Bits Bucket For July 20, 2010
Post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Hopefully Eddie will be around later today to reassure all of us that this is a buying opportunity in disguise.
BULLETIN U.S. housing starts drop 5% to an eight-month low
Index Futures:
S&P 500 1,053 -11.30 -1.06%
DOW 9,960 -100.00 -0.99%
NASDAQ 1,789 -16.50 -0.91%
Countdown to the close:
Stock futures are pointing to a broadly lower open. J&J adds to the gloom engendered by IBM and Texas Instrumets.
Eddie will be here until the market tanks again.
The shortbus just rolled by an I saw Eddie through the window. He was in the front seat wearing head-gear.
LOL. Did he have a sullen look on his face, or was there a lot of kicking and screaming going on?
(Sorry Eddie - you seem like a decent fellow. You just tend to cross over that… “easy target” line perhaps too often.)
He was licking the window.
Here is the kind of behavior that Eddie regards as less important than one’s conservative credentials:
Mel Gibson’s ex-girlfriend Oksana Grigorieva accuses actor of choking her, pulling gun: report
BY Katie Nelson
DAILY NEWS STAFF WRITER
Originally Published:Tuesday, July 20th 2010, 9:13 AM
Updated: Tuesday, July 20th 2010, 11:36 AM
…
Sources told the gossip Web site that the nearly-deadly throw-down went something like this:
Grigorieva went to a basketball game for her son Alexander, 12, leaving baby Lucia home with a nanny. Grigorieva then returned home that evening to a furious Gibson, 54, who stalked through the Malibu house slamming doors and cursing her out.
The fight escalated as “Mel punched her in the mouth and then again in the side of the head,” a source with knowledge of the investigation told RadarOnline.com.
The force of the alleged blows threw Grigorieva back onto the bed, and the Oscar-winner supposedly choked her and held a hand over her mouth.
Once she freed herself, Gibson then allegedly pulled a gun from his pocket, pointed it at Grigorieva’s head and threatened to shoot her, the children and himself.
“Oksana has told authorities it was horrific and she thought she was going to die,” the source said.
Meanwhile, Grigorieva’s son allegedly watched the entire fight take place.
Grigorieva eventually fled the house with her children in tow, barefoot and in pajamas, Radaronline.com reported.
Read more: http://www.nydailynews.com/gossip/2010/07/20/2010-07-20_mel_gibson_lashes_out_after_ex_oksana_grigorieva_accuses_him_of_hitting_her_and_.html#ixzz0uFMangbc
There’s those good old fashioned “conservative family values”. Dontchya all wish we could go back to the 1950’s when we could beat our wives without consequence, minorities were second class citizens and your kids could be molested at the church without consequence?
Ahh yes…… conservative family values.
Who cares about the whole Mel Gibson bit. I’m tired of hearing about it.
‘There’s those good old fashioned “conservative family values”.’
Well, as Eddie was fast to note the other day, Mel Gibson is a conservative. Conservative family values seem to fit him well.
Real conservatives don’t give a rats asp about the family values of other people. Life Liberty and the pursuit of happiness are the values of true conservatives. Progressives in today’s world are delving into our personal lives more than any mean old white evangelists of the past and they (progressives) have the power of the Federal Government backing them up.
“Old white evangelists” huh Cupcake?
Kinda like:
James Dobson and his conservative Focus on the Family
Tony Perkins and his conservative “Family Research Council” (brother organization to the racist “Minutemen”)
There’s your convervatives folks. In your business, in your house, in your bedroom and in your wallet.
Al Gore gropes masseuse. Roman Polanski rapes 13 year old. Bill clinton. John Edwards has bastard child while his wife battles cancer.
All forgiven by the left. Mel Gibson’s gold digger ex sells a story to a gossip web site. Excreter goes insane.
They (Minute men, FRC, and Focus on the Family) have no power over you and me. The progressives in Government do. That was the point of my post…Cupcake. You fear the wrong Entities.
Yep. You’re right. They don’t have power anymore. They’re all yours. You own them. Racists included.
Nick and eddie do have a point (and its not on top of their heads)
Black people finally have the means have the means to get off the plantation and what do we find?
The plantation is expanding to cover the entire country. There is no longer a place for slaves to escape to; matter of fact, when slaves run away, they now pass white people heading in the opposite direction.
(((shakin my head)))
“They don’t have power anymore.”
They never had the power of government.
“They’re all yours. You own them.”
They were never mine. They are right wing progressives.
“Racists included.”
That term has lost its luster. Progressives sling that term towards all who disagree with statism.
It’s ok if you are the kind of person that lives in fear and looks to law makers and bureaucrats for guidance and protection. When those bureaucrats start to restrict my right to life, liberty and the pursuit of happiness, you have in effect imposed your will on me. You do this not by using your own intellect or muscle, you use the muscle of the state.
Oh they’re yours alright……. EddieTard.
Special Ed from ‘Crank Yankers”
I wanna go to hawaii yaaay!!!!!
Roman Polanski rapes a 13 year old. Family values leftie style eh Excreter?
EddieTard!!!!!! Roman Polanski is a card carrying member of the Conservative Family Values movement huh Window Licker…..
Apple has its best quarter ever. Harley Davidson has awesome quarter. Dow 12k on track. But yall keep earning that .25% apy in the checking accounts.
Dow 12k
Isn’t high correlation a likely result of asset prices driven too much by central bank intervention and not enough by fundamentals?
The Financial Times
Stock picks tough as asset paths correlate
By Anousha Sakoui and Izabella Kaminska
Published: July 20 2010 18:41 | Last updated: July 20 2010 18:41
In mathematics, the number one has special properties. In financial markets it has taken on another significance. Since equities around the world peaked and then tumbled in April and May, analysts have noticed something unusual: sharply higher correlation.
Correlations on the rise
According to Barclays Capital, the level of cross-sectional correlation in US equities – the degree to which individual stocks move in line with each other across different markets – has in recent weeks been higher than it was when Lehman Brothers collapsed two years ago.
In May, the level of correlation across the EuroStoxx 50 index of leading European shares over two-week periods reached close to “one” – or more than 90 per cent – higher than at any point since the start of the global financial crisis.
A correlation of one would mean that all the stocks were moving in tandem with each other.
Even when measured over longer periods, say three months, the level of correlation among the EuroStoxx 50 shares is about 80 per cent.
This spike in correlation has been seen, too, on New York’s S&P 500 index, which has many more constituents and would be expected to see a lower level of correlation.
Recent indiscriminate swings in share prices, although not untypical in sharp sell-offs, have unnerved many investors and derailed carefully laid strategies at the start of the year that sought to identify investments that would outperform the wider market as the global economy recovered.
“We’ve had to take a lot of risk off the table,” one senior strategist said.
…
Isn’t high correlation a likely result of asset prices driven too much by central bank intervention and not enough by fundamentals?
Makes sense to me. Some sort of intervention anyway.
Dow up another 75. Would have been a good buying opp indeed. Better luck next time
FDIC Selling Corus Loans Means Betting on Failed Condo Projects.
Developer Norman Radow expected some thanks in April when he offered to repay a $35 million defaulted loan on a 32-story San Diego condominium project he had taken over, originally financed by failed Corus Bank. Instead, his new lender urged him to keep the money.
Even more striking to Radow was that the lender was a company majority-owned by the Federal Deposit Insurance Corp., an arm of the government swamped with bad debts, whose partners were private investors led by Starwood Capital Group LLC.
“They said they wanted to keep the principal outstanding longer because they had a zero-percent loan from the government, and it was worth more for them to keep our loan out,” said Radow, 52, chief executive officer of Radco Companies, an Atlanta-based distressed-property firm that has sold 85 percent of the 244 units in the Mark, overlooking San Diego’s Petco Park stadium. “The sooner you repay us, the worse it is for us.”
Was HE getting a zero percent loan from the bank? If not, he should shove that money down the banker’s throats.
Pimco Sells Black Swan Protection as Wall Street Markets Fear
July 20 (Bloomberg) — Robert Doll, vice chairman and chief equity strategist at BlackRock Inc., the world’s largest asset manager, talks with Bloomberg’s Susan Li about the outlook for the U.S. economy and stocks. Doll, speaking from Princeton, New Jersey, also discusses his investment strategy for emerging market stocks, and China’s economy.
Wall Street’s hottest new product is fear.
Almost two years after Lehman Brothers Holdings Inc.’s failure caused world markets to seize up, Pacific Investment Management Co. is planning a fund that will offer protection to investors against market declines of more than 15 percent. Morgan Stanley strategists estimate demand for hedges against such cataclysms helped drive as much as a fivefold increase last quarter in trading of credit derivatives that speculate on market volatility.
“Pimco Sells Black Swan Protection as Wall Street Markets Fear”
Sounds like a gamble by Pimpco that it’s all contained from here on out…
If the black swan event doesn’t happen, they make money. If it does, they go bankrupt.
The trick is to structure the finances in such a way that if they win then they get to keep winnings, and if they lose somebody else gets stuck with the losses.
Somebody else? Who might that be?
(rhetorical question - see my response below, which hasn’t shown up yet).
That is what Jim said. If they go bankrupt (don’t pay out on their obligations) someone else gets stuck with the loses. That person should be the investor who didn’t properly consider their exposure to counterparty risk (hey, they got the benefit of being able to *say* they were hedged against large losses).
I’d wonder if the thing is backed by all of Pimco’s corporate money. And whether Pimco is part of the new group of non-bank financial institutions that can be taken down and sold off to cover what debts they have (like an FDIC bank take over) under the new financial law.
Well it isn’t necessarily their choice. When AIG went Tango Uniform, in the normal course of events, those who were expecting a big payoff would have had to wait in line at the bankruptcy court with all the other creditors. But instead, the government swooped in and so we all are the loosers. But either way, the people running the financial products division got to keep a whole lotta bonus money from previous years.
If the black swan event doesn’t happen, they make money. If it does, they
go bankruptget bailed out.FTFY
GS and AIG already showed the government let the big boys’ hedge bets go bad.
At least this will be true if those making these bets include the big boys.
Point taken. Either BE to big to fail or OWE MONEY to those too big to fail.
No.
If it works, the Fund that PIMCO is creating makes a great return for the investors, and PIMCO makes their management fee and a carried interest (if there is one).
If it doesn’t work, the Fund that PIMCO is creating loses a bunch of the investors’ money and PIMCO earns their management fee until the money runs out and no carried interest.
PIMCO is not taking the risk here, the investors are taking the risk.
The key words in the article is that “PIMCO is planning a fund”. They are not selling disaster insurance/credit default swaps (AIG anyone?).
Sorry, I clipped the article incorrectly…
“The efforts to protect against another disaster, which helped drive up the relative costs of the most bearish credit derivatives to the highest in two years, show that investors’ psyches still haven’t recovered from the Lehman bankruptcy on Sept. 15, 2008, which erased $20.3 trillion in stock market value worldwide and caused credit markets to freeze”.
“…on Sept. 15, 2008, which erased $20.3 trillion in stock market value worldwide and caused credit markets to freeze”
(-20.3 Trillion) $$$$$$$$$$$$$$$$$$$$$$$$$$ = Bigchuckawucka
Common big Island lingo for: “A welcoming gift for the “Non-Hawiian”"
“A welcoming gift for the ‘Non-Hawiian’.”
A welcoming gift for those whose stash of cash was left untouched and intact.
Twenty-point-three Trillion dollars evaporating leaves a big hole in the money supply.
Oh the pain!
What exactly IS the effect of all the money disappearing? While some of it had been lent to Main Street via MEW, most of it was circling the drain on Wall Street, so instead of bidding up the prices of consumer products, it was bidding up the price of equities and RE and bidding down the interest rates on bonds.
ISTM that the real question is how much of our actual, productive economy was based on the extra money funneled into consumer hands through MEW. Unemployment figures seem to indicate that the answer is more than I had thought. But I still harbor a suspicion that far from being the economic Ragnarock that Paulson, Timmay and company feared, massive losses on Wall Street are survivable.
“…how much of our actual, productive economy was based on the extra money funneled into consumer hands through MEW.”
Good question, but how do we even begin to quantify that?
Ex: someone uses MEW to remodel a kitchen. Things are ordered, transported, installed - certainly that’s economic activity by many official measures. Yet, does a remodeled kitchen make that worker any more productive? Did all that ordering, transporting, and installing really add to the productive capacity of the nation?
I could see many debating the boundaries regarding the ultimate productive value of a whole lot of that MEW money.
Hey consumption is consumption. If the purchaser thinks it was a worthwhile expenditure, than it was. We don’t live in a command economy where somebody ELSE decides which of your desires are worthwhile and which are mere frippery. At a very real level it doesn’t matter where the money came from. At another level…
1.) If the money is borrowed, it will have to be repaid. while it is being repaid, consumption will be lower than if that money hadn’t been borrowed.
2.) How many contractors bought trucks, how many quarries expanded production equipment, how many hardware chains opened new stores, all financed on the assumption that the consumption of these sorts of goods would continue at a level that had been created by MEW and not a sustainable long term level.
It amazes me (and many other here) the degree to which many Americans depend on borrowed money. I was brought up with the idea that while it was okay to borrow for durable necessities, (a house, a car etc) borrowing for luxuries (a bigger house, a fancy car) was stupidity of the first order.
We don’t live in a command economy where somebody ELSE decides which of your desires are worthwhile and which are mere frippery.
:LOL: :LOL: :LOL:
I guess you don’t watch any TV, especially not in the middle of February, or between Halloween and Christmas.
Oxide: –there’s a difference between asking you to buy something and forcing you to buy (or not buy) something. “As seen on TV” is rarely a part of my decision making process.
Oh, I know…just making fun of the marketing industry.
It may not be straight line projections that mislead contractors and hardware stores. It may be more a strike-while-the-iron-is-hot mentality.
For the contractors, it is a time to keep busy and make money. I would expect that most of them don’t see the big picture.
For the hardware stores, it is either grow market share or lose it to a competitor who will. Even if they know it cannot last, they have to compete or die.
We might be getting closer to living in a command economy with each passing day.
Cash-4-clunkers, the housebuyer credit, HAMP, Fed MBS buying…those all seem like state sponsored efforts to direct spending, do they not?
We don’t live in a command economy where somebody ELSE decides which of your desires are worthwhile and which are mere frippery.
Oh yes we do.
Home construction sinks to lowest level since Oct.
Home construction falls 5 percent in June to lowest level since October; building permits rise. ~ July 20, 2010
WASHINGTON (AP) — Home construction plunged last month to the lowest level since October as the economy remained weak and demand for housing plummeted.
The Commerce Department says construction of new homes and apartments in June fell 5 percent from a month earlier to a seasonally adjusted annual rate of 549,000. May’s figure was revised downward to 578,000. The results were driven by a more than 20 percent decline in the volatile condominium and apartment market.
However, building permit applications, a sign of future activity, rose 2.1 percent from a month earlier to an annual rate of 586,000
The slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April.
Oh no, say it ain’t so! Another ‘worse than expected’ read on housing!!
And if this month is any guide, the housing starts figure could be revised even lower going forward.
Economic Report
July 20, 2010, 8:31 a.m. EDT
Housing starts drop 5% to 8-month low
Number of homes under construction falls to record low in June
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - Ground-breaking on new housing units fell sharply after a federal tax credit for buyers expired, putting the housing sector back where it was a year ago, according to Commerce Department data released Tuesday.
After a 15% drop in May, housing starts fell another 5% in June to a seasonally adjusted annual rate of 549,000 in June, the lowest level in eight months, the Commerce Department estimated.
The drop was worse than the 3% decline to 575,000 expected by economists surveyed by MarketWatch. The estimate for starts in May was revised lower to 578,000 from 593,000 originally reported. See our complete economic calendar.
Starts were down 5.8% compared with June 2009, and were down about 75% from the peak in 2006.
I wonder how long it will take before the PTB stop drinking their own kool aid and realize than a consumer economy needs people who… have jobs.
And not just jobs, but ones that stay at least 1% percent ahead of REAL inflation and pay more than REAL min wage.
Before or after the Chinese become the largest market?
Oh wait…
Diversity in govmint, hard at work.
http://www.msnbc.msn.com/id/38321920/ns/us_news-life/
Continuing discussion from yesterday with alpha -
Alpha - the Fed does buy treasuries directly from the treasury already, as one of their forms of QE. And this does greatly impact yields.
See this article from last year when the Fed announced $300B of such purchases. The instant that announcement was made the stock market shot up 180 points, gold went up $40, and treasury yields dropped like a rock - the 10-year went from above 3% down to 2.53%.
Point that $ at the unemployed (most reliable spenders), and we might just get our engine restarted before we go over the falls.
It won’t trickle down from the big boyz in time, as we have seen.
Too bad EVERY employer doesn’t do this
http://www.cnn.com/2010/US/07/16/air.marshal.dismissal/index.html
This article is about a Federal Air Marshall who lost his job (ostensibly for security clearance reasons) because of foreclosures on ‘his’ home and two investment properties, and related debts.
If every employer fired deadbeat homedebtors, and didn’t hire former R-E agents, and mortgage brokers or people who have defaulted on a mortgage, the unemployment problem would be contained among those who caused all this mess, and no innocent person would be suffering.
There are THOUSANDS of these homemowners (that have Sec Clearances & the like) in NoVA & MD that can’t walk away from their underwater homes - cause they will LOSE THEIR JOBS!!
Their choices are:
1) default & lose job
or
2) keep working the rest of their lives to pay for the overpriced/upside down home & NEVER retire
I know of one such individual who is taking the hit $40,000 or $90,000 on his house in the S.F. valley rather than walking away - precisely to keep his clearance. IMO, the requirement to have a good credit rating as a condition to keep a clearance is a good idea and should not be discarded. It’s otherwise unfair for the people who don’t gamble that their work locations will be a reasonable distance from their house during the entire mortgage. Better to rent in Los Angeles than to buy, particularly because the defense industry is very volatile and relocatability within LA and O.C. is a must. Just like in the 1990s.
well, they do have the option of defaulting and resigning. But that would be too respectable an option for a deadbeat to consider….
He thinks he’s losing his job because of his ex-girlfriend, who is claiming some form of domestic violence.
Here’s the important line from that story above.
In March of 2009, the TSA issued a policy statement saying that in consideration of the “current economic climate,” foreclosures and bankruptcies would not automatically disqualify individuals from working with the TSA.
Housing Bubble Leaves $4 Trillion Hangover
Bloomberg - http://tinyurl.com/2899qn5
The bursting of the U.S. housing bubble has left homeowners buried under about $4 trillion of excess mortgage debt, according to Dhaval Joshi, the chief strategist at RAB Capital.
The CHART OF THE DAY compares the total amount of home loans outstanding with the value of residential real estate, as compiled by the Federal Reserve, for the past two decades. The latter is adjusted to reflect the average 40 percent debt-to- value ratio that prevailed from 1990 to 2005.
Mortgage balances were $3.64 trillion higher than the adjusted figure as of March 31, as shown in the top panel. The actual ratio, which stood at 62 percent at the end of the first quarter, appears in the bottom panel.
To eliminate the excess and bring down the ratio to its historical norm, either house prices would have to surge or home-loan repayments and defaults would have to accelerate, Joshi said today in an interview.
“In either scenario, it would be a disaster,” the strategist said, adding that prices are unlikely to recover any time soon. The U.S. has 4 million more homes than it needs, by his count. Interest rates will have to stay relatively low for “a prolonged period” to revive the housing market, he said.
Joshi raised what he called the “4 trillion dollar question” in a July 9 report. Barry Ritholtz, the author of “Bailout Nation,” reproduced most of the report in a posting yesterday on his blog, the Big Picture.
Interesting charts, but misleading. If the top chart is really comparing apples-to-apples - residential mortgage debt to residential real-estate assets, and the mortgage debt is greater than the assets - then the bottom chart should show a debt-to-value ration of greater than 100%.
From looking at Fed z1 data, it appears Dhaval is way off in his real-estate assets figure. z1 shows just structure replacement values (i.e. not including land) being as $13.5 Trillion, whereas Dhaval shows residential real-estate assets being around $6.5 Trillion.
I think his intent was to have a different scale for the asset value, however that’s not indicated (the original charts from The Big Picture are wrong also). The explanation (including the $4T figure) is correct, just the chart is misleading - it seems to show that as a whole America is underwater, when in reality the equity level is 38% (i.e. we’re 38% above water).
(Noting though that historical norm is around 60-70% - so we really are in bad shape relative to that.)
Hamgover? More like a $4 trillion train wreck.
Hangover? More like a $4 trillion train wreck.
Seeking a Mortgage? Don’t Get Pregnant ~ nytimes
Expectant parents shopping for a home are not the only ones concerned about the date of the baby’s arrival.
Mortgage lenders are taking a harder look at prospective borrowers whose income has temporarily fallen while they are on leave, including new parents at home taking care of a baby. Even if a parent plans on returning to work within weeks, some lenders are balking at approving the loans.
“If you are not back at work, it’s a huge problem,” said Rick Cason, owner of Integrity Mortgage, a mortgage firm in Orlando, Fla. “Banks only deal in guaranteed income these days. It makes sense, but the guidelines are sometimes actually harsher than they need to be.”
Back in the slapdash days of easy credit, lenders were more likely to overlook the fact that a parent was out on maternity or paternity leave. But now that lenders have become more conservative, they are requiring new parents to jump through more hoops to prove their income will be enough to cover the mortgage.
And to think that, when my parents moved into their new house, my mother was great with child (me).
And I won’t be surprised if back in the day your folks qualified for the mortgage with only your dad’s income.
They did. And, even so, my folks were very frugal, self-reliant people.
I can remember toddling around the driveway, then making a beeline for my dad when he was working on his car. Which was a used junker that he kept going long past its expiration date.
In the house, mom would be cooking away — we rarely went out to eat. And she’d sew my clothes.
The only thing that happened to our Society when women started to work was that prices doubled. I’m not sure we’re better off.
The proper thing to do would have been to stay with single-earner households, but make it possible and respectable for the Dad to stay at home and Mom to work. Even today, Dads who do that aren’t treated with respect….
Good! They SHOULD be examining this, and denying mortgages to those whose costs will soon escalate markedly.
Having a baby does not mean your costs will absolutely, positively “escalate markedly.”
They *can* do so of course, but they definitely don’t *have* to. We just had a kid a couple months ago and (thanks to wife’s job health insurance, admittedly) our costs have barely budged. We just didn’t start spending money on tons of unnecessary crap that a baby real ply doesn’t need, and for the stuff he does need we shop smart and find used on Craigslist for items that OK to buy used.
At this point, we could in theory buy a house for less than our current rent, if we didn’t mind moving out to the SFV. Our costs would actually drop a bit! Denying us s home loan would be discriminatory, ha!
Good thing we aren’t gonna do that, we are fine renting here for at least another 5 years.
Most people are too well programmer by the MSM and society at large to not be stupid about money, and it makes me sad.
Mr. Locke, can you teach me how to flip.
Teacher trapped with a Jensen Beach house he doesn’t want
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 8:19 p.m. Monday, July 19, 2010
Who owns the home at 3065 N.E. Highland Ave. in Jensen Beach?
Randy Locke, a Palm Beach County teacher whose name is on the deed, has been trying to get an answer to the question for three years.
As lenders were toppled by the real estate crash, three, possibly four, different entities have serviced the loan, or held the mortgage note to the property, which Locke just wants to be rid of.
But when he tried to sell it last year, the bank locked him out, took his Realtor’s sign from the yard and barred his access.
His current loan servicer, Bank of America, does not comment on individual cases and refused to speak about Locke’s conundrum, but the situation appears to be part of the whole mortgage snarl that helped bring down the market, leaving property ownership about as clear as the goopy water in 3065 N.E. Highland Ave.’s derelict pool.
“Everybody’s wires are crossed,” said Locke, who has sought help from 17 government oversight and regulatory agencies.
His tale may best be explained in a timeline of events, beginning with a refinance loan obtained through a now-defunct Miami lender, Flick Mortgage.
Concerned about abnormalities in the lending agreement, Locke said he exercised his right of rescission under the federal Truth in Lending Act, which allows a transaction, in some cases, to be canceled within three days of closing.
Jupiter attorney Charles Burns, who represented the title agency that handled Locke’s deal, said in a 2008 letter to the second lender to handle the property that it was unusual for a right of rescission to be included in a loan packet for a second home, but Flick Mortgage insisted it be included.
“Furthermore, Mr. Locke the following day did not want to go through with the loan and had wished to cancel with Flick Mortgage,” Burns wrote. “The notice of right to cancel he received at closing was faxed to their office canceling the loan.”
But Flick Mortgage, in the throes of going out of business, failed to acknowledge the rescission, Locke said, and his loan ended up with Countrywide Financial Corp.
While Countrywide was investigating the rescission, Locke took care of the home and paid the mortgage by renting it out. A June 2008 letter from Countrywide acknowledges Locke had canceled the loan, and says the company will pay back closing costs and the year’s worth of payments Locke made. But Locke owes Countrywide the remainder of the loan amount, $219,124.
The question then was, if Locke had canceled the mortgage, how was he still owner of the home, required to pay back the loan?
U.S. Rep. Tom Rooney’s office has been working on Locke’s case. But Michael Mahaffey, communications director for the Tequesta Republican, said their efforts have been complicated by lawsuits between Locke and his lender.
A month after the June letter, Countrywide, sick with defaulting high-risk mortgages, was bought out by Bank of America. Locke said Fannie Mae owned the loan at some point between Countrywide and Bank of America.
In September 2008, while trying to sell the property, Locke went to cut the grass at the home and found the locks had been changed, about $1,000 in tools taken and the pool boarded up.
Six months later, an initial notice of foreclosure was filed .
Then, in a May 2009 letter, BAC Home Loans Servicing, a subsidiary of Bank of America, also agreed to cancel Locke’s loan. But, again, the bank wanted Locke to repay the remainder of the loan. He again tried to sell the home.
“By then, the value had gone down,” Locke said.
The Martin County Property Appraiser’s Office lists its total market value at $148,460.
In August, when Locke went to prepare for an open house, the door locks had again been changed.
“I had one two-week period where one Bank of America group said to sell it, then their legal group would say disregard that group,” Locke said. “I really don’t think anyone knows who owns this or how to fix it.”
Why is this man confused about why he has to pay back the base loan amount? He may have “cancelled” the loan, but the funds were evidently released to him and used to pay off the previous loan on the house or there would be another lender involved. Imagine it was a personal loan. If he had requested a rescission, he would not be responsible for making payments over the term of the loan and wouldn’t have to pay any penalties or fees, but he would still have to give back any money received. How does the fact that he apparently used the money change the fact that if you cancel the loan you have to give the money back.
Maybe it is just the reporter who is confused?
Residential
22-37-41-012-000-00820-4 3065 NE HIGHLAND AV
Transfer History
Book Page Account # Sale Price Sale Date Owner(Current) Previous Owner
2223 0157 2999 $103,500 2/15/2007 LOCKE, RANDY LOCKE,
RANDY & DELANCY, CLIF
2136 0703 2999 $202,000 4/25/2006 LOCKE, RANDY & DELANCY, CLIF LENNON, HELEN M
0089 0146 2999 $100 3/1/1962 LENNON, HELEN M SELLER - see file for name
+1, polly. It sure sounds like he is confusing recission of the loan with recission of the purchase. They are not the same at all.
If the purchase closed, then it is a done deal, and he owns the house; if he rescinded the loan, then he has to pay back the lender the cash they provided for closing with cash from somewhere else.
Do we still have someone on the HBB from Austin Texas ??
Nobody showed up. I was the only one who met Ben.
Okay…As I recall we had at least one person in Austin…
That person was hipinzilker, IIRC.
yeah, HiZ was one as well…
I think there was a Roger in Austin also…
I used to live there until about 18 months ago. I believe Brett is still there…
Brett…Are you in Austin ??
Filed under: “I don’t want it, you eat!, …well, I don’t want to eat it either, …I know let’s give it to mikey, he’ll eat anything!”
Seeking a Mortgage? Don’t Get Pregnant:
On Monday July 19, 2010, NYT
“Fannie or Freddie learn that a loan does not meet its underwriting requirements, it can require the lender to repurchase the loan. Both companies are performing more quality control checks on the loans they buy or package and sell as securities. And, perhaps not surprisingly, the number of repurchase requests has risen sharply.
The companies said they required lenders to buy back a total of $3.1 billion in loans in the first quarter, up 64 percent from the same period last year.”
(This bodes well for the RE Industrial Machine & its operators):
“That is what happened to Elizabeth Budde, a 33-year-old oncologist who lives in Kenmore, Wash. She nearly lost her mortgage after a loan officer learned she was home with her newborn.
With stellar credit and a solid job, Dr. Budde said she had been notified via e-mail that she was approved for a loan on June 15. But that note prompted an automatic, “out of the office” e-mail reply from Dr. Budde’s work account, which said she was out on maternity leave.
The next day, Dr. Budde received a second e-mail message from the lender, this time denying her loan approval. Since “maternity leave is classified as paid via short-term or temporary disability income,” the e-mail message said, it could not be used because it would not continue for three years.
The message also said the lender could not consider her regular, salaried income because she was not on the job.”
Housing starts way below expectations - 549k vs expected 575k. May revised down from 593k to 578k.
I wonder why?
I must say, I am surprised thaty haven’t resurrected the tax credit yet.
They’re probably working on something EVEN WORSE than the tax credit. Just wait and see!
If they aren’t going to extend funemployment benefits beyond 99 weeks, they aren’t going to spend more money on the tax credit.
By the time they start to get around to it, sales will be back to where they were just prior to the expiration of the credit. The credit didn’t cause people to buy houses, it caused people to pay a little more for houses a little sooner than they would have otherwise. As this plays itself out across the US, people will find that it was a giant give-away.
At least I’m praying they figure that out…
regarding banking regulation bill
Despite widespread criticism of the bill, some on Wall Street are warming to the idea. Goldman Sachs (NYSE: GS - News) CEO Lloyd Blankfein said during Congressional hearings on the financial crisis that, “on the whole, financial reform is, absolutely is essential … the biggest beneficiaries of reform will be Wall Street itself.” Mr. Blankfein’s pronouncement is likely one of many reasons almost four out of five Americans surveyed by Bloomberg say they have little or no confidence that the measure will prevent a future crisis.
But that’s looking longer term. In the short term, regulatory costs will increase for everyone, but disproportionately. According to JPMorgan Chase (NYSE: JPM - News) CEO Jamie Dimon, new regulation will cost his bank billions of dollars. But as the New York Times reports, JPMorgan may also be poised to gain market share.
I suspect much of that business will be gained from smaller competitors. Higher regulatory costs favor economies of scale; those costs represent a higher share of small banks’ profits than those of their larger competitors, giving big banks a big advantage.
Perhaps more importantly, big banks will continue to benefit from being too big to fail. No matter how tough the political talk, the U.S. Treasury will still serve as the moral-hazard back stop, even if it’s a reluctant one. Sure, Citigroup (NYSE: C - News), Bank of America (NYSE: BAC - News), and Wells Fargo (NYSE: WFC - News) took their hits during 2008’s financial crisis, but the dip in their stocks was a buying opportunity. I believe that opportunity still exists, especially given that the next earth-moving financial crisis is likely a few years away.
“Despite widespread criticism of the bill, some on Wall Street are warming to the idea.”
Like, for instance, some of those whose paid lobbyists doubtless helped to write it?
But that’s looking longer term. In the short term, regulatory costs will increase for everyone, but disproportionately. According to JPMorgan Chase (NYSE: JPM - News) CEO Jamie Dimon, new regulation will cost his bank billions of dollars. But as the New York Times reports, JPMorgan may also be poised to gain market share.
I suspect much of that business will be gained from smaller competitors. Higher regulatory costs favor economies of scale; those costs represent a higher share of small banks’ profits than those of their larger competitors, giving big banks a big advantage.
This is exactly why the big banks don’t mind these regulations. It helps remove the competition. As long as they don’t remove the implicit TBTF guarantees, which they haven’t, then they’re happy.
Costing “billions” isn’t that much to JPM, depending on the time period. Their revenue is $100B+ a year. An increase of $10M a year in costs to a bank that has $100M in revenue hurts a heck of a lot more than an increase of $3B a year to a bank that has $100B in revenue.
But one of the major parts of this bill does get rid of “too big to fail” or at least it tries to. The bill sets up a system in which regulators who determine that a financial institution not already regulated by FDIC (or the credit union or other equivalent) can be taken over and dissolved in a manner similar to an FDIC take over. You split it up, sell off the parts, and pay off the debts to the extent you can with the money acquired from selling off the parts. Now, with FDIC the creditors who are also depositors get a guarantee up to $250K per person, but the other creditors don’t. I don’t think anyone gets that sort of protection.
What this avoids is a protracted bankruptcy proceeding which takes years and which costs so much that creditors get a lot less than they could have if it had gone through a judicial proceeding. This is the power that Hank Paulson whined he didn’t have with respect to Lehman. Of course, he didn’t really ask for it either as near as I can tell. The inability to do this was also responsible (supposedly, I have my doubts) for giving the AIG counterparties 100 cents on the dollar. They claimed they couldn’t let it go into bankruptcy because of the disruption to the system of having nothing go to the creditors for years and years while the bankruptcy proceeding took place.
Now, whether you think this will actually be used or if it is used, whether it will be done well, is another story. But there will soon be legal authority in place to break up and sell off these huge financial institurions rather than rescuing them. A way to let them fail without it taking “judicial time” (not quite as slow as geologic time, but still very slow) to resolve.
The problem is though, at least from what I’ve read, is that the rules for such breakups aren’t published in advance, and they’re subject to the whims of just a few officials - people who generally have very close ties to the very entities they’ll end up breaking up, or people who have vested interest in those entities. These breakups are something that should get bogged down in court, because - while not perfect certainly - that’s the fairest and least corruptible method of determining who gets what.
Of course the issue then, as you say, is liquidity - tying up these assets can stem a lot of flows of money. Even if tied up though they should be useful assets to some extent - e.g. letting firms borrow against them at X pennies on the dollar.
And I’m not really convinced that just making it easier to break a firm apart will make it more likely to break them apart. A firm with close political ties will be more likely to make a case that such a breakup would be too disruptive to the system than small firms would be, and thus shouldn’t be broken up; or else should be broken up in such a way as to (unjustly) leave the key participants relatively unscathed.
Instead this bill should have had specific provisions stating that all firms that become insolvent will be broken up, period - that they will not receive public funding of any kind to stay afloat, and that the management team will be replaced in whole, with indictments if necessary if fraud is found. (Though of course the latter parts there are very subjective)
The reason it will make it more likely that they will be broken apart rather than rescued is that no one will be able to whine (like Paulson did - can you tell that he irks me?) that there is no other “viable” method because waiting for bankruptcy to finish would take down the whole financial system. I don’t personally have any issue with sending the thing through bankruptcy - though I don’t know that any of those judges really have the background to handle these institutions - but the meme is there that it just can’t work, and at this point we are stuck with it. OK, so if the alternatives are “bankruptcy which takes down the whole system and can’t be allowed” and bailout, then you will be stuck with bailout unless you set up something else. It is nice to think you could convince Congress that the “bankruptcy = armageddon” meme is wrong, but when you can’t you will be stuck with no option but bailouts. I will take door number three.
And the regulators that do this will certainly be using the bankruptcy rules as their guideposts on how to do the break up. They just won’t have to spend 5 to 10 years listening to lawyers (who get paid FIRST) fight before they get started - oh, and leaving the bankrupt entity continuing to operate and give out giant bonuses so they can “maintain value” for the creditors. A giant financial institution that is about to go belly up really can cause havoc if it wants to. Yes, a few pension funds might get higher priority on their pay back than hedge funds where a bankruptcy court wouldn’t do that. I’m OK with that if the alternative is bailouts. And it is.
Really, most of us regulators are fairly honest people. Do we get advice from the outside? All the time. Are we careful in case it is self-interested drivel? Yes, we are. I have found myself arguing strenuously against positions that might be considered closer to my political leanings than the one I was advocating. Why? Because it was the right answer. No other reason is needed. I took an oath of office. It means something.
And even if you assume that regulators are just there to get cushy jobs from private industry later on, would you hire someone who was in government and just rolled over for you? Would you hire a crummy negotiator who couldn’t stand up for their own position? No, you wouldn’t. So being a hard a$$ is really the better way to get that outside job if you really want it. The room is full of lawyers. Everyone knows that you aren’t a good lawyer if you can’t stand up for your client.
Thanks polly for your great thoughts and information. I thought you worked for some finance-related agency, but didn’t realize you actually worked directly in that arena. You provide very valuable insight and perspective on these issues; to be honest I’m amazed (and very glad) that you’re able to post on the boards like this.
Anyhow - I see what you’re saying, and it’s a very compelling case. Are there really not good ways to streamline the bankruptcy process to achieve the same objectives? Being an engineer, and having very little knowledge in law or accounting most of this is over my head of course.
In principle it still seems like a very explicit mandate of “no bailouts” rather than it just be being implied by making breakups easier would have been in order for this bill. Leaving that door open invites a lot of trucks to drive recklessly, figuring that they can drive through it down the road - even if they may not be able to in the end.
Explicit mandate of no bailouts sounds good to a scientist who deals with rules of nature whose enforcement is beyond the control of people. You have to check your bridge design to make sure the prevailing winds won’t hit the resonance frequency. You just have to, because if you don’t you get a bridge that falls down.
Laws are human rules and people get scared. Members of Congress get scared of not getting campaign contributions and of getting voted out and of all sorts of things. They are people and they are answerable to other people who are also sometimes scared. Until you can guarantee that you will have congressmen who don’t care about being re-elected, you can’t take the path that only works with rational decision makers. Congress isn’t gravity or wind sheer.
I think I’ve outlined how you could start making Congress more rational. Starts with only public funding of elections, committee assignments being done randomly and rotated often and committee chairs also being assigned randomly and rotated often. Just a start, but it will never happen. Never.
Yes, I have been purposely criptic about exactly where I work, but I will tell you that every place is about money to some extent. Even the National Endowment for the Humanities is a grant making institution.
By the way, I don’t work directly in this area. I never post about the areas in which I work directly. Just not appropriate and never will be. But the principals are the same all over the government: executive branch implements and enforces but doesn’t get to write the law, don’t reinvent the wheel if you don’t have to, get information from industry but remember where it is coming from, don’t do anything that is likely to get your agency head dragged before Congress to get raked over the coals. Not that hard to guess.
Oh, and so much of this information is public. Go to the FDIC website and you will be able to find tons of information about how they deal with a bank they have taken over. Tons. Not sure how much that is going to help anyone if they are dealing with a huge investment house, but if you are interested, it is there.
Polly:
I don’t think we will ever get this in America. Imagine if OH MC and Nader all had the same amount to spend.
No pacs no donations only for local elections and by local people
I would also want ALL parties to participate in at least 1 televised debate… even the commies,socialists,nazis, black panthers as long as they are on the ballot….no favorites or discrimination
But I would still allow a Bloomberg or Perot or Huffington, to spend all of their own money and not take a dime from public funds.
————————–
I think I’ve outlined how you could start making Congress more rational. Starts with only public funding of elections,
What a joke. Talked to a mortgage broker who told me 100% financing was available in Martin County Fl. through FHA or I could get $30k above the sale price to fix up a house, 3.5% down in Palm Beach County. I couldn`t believe it but…
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
But… I thought the lending spigot was completely turned off? That’s the way some people seem to present it.
Turns out it’s not off really - it seems to not have any problems putting out government-guaranteed water.
“…Rizzo did not attend the meeting.”
Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)
“Dhat turkel,… he daid, …he just don’t know it!”
By Jeff Gottlieb and Ruben Vives, Los Angeles Times / July 20, 2010
Residents irate as Bell council requests report on salaries:
“…Hundreds of angry residents attended Monday night’s council meeting, expecting that officials would take action against Rizzo. Earlier in the day, Vice Mayor Teresa Jacobo said she expected Rizzo to resign or be fired at the meeting.
Instead the council, citing legal concerns, ordered a staff report on city salaries, sparking outrage from spectators.
“We’re asking for your patience,” Velez said over the shouts of “Fire Rizzo now!” and “Recall, recall!”
Rizzo did not attend the meeting. The council asked for the salary report to be available at the July 26 meeting.
A Bell councilman said Monday that he didn’t know his salary was $90,000 a year less than his colleagues’ nor that some city administrators made far more than that, until The Times reported that the district attorney’s office was investigating why the pay was so high for the part-time positions.
Councilman Lorenzo Velez said he is being paid $8,076 a year, while his colleagues are drawing nearly $100,000 annually.
Ahead of Monday night’s council meeting, Velez called for an investigation, saying that if The Times’ report is true, the city manager, assistant city manager, police chief and entire council should resign.
The Times reported that Bell’s Chief Administrative Officer Robert Rizzo was earning $787,637 annually, twice as much as President Obama; Police Chief Randy Adams was earning $457,000 a year, 50% more than Los Angeles Police Chief Charlie Beck; and Assistant City Manager Angela Spaccia was earning $376,288, more than most city managers.
Now,…now they are filled with…“TrueAnger™”
Hint of racial discrimination…
——-Councilman Lorenzo Velez said he is being paid $8,076 a year
The American future its like the 1920’s 1930’s all over again
A series of investigative stories by the Los Angeles Times[13] discovered that several officials of the city were being paid salaries far more than those in other cities, possibly more than others in similar positions in any American city. Chief Administrative Office Robert Rizzo collects a salary of $787,637 a year, with yearly 12% increases scheduled every July; Assistant City Manager Angela Spaccia collects $376,288 a year, with a similar 12% annual pay increase; Police Chief Randy Adams collects $457,000 a year; and the part-time city council members collect almost $100,000 a year each. Word of the salaries have caused widespread criticism and calls for resignations by city officials[14][15].
On 19 July 2010, city vice mayor Teresa Jacobo said she expects Rizzo to resign or be fired at that day’s council meeting[16]. At the meeting, though, the city council deferred any action, ordering a report on city salaries by city staff[17].
“…Most of council members’ salaries come from serving on boards such as the Community Redevelopment Agency, the Community Housing Authority, the Planning Commission, the Public Financing Authority, the Surplus Property Authority and the Solid Waste and Recycling Authority.
City records show that in July 2009 council members received $8,083.25 per month for sitting on the boards. The records also show that the boards perform little work, with some meetings lasting only a minute.”
So, to be clear: “The “city council-person” board sets the salary of the mayor using collected public funds in which there is no salary ceiling limit?”
The CEO mayor of a small city is being paid $787,000 + Benefits + Pension
Just imagine if American CORPORATE board of Directors ever try something like this!!!!!!!! :-/
Time for pitchforks and torches.
“City records show that in July 2009 council members received $8,083.25 per month for sitting on the boards. The records also show that the boards perform little work, with some meetings lasting only a minute.”
That’s my kind of “work”, $8k a minute. I could almost tolerate “meetings” for that kind of money.
That’s the kind of corruption you’d expect in a third world country, which seems fitting for parts of Los Angeles County.
…and they aren’t the only ones.
Clipped from Neal Boortz… Now this sounds like fun.
Starting in 2012 you’ll have to file a 1099 with the IRS for any business, person or entity to whom you make payments in excess of $600 during any taxable year. This, of course, would include anyone you hire to do some minor labor during the year … but would also include any corporation, no matter how big, to whom you make payments in excess of $600.
How asinine can this get? Well (at the risk of getting all pissed off again) let’ me just list some of the 1099 forms you, as a businessman large or small, are going to have to prepare and file. I can just set forth a few examples and you will start to get the idea:
You are a manufacturer’s representative. You spend your time on the road. Here are some of the 1099 forms you are going to have to file at the end of your tax year:
* Did you spend more than $600 at Embassy Suite hotels during the year? Get the federal tax ID number from Embassy Suites and file that 1099. Oh, and it had better be accurate or you might face penalties.
* How about that Verizon cell phone? More than $600 for the year? Again, get Verizon’s tax ID number and file that 1099.
* Did you pay Hertz, Avis or any other car rental company more than six bills for rental cars for the year? Tax ID numbers and 1099s please.
* Oh … and don’t forget those airline tickets. Yup — a 1099 to AirTran.
Let’s say you just operate a little mom and pop grocery store. You employ two additional family members and you’re just barely getting by. What does the new ObamaCare mean to you?
* Did you buy more than $600 of Scott paper towels to sell to your customers? 1099 please.
* How about your electricity? More than $600 to the power company? Another tax ID you’ll need and another 1099 you’ll have to file.
Here are some examples from CNN Money of how completely ridiculous this will become .. if a freelance designer buys a new iMac from the Apple Store, they’ll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.
The average small business prepares less than 1099 forms a year under the current law. Estimates are that these same businesses will have to prepare more than 100 under ObamaCare. What’s more .. the demand for accuracy, and the punishment for incorrect filings will probably send many of these smaller businesses out there to hire accounting professionals. Just what we need; more tax compliance costs.
In my small business anyone I paid less than $600 a year was casual labor, anyone over got a 1099. But that was labor only.
Expert: Richard Fritzler - 1/30/2007
Question
Hello,
I formed a new LLC last year and am required to fill out a 1099. This is the first time I’m filling out a 1099 and have two questions regarding filling out a 1099 tax form for an LLC.
1. In a 1099 form, there are 2 halves. Should we fill out both the halves?
2. There are a few independent contractors who worked for us earlier last year, and I do not have any of their contact information. Hence, I cannot fill in their SSN and their address information in the 1099. How do I submit my 1099 for these individuals contractors for whom I have no contact information?
Answer
1. yes
2. It is required of you that if you employ someone that you get their tax ID information, so that you can credit them with the income. this is true for anyone that receives $600 or more for the entire year. If they received less than $600 they are “Casual Labor” and you do not need to 1099 them.
If you use a lot of casual labor, you may incur an audit, if you do not credit the money properly, you may incur an audit.
If you use a lot of independent contractors; then you might consider forcing them to incorporate. You do NOT have to send 1099s to Corporations. You CANNOT be held liable for unpaid taxes by a corporation that you paid.
Richard Fritzler
http://www.owelesstax.com
phone 800 590-6612
P.S.
Richard Fritzler is not my accountant.
If your business is unincorporated, then you’re owed a 1099 from whoever you’ve done work for IF that work totals more than $600 during the year.
Can’t this be made to operate like credit-card cashback schemes? In fact a small cashback (like 0.25%) might really incent this. Of course Uncle Sam is one sending you (small business) the cashback based on tax that he collects from the vendor. Your corporate credit card company will be happy to oblige building the whole paper trail for a small cut, I am sure.
In one of Tom Clancy’s books - Executive Orders I believe - to make a point the new president has all the books of the tax code brought in before Congress and set down on a table, until the table eventually just collapses under the weight.
That was in 1996, before SobOx, ObamaCare, etc. At this point a forklift would probably be needed. And of course OSHA would issue a huge fine for creating a workplace safety hazard.
And of course if the fine is over $600 then you’d have to send a 1099 to OSHA.
When I was in private practice I always had a tax code in my office. Two volumes, paperback. Now the paper was pretty flimsy and the type was sort of small and they were a few inches thick, but the volumes also included the history of all the changes that had been made to the sections in various bills and had some of the deletes sections as well. Regulations come in a set of about 6 volumes, I think but each volume is thinner.
Sarbanes Oxley is not part of the tax code. You will find the provisions it added in the securities regulations portions of the US code.
Mr. Clancy may have been using some artistic imagination or you may be thinking of the entire US Code. You know, every single law of federal government of the United States of America. Yes, it fills up a few books. And most businesses don’t even have to know that most of them exist.
Yeah I’m sure there was some artistic license - e.g. IIRC the ones in the book were in binders, so weren’t as compact as the version you had (which I see for 2006 online was just over 13,000 pages). However I believe the 2-volume version you had was probably just income, estate, etc. taxes, and not corporate - which is a different set - right?
(you’re right that SarbOx didn’t affect the tax code - I was thinking more of regulations overhead in general)
I was a corporate tax lawyer, but the codes I had included everything, even including excise taxes. The tax code is big. It just isn’t that big. And the idea that there would be a table anywhere near the president’s workspace that couldn’t handle a few hundred pounds is absurd. He isn’t dealing with folding card tables.
Oh, and wasn’t Sarbanes Oxley just for publicly traded companies? Not really an issue for most businesses. Not even a whisper in the wind for them. 90% of what a small business is going to deal with are taxes and consumer protection (largely state) and some evironmental and employee safety and benefits stuff. The rest just isn’t going to apply.
IIRC the prez actually did call for a folding card table, to make his point. (The collapse wasn’t an accident)
Anyhow - I wasn’t intending to say that would actually happen - it’s something in a work of fiction, after all - you’re taking it way too seriously. Lighten up polly!
Oh, and wasn’t Sarbanes Oxley just for publicly traded companies? Not really an issue for most businesses.
It is yes. I worked for about 10 years for a mid-sized public company. The accountants there did mention that they were upset at the overhead costs, being much higher as a percentage of the business than our main competition, which was a behemoth.
FWIW - I think this guy makes a pretty good case against Sarbox.
ISTR from when I worked in a legal library, USC runs about two shelves, depending on edition/publisher and the CFR runs maybe 3 shelves. Of course the appeals court decisions run several book cases. At a guess there’s probably a fair number of administrative decision to wade through as well.
I hope no one on this board pays more than $49 each month in rent.
Reporting landlord income will be a HUGE benefit. (Not to the landlords.)
I know several people who rent out their houses and never report a friggin’ dime.
Well, here’s an IRS link that tells how you can report ‘em.
Isn’t this just one of the huge overstatments of what is in the healthcare law? You know, like the death panel lies? ‘Cause this just doesn’t make any sense at all. It is the sort of thing you could imagine happening if we ever eliminate all non-electronic forms of money (no cash, no checks, only electronic transfers) in which case it would be generated automatically, but it just isn’t reasonable when cash still exists in the system.
Compare this with the goal of Card Check. Not as far fetched as you might think, polly.
The existance of card check just proves my point. You can only do this with electronic funds. And you have to put the enforcement burden on the banks that process the payments, not the people making the purchases.
No one cares that you personally spent $700 last month on your AmEx and no one expects every person in the US to keep track of every purchase that they make to the exact penny (though my mother still does). But they do care if the restaurant where you you charged $50 on that AmEx received $300K of payments just by credit card last year and only reported $200K (which they offset with $190K of expenses leaving the owners only $10K of taxable profits). That means that they “lost” $100K of receipts before you even consider that they might have received some payments in cash. Why should small business owners get free reign to cheat on their taxes when W-2 and 1099 people can’t?
All card check does is make it easier to target resources at people who are likely to be underreporting. The penetration of debit and credit cards into the culture makes this possible. You would prefer they choose who gets audited with a dartboard?
So, you’re for the Patriot Act?
Oh, pardon me. I mistook you for someone who wanted to discuss something seriously.
How The Rich Are Winning ~ July 20, 2010 MarketWatch
You may have been hearing a lot of doom and gloom about the economy recently.
OK, so the news on jobs, real estate and retail sales has been dismal. Yes, maybe it’s true the middle class is broke, in debt, under water, out of work and in despair.
But look on the bright side. One group of people is doing just fine. The rich.
The New York Times this weekend tried to find signs they were easing up — maybe somebody put their new Ferrari on hold because of the Greek crisis. But any such suggestion should be viewed in context.
Tiffany & Co. (NYSE: TIF - News) says sales at its flagship New York store jumped 26% in the first quarter. International luxury goods giant Louis Vuitton Moet Hennessy — whose brands range from Fendi to Givenchy to Moet & Chandon Champagne, plus, of course, those cliched Vuitton bags — says U.S. sales boomed 20% in the first quarter, including a remarkable 58% boost for sales of jewelry and expensive watches like Tag Heuer.
Indeed the Swiss watch federation says exports of luxury watches (those $2,000 “timepieces”) to the U.S. rose 12% in May and are now ahead 9% for the year. Nordstrom Inc. (NYSE: JWN - News) says same-store sales zoomed ahead 14% in June. They’re up 11% year to date. Super-luxury goods purveyor Richemont — which owns such brands as Cartier, Dunhill, and Van Cleef & Arpels — says U.S. sales are up.
The Sunseeker Club in New York, America’s biggest dealership in the multi-million dollar British luxury power boats, tells me business is strong again. Those who have the money to spend, they say, are spending it.
At times like these, cash buyers are king.
Maybe these buyers figure all that stuff is going to be worth more than the U.S. dollar in the future. Or else they’ve decided to live it up before the world ends.
“Yes, maybe it’s true the middle class is broke, in debt, under water, out of work and in despair.
But look on the bright side. One group of people is doing just fine. The rich.”
Echo from GOP Canyon: “Exxxxxxxxxxxxxxxxxtend Shrubs tax crediiiitssssssssss!!! Hurrrrrrrrrrrrrrrrrrrrrrry!!!”"
Because buying Swiss watches will stimulate OUR economy….NOT.
Imagine how great the economy would be if we could just give these poor elite another massive tax break.
Can’t you just feel the trickle down wealth as it washes over the dirty masses.
They do seem to be giving the poor a “golden shower” of sorts.
You have have the rich hire people, or not.
You can make it easier for them to hire and fire people, or not. If you do not, they will hire less people. If you make it easy, they will hire more people.
What do you want? More people working? Or more money and time taken from rich people and in government coffers?
They want more money taken out of CORPORATE coiffers, not the “rich”, per se.
If they were truly interested in the latter, they and their politically-connected friends would take significant hits. They’d be WILLING
That won’t happen…if it did, how could anyone afford a Georgetown abode, or a 2-bed, 2-ba NYC aprtment for $900,000?
ErikZ, be sure to remember that difference. It’s a significant point.
Elitists don’t like corporations because they represent people they can’t control. It’s harder to “protect” a corporate millionnaire than uneducated schlubs.
Oh thank goodness! At least someone is having fun. We need more help for the rich and all those jobs they provide for idiots like me.
Roidy
Even as the economy shrank last year, the income gap—the divide between the country’s richest and poorest citizens—kept growing. In 1978, CEOs at the largest U.S. companies earned 35 times as much as the average worker. Today, that figure is more than 300:1, according to the Harvard Business Review.
In 2008, the U.S. Census Bureau reported that income inequality had reached a modern high, with the wealthiest 10% of the population earning 11.4 times as much as the poorest 10%. Research by Kevin Hallock, a professor at Cornell University, indicates that the trend persists: “From 1979 to 2009, after adjusting for inflation, the highest earners in the U.S. saw dramatic growth in their earnings while the lowest earners now make less than they did 30 years ago.”
- Parade April 2010
Well OK it makes sense Don’t get PG:
http://www.nytimes.com/2010/07/20/your-money/mortgages/20mortgage.html
How many mothers go on maternity leave and don’t come back by choice. It’s a significant number. Counting the wife’s income on maternity leave is not exactly a great plan for the banks. You have moms that decide to stay home/kids with birth issues that need one parent at home for a few extra months/etc to contend with. The easiest way is to disallow the mom’s income until she’s back at work.
This is GOOD for the mortgage market in general.
Fed workers to be urged to commute, travel less.
WASHINGTON (AP) - President Barack Obama wants federal workers to cut down on business travel and commuting by car as he seeks to reduce heat-trapping emissions produced by the federal government.
The White House was announcing Tuesday that the government will aim to reduce carbon dioxide and other greenhouse gas emissions from indirect sources like employee driving by 13 percent in 2020, compared with 2008 levels.
Earlier this year Obama directed agencies to reduce pollution from direct sources, such as buildings and government fleets, by 28 percent in the next decade.
The federal government is the largest energy consumer in the U.S. economy, and the combined reductions would be the equivalent of removing emissions from 235 million barrels of oil, the White House said.
Does this directive also apply to the transcontinental commuting habits of our congress critters?
All animals are equal, some are just more equal than others.
Congresscritters don’t work for agencies, so no, of course not. And it would be unconstitutional for the executive branch to control the actions of the legislative branch in that manner.
Oh come on Barack, that’s greenwashing and you know it.
Why not tell the truth: a lot of federal employees travel more than they have to, or should, to conferences and meetings that are little more than half-vacations (really). It’s energy consumptive, it’s expensive, and it’s inefficient because less gets done in the office when people aren’t there.
Commuting by car is a necessity. In the DC area, the highways are packed and the public transport is packed. There’s not much choice.
I’m willing to bet that the “direct” modifier on expense means that commuting of the workers is not included. More like agency owned cars and buildings.
“Commuting by car is a necessity. In the DC area, the highways are packed and the public transport is packed. There’s not much choice.”
Strongly disagree. I lived in Falls Church, VA and Mt. Pleasant in DC and biked to work in Arlington. Not as easy (weather, cars, lack of bike lanes) or as quick as I would have liked, but do-able. There is always a choice. Just don’t live 50 miles from work. Fifteen miles for a daily commute would be my outer limit.
This BP spill is everyone’s spill. I wish that we’d make more bike lanes like this instead of building more auto roads…
MrBubble
Count me as one who would love more bike lanes/paths.
However one thing most people don’t think of is that most places of work don’t have showers and locker rooms that would be an additional necessity. No one wants to bike to work, get all sweaty, and then just change into their clothes that they crammed into their backpack - even if their workplace did have showers. I used to bike to work occasionally, since I worked somewhat close to the W&OD trail here, however I had the luxury of having showers at work and was able to bring casual clothes in my pack. A lot of people don’t have both of those (or even either of those) luxuries, even if they did have a great bike trail.
Obviously workplaces can add these things - it’s just an extra expense that people don’t often think of; and something that’s often not feasible on a large scale (e.g. if you have an office of 500 people who all get into work in a 1-hour window; even if only 1/5 of them biked to work you’d probably need 30 showers or so).
That’s great if you happen to have a shower at work. Most of us don’t. Biking in 100 degree weather, which is pretty common to DC, isn’t appealing either.
“something that’s often not feasible on a large scale (e.g. if you have an office of 500 people who all get into work in a 1-hour window; even if only 1/5 of them biked to work you’d probably need 30 showers or so)”
Not if they all didn’t get to work at the same time and most people don’t have to. This isn’t the factory anymore (they are all off-shored.)
“Biking in 100 degree weather, which is pretty common to DC, isn’t appealing either.”
It’s not that common; I lived there for six years. You might be thinking about what’s outside your window now (which I don’t envy). But it’s not over 100 that much on a yearly basis. Granted, this June was the hottest on record.
You both have a point about showers. But instead of putting in and subsidizing an under building garage, like my old NoVA building had, you’d think that they might be able to build one fewer parking level and put in a few showers. Think of the potential heath care savings for employers, too. Do the cost-benefit analysis, bean-counters!
MrBubble
Problem is that you still need the full garage for the days that’s it’s not feasible to be bike to work - which are many.
I suppose that’s what I’m arguing. That it is feasible, any day, especially if there are showers. It’ll be two years this September that I’ve been fully car-less and I can’t see changing. Every area has its problems: heat, cold, rain, snow. But they are all surmountable. Didn’t we put a man on the moon at some point? Or are we outsourcing ingenuity too? Our collective nutsacks as well?
Not trying to get on your case. And I don’t want to “do something resembling anything” as in the Army. I just think that there is another way to do a lot of what really needs doing and that throwing up our collective hands won’t get us any closer to a goal. It could be a combination of living closer to work, carpools, telecommuting, walking and biking (and a bit of a road grab to make these energy friendly modes of transport safer), floating/seasonal hours, showers at work, fewer and more expensive parking spaces, better mass transit, etc., etc., etc.
Guess there’s a fine line between “surmountable” and “worth surmounting”. Yes I/we could do those things you mention, but all generally come at a price - financial or otherwise.
“t’s energy consumptive, it’s expensive, and it’s inefficient because less gets done in the office when people aren’t there.”
When some people are gone from the office, more gets done. But that’s another story. It was great for “essential” employees during the government shutdown during the Clinton era when headquarter’s staff weren’t “working”.
“Commuting by car is a necessity. In the DC area, the highways are packed and the public transport is packed. There’s not much choice.”
With many jobs, there should be a lot more telecommuting. Agencies should get “taxed” (reduced appropriations) for every task that isn’t move to telecommuting that could be done that way. There needs to be a cost attached to doing nothing. Congress has pushed aggressively for more telecommuting by federal workers, but most agencies have done little or nothing.
I disagree Greg
Some of us LIKE to get out of the house and GO TO a job.
Now if it was a variable schedule…like all the days over 85-90 degrees, or its snowing and wind chills are below Zero…heck yes i can stay home and work that’s fine….
——————————–
With many jobs, there should be a lot more telecommuting. Agencies should get “taxed”
“…heat-trapping emissions produced by the federal government.”
I’m thinking a reduction in the number of 2000+ page bills they produce could go a long way towards achieving that objective.
Not to mention the forests it would save.
Okay, Mr. President, I have a question:
If I were to be working in Washington, D.C., how easy would it be for me to ride my bicycle to work? Would there be safe and secure parking for it once I got there? Would there be a place for me to change into my work clothes, and, just maybe, take a shower if necessary?
And, one more thing: In the past, when I’ve commuted by bike, I’ve been regarded as less than a fully evolved human being. I mean, come on, Slim’s coming into the office with a smile on her face and that’s because she rode to work! We can’t have that around here, now can we?
As someone who lived in the DC area for seven years by bike and Metro, the answer is, it would be very easy, but you have to pick where you live. If you live more than, say, five miles from work, it becomes hard to avoid a highway.
Almost all office buildings now have a parking garage where you can lock a bike, and a locker room somewhere in the building.
It would be different if you worked deep downtown. Even I don’t recommending riding down there. Too many people walking.
As for being not a fully evolved human because you’re on a bike, well, tell me a city where that’ NOT true. I once road my bike in one of the more granola small towns in the South and was yelled at there. So it’s not just DC.
My comment above, if it posts, echoes some of this sentiment. And I get the same as a bike commuter in the SFBay: like I’m a half-hero, half-whacko. It was worse in DC/NoVA. Just trying to lose some weight and reduce oil dependence here people!
Govt vehicles = U.S.-manufactured gas guzzlers. Change the composition of the govt fleet to energy efficient vehicles and you will get your reduction in GHG emissions overnight.
Pretty sure those stats include the military - in fact probably the bulk of said emissions are from there. Not sure having G.I.’s driving down the Route Irish in a Prius is a great idea.
(Not to mention that the bulk of the energy use / emissions are probably from the Air Force and Navy, not from the Army anyhow)
Govt vehicles = U.S.-manufactured gas guzzlers.
I see a lot of sedans, even compact ones, with US Gov’t license plates on them. They aren’t all pickups or Suburbans.
And FWIW, the Japanese have gotten pretty good at building their own gas guzzlers.
“Change the composition of the govt fleet to energy efficient vehicles and you will get your reduction in GHG emissions overnight.”
It’s more dependent on how many people are in the car, how far its driven, how it is driven and the embodied energy in the car rather than the car itself. BTW — I see so many Prii with one person in them. Do they make a multi-passenger version? These mad fools, all.
The term is “eco-bling”. I sold solar PV systems for most of the past decade, I know it well.
Very few actually care about whether or not their “green consumerism” is actually doing any good. They just want it to appear that way. If the government will subsidize their green fantasy, all the better.
That’s why global warming is so convenient for them. You don’t have to actually do anything, just believe that the government can and will fix things, if only we elect the proper stooges. What a waste.
Very few actually care about whether or not their “green consumerism” is actually doing any good. They just want it to appear that way.
And, sorry to say, the prices for eco-bling are way out of reach for most of us. Hence, the tax credits that we hear so much about.
For example, here in AZ, a solar hot water system costs about $5k to install. Yup, that’s right. Five grand to install something that heats water.
And, during our summers, it does the job too well. Ever try to take a shower in 180-degree water. You can’t. So you need a means of cooling your solar-heated water down.
Okay, about the tax credit, it does bring the price down. But, as I like to point out to the eco-blingers, you still have to front the $5k. A few months ago, when I pointed this out, I was accused of whining.
All-righty. So I was pointing out the price — a bit high, IMHO.
If the stuff were more reasonably priced, I’d be all over it. But I’m not into overpaying for status symbols. And I feel the same way about buying a Prius.
There’s an apocryphal story about a guy working at a bottled water plant who is asked what he would put on the bottle to let people know that it was environmentally friendly. He slapped a label on the water bottle that said, “DO NOT BUY THIS”.
Sorry, just had a memory of a quote from Slacker:
“Every single commodity you produce is a piece of your own death!” I feel that way about every commodity I consume.
“That’s why global warming is so convenient for them. You don’t have to actually do anything, just believe that the government can and will fix things, if only we elect the proper stooges. What a waste.”
I do not agree that “they” can do nothing to fix the problem. True, the Prii drivers can act all smug, but they’d be wrong; heck a Hummer driving with 4 people 30 miles a week is far “greener” than a Prius driven 300 miles a week. [And I believe that global warming will become inconvenient for them/us in the future]
How about we reduce the size of the massive monster known as the federal government? I’m sure you could cut easily 13 percent of the workforce and the country would run better. I bet this pompous windbag wouldn’t consider such a common sense approach. Government is good. It just has to be a little greener. Another crockpot full of bulls–t.
You do know that federal contractor employees outnumber regular federal employees, right?
How’s that working out?
So all federal employees should sell their houses and move within two miles of their work. They should also walk, thus patriotically reducing their chances of heart disease due to becoming more in shape.
Love that B.O.
Payrolls Fall in 27 States, Led by California, as Hiring Slowdown Persists.
Payrolls decreased in 27 U.S. states in June, led by California and New York, signaling the slowdown in hiring is broad-based.
Employers in California cut staff by 27,600 workers last month and those in New York reduced employment by 22,500, the Labor Department said today in Washington. Tennessee, Arizona and New Mexico rounded out the five states with the biggest job losses.
The U.S. lost 125,000 jobs last month as the government cut temporary workers conducting the 2010 census and private payrolls rose a less-than-forecast 83,000, according to Labor Department figures issued July 2. The data signal companies are becoming reticent to hire as the economy cools.
“Businesses are looking at what’s going on in Europe and the stock outlook and people are becoming a little more skittish,” Marisa Di Natale, a director at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “We may see that for a couple of more months until we start to see some real momentum in some sector of the economy.”
More b.s. from the MSM/ratings agency pulpit.
Companies aren’t hiring because they’re worried about the effects of Obama Socialism.
Many companies have plenty of cash. But they’re not willing to invest it or spend it.
God knows why.
January 1, 2011 - here we come!
Companies aren’t spending cash because they’re waiting for customers to walk in.
Customers aren’t walking in because they don’t money.
Customers don’t have money because they don’t have jobs.
Customers don’t have jobs because over the past generation, the capitalist corporations went too far and monopolized, merged, LBO’d, downsized, rightsized, outsourced, insourced, de-unionized, and ranked-and-yanked the middle class.
That’s why.
And it’s got little to do with taxes. Corporations had years of lower taxes and favorable treatment, and they chose to starve the goose that laid the golden eggs just to feather their own nests. It took 20-30 years, but now they’re whining that the goose is too scrawney. Gee, ya think??
What you’re seeing is not socialism. If anything, socialism would create customers, because the middle class would actually have dicretionary income again, even if it’s from a make-work gov job or a dole. Instead what we’re seeing is the logical conclusion of corporate capitalism: every business is so efficient that it doesn’t need any employees, and therefore there’s no one to buy the product. oops. Henry Ford figured this out a century ago, but today’s titans of industry just wanted their bonuses NOW…
+1000
…because the middle class would actually have discretionary income again…
Socialism does not provide discretionary income. It provides enough income to cover the necessities.
“…Customers don’t have jobs because over the past generation, the capitalist corporations went too far and monopolized, merged, LBO’d, downsized, rightsized, outsourced, insourced, de-unionized, and ranked-and-yanked the middle class.”
Yep,..
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
It’s good to save money in business, but you can save yourself right out of business.
Jennifer Convertibles closing N.C. stores.
On Monday, Jennifer Convertibles announced that it filed for Chapter 11 bankruptcy protection and will reorganize, adding the furniture store to the growing list of retailers using bankruptcy to try to survive the current financial climate.
CEO Harley Greenfield told trade publication Furniture Today that the company will close all of its stores in North Carolina, Florida and Michigan, as well as Philadelphia, Atlanta, Chicago and Boston.
All orders placed by customers will be honored, said Martin Ehrlich, Jennifer’s vice president of customer service and quality control.
Hey Ben. I just listened to your podcast with Jonathan Miller. You mentioned you were starting an opportunity fund. How can I get more information?
I missed that, here it is:
http://thehousinghelix.blogs.millersamuel.com/2010/01/06/interview-ben-jones-founder-the-housing-bubble-blog/
New bill for UE extension: All recipients of extended UE benefits forefit their right to vote by endorsing the next check from the government and wont be able to vote again until they stop receiving benefits. Do you think the Dems would be pushing to “help” the “poor jobless” if this were the case?
Given low voter turnout, would this even matter?
Unconstitutional.
Sorry, might be in violation of voter rights act, not directly unconstitutional. Might be both.
“Unconstitutional.”
Like that matters. The constitution has proven that it isn’t even a speed bump when it comes to either party funneling money to supporters or buying votes. That constitution thingie is so 18th century.
Agreed. The income tax (16th amendment) was said to be improperly ratified. If so, it’s unconstitutional. But here we are.
The US Constitution is just a rag.
Lysander Spooner “The Constitution of no Authority.”
Why not have a provision that corporations can’t contribute more to campaigns than the least amount that any of their subsidiaries has paid in taxes?
I’d rather punish those that have damaged the economy rather than those that are suffering because of the condition of the economy.
“I’d rather punish those that have damaged the economy rather than those that are suffering because of the condition of the economy.”
From the Southern States Strategy National conference:
“…All attendees must select at least x2 of the following labels”:
“TrueDoNothing™ / “TrueObstructionists™ / TrueGridLokers™”
Don’t ya just LOVE American innovation!
Homeowners Use Airbnb’s Room-Renting Site to Dodge Foreclosure
By Ari Levy and Dan Levy / July 19 (Bloomberg)
“Nichelle Morant was on the verge of losing her three-unit house in Brooklyn, New York, earlier this year, after tenants renting the second and third floors lost their jobs and moved out.
With bills mounting and foreclosure looming, Morant converted the space into a bed and breakfast. Using the San Francisco-based rental site Airbnb.com to take reservations, she was soon raking in $4,500 a month, enough to cover her mortgage.
“This has been our stimulus package,” said Morant, a pastry chef, who lives with her family on the ground floor of the home. “We were going to lose our house.”
For Airbnb — along with Craigslist and rival rental sites like HomeAway.com Inc. — the threat of foreclosures is bringing a surge of listings.”
Hey Losty, I found a place for ya when visit AZ, purple, close to the taverns & bicycles too!
“We don’t come into your part of the house and you don’t come into ours.”
http://www.airbnb.com/rooms/39122?price=40.0&rcity=Flagstaff&rcountry=US&rlanguage=0&rlat=35.2013516&rlng=-111.639249&rlocation=Flagstaff%2C+AZ&rmax_price=&rmin_price=&rneighborhood=&rnumber_of_guests=1&rprecision=city&rseo_city=flagstaff&rseo_other=az&rsort_by=0&rstate=AZ
When will the angry people be most angry? When they got mad this stuff passed or when they found out most people arn’t that freaked out anymore?
Americans Warming To Healthcare Reform
An in depth survey from the Kaiser Family Foundation suggests that Americans are becoming increasingly supportive of the new health care reform law. This month, the number of respondents approving of the legislation is actually higher than disapproving: 48% support the law, while 41% had an unfavorable opinion. Just a month ago, the levels of support were reversed, with 41% approving and 44% against.
http://www.rttnews.com/Content/PoliticalNews.aspx?Id=1364055&SM=1
PRINCETON, NJ — In the same week the U.S. Senate passed a major financial reform bill touted as reining in Wall Street, Democrats pulled ahead of Republicans, 49% to 43%, in voters’ generic ballot preferences for the 2010 congressional elections.
Poll Shows Democrats Retake Lead On Generic Ballot
(RTTNews) - Democrats have pulled ahead of Republicans in voters’ generic ballot preferences, according to a poll released by Gallup on Monday, with the poll conducted in the same week that Democrats in the Senate passed the financial reform bill despite nearly unanimous Republican opposition.
The poll showed that Democrats lead Republicans on a generic ballot by 49 percent to 43 percent, a notable improvement from the 47 percent to 46 percent lead Democrats held in the previous week and a turnaround from the 46 percent to 44 percent lead that Republicans held earlier in the month.
Gallup noted that the six-point advantage for Democrats represents the first statistically significant lead for the party since it began weekly tracking of the measure in March.
http://www.rttnews.com/Content/PoliticalNews.aspx?Id=1364055&SM=1
Note from IMF to Fed:
It is time to stop blowing bubbles, and to instead lean against them.
* The Wall Street Journal
* MARKETS
* JULY 20, 2010, 1:16 P.M. ET
IMF: Central Banks Must Thwart Bubbles
By BOB DAVIS and TOM BARKLEY
The International Monetary Fund’s executive board said central banks should use interest rates in a “limited” way the next time they encounter an asset bubble that needs to be pricked, weighing in as the Federal Reserve and other major central banks reevaluate their bubble-fighting strategies.
Before the global financial crisis, the Fed’s main strategy for addressing bubbles was to mop up after they burst, lowering interest rates to cushion the blow to the economy and restart growth. That was a central conclusion of the academic work of Ben Bernanke before he became Fed chairman and was an approach embraced by his predecessor Alan Greenspan.
But the depth of global downturn, prompted by the bursting of a real-estate bubble in the U.S., has led to a rethinking. The IMF, in a paper released Tuesday on the subject, urged central banks to use tougher regulation to head off future asset bubbles, including tighter capital requirements for banks, limits to banks’ use of short-term loans and tougher collateral requirements for loans they make.
The IMF also said financial regulators would have to use their judgment as to whether to take more specific actions, and have the independence to enforce their actions.
But in cases where that isn’t sufficient, central banks may have to use interest-rate policy to “lean against asset bubbles,” the IMF staff said. For instance, “the combination of rising asset prices and rapid credit growth may warrant a higher policy rate,” the IMF paper said.
…
LOL - except one thing - timing is everything. The Fed did tighten to thwart this bubble - in 2005; about 3 years too late. Any tightening before that would have supposedly short-circuited the still-early 2003 recovery from the previous recession.
This country would cease to exist if it weren’t for bubbles.
And you sure as HELL aren’t going to get the people who profit the most, to stop it, either.
Has anyone been watching the prices/inventory/foreclosures in the SF Bay Area? I would like to buy a small house (2/1 ~1000sq ft) in the central east bay in 2-3 years, but the prices are at around 400k for something outside the ghetto, but not in a very nice area. Should I expect prices to fall over the next couple years? I’m hoping for prices on similar homes to go down by at least 10%. I also feel uncomfortable buying with such low interest rates.
I also feel uncomfortable buying with such low interest rates ??
Why ??
because i want my down payment money to go farther. if i had to sell and rates are higher than when i bought, then the buyers would have higher payments. also it would be nice to buy at 10% then be able to refinance in 10 years at 6 or 7%.
Yes.
The value of low interest rates is inversely proportional to the size of your down payment. If you plan on putting a big downpayment on a house - you actually want interest rates to go up for a while before you buy, in order to bring down the general price of housing.
I don’t get it.
We have a huge supply of houses for sale, and we’re still building MORE houses?
http://www.bloomberg.com/news/2010-07-20/housing-starts-in-u-s-slide-to-lowest-level-since-october-on-sales-slump.html
The only reason I can think of for building a house right now, would be a custom-built design. 549k NEW HOUSES being built this year? What the heck is going on?
There’s always *some* demand for housing, but surely there’s plenty of existing houses on the market to meet that demand?
“We have a huge supply of houses for sale, and we’re still building MORE houses”?
As they say, builders gotta build.
Here in central S.C. we have foreclosures on a steady rise, tons of homes for sale, and the building beat goes on.
I can personally attest - there is a lot of building going on in the DC area right now. And it is indeed due to actual demand and not speculation. People are actually moving into these places.
It’s mostly condos/townhouses around me though - very few SFH now.
It really does depend on location. Some areas have massive overbuilt inventory - others (like here) not at all.
But DC also has the lowest UE, doesn’t it.
Yep, absolutely - which is exactly why the home building is going on. Growth of federal government while the rest of the country shrinks.
Interestingly DC itself has quite high unemployment - 10.5% right now. However the 2-deep ring of commuter counties around it all have unemployment in the 4-6% range.
Poll: Faith in Social Security system tanking. ~ USA TODAY
WASHINGTON — Battered by high unemployment and record home foreclosures, most Americans seem to have lost faith in another fundamental part of their personal finances: Social Security.
A USA TODAY/Gallup Poll finds that a majority of retirees say they expect their current benefits to be cut, a dramatic increase in the number who hold that view. And a record six of 10 non-retirees predict Social Security won’t be able to pay them benefits when they stop working.
Skepticism is highest among the youngest workers: Three-fourths of those 18 to 34 don’t expect to get a Social Security check when they retire.
Might have something to do with this:
Net budgetary impact of trust funds (SS/Medicare/pensions/etc - billions of $):
2009 -410 (actual)
2010 -471
2011 -491
2012 -487
2013 -522
2014 -572
2015 -577
2016 -636
2017 -682
2018 -724
2019 -826
2020 -907
(from 1/2010 CBO projections - which I believe are being changed to look worse now)
For comparison - here’s the same projection from 5 years ago.
2004 -192 (actual)
2005 -161
2006 -184
2007 -213
2008 -227
2009 -244 (actual ended up being -410)
2010 -271
2011 -306
2012 -332
2013 -382
2014 -433
2015 -491
Noting that the budgetary impact from 5 years go also included projections of interest rates that were much higher than the current level and projections. So not only were the 2005 projections way low, but the impact due to extremely low rates on treasuries wasn’t accounted for. If interest rates had stayed higher (e.g. a 3-month rate that was projected to be at 4.5%, but in actuality has been running only 0.15%), the net deficit due to these trust funds would now be way worse than the worse-than-projected levels.
Looks like we magically have lots more money to play with now than we did a few years back…
Here you go, oxide! More “proof” that socialism works!
And more reason that Americans aren’t spending the money they have.
As much as this will annoy you, oxide, bartering is going to be all the rage in the not-too-distant-future. Increasing numbers of people are going to avoid spending as a means of thwarting the government.
Communities will “pay for” their own doctors and nurses, by giving them property, etc. People in the USA will wise up in a hurry, and work jointly to circumvent government shackles.
Count on it. Americans are not Europeans. Sorry.
“Communities will “pay for” their own doctors and nurses, by giving them property”
That makes me giggle. One of the candidates for Senator(?) in Nevada tried to say that people should pay for their doctor with a chicken, just as they did in the past. “Chickens for Checkups” became a punchline on the liberal blogs. And how would you pay for something like cancer treatment? Would a doctor or hospital accept a devalued McMansion over in Pahrump?
And technically, if people are afraid of not getting SS, then it IS proof that socialism works. Otherwise, the people wouldn’t care about SS, and pull themselves up by their bootstraps a la John Galt & Co.
Sorry I forgot the word NOT
“Count on it. Americans are not Europeans. Sorry.”
When you say Americans are not Europeans do you mean because we are NOT very happy anymore?
“Count on it. Americans are not Europeans. Sorry.”
When you say Americans are not Europeans do you mean because we are very happy anymore? Maybe Euro socialists are happy because the law requires it or they go to jail or something. Or maybe they don’t know about the unbridled joy of chasing a buck from cradle to grave. Those idiots.
World’s Happiest Places, Forbes 5/5/09
Where in the world do people feel most content with their lives?…happiness levels are highest in northern European countries.
Denmark, Finland and the Netherlands rated at the top of the list, Outside Europe, New Zealand and Canada landed at Nos. 8 and 6, respectively. The U.S. did not crack the top 10.
Why did the northern European countries come out looking so good? Overall economic health played a powerful role,
the countries that scored at the top still boast some of the highest gross domestic product per capita in the world. Denmark, which got the highest score, is not only a wealthy country, it’s also highly productive, with a 2009 GDP per capita of $68,000, according to the International Monetary Fund. The United States’ GDP per capita, by contrast, is $47,335. Though the U.S. got an above-average score of 74, it did not break the top 10.
Wealth alone does not bring the greatest degree of happiness. Norway has the highest GDP per capita on the list–$98,822–yet it ranked ninth, not first. On the other hand, New Zealand’s happiness level is 76.7 out of 100 on the OECD list, but its 2009 GDP per capita is just $30,556.
individuals typically get richer during their lifetimes, but not happier. It is family, social and community networks that bring joy to one’s life, according to Delamothe.
The OECD data shows that another important factor is work-life balance. While Scandinavian countries boast a high GDP per capita, the average workweek in that part of the world is no more than 37 hours. In China, which got a low score of just 14.8, the workweek is 47 hours and the GDP per capita is just $3,600.
Low unemployment also contributes to happiness. “One thing we know for sure,” says the OECD’s Chapple, “not having a job makes one substantially less satisfied.” Denmark’s unemployment rate is just 2%, according the C.I.A.’s World Factbook. Norway’s is just 2.6%. The Netherlands: just 4.5%. Many economists concur that a 4% unemployment rate reflects a stable economy. The U.S. unemployment rate is currently 9%.
US UE is currently 20%.
Socialism works, until it runs out of OPM.
(Oxide, Measton, Excretor, Polly, Alpha, Grizzly, and Eco still don’t know it yet).
Unbridled capitalism works until 0.001% of the people own 99.999% of everything including the gov.
Tell me Bill did Wall Street’s CEO class earned their money??? How about Ken Lay??? etc etc
Fortune 500 company CEO’s make 400-1000x average workers salary.Did they earn this. Is the money they have really theirs or did they manipulate the system.
It’s good to know you’re keeping a list Bill
I’m #1! Woo-hoo!
“Three-fourths of those 18 to 34 don’t expect to get a Social Security check when they retire.”
Chill out, dudes — you all will get your Social Security checks when you retire.
However, the amounts may prove ’smaller than expected,’ especially when purchasing power is considered.
+1.
Why do you think CPI understates inflation? Think about that over the 40-plus-yr time-frame, and you will grasp the “solution” to the SS trust fund problems.
Its funny how the masses have no understanding how SS is funded. Do they not understand that its a “pay as you go” system?
“However, the amounts may prove ’smaller than expected,’ especially when purchasing power is considered.”
Unless they raise payroll taxes this is a certainty.
They think they’ll be able to retire? I love how naive the young always are.
NYC Transit cuts positions of 163 more employees. ~ 07/20/10
NEW YORK — New York City Transit, the Metropolitan Transportation Authority’s subway and bus subsidiary, has notified 163 administrative employees that their jobs will be eliminated as of Sept. 17.
The layoffs are part of the MTA’s ongoing effort to trim at least 2,825 jobs.
By the end of the year, the transit agency expects to have eliminated the jobs of 475 subway station agents, 700 administrative employees at its headquarters and subsidiaries, and 1,000 managers in its subsidiaries’ operating and maintenance.
Another 650 jobs were eliminated when bus and subway service reductions went into effect last month.
market pulse
July 20, 2010, 2:32 p.m. EDT
U.S. stocks lifted by Fed speculation
NEW YORK (MarketWatch) — The U.S. stock market drew a Tuesday afternoon lift from speculation the Federal Reserve was readying to announce an effort to force banks to lend more. The talk involves the idea that the central bank would stop paying interest on reserves where it is currently paying 0.25%, according to Peter Boockvar, equity strategist at Miller Tabak. But Boockvar dismissed the talk, saying he doubted the Fed would use its “last bullet” so soon.
“But Boockvar dismissed the talk, saying he doubted the Fed would use its “last bullet” so soon”.
I agree why would BB do that when we are clearly in recovery, or so I’m told.
MSM progress noted:
Usually they attribute late day rallies to the actions of small individual investors. At least now they are reporting the Fed’s part in the quixotic move against a second day of bad news on the home front.
Global effort needed on bank capital: U.S. officials
WASHINGTON (Reuters) - Global cooperation will be crucial to hardening world banks’ capital armor along the lines backed by Congress and the Obama administration, senior U.S. regulators said on Tuesday.
As standard-setters in Switzerland hammer away at a new set of worldwide bank capital standards, U.S. Treasury Department official Lael Brainard said, “Capital rules must be harmonized internationally to be effective domestically.”
More broadly, she told a Senate subcommittee, the tougher financial regulations that are headed for President Barack Obama’s desk to be enacted on Wednesday will be less effective without global consensus on some key policies.
Is that what they’re calling them now?
Bruce Ross ~ July 20, 2010
In the Forest Service’s news release about the recent string of marijuana busts, I discovered a term of art I’d never encountered before:
“During the raid, a U.S. Forest Service K-9 team located Gauldry Almonte-Hernandez, a displaced foreign traveler from Michoacán Mexico, who had tried to flee the area and hide while officers were performing entry into the marijuana garden”.
“Displaced foreign traveler”? Makes it sound like he meant to go to Disneyland, got lost, and ended up at a pot plantation in the woods south of Hayfork.
I believe that would be called “Euphemism Treadmill”.
lame -> crippled -> handicapped -> disabled -> physically challenged -> differently abled
alien -> immigrant -> traveler
Alien > ILLEGAL immigrant > undocumented
Fox Biz reports that Ken Feinberg, as one of his last ineffectual actions during his tenure, will announce on Friday the clawback of various bonuses paid during the 2008 year of ubiquitous bail outs. Since every single bank received some form of assistance in 2008, and many still benefit from the ridiculously low rates on the FDIC-backed TLGP debt (which only has 1.5 years before it matures), it is unclear which banks will be the target of this last attempt to recover some taxpayer money out of the TBTF. Also, since these same banks run the country via their Federal Reserve lobby, it is unclear if and to what extent the Goldmans of the world will agree to this action. As Gasparino reports: “In an interview, Feinberg refused to say how much money he’s going to ask for or which banks will be targeted. “I’m aiming for Friday to make an announcement,” he said in an interview. “The banks will be notified shortly.” Feinberg declined to say whether the five remaining banks — Citigroup, JPMorgan, Goldman Sachs, Morgan Stanley and Bank of America — would be repaying any of the claw-back money; his mandate covers 418 banks, but people on Wall Street suspect the main focus of his mandate will be the large financial institutions.”
(zero hedge)
Hmmmm….every time I get excited that justice will be served, the action turns out to be a carved out shell meant to trick the people they’re used to convincing all is well. We’ll see if this claim is more of the same.
Sounds to me like Bankers get their bonus but stock holders pay for it.
More US restaurants close over weak diner traffic
Associated Press, 07.20.10
CHICAGO — More restaurants have shut their doors as high unemployment and lackluster wage gains keep diners from eating out. The number of U.S. restaurants slipped 1 percent this spring from the same time last year, according to market research released Tuesday.
The NPD Group said there were 579,416 restaurants open across the country this spring, 5,204 less than at the same time last year. Independent restaurants were harder hit than their corporate competitors, with their number slipping 2 percent over the past year as the number of chain restaurants held steady.
About 54 percent of U.S. restaurants are independently owned.
“It’s been a difficult time for the restaurant industry with customer traffic down over the past year,” NPD’s director of foodservice product development Greg Starzynski said in a statement. “The unit losses we’re seeing in our latest census are a reflection of the weakness in the industry with the greatest impact on the independent restaurant operators.”
Clipped from The Daily Reckoning.
*** And here’s an interesting item that is going around the Internet: If July has ides, this is it.
Ever had a job?
A chart that showed past presidents and the percentage of each president’s cabinet appointees who had previously worked in the private sector - you know, a real life business, not a government job? Remember what that is? A private business?
Roosevelt - 38%
Taft - 40%
Wilson - 52%
Harding - 49%
Coolidge - 48%
Hoover - 42%
FDR - 50%
Truman - 50%
Eisenhower - 57%
Kennedy - 30%
LBJ - 47%
Nixon - 53%
Ford - 42%
Carter - 32%
Reagan - 56%
GHWB - 51%
Clinton - 39%
GWB - 55%
And the Chicken Dinner Winner is…………………….
Obama - 8%*
This is the guy who wants to tell YOU how to run YOUR life!
ONLY ONE IN TWELVE in the Obama Cabinet HAS EVER HAD A JOB.
*YEP, EIGHT PERCENT!
~ P.S. Remember little TTT said on T.V. that he had never had a “real” job, he’s not alone.
Methinks that a lengthy history of employment in the private sector isn’t commonplace among high government officials like cabinet members. Looks like the trend has been toward careers in government.
WOW.
If that is accurate, no wonder it is so easy to spend soooo much of other peoples money. Never had to worry about making payroll, insurance, tax deposits or a profit.
profit Definition
definition of profit - The positive gain from an investment or business operation after subtracting for all expenses. opposite of loss.
Well, we do like chicken.
Take for example, my congressman Harry Mitchell (in the 85044 zip of my permanent residence).
Background: Political science instructor - that is, public employee. Then elected official.
Career government employee.
I do not ever grant him humility by referring to him as a public servent. We constituents are aware we are serving him.
BTW: He voted for the Obama health care swindle. Which is now admittedly a tax.
I’m wondering if the “Socialist” Obama made a big mistake for a Socialist and actually unintentionally helped “capitalism” going forward.
I mean by year 2013 or something everybody will be able to keep or buy health-insurance even with pre-existing conditions. (I know, it’s crazy and violates my freedom to want my country back)
That means more people will be able to be risk-takers and will be empowered to start their own companies and stuff. Well, small businesses create a heck of a lot of private sector jobs and we need private sector jobs I think.
Right now there are many people wanting to start their own business but are shackled to jobs they might not like but they don’t have the freedom and liberty to go out on their own because they might have a bad back or had a rash or cancer or a stomach ache or something in the past so they can’t leave their company’s health insurance. (Is that kind of like slavery or something because it takes away our freedom to pursue happiness?)
Anyway, in 2013 these people will be able to be entrepreneurs and producers and captains of industry and a bunch of capitalistic sounding things because of Obama’s big mistake of helping capitalism by making people less afraid to be capitalists instead of socialists and liberals and lefties and other scary names I hear on the radio.
I wonder if Obama feels bad about that because it won’t help to destroy America.
And, when those entrepreneurs bust the shackles of their oppressive jobs, the national anthem will change to that catchy tune, “Take This Job and Shove It.” (The Johnny Paycheck version is my favorite.)
I’ve wondered why those who supposedly love entrepreneurship don’t embrace socialized medicine for exactly those reasons.
Oh ya! There is a huge surplus of these entrepreneurs in western europe busting out new products and ideas each and every second.
I am glad we finally joined the club.
Ummm, not meaning to pick a fight but the United States has long had an entrepreneurial culture that’s largely missing from Western Europe. In WE, getting a secure job with a big company is a major life goal. Same as it is in a good bit of Asia.
Which club? The manufacturing club?
http://www.globalautoindustry.com/article.php?id=5585&jaar=2010&maand=7&target=Euro
Europe better than its reputation
Europe’s economy stronger than the US.
The Europeans, shaken from the crisis in Greece, want to cut national debt while the US is bedeviling the savings packages as being too austere. They say it has the potential to smother recovery, which was a big bone of contention at the G20 Summit in Toronto. Nevertheless, Europe is economically much stronger than the US and, according to one consultant, should be much more self-confident.
Manufacturing is strength
Saving and stimulus packages, both are necessary says Burkhard Schwenker, CEO at Roland Berger Strategy Consultants. Schwenker believes Europe is in a better position than the US, because Europe’s strength is its manufacturing sector. US criticism of European savings packages may simply be a ploy to distract from the country’s own problems.
“Who wins in U.S. vs Europe contest?”
Reuters Feb 12, 2010
In these days of renewed gloom about the future of Europe, a quick test is in order. Who has the world’s biggest economy? A) The United States B) China/Asia C) Europe? Who has the most Fortune 500 companies? A) The United States B) China C) Europe. Who attracts most U.S. investment? A) Europe B) China C) Asia.
The correct answer in each case is Europe, short for the 27-member European Union (EU), a region with 500 million citizens. They produce an economy almost as large as the United States and China combined but have, so far, largely failed to make much of a dent in American perceptions that theirs is a collection of cradle-to-grave nanny states doomed to be left behind in a 21st century that will belong to China.
As foreigners traveling through the United States occasionally note, the phrases “we are the best” and “America is No.1″ are often uttered with deep conviction by citizens who have never set foot outside their country and therefore lack a direct way of comparison. (They are in the majority: only one in five Americans has a passport).
I’ve read somewhere that Europeans have a similar level of self employment.
In 2005 in the US 10% owned a business but most were single employee businesses, ie consulting.
I imagine this is much smaller now.
I can’t seem to find any direct info from Europe.
Which would have greater historical significance: A depression or an accounting-trick recovery?
atr
Gotta hand it to Obama:
He is the first president I recall with administration staffers who publicly acknowledge that the one-size-fits-all solution of home ownership isn’t right for all American households.
Kudos for staying in tune with the times! Perhaps the war on renters will end soon.
Obama’s next focus of reform: Housing finance
By Zachary A. Goldfarb
Washington Post Staff Writer
Wednesday, July 21, 2010
After President Obama signs into law an overhaul of financial regulation at a ceremony set for Wednesday, his administration will turn to reforming an area at the root of the financial crisis: the U.S. housing market.
Responding to the collapse in home prices and the huge number of foreclosures, the Obama administration is pursuing an overhaul of government policy that could diverge from the emphasis on homeownership embraced by former administrations.
“In previous eras, we haven’t seen people question whether homeownership was the right decision. It was just assumed that’s where you want to go,” said Raphael Bostic, a senior official in the Department of Housing and Urban Development. “You’re not going to hear us say that.”
Bostic, who has published leading scholarship on homeownership, added that owning a home has a lot of value, but “what we’ve seen in the last four years is that there really is an underside to homeownership.”
The administration’s narrower view of who should own a home and what the government should to do to support them could have major implications for the economy as well as borrowers. Broadly, the administration may wind down some government backing for home loans, but increase the focus on affordable rentals.
The shift in approach could mean higher down payments and interest rates on loans, more barriers to lower-income people buying houses, and fewer homeowners overall, government officials said. But it could also pave the way for a more stable housing market, one with fewer taxpayer dollars on the line and less of a risk that homeowners will not be able to pay their mortgages. And it could spell changes throughout the financial markets, as investors choose new places to put their money if the government withdraws some incentives for investing in the U.S. mortgage market.
…
Chris Dodd was not the only Friend of Angelo in a high place.
Countrywide VIP loans reached deep into Fannie Mae
By LARRY MARGASAK (AP) – 7 hours ago
WASHINGTON — The former Countrywide Financial Corp. gave preferential loans to more than three dozen employees of Fannie Mae while the two giant housing enterprises were locked in an expanding, multi-billion dollar business relationship in subprime mortgages, documents show.
Discounted mortgages written by Countrywide, once the nation’s largest subprime lender, were granted to a far wider group of Fannie employees than the four top executives executives whose preferential loans were previously disclosed, according to Countrywide documents provided to Congress under a subpoena.
Countrywide’s VIP section, established to handle preferential mortgages for favored customers, serviced a variety of Fannie employees who handled Fannie’s business of buying mortgages and selling mortgage-backed bonds. Recipients included an account manager, a lobbyist, underwriters, lawyers, a home loan manager, a sales executive and a credit risk manager.
The documents reveal that when Countrywide was depending on government-sponsored firms to finance billions of dollars worth of subprime loans that touched off the housing meltdown, it was giving employees at the largest of those companies — Fannie Mae — sweetheart deals on their own home loans.
Countrywide was acquired by Bank of America in mid-2008. The documents were turned over to the House Oversight and Government Reform Committee by Bank of America. The government seized control of Fannie Mae and its smaller government-sponsored competitor, Freddie Mac, in September 2008. So far, the takeover has cost taxpayers $145 billion and is likely to be the most expensive of all the financial bailouts.
Rep. Darrell Issa of California, the House committee’s senior Republican, said Countrywide’s preferential VIP mortgages for Fannie employees spiked in 1998, when Countrywide was negotiating volume discounts on the subprime mortgages it was selling, and again from 2001 to 2003, at the edge of a housing and mortgage boom.
In a letter to the Federal Housing Finance Agency — the government agency that regulates Fannie Mae and a smaller competitor, Freddie Mac — Issa said Countrywide’s 153 loans to 37 Fannie employees were part of a attempt to vastly expand business with Fannie to the detriment of Freddie. Though government-chartered institutions, both Fannie and Freddie were owned by private stockholders.
“In 1999, Countrywide reached an exclusive agreement to sell Fannie Mae billions of dollars in mortgages at a discounted rate,” Issa said in the letter.
…