there are so many problem banks right now isn’t because they were poorly managed,” said Davis, who is also an Appalachian State University banking professor. “It’s because the absolute bottom has fallen out of the economy.”
Banks, struggling through the national economic crisis, are plagued by plunging real estate values, delinquent loans and weak loan demand. Locally and nationwide, job losses, weak consumer spending and struggling businesses have made it harder for people to repay mortgages, credit cards and other debt.
So then the reason for increased burglaries would be unlocked doors?
Top Chinese Economists Call For Government To Ditch U.S. Treasuries And Buy Gold. BI ~Jul. 19, 2010
A former advisor to the Chinese central bank, and influential economist, has called for his nation to diversify away from U.S. treasury holdings.
This comes after China cut its U.S. treasury holdings by $32.5 billion in May.
“Although assets in other currencies and forms are not an ideal replacement for U.S. Treasury bonds, diversification should be a basic principle,” Yu wrote in the China Securities Journal.
“When demand for U.S. Treasury securities is strong, it’s a rare opportunity for us to gradually pull back. That way, it will not have a big impact on prices and China will not suffer too much,” he said.
~ Max Keiser Prediction: Soon enough, a G20 nation will announce a full or partial gold backed currency forcing every other country to either reply with their own gold backed currency – or equivalence – or risk 100% capital flight.
This isn’t new is it? This guy’s been saying the same thing for over a year now, IIRC.
Max Keiser Prediction: Soon enough, a G20 nation will announce a full or partial gold backed currency forcing every other country to either reply with their own gold backed currency – or equivalence – or risk 100% capital flight.
alpha-sloth prediction: This will not happen. Sorry, goldbugs.
Agree. The biggest changes I see in currencies in the future are a move towards international ones (e.g. IMF SDRs).
The thing with gold is that it may end up being a big black-market currency. If things stay geopolitically stable, this will remain small/nonexistent. If things melt down though (the aladinsane scenario) - watch out.
Union Shops Driving Down Job Growth, Critics Warn.
July 19, 2010 ~ FoxNews.com
The White House and congressional Democrats have made several moves to promote the interests of labor unions, but the efforts may result in fewer jobs available to workers, say critics who argue that unions restrict competition by raising wages and expanding government.
Unions used to comprise more than 30 percent of the labor force in the 1930s, ’40s and ’50s, when fewer labor laws were passed to rein in business taking advantage of employees. But unions find themselves now at about 7 percent of the workforce.
Lee Ohanian, a professor of economics at UCLA, recently finished a study at the American Enterprise Institute that examined what would happen if the U.S. returned to unionization levels of the 1970s. He said the numbers wouldn’t be good for economic recovery.
“My estimates suggest (we) could lose perhaps 5 million jobs and lose about 500 billion worth of GDP if unionization returned to levels we had in the 1970s and if new union members were able to command the 15 percent wage premium that historically is applied to union membership. So we would have a much sicker economy than we have right now.”
Ohanian said unions raise the price of labor above prevailing prices in a competitive marketplace to businesses, and that raises the cost to businesses.
OTOH, you can thank unionism for the 40-hour work week, paid time off, and many other things.
What a joke these cry babies are
The unions have lost pure and simple. The percentage of our workforce that is unionized has been and continues to fall. We’ll see how strong America is when there is no middle class. American workers will be treated more and more like Chinese workers and they will be paid the same as well.
I think that a big part of the problem with unionism in this country was its failure to evolve past the blue collar/factory/tradesman workforce emphasis. Once the workforce became less like this, the unions began to whither away.
Oh, the corruption didn’t help either.
Any power/political structure will attract corruption.
Politics
Wall Street
Religion
Unions
I think that a big part of the problem with unionism in this country was its failure to evolve past the blue collar/factory/tradesman workforce emphasis
Globilization was the end game for unions. It undercut any bargaining power.
From BLS website:
In 2009, 7.9 million public sector employees belonged to a union,
compared with 7.4 million union workers in the private sector. The union membership rate for public sector workers (37.4 percent) was substantially higher than the rate for private industry workers (7.2 percent). Within the public sector, local government workers had the highest union membership rate, 43.3 percent. This group includes workers in heavily unionized occupations, such as teachers, police officers, and fire fighters.
–More public sector employees (7.9 million) belonged to a
union than did private sector employees (7.4 million),
despite there being 5 times more wage and salary workers
in the private sector.
The reason
Globilization does not affect these areas. Thus union representation remains strong. If cops fire fighters and teachers jobs could be sent to India/China you can bet there would be very few public sector unions.
And most of those work for the California Department of Corrections………….LOL
Good analysis by all.
Yes, the unions failed to evolve. They were also successfully infiltrated by pro corporate shills.
Yes, the soviet corporatists ARE cry babies, but the fear mongering worked before so why not trot out that old bugaboo again. Can’t have folks realizing that maybe, just maybe, they have been lied to over the last 30 years and that butt kissing for job security makes you nothing but a punk. The prison kind.
This morning on the tread,I was listening to John Williams of Shadow Stats, and his stories how he has talked to Economists of Fortune 500’s and Trade Groups in the green room, about how bad the economy is (past and present timeframes) and when they (the Economist) go on camera, they change their tune real fast (hand that feeds them). He told how the MSM has told sponsor/sector related Economist to chill on the bad news when they go on camera. The sponsors could pull advertising.That explains the Twilight Zone commentaries and forecasts. But then again, the NAR is a shining example. Williams is his own man, and I respect him.
“…That explains the Twilight Zone commentaries and forecasts.”
Very financially tough these days to be “Professional” & “Ethical” at the same time.
I was listening to an MP3 referencing John William’s greenroom comment this morning. He said that happened in 1989 and positive spinning was actually an accepted post WWII practice. (the unsaid word: Propaganda) He did go on to add how this particular downtrend has created an even more cavernous split between spin and truth.
MSM is owned by just 7 corporations who are heavily dependent on advertisers who are heavily dependent on J6P being a stupid FB.
Prison workforce feels pinch. ~ USA TODAY
The nation’s unemployment crisis is now reaching far inside prison walls.
Since 2008, thousands of inmates have lost their jobs as federal authorities shutter and scale back operations at prison recycling, furniture, cable and electronics assembly factories to try to make up $65 million in losses.
The job cuts, prison officials say, mean a dramatic reduction in job training for inmates preparing for release, lost wages for prisoners to pay down child support and other court-ordered fines, and more tension in already overcrowded institutions.
“Anytime we have a loss of inmate jobs … it becomes more challenging to keep inmates constructively occupied,” federal Bureau of Prisons spokeswoman Traci Billingsley says. Bureau records show the job cuts during the past two years coincide with slight increases in serious inmate assaults on staff and other prisoners.
Slightly more than 7,000 federal prisoners have been cut from the work rolls in the past two years, and up to 800 more are expected to be dropped in the next several months, according to Federal Prison Industries records.
They could always go back to farming.
Oceanographer John Kessler analyzes methane levels from oil spill site
Preliminary results show concentrations at some points to be a million times higher than normal, researcher says John Kessler, a chemical oceanographer in the College of Geosciences at Texas A&M University, is currently analyzing methane levels in water collected from seven miles to 500 meters from the Deepwater Horizon wellhead.
Preliminary results, he says, point to high concentrations of the gas. “Methane levels ranged from 10,000 to nearly 1 million times higher in some spots than normal concentration,” Kessler said.
The 10-day cruise, which was funded by a National Science Foundation Rapid Response grant, returned June 21 with nearly 1 million data points gathered. Since that time, he and his colleagues have been analyzing the results in the shore-based lab at Texas A&M.
Ramifications are multifold, Kessler said. He called the site a natural laboratory in which to better assess the effect of methane on global climate change. Naturally occurring methane seeps have been linked to rapid climate change. For instance, an event occurring 55 million years ago may have caused one of these spikes, scientists believe. So the Deepwater Horizon environmental disaster may, at least, help scientists better understand and perhaps predict methane effects on global temperatures.
Methane levels ranged from 10,000 to nearly 1 million times higher in some spots than normal concentration
Yeah well the same is true for my couch on occasion.
The key is relativity, specifically:
- Over how much of an area? Are we talking just a few feet away from the wellhead, or spread over hundreds of miles, or what?
- How high is “normal”? If normal levels are almost none, then a million times almost none could still be almost none.
(Not doubting the claims - just that it’s not very useful information as presented.)
This would explain why they couldn’t use the large skimmer. With that much methane, you could run into problems with buoyancy of larger ships.
Of course that’s not what they said. They said it was “too large to maneuver properly in small areas.”
Offshore drilling moratorium affects everyone
Study outlines how the Obama administration’s offshore moratorium will negatively impact industries nationwide.
The presidential offshore drilling moratorium will cost approximately US $2.1 billion in economic loss to the states along the Gulf of Mexico (GoM) in first six months, according to a recently released paper.
“The Economic Cost of a Moratorium on the Offshore Oil and Gas Exploration to the Gulf Region” was written by Dr. Joseph R. Mason, Louisiana State University endowed chair of banking and renowned economist. Mason said he estimates the moratorium will see a loss of 8,000 jobs and $500 million in lost wages in the Gulf Coast in the first six months.
“The moratorium will cost the Gulf Coast region jobs, money, and economic development,” he said. “In fact, the moratorium could be more costly than the oil spill itself.”
The analysis addresses the negative impact the six-month offshore drilling moratorium will have on the US, both directly and indirectly. It estimates 12,046 full-time jobs will be lost nationwide, not only on oil rigs, but also in associated industries.
The study, sponsored by Save US Energy Jobs – a project of the American Energy Alliance – also focuses on the spillover effect the moratorium will have on other job sectors such as mining, transportation, warehousing, wholesale and retail trade, health care, entertainment, education, and waste management. Texas will see a decrease of approximately 2,492 jobs, and Louisiana will see a decrease of approximately 4,719 jobs.
The study, sponsored by Save US Energy Jobs – a project of the American Energy Alliance – also focuses on the spillover effect the moratorium will have on other job sectors such as mining, transportation, warehousing, wholesale and retail trade, health care, entertainment, education, and waste management. Texas will see a decrease of approximately 2,492 jobs, and Louisiana will see a decrease of approximately 4,719 jobs.
Astroturf group alert!
I keep running into this methane bubble theme from supposed industry insiders. Here’s the latest from Matt Simmons.
http://www.kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/7/17_Matt_Simmons.html
I’m just wondering if anyone can comment just how likely this scenario is. He also quite explicitly calls BP near pathological liars mostly for the purpose of avoiding jail time for gross negligence.
I wonder if the release of methane that has already happened makes a catastrophic release less likely.
They are pathological liars. I witnessed this first hand after the Texas City explosion.
PLEASE SKIP IF YOU DONT WANT TO HEAR—confessions of a slumlord!
I feel the need to clarify something. Many on this board have accused me of coming on with sob stories and have called me a flippin’ specuvestor. While it’s true I have bought and sold houses, they have always been either to rent out or to live in, and bought for cash or with skin in the game, which distinguishes me as someone who has won some. LOST some on the real estate market. I have been a slumlord(renting housing to students, who always seem to let things go but pay top dollar to live at the beach, even in a crappy, moldy, 50 yr old non insulated beach house)
I really have never been a speculator due to the fact that I have lived in all my homes, hoping to stay, yet sold them for a profit(or loss) later. But the intention was never to make money rather have affordable housing. Got burned on our last house because wife put 20% down and no longer can afford the mortgage, cant refi because the value has halved. Even though we will be sad when we have to leave, we understand that a mortgage agreement has not been met and we will vacate without spite or damaging the property.
I find it interesting that BAC has a newish subsidiary, at least in Oregon, that is liquidating 533 Deschutes County houses at the courthouse, yet has only sold them starting this June, and has sold only about 70. recontrust dot com Active in many states. Already has our courthouse steps date set although we have not been issued a NOD. An acquaintance tells us his date came and went without anything happening. Must not have sold.
In 1995 I looked long and hard to find affordable housing to purchase because I had a pretty good job and money saved. Settled on an older 3/2 with a granny flat. Put 60k down, saved from being an organic vegetable broker and lived in the granny flat and rented the house to students. Nut was $500, and I took in a roomie as well.
Then I got married, had two kids, and hurt myself so decided to move to Bend-not to spectulate, but to get a teaching license. They were the only school that would take me, EOU. But I made the dean’s list with a 4.0 GPA. In Bend, to have housing, my wife and I bought a home for 129k, again with 20% down. Nut was about 900 bucks, but it also had a garage conversion that we rented out, and money coming in from the rental down in SB.
We had two kids by that time, but still lived in the Santa Barbara house from time to time, but kept it rented. Its value went from 280k to 860k, so we sold in 2004. It was purchased by Russians, who put 300k in improvements in and sold it in 06 for 860k.
Then we purchased a condo for cash in Bend to live in while we kept our other Bend home rented, but also paid off the mortgage. The tenants there at that home shared the master with their cats, so we had to replace the subfloor when we sold. Bad Kitties!
But we sold that home that I went to teaching school in for 285k,and our condo which we bought for 200k we sold for 350k.
Never took out any loans without 20% down. Then we started losing money. We bought a dream home in Utah for around 400k cash, and put 80k down on the second condo that was also around 400k. We wanted to live in Utah so I could get a masters degree there in Logan. But the religious persucution was quite stunning(could not play with the neighbors on Sunday’s as we were not LDS). Realtor was a Bishop but he promised us that the neighborhood would not be fundamentalist, but he was wrong, so we left there. We ended up selling that home for 290k. The home we sold in Bend for 285k is on the recontrust website. it sold last month for 220k. The condo we sold for 350k also went into foreclosure and is languising on the market at 160k. I contend the people who purchased from us were the speculators, but with little skin in the game i assume, they stopped makng payments long befoe we did.
How did we lose so much money? Some on having skin in the game, like paying 160k real money to stay in our condo for the last 3 years. 110k on the Utah house. Capital gains taxes on the Cali home because as I was going to teaching school we fell under the cap gains tax exclusion, so we paid 100+k in gains taxes.
I had 4 surgeries, one that Blue Cross pre approved but later denied which ran a cool 50k.
So now we sit, squatting in our condo waiting for the day of reckoning. Sargesse does not want to help us delay foreclosure cuz he thinks I am a speculating scum. I simply could not say no to 100k here, 100k there, teaching at 30k per year in Oregon, you could devote 10 years and only get that kind of money so why begrudge a fellow for selling at a profit??
Why call each other names (I am guilty of calling sagesse a mf’er in cryptic french), but in defense of his calling my stories sob stories, making disparaging remarks about where I like to live, and saying he don’t like my type. Does he really know my type?? I am trying to find out information and am happy to add to the discussion if you all want to be civil.
Look at recontrust dot com and see that the banks have quite a number of homes they are trying to move at this point, thousands upon thousands, and Recontrust is just part of BofA’s wholly owned subsidiaries active in only 12 states, give or take.
I am not arguing Sage’s points that there ain’t diddly to support high prices in Bend. When we first moved there it was a town of 30k, mostly retirees and ski bums who could live cheaply and ski, etc.
Then there was a decade of building homes out into the sagebrush, framers supporting plumbers supporting realtors supporting. Housing built on housing growth. Califorinians did do an excellent job of pricing out the old fashioned ways in Bend, the mill shut down to make room for shops. Now there is 100k people with 30k economy. That means that lots of competition for teaching jobs, which is why I work at the coast, in a trailer, away from my family, cuz we need the income now. But did we ever have a sweet decade being slumlords. Now we just have one paid off house that provides us 10k a year income, luckily it was brand new and energy star built so it is cheap to heat, and we will be moving there or all of us into the trailer when the forclosure bell rings.
Hope some of you can read this and not seethe. I know my family loves me and I like working with youth, even though they are largely a lost cause these days. My own benefitted by having two parents who devoted lots of time to them, never sent them to daycare, always were taking them on our surfing or hiking adventures, not into the single parent absentee model that is so prevelant today.
Anyone else heard of recontrust? I think they may have been the main players in the Utah injunction, being accused of predatory practices, not too long ago that has since been lifted so BofA can go on foreclosing as usual. Maybe they will be more agressive pursuing my wife’s foreclosure since she put 20% down the mortgage is insured by the FHA?
Mike let me be the first to say a lot of us have done things we aint a proud of………to pay the rent….
And in some way I hear a story like yours and man my life ain’t so bad right now…I’m working a below minimum wage job, at least its something i like (internet radio) and it will improve the resume…maybe Sirius will finally hire me…for a lot of $$$
And i’m still healthy but not thin…so to be sick and have surgeries and deal with insurance companies..and paying that much out of pocket…is that what i have to look forward to????
But being honest is what is necessary, your choices may rile some here and sure I’ll tell you to get a divorce if all else fails, but this is what we have a board to tell our personal stories…on how this bubble threw us under the bus. Heck my high school and college reunion sideline business crashed too, hence i had to do things the GF didn’t approve of.
So keep posting mike because a lot of people might be doing just the same thing this year and next….then what for our country?
mikeinbend, I’ve never thought you were a specuvestor—just a guy who thought he was following society’s formula for success: buy your house to live in instead of paying someone else’s mortgage by renting, and pay 20% down to avoid PMI. I was following that formula myself, until I had a “whoa” moment back in 2002 when things in Seattle started going up 20% a year, and I relized that it could not go on forever. I would say that the only thing you did wrong was not realizing that a bubble was raging early enough. But it lasted much longer than I thought it would, so I didn’t predict it perfectly either.
Don’t let the naysayers get you down. Personally, I appreciate the many first-hand anecdotes/experiences that get shared here on the HBB on a regular basis. For me at least, it puts a human face on the wreckage of the credit bubble/bust.
Mike, I wish you the best. I have known hard times. I understand and don’t judge you.
The only time we have ever been evicted, we were naive and signed a lease option on a house. The builder, who was the other party, did not pay the mortgage, even though we paid him faithfully. We stuck it out as long as we could to recoup our deposit.
You had bad luck and made a bad decision or two, but you keep moving forward. I admire that.
Teaching is hard work. I believe it is a performance profession. You have to be on every minute of every day and it is physically demanding.
Teen charged after crash of horse and buggy in chase.
LEON—An Amish teen who tried to flee police faces charges of alcohol possession and “overdriving an animal” after he crashed his getaway vehicle— a horse and buggy.
Cattaraugus County sheriff’s deputies reported over the weekend that Levi E. Detweiler, 17, ran a stop sign and refused officers’ attempts to stop the buggy. Deputies chased Detweiler for about three quarters of a mile, and when he tried an unsafe turn into a driveway, he crashed the horse and buggy in a ditch. The teen then fled on foot but was found later in the area.
The Sheriff’s Office Criminal Investigation Bureau completed an investigation and charged the youth with possession of alcohol by someone under 21, overdriving an animal, seconddegree reckless endangerment, failure to stop at a stop sign and failure to yield to an emergency vehicle in the incident that occurred at about 1:30 a. m. last Monday. He is free on $500 bail.
Gun Permit Allows Visitors Quick Access to Texas Capitol
AP/Austin American Statesman
AUSTIN, Texas — Everyone from lobbyists to lawyers and journalists is rushing to get permits to carry guns inside the Texas Capitol, where legislators already often tote pistols in boots and purses or stow them away inside their desks.
A unique loophole in a new security procedure means a gun permit is like a special-access pass into the domed building, allowing people who are certified to carry a gun to bypass lines at the metal detectors that were set up after a shooting incident earlier this year.
“Nobody wants to be the one standing in line behind three hundred kids wearing the same colored T-shirt,” said University of Texas political scientist Jim Henson. “If you’re trying to get in and out really quick and there’s going to be choke points, well, people don’t want to have to deal with that.”
And what happens when the Capitol has the Texas equivalent of Dan White shooting Harvey Milk?
People will shoot back. That’s what we do here. We shoot back. Much to the surprise of many a would be rapist/robber/car jacker.
This will not end well.
It Takes More Than Just Low Mortgage Rates. ~ July 19th, 2010
It takes a lot more than just low mortgage rates to spin the wheels of the housing market; and that couldn’t be more apparent than it is right now. Mortgage rates continue to fall week after week — according to HSH.com the weekly average for the 30-year Conforming fixed rate fell to 4.69% (week ending 7/16/10) — and yet the Mortgage Bankers Association reported the lowest level of mortgage application activity since 1996:
Yet it seems that the economic slowdown which began in May became more entrenched in June, as more signs of weak activity accumulate. Conforming 30-year loans shed two basis points from last week to establish the latest record low, but while low rates have created some new demand for refinancing, the applications index from the Mortgage Bankers Association of America stands at levels not seen since 1996 — and there is little indication that it will pick itself up off the mat anytime soon.
What’s the Issue?
First off, the summer is a slow season for homebuying activity to begin with. Second, two homebuyer tax credits have borrowed from future purchase demand, and lastly, a large portion of borrowers — whether buyers or refinancers — have already taken advantage of the low rates.
Ummmm, maybe-just-maybe we could develop an economy that’s based on something other than selling houses back and forth to each other?
Just a thought…
Summer is a slow season?
I noticed that, too. It’s kind of like in Spinal Tap when the manager is consoling the band on a poorly attended gig, saying Boston wasn’t a big college town anyway.
“It takes a lot more than just low mortgage rates to spin the wheels of the housing market;…”
That’s right. One also either needs some combination of home prices in line with local incomes and rents lending standard debauchery. The former is far better than the latter, as the latter alternative is inherently unstable and leads to financial collapse.
One also either needs some combination of home prices in line with local incomes and rents lending standard debauchery.Trying that sentence again; my editor seems to be on strike:
One also needs some combination of home prices in line with local incomes and rents, with lending standard debauchery.
This being Monday is crime report day in the Boise paper - all the stories about crime from the previous weekend are posted there for jeers from the public commenters.
Here’s one for you…..talk about a drunk dipstick.
http://www.idahostatesman.com/2010/07/19/1272586/police-intoxicated-man-arrested.html
I know there are a lot of bad news bears around here, but I have a bit of good news to report.
Late last week, I got an e-mail from an associate art director at a local magazine publisher. Turns out that they’re trying to pay me. And I didn’t even know it.
Earlier this year, I’d submitted a CD of photos for possible inclusion in one of their magazines. I’ve been doing this since early last year, and nothing’s come of it.
Matter of fact, I’ve taken to mumbling “The Holy Grail” whenever I’ve passed by this publisher’s building.
Well, turns out that they’re buying a couple of my photos.
So, Slim’s a happy camper.
After two years of pitching photo buyers, and nothing to show for it, I get my foot in the door at one of Tucson’s biggest and most respected publishers. I’m going to be seeing the aforementioned associate art director later this afternoon. Am hoping to pry that door open even further.
Good luck!
Nice work, Slim!
So, Slim’s a happy camper.
Another removed band-aid ripped from the slow healing mega-wounded America!
Good job Slim!
Speaking only for myself of course, it’s not so much I’m a bad news bear but that I expect life to have some sort of symmetry: you know, a giant bubble should be followed by a giant crash, that sort of thing. And perhaps I’m naive in believing in such concepts but it has served me well so I guess I’ll soldier on.
Oh, and congrats on your latest success!
Toll Brothers Forms Distressed Real Estate Business
Jul 19, 2010
Toll Brothers Inc., the largest U.S. luxury-home builder, formed a unit to invest in distressed real estate as demand for new houses slumps.
Toll created Gibraltar Capital & Asset Management LLC to “pursue a broad range of real estate acquisition and investment opportunities,” the Horsham, Pennsylvania-based company said in a statement today. Those may include buying loan and property portfolios, developing sites for other builders and assisting in the workout of troubled real estate, the company said.
Toll, led by new Chief Executive Officer Douglas Yearley Jr., joins Lennar Corp. in seeking to make money from distressed real estate and move beyond its traditional homebuilding business. Sales of new U.S. homes slid 33 percent in May to a record low annual rate after the end of a federal tax credit, according to a Commerce Department report last month.
Now that’s some serious hedging.
Insurer Losses Trigger Most Regulator Intervention in a Decade
Bloomberg
U.S. life and health insurers were subjected to regulatory intervention last year at the fastest pace in a decade as they lost money on investments and promised more to clients than they could deliver.
The industry “has yet to fully shake off some of the lingering effects of the financial crisis,” Carole Ann King and Joe Niedzielski, analysts with insurance company ratings firm A.M. Best, said in a report released today. Twelve insurers were targeted for regulatory action last year, the most since 1999 when 24 carriers were deemed impaired. The number will probably rise this year, A.M. Best said.
The biggest life insurers, led by MetLife Inc. and No. 2 Prudential Financial Inc., reported quarterly losses exceeding $1 billion during the credit crisis. Investments soured during the recession and guarantees made to policyholders weighed on results when stock markets declined. Even after profits returned to many carriers last year, Fitch Ratings warned of losses to come on commercial mortgages.
If I may make a bold prediction, I predict that the private health insurance industry will largely be gone in a few years. Why? Well, that health care reform bill’s promising a lot of rules and regs that didn’t exist before.
And, if you take just a gander at the above, the investments that they make after collecting premiums from us folks can go bad in a big way. Only so many double-digit rate increases you can levy before us folks say, “Cancel the policy!”
One more thing: A friend of mine has been in insurance sales for quite some time. He’s not a big fan of selling health insurance policies, as they’re not very profitable for agents like him.
He told me that selling life insurance is where agents really make their moolah. Which explains why, if you’re going to an agency for insurance, you’re gonna get hit with the Life Insurance Hard Sell whether you need life insurance or not.
Wish I would have known that last week, it would have saved me a call. My B-day is upcoming and I got the letter from our car/home insurance company quoting $63/per month for a 500k term life insurance. Rate only good until my birthday of course. Gave them a call and admitted I was an “occasional” smoker. Same policy jumped to $4500.00 per year. Thanks, but no thanks.
Beautiful people political party?
Sanziana Buruiana would tax obese citizens and criminalize ‘dumb blonde’ jokes.
A Romanian model wants to improve the country’s image by starting a political party for beautiful people, according to Orange news.
Sanziana Buruiana would tax obese citizens and criminalize ‘dumb blonde’ jokes, saying “anyone like that needs to be put in prison.”
The party platform calls for a fine of $130 for adultery, and would limit all tourist guides to models in bikinis.
Buruiana says the goal of the party platform is to boost Romania’s tourism industry.
I don’t participate in buying Christmas crap, but I’m sure plenty will.
Stores push ‘Christmas’ sales to beat recession
NEW YORK — Santa in the summer?
Retailers are pumping still more energy this year into trying to get shoppers to loosen their purse strings early for Christmas with sparkly ornaments, holiday music and special prices. In July.
Target is entering the game for the first time, with a one-day online sale starting Friday on 500 items from clothing to Blu-ray disc players that’s modeled after sales typically held Thanksgiving weekend. And Sears and Toys R Us are dramatically promoting “Christmas in July” online based on the success they saw in last year’s efforts.
“We really wanted to create that sense of excitement, that sense of urgency,” said Target (TGT) spokeswoman Molly Hanus.
I think they are expecting low back-to-school sales.
It’s about time retailers relearned the fine art of selling to customers instead of thinking we owe them a living.
Pakistan’s Elite Pay Few Taxes, Widening Gap. ~ The New York Times
ISLAMABAD, Pakistan — Much of Pakistan’s capital city looks like a rich Los Angeles suburb. Shiny sport utility vehicles purr down gated driveways. Elegant multistory homes are tended by servants. Laundry is never hung out to dry.
But behind the opulence lurks a troubling fact. Very few of these households pay income tax. That is mostly because the politicians who make the rules are also the country’s richest citizens, and are skilled at finding ways to exempt themselves.
That would be a problem in any country. But in Pakistan, the lack of a workable tax system feeds something more menacing: a festering inequality in Pakistani society, where the wealth of its most powerful members is never redistributed or put to use for public good. That is creating conditions that have helped spread an insurgency that is tormenting the country and complicating American policy in the region.
Sounds like a case study for what’s starting to happen in the US.
Bingo! No hope is a recipe for trouble.
The US was exactly like that until the GD of 1929.
A bit off Topic, but DinOR, if you’re reading, we were talking about land on the border of Oregon/Cali yesterday, and in poking around, I found that they are going to probably be removing and draining all 4 of the reservoirs on the Klamath in that area, which may affect where you’d be looking for property. Lake front is probably not a good investment.
The jumbo’s are back
Amid all the double-dip discussions in the housing market is an odd ray of hope on the high end.
With little to no fanfare, it appears jumbo loans are not only getting cheaper, they’re getting easier to obtain.
After several years of stagnation in high-end housing, thanks to the disappearance of the jumbo market, things are moving yet again.
A quick check on Bankrate.com shows the 30-year fixed jumbo at around 5.50 percent, and Citibank last week reported applications for jumbos up 30 percent just over the last 60 days.
“It is the overall weak economy driving the 10 year lower, which is the proxy for most mortgage loans,” says FBR’s Paul Miller. “This is still probably the best of the best getting loans at these low rates, but Jumbo activity is still very, very low.” Miller says it’s good for the market, but only “marginally better,” as banks are desperate to find good loans to put on their books.
But how long will it last? Probably only as long as investors remain nervous about the economy.
“Preliminary signs of life in the secondary market are a good indication that the narrower spread between jumbo and conforming loans will stick around,” says Bankrate.com’s Greg McBride. “However, the level of mortgage rates will hinge more than anything on the demand for Treasuries.”
I heard of one bank offering loans up to something like $2MM. In addition to 20-25% down, the bank was requiring the borrowers have 3 years of payments in liquid securities. The down payment portion didn’t seem to be a problem…but after putting 20-25% down, they were stumbling on the 3-years of payments. This is the equivalent of having 40-45% of the home price as cash in the bank.
Let FHA Loans Help You
FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal.
Low down payments
Low closing costs
Easy credit qualifying
What does FHA have for you?
Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.
Want a fixer-upper?
FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan.
Financial help for seniors
Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer “yes” to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.
Want to make your home more energy efficient?
You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
How about manufactured housing and mobile homes?
Yes, FHA has financing for mobile homes and factory-built housing. We have two loan products – one for those who own the land that the home is on and another for mobile homes that are - or will be - located in mobile home parks.
Ask an FHA lender to tell you more about FHA loan products.
Find an FHA lender
Need advice? Contact a HUD-approved housing counselor or call
(800) 569-4287.
Need help with your downpayment? State and local governments offer programs that can help. Find a program near you.
Content current as of 16 July 2009
Why Ask For An FHA Loan?
There are lots of reasons to ask your lender for an FHA loan instead of taking a conventional or an expensive and risky sub-prime mortgage loan. Why not take advantage of the many benefits and protections that only come with FHA:
Easier to Qualify - Because FHA insures your mortgage, lenders are more willing to give loans with lower qualifying requirements so its easier for you to qualify.
Less than Perfect Credit - Even if you have had credit problems, such as bankruptcy, its easier for you to qualify for an FHA loan than a conventional loan.
Low Downpayment - We have a low 3% downpayment, and that money can come from a family member, employer or charitable organization. Other loans don’t allow this.
Costs Less - Many times, FHA loans have competitive interest rates because the loans are insured by the Federal Government. Always compare an FHA loan with other loan types.
Help You Keep Your Home - The FHA has been around since 1934 and will continue to be here to protect you when the others walk away. Should you encounter hard-times after buying your home, FHA has many options to help keep you in your home and avoid foreclosure.
There is more to buying your home then the monthly house payment. Why not ask for an FHA loan that will help you buy your house and keep it too? Tell your lender you want an FHA loan for all the reasons above- FHA is a wise choice.
HUD in Florida
Staff PhotoTampa Housing Authority breaks ground on Encore, a 30-acre residential housing facility, creating thousands of jobs with Recovery Act funding.
Staff Photo
Recovery Dollars Putting People to Work in Tampa Bay
“Investing in housing is a winning proposition. We are making sure our Tampa Bay region residents have safe, affordable places to live while creating jobs at our housing complexes at the same time…”
The American Recovery and Reinvestment Act investing in Florida
Upcoming Events
•July 17: Foreclosure Assistance Workshop, Port Charlotte
•July 17: Florida Housing Help Workshop, Immokalee
•July 19: PRAC Budget/Rent Adjustment Workshop, Tampa
•July 19: Florida Housing Help Workshop, Tampa
•July 20: MF Housing Owner/Agent State Conference, Tampa
•July 31: Florida Housing Help Workshop, Lecanto
•August 7: Foreclosure Assistance Workshop, Tampa
HUD advances fight against loan modification scams with PreventLoanScams.org
HUD selects Orlando Housing Authority to Moving to Work Program
FHA to provide early relief to struggling homeowners
FHA announces policy changes to address risk and strengthen finances
When Will Consumers Start Spending Again? Try 2013
cnbc ~ July 19, 2010
Five to seven years. That’s the length of time the Federal Reserve suggested last week that it would take for the U.S. economy to recover from the worst economic downturn since the Great Depression.
A new survey released by AlixPartners shows that most Americans are a little more optimistic than the Fed. The majority of those surveyed don’t expect their quality of life-including their spending levels-to return to pre-recession levels until mid-2013.
While it may seem like good news on the surface that consumers are more optimistic than the Fed, Bryan Eshelman, managing director of the global retail practice at AlixPartners, said the firm’s research has found Americans keep pushing that date farther into the future, and consumers tend to be more optimistic than circumstances may dictate.
When the firm polled people last November, respondents expected a return to “normal” by November 2012. Now they’re saying not until August 2013.
It will be interesting to see when they do their next survey whether that date gets pushed out even farther.
“YOU MAY BE A TALIBAN IF…”
1.. You refine heroin for a living, but you have a moral objection to liquor.
2. You own a $3,000 machine gun and $5,000 rocket launcher, but you can’t afford shoes.
3. You have more wives than teeth.
4. You wipe your butt with your bare hand, but consider bacon “unclean.”
5. You think vests come in two styles: bullet-proof and suicide.
6. You can’t think of anyone you haven’t declared Jihad against.
7. You consider television dangerous, but routinely carry explosives in your clothing.
8. You were amazed to discover that cell phones have uses other than setting off roadside bombs.
9. You have nothing against women and think every man should own at least four.
10. You’ve always had a crush on your neighbor’s goat.
Anyone who doubts the Fed has a money tree (or maybe forest) needs to read this article closely.
It is far too soon to end expansion
Brad DeLong
Published: July 19 2010 22:21 | Last updated: July 19 2010 22:21
It was in 1829 that John Stuart Mill made the key intellectual leap in figuring out how to fight what he called “general gluts”: he saw that what had happened was an enormous excess demand for particular financial assets was driving an enormous excess supply of goods and services – and if you relieved the excess demand in finance you would cure the excess supply of labour. When the government relieves an excess demand for liquid money by printing up cash and swapping it out for government bonds, we call that expansionary monetary policy. When the government relieves an excess demand for bonds by printing up more Treasuries and selling them to finance its own purchases of goods and services, we call that expansionary fiscal policy. And when it prints up cash and bonds and swaps them for risky private financial assets, or when it guarantees private assets and so raises the supply of high-quality and reduces the supply of low-quality bonds, we call that banking policy.
…
“And when it prints up cash and bonds and swaps them for risky private financial assets, or when it guarantees private assets and so raises the supply of high-quality and reduces the supply of low-quality bonds, we call that banking policy.”
Does anyone besides me suspect Brad DeLong just made this up?
If anyone has evidence to the contrary (i.e., that this sort of procedure is legally-authorized ‘business as usual’ for central banks), I would love to see it.
Isn’t DeLong basically advocating the Greenspan money tsunami solution to our economic problems — you know, the same recipe that got us into the present mess?
Outside the Box
July 20, 2010, 12:54 a.m. EDT
Double-dip looks doubly certain
Commentary: The economic recovery is just an illusion
By Robert P. Murphy
NASHVILLE, Tenn. (MarketWatch) — Economists and financial analysts are currently arguing whether the economy will experience a “double dip,” a recession followed by a short recovery, followed by another recession.
Some think the worst is behind us, and that output and employment will slowly but steadily increase during the next few years. Others believe we are headed for another crash. The lessons from the last business cycle favor the case for pessimism.
It has been said that if one laid all the world’s economists end to end, they wouldn’t reach a conclusion. Even so, a surprisingly large number of economists now agree that then-Federal Reserve Chairman Alan Greenspan made a tragic mistake. After the dot-com bubble burst in 2000, Greenspan opened the monetary floodgates.
Specifically, Greenspan allowed the “monetary base” to increase 22% from June 2000 through June 2003. The monetary base, also called “high-powered money,” is the base upon which bank loans are pyramided, expanding the total amount of money held by the public.
During the same three-year period, Greenspan cut the federal funds rate — the interest rate commercial banks charge each other for overnight loans — from 6.5% down to 1%, the lowest federal funds rate in more than 40 years.
The rationale for Greenspan’s easy-credit policy was to provide a “soft landing” for the economy in the wake of the dot-com crash and Sept. 11 attacks. And for a while, it seemed he had succeeded. People marveled that housing prices continued to rise, even amidst the recession of 2001. Indeed, people referred to Greenspan as “the Maestro.”
In retrospect, economists across the political spectrum recognize the role Greenspan’s Fed played in fueling the housing bubble. The more cynical analysts argue that Greenspan’s policies weren’t “easy” at all and merely postponed the inevitable day of reckoning for the economy. Rather than gritting its teeth and suffering through the necessary adjustments in the early 2000s, the nation got an injection of artificial credit that masked the underlying problems with a euphoric boom.
The housing market eventually collapsed, as all bubbles do. At this point, Ben Bernanke was at the helm of the Fed. Unfortunately, he got his policies out of Greenspan’s playbook, except Bernanke doubled down.
Rather than pushing short-term interest rates down to 1% as Greenspan did, Bernanke has pushed them down to almost zero percent. And in contrast to Greenspan’s 22% increase in the monetary base during a three-year period, Bernanke increased it by 94% in one year.
The unprecedented monetary stimulus from the Fed, in conjunction with the massive deficits of the federal government, did succeed in partially re-flating the stock market and stabilizing home prices. Time magazine named Bernanke its 2009 Person of the Year, and Obama administration officials are taking credit for nipping the Great Recession in the bud. Yet the parallels with the Greenspan episode are clear.
It makes no sense to “rescue” the economy by having politicians borrow and spend trillions of dollars. It also makes no sense to fix the horrible mistakes of the housing-bubble years by having the Fed create electronic money out of thin air to buy “toxic assets” from investment banks that would otherwise be insolvent.
The alleged economic recovery is unfortunately just as illusory as the prosperity of the housing-bubble years. It is disturbing to consider that if this is the calm before the storm, then the pending crash will be painful indeed. In the current debate on the direction of the economy, those predicting a “double dip” have the stronger — if more depressing — case.
Robert P. Murphy is a senior fellow in Business and Economic Studies at the California-based Pacific Research Institute.
Does anyone else feel like the Oil Spill may possibly ruin Florida? And I mean completely ruin, in ways no beachfront McCondos ever have.
I have been tracking the property for almost two years now. A complaint of foreclosure was filed in Nov 2008 on a countrywide loan now held by Bank of America. I have communicated with the owner who has vacated the property, and the property continues to sit empty. She has mentioned that the property is in the banks hands, but nothing shows up in the registry of deeds as being recorded etc. I would like to purchase this property but have tried many ways to get my foot in the door. First of all why so long, second any contact info out there, and third what should I do at this point.
Excellent analysis of where the US was economically, and where we are headed by Stephen Cohen: The End of Influence: What Happens When Other Countries Have the Money
Click on my name for the URL with a 1 hour interview. I caught this on UCSD television the other day, apologies if its already been posted.
The banking industry would be more competitive now if these Megabanks had been allowed to die of suicide in Fall 2008. Now they have come back stronger and more monopolistic than ever, and the banking industry is less competitive and more top heavy as a result. And since they are making 60% of home mortgages, they are capturing the benefit of a federal guarantee of something like 97% of all their new mortgage originations, courtesy of the U.S. taxpayer’s involuntary largess.
The Wall Street Journal
Mega Banks Pressure Smaller Players
July 20, 2010
Bank of America, J.P. Morgan Chase and Wells Fargo hold 33% of all deposits and made nearly 60% of home mortgages, pushing smaller banks out of the market.
…