Bits Bucket For August 11, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Fed Looks to Spur Growth by Buying Government Debt (Reuters)
Federal Reserve officials decided to reinvest principal payments on mortgage holdings into long-term Treasury securities, making their first attempt to bolster growth since March 2009 to keep the slowing U.S. economy from relapsing into recession.
“The pace of economic recovery is likely to be more modest in the near term than had been anticipated,” the Federal Open Market Committee said in a statement in Washington. “To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level.” The Fed retained a commitment to keep its benchmark interest rate close to zero for an “extended period.”
Pushing on a string.
This sucker’s going to drag out a long time.
Though I’m glad that’s all they did. As it is now - things will fall harder in the near-term vs. if they did a stronger level of QE (e.g. if they had decided to create new money for treasuries, vs using already-created money); therefore we’ll recover (i.e. get to true price discovery) faster.
I listened to the full report this morning on the radio. Apparently one of the goals is to lower mortgage rates even more. In other words it seems that the Fed still believes that the best thing for the US economy is for us to all go out and buy houses. This is precisely why we’re in the mess we find ourselves today because mortgage debt is unproductive economics.
All I can say is that this last weekend I was walking around my East Bay neighborhood ( Bay Area) and around the block from me was a sedate 3 bedroom home for sale. Asking price: $650,000. In other words prices are still for the most part obscene- at least around here and not in the ghetto. No amount of finagling with interest rates will alleviate the real problem here: Prices are still too high and must come down to reasonable levels.
“No amount of finagling with interest rates will alleviate the real problem here: Prices are still too high and must come down to reasonable levels.”
To the contrary, keeping the interest rates at current super-low levels helps to support those obscenely unaffordable prices.
But the problem is that sales are actually dropping even with the current low interest rates.
To the contrary, keeping the interest rates at current super-low levels helps to support those obscenely unaffordable prices.
That was my thought as well. But as jetson says…
But the problem is that sales are actually dropping even with the current low interest rates.
This is true - we still have a tremendous inventory overhang. It’s slowly working its way down though. The vacancy rate is back down to 2.5 after peaking at 2.9 (normal rate is around 1.6). So eventually when the vacancies are worked through, if interest rates are still low then there will be very strong price support.
IMO we’re in for another 1-2 year leg down, then finally getting to a true bottom as inventories get back closer to historic norms; then prices will flatten and eventually start back up within about 3 years, if interest rates stay low, which I think they will.
IMHO, the main problem is not supply overhang, but jobs, confidence, and in some places, price.
The vacancy rate is not necessarily a measure of having too many homes per capita (more likely too many homes per job)–in many places, it is a by-product of people doubling up on apartments, living at home, living in rented rooms, etc., since they can’t afford a place of their own. In some cases, people COULD afford a place of their own, but are putting off buying decisions because they a) feel nervous about keeping their job and/or b) feel nervous that prices are going to fall further (this is the confidence portion of the show).
0.9% vacancy on ~130MM homes is approximately 1.2MM homes of “overhang”. We lost +/- 8 million jobs. If you snapped your fingers and instantly created 3-4 million jobs, the vacancy rate would be quickly below 1.6%. People are going to flame on that comment given the anemic job growth so far, but, as I’ll say again, jobs are a lagging indicator–job growth was just beginning to come back when confidence took a hit from the Greek debt crisis.
Homes are longer term assets, whether you feel there is a supply overhang, or job shortage depends on your view of structural unemployment going forward. If you feel that 9.5%-10% is where we will be for the next decade, then we have a supply overhang that needs to be burned off only with population growth and household formation. Even this would take about a year if you assume that we only create 1MM households per year. This may coincide with job growth of less than 100,000 per month, far below the “normal” of 300,000 to 400,000.
If you believe (as I do) that unemployment should settle in at closer to 7 or 7.5% over the next 2-3 years (but not get back to 5% for some time), then the issue isn’t supply overhang, but too few jobs in the near term (demand shortage).
Jobs, jobs, jobs, jobs. Given the mortgage rates currently, combined with prices, I do not expect prices to fall, except in locations where they have not fallen as much yet (generally higher priced areas).
Unlike you Packman, with the exception of higher end homes, I think we’ll begin to see prices start back up more strongly in the first recovering housing markets within the next 12 months. To assume otherwise is to assume that we have another full year of sub 100,000 per month job creation–which is certainly possible, but I guess I woke up on the more optimistic side of the bed today, and wouldn’t be surprised if over the next 12 months we see substantially higher than 100,000 new jobs per month.
I’d be interested in other people’s view on jobs. In my opinion, it is the single-most important indicator as relates to housing.
Mostly disagree. The vacancy rate shot up to 2.8 percent back in early 2007, back when the unemployment rate was 4.5 percent. It’s all about overbuild.
Foreclosures are still hitting the market at a rate of 4M per year.
The vacancy overhang is not 0.9% as you mention. I’m not sure how that 2.x number is caclulated, but it’s not percentage of total homes. The total percentage of vacant homes is actually 19 Million, or about 14.5% of all units. Normal value for this is about 8-9%.
You’re making the false assumption that most unemployed people don’t live in housing - rental or their own. While some have consolidated, most have not; thus increasing employment will not impact the inventory overhang as much as you think.
See this chart - vacancy rate.
I mentioned normal as being around 9% - it depends on which period is considered normal - I was thinking the 1970-1985 period. In later years it was more like 11% due to the S&L bubble and other various housing incentives. A case could be made that that’s the “new normal” if such incentives (e.g. the cap gains exemption) stay in place.
Weren’t we all expecting another round of even more foreclosures from the Alt-A resets, supposed to hit around now? Or did they all refinance? And successfully?
Since 2007, we have added 9 million people +/- and +/- 3 million households, while home construction fell to levels at sub 500,000 per year. Where are these people living if they haven’t decreased the vacancy rate in 3 years? My answer is consolidation. Over the next year, we’ll add another 3 million people and ~1 million households.
Foreclosures are a game of musical chairs (one family moves out, another moves in), which in my view is not relevant to the overall supply picture. It is relevant in terms of confidence, psychology, the number of listings, turnover, and keeping home prices depressed.
Your number of 19 million is correct, your 8-9% is not correct. In 1999 (my “typical” year), the number was 12%. Today is 14.5%. It includes:
4.4MM for rent, or 3.4%, this is about 1 million more vacant than typical–with typical being 1999 at 2.6%.
2MM for sale only, or 1.5%, this is about 700k more than typical, which is 1% (again 1999).
900k “rented or sold”, which I assume is vacant prior to move-in, but with occupant moving in. Is is about typical (150k less than typical if we want to be exact).
7.1MM “held off market”, 5.4%, which is about 1 million more than typical, with 1999 being typical at 4.7%.
4.5MM “seasonal”, 3.5%, which is about 1 million more than typical, with 1999 being typical at 2.7%. (although I think we would all agree that with demographic shifts, this number is bound to grow over time).
All but seasonal equate to about 2.5 million more homes vacant than “typical”. But on a per capita basis do we see the same number of people per housing unit?
Overall, we have now 131 million housing units for roughly 310 million people (1 per 2.366 people), in 1999 we had roughly 119 million housing units for approximately 280 million people (1 per 2.353 people). To get to the 1999 average, we would need to BUILD about 750k housing units. Today though, that would add to the vacancy…not a good idea. But that is total housing units, what about just those occupied?
In 1999 on occupied housing units, we had, on average 2.67 people packed into each housing unit.
In 2010 (Q2 numbers), we have, on average 2.76 people packed into each occupied housing unit (3% more then 1999).
Today, we have more people crammed into each occupied house as compared to 1999 by about 3%. You don’t need a big percentage consolidating to make a big difference.
If you go back to the 1999 average of 2.67 people per house, we occupy another 4 million units that are currently vacant, almost 75% more than the vacant housing oversupply today.
From my standpoint, these numbers seem quite compelling. I struggle to see a true oversupply (the need to truly bulldoze houses to get back to normalcy). With job growth, all the perceived oversupply will be gone quickly.
For what it’s worth, the 1999 percentages are very similar to every year from 1996-1999. I don’t know what people consider “typical”, but I tried to pick a time when most would agree there wasn’t an oversupply of housing.
You didn’t hear about the walk-aways?
Holy moly, the primes are leaving their houses faster than the sub-primes were and now account for more as well!
The Alt-A resets were a bad thing because we expected the interest rate to be higher, and the interest-only and ARMs would reset to a higher rate, putting strapped homeowners into even more of a pickle.
Now that the fed is manipulating the interest rate towards 0%, interest-only stills seems iffy, but a standard ARM was still a good idea.
Since 2007, we have added 9 million people +/- and +/- 3 million households
IMO that’s a very bad premise. That’s based on census estimates, which are based on general trends of 1% growth per year. However that was the trend before the housing crash, when illegal immigrants were coming in in droves. Since the crash that rate has slowed dramatically. It won’t be reflected until the census updates its trending rate after the 2010 census is done.
Additionally since since most of the immigration was from Mexico, a growing percentage of the population is not able to afford to buy housing. Most of the consolidation that’s happened over the past 3 years or so will never be undone, because many people who could afford their own place in 2007 will never again in their lifetime buy a house, in the U.S. at least.
And as you can see from my chart - 1999 was not normal in terms of housing. The 12% that was touched that year was a record vacancy rate at the time. The housing bubble was already in full force by then, with prices going up 9% per year, and housing starts running at 1.7M per year vs. normal average of about 1.5M.
I agree that the very-low level of starts that we have now will definitely work us through the inventory overhang. However I think we still have a long way to go yet to get back to normal inventory levels.
Also keep in mind that the economy as a whole hasn’t really been normal since about the 1970’s - it’s been fed by ever-growing debt; sometimes public (e.g. Reagan’s deficits), sometimes private (e.g. housing bubble mortgage debt). But that debt’s running up against ever-decreasing ROI. Every new dollar of debt is buying less and less economic growth. What this means is that we’ll probably never get back to 4.5% unemployment in our lifetimes - if we do it’ll probably be at least 20 years out.
Census estimates are the best we have. For 2008-2009, the components of the growth were:
1.776MM (birth minus death)
854k international immigration (this is post crash).
2.63MM total increase, or approximately 0.9%
For perspective, (admittedly according to the immigration estimates based on prior decades) immigration generally accounted for about 1 million people per year from 2000 to 2009, so 2008/2009 estimate is below that average already.
If you simply assumed that our immigration was cut in half over the past three years as compared to the census 10-year average (so the census overestimated by ~70%), then we wouldn’t have added 9 million people from 2007 to 2010, but approximately 7 million.
I would argue that in 1999 we were in full RECOVERY mode from the S&L crisis, not bubble mode. During the first half of the decade, housing starts were well below the 1.5MM mark. Housing was playing catch-up in the second half of the decade. Housing was flat to down for the first half of the 90’s. The trough of housing was in approximately 1994/1995. 1999 prices are certainly well above that (with an abnormal growth rate of ~7% per year from that point to the end of the decade), but I would expect a significant rise off of the bottom after falling for each of the prior 4 years.
Prior peak to 1999, home price growth was about equal to inflation (if not a bit less). That was when increases should have petered out, marking another peak. (Interestingly, housing starts started to slow after about 1999…then our friend AG dropped rates to almost nothing for far, far too long) After falling from the peak in 1989 by about 10% to the trough, prices went up by about 35% from 1995 to 1999, from 1999 to 2006, prices went up by more than 125%–that’s bubble zone, IMHO. Credit in 1999 was not cheap. 30 year money was at 8%, with inflation running at a bit over 3%. Without the credit gasoline, if there was truly an oversupply in 1995-1999 (when the vacancy rates were 11-12% vs today’s 14.5%), how do you get such a recovery in prices? I would argue that there was NOT an oversupply during those years, or free money, but simply a recovery off of the bottom of the market. If there was oversupply at that point, it would have stifled home price appreciation–which clearly didn’t happen.
We don’t need to get back to 4.5% unemployment to absorb the excess vacancies. Getting back to 7-7.5% would do the trick.
I have no argument against the ever-growing pile of debt. IMHO, that is the main reason we won’t get back to 4.5% unemployment anytime soon, and I expect we will be settling in the 7-8% range. It is interesting though that from 1995-1999 during the last housing recovery, the “ever-growing” US public debt wasn’t really growing.
Data point: Baltimore City, from 2000-2006, lost population, yet its prices skyrocketed, just like everywhere else (I know, citation needed, but Baltimore has been losing population for a long time).
This was one of the pieces of information which clued me that shenanigans were afoot in the housing market, back in the mid 2000s.
helps to support those obscenely unaffordable prices…..absolutely true.
What created the Bubble? Too low interest rates. In particular, the “teaser” rates. If the interest rate is 1%, how much is the monthly payment? Practically nothing. Therefore, very affordable. The house is “worth” a bazillion dollars.
Then, the problem arises. The rate goes up. It’s now unaffordable. No one can afford it.
We are in LOW rate zone. Look at current prices. Do you think the rates will go lower and stay lower? If not, and the rates go up, do you think you can sell at the same price 5 years from now?
Right, diogenes.
To the contrary, keeping the interest rates at current super-low levels helps to support those obscenely unaffordable prices.”
not if you can’t refinance because you have negative equity
I think they will address this next use FNMA to refinance CERTAIN LOANS by allowing negitive equity to be forgiven.
FNMA already allows 125% LTV. and 3% down with 3% in seller closing costs………..entry is free. It’s all a big joke.
And you are already talking about RE-FINANCING????
It shouldn’t even be an option. WE are talking about Purchasing and later selling to someone willing to pay a higher price.
Pushing the mortgage rates down far enough might keep some of those that nominally overpaid still in their houses. Getting people who can barely not afford their houses to just barely afford their houses will “help” in their minds, even if it’s just slowing the price falls.
sfbb,
That kind of goes hand in glove w/ what was discussed yesterday on the Buy & Bail crowd. So… they can’t pull a rabbit out of hat by performing yet ‘another’ death defying Re-Fi, so they B&B.
It certainly seems to be what they’re encouraging? I hate to admit but if I were in that situation one would have to at the very least, ‘think’ about it?
One thing I’ve noticed ( and I’m kinda’ miffed about it too ) is that I’ve seen a lot of military people basically abandoning their homes. The words “transfer” and Air Force aren’t often said in the same sentence but it… strikes me that a good many are requesting them “for their kids” or to be “closer to the folks” and then weathering the storm where their sec. clearances are concerned. Sadly I think this is becoming common practice?
Economists Cut U.S. Growth Forecasts as Companies Limit Hiring
Bloomberg ~ Aug 11, 2010
A lack of jobs will shackle consumer spending and restrain the U.S. recovery more than previously estimated, according to economists polled by Bloomberg News.
Gross domestic product will expand at an average 2.55 percent annual rate in the last six months of 2010, according to the median of 67 estimates in a survey taken July 31 to Aug. 9, down from the 2.8 percent pace projected last month. Household purchases will climb at a 2.25 percent rate, compared with a 2.6 percent gain previously forecast.
“Simply put, job growth in the private sector hasn’t improved as we would’ve expected,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “The consumer continues to contribute to growth but at a subpar pace.”
Hey there Big O, you said unemployment would only be 8%. (It’s 12.5-16 in Ca). “Don’t blame me, blame Roehmer and Bush”. I was community organizing in Chicago with Bill Ayres.” Let’s give some more of YOUR $ to Acorn.” That will help things.
China Output Growth Weakens; Inflation Accelerates.
Bloomberg News - Aug 11, 2010
China’s industrial output rose the least in 11 months, retail sales growth eased and new loans climbed less than estimated, adding to signs that a slowdown in the world’s third-biggest economy is deepening.
Production rose 13.4 percent from a year earlier, the statistics bureau said in Beijing today. Inflation quickened to 3.3 percent, the fastest in 21 months, boosted by a low year- earlier base for comparison and rising food costs.
I have a tentative theory that the massive liquidity injections here in the US are responsible for inflation elsewhere in the world. Though they are not showing up in the numbers here yet, it has to bubble up somewhere. See the recent massive re-inflation of RE in India, and the increasing inflation in China in spite of reduced investment due to over-capacity.
Thoughts?
I think those events are unrelated, except as a move by investors world-wide to try and find a place to get some type of return.
In a zero-rate world (FED world and Japan-world), where do you go to get a return on your money? “Emerging Markets” have been about the only play. Look at the NASDAQ. It dropped to around 2500 in 2000. It’s been hovering around 2200-2500 for a long time now.
Where do you go? Treasuries? No pay. Municipals? Really scary.
I think you are seeing money looking for a home.
As for the inflation here, there haven’t really been massive liquidity injections. The FED has taken all the bad bets from the banks and returned to them freshly printed paper (or electronic digits). But, they haven’t been lending it out. Everyday you read stories about businesses that can’t get loans. The FED is holding all the crap mortgages, in hopes of someday returning them to the banks, or finding some other sucker to take them when the market “returns”. They NEED inflation to unload the crap. It’s the only way they can say they saved the economy.
The Banks, however, don’t have anywhere to lend where they can get a return on the money without risking another balance-sheet melt-down. The US business environment is dismal. There are very few places they can make loans that don’t get them in trouble (default). Look at Commercial RE. A mainstay of banks. Would you lend for a new development? Of course not.
Business ventures? Fuggidaboutit.
The banks now have a loaded gun. The real threat of inflation is when they feel they can make their 10 to 1 leveraged bets with all their cash on hand. That’s a lot of money. It hasn’t got into circulation yet. The only money going in is from “stimulus” (govt. planned economy) that various political factions release to their buddies. Most of this money is being sucked into the void of all the defaults that were generated by the over-leveraged American public. There isn’t enough money to make up for the losses, so they can’t spend fast enough. Unfortunately, this plan only puts America deeper in debt and will not fix the problem of continuing defaults. I think the “inflation” will take a little longer, but will come with a vengeance when we get moves up in markets and assets when the banks feel they can gamble more freely.
But, then, if i knew anything about the economy, then the NYTIMES would be posting my thoughts, rather than those of Paul Krugman, whom i consider to be a complete idiot.
Absolutely! The RE bubble in India has a lot to do with folks with dollars having no place to park them with decent returns. China, of course, is at the root of all this because of the huge savings glut. Do keep in mind that the Fed can set interest rates as low as they wish because they have a ready buyer of bills/bonds at these absurdly low rates.
I have a tentative theory that the massive liquidity injections here in the US are responsible for inflation elsewhere in the world.”
yes just like massive liquidity injections by Japan in the 1990’s caused Inflation here ( mostly in Housing easy to get loans)
there was a chart on this somewhere pretty interesting theory
Money doesn’t always go were Governments want it to go.
In the U.S. vs Japan comparison - it’s worth noting that our liquidity injections way earlier and way bigger than Japan’s were.
Food for thought.
Yeah, we’re about to put the monetarism philosophy to the test, vis-a-vis Japan’s lethargic response to their similar situation. China looks like they’re going to go the Keynesian route. (Lucky for them- it must be nice to have saved during your surplus years so you can invest in worthy things like infrastructure and technology during your down times, rather than just flooding your financial sector with money, a la monetarism.)
There are countless examples of money injection going to unintended places.
Like this one. (From back in 1966 when Greenspan saw the Fed for what it was - a sloppy manipulator of financial markets)
- Alan Greenspan in his 1966 paper “Gold and Economic Freedom”
(emphasis mine)
Great Britain fared even worse…
Great Britain (except for their North) actually fared much better than the US during GD1. I wonder where Greenie got his info- it wasn’t very good. Perhaps he was ‘bending’ the data to suit his argument. (OOps- I just clicked the link- it’s published in Ayn Rand’s ‘Objectivism’. ‘Nuff said;-)
One of 2 things need to happen for US labor to be competitive in the global marketplace. Either the developing world has to inflate or the US has to deflate.
India will have to tackle population growth. China will have to deal with environmental damage at some point, which will increase their cost of production.
I think this is why they dumped the one child policy. They can rely on pollution to keep their numbers down now.
Or maybe they need more hands on deck to help with cleanup.
Real Estate Revival Seen by Fund Managers
NEW YORK (TheStreet) — Real estate mutual funds have been soaring. During the past year, the funds returned 39%, outpacing the S&P 500 by 25 percentage points, according to Morningstar.
The rally has been driven by an improving outlook for commercial real estate, which includes offices, apartments and warehouses. “Many markets are strengthening, and we should have good demand for real estate for at least the next three or four years,” says Marc Halle, manager of Prudential Global Real Estate.
The positive outlook represents a big change from the turmoil of 2008 when financing disappeared and values of many properties collapsed. At the time, some analysts predicted that the commercial real estate industry would not recover for five years or more.
At some point over the next three decades, commercial RE is sure to revive! It is kind of unlike Wall Street folk to be that forward looking, though…
Don’t mix commercial with residential. Commercial isn’t backed by Fannie/Freddie, foreclosed malls don’t buy votes, so there is much less political interference.
Of course with the overall economy in the toilet and the high emphasis on consumer/retail, commercial may be going through a rough patch. But surely not in the same league of hurt as residential.
Commercial RE is often developed with investment money from life insurance companies and retirement funds, so it’s going to add to the world of hurt.
Don’t forget that commercial mortgages are both recourse and must be re-negotiated every 3 to 5 years. This puts tremendous pressure on speculators who bought in the last few years. A re-fi isn’t an option: it’s mandatory. And I’ll bet a lot of folks get foreclosed upon when they can’t secure financing going foreward.
Recourse yes, but aren’t most payers corporations? So once the company enters bankruptcy the owners have no further liability, barring some sort of finding of criminal activity on their part. Or am I misunderstand something?
That’s my understanding too, Jim: recourse, but usually held in holding companies to prevent liability from attaching to other holdings.
Dennis, please enlighten me if that is not the case!
DennisN,
Excellent points as always ( and loved the pic of Condi the Cat btw! ) but the truth is.., there’s become this whole secondary mkt. surfacing to fill that need.
Contrary to pop. belief, most can and ‘are’ securing some form of financing. And the terms aren’t as abusive as we might imagine. Merchant’s Bank in PDX, and yes, they’ve had troubles of their own, seems to be filling that niche. Among others.
Dennis, please enlighten me if that is not the case ??
Is scdave good enough ??
The corporation holding company does not protect from recourse because the loan carries a “personal guarantee” from some of the principals…Not necessarily for the whole amount…Pretty common practice really…
Sorry DennisN I did not see your post previous to mine…
I was mostly thinking of individual speculators, such as a guy I know in LA that mortgaged his otherwise-paid-off personal house to dabble in highly-leveraged CRE.
“Contrary to pop. belief, most can and ‘are’ securing some form of financing.” - DinOR
Makes sense. Better to roll over the loan and keep the debtor paying if they’re able and willing. The question becomes how long the debtor will be both able and willing.
Al,
And they’re only following thru where it ‘makes’ sense! If ( as Ben has noted ) your tenant is “The Pirate Store” ( good LUCK! )
It’s not being done without careful consideration. I think the wake-up call came when several local Portland Landmarks were folding after 50+ years of successful operation?
Of course all of this on a local/bootstrap effort. I think ppl got tired of waiting for BB etc. to do anything about it and have taken matters into their own hands.
“I was mostly thinking of individual speculators, such as a guy I know in LA that mortgaged his otherwise-paid-off personal house to dabble in highly-leveraged CRE.”
Pity the soul who has to borrow to invest.
commercial may be going through a rough patch. But surely not in the same league of hurt as residential ??
Huh ?? Commercial is worse than residential easily….
Commercial in my area is absolutely DECIMATED. Driving along any major road one can see “for sale” or “for lease” signs in front of almost every single business or vacant parcel. I have never seen anything like it.
The point I am making is that commercial isn’t being propped up with an elaborate taxpayer funded system so what you see is what it is. If it has already fallen, then yes losses have been eaten. Commercial RE is valued based on pragmatic cash flow considerations, and not by Suzanne, granite countertops and nesting instinct.
Actually REITs have been recovering steadily, and are back to 2006-2007 levels if you factor dividents (without which they are back to 2005 levels).
+1 on the nesting instinct. Benny and Timmy aren’t going to bail out CE because CE doesn’t throw babies out onto the sidewalk.
Actually REITs have been recovering steadily ??
And they are recovering quite simply because they are REITs….Funding is available either through conventional means (Life or Pension funds for example) or by raising more capital through the investment vehicle its self…Not so for owners out side of a REIT…
Yensoy, I agree that commercial is more tied to market realities than residential, but, although I’m no economist, I believe the S will HTF with commercial like everything else eventually, since we have yet to really experience a day of reckoning in this current recession (extend and pretend, phony stimulus, record deficits).
There is a lot of empty commercial space in Austin. Every strip mall and office complex in the more suburban areas has ‘to lease’ signs out. And here in the central area, the VMU (vertical mixed use) monstrosity condos and apartment complexes have mostly unleased retail / restaurant ground floor space.
And of course, as previously discussed we have two condo “shells,” one on Enfield and one on LaVaca. (Austin just wouldn’t be Austin without a gone-bust shell here or there on the landscape.)
A couple of days ago I went to the Rollingwood branch of a Corpus-based bank. The last time I was there was one year ago, and they had just moved into a new building (previously they had been leasing in a strip mall). They were very pleased with their new building. The bank was leasing the land on which they had built their own little strip mall, the other units of which were just being finished. I went to that bank the other day, 13 months later. One unit was occupied by a title company, the rest all still vacant. Way late to the party.
Poor Austin. Didn’t Intel stop work on a high rise downtown and walk away circa 2000? IIRC that mess was only cleared up in the last year or so.
Yep. Intel ceased construction in 2001 and the shell stood there until it was imploded in 2007. It was a blight on the landscape.
And - unless I misremember - that Intel building was on the site where a very cool music venue, Liberty Lunch, had been. Liberty Lunch was great fun. It didn’t have any particular theme or genre of music. If you went at 9 for some reggae, you might come in on the end of a punk show or a ‘hillbilly’ band or salsa. You could see world-famous African bands or a polka band from Plano. It always had an eclectic crowd, very laid back. And the building was open-air, there was a big gap between the top of the walls and the roof, so the smoke went out.
Liberty Lunch had to close for the Intel building, which then stood as a shell near the lakefront for 6 years.
Intel shell stood from 2001 until they imploded it in 2007.
What was really sad was that there had been a very cool music venue, Liberty Lunch, on that site before the Intel mess. It was a fun place, very eclectic, very laid back. They booked all kinds of stuff. You could go there to see a world-famous African band or a local hillbilly band or reggae or salsa or punk or headbanger music or a polka band from Plano. It was very open air, there was a big gap between the top of the walls and the roof so the smoke went out. (I think maybe some of the walls had garage doors too, it was almost like being outdoors there.)
So we lost Liberty Lunch to the tech boom and got a shell on the lakefront for 6 years.
2001. Then demolished in 2007.
I suppose it would be possible to form a Beanie Baby Mutual Fund and investors would be able to make a bunch of money investing in the fund as long as there was a widely held perception that Beanie babies would always increase in value.
If these real estate mutual funds are drawing in a lot of money (probably from investors hungry for yield) then they could do quite well selling real estate to each other at ever-increasing prices. But these prices wouldn’t necessairly be justified by the fundamentals of the properties - its Return On Investment, the amount of income the properties would generate - rather the rising prices would be rising due to the technicals: The prices would be going up because the prices are going up.
The prices may be going up only because there is a constant stream of new money pushing them up.
Could Beanie Babies serve as an alternative currency?
Could Beanie Babies serve as an alternative currency?
Joulie Babies
A car that runs on Beanie Babies would be considered green?
BBBS =Beanie Baby Backed Security
And an accounting specialist would be a Beanie Baby Bean Counter.
You know, they are not making any more Beanie Babies.
Fund managers need to get a rate of return for their investors that will overcome the hefty fees they charge; In a one-percent world that’s tough thing to do. So that means fund managers are forced to chase yields, to chase whatever is curently in vogue and is currently going up in price.
Right now real estate - some of it at least - seems to be in vogue. Investing in this in-vogue real estate will work well until it doesn’t, just as investing in Beanie Babies worked well until it didn’t.
Fund managers need to get a rate of return for their investors that will overcome the hefty fees they charge; In a one-percent world that’s tough thing to do.’
yea thats right watch out who knows what they ( fund managers) might try to make up for low interest rates
In order to avoid any nasty lawsuits will have to call it:
Ben Jones’ Beanie Bay-beeee Mutual Fund!
Isn’t that a classic Ponzi scheme ?
Real Estate Revival Seen by Fund Managers
What DID happen to the CRE crash that people were predicting recently?
I sure see evidence of it here on the ground in San Diego, in the ever-increasing number of “For Lease” signs to be seen on all, and I mean ALL, commercial developments.
At some point the commercial REIT stocks will be a great short. But like the housebuilder stocks timing will be everything. Look at something like SPG. That is near it’s 52-week high as CRE is a complete disaster. I won’t be shorting anything anymore. I’ve lost enough playing that game but somebody else might make a fortune. Good luck to that person. I hope they can really knock the snot out of these jerks.
Wouldn’t you love to understand what mechanism serves to keep the share prices of F-d companies propped up at overvalued levels for long enough to kill the shorts, even when said companies are obviously in the toilet? Maybe it is as simple as coordinated HFT; I just don’t really know.
All you need to know is that it’s rigged.
“All you need to know is that it’s rigged”
The stockmarket, govt’s, Life…It’s all rigged!!
Conversation with Australian Lieutenants Harry “Breaker” Morant and Peter Handcock of the Bushfeldt Carbineers prior to their executions by a firing squad by British Cameron Highlander soldiers for alleged war crimes. Movie Breaker Morant–1980
Sentry: Do you want the padre?
Harry Morant: No, thank you. I’m a pagan.
Sentry: And you?
Peter Handcock: What’s a pagan?
Harry Morant: Well… it’s somebody who doesn’t believe there’s a divine being dispensing justice to mankind.
Peter Handcock: I’m a pagan, too.
(Mikey: Me too, I’m a pagan too…Wait, wait…IS there any shooting involved !?!)
“The stockmarket, govt’s, Life…It’s all rigged!!”
Morant (to the suggestion that a jailbreak could be arranged, then he could go “see the world”): I’ve seen it.
Extend and pretend seems to be working for the moment, and large pools of assets formed to purchase distressed properties are either dissolving or overpaying.
I hadn’t expected CRE to be hit as hard as for-sale housing, but there are issues.
The apartment vacancy rate is near an all time high.
Retail space was overbuilt, making many older properties obsolete.
And the use of office space per worker has fallen sharply, leading to high vacancy despite a lack of overbuilding.
Space per worker went up in the 1980s and 1990s when clerical workers were replaced by information technology and outsourcing, and more of the remaining workers were college educated professionals. In the new wave of labor force power, those college educated professionals are deemed no more worthy of space than the former clerks.
Telecommuting has been increasing, decreasing the need for office space.
Not to mention the growth in home offices. My little biz does quite nicely in one.
Somebody, somewhere, is hemorrhaging massive amounts of cash, evidenced by the eye-popping amount of empty CRE from AZ to MT, over to WA, and all the way down to southern CA.
In Rio Rancho NM, sphincter of Hell, they built 3 brand new one story office buildings on the same street (Jackie Rd) in 2007. One of them is sold I think, and is about 25% empty. Another is about 75% empty. The other, 100% empty. Apparently they are owned by some entity called Sperry Van Ness. They must be taking a beating on this. Three years. Very mysterious.
“During the past year, the funds returned 39%, outpacing the S&P 500 by 25 percentage points, according to Morningstar.”
How does a RE mutual fund price its holdings? If they claim to return 39% how is this determined?
A stock mutual fund determines its value every day by looking at the closing price of the stocks it holds. Same goes for a bond fund. And a commodities fund. What does a RE mutual fund look at to determine its value?
In the case of stocks and bonds and commodities, prices are determined by actual sales, not asking prices.
combotechie,
I can’t seem to get a straight answer on that one either? Of course if one runs a Non-Traded REIT well you can just make ‘the number’ what you WANT it to be!
Inland Western shaved 20% of their share price while the Public’s took an 80% hit! Go figure. ‘My’ general experience is to look at their sales of assets from the previous qtr.
If they show a prop. at X FMV and then SELL it in the following qtr. and… it sells for within 3% of their mgmt. team’s valuation, you’re probably flirting w/ the truth. Make sense?
Business
Metro home sales plunge more than 45%
Experts link July drop to end of U.S. tax credit, slow economy
By Paul Gores of the Journal Sentinel
Aug. 10, 2010
(has a little bar graph chart)
Metro MLS Inc. reported Tuesday there were 885 homes sold by Realtors last month in Milwaukee, Waukesha, Washington and Ozaukee counties, down from 1,619 in July of 2009.
Although mortgage rates are at historically low levels and prices of residential real state have fallen, unemployment and job uncertainty continue to hurt home sales, real estate professionals said.
…Sales in Milwaukee County fell 46.8% in July, while Waukesha County had a 44.1% decrease. Ozaukee County saw a 39.8% decline in sales in July, and Washington County had a 43.9% drop.
… “What all this means is there is probably going to be a little downward pressure on prices the next couple of months,” Ruzicka said. “For buyers, it’s just a fantastic time.”
Oh Yeah…as always, we advise that you grab a millstone or two, attach them to your neck and dive right in.
http://tinyurl.com/2dftxxv
Yes, a 40% decrease in sales will have a LITTLE downward pressure on prices. Driving a tank over your foot will hurt a LITTLE. Being dropped out of a plane over the Sahara Desert is a LITTLE bit of an incovenience. Buying a house at this time could cause a LITTLE financial setback.
This is unbelievable… believe me, the toastier the FB, the better, but fraud ain’t cool.
“Among the allegations: that the firms, which represent banks, filed “fabricated” documents in court on numerous occasions when the original paperwork needed to foreclose was missing.”
http://www.tampabay.com/news/business/realestate/attorney-general-investigates-law-firms-in-alleged-falsified-foreclosures/1114455
As I’ve said, the government, at all levels, is trying as hard and fast as it can to prosecute all the fraud that was out there but they are overwhelmed.
Good find.
And some of those were on homes that were current on their mortgages.
There is unusual degree of uncertainty about economic recovery prospects among western nation central bankers.
Bank of England warns UK recovery will be weaker than hoped
Britain faces a weaker economic recovery and higher inflation for longer than previously hoped, the Bank of England forecast today.
Published: 10:46AM BST 11 Aug 2010
Economic expansion will peak at 3pc next year, weaker than the 3.6pc the Bank was expecting just three months ago. Today’s Inflation Report also forecast that inflation will remain above the Bank’s 2pc target for much of next year.
Mervyn King, the Bank’s Governor, said at a press conference that while “the UK recovery is likely to continue, the overall outlook is weaker,” than at the last forecast in the spring. Today’s forecasts reflect the wider threat of simultaneous slowdown in Europe and the US, Britain’s two biggest trading partners, as well as the austerity measures announced in the Coalition government Budget.
…
A while back, someone here joked that the way for an illegal alien to avoid deportation is to become a knifecatcher. In a way, the “dream act” does that for any illegal willing to become a student (by taking on massive student loans). At the same time they help support the “higher edjumacation” bubble.
We’re saved!
Coming soon; “take your Mexican to school day”
Yeah i suggest that put 40% down and get a green card
Or here is an idea…Lets keep the 14th amendment, and say ok your anchor baby is an American but you are not.
The baby can stay in America , since you are an Illegal you have no parental rights, and must be deported. And If you DON”T have some legal family here to take financial responsibility for it, then it becomes a ward of the state, and freed up for adoption.
or we can pay for a one way ticket for you and you baby back home.
Sounds fair to me.
Stop trying to make sensible suggestions! This is America dammit!
Children are the responsibility and “property” of their parents.
Children GO with their parents. I don’t agree with allowing illegal aliens to drop off their kids here as “new americans”. It’s been a gross injustice to the rest of us, and a major reason that the open-border policies need to be stopped immediately.
However, even if the child is considered an “american”, he/she is a ward of the parent, not the state. The child goes with the father/mother. Remember Elian Gonzalez in Miami? Shipped off to Cuba. Lots of people thought this was an outrage. I thought it was the right decision. The father wanted his son returned to him.
The State agreed.
That is the correct decision.
My brother and sister were both born in England, since my father was in the service. The have British birth ceritficates and can claim “dual” citizenship. They came here with my parents. They live here as American Citizens.
However, after the age of 18, if they wanted to return to the country of their birth they would be allowed to do so.
Until we fix the illegal immigration problems, the same rules should apply. The KIDS go with the Parents. Period.
NO wards of the State.
Oh, i forgot to add, that the current direction of the State Department and the executive branches have been that people who are “caring for” Americans be given special treatment in getting services here. It’s a way of saying the child is the responsibility of the State, and the parent is the “caretaker”.
This is total leftist crap.
It’s a way to try and legalize the illegals, claiming that they need to stay here to care for their “American” children. This is a complete scam. The kids go with their parents, where ever they go. Period. Parent deported. Child is deported, also.
Then, at age 18, after they have grown up in Mexico or Guatamala, or where ever their parent reside, they can take their “american” birth cerificate and apply for an entry visa back into the U.S.
Children don’t have rights as adults.
This was one of the misunderstood parts of the Japanese-American internments during WWII. In many cases the children born here were US citizens but the parents weren’t. But the kids got shipped off to the internment camps to be with their parents, giving rise to the charges that “American citizens were interned in the camps”.
What else would you do with those minor children?
Dio:
There are over a MILLION couples that can’t have kids this would be a cheap easy supply.
OK…If you are a ward of the parent and here Illegally then the child is illegal and must be deported
Cant have it both ways.
I don’t agree with allowing illegal aliens to drop off their kids here as “new americans”. It’s been a gross injustice to the rest of us, and a major reason that the open-border policies need to be stopped immediately.
However, even if the child is considered an “american”, he/she is a ward of the parent, not the state
since you are an Illegal you have no parental rights
Sorry I have to draw the line at that ridiculous statement! Parental rights are fundamental human rights and don’t need to be blessed by the US constitution. Try arguing your point in court. It didn’t work with Elian Gonzalez (not really the same situation but a close one nonetheless) and it won’t work with anyone else.
The point about anchor babies, immigration reform etc can be made without irresponsible talk and threats about forcibly separating parents from their children.
you are correct. no need to separate the children.
keep this basic rule in mind: the children go with the parents.
the place of birth is irrelevant. same applies to legal immigrants.
Go-bye anchor babies. See you in 20 years, maybe.
umm… yes.
My God! What is happening? rational thinking about immigration? Whowouldknown?
Well we have no guts to try ….just a few cases with Social services taking the baby, and people will get the hint don’t come here pregnant
Oh Texas said they had 63,000 babies born to illegals last year 63,000 in one year….what a nice bunch of babies ripe for adoption.
Forced surrogacy is the worst kind of slavery.
I favor sending the children back *home* with their parents. They should not be granted U.S. citizenship in the first place.
Instead of deporting illegals, send them to DC. Let the bureaucrats deal with them in their backyard. Maybe a million or two people standing out in front of Home Depot would make them understand what we in Arizona go through every day.
Here in Tucson, I’ve never seen illegals standing outside of Lowes or Home Depot.
Now, I’ll be honest and say that my sample size is limited to the El Con Mall Home Depot and the Home Depot and Lowes stores at the intersection of Oracle Road and Limberlost Drive.
That’s three stores. But, in many years of going into them, or passing by, I’ve never seen the illegals.
Here in my area of So Ca, the Home Depot stores were mandated by the city to build an enclosed room on a parking lot pad, with a bathroom and kitchette, so the creatures could be comfortable and not distrupt traffic and parking. Some corners and streets are full of illegals, hanging out, looking for work. With the trash, look of the crowd, and smell, you’d think you were in TJ.
Lowes
…rantees that a person will have a chance in court to prove his or her citizenship status.
Gotta take the bad with the good, I guess.
Cassandra,
Outstanding! I’ll even help set up the tents!
Humor aside, especially if you’re a Westerner, we’re out-of-sight, out-of-mind where they’re concerned? Given this is the Age of Technology, maybe we could just set up WebCams from border towns in the halls of power just as a little reminder?
If you’ve the stomach, check out Borderland Beat dot com. Someone here rec. a few weeks ago and it has almost hourly updates. It makes the body count in Iraq pale in comparison.
There are already plenty of illegal immigrants in the DC/MD/VA area already, because of all the housing that was built here.
I for one would rather that the “anchor babies” grow up in the US. What if they go back to the poor and corruption-laden Mexican culture? They will be immersed in a Spanish-speaking, corruption-laden, uneducated culture. And in 18 years they will bring that culture back to the US, only legally this time. If the kids stay in the US, they will have some American culture, and the kids’ kids will be full American (hopefully). Just like the melting pot from 1900 to ~ 1940.
No, I think we have to allow this one lucky generation, but SLAM the border shut to keep the others out. That means no jobs for them, little welfare for them, and a 1200-mile low-tech WALL. None of the “virtual wall” stuff which IMO is jsut pork for Boeing.
oxide
As much as I like and respect you, it doesn’t work with most of the anchor children. The mindset of lowest common lifestyle, is built into their family dynamics. Education isn’t monitored, a curfew isn’t set, no disipline, and no respect for the law or rules.I wish you were right. The trouble makers in our area are usually anchors. One anchor teen told me they might have been born here, but they are Mexican.
Education isn’t monitored, a curfew isn’t set, no discipline, and no respect for the law or rules.
I see this very thing next door. Kiddo hasn’t darkened the doorway of a school in years.
After all, staying at home and listening to rap is much more important. That and running the streets until the sun comes up in the morning.
Sorry, Cassandra, that is a terrible idea.
DC is already 85% black, in a country where they are considered “minorities”. How did DC get to be 85% black (except inside the beltway)? Because that’s were the goodies get passed out.
If we send a bunch of illegals to Washington, our politicians will find all kinds of needed medical, housing, feeding, education, and child-care programs, that need to be established immediately.
Obama’s administration will see this as a way to “stimulate” new economic activity, and we will all pay for it. A disaster for sure.
Arizona’s problem is that the government has refused to enforce existing laws for decades, and the illegals know that there is little to no consequence for breaking our laws. Additionally, they can have their kids get free food and a US education (better than theirs) for FREE. And….medical care.
You won’t find that in Mexico without dinero. Everything that’s been done is a magnet for more illegal border crossing.
“How did DC get to be 85% black (except inside the beltway)? Because that’s were the goodies get passed out.”
Wow, that’s not racist or anything. Actually, DC has had a large black population since inception since the JOB (not welfare) opportunities were among the best for freed slaves in the upper South.
And while you’re at it, send all the Grizzlies and Canadian Wolves there, too…at the same place.
Im not worried about Al Qeada or Al Sharpton, Im worried about Al Cracka!
Michigan serial killer suspected in three Leesburg, Va., attacks
A white man who stabbed or attacked three dark-skinned men in Leesburg this month is probably the “Flint serial killer,” thought to have killed five men and wounded 10 — almost all of them black — in Michigan, police said Monday
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/09/AR2010080906113.html
I live in Leesburg - lots of people concerned here of course. I heard though that he was suspected to have moved on to Ohio and killed someone there the other day.
Pure scumbag.
5 out of 18? Well, he’s batting .277. Not great for baseball, and truly abysmal for a serial killer. Maybe we should get him in congress. He seems like he’ll fit right in.
Amazing. Most all crime is committed by Blacks, and you have managed to troll your racist sites and find a crime against blacks by a white man. And it’s your big topic for today.
I guess it’s news because of its rarity. But, unfortunately for you, the story even admits that they can’t peg it as a “hate crime”, based on the facts presented:
“Two of the Leesburg victims are black. The 19-year-old who was struck with the hammer is Hispanic, but police think the attacker mistook him for African American because of his dark complexion. In the Leesburg attacks, the man has not used racial slurs or indicated any motive to his victims. In two instances, he did not speak.”
Remember the DC sniper. They were looking for a white guy. At least the black police were. sorry. didn’t work that way. I’m sure if you look hard enough, throughout the country, you will find a few more stories to post. IF i start posting black crimes against whites, i will fill up the blog, so i won’t.
Yesterday hip in zilker posted this:
If enough people quit buying the Chinese made garbage then maybe we could change things for the better. Here are a few other examples of Chinese made garbage:
Rubber bands. Seriously, just place a package in a desk drawer and check on them in a year. A deteriorated ball of goo is what you will find.
Ice cube trays that crack/split when used for the first (and only) time.
C-clamps that break in half the first (and only) time they are used.
User’s manuals that are both useless and insulting to the reader:
(a) When the indicating lamp continuously glitters 10 times of opportunities remlriders please not To have excessively frequently to use.
(b) Caution! Trouble, break down the regulation.
(c) Danger! Place the place that touch to can not touch in the infant.
When I purchase my next new vehicle I will write a letter to Mr. Mulaly at Ford. I will explain that if his vehicles had a higher concentration of domestically sourced parts than the USA assembled Asian brand that I purchased, then I would have given his vehicle preferential consideration for purchase. If enough people vote with their money and write these letters then I believe we could make a difference.
I always look at the threads of clamps. If it uses normal machine screw threads instead of something like an ACME thread, they’re usually worse than useless and often overpriced even for free. This doesn’t actually tell you about the metallurgy and heat treatment of the “C” but at least it sorts of the worst “trying to look like a tool,” examples from the “trying to be a tool,” ones.
Harbor Freight = Tools From Hell
Hey, it’s mostly cheap cr@p, but sometimes that’s really all you need.
d) Saute cat only five minute to add hoisin sauce now.
e)Over-regulation of clamp will causing breakage
Printing for the money when spending poor is stopped.
When I buy something for full function and want it to last I make sure it wasn’t made in China. Tools and hardware (nails, screws, etc) are an example.
Several months back I bought a fluorescent lamp for the garage and after about 30 pulls on the on/off chain the chain broke in the mechanism. I bought a quality mechanism to replace it and had to break part of the fixture when taking it apart (wasn’t meant to be taken apart) and found the mechanism was soldered in. No problem, cut wires and use elec caps on connection, then self tapping screw on the housing. Beats buying another fixture from China for another 30 pulls.
after all that the bulb is going to burn out next, then the cord will pull out of the fixture, then the housing will crack. You are doomed to using a duct-taped,unreliable POS until you buy another one.
Ford…
I just bought a new car. It came down to a Toyota Corolla and the new Ford Fiesta. Lets support the local manufacturer I thought…The Ford’s drive train was made in Brazil and final assembly in Mexico…nuff said. I went with the Corolla that was made in Japan. You can tell by the VIN number where they were made. So much for my attempt to “buy American”.
I agree, much of the Chinese junk is completely useless. I recently bought a can opener and a door lock that were so poorly made that they could not be used at all. Go to HomeDepot, or Target or Bed Bath & Beyond or wherever you go to shop and try to find ANYTHING made in USA. You’ll find out that there’s not a whole lot we still make in this country.
I alos wonder how long China can keep growing their economy based on exports. By now they make pretty much everything that’s being offered in US stores.
“I recently bought a can opener and a door lock that were so poorly made that they could not be used at all.”
+1.
I bought a can opener at a discount store a while back; it failed on the very first use. The portion that is supposed to puncture the can and cut the lid off instead broke off and went flying past my head. Coulda been in my eye. Who ever would have imagined such poor quality steel in a can opener?
At the $1 price-tag, it wasn’t worth my time and energy to return, so the store won’t even get that bit of useful feedback; but they won’t get any more of my $$s either. Eff ‘em.
Things so poorly made that they don’t work for even a single use—inconceivable.
What’s even more inconceivable is that someone is making a profit from it! Yet somewhere, someone is.
You have just described the fear and nightmare i have been having for many years now, with the whole concept of “outsourcing” our entire productive economy.
“You’ll find out that there’s not a whole lot we still make in this country.”
While i disagree with a lot about our entry into WWI and WWII, you must recall that our major factories were converted to production of war material. We feel at ease currently because we have the best weaponry and are running a world-wide police state that is bankrupting the nation.
However, China, India, Russia and other big players are getting stronger continuously, as their industries have been growing.
If we got into a real shooting war with China, do you think we could get them to make us some ammunition and ship it over?
Why not, they already make all of our military uniforms.
really?
You didn’t know that?
Not quite “all”, but quite lot in any case. Hard to find solid numbers. Gee, I wonder why? But you can confirm it on google.
So we have our own government funding the outsourcing of our jobs, yet businesses claim a shortage workers and a dire need for H1B, a foreign country that is our biggest enemy, yet our largest trading partner, making our military uniforms and we rewarded the biggest crooks who caused our current economic mess…. and people wonder why I drink and have a bad attitude.
(and brother, that ain’t the HALF of it!)
I didn’t know. I guess it isn’t a surprise. A lady I know who sells flags to businesses, mainly hotels and car dealers, complains that it is hard to find US-made American flags.
How about that “U.S. flag” someone found in a 99 cent store a while back that had something like 58 stars on it? They then tried to pass it off as a “patriotic banner.”
Why worry. Big O’s flag has 57 stars on it. hahaha
It’s not as if there are 2-3 choices of rubber bands and we can pick the quality American-made one. It’s a monopoly on quality rather than a monopoly on price.
And by the way, this isn’t much of a knock on the actual Chinese workers. There probably is some good-quality Chinese-made stuff. It’s the greedy American design and specs that allows products to go to pot.
CLEVELAND, Ohio - The director of the Ohio Energy Resources Division has resigned after an internal review revealed that she knew at least a month before Ohio’s $11 million Appliance Rebate Program began on March 26 that the Texas company processing the rebates was going to use offshore workers.
“Customer mail is delivered to a processing facility in El Paso, Texas, where is it immediately put on a truck and shipped to Mexico for scanning then data entry in other parts of the world, wherever the lowest cost labor is at the time,” wrote Dave White, vice president of sales for Helgeson Enterprises Inc. of White Bear Lake, Minn., in an e-mail.
Seems like a good bout of deflation will help bring those jobs back to the U.S.
Not when our own government is actively working to send our job there.
Did you catch the story about USAID funding IT training in Armenia and Sri Lanka? For the EXPRESS purpose of making it easier for outsourcing?
You can google it.
I did catch that. Are you implying that IT funding to Armenia is making its way to Mexico mail processing facilities?
Nevertheless, let me restate:
Seems like a good bout of deflation, as well as the U.S. government ceasing to muddle in international job markets, will help bring those jobs back to the U.S.
No, I’m saying that our government is actively working against us.
Another (apparently) forgotten little gem is that the government gave corporations tax breaks, starting in the 1980s, to offshore our jobs as well.
I’ll let you know if I EVER see any of that mythical deflation I keep hearing about, because the only things I’ve seen deflate are RE and wages.
You want to hear something crazy? I went looking for a new pair of shoes this weekend. These were to be my casual office shoes. I wound up trying on a few pair. One pair ( don’t recall the brand) was a very attractive leather pair. Looked almost hand-made. They were actually made in the US. I was stunned. When was the last time you ever saw a shoe made in the US? I almost bought them but they were unfortunately a bit too narrow.
Where and what brand? I’d like to support this…
That’s part of why I go to the farmer’s market. The local organic food isn’t really THAT much better than store food, but I support the local people. It’s a lot like paying extra for a shirt because you know it’s not made in a sweatshop. The shirt itself isn’t high high quality, but at least you feel good about the process.
Unfortunately, made in the USA is not a guarantee it’s not made in a sweatshop. I recall in the early 70’s when a Chinese friend of mine went to a Chinese sweatshop in Chinatown (NYC) to pay a small debt owed by his mom. A red-headed Irish friend and I went with our Chinese friend. We went to the topmost floor of a tenament building, a floor without interior walls that was packed with sewing machines. By converting the topmost floor into a workroom floor the sewing machines could not be heard in the street. There wasn’t any signage on that building indicating it was a garment factory, everything was very discrete. These where Chinese who were paying for their passage to the USA with servitude. The foreman was very bothered and nervous that an Irish and Puerto Rican guy where seeing this.
I don’t know what was the country of origin that was being sewn on their garments. That would have been interesting to find out, but I didn’t think about it at the time.
But as far as shirts are concerned, the last garment that I ever purchased from Walmart was a dress shirt. (Years ago.) This thing fit around my torso like a giant parachute. One size fits nobody. (Except the morbidly obese.)
Really? Made in USA? I’d kill for a pair of comfortable, quality shoes. I used to buy Clarks when they were made in England, alas no more. Best I can seem to do now is Ecco,which is made in Slovakia.
nNYCdj has it below -
SAS shoes, made in San Antonio
comfortable, high quality, last forever
New Balance athletic shoes are still made in the US of A. You have to check the shoe box where they proudly display an American flag or the label. If you don’t see it, they were made in Vietnam or China.
Thanks, m2p!
Reason: I’m in the market for a new pair of walking shoes. My weekly Meet Me at Maynards habit’s wearing out the current pair.
You should have bought them and put them in a museum or something.
Here Ya go American shoes. I love them…
http://www.sasshoes.com/index.php
You know, when I read “Sass Hoes” I don’t think of shoes.
The styles remind me of a Florida nursing home.
Florida nursing home styles
Oh dear.
In that romantic comedy where Catherine Zeta-Jones played a restauranteur, I’m pretty sure that she was wearing SAS black leather clogs. It was a nice touch. Even though she always looked so beautiful and elegant, her footwear helped make her seem like a real chef.
Congrats to everyone who is searching for and buying American made products! It makes me happy knowing Im not the only one and that people actually do care about this country. So many times when it is brought up in conversation to friends all they care about is the price. Not quality, not anything else - THE PRICE!!!
We buy American made when we can. We also patronize local businesses as much as possible, even though it costs more.
Same here. We make a special effort to seek out U.S. made products (it’s not easy, as many of you know).
Thanks to all the others who also try to keep jobs here.
User manuals ……… aaah …….. “sweet” memories:
I bought a HID (Xenon) kit for my car. The bulbs themselves were a perfect fit in the headlight and the only “work” I had to do was finding a place in the engine compartment for the ballasts. However, the instructions started with (I’m not kidding, this is 100% true): “take out the engine” and continued with “cut a circular hole in the headlight for the bulb”. I think I still have the manual …
Obama signs emergency bill to halt teacher layoffs
Nowhere else to cut? Look a little harder. It`s always the teachers, police or firemen. They never mention….
In the city of Bell California Robert Rizzo was raking in a salary of $787,637
By Ed Fletcher
efletcher@sacbee.com
Published: Friday, Jul. 30, 2010
A Bee survey of the Sacramento region’s 22 cities and counties did not find any top executive salaries that would evoke the outrage unleashed over Robert Rizzo’s $787,637 salary, but it did reveal some interesting points:
• Lincoln City Manager Jim Estep’s salary of $215,000 a year makes him the seventh highest paid city or county executive in the region, equaling the pay offered the city manager of the much larger city of Sacramento. Among area cities, pay for Lincoln’s city manager has increased most – nearly 40 percent – since the beginning of the 2005 fiscal year.
By JIM ABRAMS
The Associated Press
WASHINGTON — Summoned back from summer break, the House on Tuesday pushed through an emergency $26 billion jobs bill that Democrats said would save 300,000 teachers, police and others from election-year layoffs. President Barack Obama immediately signed it into law.
Lawmakers streamed back to Washington for a one-day session as Democrats declared a need to act before children return to classrooms minus teachers laid off because of budgetary crises in states that have been hard-hit by the recession.
Look, will ya QUIT quoting the very few examples of bad apples? How much does your average pension actually pay? Go find some statistics about MEDIAN pension income, and then maybe I’ll join your crusade against public unions.
My mother’s one of those teachers who’s now on a pension. It’s not that generous.
My Mother is a teacher too. So was my Grandfather and my Aunt. I can tell you that none of them made or make that much money and their pensions are far from generous.
I’ve been hearing whining from people about the passage of this bill. Funny since most parents with kids seem to have no problem shelling out craploads of money on a house that might be closer to a good school. Seems to me that having good teachers is actually a positive economic asset.
What makes the Bell, CA story “newsworthy” is that IIUC, it’s a largely hispanic community and it looks like Rizzo the Rat and his boys from Jersey descended upon that poor and unsuspecting town and proceded to Clean.It.Out!
Again, why weren’t the CalPers folks that worked for Bell’s Water & Sewer dept. ( where they’d be lucky to get 27k a yr. in pension btw ) pitching a FIT over this?
We here at HBB can’t monitor everything you know!
Yes, but then she’s on the “old” pension plan, where you needed to work for at least 30 years, be over 65, put some of your own money in the plan, and have the plan invested in secure insurance type securities, so that the money would actually be available. And, yes, the salaries on which the pension is based were never that high.
Were in the “new” government pension age now. Salaries exceed comparable private sector jobs. You can retire after 20 years with a full pension. You can even retire after 10, with a partial payment for the “Rest or your life”. Contributions are minimal, if any……and you can quite at 40 or 45 if you got your 20 years in.
Many of the latest Union schemes are completely unworkable and rely on the “state” (city, county) to come up with the cash that the “plan” will NEVER be able to support.
That’s the problem.
RE-write the union plans to your grandmother’s plan, and maybe we can have some “reasonable” benefits. Oh, and one other thing. In the not-so-distant past, life-expectancy was 65.
If you got a pension at all, you did good.
The trends have been living longer, and “retiring” sooner. It just doesn’t work.
Were in the “new” government pension age now. Salaries exceed comparable private sector jobs. You can retire after 20 years with a full pension. You can even retire after 10, with a partial payment for the “Rest or your life”.
Someone please send a memo to the city of Loveland, because the only thing city employees get is a a 401K plan.
All union members are thugs.
Diogenes,
I worked for a very large school district as a teacher, and their retirement benefits were reduced in the 90s. No more healthcare for life, etc.
Not sure where you get the idea that benefits are better now. From everything I’ve seen, they are much LESS generous than they used to be.
BTW, the union members are now making more than private sector workers *because of the downturn* and because private sector workers were brainwashed into thinking joining unions was somehow a “bad” thing. That’s their problem to contend with. I’d suggest they start forming unions again.
Alright, someone gets into financial trouble they should let the electric and water get turned off but keep the wave runner, the Lexus, private school for the kids, the country club membership and dinning out a couple of times a week. There is nowhere else for local and state governments to cut besides teachers, police and firemen? That may be what they are selling but I am not buying it.
jeff,
About a year and half ago USA Today ran an article on folks w/ huge tax bills living in close proximity to awesome sch. dist’s Up & Selling the -minute- Chad was due to graduate!
See ya’! From the ppl they interviewed, they had no compunctions whatsoever over their decisions!
It is not the teachers, firemen or policemen who are getting these outlandish retirements, but rather those in management of all levels in government, and administrative staff levels have grown to vast legions.
Some metro areas like San Francisco do have some very overpaid civil “servants”, but no so common. Elementary school teachers in Orange County do very well too …
Regardless when you hear of the $100K ++ pensions, it is generally the rather useless administrative layers in this boat. Have you noticed the California budget, nor any school district budgets are so bad as to necessitate the layoff of a single administrator? Until they do in earnest, I call BS on real budget problems.
“It is not the teachers, firemen or policemen who are getting these outlandish retirements, but rather those in management of all levels in government”
Thank you.
Thank you X2.
Look, will ya QUIT quoting the very few examples of bad apples? How much does your average pension actually pay? Go find some statistics about MEDIAN pension income, and then maybe I’ll join your crusade against public unions.
”
I think the MSM has decided to rally public opinion against government pension plans I think it’s to influence voters most who are private employees or self emloyeed to accept big cuts in Public pensions. “its for the children” maynot work anymore if they can keep digging up stories like the city of bell. This is how government works they turn public opinion with the help of the Main Stream Media and then get what they want, what they want now is to get out of their pension promises as they are going broke.
notice how they didn’t really do this for investment banking like Goldman Sachs when they manipulated the government to bail them or AIG out with taxpayer money. hard target I guess. a few very stupid and greedy public officals make a much easier story this will spread to all Public workers as the media finds more about pay and pensions.
cactus,
I think the focus on public sector workers is intentional (as was the focus on the healthcare bill in the middle of “The Worst Recession Since the Great Depression”). During the “crisis” there was real anger brewing and we were about to pull the curtain and reveal the Wizard of Oz. Pitchforks were coming out, and we were about to demand REAL change that would have actually been effective. The PTB/elite saw this and quickly mobilized to dig up new topics which would distract us from getting to the truth.
They are trying to distract us from those who are at the root of our problems — the FIRE sector and their govt minions.
Just got back from a little r&r in the north atlantic coast of Florida. My report:
1) Most tourist areas were very busy- the busiest they’d been in several years, according to the locals. Everyone ascribed this to the oil spill discouraging people from going to the gulf coast.
2) Way fewer ‘for sale’ signs than I expected in front of houses. Either the banks are keeping a lot of homes off the market, or else in the older, no-HOA areas where I was driving there are far fewer REOs than in the inland vinyl subdivisions (where my non-schadenfreudy friends didn’t care to go.).
3) Extensive vacancies in strip malls. I would be surprised if there was 50% occupancy.
4) I saw what appeared to be nice condos on the water (not beach) being offered for less than half their previous selling prices (per the ad). 3/3s being offered for ~250,000 that supposedly had sold for 600,000 IIRC.
5) North Florida is hot as hell in the summer. And so is the water in the pools and ocean. Large amounts of cold beer is required. At all times.
Thanks for your insights, aqua!
Soon you’ll be able get ‘benefits’ even if you never had a job, or wanted a job, but at one time had thought about getting a job.
More S.C. jobless to qualify for benefits
The State Paper
South Carolina will expand its jobless benefits to include part-time workers and those who are out of work because they are caring for a sick family member thanks to an infusion of $97 million in federal money.
Buying votes ain’t cheap.
But the cost doesn’t matter when it’s not your money.
I wonder how SC plans of funding these benefits? Tax increases?
Thanks goodness for TABOR.
thanks to an infusion of $97 million in federal money.
That would be the money Sanford heroically refused to accept (refudiated) a year ago.
alpha-sloth,
LOL, well he had some problems of his ‘own’ about that time?
Went for a hike and got lost in the bush.
If nobody had a job and we all got enough benefits, there would be way more time to go shopping and consumption would surge.
Buy-N-Large!
Wmbz:
as a person who cared for a sick member…..this is easy to verify by a quick home visit or documentation…at least they are helping to save taxpayers money instead of just dumping the old folks into a nursing home…
so to me its should considered as meeting the requirements of looking for work each week..
You’re being pragmatic and sensible again…
Knock it off!
wmbz,
That’s a story I’ll exercise my option to ’sanitize’ for Mrs. D. She’s already bent out of shape over how UE has become a crutch for the seasonal.., part-time, job-hopper/casual employee and… folks that just aren’t taking life very seriously.
Someone here ( one of our more liberal posters ) noted that ‘really’, Unemployment was originally designed for -factory- workers! Where a lay-off was highly visible ( economically sound ) and with every intent of RE-hiring the minute things picked up! ( Was that Oxide? )
Whomever, please take a bow. This thing ( as Darrell in PHX also noted ) has become so perverted it’s almost unrecognizable?
Yeah that was me.
There is a bit of a movement on the ultra-left which advocates providing a dole to EVERYONE. Just enough for rent and food, or perhaps rent and food stamps. If you want nicer stuff, you get a job. But you won’t starve.
The reasoning behind it is that the most successful middle class depends on jobs. However, the most successful company has NO employees (or expenses). In other words, our economy is self-contradicting, with no resolution.
On the one hand, such a dole is liable to create generation of lazy people. On the other hand, it’s the ultimate in trickle up economics, since people are likely to spend all their leftover income on goodies.
Some people suggest that the gov provide a job for anyone that wants it to avoid the lazy-people problem. (IMO, we already have that; it’s called the US Military.)
oxide,
Remarkably, when my brother passed away, mom found he still had a number of months of “eligibility” left on his Unemployment claim?
A mystery to her ( as he hadn’t worked in a meaningful way in years ) Being Mom, she called the AZ St. Un-office and they assured her that was in fact the case. We were all pretty surprised.
I just think there needs to be some parameters on that. “This is your FOURTH claim in (2) years!?” Before we can issue you another check we’ll have to get you enrolled in Vo-Rehab Program ( or… the ‘Military’ if you prefer? )
But I’m afraid, and I don’t want to misinterpret your original intent, but sadly I think it ‘is’ encouraging casual employment? In OR it’s practically a way of life.
There are plenty of lazy people in the world. Many of they HAVE jobs. Many of them are your boss.
That said, with a recession occurring roughly every 6 years, it’s hard for millions to keep a job. Let alone a career.
I’m all for punishing the hard core slackers, but millions of folks don’t fall into that category.
That said, with a recession occurring roughly every 6 years
Followed by “jobless recoveries”.
“Many of them are your boss” LOL!
Truer words were never spoken. It’s… actually a bit more advanced than many of us might want to admit. Here in OR a good many people ‘time’ their employment to coincide w/ hunting/fishing/toking season and -won’t- take a job that interferes w/ ANY of it!
Pee Test? Pass…
So like I say, does the system exist for the benefit of long term well established employees that suddenly find themselves out in the street? Or does it exist to facilitate casual employees? We can’t afford everything and it would be nice to have ’some’ assurance that after 20 yrs. if the Mrs. gets the axe, that there’d actually BE something there for her.
“There is a bit of a movement on the ultra-left which advocates providing a dole to EVERYONE.”
A “bit” of a movement?
BWAHAHAHAHAHHAHAHAHAHHHHH!
(gasps for air)
BWAHAHAHAHAHAHAHAHAHAHAHHH!
“Some people suggest that the gov provide a job for anyone that wants it to avoid the lazy-people problem. (IMO, we already have that; it’s called the US Military.)
”
The military won’t take anyone over 50.
I’ve been perusing Borderland Beat dot com. One of the posts has this, “It is the drug traffickers who provide rural finance and it impacts approximately 6 million hectares, equivalent to the acreage of all the irrigation districts of the country. And they do it at the base of the social pyramid, in the space where before policies reached the poor to promote agricultural production.”
If everyone had a minimum level of housing/food/medical care, would they be interested in what the narcos offer?
The same sort of argument can be made in the Middle East. Say what you will about organizations that we in the West often label as “terrorist,” but they do provide social services to the poor.
The Nazis provided social services to the poor.
Yes they did. And that’s how they were able to take over the country.
Didn’t the mafia also help out the poor in their neighborhoods?
“In America you can go on the air and kid the politicians, and the politicians can go on the air and kid the people.”
~Groucho Marx
Interesting to see Treasurys (a fixed stream of future dollars) rallying at the same time the (current) dollar is putting in a new low against hte Japanese yen. The simple intepretation is that the dollar’s value is expected to rise going forward.
market pulse
Aug. 11, 2010, 8:01 a.m. EDT
Japanese yen hits 15-year high versus dollar
Related stories
* Stock futures fall sharply on economic worries (7:33a)
* Dollar, yen rally as China data trump Fed (4:40a)
* U.S. Treasurys, German bunds rally on Fed move (6:52a)
* Tokyo stocks lead Asian decline on strong yen, Fed (7:01a)
By William L. Watts
LONDON (MarketWatch) — The Japanese yen (USDYEN 84.9200, -0.5600, -0.6551%) on Wednesday hit a new 15-year high versus the U.S. dollar. The dollar traded as low as 84.71 yen, according to FactSet, after taking out its previous low for the year near 85.00 yen. The dollar recently changed hands at 84.90 yen.
well, if the Euro is the worlds most messed up currency then the Yen aint far behind. Weren’t we just talking about default?
I seem to recall something about the yen carry trade in the past where you could borrow japanese yen, convert it to dollars, stick it in an interest bearing account, collect the interest in US dollars, and make money off the arbitrage of low Japanese rates. I heard all hell was going to break loose when this carry trade unwound, and that appreciation of the yen would be the factor that pushed the loans into non-repayable states that caused the margin calls to start rolling in. Is it still the case that this unwinding has yet to happen, or has the carry trade already “unwound”.
Thousands of online banking customers have accounts emptied by ‘most dangerous trojan virus ever created’
Out of action: The new trojan virus can empty bank accounts without their owners knowing about the theft. ~ UK Mail
About 3,000 online banking customers are said to have been victims of a computer virus attack that empties their accounts while showing them fake statements to prevent being detected. In total, £675,000 is said to have been stolen from one unnamed British bank, according to internet security firm M86 Security.
Link? Reference? Date?
Should read unexpectedly “anemic recovery in the world’s biggest economy.”
US dollar falls to a 15-year low against the yen
By SHINO YUASA
The Associated Press
Posted: 8:09 a.m. Wednesday, Aug. 11, 2010
TOKYO — The U.S. dollar slid to a 15-year low against the yen Wednesday,dragged down by the anemic recovery in the world’s biggest economy.
The greenback was quoted at 84.71 yen in London, the lowest since 1995.
Investors stepped up selling of dollars after the Federal Reserve announced Tuesday additional monetary easing steps in a bid to shore up the flagging U.S. economy. The central bank also downgraded its assessment of the economy’s prospects.
“Investors were unnerved by the Fed’s statement. It just confirmed that the U.S. economic recovery is slowing,” said a dealer at a Japanese bank in Tokyo. The dealer declined to be named as he was not authorized to talk to the media.
Al Gore: ‘The United States Government as a Whole Has Failed Us’ on Global Warming
Former vice president, now climate alarmist activist, bemoans the inability of the Senate to pass cap-and-trade legislation.
Business & Media Institute ~ 8/11/2010
You can’t always get what you want and that appears to be a bitter pill for former Vice President Al Gore to swallow.
Gore, the leader of the global warming alarmist movement, told supporters during an Aug. 10 conference call that despite his best efforts to inspire fear over this issue or else it is the end of civilization, the battle has been lost for the time being. He placed blame solely on the U.S. government, specifically the Senate, controlled by Democratic Senate Majority Leader Harry Reid, Nevada.
“I have a difficult task tonight,” Gore said. “I want to call you to action but I have to begin by telling you what you know, in all candor – the United States government in its entirety, largely because of the opposition in the United States Senate to taking action on clean energy and a solution to the climate crisis, has failed us.”
“Gore, the leader of the global warming alarmist movement,”
There`s that word “movement” again. Just saying.
And I’m sure this fine citizen disclosed the millions upon millions of dollars he would make from Cap and Trade before going back to banging Larry David’s ex-wife.
“You can’t always get what you want and that appears to be a bitter pill for former Vice President Al Gore to swallow”
Is that in reference to cap and trade or his personal life motto of “capture and raid”.
You know after climate gate where we pretty much confirmed that the science was bunk; you’d think we’d move on to the next imaginary demon. Like dangers of uncharted meteors or something. Perhaps alien invasions from alternate dimensions.
Not even close. A few bad apple scientists were discredited, but vast majority of the science was intact. Then the discrediting was re-credited anyway, so there is no climate-gate.
That doesn’t excuse Al Gore for his behavior. I still think a couple of his wires snapped in 2000.
You know after climate gate where we pretty much confirmed that the science was bunk;
“The Climatic Research Unit email controversy (dubbed “Climategate” in the media) began in November 2009 with the Internet leak of thousands of emails and other documents from the University of East Anglia’s (UEA) Climatic Research Unit (CRU). According to the university, the emails and documents were obtained through a server hacking. Allegations by climate change sceptics that the emails revealed misconduct within the climate science community were quickly publicised by the media.”
“Three independent reviews into the affair were initiated in the UK, two of which were concluded by the end of March 2010, with the remaining review releasing its findings on 7 July.”
“The scientific consensus that ‘global warming is happening and that it is induced by human activity’ was found unchallenged by the emails and there was ‘no evidence of any deliberate scientific malpractice in any of the work of the Climatic Research Unit.’”
Wikipedia
The review was by the same people who were discredited.So much for the ’scientific analysis’.
Tonight there is a meteor shower.
“I have a difficult task tonight,” Gore said. “I want to call you to action but I have to begin by telling you what you know, in all candor – the United States government in its entirety, largely because of the opposition in the United States Senate to taking action on clean energy and a solution to the climate crisis, has failed us.”
Talk to China, Yacht Boy.
Oh, I’m sure he’s talking to them alright.
Cap and trade in its current form would merely send the REST of our industrial jobs over there.
Heck, they should be paying him for his efforts!
Yes, our government in its entirety has failed us. But not at all for the reasons he supposes.
Go enjoy your energy-extravagant lifestyle, your mansions, your fawning press coverage and your high-paid massages. Just leave the rest of us alone to cope as we can.
Gee Al Gore, then why don’t YOU run for political office and try to change things? Why don’t you try to get your old Senate seat back?
America Is ‘Bankrupt Mickey Mouse Economy’: CIO
11 Aug 2010 ~ CNBC News
America is a “Mickey Mouse economy” that is technically bankrupt, according to Jochen Wermuth, the Chief Investment Officer (CIO) and managing partner at Wermuth Asset Management.
“America today looks like Russia in 1998. Consumers, companies and the government are all highly indebted. America as a result is a bankrupt Mickey Mouse economy,” Wermuth told CNBC.
The comments followed news that the Fed was extending its quantitative easing program following what the Federal Open Market Committee (FOMC) described as a fall in the pace of growth in output and employment.
The Fed has spent the past three years on a route of aggressive rate cuts and purchases of trillions in various securities but it is running out of measures it can take, Pimco’s co-CEO Mohamed El-Erian told CNBC.
Wermuth is a fund manager heavily invested in Russia and says if the same International Monetary Fund (IMF) team that managed the financial crisis in the former super power in 1998 now turned up at the US Treasury, they would withdraw support for current US policy immediately.
“The big evil for the IMF in Russia in 1998 was the prospect of the central bank funding government debt. The Fed is now even buying mortgage-backed securities,” he noted.
Damn the Euroloser. As long as Uncle Hu continues to buy prime US junk, why worry?
It’s about time these wealth managers tell the truth.
At least Mickey Mouse is doing well these days.
Wednesday, August 11, 2010, 7:05am EDT
Disney profit up in 3Q
Orlando Business Journal
The Walt Disney Co. said Tuesday it earned $1.3 billion in the third quarter ended July 3, a 36.2 percent increase in profit from $954 million in the year-ago period.
…
What was interesting was the breakdown of where the surge in profits came from, and it wasn’t the themeparks. It was the entertainment divisions. It cheaper for J6P to watch ESPN while the kiddies watch the lastest Disney DVD on the TV than to take the brood to Orlando.
Anaheim is doing well and its parks are packed year round (it caters more to local customers), but Disneyworld, which depends much more on filling overpriced hotel rooms and selling expensive meals, is having to discount heavily to bring the tourists in. Because of the Disney discounting I hear that some great deals can be had on International Drive hotels.
Disney DVDs—the ultimate baby-sitter.
And to think that, when I was growing up, if I nagged my parents to entertain me, they’d tell me to go away and find something to do. Which I did. I quickly figured out that reading books or doing art projects were much better ways of entertaining myself.
Donald Duck gropes ugly woman in Orlando. Time for Tiger Woods.
We wish we were a Mickey Mouse economy- we’re more of a Wile E. Coyote in mid-air economy. (Of course, Russia is a Beagle Boys economy.)
“Beagle Boys”?
Oh and that IS an insult to Mickey! Expect suit from Minnie shortly.
So what? - we have hope and change!
“- we have hope and change!”
A guy on the corner this morning was hoping I could give him some change. I, in turn, am hoping I won’t be joining him.
Treasury yields at record lows says no - we are not technically bankrupt. One would think that the CIO of an asset management firm would know what the term means.
We’ll get there eventually, but we’re not there now.
We will not be bankrupt as long as the world continues to value the future productive value of all American citizens, or anything that we own.
Because the only reason that we are not insolvent is because the USGov has the full taxing authority on all future production and all current and future savings.
That’s quite a line-item on the national balance sheet.
More like a Looney Tunes economy.
Hunting wabbits!
Well we are creating tons of McMusic daily…….
Lightweight throwaway disposable McMusic…not worth paying for.
Another must-read Bloomberg article.
http://noir.bloomberg.com/apps/news?pid=20601039&sid=aiFjnanrDWVk
Sometimes mathematics can be such a downer. I love the comment about a decades-long Ponzi scheme. So true. When my daughters are ready to go out into the world of work in about 20 years time they will face a very different world than I did in 1983.
Have a good day everyone (even Eddie).
Well my daughers are 16 and 18, and I expect them to face a job market very much like 1983 when I too entered the labor force, and when the unemployment rate was even higher than it is now.
Being at the back end of the baby boom echo, the way I was at the back end of the baby boom, can be added to the various other disadvantages.
I was also at the arse-end of the baby boom. And, like WT Economist, I didn’t like the early 1980s job market. Not one bit.
What’s worse, I decided to launch my career in Pittsburgh. Big mistake. In late 1982, when I started jobhunting, the local unemployment rate was up around 20%.
After half a year of looking, I finally found a job. Part-time. Minimum wage. Washing dishes. And I felt damn lucky to have it.
After six months, I left that gig for another one in a food co-op. Part-time again. Got the co-op out of offering any benefits, not that they did, other than a 10% employee discount on purchases in the store.
I held onto that crapjob for 2.5 years, then got a pro-fessional job at the University of Pittsburgh. Where I had the boss from hell. This gal must have taken management lessons from Attila the Hun. She was that bad.
Well, I was the person who was handling the production of a journal for which Ms. Attila was supervising me. And the computer crashed. Dang if I knew how to get the thing going again. So, I buried my head in my hands.
Not an appropriate response, per Ms. Attila. She called me into her office and launched into a tirade that all but peeled the paint off the walls.
Then, once she ran out of gas, she said, “It’s obvious that you’re miserable here.”
Me: “You’re right.”
Her: “Start looking for another job.”
Me: “I think I’ll look for another city.”
Her: (She was quite taken aback.) “You don’t have to do anything THAT drastic.”
Well, I did. I wasn’t a very happy Pittsburgher. And I was an avid bicyclist, and wouldn’t you know it, the open road was calling again.
So, I tendered my resignation on Friday, February 13, 1987. And I had a truly wonderful final six weeks at that job. All of my coworkers marveled at how relaxed and happy I looked. Meanwhile, Ms. Attila seethed at me.
On my last day at work, the faculty involved with the journal gave me a lunch, complete with toast, but Ms. Attila refused to raise her glass. After the lunch, she gave me the bum’s rush out of the office, and that was the end of me in that job.
I left Pittsburgh a week later, flew to Phoenix, Arizona, then bicycled down to the Mexican border. After saying hello to Nogales, Sonora, I headed up to Canada.
In late June 1987, I put myself and bike on a plane in Portland, Oregon, and flew down here to Tucson. And I’ve been a happy Tucsonan ever since.
Great story, AZ. Glad to hear you found your calling.
U.S. Trade Deficit Unexpectedly Widens to $49.9 Billion as Exports Decline. Bloomberg ~ Aug 11, 2010
The trade deficit in the U.S. unexpectedly widened in June to the highest level since October 2008 as consumer goods imports rose to a record and exports declined.
The gap expanded $7.9 billion, the most since record-keeping began in 1992, to $49.9 billion in June, Commerce Department figures showed today in Washington. A $42.1 billion deficit was projected by economists, according to the median forecast in a Bloomberg News survey. Imports climbed 3 percent, while exports dropped 1.3 percent, the most since April 2009.
Record low mortgage rates do little for US demand.
NEW YORK Aug 11 (Reuters) - U.S. home loan demand climbed last week but record low mortgage rates failed to light a fire in a market constrained by unemployment and tight lending practices.
Mortgage purchase and refinancing applications rose by less than 1 percent in the first week of August, even as 30-year loan rates fell to 4.57 percent, the lowest in 20 years of record keeping by the Mortgage Bankers Association.
This contract rate, which excludes added lender fees and points, was down from 4.60 percent the prior week and 5.38 percent a year ago, the industry group said on Wednesday.
If people don’t have jobs, or, if they’re worried about the jobs they still have, then don’t expect them to go out and buy houses.
In short, the housing market is going back to its own version of fundamentalism — sales and prices based on jobs and incomes.
its own version of fundamentalism — sales and prices based on jobs and incomes.
“Oh, it’s a thin line between Saturday Night & Sunday Morning…” Zeemay Buffett
Daytraders & Flippers are soakin’ in the baptismal waters,… staring at a new morning dawn of real estate reality. hallelujah!
There’s just so only much discretionary income the FIRE sector can pull out of the rest of the economy. The low hanging fruit’s gone.
Democrats, Advocacy Groups Blast Cuts to Food Stamps to Fund $26B Aid Bill ~ FoxNews.com
Some House Democrats and advocacy groups are getting squeamish about the move to fund the $26 billion state aid bill by making cuts to food stamps, a federal assistance program currently depended on by nearly 41 million Americans.
House members convened Tuesday to pass the multibillion-dollar bailout bill for cash-strapped states that provides $10 billion to school districts to rehire laid-off teachers or ensure that more teachers won’t be let go before the new school year begins, keeping more than 160,000 teachers on the job, the Obama administration says.
Screw the teachers. We need vouchers and Charter schools, just like we had for the poor children in DC before Big O cancelled the program.
“Waves of More Foreclosures” = More Bank Failures + Big Trouble for the FDIC, Suttmeier Says.
Aug 11, 2010 Peter Gorenstein in Investing, Recession, Banking
The U.S. housing market continues to send mix signals. More homes continue to enter foreclosure but the number of homeowners carrying so-called “under water mortgages,” declined in the second quarter, Zillow.com reported Monday.
21.5% of homeowners owed more on their mortgage than their home was worth in the second quarter, that’s down from 23.3% in the first quarter and 23% a year ago.
“There are a lot homes caught up in mortgage modifications,” explains Richard Suttmeier of ValuEngine.com, which he says results in a temporary stability in home prices. The key word: temporary.
“There’s waves of more foreclosures coming in the housing market because very few of the HAMP modifications are becoming permanent,” he says.
I think I mentioned back in 06 that due to demographics, extend and pretend and the whole mess exc, that housing might be a bad investment till 2020. That was a might, takes a lot of things to break bad.
Down in Carlsbad now, looking for housing rental or to buy. There is a substantial amount of new construction on line.
I have to get a new place by December and would like a house with a decent yard. Going to be a challenge and expensive.
Unless the cutbacks cost me this job. My daily plea at work is that we must aggressively attack commercial telecom market stuff.
Such is life. Getting caught in another industry storm.
james, i love carlsbad but i rent a fine home in o’side complete with an ocean breeze. but i must admit i am snooping around looking for a home to buy for a steal.
I’d wait.
I believe Suttmeier. 2014 is only four years from now. Enjoy your ocean breeze and your freedom. Your freedom goes away when you buy.
Check with Mr. Ben, there was a good fellow who used to post & come to HBB gatherings in San Diego, I believe his first name is Jim, he knows just ’bout everything happening along the section of paradise.
Jim the Realtor? He runs a blog called bubbleinfo, tours homes in that area and always has good comments about whats going on there.
I like the last quote.
Sellers Refused Home to Black Couple: HUD
In this tough real estate market, you would think that agents would be itching to sell their properties to anyone with money in hand.
But a Chicago couple, their agent, and their broker are accused of some nasty discrimination that goes beyond being overly particular.
Daniel and Adrienne Sabbia have been charged with refusing to sell a Bridgeport home to a Black couple because of their race, reports Chicago Breaking News.
In January, Chicago native and comedian George Willborn and his wife made a $1.7 million offer on the 5-bedroom home, which the Sabbias accepted, according to the U.S. Department of Housing and Urban Development.
However, the Sabbias refused to sign the sales contract, and HUD investigators were told Mr. Sabbia “expressed a preference not to sell his home to an African-American,” reports Chicago Breaking News.
HUD also charged the Lowe Group Chicago Inc. and real estate broker Prudential Rubloff Properties.
Seriously, what year is this? Aren’t we past this kind of nonsense yet?
And perhaps even more ridiculously, who in this market passes up $1.7 million?
Good gah-rief! If they can afford that kind of house, then why can’t they buy it?
Agreed. If they can afford it with money they earned, I would want them as my neighbors.
What kind of comedian can afford a $1.7 million house? He must be really good or have really good media backing.
From the SunTimes….
Daniel Sabbia, 47, is part of the extended Roti family, whose connections are deep in political and organized crime circles in Chicago. A source said Sabbia quit his city job in 2006 while under investigation for allegedly operating two hot dog stands on city time.
Hot dog stands???!??
Dang, not even classy enough to do construction..
That’s just what he was nailed for.
I would sell my underwater POS to Bin Laden if he made an offer.
Well then, I guess we’d know where to find him.
It is interesting to me that the story both says that “the Sabbias accepted” their offer, and it also says that “the Sabbias refused to sign the sales contract.”
Which is it? It can’t be both—aren’t they one and the same?
Another fine example of quality reporting…
“Another fine example of quality reporting…”
Exactly, Prime. We don’t really have good information on what happened here. For all we know, he found something unfavorable in the sales contract and refused to sign and might have been blackmailed with threats of racism accusations. But, of course everyone immediately believes what’s in the media, as demonstrated in the responses above.
I know of a lady who was pressured at closing to reduce her price from the contract price under threats that she was facing foreclosure, etc. In other words, the buyers (one of whom was in the title business) knew she was struggling, and were very nasty to her at closing.
Did my heart good to see, a couple of years later, the buyers divorced, their property is way underwater (like 50%), they were in lis pendends, got a mortgage mod, six months later, another lis pendens. Bwahahahaha.
Good point, Prime. My other post isn’t showing up, but looking at the posts above, it’s also a fine example of people believing the media without full information.
Guy gets a call from his realtor with an offer, he accepts verbally pending the paperwork, sees the actual sales contract and maybe there’s a clause or concession he doesn’t like. So he refuses to sign and maybe he’s being race-baited for not agreeing to some concession. Anything’s possible. Full information is needed.
Could have been a 1.7 million dollar offer with a substantial cash back at closing demand.
He probably just refused to sign at closing and let the house fall out of escrow.
Bridgeport.
Nuff said.
No kidding. You people have to understand the locale - and the story becomes a big yawn.
I know a few wealthy people and I will swear they have white sheets with hoods, hanging in the closet.
Spook, meet eco. Eco, meet spook.
It’s the only conclusion I could draw due their OUTRIGHT racist comments and jokes.
Should I consider racist comments and jokes… not racist?
Seriously?
I have a Black celebrity story. It’s true; it happened to friends of my parents.
About 20 years ago, this elderly couple from small town Kansas were visiting Chicago. They stayed at the Palmer House Hotel. Once when they got into the elevator, several really big black guys got in - they were wearing expensive suits, looking really glossy and sharp.
When one of them said in a soft deep voice, “Hit the floor,” the Kansas couple laid down on the floor of the elevator, thinking they were getting robbed by gangsters. The black guys helped them back to their feet, explaining that they meant to push the button for their floor.
The black guys apologized for frightening the Kansas couple and the Kansas couple apologized for assuming the guys were criminals. The embarrassed couple pushed the button for their floor and the guys pushed the button for the top floor. The couple got out at their floor.
They enjoyed the rest of their trip. When they went to check out of the Palmer House, the receptionist told them, “Oh, your bill is already paid in full. Mr. Ritchie took care of it.” The guys were Lionel Ritchie’s bodyguards.
Cool story.
The bodyguards were probably hired because they were physically intimidating. Funny how expensive suits add to the intimidation factor.
The U.S. Secret Service uses the same modus operandi.
The Secret Service agents with Lady Bird wore very professional dark suits. (The times I saw them I was impressed that they could simultaneously look relaxed - friendly and alert - observant - poised for action.)
I imagine Ritchie’s bodyguards were wearing expensive Italian designer suits or bespoke, maybe with a little bling like flashy cuff-links, gold chain, or stud earring.
Thanks.
I enjoyed telling it. I can still hear my late father saying “Mr. Ritchie took care of it.”
That is such a cool story, zilker!
Bad Karma?
Scamster uses duplicate checks to rip off Sewall’s Point Realtor for thousands
By Jeff Ostrowski
Palm Beach Post Staff Writer
Posted: 5:32 p.m. Tuesday, Aug. 10, 2010
SEWALL’S POINT — Bonnie Muir couldn’t figure out where her money was going. The owner of Castle Keepers Realty knew times were tough for the Treasure Coast housing market, but she didn’t understand why her personal checking account seemed perpetually drained.
After Muir returned home from a trip last year to find her power had been shut off, she discovered she’d been the victim of bank fraud by an agent at her real estate brokerage.
http://www.palmbeachpost.com/money/real-estate/scamster-uses-duplicate-checks-to-rip-off-sewalls-852116.html
jeff,
Sad, funny, interesting. Why isn’t it that their local NAR board didn’t step in as well? She should have had her realtwhores lic. permanently revoked and fined!
She’ll be back at it the minute she gets out and they’ll “have no record” of her previous dealings. Typical.
Ripping off the owner of your employer sounds especially stupid.
Feds rethink policies that encourage home ownership
With Fannie Mae and Freddie Mac on shaky ground, a restructuring of the mortgage giants is in the works. ~ USA TODAY
Just how much should Uncle Sam do to help Americans buy their own homes?
For 70 years — and for the last 15 in particular — the answer has been: Whatever it takes.
Now, policymakers are pausing to reconsider. In the next few months, they’ll weigh whether there can be too much of a good thing when it comes to helping families finance the American Dream.
The rethink could mean a shake-up for a mortgage market addicted to government subsidies.
“This process of figuring out the government’s role is going to involve some hard choices,” says Alyssa Katz, author of Our Lot: How Real Estate Came to Own Us. “The moment you start changing the nature of what is guaranteed by the government, what is subsidized, you start to change the alignment of winners and losers. … We took for granted that anyone could get a mortgage.”
Now, policymakers are pausing to reconsider. In the next few months, they’ll weigh whether there can be too much of a good thing when it comes to helping families finance the American Dream.
It’s about f-ing time!
I always forget, as I am mostly just a reader here, but…I read ‘Our Lot’ and there was an alumni sighting of sorts. There was a very brief section about a man named ‘Paladin’ working to expose fraud in the system, etc. Didn’t really give any insight into what he has accomplished after leaving us though.
Will have to check that out.
Paladin checked in maybe a year or so ago, but haven’t seen him since. It would be great to know what he’s doing now.
Buy and Bail’ Homeowners Get Past Loan Restrictions
By Kathleen M. Howley - Aug 10, 2010 12:00 AM ET
Real estate professionals call it “buy and bail,” acquiring a new house before the buyer’s credit rating is ruined by walking away from the old one because it’s “underwater,” or worth less than the mortgage. It’s an attempt to escape payments on a home whose value may never recover while securing a new property, often at a lower price with a more affordable loan.
The practice, which constitutes fraud if borrowers lie on loan applications, is continuing even after Fannie Mae and Freddie Mac, the biggest U.S. mortgage-finance companies, beefed up standards to prevent it, according to brokers such as Collier and Meg Burns, senior associate director for congressional affairs and communications at the Federal Housing Finance Agency. Whether driven by greed or desperation, the persistency of buy and bail underscores the lingering impact of the worst housing crash since the Great Depression.
“People were holding on, hoping the market would turn around,” Collier, who won’t work with applicants who intend to go into foreclosure, said in a telephone interview. “But now they’re giving up because there’s no light at the end of the tunnel in places like Florida.”
The value of U.S. homes fell by a third from 2006 to 2009, as tracked by the S&P/Case-Shiller index. In some areas, the losses were bigger. Prices declined 56 percent in Las Vegas, 55 percent in Phoenix and 49 percent in Miami.
http://www.bloomberg.com/news/2010-08-10/-buy-and-bail-homeowners-get-past-mortgage-hurdles-from-fannie-freddie.html
The practice, which constitutes fraud if borrowers lie on loan applications.
I wasn’t aware that loan applications ask what your future intentions were. Is there really a “do you intend to default on your existing loan?” question? Somehow I doubt it.
Presumably they’d be lying about their current debts. I doubt most of these people would qualify for two mortgages.
I think the premise of the principle stated in the article is that the couple defaults on the original house not because the can’t afford it, but because it’s underwater.
Yes, of course, they can afford the first house that’s underwater. But once they buy the second house there’s no way they can afford both. The fraud comes in when they neglect to inform the lender for their new property that they already have a mortgage on another property which would put their total housing payments well above the acceptable level.
According to the article no - it’s mostly people who actually do qualify for two homes:
Buy and bail is most often pursued by people with big enough paychecks and low enough debt to qualify for two homes, according to Mark Goldman, a broker at Cobalt Financial Corp. in San Diego.
Hot damn. There can’t be many people that can afford that. At least, not enough to make it a real problem.
To follow up on the listing discussion of the past few days - I keep track of stats here in Loudoun Co, near DC. The number of listings:
- Started up in early 2005 (May at about 1000 - up 4% YoY)
- Skyrocketed by 2006 (April above 3000 - up 246% YoY, peaked above 4k)
- Started back down some in 2007 (down close to 3k by end of the year)
- Paused on the way down in 2008, at around 3,200
- Continued down thru 2009, bottoming below 1,700 early this year
July stats just came out - the YoY number of listing (2,100) is now higher again, for the first time since a brief pause on the way down in 2008.
Doesn’t bode well. The last two times listings were up YoY, prices took a dive shortly after. Law of supply and demand of course - very evident.
I sure as hell hope so!
Been waitn’ on another price drop in LoCo since last year!!
We’ll see who has to move
(or is just trying to get the granite-laden albatross from around their necks)
come the end of August/early Sept…
Comment by packman
2010-08-10 04:56:08
including large-scale asset purchases
Oh, that’s nice.
Does this perhaps bother anyone else besides me?
Just think about this statement for a minute. In the interest of “financial stability” we’re selling the pieces of the country to an entity that has all the power of the federal government, but nearly zero oversight.
(Noting of course that the Federal Reserve currently already owns about $2T of U.S. assets)
—————————————————————-
packman, I strongly agree. I w as too tied up to comment yesterday, but couldn’t let this one go by quietly.
It is deeply disturbing to me that the Fed can basically pump up asset pricing in any particular area that they choose (as demonstrated by their massive purchases of MBS) with money out of thin air.
They have the power to _massively_ disrupt the normal operation fo the free markets; I would go so far as to say that by their very nature, they are the enemy of the free market.
The only apparent constraint on their exercise of this power is fear of political backlack—e.g. Congress could, if it were to grow a pair, change the law and remove their ability to perform open-market operations.
Since making that statement - it was revealed that the asset (for the time being) that the Fed is focusing on is U.S. debt.
That being the case - here’s a follow-on thought. When a company goes bankrupt - it’s assets (physical) end up often being given to its creditors, do they not? What happens if the U.S. government ends up going bankrupt? Might the Fed end up owning a part of the U.S. “public space”?
Not thinking so much obvious goofy things like national parks and the like (imagine the Fed running the NPS), but more just holding liens, and therefore direct control, on all kinds of properties - financial and physical. Thinks like parts of the military, office complexes, etc.
I’m not a financial person or bankruptcy expert, but it seems to me the implications are scary. Years ago we were worried about Japan owning chunks of the U.S., and rightly so - they ended up buying a bunch of it and still hold a lot. Now we’re worried about China owning chunks of the U.S. at some point via their held treasury debt. But what about the Fed - an internal private entity (banker symposium, if you will)?
“Since making that statement - it was revealed that the asset (for the time being) that the Fed is focusing on is U.S. debt.”
That limitation (at present) does not make me feel better about their manipulative actions or nature.
Why should I, as someone who wants to buy Treasuries in the 2-to-10 year window, with my own $$$s that were legally acquired by the sweat of my brow (metaphorically), have to compete against bids from an entity that has NO BUDGET CONSTRAINT and can pay any amount that they decide to pay?
There is no apparent limitation on the amount that they can pay since they can magically create the money out of nothing.
And I have to bid against them.
In the last go-round, it was MBS rather than Treasucourseries—with the clear intent of helping to prop up the housing market prices at levels that the markets had already concluded were mis-priced.
The only sensible course of action is to FLEE any market that the Fed enters.
Agree completely.
OK smart guy, you told me where to flee FROM. And I know other places to flee from.
Now come up with one place to flee TO!
Exactly my question.
“Now come up with one place to flee TO!”
Boy do I wish I had an answer to that question! Turns out my answer used to be “to Treasuries.”
With that option removed, I’m about out of ideas.
With that option removed, I’m about out of ideas.
You’re welcome to invest in my happiness. I’ll even swing by to pick up the check….
Or you could invest in my craps-playing ability. Of course, the cost of the trip to Vegas is part of my management fees…
I want to start an ETF. It would be composed of Bernanke,Geitner,and Obama. Democrats would be restricted to only buy calls. Republicans would only buy Puts. Independents would only buy straddles. ! HAHAHA
Famed Colony resort closing indefinitely
August 11, 2010 HERALD-TRIBUNE
LONGBOAT KEY - The Colony Beach & Tennis Resort will close indefinitely Sunday, the second time in the past year legal loggerheads have prompted the famed destination to shut down.
Staff will attempt to relocate guests who have reservations, said Katherine Klauber Moulton, the Longboat Key resort’s president.
But unlike last September, when a simmering, 4-year-old dispute with condominium owners shuttered the Colony for two months, the new closing could be permanent.
Klauber Moulton said in a statement that she and her family — which have run the 18-acre, beachfront resort and its centerpiece condo hotel for four decades — are “closing a chapter in their lives.”
The shutdown also will be more inclusive then the last — involving the hotel units, restaurants and recreational operations.
I love when they say “famed” or “famous” about people and places I’ve never heard of.
MTA set to lay off station agents Friday
NEW YORK (WABC) — Hundreds of MTA agents are spending their last days on the job.
The MTA is set to lay off 202 station agents and close 44 token booths across the city Friday.
The layoffs were originally blocked by a judge last June.
Agency estimates indicate keeping the workers on the job cost the agency $49,000 a day in wages and benefits.
They have people to sell tokens?
And to think that, during a 1999 visit to Washington, DC, there were vending machines selling fare cards for the Metro. I don’t recall seeing any humans doing that.
Haha, you just try to get a Metro employee to talk to you. You usually have to bribe them with fast food or promises of overtime pay.
What is this Metro employee of whom you speak? On all of my trips to DC, I’ve never seen one.
What’s really funny is that the DC Metro and SF BART systems have what appear to be identical fare cards.
When in DC once I put a BART card into the Metro slot to see what would happen. The display lit up “WRONG SYSTEM”.
Some of the trains are apparently almost identical as well. I hope BART doesn’t let theirs decay to the point Metro did before the crash.
MarketWatch News Break
Aug. 11, 2010, 11:14 a.m. EDT
Shiller sees significant likelihood of double-dip
There’s more than a 50% chance the economy is heading for a double-dip recession. And noted economist and author Robert Shiller tells MarketWatch News Break that the Federal Reserve may now lack the power to end the gloom and doom. Shiller now wants Washington to pass a new job-creating stimulus package. Plus, John Madden’s videogame empire keeps growing.
Shiller Sees High Probability of Eddie Dining on Crow (after an hour-long wait, of course)
Eddie will either be missing in action or in full denial mode as of year-end if his DJIA = 12K prediction fails to happen.
?
Isn’t this all working off the assumption we actually got out of the first dip?
They mean “for the wealthy.”
Study: Recession Cost Small Businesses $2 Trillion
Deep losses have left small-business owners decidedly pessimistic and unlikely to hire, survey finds.
Despite a brief surge in optimism earlier this year, less than one in 10 small businesses believe the recession is over, says a new study.
The Quarterly Economic Pulse Survey, conducted in July by financial services market research firm Barlow Research, reveals that 14 percent of small businesses are less than 50 percent confident they’ll still be in business by August 2011. One in seven is estimating their chances of survival by the flip of a coin, and just one in three said their financial condition is improving – down from nearly one in two in the second quarter.
If the numbers are any indication, small businesses have reason to be gloomy: They’ve lost an estimated $2 trillion in profits since the recession began in December 2007. That’s an average loss of $253,000 for each of the 8 million U.S. businesses with sales between $100,000 and $10 million. (Larger companies have been less affected and so are recovering faster, says the survey.)
Small businesses have little political clout and are the first place our govt is turning to for additional taxes and health care payments…
By my estimate, we have had a GM bankruptcy a year in the US for over a year now when you aggregate all the failed businesses. There appears to be little stopping the party either.
US dollar falls to 15-year low against yen amid signs of slowing economic recovery
TOKYO (AP) — The U.S. dollar slid to a 15-year low against the yen Wednesday, dragged down by the anemic recovery in the world’s biggest economy.
The greenback was quoted at 84.71 yen in London, the lowest since 1995, before recovering slightly to hover under 95 yen.
Investors stepped up selling of dollars after the Federal Reserve announced Tuesday additional monetary easing steps in a bid to shore up the flagging U.S. economy. The central bank also downgraded its assessment of the economy’s prospects.
Good thing Goldman has trading software to prevent a big stock market drop.
You have it backwards, pressboard. Dollar falling usually suggests stock-market rally. After all, with a dollar that is worth less, you would need to pay more of them to buy a business.
…if you say so.
At some point the up shot of this massive rise in the yen (I think it represents Japanese investors and corporations repatriating their investments from around the world), is going to have dramatic consequences.
It seems that such an imbalance can only addle so many other other markets.
If the yen continues to rally, exporting activity out of Japan will either grind to a halt or proceed at a loss.
I don’t know what the current percentage is, but Japan used to represent an important fraction of global economic production.
Bill Black’s ‘Alternative’ to the Rating Agencies: “Get Rid of Them”
Aug 11, 2010 Aaron Task in Newsmakers, Banking, Politics.
The slow-motion fallout from the credit crisis resumed Tuesday when the FDIC asked for public comments on alternatives to the rating agencies.
Among many others, former federal prosecutor William Black has some ideas for “alternatives” to the rating agencies:
Get Rid of Them: “The rating agencies to my mind add negative value - they’re bad for the world,” Black says. “I wouldn’t mourn their passing at all.”
Break the Duopoly: Most institutional investors are prohibited from buying debt without a specified rating. At a minimum, the government can force public pension funds to end these mandates, Black says. “Isn’t it insane that after a track record as bad as you can imagine, the rating agencies are [still] all powerful?”
End the Conflicts of Interest: Black says assigning rating agencies to rate certain debt rather than have them be paid by the issuers would stop some of the abusive industry practices he compares to “extortion.”
Rating Agencies / Accounting Firms / Appraisers
What could possibly ever go “collectively” wrong?…there ALL Professional organizations with rules & ETHICS!
Take a look at William K. Black’s book, The Best Way to Rob a Bank is to Own One. It’s about control fraud and the role it played in the S&L crisis of the 1980s.
With regards from your HBB Librarian…
That sounds good. I listened to a podcast of his interview with Bill Moyers.
Melissa Francis just bought a home. (she disclosed it interviewing some realtor-like person.)
That’s what she said this AM. She’s one of those annoying CNBC shills. I remember when she heard that avg. CA home selling prices were down to $300,000 and she said she wanted to hop a plane and go buy one.
These financial news spigots usually have a huge buy side bias. Rating are better when the selling is heavy.
I bet she is married to a guy in the “finance industry”. These people truly practice what they preach. Not very smart people IMO……
“states hardest hit fund” now getting $2 billion more (it’s aimed at the 17 states with the highest unemployment)
new program $1 billion HUD program - no interest loans to unemployed homoaners
i’m going to scroll back a couple days to look for discussions on the topic but what are the chances that the govt. will start a program to cut principal right off the loans? I always thought the chance was zero, it still seems impossible.
i’m going to scroll back a couple days to look for discussions on the topic but what are the chances that the govt. will start a program to cut principal right off the loans? I always thought the chance was zero, it still seems impossible.”
there is a rumor the government will use fannie Mae to do this
all things are possible when its just paper money I guess
I would be totally Offended by that…since they wont cut a few thou off my credit cards because I am a stupid idiot renter.
Taleb Says Government Bonds to Collapse, Avoid Stocks
Aug 11, 2010 ~ Bloomberg
Nassim Nicholas Taleb, who warned that unforeseen events can roil markets in “The Black Swan,” said he is “betting on the collapse of government bonds” and that investors should avoid stocks.
“I’m very pessimistic,” he said at the Discovery Invest Leadership Summit in Johannesburg today. “By staying in cash or hedging against inflation, you won’t regret it in two years.”
Treasuries have rallied amid speculation the global economic recovery is faltering, driving yields on two-year notes to a record low of 0.4892 percent today. The Federal Reserve yesterday reversed plans to exit from monetary stimulus and decided to keep its bond holdings level to support an economic recovery it described as weaker than anticipated. The Standard & Poor’s 500 Index retreated 16 percent between April 23 and July 2, the biggest slump during the bull market.
“I’m very pessimistic,”
And this some how qualifies as news?
Home Prices Gain in 100 U.S. Cities in Second Quarter
Aug 11, 2010
Home prices rose in 100 U.S. cities in the second quarter as a buyer tax credit boosted demand and distressed properties made up a smaller portion of sales.
The median price of a single-family home sold in Akron, Ohio, climbed 36 percent from a year earlier to $119,700, the biggest rise of 155 cities measured, the National Association of Realtors said in a report today. Prices in San Jose, California, gained 26 percent to $630,000 and San Francisco added 25 percent to $591,200. The median U.S. price rose 1.5 percent to $176,900.
A federal tax credit of as much as $8,000 underpinned second-quarter real estate demand, boosting sales to an annual pace of 5.61 million homes, according to the Realtors group. The effect is waning, said Richard DeKaser, chief economist at Woodley Park Research in Washington. Transactions probably will fall to a 4.55 million pace in the three months ending in September, the NAR said in a forecast posted on its website.
“Throwing a sale price on housing stimulated demand, but there is no doubt it’s been a largely temporary effect,” DeKaser said in a telephone interview. “The level of housing activity, whether one is talking about sales or construction activity, is abysmally low.”
“Home Prices Gain in 100 U.S. Cities in Second Quarter”
I guess it goes without saying that the second quarter home prices were distorted by the $8K federal tax credit for first time home buyers, which expired April 30, 2010.
The third quarter housing price data should be far more interesting, and the fourth quarter data may be more interesting still, given where the stock market is currently headed.
It seems that Wall St’s hope that the rest of the world would make the US economy irrelevant was premature. I guess Rajiv won’t be buying a Suburban, a 60″ plasma TV and a Harley after all.
READ ALERT interesting.The Nail In Wallstreets Coffin
http://www.phonienews.com/12316/the-nail-in-wallstreets-coffin/
As the Obama administration helps our largest banks tread water in an ocean they themselves created, a tidal wave has been spotted just over the horizon.
A new, stock clearing house will open in the U.S. in March that will right many of the wrongs perpetrated by the market makers, brokers, and hedge funds conducting business on the NASDAQ and OTC markets. The NASDAQ OMX has been approved to start the clearing of stocks next month. Currently, 92% of all stocks in the U.S. markets are cleared by the DTC, which is an arm of the Federal Reserve.
The problem for the market makers, brokers, and hedge funds, is all of their NSS (naked short selling) will have to be covered when companies jump to the No Nonsense NASDAQ OMX from the DTC, that for years looked the other way when this practice occurred.
A naked short sell is perpetrated when a buy order is placed by an individual for a stock and a market maker pulls those stocks out of thin air and puts the imaginary stocks into the individuals broker account. This practice has bankrupted countless marginal companies in the last 8 years. Many, if not most market makers are owned by the large banks and brokers on Wall street.
This practice of naked short selling artificially deluded the outstanding shares, making each share worth less causing a death spiral. At this point the brokers and hedge funds sell short, betting that the stock would further decline, which was a no brainer of course.
Almost all of these affected companies did not survive, at least in their original form. However, the companies that did survive this savage market manipulation will soon leave the DTC and join the new clearing house of the NASDAQ OMX. I know of one CEO that spent over 750K of his own money to save his shell OTC company from this type of manipulation and will most likely have a very healthy profit for his
troubles.
When this transpires in March, ALL OF THOSE AIR SHARES MUST BE COVERED by the brokers or market makers AND all those hedge fund short sells MUST BE COVERED AS WELL.
This will put the nail in the coffin of dozens of hedge funds, markets makers, and brokers throughout the U.S. The chickens are finally coming home to roost and they’ve grown to the size of an Emu.
The greed imbeded in our stock market will be proved to have been unprecedented in human history.
This will put the nail in the coffin of dozens of hedge funds, markets makers, and brokers throughout the U.S. The chickens are finally coming home to roost and they’ve grown to the size of an Emu.
Neener-neener!
Will this make it safe to go long again?
NY race for “Sheriff of Wall Street” hard to call.
NEW YORK (Reuters) - The campaign for New York state attorney general — a job that includes being the “sheriff of Wall Street” — is opening up now that the front-runner has been shaken by admissions of drug use and failing to vote.
Five Democrats and one Republican are vying for the job now held by Andrew Cuomo, who is running for governor. The primaries are scheduled for September 14.
The attorney general race has stirred little excitement across the state. A Quinnipiac University poll taken in late July found only 3 percent of Democrats could name any of their party’s candidates and 81 percent said they did not know who they would choose.
The poll showed Kathleen Rice, a suburban district attorney, leading the Democratic field with 11 percent. She was followed by state Assemblyman Richard Brodsky with 5 percent, state Senator Eric Schneiderman with 4 percent, lawyer Sean Coffey with 3 percent and former assistant attorney general Eric Dinallo at 2 percent.
The poll’s margin of error of plus or minus 2.9 percentage points put the bottom four in a statistical tie.
“In such a fragmented situation, the election is going to go to the best organized person, the one person who is best able to mobilize on the street,” said Gerald Benjamin, dean of the political science department at the State University of New York at New Paltz. “But we just don’t know who that is.”
Dollar Hits Low Against Yen, Dealing Blow to Japan’s Economy
By HIROKO TABUCHI
Published: August 11, 2010
TOKYO — The dollar sank to a 15-year low against the yen on Wednesday, as the Federal Reserve’s pessimistic view of the American economy prompted investors to sell the American currency for safer assets.
The strengthening yen comes as a further blow to a Japanese economy that is suffering the effects of deflation.
The dollar, which has declined more than 10 percent against the yen in the last three months, dropped to 84.72 yen on the Electronic Brokering Services trading platform late Wednesday — the lowest level since April 1995, when the dollar hit a low of 79.75 yen in the aftermath of the 1985 Plaza Accords, the coordinated effort between major economies to depreciate the dollar.
I nearly fell out of my chair!
An article in the mainstream press pointed out that low interest rates punish savers:
http://money.cnn.com/2010/08/11/markets/thebuzz/
Usually it’s “RAH RAH! Let’s keep house prices inflated”
Klunk! (Slim just fell out of chair.)
“Of course, Ben Bernanke and his merry band of policy makers aren’t vindictively singling out savers to punish”.
“The Fed has good reason to do its best to try and keep short-term and long-term rates low in order to prevent what seems to be a sluggish recovery from becoming something much worse, i.e. a deflationary double-dip recession”.
Interesting how debt has replaced capital in the ability to sustain life. Guys like Schiff keep pointing this out. In the absence of Feddling, he’s right. Perhaps if rates were higher, folks such as DennisN below would have more money to spend on the economy every year.
folks such as DennisN below would have more money to spend
That would be good for the ammunition, Wagner recordings, and cat-food markets!
Please….Beethoven and Brahms recordings.
But I’m already fully stocked with them.
I’m pissed at the Fed ZIRP policy, but I can survive due to inherent cheapness. Mostly I’m pissed because the government has decided to penalize frugal people to bail out high-hubris-speculators, who should IMHO be sent off to a forced labor camp.
I’ve always worked on my own cars, partly because it’s good mental therapy. Right now my paid-cash-for cars are a 2001 F-150 with 4.6l V8 (70K miles) and a 2004 Miata (30K miles). Barring accidents, these probably can last me the rest of my life (I’m 57).
I left Silicon Valley in early 2006 with $1 million in CASH after selling my tiny home for a fortune. I bought my Boise mini-McMansion for $270K and put the rest into mostly short-term investments. My house has dropped to about $200K but so what? I still have over $600K to live on. BUT that has to last me the rest of my life, however long that is. My biggest mistake was not putting that money into long-term CDs back in 2007 - but how was I to know?
Tonight’s frugal supper is boneless pork chops sauted in EV olive oil and dry Marsala with onions, mushrooms, and red bells. Served with brown/basami/wild rice pilaf and Gallo Sauvignon Blanc. This supper cost less than a typical McDonalds meal. The local market has beautiful sirloin pork chops for $1.88 a pound.
I live on $24K a year - my biggest expense is $460/mo for Blue Cross. But I only had taxable income last year of $15K so I spent $9K of my savings. And I’m living as cheap as humanly possible. Restaurants, hotels, mechanics, local bookstores, and the like don’t get ANY money from me.
And yet I realize that I’m in MUCH better financial shape than 90% of the people in America.
My local newspaper (Idaho Statesman) published an article last week about how poor suffering government employees had to take a 7% pay cut. I commented that retired people like me, trying to live off the interest on savings, had taken about an 80% pay cut due to Fed policy.
My comment got the highest number of thumbs-up responses - about 25.
Crowd waiting for housing vouchers gets rowdy
The Atlanta Journal-Constitution
A crowd of people hoping to get federal housing assistance became unruly Wednesday morning with reports of fights breaking out in the crowd.
Thousands of people were lined up at the Tri-Cities shopping center, hoping to apply for a voucher from the East Point Housing Authority that will give them a discount on their rent.
People began lining up at the shopping center two days ago, and by Wednesday morning the crowd had grown to over several thousand people. East Point police, some wearing riot helmets, were patrolling the area. Firefighters and EMTs were attending to people who were overheating in the sun. Police from College Park, Hapeville, Fulton County and MARTA assisted in crowd control.
Felecia McGhee told the AJC she arrived around 6:30 a.m. Wednesday. She said the major problem began when people started breaking into the line and officials started moving the areas where they were handing out applications. She said she saw at least two small children trampled when the crowd rushed the building where the applications were to be handed out.
“It’s a real mess out here,” she said.
I hope there’s film at 11.
more free obama stash money for his devoted supporters…
Was there a Wal Mart nearby?
Was there a Black Friday nearby?
Why did they have to bring them water? Nobody ever brings me water.
I see nothing to worry about until this October or so…
market pulse
Aug. 11, 2010, 1:34 p.m. EDT
S&P 500 correlation index rises to record level
* VIX jumps 14% amid stock sell-off (11:23a)
* Bank of England cuts U.K. GDP growth outlook (8:11a)
* Obama insiders out of touch on the U.S. economy (1:06p)
* Treasurys hold gains after strong 10-year auction (1:32p)
By John Spence
BOSTON (MarketWatch) — The CBOE S&P 500 Implied Correlation Index based on options expiring in January 2011 rose to a record high of 79.84 at one point Wednesday, according to the Chicago Board Options Exchange. The index rises when S&P 500 (SPX 1,093, -27.81, -2.48%) stocks move more in tandem, or have a higher correlation. In July, The Wall Street Journal reported stocks were trading in lock-step more than at any time since the crash in 1987, showing the recent tendency of investors to move in a herd and raising red flags with analysts.
We’ve heard from plenty of bottom callers recently that the housing market has already bottomed out, but today’s stock market action suggests the same is not the case for the U.S., not to mention global, stock market. History suggests that stocks are a leading indicator while housing, which is more closely tied to employment, is a lagging indicator.
Do the housing market bottom callers think it is different this time?
WASHINGTON (AP) — The Obama administration is providing $3 billion to unemployed homeowners facing foreclosure in the nation’s toughest job markets.
The Treasury Department says it will send $2 billion to 17 states that have unemployment rates higher than the national average for a year. They will use the money for programs to aid unemployed homeowners. Some of those states have already designed such programs.
Another $1 billion will go to a new program being run by the Department of Housing and Urban Development. It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.
Yea, read that report, typical move by typical morons.
I’ve been reading in more than a few places about the high rate of U.S. homeownership and why that might not be such a good thing.
After all, if you have to move for a job, it’s a lot easier to do if you’re a renter. Many HBB-ers have pointed this out.
BTW, if you want to explore this topic in depth, Richard Florida’s Who’s Your City? is a good book to start with.
With regards from your HBB Librarian…
Just heard a NAR shill on the radio, say “that with the new report of home prices in 100 markets rising, it is apparent that we are seeing a bottom with more price rises to come”.
“I other words buy now or be priced out forever”
I sure this will baffle the clowns in charge, surely they were counting on an increase in tax revenue.
Store Owners Say Cigarette Sales Plunge
11th of August , 2010
ALBANY—The first six weeks of meteoric cigarette tax rates in New York showed a plunge in sales at convenience stores statewide, mainly because most smokers are finding ways to dodge the tax altogether, reports the New York Association of Convenience Stores.
On July 1, Governor Paterson and the Legislature increased the cigarette excise tax from $2.75 a pack to $4.35, the highest state tax rate in the country. Just as NYACS predicted, the 58% jump unleashed a new wave of cigarette tax evasion, as tens of thousands of additional smokers – aghast at $9 to $12 pack prices – shifted their purchases to tax-free tribal smoke shops, the black market, and border states with lower tax rates.
border states?????
Like in civil war border states???
Or non-socialist border states???
Roll your own!
How is bulk tobacco taxed?
Not sure about elsewhere, but here it’s a big difference and two friends have been doing just that for going on four years now.
Ah yes, what I call “state line arbitrage”.
If you’re ever driving south on U.S. 202 into the great state of Delaware, you’ll be greeted by the following sign:
Welcome to Delaware
Home of Tax-Free Shopping
Talk about thumbing your nose at Pennsylvania!
I once heard a spokesperson for the convenience store industry claim that cigarettes are a huge share of their sales.
Add on soft porn magazines, Colt 45 and lotto tickets, and my guess is you are up to to 95 percent.
You left out cigars for blunts (cigars stuffed with pot). A friend who owned a gas station and convenience store said they sold a lot of them.
He ended up selling and going back to his native country, partly because he became uncomfortable making money from vices. I think he has a wholesale foodstuffs business now.
increased the cigarette excise tax from $2.75 a pack to $4.35, the highest state tax rate in the country. Just as NYACS predicted, the 58% jump unleashed a new wave of cigarette tax evasion, as tens of thousands of additional smokers – aghast at $9 to $12 pack prices – shifted their purchases to tax-free tribal smoke shops, the black market, and border states with lower tax rates.
Don’t …Stop!,…Don’t …Stop!,…Don’t …Stop!
Tobacco Corporation CEO’s = “Those f@!king Guys!,” Jon Stewart.
Where are all of the new “green” jobs that Barry promised, was he talking about jobs for Mexico.
Energy Conversion Devices to lay off 140
FREE PRESS
Energy Conversion Devices said this morning that it plans to layoff 140 employees at one of its solar panel plants in Auburn Hills.
The layoffs are likely to occur in October when the Rochester Hills-based company plans to move some final assembly work to one of its underutilized plants in Tijuana, Mexico.
The affected Auburn Hills plant will not be idled and will employ 140 workers after the layoffs. But to reduce costs, only the first three steps in the thin film solar panel manufacturing process will occur there, said Martha Duggan, ECD’s vice president of government and regulatory affairs.
“We are aggressively reducing our cost structure to operate more effectively in the highly competitive, global solar market, and, through these actions, we will better utilize our existing capacity in Tijuana, without any additional capital costs,” Mark Morelli, ECD’s CEO and president, said in a statement.
Oregon tries foreclosure on resort solar project
The Associated Press
Posted: 4:09 p.m. Wednesday, Aug. 11, 2010
BEND, Ore. — The state is trying to foreclose on some property at the Pronghorn golf resort in central Oregon to recover $1.2 million from a loan for a solar energy project.
The Oregon Department of Justice is suing Pronghorn to recover a $1.8 million loan from the state Department of Energy for the 158-kilowatt solar project. Court documents allege Pronghorn Investors, the golf resort’s operating company, stopped paying on the loan March 1.
The loan was to help pay for $1.6 million in materials and nearly $580,000 in labor costs related to construction of the electricity generation system, according to Deschutes County Circuit Court documents filed July 23.
Two Brokers Convicted of Fraud Can Keep Morgan Stanley Bonuses
Aug 11, 2010
Morgan Stanley, owner of the world’s largest brokerage, lost an arbitration ruling that will allow two brokers convicted of securities fraud to each keep $4.45 million in signing bonuses.
A Financial Industry Regulatory Authority arbitration board denied the New York-based firm’s request to have Eric Butler and Julian Tzolov repay the bonuses paid when they were hired in 2007, according the ruling. The board also denied Butler and Tzolov’s counterclaims seeking damages, said the ruling, dated July 22.
“Eric is pleased with the result, and it was the right result,” Zachary Johnson, a lawyer for Butler at the firm Galluzzo & Johnson LLP, said in a phone interview. Tzolov, who represented himself, couldn’t be reached.
The arbitration board didn’t provide a reason for its decision.
Let them eat cake!
Foreclosure(s) in Gilbert, AZ
Well the DOW didn’t do to bad, just down 262. The street will need to conjure up some new false hope to get the savvy investors back on the bull.
Just wait until all those foreign debt defaults start happening. Dow 12,000? Maybe a DOW 1200.
No worries, Barron’s magazine sez the fed will just print up another $2-3 trillion, and fix all those pesky problems!
They just can’t figure out why all this printing hasn’t “fixed” anything. So surely more printing will do the trick….Not.
We haven’t heard from Eddie recently; wondering if his DJIA = 12K by year-end forecast is intact?
It seems like Eddie is far more likely to show up here when the stock market is going up than when it is taking a dump.
Exactly. I almost never see him during a downcycle…or even a down day for that matter.
Last week he was gloating about how good it felt to be right, and that the Dow would hit 12K sooner than he predicted. He neglected to mention that he originally predicted it for June.
Q2 GDP Growth Could Be Revised To Just 1% After Trade Data
Aug. 11, 2010
June’s trade deficit swelled 18.8% to $49.9 billion, the highest since October 2008. That was much worse than Wall Street predicted — or what the Commerce Department estimated in the recent Q2 GDP report. The new report, along with recent inventory data, suggest Commerce will revise down Q2 economic growth from the already-sluggish 2.4% annual rate to about 1%, according to Action Economics. Action Economics is looking for stronger retail inventory figures later this week that would imply a 1.4% GDP pace.
Those downward revisions may bolster Q3 figures. Weaker inventory growth in Q2 suggests there will be less of a drop-off in Q3. Q2’s fat trade gap may mean the same.
But there’s no denying that the recovery is losing steam just as head winds hit. The inventory restocking cycle, which had fueled growth in recent quarters, clearly is ending.
More asset market intervention Shock and Awe on the way from the Fed later this year?
The Financial Times
Fed shift aims to avert rate rise
By James Politi in Washington
Published: August 11 2010 20:26 | Last updated: August 11 2010 20:26
… Wednesday’s negative market reaction will raise doubts about the effectiveness of the Fed’s strategy. Critics may argue that the US central bank has weakened confidence in the recovery without delivering a strong enough policy response, such as a fully-fledged asset purchase programme like that cooked up during the financial crisis. The central bank may now face pressure from the markets to act more forcefully earlier than it wants to.
“They have now created expectations in the markets that if there is more weak data then asset purchases will follow,” Dean Maki, an economist at Barclays Capital, says.
The threshold for further action could be quite high. Many officials may want to see at least several more months of unexpectedly poorer data – with more slowing growth, sluggish consumer spending, disinflation and weak private sector job creation – before approving a new easing programme on the $1,000bn scale of that which was put in place during the crisis.
If the Fed does eventually have to move, most economists believe it will have to do so in very bold fashion. Although there could be some officials calling for gradual asset purchases, the consensus seems to be that the US central bank would once again want to strike with overwhelming force – as it did in 2008 – if it really believed that the economy was heading on a dark path.
…
Once again, the financial press feeding the Fed myth/cult, as if it is a given that they’ll always make all the right moves at just the right time.
Sure, they have lots of power - but if it’s run by humans, it’ll f*ck up - sooner or later.
“Long-Term” score:
Bungee-cord Theory = 1
Rope-around-the-Throat = 0
That’s just the way it’s gonna be
Mr. Bear/Packy…CantankerousIf the Fed does eventually have to move, most economists believe it will have to do so in very bold fashion…the consensus seems to be that the US central bank would once again want to strike with overwhelming force
I’m just a sittin’ & a waitin’…just a sittin’ & a waitin’…
‘Arizona style’ immigration law for Florida introduced
By John Lantigua
Palm Beach Post Staff Writer
Posted: 11:25 a.m. Wednesday, Aug. 11, 2010
Florida Attorney General Bill McCollum and State Rep. Bill Snyder, R-Stuart, today jointly introduced to the public the draft of an “Arizona style” immigration enforcement law that they hope will be passed by the Florida legislature.
The bill would obligate Florida law enforcement agents to inquire about the immigration status of people they encounter in the pursuit of their duties when they have a “reasonable suspicion” that those people may be in the country illegally. The law would require those law enforcements agents to detain anyone in the country illegally and that those not under arrest for some other crime be turned over to federal immigration agents for deportation.
The bill would also require Florida judges to increase the sentences of illegal aliens found guilty of crimes by 50 percent over usual prescribed sentences. For example, McCollum said, an undocumented worker found guilty of a third degree felony might be sentenced as if he had been convicted of a second degree felony.
Judges would also be required to check a person’s immigration status before releasing that person on bond. McCollum said it is more likely a person in the country without permission would flee a jurisdiction if given the chance.
The bill also makes it a misdemeanor for a person not legally in the country to seek employment in Florida.
The proposed law was drafted by Snyder with the help of McCollum’s office. Snyder has said previously he will wait until the regular legislative session in March to introduce the measure
Ariz. residents find freedom, protection under new gun law
SEDONA, Ariz. — Be careful who you mess with in Arizona because you never know who might be packing heat.
On July 29, a new concealed-carry weapons law took effect, granting Arizona residents the right to carry concealed weapons without a permit. Before the law was passed, Arizona residents were allowed to carry weapons as long as they were displayed in plain sight.
Arizona residents older than 21 who do not have criminal records can carry a concealed weapon almost anywhere, including shopping malls, movies and grocery stores. Only in establishments that serve alcohol are non-permitted carriers forbidden to wear concealed guns.
The law underscores the state’s Wild West reputation, and one of Arizona’s most notable law enforcement official defends the right to carry concealed arms.
About two months ago I went to refuel a work truck. The isle nearest the snack shop had a car blocking the pumps with a young lady sitting behind the wheel, so I turned off the motor to wait. A guy in another isle who was filling his car suggested to the woman that she pull forward to the parking area to free the pump access; she said her boyfriend was getting some cigarettes. Out comes the boyfriend who hops in the car, gets briefed by the girlfriend, and quickly hops out. He suggested that the guy mind his own f* business. The guy said something back, and the boyfriend closed the car door, and bolted toward the guy. The guy quickly pulled out a badge hanging on a necklace chain, and reached his hand behind his back steadying it there. The boyfriend halted like he hit a force field. He retreated to his girlfriend’s car, and they drove away.
That was a cop, right?
“That was a cop, right?”
That was my thought.
It occurs to me that the Fed and the government are more than willing to carry out policies that don’t cause immediate pain, like gargantuan deficit spending, and supporting asset prices.
But - if the right thing to do is to cause pain (like relocating a dislocated joint) - would they ever do it?
I recently saw a story about William Black decrying the steps the US is taking - that it is hiding bank losses, like Japan did.
http://finance.yahoo.com/tech-ticker/article/535317/Bill-Black%3A-U.S.-Using-%22Really-Stupid-Strategy%22-to-Hide-Bank-Losses
Just how much should Uncle Sam do to help Americans buy their own homes?
For 70 years — and for the last 15 in particular — the answer has been: Whatever it takes.
Now, policymakers are pausing to reconsider. In the next few months, they’ll weigh whether there can be too much of a good thing when it comes to helping families finance the American Dream.
The rethink could mean a shake-up for a mortgage market addicted to government subsidies.
http://www.usatoday.com/money/economy/housing/2010-08-11-housing11_cv_N.htm
I’ll believe it when I see it. Real change I mean.
- Significantly higher interest rates
- Remove the FHA backstop
- Kill Fannie and Freddie
- Remove the mortgage interest deduction
- Remove the cap gains exemption
- Kill the FHLB system and CDFI funding
- Change the Recourse Rule to not purposefully steer funding towards mortgages
Anything short of those is lip service.
Da’Boyz want middle-class payment slaves, not ownership.
And the middle-class payment slaves want the right to walk away from their mortgages if they don’t think they will be able to eventually profit on their “investment.”
And the Fed wants to make sure that everyone feels comfortable enough with interest rate levels to buy a house or ten.
Sounds like a multi-way match made in Heaven!
Great article! There are several things we must avoid in order to become financially stable and not retire broke. An interesting article on this subject is:
Worse Financial Decisions You Can Make To Guarantee Bankruptcy During Retirement!
“Prices are still too high and must come down to reasonable levels.”
In my Iowa city commercial real estate seems cleaned up a bit. They dusted off and straightened up all the For Lease signs that were laying sideways in the windows, and even cleaned the glass. They’re serious now… & ready for cargo.
It seems like All the For Sale signs of the overpriced too long on the market residential properties suddenly have a Price Reduced sign on top now.
A number of houses have For Rent signs right next to the For Sale signs, something I’ve not ever seen much of here before, it’s now a bit common.
Yet the towers of new apartments continue to be built, although the cranes have disappeared from the downtown area.
The real estate changes many of you write about are quite clear to see in this area, now.
And sadly, while reading this blog I see there are too many people really hung up and focused on shoo-ing away the hands that reach out for Free Services rather than questioning the re-distributionist idea of forcibly taking from one group and giving to another - for Free - that started and maintains this whole illegal immigration fiasco. WTF? What do people think happens when a store gives out Free Steak, think people won’t show up in numbers and come back for seconds and thirds and hang around for more? That’s what it looks like some people are complaining about, not the Free Steak provided by the taxpayer, but those who reach for it.
This lack of clarity of the source of the problem made the first part of this blog just a terrible read. …They’re acting like having a drivers license means a person knows how to drive. Documentation means nothing in the big scheme of things, just look at the behavior of the Legal American banksters who continue to do what everyone here finds so repulsive, as if legality determines behavior.
And the people piling on and thrashing blacks as criminals, do they ever stop and consider black communities at one time were quite stable with tightly knit family units until the government stepped in and sort of replaced the head of the household causing the problems we have today? Forgotten history?
On top of everything else lawmakers are talking about making an unequal helot caste system of laws in Florida? Don’t people realize that these sort of things have a tendency to expand and include everyone except the ruling class? And the ruling class does not mean legal, or include you and I.
We don’t need The Berlin Wall on America’s border Or an increase of laws.
I’m reminded of a book called, And They Thought They Were Free.
“Prices are still too high and must come down to reasonable levels.”
In my Iowa city commercial real estate seems cleaned up a bit. They dusted off and straightened up all the For Lease signs that were laying sideways in the windows, and even cleaned the glass. They’re serious now… & ready for cargo.
It seems like All the For Sale signs of the overpriced too long on the market residential properties suddenly have a Price Reduced sign on top now.
A number of houses have For Rent signs right next to the For Sale signs, something I’ve not ever seen much of here before, it’s now a bit common.
Yet the towers of new apartments continue to be built, although the cranes have disappeared from the downtown area.
The real estate changes many of you write about are quite clear to see in this area, now.
A number of houses have For Rent signs right next to the For Sale signs, something I’ve not ever seen much of here before, it’s now a bit common.
AZ Slim noted this (Tucson) and I noted it here (Austin) too.
And sadly, while reading this blog I see there are too many people really hung up and focused on shoo-ing away the hands that reach out for Free Services rather than questioning the re-distributionist idea of forcibly taking from one group and giving to another - for Free - that started and maintains this whole illegal immigration fiasco. WTF? What do people think happens when a store gives out Free Steak, think people won’t show up in numbers and come back for seconds and thirds and hang around for more? That’s what it looks like some people are complaining about, not the Free Steak provided by the taxpayer as they should, but those who reach for it.
This lack of clarity of the source of the problem made the first part of this blog just a terrible read. …They’re acting like having a drivers license means a person knows how to drive. Documentation means nothing in the big scheme of things, just look at the behavior of the Legal American banksters who continue to do what everyone here finds so repulsive, as if legality determines behavior.
And the people piling on and thrashing blacks as criminals, do they ever stop and consider black communities at one time were quite stable with tightly knit family units until the government stepped in and sort of replaced the head of the household causing the problems we have today? Forgotten history?
On top of everything else lawmakers are talking about making an unequal helot caste system of laws in Florida? Don’t people realize that these sort of things have a tendency to expand and include everyone except the ruling class? And the ruling class does not mean legal, or include you and I.
We don’t need The Berlin Wall on America’s border Or an increase of laws.
I’m reminded of a book called, And They Thought They Were Free.
While reading this I see there are too many people really hung up & focused on shoo-ing away the hands that reach out for Free Services rather than questioning the re-distributionist idea of forcibly taking from one group & giving to another, for Free, that started & maintains this whole illegal immigration fiasco. WTF? What do people think happens when a store gives out Free Steak, think people won’t show up in numbers & come back for seconds & thirds & hang around for more? That’s what it looks like some people are complaining about, not the Free Steak provided by the taxpayer as they should, but those who reach for it.
This lack of clarity of the source of the problem made the first part of this blog just a terrible read. They’re acting like having a drivers license means a person knows how to drive. Documentation means nothing in the big scheme of things, just look at the behavior of the Legal American banksters who continue to do what everyone here finds so repulsive, as if legality determines behavior.
And the people piling on and thrashing blacks as criminals, do they ever stop & consider black communities at one time were quite stable with tightly knit family units until the goberment stepped in & sort of replaced the head of the household causing the problems we have today? Forgotten history?
On top of everything else lawmakers are talking about making a separate system of laws in Florida? Don’t people realize that these sort of things have a tendency to expand & include everyone except the ruling class? And the ruling class does not mean legal, or include you & I.
We don’t need The Berlin Wall on America’s border Or an increase of laws. I’m reminded of a book called, And They Thought They Were Free.
While reading this Bits Bucket I see there are too many people really hung up & focused on shoo-ing away the hands that reach out for Free Services rather than questioning the re-distributionist idea of forcibly taking from one group & giving to another - for Free - that started & maintains this whole illegal immigration fiasco. WTF? What do people think happens when a store gives out Free Steak, think people won’t show up in numbers & come back for seconds & thirds & hang around for more? That’s what it looks like some people are complaining about, not the Free Steak provided by the taxpayer (as they should) but those who reach for it.
This lack of clarity of the source of the problem made the first part of this blog just a terrible read. They’re acting like having a drivers license means a person knows how to drive. Documentation means nothing in the big scheme of things, just look at the behavior of the Legal American banksters who continue to do what everyone here finds so repulsive, as if legality determines behavior.
Obummer — not yet another one of these gloomy economic reality news items. I can’t take it any more! Please pass the medical marijuana cigarette this way.
U.S. Is Bankrupt and We Don’t Even Know It: Laurence Kotlikoff
By Laurence Kotlikoff - Aug 10, 2010 6:00 PM PT
Laurence Kotlikoff Interview on U.S. Economy
Aug. 11 (Bloomberg) — Laurence Kotlikoff, an economics professor at Boston University, talks about the state of the U.S. economy. Kotlikoff speaks with Erik Schatzker on Bloomberg Television’s InsideTrack.” (Source: Bloomberg)
Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.
What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”
But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”
The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years.
Double Our Taxes
To put 14 percent of gross domestic product in perspective, current federal revenue totals 14.9 percent of GDP. So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act.
Such a tax hike would leave the U.S. running a surplus equal to 5 percent of GDP this year, rather than a 9 percent deficit. So the IMF is really saying the U.S. needs to run a huge surplus now and for many years to come to pay for the spending that is scheduled. It’s also saying the longer the country waits to make tough fiscal adjustments, the more painful they will be.
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Please pass the medical marijuana cigarette this way
Don’t bogart that joint, my friend
Pass it over to me.
Don’t bogart that joint, my friend
Pass it over to me.
Roll another one
Just like the other one.
You’ve been hanging on to it
And I sure would like a hit.
Don’t bogart that joint, my friend
Pass it over to me.
Don’t bogart that joint, my friend
Pass it over to me.
Ro-o-o-o-o-o-o-o-o-o-o-o-o-o-o-oll another one
Just like the other one.
That one’s just about burnt to the end
So come on and be a friend.
Don’t bogart that joint, my friend
Pass it over to me.
Don’t bogart that joint, my friend
Pass it over to me
What the fark do they teach the students at Gollum University?
Stripper Says Degree Profitable for Goldman Not Worth It
Aug. 6 (Bloomberg) — Carrianne Howard dreamed of designing video games, so she enrolled in a program at the Art Institute of Fort Lauderdale, a for-profit college part-owned by Goldman Sachs Group Inc. These days, the 26-year-old makes her living in a way that doesn’t require a college diploma — by stripping at a topless club. Like many investors, Goldman, owner of 38 percent of the Art Institute’s parent, Education Management Corp., was drawn to for-profit colleges by their rapid growth and soaring stock prices. Bloomberg’s Cali Carlin reports. (Source: Bloomberg)
If it matters, sorry about the multiple posts - I didn’t think it went through.
I hope it did some good.