Bits Bucket For August 12, 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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Name:Ben Jones
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Bem-vindo à bolha imobiliária!
Welcome to Fantasy Island.
Oh hamburgers!
I like how the word “immobile” is used to describe real estate. Its the same in Spanish.
o PNF vai a bolha dos bens imobiliários
Survey: 40 percent of U.S. professionals want to quit
Kansas City Business Journal
As autumn approaches, companies could see employees leaving for greener pastures.
Forty percent of U.S. professionals are thinking about quitting their jobs after the summer vacation, according to a new survey by workplace supplier Regus. They’re tired of not being promoted, bosses that don’t share company goals and being overworked, the survey found.
“As workers pack up their swimsuits this summer, they are more likely to dwell on the pros and cons of the job that is waiting for them at home,” Sande Golgart, Regus regional vice president, said in a release. “With reports indicating that as many as 25 percent of company top performers in the U.S. plan to quit their jobs within a year, businesses that are not evaluating the necessary benefits for their staff may face losing some of their best talent.”
And they are going to go … where?
They are going to retire early. Why not? What do they have to look forward to in the next 10 years with what the government yokels are doing to the economy. I know of several people with 6 figure incomes planning to do just that at the end of the year.
Corporate Pension Bomb Set To Explode
http://www.forbes.com/2010/08/11/pension-fund-liability-personal-finance-corporate-profits.html?feed=r
It would be interesting to know what constitutes ‘professionals’. I’m sure there are people out there that can retire without any concern over pension funds. Others that overestimate their own self worth and will find quitting to be a major mistake. And others that can quit their corporate job and set up shop individually with mixed results.
A Bunch Of Retirement Statistics
http://www.freeby50.com/2010/03/bunch-of-retirement-savings-statistics.html
If you talk to employees where I work about possible future declines in Social Security payouts you will hear from some of them that one should retire ASAP so they can get onto Social Security before it is cut. Same goes for corporate pensions: Retire now so they can start receiving a pension before it is cut.
This is the same mentality of cashing out one’s home equity in a declining market ASAP before it all disappears.
I predict that the regulatory requirements for full funding will be relaxed in the name of keeping companies in business.
“This is the same mentality of cashing out one’s home equity in a declining market ASAP before it all disappears.”
Some of the papers even suggested that homeowners consider drawing down their home equity loans while they were still accessible and put the money in a checking account. Now, it’s clear that this might have been prudent advice for deadbeats. Today, the NY Times reports about the large write offs of home equity lines of credit:
http://www.nytimes.com/2010/08/12/business/12debt.html
We’ve been up and down this pension thing for a while…
Where I’m at with it is the system is totally horked. You had chronic underfunding and risky investments allowed making this mess. Like everything else, there aren’t any real reserves of money set aside, just money in motion, so deflation or slowing velocity burns them too. Poof, pensions insolvent.
There was plenty of over promising and over commitment just like medicaid, medicare and the rest
The things that should end are letting people start collecting before they are 62 for public pensions OR it should be at a greatly reduced level. No more abuse by the millions of public employees, mostly cops and prison guards, that work the system with overtime money. Pay is based on your salary not OT and bonuses. Should be reviews of pensions to admins as well BUT the bulk of problems are from the cops and guards.
We also need to tighten up regulation on reserves, investment types and what politicians/govt are allowed to negotiate into contracts.
A good bit of court work is required to cut payments to the current abusers.
Same thing goes for private industry pensions, the few out there.
Chances of democrats doing this is zero.
Also a lot of people underestimate what it takes ($-wise) to retire. There is so many with wild-ass thinking about setting up a part-time business to bring in extra $s. Scary
And others that can quit their corporate job and set up shop individually with mixed results.
Tell me about it! If you’ve worked for many years in a corporate job, or as I did, in academia and for nonprofits, that sort of experience does not carry over to solo-preneurship.
And, trust me, you’ll be going to school at the University of Hard Knocks College of Business. They use some pretty harsh teaching techniques there.
This is the same mentality of cashing out one’s home equity in a declining market ASAP before it all disappears.
but that works most home owners won’t have to pay back home equity loans and bought all kinds of stuff they couldn’t afford to now.
PHOENIX — During the great housing boom, homeowners nationwide borrowed a trillion dollars from banks, using the soaring value of their houses as security. Now the money has been spent and struggling borrowers are unable or unwilling to pay it back.
“The delinquency rate on home equity loans is higher than all other types of consumer loans, including auto loans, boat loans, personal loans and even bank cards like Visa and MasterCard, according to the American Bankers Association.
Lenders say they are trying to recover some of that money but their success has been limited, in part because so many borrowers threaten bankruptcy and because the value of the homes, the collateral backing the loans, has often disappeared.
The result is one of the paradoxes of the recession: the more money you borrowed, the less likely you will have to pay up.
“
“What do they have to look forward to in the next 10 years with what the government yokels are doing to the economy.”
Will you drop the political fantasy? What the government has been doing has been screwing the 50 years after the next ten years to prevent an economic collapse over the next ten years as a result of the public and private sector actions of Generation Greed over the past 30 years. With the worst of it from 2000 to 2008.
Now we can argue if that was the right course of action or the wrong course of action, based on various socio-political perspectives.
(Gee, that distribution of income and wealth was a long more even in the wake of the Great Depression, after the paper wealth the rich had piled up was wiped out. And people were pretty happy with the modest but more equal living standards of the 1950s).
But let’s not kid that everything was wonderful before Obama showed up and started screwing up the economy. What is happening is that total debt has started (barely) to come down. That hurts, and will go on for a long time.
Booms and recessions should be planned by our society and performed according to a scheduled time-table so there are no surprises. The cycle seems as old as time, like breathing, and struggles to fight the cylcle seem futile. Imagine if everyone really actually knew a major slowdown was coming years ahead of time and it was not just a guess? We could really plan ahead for it and not buy new police stations and schools and hummers and granite tops. Is there a chance we could ever really be smarter than ourselves?
Booms and recessions should be planned by our society and performed according to a scheduled time-table so there are no surprises.
What makes you think they aren’t?
Problem is, the PTB just won’t publish the dang timetable.
(sorry - tin-foil-hat moment)
Oh wait, the Fed is supposed to be in charge of this. Silly me.
Responsible behavior has been consistently punished. Irresponsible behavior has been consistently baled out, if not actually rewarded.
“Saving for a rainy day” for example. Any business that does this becomes a target for the private equity parasites, who borrow money to buy the so called “underpriced” stock of a company that is sitting on rainy day cash, then immediately strips the company of cash, borrow money up to the limits of the company’s credit line. and start cram-downs on employee pay and benefits, so they can pay themselves bonuses and management fees. Then maybe take the company public a few years later, to collect even more money, or let it go bankrupt after all the cash is gone.
And now the banks are letting all these jackasses slide, because it is too much trouble to recover money from them.
If there was any justice, these a-holes would at least be “black-listed” from every being able to borrow money again, if not wage-garnished for the next 40 years, or even put in jail. But no, bailouts for everyone, because the “recovery” depends on these people pi$$ing away money again.
USA = TFTF………Too fooked to fix
My experience says 6 years is the BB cycle.
6 down. 6 up. The trick is to time it.
SURFS UP!
Oh, and not all sectors are on the same cycle.
Fun, huh?
Wipe-out!!!
I’m still trying to figure out who generation greed is. Each generation takes one step into the future, trying to best provide for themselves and their dependents with limited vision. Consequences cannot always be accurately predicted and circumstances may tatter the best of plans.
“They are going to retire early.”
Why perpetuate this BS? “Retire”? Who? That’s right… the wealthy elite. You’re not one of them nor will you ever be so why champion them at your own economic peril?
Thank you, exeter.
They will all become nurses.
“They will all become nurses.”
The new economy trifecta: nurses, walmart greeters & diesel mechanics.
You mean Chevy Volt mechanics.
I could introduce you to many, many people who think that the entire nation could work for the government and all would be fine. And these aren’t all “skinny jeans” wearing hipsters (some are though), no most of them are nice SFH, two nice cars, two kids, and a dog people.
We have some of them on this blog and they know who they are.
Pleased to meet you too, Bill.
That said, i don’t think that “all would be fine” if the entire nation could work for the government. That would turn us into Soviet Russia.
But, seriously, look at how businesses are going. Those who make the most profits are those who fire the most regular employees, to be replaced by the usual suspects that we all know about. We simply have too many people and too few jobs, which would have blown up our economy even if we didn’t have a housing bubble.
What do you expect the unemployed to eat and where do you expect them to live? If private business doesn’t hire, the government will have to do it, even if the “hiring” consists of handing out a dole in return for not burning down the cities.
If they burned the cities, construction would boom and they’d have jobs.
I blame computers. Ban computers and productivity will drop and then everyone can have a job again. Down with computers!
We simply have too many people and too few jobs, which would have blown up our economy even if we didn’t have a housing bubble.
So, just so we’re clear - you believe that the amount of goods and services that a country can produce has a ceiling, regardless of the number of people working - right? That if N people can produce this level of goods and services, and N+x people in this country exist, that x therefore simply cannot work unless they replace one of the N people?
Given that - can you state what would be your criteria for the ceiling of the amount of goods and services a given country can produce? Is it based on land mass? Natural resources? A limit on human needs and desires? Something else?
If this is not the case, please tell me what I’m missing.
Packman,
Further, there’s a tremendous under-utilization that’s been going on in this country for years! I used to cold call and you’d get these “lead cards” and I swear HALF of them used to be for “Tire Re-Treading” or Appliance Repair ( and a whole LOT of other things that up and DIED during The Boom! )
Who had ‘time’ for that? STFU ( we’re all going to be RICH! ) right? A good many of these people can and WILL find gainful employment, yes again in these lost trades.
“You believe that the amount of goods and services that a country can produce has a ceiling, regardless of the number of people working - right?”
Not even close. The ceiling is on the amount of demand — how many goods and services people want, or more accurately, how many goods and services people are able or willing to pay for. If you can fill that limited demand with machines, computers, and second/third world labor*, then there is less need for human production —> fewer jobs —> less demand/money —> companies outsource to cut expenses even more —> fewer jobs —>
It’s a vicious cycle, as I said a couple days ago. The ideal situation for a corporation is for the labor to always be one tier below the consumer. We’re going to race to the bottom until the only capitalism is going to be when the Sudanese buy no-quality goods from Myanmar.
——–
* and the second and third world labor does not contribute any demand.
The ceiling is on the amount of demand — how many goods and services people want, or more accurately, how many goods and services people are able or willing to pay for.
Hypothetically - would you say that the goods and services people people want is essentially unlimited, if they could pay for them? (e.g. had infinite money)
I’m going assume yes as a premise for discussion (if the answer isn’t yes, then we’ll need to step back).
That being the case, the amount of goods and services is really just limited by the amount people can pay for - correct?
But money is an artificial limit. In reality money just represents labor. For all intents and purposes there is no limit of money, because there is no limit in the amount of labor that can be done.
I say this using money as a representative of labor. In a good economy with an actual static money supply, and hypothetically static population - the amount of goods and services supplied grows over time, and thus price deflation - but not wage deflation - is natural. So even though the amount of money each person has (be it $$, gold, whatever) doesn’t increase - the amount of goods and services that that money represents does.
I’ll have to create a good example/analogy to illustrate this. It would be proof (to a logical person anyhow) that production of goods and services can be consolidated (e.g. through automation) without actually reducing employment. This is acquired through a constantly-growing standard of living (i.e. each person receives more goods and services) offsetting such consolidation. The people who would lose their jobs through automation just gain new jobs creating and producing the machines that allow for the automation.
P.S. people don’t actually have to receive money to be “employed”. I can live on a self-sufficient farm in Montana, work there all my life and have a decent life, and receive zero money. This can be true even in an urban setting - e.g. someone can spend their life fixing up buying houses, fixing them up, and selling them - never being employed by anyone or receiving a salary, but still make a living. What I’m getting to is this - jobs don’t have to be “given” - they actually can be “created”, at the micro scale (1 person) or the macro scale (a new company producing a new good or service).
packman,
Well said, and even if there were this hypothetically ’static’ population, certainly TIME isn’t static and their needs ( hence demand ) would change as they age as well.
I realize re-treading tires or fixing washers isn’t the sexiest of work, but now that we’re no longer flush w/ MEW $’s flooding Home Despot (TM) to buy ‘new’ someone is going to fill that niche.
On a micro-scale, I called my buddy b/c the only ‘other’ auto shop in town just went OOB. Since the major chains simply Will.Not sell you (1) used (ewwww! ) tire, I thought it would be a great niche for him? In truth, the mark-up on used is MUCH better! If we don’t do it, I’ve no doubt someone else will. Hell, could be fun?
I realize re-treading tires or fixing washers isn’t the sexiest of work, but now that we’re no longer flush w/ MEW $’s flooding Home Despot (TM) to buy ‘new’ someone is going to fill that niche.
One of the oldest mom-n-pop appliance retail and repair shops in town went OOB last month. Apparently from what I read in the paper the retail side of business couldn’t compete with Home Despot and there were suddenly a lot of competitors on the repair side.
I bought a used tire just 4 years go. Best deal I ever got - $20 for a tire, installed, when on a cross-country driving trip. Saved me a ton of headache. IIRC it was from a Goodyear shop even.
I used to buy (about 20 years ago) retreads all the time. They were pretty dangerous though. I think truckers still use them a lot (thus the tire treads you often see on the side - or sometimes in the middle - of the road).
i think i see most what you’re saying, pack. i would argue that there is a limit to what people want even if they had money, but that ceiling is too high to make any difference.
I think your model is too simple, and it’s the nuances in the model (which you left out) which is causing all the problems. Nuances:
1. You assume that money represents labor. No way. Money represents government activity, ie printing press. Money represents the confidence in a country, i.e. dollar vs. yuan. Money can be created in the form of debt. And even if money was remotely tied to labor I believe that this representation is far too skewed to be valid. Example: A UPS driver makes $20 for one hour of work. A CEO makes something like $3000 for one hour of work. Peyton Manning makes upwards of $6000 for one hour of work (ballpark). Is that CEO really creating THAT much more in goods and services? That’s just too skewed to have any meaning.
2. You assume that the amount of goods and services is equal to the amount of money/labor: that is, that people will spend every nickel they earn. This isn’t true for the upper classes (for example, that $3000/hr ceo) or corporations, who sock away wealth in the form of hidden cash or non-liquid assets like real estate. That’s money that’s not moving in the money supply. And the upper classes have proportionately more wealth. So there’s a lot of wealth that isn’t being used to buy goods and services.
3. You assume that when one job becomes obsolete or is outsourced, the increasing standard of living will create a new higer-quality job to fill it. There are several problems with this:
3a. These tend to be tech based jobs, which take a lot of time in the innovation R&D pipeline to become viable enough to create jobs. Example: the “Internet” was around for ~40-odd years before it created a single internet job.
3b. Standard of living jobs take lots of up-front capital, which companies are unwilling to pony up. Example: It would be great if we could improve our lifestyle with solar panels and panel maitenance jobs, but you can’t create a soalr panel job upfront capital. Obama is trying to put up public capital where the private sector will not, but conservatives keep hammering him with the “too much debt” etc talking point. Result: jobs are not created.
3c. The creation of the standard-of-living jobs is often so slow that other countries can train the workers faster than the jobs are created. Examples: by the time a new computer-based job is created, there’s a whole host of news graduates in India just waiting to fill that job. Or, medical tourism. Or, it’s easier to import nurses from the Philippines that it is to train Americans here. Outsourcing will fill demand far quicker than you can create demand.
3d. There is the assumption that all US workers will be able to do these high skill jobs. Again, not true. There is a whole class of workers who are too stupid for knowledge jobs, and a related class of workers who are smart but too poor to afford the training. So you again fill your jobs with outsourcing, while there is no job for the underclasses to do.
4. The self-sustaining classes simply don’t count. They don’t handle money, and in a sense, they don’t have to interact with other people. and there aren’t enough of them to make a difference anyway.
so I have to disagree, Pack. Now look, there’s a tornado warning in the vicinity so I’d like to concentrate on that.
The axioms of the austrian school are self-evident only to True Believers.
The axioms of the austrian school are self-evident only to True Believers.
Nanny nanny boo boo to you too.
I used to buy (about 20 years ago) retreads all the time. They were pretty dangerous though. I think truckers still use them a lot (thus the tire treads you often see on the side - or sometimes in the middle - of the road).
They’re called Roadgators…..
oxide - appreciate you putting some thought into this, unlike some who are… their mental namessake.
1. You assume that money represents labor. No way. Money represents government activity, ie printing press.
Seriously? You do realize that money preceded government in history, right? You’re talking about legal tender, not money. It’s a key distinction.
In the 1939-1945 time period “Government activity” in the U.S. increased over 11-fold - from $8B per year to $92B per year. Would you say that “money” increased by that much then?
Money represents the confidence in a country, i.e. dollar vs. yuan.
Now you sound like Eddie. Sorry but please tell me where I can exchange my confidence for money. Generally I can only exchange my labor for it (or my goods which were created with labor). Unless of course I receive it as a handout - though I’m not aware of too many people that can use confidence to do that.
Example: A UPS driver makes $20 for one hour of work. A CEO makes something like $3000 for one hour of work. Peyton Manning makes upwards of $6000 for one hour of work (ballpark). Is that CEO really creating THAT much more in goods and services? That’s just too skewed to have any meaning.
An important distinction that I indeed didn’t raise. Money actually isn’t a direct representation of labor - it’s actually a direct representation of value. And yes Peyton Manning, the CEO, etc. are considered to be creating that much value to society relative to a UPS driver, despite the fact that they may not actually be working harder. Seems kind of unfair, doesn’t it? Well I have news - life is unfair. Peyton is not stealing the money - he’s having it given to him in exchange for his value. CEO’s (usually) aren’t stealing the money - they’re having it given to them for the value that they’re being perceived to provide.
I guarantee you if you tried to pay Peyton Manning $20 an hour, he wouldn’t play football, at least not in the U.S. That’d be a heck of a lot less value (entertainment) provided to the people of the U.S.
2. You assume that the amount of goods and services is equal to the amount of money/labor: that is, that people will spend every nickel they earn. This isn’t true for the upper classes (for example, that $3000/hr ceo) or corporations, who sock away wealth in the form of hidden cash or non-liquid assets like real estate. That’s money that’s not moving in the money supply. And the upper classes have proportionately more wealth. So there’s a lot of wealth that isn’t being used to buy goods and services.
In the long run all money is spent. All money moves, even money which is socked away, inherited, etc. If it doesn’t, it’s worthless.
In case you haven’t noticed - I’m concerned about the long run. Short-run thinking is what gets us into messes like what we have now. In this case forced movement of money pushes it into places it doesn’t belong - like housing.
3. You assume that when one job becomes obsolete or is outsourced, the increasing standard of living will create a new higer-quality job to fill it.
Increased standard of living doesn’t create jobs. Increased standard of living is the result of value provided - value that may come in the form of labor. Or “jobs” if you will. (though of course value can be created without a structured job)
Nevertheless I know that’s not the point you were making…
There are several problems with this:
3a. These tend to be tech based jobs, which take a lot of time in the innovation R&D pipeline to become viable enough to create jobs. Example: the “Internet” was around for ~40-odd years before it created a single internet job.
There were lots of jobs setting up the infrastructure for “the internet” long before it became mainstream, and certainly long before “40-odd years” after it was started (which would be 2009). CompuServe started in 1969 in fact - the same year as the internet. AOL started in 1983. Prodigy started in 1980. And that’s just on the private side - obviously of course the internet had tons of jobs as ARPANET on the government side going back well into the 1960’s.
Obviously for any individual innovation (technical or otherwise) there’s going to be lag time between when the innovation is started and when it bears fruit. However:
- During that time there are jobs created in developing that innovation. This is in fact the core of capitalism - investing previously-earned resources (money) into things that are not yet providing benefit.
- Like I say we’re talking long-term scale here, and spread out across all industries. At any given time thousands of innovations are being started, thousands more are beginning to bear fruit, and we’re constantly reaping the benefits of millions of past renovations. The economy as a whole is a vast slurry mix of these stages. There isn’t some huge hole created when someone decides to innovate.
3b. Standard of living jobs take lots of up-front capital, which companies are unwilling to pony up. Example: It would be great if we could improve our lifestyle with solar panels and panel maitenance jobs, but you can’t create a soalr panel job upfront capital. Obama is trying to put up public capital where the private sector will not, but conservatives keep hammering him with the “too much debt” etc talking point. Result: jobs are not created.
There is tons of private capital going towards solar power. However I know enough about solar power to know that it will never be able to provide more than a small percentage of our energy needs. Again - trying to force money where there isn’t demand, using excessive resources that will provide less benefit than resources used elsewhere (like nuclear power).
Don’t get me started on the debt. Just look around you, and you can see the results of a government taking on too much debt.
3c. The creation of the standard-of-living jobs is often so slow that other countries can train the workers faster than the jobs are created. Examples: by the time a new computer-based job is created, there’s a whole host of news graduates in India just waiting to fill that job. Or, medical tourism. Or, it’s easier to import nurses from the Philippines that it is to train Americans here. Outsourcing will fill demand far quicker than you can create demand.
Yes we’ve been outsourcing like crazy. This is in part due to various trade agreements - many of which unfairly promote competing countries (see the IT training discussed recently). Our government has no business actually promoting outsourcing like this.
Nevertheless - we are in a global marketplace now. Most of the rest of the world is very far behind us, and thus has cheaper labor costs. It’s got nothing to do with “how fast other countries can train their workers”. It’s all about labor costs. Ours are high relative to the rest of the world. If we continue with unrestrained (and unfair) trade practices, this will continue until the rest of the world catches up. It’s already happening in China - they’re losing outsourcing jobs to places like Vietnam and Indonesia, where labor is even cheaper than China.
I mention unfair trade practices - best examples are labor and environmental laws, which are vastly stricter in the U.S. This makes international trade very unfair and as such not free trade. We need to either impose tighter restrictions on the source of imported goods, or loosen our own restrictions, or both.
3d. There is the assumption that all US workers will be able to do these high skill jobs. Again, not true. There is a whole class of workers who are too stupid for knowledge jobs, and a related class of workers who are smart but too poor to afford the training. So you again fill your jobs with outsourcing, while there is no job for the underclasses to do.
Training. Yes there are lots of people for whom training does no good - but the vast majority of people *can* be trained (e.g. through school) to do these higher-skilled jobs. And there are plenty of low-skill jobs available for the taking - starting first by closing our border with Mexico.
4. The self-sustaining classes simply don’t count. They don’t handle money, and in a sense, they don’t have to interact with other people. and there aren’t enough of them to make a difference anyway.
I was just using that as a segue to my point of how people don’t need to be “provided with jobs” in order to make a living. People can provide for themselves in varying degrees by working for themselves, and thus allowing for lower income to have the same standard of living. Plant a garden to save money on food. Cook instead of going to a restaurant to save money on food. Change your oil yourself. Fix your broken chair, or your roof, or your window, or whatever, with a few hours of work instead of hiring someone or buying a new one. If you’re renting do some work on the place and get a discount on your rent (I used to do it all the time). Even work on someone else’s stuff for some payment. Do some babysitting. Etc. There are plenty of ways to save and make money without having to “get a job”. People have gotten lazy; only willing to get a very specific job in the corporate world in the specific subsection of the specific field they’re in. We need to get out of that mindset.
This is really interesting. Thanks for the thoughtful conversation, packman and oxide.
? You do realize that money preceded government in history, right?
The first sentence is a self-evident axiom that isn’t self-evident. Symbolism preceded brute control? Not in this world, alas. (The austrian school is full of unfounded ‘truisms’ like this.)
“People have gotten lazy; only willing to get a very specific job in the corporate world in the specific subsection of the specific field they’re in.”
I disagree that people are lazy. Some are, but most are willing to work hard. Many of the unemployed find themselves with monthly expenses that exceed what they can earn from any of these ideas. They look for work in their field because they know it will support them. They continue to look until they do not have the resources to build up a business that will support them. Are you saying that they should immediately give up on a good-paying occupation so they have enough time to work some of these options?
And most small businesses fail in the first 5 years. So a year or two down the road in their new venture, they find themselves without resources, which have all been sunk into the business, with no unemployment, because they don’t qualify as business owners, and their skills in their former occupation are stale. This is a path that takes lots of courage and good luck and is fraught with peril in a down economy.
Are there no people or businesses already doing these tasks? How do you expect them to out compete established businesses. Dentists and doctors are fishing for business now. If people are putting off medical care, they will be doing these things themselves.
I found another higher paying job. Technical fields are doing well right now.
Everyone else is screwed.
Google recruiters are working hard. Interviewing lots of people. Don’t know about actually hiring them, though.
Very interesting. I’m working longer hours for no extra pay - and I’m not supposed to, by my contract with my shop. But I have been given very interesting, visible, and challenging tasks and I like working with my group. Been working on weekends too.
But just a trickle of headhunters calling for now. I do know that when I get the five calls per week, that will probably be my time to move again. Probably return to the east coast and hang out there a couple of years. Got great connections and a good reputation with the client.
As Combo says, the important thing is to keep a job and your income in these lean years. If you have several years worth of cash savings, you can build up maybe two or more additional years of living expenses on top of that in case things really go bad.
Stay free and rent.
Oddly enough headhunters are contacting me. The last time that happened was maybe 3 years ago.
Yeah, there contacting me as well. Insurance sales.
(”Uh, nope”)
“40 percent…”
Is that an unusually high number at the tail end of a recession, after people lucky enough to have a job have assumed not only their own duties but also those of recently departed colleagues?
Fellas, consider the source. Regus provides “rent by the month” office space and secretarial svcs. etc. You can even have access to their conference room!
Actually it’s a great concept and for a time I considred it. Easier to attract larger clients w/ a Big City address and phone number etc. So it serves their agenda to skew the survey that direction.
excellent point DinOR….
I had a deal like that with my law practice. Loved it. No one was my boss, and there were other lawyers around to talk to and get referrals from. There was a front office receptionist and phone service, and I swear most my dopey clients thought I was with some badass law firm.
In Montana,
I may ‘yet’? I’ve always thought it preferable and it reduced the legions of secretaries…, office mgrs. and even cleaning staff. I’ve offered to do the same for fin. svcs. here in town ( only to be met by cold stares! )
Forty percent (or more) of the entire workforce may want to quit. You can’t always get what you want. Workin’ for Da Man is not fulfilling but it does pay the bills.
Great. Another useless survey
Bread and circuses.
Facility closing, loses 139 jobs.
Smead Manufacturing announced plans to close its McGregor facility today after 40 years of operation, ending 139 jobs.
The Minnesota-based company tried to reduce costs through outsourcing and automation, but personnel say that a careful analysis shows that they needest more drastic measures to stay afloat.
“Our employees have been very supportive of Smead and have met and exceeded our customers’ needs over the years, but it has not been enough to keep us competitive in this global economy,” said President and CEO Sharon Avent.
The company says it plans to work with the city of McGregor, the state of Texas and directly with employees to help them find new employment.
needest? Methinks the editor doth deserveth a sound flogging.
GM is cooking the books again before the IPO.Stay away from these crooks.
http://www.cnbc.com/id/38672401
Why do you have to continually piss on all of the green shoots, wmbz?
When is the last time we saw a headline that said;
XXX Company hiring 139 people ??
Not counting Government I might add…
Convergys looking to fill 750 Wichita jobs
Full disclosure: these are telemarketing jobs related to “the health care industry,” whatever that means. The article doesn’t provide many details.
If my caller ID is any indication, these are jobs calling small businesses to sell them bogus health insurance policies. I’m noticing an uptick in these calls.
a JOB means an actual amount of pay you can count on each week…….are you sure its not just a flaky fluky commission only “job”?
Great…Eliminating the manufacturing jobs and filling with telemarketing…
Welcome to the last 30 years.
“We’ve met and exceeded our customers needs, but in order to remain competitive globally, we are embracing the new global paradigm, and will go out of business”.
“The Minnesota-based company tried to reduce costs through outsourcing and automation, but personnel say that a careful analysis shows that they needest more drastic measures to stay afloat.”
After giving the jobs to China and robots, I wonder what the more drastic measures could be?
Does make you wonder, doesn’t it?
I’m going to guess product and management. But that’s just me.
Debts Rise, and Go Unpaid, as Bust Erodes Home Equity
~NYT
PHOENIX — During the great housing boom, homeowners nationwide borrowed a trillion dollars from banks, using the soaring value of their houses as security. Now the money has been spent and struggling borrowers are unable or unwilling to pay it back.
The delinquency rate on home equity loans is higher than all other types of consumer loans, including auto loans, boat loans, personal loans and even bank cards like Visa and MasterCard, according to the American Bankers Association.
Lenders say they are trying to recover some of that money but their success has been limited, in part because so many borrowers threaten bankruptcy and because the value of the homes, the collateral backing the loans, has often disappeared.
When someone leverage their house to pay for something as fleeting as a vacation, what did they think was going to happen? This has been a long time coming, a long time coming.
Worst of all, these bozos still insist that more of the same is the cure?
“… what did they think was going to happen?”
Think? What is this think word you speak of?
I’m glad my teacup is resting peacefully on its coaster. Otherwise, you’d be owing me a new keyboard and monitor.
I think they knew they wouldn’t have to pay it back if the equity ride stopped”
that was my impression when I asked the question back in 2004-5
they also figured the government would bail them out if it got really bad which it did. funny I don’t see the government really bailing anyone out
except for banks
They thought they were going to get their quarterly bonus and a promotion. They thought they would be able to sell the debt to some sucker by getting a rating agency to rate it as AAAA. They thought they could get the gov to purchase it when the crap hit the fan.
They thought the good times were never going to end.
Those were the days my friend
We thought they’d never end
We’d sing and dance, forever and a day
We’d live the life we choose
We’d fight and never lose
For we were young and sure to have our way
Simple: INFLATION
That’s what every debtor hopes/waits for …
I was in a mall a few years back that had a bunch of boats parked in the spacious walkways. Took a closer look at a nice fishing boat and noticed the price was a little over $200 per month, with no total price displayed. Since it was quite a nice boat, $200 per month seemed on the low side. The 120 months to pay it off cleared up the discrepancy.
I never understood the allure of a boat. Most people I know who have one almost never use them, maybe 3-4 times in the summer.
Much like planes - there’s a wide range. I know some people with boats that use them almost every weekend (probably total 30-40 times a year) but others that use them like twice a year. I have a friend with a small plane that uses it about once every 3 weeks, but his co-owners mostly use it about once every 6 months.
I suppose that in the sun belt they get more use. But out here its pretty much between Memorial and Labor Day.
BOAT stands for Break Out Another Thousand. I’ve always thought that it would make more sense to rent a boat for the 4-5 times a year most boat owners actually go out on the water.
SFChronicle did a survey years ago among
boat owners who kept their craft in marinas.
The average usage was seven (7) days a year
when the boat actually left the dock…
I finally broke down and bought a boat, a Grand Caravan, lol.
And the boat’s annual property tax is the cherry on top.
Yeah..buy a boat and then this 4 plex and get this FREE Mercedes convertible Slumloard Special Ltd to haul it around. You too CAN live the American Dream.
Help both your sinking boat makers and friendly slumlords in one big swoop.
They’re both sweating bullets…
and money.
Please Call NOW!!
http://milwaukee.craigslist.org/reo/1894273457.html
Desert Schools Federal Credit Union, mentioned in the article, ran TV ads as late as 2007 urging people to take out a 2nd and “…take that dream vacation”.
When first I saw the ad my jaw dropped; this was a CREDIT UNION!
I recall my near appoplexy when the calendar from my credit union urged getting a heloc to “get out of debt.” umm…While it may be a suitable tool to manage your debt, the way to get out of debt is to PAY IT OFF.
In 2006 I recall the frequent commercial on Bloomberg radio by Valley National Bank…
“Harry, we need a HELOC”.
“Whats a HELOC?”
“Harry! We NEED a HELOC!”
And it went on and on. You know the consumer hook routine. It was vomit inducing as it was evident to us HBB’ers what was going on. That bank really pushed HELOC’s hard.
Remeber the fat kid with the milk-mustache saying “My parents are with AIG”?
The single woman with the dog in the “pick-a-payment” loan commercials for Wachovia
“People are smart!” -DiTech (GMAC -the bankrupt POS)
Any Countrywide ad.
http://www.youtube.com/watch?v=LLFRIyRk3AA
The “people are smart” tripe is right up there with Suzanne. It’s a flat out lie. People are stupid…. so stupid that they’re dumb enough to believe a bank when they say “you’re smart”(now call us so we too can bend you over)
Good pick up lines always work.
“the way to get out of debt is to PAY IT OFF.”
Gee, Jim that’s so yesterday!
What should have made your jaw drop was where a $75k 2nd was negotiated down to $3,500 further down in the article. Oh and one of the walkers was a realtwhore. Go figure.
I can top ya, krazy bill. Down here in Tucson, the Vantage West Credit Union used to throw HELOC parties in the lobby. Complete with fresh-popped popcorn.
Oh My Nothing!
The thought of borrowing money to take a vacation makes my head hurt…
Me, too. But lots of people put them on credit cards.
I read the same article this morning, but was more interested in the comments of the defaulters. As always, its not their fault. The Bank should have been more careful, and after all, they deserve better:
“I am not going to be a slave to the bank,” said Shawn Schlegel, a real estate agent who is in default on a $94,873 home equity loan. His lender obtained a court order garnishing his wages, but that was 18 months ago. Mr. Schlegel, 38, has not heard from the lender since. “The case is sitting stagnant,” he said. “Maybe it will just go away.”
Mr. Schlegel’s tale is similar to many others who got caught up in the boom: He came to Arizona in 2003 and quickly accumulated three houses and some land. Each deal financed the next. “I was taught in real estate that you use your leverage to grow. I never dreamed the properties would go from $265,000 to $65,000.”
Another comment from a defaulter:
Eric Hairston plans to be among this group. During the boom, he bought as an investment a three-apartment property in Hoboken, N.J. At the peak, when the building was worth as much as $1.5 million, he took out a $190,000 home equity loan.
Mr. Hairston, who worked in the technology department of the investment bank Lehman Brothers, invested in a Northern California pizza catering company. When real estate cratered, Mr. Hairston went into default.
The building was sold this spring for $750,000. Only a small slice went to the home equity lender, which reserved the right to come after Mr. Hairston for the rest of what it was owed.
Mr. Hairston, who now works for the pizza company, has not heard again from his lender.
Since the lender made a bad loan, Mr. Hairston argues, a 10 percent settlement would be reasonable. “It’s not the homeowner’s fault that the value of the collateral drops,” he said.
It’s not mine, either. That’s why I shouldn’t need to pay bad government bailouts. Yea, 10 cents on the dollar is reasonable. The property dropped 50 cents on the dollar.
And what does the value of collaeral have to do with a borrowers ability or obligation to repay their debts? If you want debt forgiveness, file for bankruptchy.
If you want debt forgiveness, file for bankruptchy
But that means the CCs go bye-bye.
No Colorado
You dont have to put your CC in the bankruptcy filing…
By keeping them out of BK you are obligated to pay them off..
I think his point is that the CC companies won’t lend you any more (or will raise your rates precipitiously) if you file for bankruptcy protection regardless of whether you keep payint THEM or not.
I thought the universal default was not allowed anymore? keep the lowest rate card….if CC jacks the rate…just ask them
Would you like me to revise my BK filing and put your card on the list? I leave that answer up to you.
I might be mistaken, but I believe that a BK overrides “no universal default” even if you reaffirm the debt on the CC.
“Shawn Schlegel, a real estate agent who is in default on a $94,873 home equity loan.”
“he bought as an investment a three-apartment property in Hoboken, N.J. At the peak, when the building was worth as much as $1.5 million, he took out a $190,000 home equity loan.”
These two should fry. The excuse that my-banker-is-a-meanie is legit ONLY for the struggling young single or struggling young couple trying to buy their first home, and THAT’S IT.
The truth is that people took out long term loan obligations they couldn’t afford and they leveraged to the max. based
on the idea that the property would pay for the loan when the time came that they wanted to cash in their chips . The banks allowed this speculation and gave out faulty loans and breached their duty to underwrite loans . The faulty loan underwriting caused the fake rise in prices causing more speculation and fraud in the real estate market .
The media along with experts were rah rah cheerleading
the fake market that wasn’t sustainable .
Now people just have the loan obligation with no chips or value to cash in and they don’t want to pay or they can’t pay . To the degree that prices crashed is the degree of how false the market was .
I have never seen this degree of Speculation Mania combined with faulty lending and corruption in my lifetime . All government and social check and balances were void and Wall Street Money Changers
were the brains behind the fake boom values with faulty lending while Politicians went along with the home for everybody concept because their Masters pull the strings .
Now everything is screwed up and adding Monopolies and Globalism evils with the border problems and Health care costs that are not affordable , I don’t feel very positive about any potential for America to be like it was when I was growing up as long as we stay on the same paths we are on . At this point I’m just watching and wondering how this is all going to play out .
“Mr. Hairston, who now works for the pizza company, has not heard again from his lender.”
Anyone else think that he’s a delivery boy?
The building was sold this spring for $750,000. Only a small slice went to the home equity lender, which reserved the right to come after Mr. Hairston for the rest of what it was owed.
—
That’s the sweet spot.
Bad news Shawn. We’re ALL slaves to the bank one way or another.
Some good comments from the NYT article:
“No one had ever seen a national real estate bubble,” said Keith Leggett, a senior economist with the American Bankers Association.” (No one except a bunch of wild and crazy bloggers.)
“Desert Schools, the largest credit union in Arizona, increased its allowance for loan losses of all types by 926 percent in the last two years. It declined to comment.”
“Even when a lender forces a borrower to settle through legal action, it can rarely extract more than 10 cents on the dollar….’Anything over $15,000 to $20,000 is not collectible,’ Mr. Terry said. ‘Americans seem to believe that anything they can get away with is O.K.’
“No one had ever seen a national real estate bubble,” said Keith Leggett, a senior economist with the American Bankers Association.”
This idiot should never have gotten past the mail room.
Remember the S&L disaster Keith?
Well at least we now know the American Bankers Association are complete morons.
On the inflation/deflation discussion from earlier in the week. Deflation followed by inflation…so says these guys:
http://www.kiplinger.com/magazine/archives/how-to-profit-from-the-markets-rocky-road-ahead.html
Once the gubermint runs out of borrowing capacity due to the bond suckers waking up the Ponzi scheme will find an abrupt end. There are 3 basic options:
1. default on treasuries/bonds
2. austerity
3. printing up the difference
Local governments only have option 1 & 2. Neither option is too palatable. #1 causes outright economic chaos, panics, bank runs, etc. Option #2 has the very real potential to cause wide spread riots. In Greece that’s one thing, having millions of gun owners rioting is another. I would think #3 is the most likely path chosen by our politicians. It be noted that one path doesn’t necessarily exclude the others. It could be a combination of the 3 with #3 carrying the most weight.
You really think politicians will cut grandma off from her social security benefit? How high can you raise taxes before people quit work or work in an underground economy? Printing money is easy in comparison. You cook the numbers of the CPI to your heart’s delight and your debt magiacally disappears. Of course everybody holding cash or cash equivalent gets screwed. But screw ‘em, they should have known better.
or work in an underground economy ??
Former Tres. Sec. Paul O’neil said the other day that $400,000,000,000. in taxes go uncollected every year due to the underground economy…Thats why we are going to get a VAT…
That will drive people to an underground market. Taxes will still go uncollected.
IIRC, most European countries have VAT. And many also have thriving underground economies. Italy comes to mind.
The UK has just raised their VAT from 17% to 20%. They have had that for years. Food does not have VAT, but other goods do and the tax is factored in the price, so no surprises at checkout.
Well, the VAT as I have had it explained to me taxes everything at every stop from the raw materials to the final retail customer so I am not sure how you can avoid it…
“There are 3 basic options:
1. default on treasuries/bonds
2. austerity
3. printing up the difference”
4. Stop talking about this depressing reality crap.
Yep, that would indeed cause the most pain to the greatest number of people (what markets typically do). First, devalue their assets and increase the burden of their debts - forcing them to deplete what assets they have. Then whammo! Inflation devalues what little is left.
Yikes!
I believe in military terms that would be considered a pincer movement.
The bankers will own everything via a series of inflation and deflation and Gov bailout.
Exactly. The same thing has already happened twice in our nation’s history.
The 1st and then the 2nd Bank of the United States.
Almost exactly the same dance steps.
I call it the Weak Hands Shakedown. Only the strong hands get to survive this episode.
“Deflation followed by inflation”
Everyone ‘knows’ that once sufficiently panicked, the Fed is going to print like crazy to try to buoy the economy back up on a tsunami tide of liquidity.
Why else would real estate investors be back out there buying up houses at high prices when fundamental demand is dead as a door nail?
They are preparing for the next RE boom in 2050.
The threat of future inflation helps alleviate the present deflation. The Fed should want everyone to think they’re likely to overinflate the economy in the somewhat near future. Keeps people buying. The truth may be they can’t push that string, or the inflation they create appears elsewhere in the world.
DEFICIT ADDS ON $165,040,000,000.00 — In The Month Of July!
Come on team Barry, you can get that much higher if you really try!
Michelle is doing all she can!
Yes, but she only has so much to work with.
Thank god that $26 billion they just ran through their vote buying machine was deficit “neutral”. We are led by complete morons and crooks. But then you look around at your fellow citizens and you realize that these politicians are a reflection of their muddled and clueless minds.
I sure do miss all those liberals who would cry, scream and flail about the Bush deficits…
What was it again - oh yeah - imagine all the teachers we could hire and the hungry children we could have fed with that money.
Kinda like the war dead counts and homeless reports in Time and Newsweek and the NYT and ABC and NBC etc. You just don’t see them anymore. Cindy Sheehan - who is that?
Or when the unemployment rate went from 5.3% to 5.4% and liberals screamed about the worst economy since the great depression…
Ah - the bad old days.
Zealots never criticize their own religion.
And despite their religious approach to everything, zealots somehow systematically miss this passage in the Bible:
The last bible I read would write it as a sliver and a board but this works, too. I love using that line.
The California governor’s race replaces it with this:
And why beholdest thou the Meg that is in thy brother’s eye, but considerest not the Moonbeam that is in thine own eye?
Because of this observation: “It is said that he who is without sin should case the first stone. So I CAST that mutha.” (with apologies to Berkeley Breathed and Bloom County, where I first saw that version
Bloom County. I love it! I’m in Volume II of The Complete Library 1982-1984.
“It is said that he who is without sin should case the first stone. So I CAST that mutha.”
Thank you for that comedic pearl.
Oh - I did. I was mad at hell at the republicans and bush for spending so much. Wrote them all the time. Withheld contributions. etc.
I have not changed my tune. But I have not heard any music from the fiscal hawk liberals in two years now…
Yep. I got into wars with friends and family when I was criticizing Bush. They would either shout at me in a discussion or use all caps on an email. But what about the zealots on our HBB? No such thing as perspective in their minds. They have set the ship sailing and they aren’t turning back for anything.
No such thing as perspective in their minds
“I’m the Decider!”…I’ve decided…to not give my 2008 vote to McSame & Sarah the Barracuda.
(Hwy opens an ice pack & bag of pretzels, looks for you tube on Powell presenting “eveidence” for War #2)
But this time it’s for the children. Who but a cold-hearted bastard would complain when it’s for the children?
But what about the zealots on our HBB?
Do you see a sliver in their eye?
2banana,
All true, and a little hard to argue, but I think we’re now playing the same game. Between ‘04 and ‘06 you’d have thought we were running indiscriminate “carpet bombing” campaigns w/ B-52’s flying sorties round the clock like Linebacker I & II in Viet Nam!
For lib’s it was all about “The War”. O held all the cards. Then in August of ‘08, when McCain flew back to DC as Lehman ( or was it BSC? ) was falling apart.., it became all about “The Economy”. He just wasn’t able to switch gears fast enough.
I don’t think any of us really care of feel anything CAN be done about job creation right now! In fact, when you think about it, it’s just ridiculous. We’re not even in a place to have that conversation. So it’s just a word of caution. The Jobs issue is playing well in the media right now but I’m laying awake nights waiting to see what game changer they have up their sleeve. We all should.
“I’m laying awake nights waiting to see what game changer they have up their sleeve.”
I think they are wearing tank tops.
NYCityBoy,
LOL! Yeah that was ‘my’ summation ( but after everything we’ve been thru, economically and pol. ) I’m not taking anything for granted!
You make an excellent point when you say “No such thing as perspective in their minds”. That’s the part that used to infuriate me, but now it only depresses me.
Their only references to ‘people’ are thru the eyes of voting blocks. I think there’s been enough put on display that the only time we are truly ‘individuals’ is when “we’re being a-holes!”. Reid’s recent comments made that altogether too apparent. Stop being an a-hole and get in line! Where you are predictable and quantifiable.
The other issue ( and true enough ) is that while cons. may see Have’s and Have Not’s in a monetary sense, libs version is simply those that ‘have’ power ( voting blocks and elected official ) and those that do ‘not’ ( you and me ) So in that regard, we’re not even worthy of the most modest respect.
O was hoisted on his own petard. Oh, cool move, compare Iraq war unfavorably with Afghan war, saying the latter was worth fighting. And so here we are.
I wonder what idiot came up with that brilliant tactic.
Kinda like the war dead counts and homeless reports in Time and Newsweek and the NYT and ABC and NBC etc….
Alas, a fellow observer of American Propaganda. Ever watch the NPR and PBS stations? Remember the reading of names and showing of photos of all the dead, each week, from Bush’s war??
I point this out to leftists all the time, who parroted the media’s daily presentations. They were outraged that so many Americans were dying in Bush’s wars of profit for the oil companies.
They don’t say anything anymore. I need to bring it to their attention that soldiers are still dying every week. They never bring it up.
I guess it’s because the Nobel Peace Prize winning President increased the number of troops and increased the war effort.
What are the facts on the ground right now?
Last I checked, Bush owned roughly 30,000 US casualties and 700,000 Iraq casualties.
In the past 6 months, the 80,000 man US war machine has been demobilized from that country.
We were talking about US troops dying in Iraq. Just for the record, I have opposed this war, and the war in Afghanistan, as i don’t believe in going to war with a concept: “terrorism”.
Wars are fought with nations, against a particular people, by declaration of war. We are chasing “insurgents” in other people’s countries that we are not essentially at war with.
But that’s another story. The DEATH TOLL in Iraq for US solders is about 4400. That is tragic. It has been failing since the “surge” and will eventually fall further. I don’t think we will get out of Iraq. We always have people left in country.
In 2008: 314 deaths, 2009: 149, somewhere around 50 this year.
I don’t like the use of casualties in statistics. It should be broken out between fatalities and injuries. It gives the mistaken impression that 30,000 soldiers have died in Iraq.
55,000 did die in Viet Nam under Kennedy and Johnson and Nixon before “peace with honor” Nixon(rep) finally pulled us out.
And I’m talking about dead human beings which is the only thing that matters.
And you talk as if those 30,000 guys with missing arms, legs, hands, eyes and hearing don’t matter. There is something very wrong with that.
And you talk as if those 30,000 guys with missing arms, legs, hands, eyes and hearing don’t matter. There is something very wrong with that.
Agreed.
I use the weight room in a gym that’s also used by a wheelchair basketball team. They’ve been getting a lot of new members in the last couple of years.
Mind you, they’re young, athletic guys, and some of them are pretty hot players. But, if you asked any one of them, they’d give anything to have the bodies they had before their war injuries put them in wheelchairs.
Ex:
They volunteered….they didn’t have to go…..I don’t feel sorry for them
Its called personal responsibility….let em man up to their decisions.
THINK
I did and the ones I have sympathy for are the Nam vets who were drafted against their will….
just like driving dunk or high you know the risk so man up.
You man up kiddo. I did my patriotic duty. Your family values/peronsal responsibility tripe has no place here either.
They volunteered….they didn’t have to go…..I don’t feel sorry for them
Its called personal responsibility….let em man up to their decisions.
Does this logic apply to you and your choice of career and the way you are always wanting Uncle Sugar to put a bunch of money into your credit card account? Didn’t you choose your career path and therefore shouldn’t you take personal responsibility for it? And if so, shouldn’t you man up and quit asking for a bailout/whine about being unable to get a job?
There but for the grace of random factors go you.
Amen brother, I lost a couple of good friends
and one is still in and out of the funny farm
at the VA hospital.
Michael:
True so why should homeowners be the lucky ones to get a bailout? I am current with my bills , i am working but still its hurts, the total unfairness and cluelessness of our leaders to reward all these morons and scammers and I ask for some breathing room and get shot down….
Don’t worry mike or EX i have a thick skin, so If i say something stupid you can smack me down…we all have are points of view and our anger towards what just happened..
———————————–
And if so, shouldn’t you man up and quit asking for a bailout/whine about being unable to get a job?
There but for the grace of random factors go you.
————
Ex
You did what you thought was right…..and so did I, by avoiding service…but when you volunteer when there is a war on, well…..you take yer chances.
You know my position on us being in afghan and iraq, we are aiming at the wrong targets…that is why we will lose badly.
—————
You man up kiddo. I did my patriotic duty. Your family values/peronsal responsibility tripe has no place here either.
He’s busy saving jobs. Forget saving lives.
Within each body-bag lies a new job opportunity.
Remember the reading of names and showing of photos of all the dead, each week, from Bush’s war??
They still do that on PBS. Don’t knock the NewsHour. It’s the best news on TV.
Don’t knock the NewsHour. It’s the best news on TV.
For television-free households, here’s your online linkie.
Ray-Gun Zealot reflects back on: “The needle in,…the damage done”
Get it? Not “destroying.” The GOP has already “destroyed” the U.S. economy, setting up an “American Apocalypse.”
“How my G.O.P. destroyed the U.S. economy.” Yes, that is exactly what David Stockman, President Ronald Reagan’s director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, “Four Deformations of the Apocalypse.”
Aug. 10, 2010, 12:45 a.m. EDT · Recommend (64) · Post:
‘Reagan insider: ‘GOP destroyed U.S. economy’
Commentary: How: Gold. Tax cuts. Debts. Wars. Fat Cats. Class gap. No fiscal disciplineView all Paul B. Farrell ›
ARROYO GRANDE, Calif. (MarketWatch) — “How my G.O.P. destroyed the U.S. economy.” Yes, that is exactly what David Stockman, President Ronald Reagan’s director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, “Four Deformations of the Apocalypse”
Get it? Not “destroying.” The GOP has already “destroyed” the U.S. economy, setting up an “American Apocalypse.”
Jobs recovery could take yearsIn the wake of Friday’s disappointing jobs report, Neal Lipschutz and Phil Izzo discuss new predictions that it could be many years before the nation’s unemployment rate reaches pre-recession levels.
Yes, Stockman is equally damning of the Democrats’ Keynesian policies. But what this indictment by a party insider — someone so close to the development of the Reaganomics ideology — says about America, helps all of us better understand how America’s toxic partisan-politics “holy war” is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.
But why focus on Stockman’s message? It’s already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?
Read on, Oh Brilliant Rabid GOP republican Great Ones…
http://tinyurl.com/28acb3c
Get it? Not “destroying.” The GOP has already “destroyed” the U.S. economy
Cheney-Shrub hand-off the US economy Jan 2009: “It’s all there, you just have to… rebuild it! See ya!”
(Please place special emphasis on the “See ya!” part)
http://weburbanist.com/wp-content/uploads/2008/11/chris-jordan-katrina-trash-pile.jpg
Wow. That is a really impressive article. Thank you so much for posting it without comment or criticism. I feel so much wiser. That must really make you zealots feel righteous. It is superb.
I am glad that the author didn’t mention Kennedy getting us further involved in Vietnam or allowing the public employees to unionize. There is definitely no fallout from that. We’re all good there.
It seemed to slip the author’s memory that the programs setup under FDR continue to be huge anchors around the neck of the American economy. The one that unleashes the beast deserves his share of credit. I believe Fannie Mae and Social Security were unleashed on FDR’s watch. No problems there.
It is most excellent that the “guns and butter” president, with his Great Society, wasn’t mentioned. The damage done by LBJ to this country was massive. It led right to Nixon yanking us off any semblance of the gold standard. It put the welfare state into high gear. It also put 500,000 Americans into the jungles of Vietnam. Nope, LBJ had nothing to do with the destruction we are now experiencing. He’s clean.
Yes, the Republicans became a fiscally unsound party. What choice did they have? They had to try to compete with the giveaway machine that The Democrats are. If you own a restaurant and your competitor is running coupon specials, early bird promotions, giving away free booze, comping meals and even paying people to come into their restaurant, at some point you have to do something to compete. I can just see the marketing now. “Come on down to The Democrat Cafe where all the $hit is free and we will even pay you to drop on by. Bring the kids. The more you have the more we will give you. Stop by today. If you can’t make it down we will send a bus to bus your worthless a$$ over.”
Mikey, are you the mayor of The People’s Republic of Madison? You must be since your leftist zealotry is right up there with Comrade Exeter. I like you and Exeter when you comment on housing. When you get political it is like listening to 2 year olds crying in the nursery.
“I feel so much wiser. That must really make you zealots feel righteous. It is superb.”
NYCityBoy,
You are one talented, well educated and charismatic
character. Who am I, to dare to Influence or impart any wisdom upon you! Glad to be helpful but….
I just posted the news, and any assessment of your Wisdom, remains entirely, your personal problem.
And I look forward to more of your open-minded and balanced perspective. It is wonderful to be educated by a wide array of rabid Democrat liberal mindless shills.
WE can lead the elephants to water but we can’t make them drink.
“Okat Boyz…Head ‘em up, move ‘em out…Rawhide”
Yes, the Republicans became a fiscally unsound party. What choice did they have?
Darn, you were almost there…then stopped. Then follows with the usual, but, but, but…
Hemp, pre-martial sex, “non-bid contracts” for War Corporations:
No religious zealotnationism needed:
Follow the “TruePurity™” admonition since 1982:
“Just say, NO!”
Let me help you with your rant “characterization-of-other-posters” orientation:
Hwy: “Bill Clitnon is a womanizing big penis who should have RESIGNED the presidency!”
(special emphasis on: “is”)
Radical Rick: “Hwy, how tough is it?”
“Tiny lapel flags and Freedom Fries…Forever”
You can lead a horticulture, but you can’t make her think.
I’m confused. I know the left hates Reagan. According to them, he destroyed America and if it wasn’t for the election of Bill Clinton, whose administration eliminated Glass-Steagel, then the world would have been doomed.
Remember Clinton? The stock market boom. The Free-trade NAFTA, CAFTA, agreements? He saved the world.
He gave Bush the best economy, with shrinking deficits, that the world had ever seen. (it was actually cheap FED credit and derivatives).
Then, it was BUSH, i think the derogatory name is SHRUB-Cheney, that destroyed America. Isn’t that the tale we’ve been given by the Democratic supporters???
So, tell me, which is it?
Or is it just every republican administration that tries to restrain wild-assed government spending?
Or is it just every republican administration that tries to restrain wild-assed government spending?
Can you name one?
…crickets…..
Or is it just every republican administration that tries to restrain wild-assed government spending?
Can you name one?
+1
The only administration to pay off the U.S. debt was Democratic actually. As well as the last one to (kinda sorta) have a budget surplus in any given year.
+1 Diogenes
+ 1 Mikey…Nice find…
I don’t care who created all the problems anymore ,I’m just concerned with solving the problems at this point and I’m afraid that Politics and bought off Politicians are preventing the solving of the grave problems America has at this point . Each side of the isle has their idea of
what groups should benefit and what groups should pay . The basic long term structures of America are not working in combination with the new age policy decisions and some past decisions .
We all have examples of watching one of the parties passing a law or decision and you know darn well that it will create more problems in the future .
Housing Wizard,
You’re exactly right. I haven’t been interested in blame for some time. I’m just not invested in it any more. At the rate we’re going, it will be up to whomever picks up the remains to determine where ‘we’ had gone wrong?
There’s no future in it. Fact is, there’s no future period.
The problem is that many of the players who created these problems are still players today, although some are now behind the scenes and other have come from behind the scenes in a tag team smoke mirrors performance.
I was an adult when Raygun was prez. I remember Stockton. For him to publish this is the equivalent of McNamara saying he made a mistake with Vietnam (he did and he did) or Cheney and Rumsfeld admitting the WMDs didn’t really exist.
That’s how shocking this is.
For an earlier take on his disillusionment with Reaganism, read Stockman’s book, The Triumph of Politics. ‘Twas published shortly after he bailed out of the White House.
With regards from your HBB Librarian…
Ah, the sweet call of Mexico…
Callaway Golf operations in Chicopee will be left with 150-200 employees after latest layoffs, Mayor Michael Bissonnette says.
CHICOPEE – Lured by cost savings in Mexico, Callaway Golf Corp.will drastically cut its work force in Chicopee during the next year and a half.
Callaway wouldn’t confirm numbers, but Chicopee Mayor Michael D. Bissonnette said the restructuring will leave the sprawling factory at 425 Meadow St. with just 150 to 200 employees.
The plant, once Spalding’s Top-Flite factory, had as many as 600 employees as recently as fall 2008 when Spalding cut its third shift and laid off 150 workers, Bissonnette said. Then earlier this week, Callaway laid off between 40 and 50 seasonal production workers who had arrived in January to prepare for the warm-weather golfing season. The next remaining layoffs, expected to total 200 to 250 workers, will happen during the next 18 months, the mayor said.
I wish we could get accurate figures from anyone today
Like how much money can they save per golf ball by firing everyone and making them in Mehiko
And why is it no one ever seems to try the buy American trick before they fire everyone??
Yeah we cost a little more but if you don’t buy we have to fire American workers….put some guilt on the public
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.”
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.
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.
Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future. For example, our Social Security FICA contributions are called taxes and our future Social Security benefits are called transfer payments. The government could equally well have labeled our contributions “loans” and called our future benefits “repayment of these loans less an old age tax,” with the old age tax making up for any difference between the benefits promised and principal plus interest on the contributions.
We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare, and Medicaid that, on average, exceed per-capita GDP. The annual costs of these entitlements will total about $4 trillion in today’s dollars. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year.
This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.
Uncle Sam’s Ponzi scheme will stop. But it will stop too late. And it will stop in a very nasty manner. The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.
Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on. And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece.
Demand-siders say forgoing this year’s 14 percent fiscal tightening, and spending even more, will pay for itself, in present value, by expanding the economy and tax revenue. My reaction? Get real, or go hang out with equally deluded supply-siders. Our country is broke and can no longer afford no- pain, all-gain “solutions.”
And then there’s this …
Golf clubs suffer in recession as membership dwindles.
http://www.usatoday.com/sports/golf/2010-08-03-golf03_CV_N.htm
Golf balls. All golf clubs except Ping are already made in China.
Golf took a huge tumble after the Tiger Woods “episodes”.
It will not recover.
Except for the hard core who can still afford to play golf, people don’t really care about it anymore.
I am still waiting for Roller Ball to take off…
Isnt ping based in phx?
This may well be a broader reflection of the game ‘itself’. On this very blog someone posted an article about a “recreational pastime in decline”.
Others have opined that all those golf courses in failing gated communities are future Walmart sites! I feel like David Letterman the last time we hosted the World Cup, “No matter where I go and who I talk to, NO ONE is talking about the World Cup!”
( When was the last time you heard anyone speaking about golf w/ genuine passion? )
Then let the Mexicans buy the overpriced f—ing golf clubs. Who do these a–holes think will be left to afford any of this crap in this country?
And still when the villains in Congress or at The Fed talk about jobs they never once mention the disastrous trade policies they have enacted and allowed.
disastrous trade policies they have enacted and allowed ??
Ross Perot warned us in 1992….
Yes. Yes he did. And was labeled a kook.
And I voted for Ross Perot. I also voted for John Anderson in 1980. So much for my GOP credentials.
I think this is a direct result of the housing bubble collapse. I think, with a shrinking “middle class”, and less equity extraction, that the game will be less appealing to many folks. Greens fees around most parts aren’t generally cheap. The manufacturers may see further declines in revenues.
Golf’s popularity has been on the wane for quite some time.
Trends come and go.
I reckon, “Girls just wanna have fun!” was not a bit hit in Sweden.
Run Hwy, …Run!
Dio,
That’s my take as well. The only place I went ( pub. course ) was $14 for 9. Even at that, gas ( beer ) a sleeve or two of balls and it’s easy to drop 50 bucks an outing. Assuming you’re not paying for someone else etc.
Who knows, maybe it -will- become popular south of the border ( they’re getting all the jobs? )
Yep, DinOR,
My choice has been $50 to the 401k vs. $50 for 9 holes in the OC, much less 18.
Illegals come to the US to “do the jobs Americans won’t do”. While business continues to move the jobs Americans will do to Mexico, China, etc.
Evidently the risks of doing business in unstable/authoritarian countries is more than offset by the immediate savings. Or the perception that the US is that the USA is turning into it’s own unique brand of Banana Republic, so why not?
Stability is overpriced/overrated.
About a decade ago, I was at the post office where I have a box. While I was going through my mail and bemoaning the state of my still-young design studio, a guy started telling me about his venture in China.
He’d been in charge of opening a bottling plant in a large city there. IIRC, it was Coke in Shanghai. And he lost the plant. Apparently, the Chinese government swooped in and took it over.
“Illegals come to the US to ‘do the jobs Americans won’t do’. While business continues to move the jobs Americans will do to Mexico, China, etc.”
- X-GSfixr
POTD!!
Protesters block Newark traffic, criticize Mayor Booker’s plan to lay off 230 sanitation workers.
NEWARK — At least a hundred protesters stopped traffic on Broad Street today protesting Newark Mayor Cory Booker’s plan to lay off 230 sanitation workers and outsource their jobs to a private firm.
“At some point we’ve got to say enough is enough,” said Rahaman Muhammad, president of the SEIU local 617, which represents the targeted city employees. “Cory Booker is going to sell our city brick by brick.”
The Booker administration did not immediately respond to inquiries surrounding the layoff of the workers, who comprise roughly a third of Booker’s proposed 650 layoffs.
According to the mayor’s proposed 2010 budget, letting go of the workers will save under $2 million, but new money has not been identified in the budget to hire outside contractors.
Let the Greek games begin.
Homes lost to foreclosure up 6 pct from last year
Home repossessions surged in July, but pace of new home loan defaults continued to slow.
LOS ANGELES (AP) — The number of U.S. homes lost to foreclosure surged in July, another sign lenders are moving quicker to take back properties from homeowners behind in payments.
Lenders repossessed 92,858 properties last month, up 9 percent from June and an increase of 6 percent from July 2009, foreclosure listing firm RealtyTrac Inc. said Thursday.
Banks have stepped up repossessions this year to clear out the backlog of bad loans. July makes the eighth month in a row that the pace of homes lost to foreclosure has increased on an annual basis.
Meanwhile, homeowners who are falling behind on their payments are being allowed to stay in their homes longer because lenders are reluctant to add to the glut of foreclosed homes on the market.
The number of properties receiving an initial default notice — the first step in the foreclosure process — rose 1 percent last month from June, but tumbled 28 percent versus July last year, RealtyTrac said.
Initial defaults have fallen on an annual basis the past six months.
Oh yeah and I cant even take the great gf out to eat once a week even with a 2 for 1 coupon…all to pay our rent on time…..its time for an all out war on deadbeat scamming hoeownazzz
Meanwhile, homeowners who are falling behind on their payments are being allowed to stay in their homes longer because lenders are reluctant to add to the glut of foreclosed homes on the market.
“Meanwhile, homeowners who are falling behind on their payments are being allowed to stay in their homes longer because lenders are reluctant to add to the glut of foreclosed homes on the market.”
This benifits the lenders because:
1. An occupied house is better for the neighborhood than an empty house thus the value of neighboring houses the lender may hold the mortgages on will be kept higher than they otherwise would.
2. Just because a homebuyer doesn’t pay doesn’t necessairly mean he doesn’t owe. Sometime, many years in the future, the bill collectors may come knocking. These mortgages have value even if the payments are not currently kept up to date.
#2 - Nothing a Chap 7 BK won’t fix, and when these people finally get slammed with the huge bill and garnished wages, they will file.
“An occupied house is better for the neighborhood than an empty house thus the value of neighboring houses the lender may hold the mortgages on will be kept higher than they otherwise would.”
Only somewhat better. Owners here are letting the lawn maintenance, and other maintenance go, and why not, they are getting a free ride.
I see it time and again that people say that credit scores shouldn’t be used against these poor, unfortunate souls that have been foreclosed. This is not their fault. I would say that the stories continuously show that this is in fact a character issue. So many people have their character coming front and center during this mess and it ain’t pretty. How many people on the HBB would want to rent to, hire or lend to the people that have been foreclosed?
How many people on the HBB would want to rent to, hire or lend to the people that have been foreclosed?
Not me, but then I’m not a bank that charges & collects upfront $$$$$$$$$$$ fees with a Gov’t that fully understands how any loss might pain me.
“Owners here are letting the lawn maintenance, and other maintenance go, and why not, they are getting a free ride”.
Yep, we see it all over the place here in central S.C. over grown yards, trash etc… No matter where I have lived, whether I was an owner or renter, with or without money. I have and will always maintain the place we live. Keep it neat and clean, when we moved into our current digs, I took over the building and yard maintenance, because the people that were doing it were doing the very minimum, to get by.
I took over the building and yard maintenance, because the people that were doing it were doing the very minimum, to get by.
You can’t watch Real Housewives of (Fill in the blank) and do yard work at the same time. Geez.
on #2, the question isn’t whether those mortgages have value, the question is whether that value will be higher or lower in the future. There are FAR too many people on Wall Street, Main Street, and on both ends of Pennsylvania Avenue betting that is we give the market just the right nudge, real estate prices, as well as the mortgages and bonds based on them will soon zoom back to bubble heights. In most markets, the fundamentals (Jobs and their payrolls) don’s support CURRENT prices, much less a return to bubble pricing.
Except meanwhile the bank has to pay for property tax, insurance, HOA dues, lawn-maintenance,etc. The happy squatter gets to head off to the apple store and the car dealership.
Right now FB dollars not going to the lenders are going into the economy and are helping keep the economy afloat. Meanwhile the lenders can extend-and-pretend and keep the values of their mortgages whole - they can keep from writing the mortgages off as being uncollectable.
So in effect the FB dollars are in two places at once: These dollars are circulating throughout the economy and are helping keep the econmy lubricated, and they are counted as delayed payments by the banks which keeps value attached to the mortgages and thus keeps value to to the bank’s collateral.
It’s all good. Party on.
So in effect the FB dollars are in two places at once:
I don’t know if I agree with this. On an accrual basis these loans would have to be put in non accrual. They would then be classified negatively requiring the lender to put away into a loan loss reserve. This would diminish the ability of the lender to extend other loans. It would also hit their bottom line. I don’t think the FB dollar is really in two places at one time. I could be wrong. It wouldn’t be the first time.
I admint I am weak in this area but as I understand it Accounts Receiveables are counted as Current Assets until they are deemed uncollectable and are written off.
“Accounts Receiveables are counted as Current Assets until they are deemed uncollectable and are written off.”
And when the collateral is seized, it gets classified as a “Level 3″ asset, where it can be marked to fantasy.
Voila’!
Right now FB dollars not going to the lenders are going into the economy and are helping keep the economy afloat…
There is a growing body of evidence that points in this direction.
Banks repossess more homes, but file fewer new foreclosures in July
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 5:12 a.m. Thursday, Aug. 12, 2010
More than 10,000 Florida homes were repossessed by banks in July, a 60 percent increase compared to the same time last year according to foreclosure data released today by RealtyTrac.
In Palm Beach County, banks took back a record high 559 foreclosed properties last month.
At the same time, however, the Irvine, Calif.-based RealtyTrac found that fewer homes received initial notices of foreclosure in July, a months-long trend in Florida and nationwide.
July was the fourth straight month in Florida where banks initiated fewer foreclosures.
“We don’t actually think that’s a sign that the market is recovering as much as that some of the foreclosure prevention efforts have been successful,” said RealtyTrac spokesman Daren Blomquist. “Loan modifications, short sales, and refinances are all having an impact on helping people avoid foreclosure.”
In Palm Beach County, 1,448 initial default notices were filed in July, down 34 percent from the same time last year.
Martin and St. Lucie counties also saw decreases in initial notices, with July filings down 37 percent in Martin County and down 66 percent in St. Lucie County.
Statewide, 54,472 homes got new foreclosure notices, down 24 percent compared to July 2009.
Blomquist said RealtyTrac is still predicting a record 3 million foreclosure filings by the end of the year.
“We’re stuck nationwide at a very high plateau for foreclosure activity and we don’t expect that to drop off this year,” Blomquist said.
“We’re stuck nationwide at a very high plateau for foreclosure activity and we don’t expect that to drop off this year,”
You mean there won’t be any Christmas moratoriums this year? Think of the children!
I hope Peggy Joseph wasn`t injured.
ATLANTA CROWD TURNS INTO A MOB…. OBAMA VOUCHERS FOR RENT DISCOUNTS….. 8-10,000 DEMOCRAT VOTERS???
Posted by TONY SALAZAR, SC DIST.#5 COORD; on August 11, 2010 at 1:20pm in General, Uncategorized Town Hall
View Discussions
http://www.ajc.com/news/atlanta/crowd-waiting-for-housing-589653.html
Crowd waiting for housing vouchers gets rowdy
By Mike Morris
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.
Why do they bring them water? They apparently assume no responsibility whatsoever for themselves. If I was planning on bringing my ten kids along on a hot summer day to wait in a long line, I would bring a cooler. Nobody has ever brought me water.
“Nobody has ever brought me water.”
I am guessing you don`t live in New Orleans.
I thought that not bringing water was SOP for New Orleans.
*runs away*
Nothing is their fault in Victim Nation.
Hah. Police won’t let them line up for housing, but I bet if game consoles or condos were for sale pitching a tent would be allowed.
America fail.
And concert tickets.
Personally, I think this sounds like a (very immature) college prank, and nothing more. But can you imagine the drudgers (no mention at all of the story there, surprise surprise) and the dittoheads and Sarah!’s reactions if this had been Obama instead of Randy Paul? (”This young lady was forced to do drugs and swear her belief in a false god! Can you imagine what the next step would have been? In better times, these men would be burned at the stake, not elected to office!”)
Thursday, Aug. 12, 2010
Comments (6) | Recommend (0)
Report: Accuser says Paul didn’t kidnap her; describes incident as hazing
Says it was college prank, denies being forced to smoke pot
By Bill Estep - bestep@herald-leader.com
The unidentified woman who said Republican U.S. Senate nominee Rand Paul made her take part in an apparent college prank that included worshiping “Aqua Buddha” has clarified her story, making clear Paul did not kidnap her or force her to smoke marijuana, according to The Washington Post.
However, the woman stood by the details of her story, the Post reported Wednesday.
The woman’s account first surfaced Monday in a posting on the GQ magazine Web site. She told GQ that Paul and another young man — members of a society at Baylor University called the NoZe Brotherhood — blindfolded her, tried to force her to smoke pot, then took her to a creek outside Waco, Texas, and told her to worship the Aqua Buddha.
http://www.kentucky.com/2010/08/12/1388978/report-accuser-says-paul-didnt.html#ixzz0wOUWLV8k
Gov’t likely to keep big mortgage market role
By ALAN ZIBEL
The Associated Press
Posted: 8:19 a.m. Monday, Aug. 9, 2010
WASHINGTON — Keeping Fannie Mae and Freddie Mac in business will cost taxpayers billions. But getting the federal government out of the mortgage business would cost home buyers dearly, in the form of higher interest rates.
The Obama administration will begin tackling this dilemma next Tuesday at a public conference on the future of the mortgage system. Fannie and Freddie lost a combined $9 billion in the April-to-June quarter and have needed more than $148 billion to stay afloat since the government rescued them nearly two years ago.
Figuring out what to do with Fannie and Freddie could take years and involves a more difficult question: How much should the government do to subsidize the housing market?
http://www.palmbeachpost.com/money/govt-likely-to-keep-big-mortgage-market-role-849255.html
I have stated that they will reshape Fannie and Freddie but they will not change their involvement. There is no way they will get rid of the ability to slush around this much money and power. All of their talk is just noise.
Fannie and Freddie
Dear America:
This is Fannie and Freddie your new “adopted” bastard siblings, they’ll be living with us for “awhile”. I know, I know they do have their own lil’ unique “problems” …appetite & size for starters…but we’ll just have we’ll have to make room for ‘em some how.
Now let’s make some of Neil’s All Natural popcorn and watch the Red Box movie rental for tonight: It’s called “Blind Side”
Let’s hope it has a happy ending…
How much should the government do to subsidize the housing market?
Absolutely Nothing. There’s your solution.
Result: Cheaper houses. NO housing bubbles. NO government bailouts, and no government support of the useless parasites that gamed millions of dollars in bonuses from these depraved organizations.
It also would mean that no “campaign money” would go to politicians from these “private” companies. They are still giving donations.
But getting the federal government out of the mortgage business would cost home buyers dearly, in the form of higher interest rates.”
yea like the home prices won’t go down
The threat of the ‘fake fishermen’: How BP may be paying out millions in oil spill compensation to fraudsters.
Mail Foreign Service ~12th August 2010
BP could be paying millions in compensation to ‘fake fishermen’, it has been revealed.
So far BP has paid $308million to those whose livelihood has been threatened by the oil spill in the Gulf of Mexico.
But to receive compensation, fishermen must display a valid fishing licence - and applications for such licenses have spiked by nearly 60 per cent, despite most fishing grounds being closed by the disaster.
Three people suspected of abusing the system have been arrested in the past week in the U.S. - but there are fears there could be many more such ‘fraudsters’ at work.
One genuine fisherman even told reporters of being approached by two men who asked him to sign documents for them showing that they had worked for him.
He said he refused - but told the BBC that other captains have been offered thousands to sign similar such documents vouching for fraudsters trying to claim compensation.
The Louisiana Department of Wildlife and Fisheries (LDWF) has sold 2,200 licenses since the spill, Lt Col Jeff Mayne of the LDWF Law Enforcement Division told the BBC today.
‘Originally BP was paying to cheques to just anybody who had a licence and that may have spurred some of the fraud,’ he said.
You mean like all the banks and insurers becoming bank holding companies all at once to be eligible for TARP?
pressboardbox,
LOL! Great catch, kind of forgot about how suddenly everyone up to and including payday lenders got on that bandwagon. Made my day.
But what are we to expect? I mean, when there’s so much to go around?
Only give money to those with tax documents backing up the claims… if you have no tax documents you are:
1. not being honest and are trying to get money from BP
2. owe the system money in unpaid taxes
It was my understanding that only folks who could show copies of their tax returns could get money. That ticked off a lot of folks who were being paid in cash. They got nothing.
I’d guess there were few frausters, BP caught some of them, and the media is making this out to be more than it really is so as to have a more interesting story.
I must be the only person who doesn’t have a whole lot of sympathy for the good fisherfolk. Leaving out the environmental effects, economically all that happened was that a company cut costs and lots of people lost their jobs. Heck, that sounds no different than what happened when manufacturing left the Midwest.
And the lack of fishing is only temporary, 2-3 years? I don’t see why the good fisherfolk can’t sign up for their 99 weeks unemployment and compel BP to make payments on business mortgages so they get to keep their boats and buildings.
I don’t see why the good fisherfolk can’t sign up for their 99 weeks unemployment
So (if you agree that BP is to blame for this) you’re saying the American taxpayer should be paying for BP’s f up?
This IMO is just more indication that you think government largess just comes out of thin air.
I think it was sarcasm
BP cutting costs caused these people to lose there jobs, just like all those who lost jobs to outsourcing.
It wasn’t exactly sarcasm, but measton is right. Why should these fisherfolk get any special treatment above and beyond what the outsourced factory workers in Ohio got? I got sick of anecdotes where the guy says “I can’t take my boat out today.” Really? I still think the shrimp will be back in a few years. Those workers in Detroit won’t go back to work EVER.
And who pays for it is besides the point htere.
Democrats like this because they will get more voters…
Republicans like this because they will get cheap labor…
Who cares about the rest of the country…
====================
Report: 8 percent of U.S. newborns have undocumented parents
CNN) — One of about every 12 babies born in the United States in 2008 was the offspring of unauthorized immigrants, a Pew Hispanic Center study released Wednesday concluded.
According to the study, an estimated 340,000 of the 4.3 million babies born in this country that year had parents who were in the United States without legal documentation.
According to the study, 79 percent of the 5.1 million children of unauthorized immigrants in the United States were born in this country, making them U.S. citizens.
Many of those children are Latino, Passel said.
More than three-fourths of all unauthorized immigrants in the United States in March 2009 were Latinos, the researcher said. And nearly one of every four children under age 18 in the nation was a Hispanic.
That trend is likely to continue, the study concludes.
“Overall, Hispanics who live in the U.S. have higher rates of fertility than do whites, blacks or Asians,” the report states. “And among Hispanics, the foreign born have higher rates of fertility than the native born.”
===
Exterminate! Exterminate!
I guess the Doctor is an anchor babies best friend.
340,000 new babies =
340,000 new hospital bills
340,000 new students
340,000 new food stamp recipients
Who is paying for this?
You are…Thats assuming you have a job…
Unemployment claims rise unexpectedly.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aLk38IPaSJjM&pos=1
Unexpected by whom? Well, unexpected by me.
I really believed (believe) that at some point Americans will be working, but will be working poor, as our comparative economic decline works its way out, the baby boomers retire, like it or not, and the value of the dollar comes to reflect our indebted reality.
Perhaps the Chinese are keeping the lid on this, perhaps it is some “flight to quality” response that is keeping up from getting jobs sewing blue jeans for the purchasing power equivalent of $3.00 per hour. But I believe that is the end game.
Where is D-bag,…I mean Eddie?
He’s on his way to DOW 12,000…
LOL!
Or down in Fla. snapping up 25k condos.
Sillies…he’s waiting in line at Applebees.
ApplebeesHooters!At Hooters with a bimbo real estate agent discussing $25K condos!
I really believed (believe) that at some point Americans will be working, but will be working poor
That began in earnest during the 1980s ramp up of offshoring.
“That began in earnest during the 1980s…”
as did the rise in U.S. homelessness.
80s rise in U.S. homelessness
I understand (from magazine articles and documentaries, this is not my area of expertise) that the 80s rise in homelessness also was because of a change in mental health care policy, which intended to allow greater human dignity to the chronically mentally ill, de-institutionalizing them so that they could live more independently with the help of anti-psychotic drugs and community-based care. Unfortunately, it didn’t work well for many, still doesn’t.
It was very hard to see that rise in homelessness. I was working overseas then, with annual leave. On my stateside visits, American material abundance was almost disorienting and to see so many homeless, including many Vietnam vets was very disturbing.
After I was laid off a few years back by the big american title company, I was told I had been replaced by 10 Indian programmers.
Go figure…
Has anyone else recognized that adjustable rate subprime mortgages were written to reset within two years leading to rapid default and foreclosure. Prime mortgages were often written to reset in five to ten years meaning that we were well into the downturn before the better off debtors faced any interest rate sensitivity. The onset of the downturn brought down interest rates, which assisted these prime borrowers with their reset risk. And now that the downturn is well established, the banks are less eager to foreclose. Just one more advantage to these prime banking customers.
“Prime mortgages were often written to reset in five to ten years meaning that we were well into the downturn before the better off debtors faced any interest rate sensitivity.”
The prime folks had to bring a down payment to the table.
If you look at the Credit Suisse reset chart, we’re just about sitting on one of the pinnacles. (Maybe not coincidental that mortgage rates are at all time lows, but too bad so many of these folks won’t have the equity needed to refinance.) So the number of resets will go down for the next few months.
Not everyone who eventually defaults will do so immediately upon the reset. Even if they do, it will take three months of late or no payments for the NOD to arrive. So look for whatever number of foreclosures come from this summer’s resets to start arriving between Christmas (February/March, if there are Christmas moratoriums as in the past two years) and next summer/fall. Except, there is a larger pinnacle of resets still to come. Those NODS will arrive just as the first pinnacles foreclosures come to market as REOs or short sales.
Link to Credit Suisse reset chart.
Perhaps it is just the trickery of my jaundiced eye fooling me, but it appears to me that THE pinnacle of that Credit Suisse chart is not achieved until JANUARY 2012, with a long denouement to follow, with no end in sight (defined as monthly resets “contained” to less than $200 bn) until maybe FALL 2014 or so.
DON’T BUY UNTIL AFTER FALL 2014 UNLESS YOU DON’T MIND CATCHING YERSELF A FALLING KNIFE FOR THE TEAM!
Despite the purpoted 30 year term, nobody was willing to bet that these guys could make 30 years of mortgage payments. In the event, many of ‘em couldn’t make 20 MONTHS of payments.
nobody was willing to bet that these guys could make 30 years of mortgage payments.
Except AIG…and now Fannie and Freddie…
To true on AIG. Of course most of the crazy subprime cr@p wasn’t bought by F+F but was instead securitized by Wall Street.
“The New Deal is demographically obsolete. You can’t fund the dream of the 1960s on the economy of 2010,” says former Colorado Governor Richard Lamm.
“The average retiree in the Colorado pension fund stopped working at the age of 58 and deposits a check for $2,883 each month. Many of them also got a 3.5 percent annual raise, no matter what inflation was, until the rules changed this year. State pensioners all over the country are nervously eyeing the trend in Colorado as funding of state pension plans become increasingly hard for state treasuries to support”. ~ Public Pension Costs
~ If you’re on Social Security and still get your monthly money in the form of a check, you’re okay until March, 2013. Paper checks will then be eliminated and your money must be deposited directly in your bank account. For new people coming onto the roles next year, the phase-out date for paper checks is March 1st, 2011. The government says it’ll save $60 million a year by going paperless.
At least some people are coming out and saying it. We are at a heck of a turning point here, the postwar/Fordist era is fading faster with each passing day.
Truth is slipping through the cracks. The big boys better put an end to that.
58? No wonder we’re in the red.
Our plan is to educate kids for 13 years. (public dime)
Then family’s pay for the next 4 -8 years education.
Then they produce for all of 35 years.
Then the public takes care of them for the next 25 to 35 years.
Gee I can’t see why this wouldn’t go well. ; )
Carrie Ann,
Excellent point, never thought of it that way. And of course the “35 years” is assuming they don’t file a disability getting impatient for 58 to roll around?
Then they produce for all of 35 years ??
Thats assuming they don’t have a government job…
Dick Lamm was affectionately known as Gov. Gloom
I agree Ejohn…
The government says it’ll save $60 million a year by going paperless.
If you’re a federal vendor, this is already the case. The feds default to electronic payments.
IMHO, this is a good thing. I’ve had more than a few headaches caused by the need to chase checks from my university clients.
$2,883 each month
Is that before or after taxes? I noticed it didn’t say.
Yeah, FAT BANK at $34,596 per year. Whoo hoo! Caviar all around!
New claims for unemployment aid reach 484K
New applications for jobless benefits rise to highest since February as layoffs continue.
WASHINGTON (AP) — New applications for unemployment insurance rose last week to their highest level in almost six months, the latest evidence that some employers are still cutting their staffs.
First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000, the Labor Department said Thursday. Analysts had expected a drop. That’s the highest total since February.
Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smooths volatility, soared
Let’s see, if it was up only 2k then that means last week was revised UP to 482k. Another large upward revision, because IIRC the initial lat week was in the low 470’s.
Both Romer and TTT went on the record saying spring 2010 would be the jobs turning point. She was shown the door, when will it ever be Timmay’s turn?
I miss romer, not!!!!!!!!!!!!!!!!!!!!!
That is a lot to miss. I had read that she was doing some extra work as a stunt double for the Pillsbury Dough Boy.
No kidding! She should do well at that.
I read she had worked so hard and was so tired,she wanted to get back to the bosom of academia at Berkley.
I took that to mean she doesn’t have to work hard there.
She missed their cafeteria. They have killer tater-tots.
“I took that to mean she doesn’t have to work hard there.”
You have no clue about this.
Come on, fellas. Let’s not get too nasty over the obesity problem there. About 30% of Americans are now obese. I just hate her Keynesian philosophical views. The entire Administration is filled with these types, all from Colleges and Universities, with lots of theories, that when proven they are wrong, try to justify the their failures with excuses.
The most telling is the Krugman excuse.
Keynesian policies have failed, because although we spent trillions of dollars in government “stimulus”, we didn’t spend enough. It’s never enough.
I’m glad to see her gone. She shouldn’t be given a University job because she is a moron. I just don’t think Obama will get anyone that’s any better. Birds of a feather, you know.
by CDC standards I’m surprised we are not all obese. A friend of mine is 6′2″ average to fine boned, he weighs about 230#. CDC tables says he’s obese.
Any thing but obese, he’s buff as hell. He just got back from Iraq where her carried around 60# of equipment on 12 hour shifts. It’s all muscle.
So when we say some one is obese sure there is a clinical definition, but I doubt the clinical definition matches what most people think the word to mean.
Bank Repossessions Drive up US Foreclosures
12 Aug 2010 | Reuters
More Americans fell into foreclosure in July as a sour job market kept them from making payments, and banks took over homes at a near record pace.
Banks repossessed the second highest monthly number of homes ever last month, working through distressed loans already on their books rather than sharply stepping up new default notices, real estate data company RealtyTrac said on Thursday.
This reflects problem management instead of a fix of the root problem, said the company, which expects more than 1 million homes to be repossessed this year.
“What’s driving most of the foreclosure activity is unemployment and other types of economic displacement,” RealtyTrac senior vice president Rick Sharga said in an interview.
Banks took over 92,858 properties in July, up 9 percent in the month and 6 percent in the year.
More Americans fell into foreclosure in July as a sour job market kept them from making payment
“More Americans fell into foreclosure in July as bad bets on overpriced houses turned sour for the gamblers or they just decided to stop making the payments on the underwater POS.”
Better?
“Banks took over 92,858 properties in July”
Simple math would suggest this number is ridiculously low given all of the abandoned homes in the ENTIRE country. The state of California probably has this many REOs a month waiting to be addressed.
GM posts largest quarterly profit since 2004
DETROIT (Reuters) - General Motors Co posted its biggest quarterly profit in six years on Thursday, a day ahead of an expected IPO filing that will clear the way for the U.S. government to relinquish its majority stake in the top U.S. automaker.
GM reported second-quarter net earnings of $1.3 billion, compared with $865 million in the first quarter.
The second-quarter profit was the largest since 2004, when the U.S. auto market was still booming with annual sales of near 17 million vehicles and GM’s brands accounted for more than one in four purchases of new cars and trucks.
The results reflected a 47 percent surge in global production from the depressed levels of a year earlier when GM began operating under bankruptcy protection in a restructuring that included $50 billion in U.S. government funding.
The stronger profit also showed the gains GM has made from cost-cutting during bankruptcy and stronger sales in overseas markets led by China.
Well, we can all rest easier with that news!
Funny how this rosy report comes out one day ahead of their IPO.
Must just be a coincidence!
I wonder what percentage of GM’s sales are government fleet sales.
I wonder what percentage of the “earnings” is due to off-balance sheet shenaniagans and “mark-to-fantasy” accounting?
Is that real profit or is that Fed profit? (Who they jivin with that cosmic debris?)
“Ineffective and Impotent”: Greenhaus and Pento Slam Bernanke’s “Watershed” Moment. ~ Aug 12, 2010 ~ Tech Ticker
Tuesday’s announcement that the Fed will start buying Treasuries was a “watershed” moment for Ben Bernanke, says Michael Pento, senior economist at EuroPacific Capital.
Important? Definitely. Successful policy? Not hardly, judging by the market’s slump on Wednesday and the critiques levied in the accompanying video by Pento and Miller Tabak’s Dan Greenhaus.
The FOMC’s move is like “pouring gasoline into the tank of a vehicle that doesn’t have an engine,” Pento says, noting U.S. banks already have about $1 trillion of so-called excess reserves on hold at the Fed.
“That money is not being moved out,” he says. “Consumers are still deleveraging [so] there’s no demand for that money. Pouring more gasoline in that tank is not going to spur more lending.”
“pouring gasoline into the tank of a vehicle that doesn’t have an engine,”
Is this supposedly a new twist in Fed policy?
P.S. There seems to be an obvious risk that the chassis of the engine-less car will catch fire and burn up.
They just pumped $2T worth of unleaded into an electric car?
…with a dead battery.
When this was first reported yesterday, they said two to three thousand showed up. Turns out to be 30,000.
Georgia city hopes order prevails in housing sign-up.
Atlanta, Georgia (CNN) — A day after 30,000 people unexpectedly turned out in hopes of picking up public housing applications, the city of East Point in Georgia is hoping it won’t see a repeat crush when it begins accepting those applications Thursday morning.
The small city had expected only 10,000 people to show up Wednesday. But officials said crowd control became an issue after many families brought more than one member — children, other relatives and even dogs in some cases, according to Kimberly Lemish, executive director of the East Point Housing Authority.
While the crowd remained orderly and calm leading up to the handout, “as soon as the doors were opened panic ensued,” the East Point Fire Department said in a news release.
The crowds, however, tried to circumvent the lines and come around the sides to gain access, Chase said.
As many as 62 people required medical attention, including 20 who were hospitalized as a result of the crowds, the hot weather and the failure of some to take their usual medications, the fire department said.
Just look at it this way: There is a demand for affordable housing. Even if it’s (yecch!) public housing.
Well, now we know where Eddie’s been.
Haven’t they heard of the internet around there?
I wondered that myself. However, if you have to stand in line with 30,000 other people and risk of getting trampled, bringing a large and fierce-looking dog along for company is a terrific idea.
“Haven’t they heard of the internet around there?”
Most of those Atlanta peeps are functionally illiterate, so using a keyboard is a challenge.
They should have handed out job applications instead. “Hah, tricked ya!”
Oh Snap!
Wheels are coming off the wagon….I could be a very long and “dangerous” winter….
30K? 30K?!
I have to agree with scdave, this does not bode well…
Where have I heard ALL of this BEFORE???
Getting real: Bull run coming to an end for Canada’s housing
Garry Marr, Financial Post · Friday, Aug. 6, 2010
Erica and Jeff Manger never thought the price of their house could drop.
The Alberta couple bought a condominium in the Rockies resort town of Canmore three years ago and when they decided to move in 2008 to Sylvan Lake in Alberta, where they could afford a detached home, they kept the condo as an investment.
“It never occurred to us that we wouldn’t be able to sell for what we paid,” says Ms. Manger. “People were making $100,000 [on paper] a year on their condos.”
Now they’d be lucky to get the $315,000 they paid for their condo, even though it may have fetched $345,000 in 2008 when they were thinking about selling it to help pay for their new home. Instead, they’re getting $1,100 a month in rent for an investment that costs them $1,800 a month to carry and isn’t going up in value.
more…
“People were making $100,000 [on paper] a year on their condos.”
The sweet sweet nectar: “The Single Transaction / Deposit”
(Years of ed-u-cayshun & “shiny car w/eurologo” required)
This WSJ article by David Weidner somehow got hijacked by commentors:
* WRITING ON THE WALL
* AUGUST 12, 2010, 8:35 A.M. ET
A Nation That Won’t Be Fooled Again
Betrayed by Washington and Wall Street, We Find It Hard To Accept Good News
* By DAVID WEIDNER
The financial crisis and stagnant economy have made us bitter. We’ve become a nation of complainers and critics. Nothing is ever good enough for us. The bailouts are misguided. The stimulus didn’t work or wasn’t enough. Reform is too weak or makes matters worse.
It’s one thing to call the glass half empty, but these days we deny the existence of tableware.
Understandable as it may be, cynicism is a damaging and unhealthy way of analyzing Wall Street. We’re all for the free exchange of ideas, but when the conversation is dominated by the dispiriting, blindly disparaging discourse, it’s not just a downer, it’s dishonest.
Take, for instance, a recent report by Alan Blinder and Mark Zandi that examines the impact of the government’s response to the financial crisis. “How the Great Recession Was Brought to An End” suggests that government policies saved about 8.5 million jobs, staved off deflation and boosted gross domestic product — hardly a radical assessment.
The report was released July 28, and in the two weeks that have followed the response has been nothing short of spiteful.
…
We welcome your thoughtful comments. Please comply with our Community rules.
Brian Yossarian wrote:
Chaos: 30,000 near Atlanta seek place on rent-aid wait list
Today outside Atlanta, an estimated 30,000 people waited for hours in a broiling parking lot for the chance to get on a waiting list for federal help paying rent. News outlets report it was chaos outside the East Point Housing Authority, as tempers and temperatures flared.
Dozens were treated for heat-related problems or taken to hospitals, the Associated Press reports.
The crowd was three times larger than what the housing authority expected. People began lining up days ago for the applications to get on the waiting list for 455 rent-subsidy vouchers. No vouchers are available at the moment, said housing authority director Kim Lemish.
This scene will be repeated more and more frequently across the country as welfare funds are exhausted by ever larger pools of the unemployed and others.
The scary part will start when the unwashed finally realize that it’s over. Some will double up with realtives and and find menial jobs to feed themselves with. Others will have to stand in soup and breadlines (hopefully private charity will be up to the task).
In the early 90’s I volunteered at a soup kitchen in Escondido (once a month), CA. More often than not they had no coffee or sugar, so I would go to CostCo the night before and buy a giant can of generic coffee and a big sack of sugar which I donated to the soup kitchen.
The “clientele” were a sad looking bunch, many appeared to be homeless and mentally ill. It was humbling to see how a lousy cup of coffee would make their day.
Honestly, I do not understand some of these people. Why keep bringing more kids to the world when you can’t feed them?
———-
And people had waited for hours, even days, in line for the applications. Candice Dixon — who has three children and is 37 weeks pregnant — said she had been in line since Monday.
“It was horrifying, just chaotic, to be someone who waited patiently in line, and then all those people coming; I was scared for my life,” she said. “I didn’t leave; I slept out there in a lawn chair with a pillow. Then I washed up at Kroger, and went back and camped out some more.”
—————–
-
The “clientele” were a sad looking bunch, many appeared to be homeless and mentally ill. It was humbling to see how a lousy cup of coffee would make their day.
I live near a Tucson city park. A few years ago, it was quite the hangout for the homeless. Then, after complaints from the neighbors and more aggressive policing they went elsewhere.
There’s been a bit of a resurgence in our park’s homeless population. For the most part, they keep to themselves and don’t bother other people using the park. To me, they appear to be down and outers, possibly drug/alcohol addicted and/or mentally ill.
AZ Slim: we’ve got about 50 of the people you describe, usually drunk, making their rounds from panhandling, to the soup kitchen, to the park - And this is in Flagstaff!
These are year round residents, if you can call a homeless person a resident. Then we get our share of transients, but they don’t usually stick around long in winter…
A handful die each year, hit by a car or a train, beaten to death by a “colleague”, or just freeze to death.
It was humbling to see how a lousy cup of coffee would make their day.
Imagine how good they would have felt if you had provided them a good cup of coffee!
It was humbling to see how a lousy cup of coffee would make their day ??
Our priorities are all f….. up…
“Applicants came from all over the metro area and some came from other states. Since the program is a federal program, applications are not limited to East Point residents, Lemish said.
The current process is being conducted because, while all housing units are filled, the waiting list is depleted and the current group of applicants will be put on a new waiting list. There are a total of 655 housing spots available — 200 public housing units and 455 vouchers for rent assistance in private housing. East Point currently has five housing developments, but three of them will be closed or sold.
Lemish said it will likely be six months before any vacancies arise and that people could spend up to 10 years on the waiting list.”
Mission Accomplished!
How QE 2 Could Drift Off Course
By PETER EAVIS
Easy money, like other intoxicating substances, tends not to aid intellectual coherence.
…
The problem is that the Fed already has spent more than $1.7 trillion buying bonds in the first round of quantitative easing, which ended in March. The central question is why wasn’t that enough to prevent the economy’s slowdown?
Answering that shows the limitations of QE. It did push huge amounts of money into the banks. But the banks have $1 trillion of cash just idling on their books that isn’t being used to fuel higher amounts of lending. And that lack of loan growth requires little explanation: Borrowers are reluctant to take on more credit, as banks are to extend it.
This can be dealt with in two ways. The Fed can remain cautiously accommodative while household balance sheets repair and real-estate markets truly bottom. Once those have occurred, people will want to borrow more and banks will be more likely to lend. This may mean lower-than-expected growth for a period, but increases the chance of sustainable growth later.
The QE 2 camp disagrees, saying it risks a deflationary economic tailspin. However, the only way QE 2 is going to “repair” household balance sheets is if it is big enough to drive up the value of assets like real estate to the point that they are better aligned with liabilities.
But the amounts of money that need to be printed to lift, say, U.S. house prices substantially is likely huge and potentially destabilizing.
QE 2 could end up a ship steered by drunken sailors.
QE2 is like the rusty tanker with holes in it being rowed by slaves in “Waterworld”.
Groundhog Day!
* TODAY’S MARKETS
* AUGUST 12, 2010, 9:53 A.M. ET
Stocks Fall as Economic Worries Grow
By DONNA KARDOS YESALAVICH
NEW YORK—U.S. stocks opened lower as a disappointing round of data highlighting weakness in the U.S. job market and euro-zone industrial production added to investors’ concerns about the global economy.
The Dow Jones Industrial Average fell 102 points, or 1%, to 10277, in early trading, putting the market on pace to extend a two-day slump. The drop also pushes stocks deeper into the red for the year as economic data pointing to slower economic growth have refueled fears of a double dip.
…
It’s Weak Hand Shakedown time on Wall Street.
I guess it goes without saying that the green shoots of recovery have withered and died.
Economic Fears Fuel Market Swoon A1
Investors dumped stocks, commodities and riskier currencies in a world-wide flight to safety amid worries over slowing growth.
* ASIA BUSINESS
* AUGUST 11, 2010
Markets Swoon on Fears
Stocks Pummeled on Signs of Global Slowdown; Money Flees to Dollar and Yen
By MARK GONGLOFF, ALEX FRANGOS And TOM LAURICELLA
A foreign-exchange dealer passed an electronic board displaying a graph showing movements of U.S. dollar and Japanese yen exchange rates Wednesday.
Investors around the world scrambled for safe havens as fears of a global economic slowdown grew.
The yen briefly touched a 15-year high against the U.S. dollar, the euro suffered its worst selloff in nearly two years, and global stock markets tumbled.
A day after briefly cheering the Federal Reserve’s announcement it would buy Treasury debt to bolster the U.S. economy, investors Wednesday began fretting about the negative implications of the move: The world’s biggest economy still needs extraordinary government help.
…
“The world’s biggest economy still needs extraordinary government help”.
Anyone who doesn’t live inside the beltway, or in a 50 mile radius of Manhattan knew this six months ago.
Call it the “Trickle-Up Theory”
More like “Trickle Dumb Theory.”
GM has best quarter in six years:
Amazing what government-endorsed accounting tricks will do for the quarterly “earnings” these days.
http://finance.yahoo.com/news/GM-posts-largest-quarterly-rb-4021404322.html?x=0&sec=topStories&pos=1&asset=&ccode=
We Want Our IOUs (AP)
State Controller John Chiang said Tuesday that without a state budget, California’s government would be unable to pay its bills in late August (or maybe early September). That means issuing IOUs to some people. Possible dates for IOUs could be either Aug. 27 or Aug. 31, when big payments to schools are due, according to this schedule on the controller’s website.
This announcement, in the upside down world of California’s badly broken budget politics, felt almost like good news. With lawmakers and the governor making little progress on the budget — and showing little interest in making that little progress — the threat of IOUs seemed to provide hope that there’s a deadline out there, somewhere in the near future, that might force these guys to pass a budget.
I suppose the state pensioners could live on IOU’s until they conveniently starve to death. Or perhaps admit their fund was mismanaged and take less???
I see quite a few CHP’s on the freeways these days around San Diego, but not nearly enough to balance the budget.
Good Grub Guide!
The UN says eating creepy-crawlies will save the planet …~ 11th August 2010
South American ants are huge. Trust me, I’m about to eat one. Until I notice that their eyes are the size of currants and I lose my appetite.
It’s amazing I even got that close — just last week I felt such antipathy towards red ants that I poured boiling water on to a nest by my front door. And yet here I am, confronted with a plate of their giant relatives in the name of sustainable living. Sometimes it’s not easy being green.
But then, if the United Nations gets its way, we might all soon be adding creepy-crawlies to our weekly shopping lists. The UN is considering strategies to cut levels of meat consumption worldwide as part of its commitment to stamp out famine and cut global warming.
When will the UN tackle the real problem? The one of population growth. With various religious zealots around the world, it may prove to be the third rail. Unless unchecked population growth worldwide is tackled, I’m afraid the world is doomed.
Because if the UN started to tackle this problem, it would lead to discussions of birth control and abortion.
Didn’t someone in the 1970’s say the exact same things (along with global cooling)?
So how many mouths can we feed really?
Like the government debt bubble, we are borrowing against the future. We are sucking water out of the ground faster than it replenishes itself, so we can irrigate our crops. We are heavily dependent on crude-oil based fertilizers to produce the yields we need. Neither of these is sustainable in the long run, and by long I mean 50 years+ so I probably won’t be around to see the meltdown but I am concerned for the children of the world.
tackle the real problem? The one of population growth ??
The problem will be solved when we stop rewarding it…
No, it won’t. The truly poor will have children no matter what.
Is that insane? Of course it is. But that doesn’t change the fact. Because for the poor, their children are their ONLY hope of having someone take care of them in their old age or when they are sick.
When will the UN tackle the real problem? The one of population growth.
I assume you mean growth in the population of UN bureaucrats. The rest of us can manage quite well, thank you.
This guy calculates that the Earth could easily support 5-10 times its current population:
fatknowledge dot blogspot dot com/2008/11/how-many-people-can-earth-support.html
Idiocracy Introduction
http://www.youtube.com/watch?v=BXRjmyJFzrU
BS
Hey my country has too many people already. How would you like to accommodate, hmmm…, say 300 million folks from over here? Shouldn’t be hard, considering your theory that says you could fit in 3 billion people in the USA.
Here’s a bold statement:
U.S. Is Bankrupt and We Don’t Even Know It
By Laurence Kotlikoff - Aug 10, 2010 6:00 PM PT
Bloomberg Opinion
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.”
…
Your on a roll today with the data mining Pbear…
I have previously stated that if the gold old USA was a public company it would already be BK.
This particular Co. gets to print its own currency though.
Gravity wins every time.
“This particular Co. gets to print its own currency though.”
Methinks the moral hazard issues associated with the ability to print its own currency have caught up with Uncle Sam, Amalgamated.
China PLA warns U.S. over fresh military drill in region
Aug 12
BEIJING (Reuters) – China’s People Liberation Army demanded a tough response to U.S. plans to send an aircraft carrier to naval exercises near its coast, saying that “respect” was at stake.
A commentary in the Liberation Army Daily on Thursday laid bare rancor over Washington’s naval exercises with ally South Korea, and over its criticism of Chinese territorial claims to swathes of the South China Sea, where Taiwan and several Southeast Asian states also have claims.
“A country needs respect, and a military also needs respect. ‘If someone doesn’t hurt me, I won’t hurt him; but if someone hurts me, I must hurt him,” wrote Major General Luo Yuan in the paper.
“For the Chinese people and the Chinese military, those are by no means idle words.”
If they sink our carrier, will they still buy all of our bonds?
It will come out of the blue…The unexpected event that will send everything into complete meltdown.
I agree Dave, the fall will be swift.
So the gang-banger culture is taking over the Chinese military.
“He dissed me, so I busted a cap in his ass……”
Tried to replace the broken screen on my GF’s iphone last night. Bought a kit from Amazon for ten bucks and watched a couple youtube videos on how to do it. Everything went fine and the job really was not that hard although quite a pain in the @ss and time-consuming. Then…I was reassembling the phone with the new screen and the Chinese quality gremlin brought things to a screeching halt. The tiny plug attached to the new screen was a cheap incompatible version with the OEM one and would just not plug in to the phone. I used a jewelers loupe to examine the plug and it looked nothing like the original which would pop right on. What a frustrating experience. I eventually gave up and re-installed the broken screen. Chinese parts just plain suck is what I learned but I have already learned that about a thousand times…
But the phone was made in China of Chinese parts by Foxconn.
I know. The aftermarket parts must be made in the part of China where the Chinese get their equivalent of our cheap imported crap. A flea-market within a flea-market. The bottom of the food-chain.
Those are factory rejects. Parts that were ordered from a sub vendor but failed to meet specs.
Ask me how I know this. Seen it a thousand times.
I wonder if that huge solar flare/event last week has anything to do with the storms in Dee Cee lately?
We just got hammered again big time
The Gods of Justice are pissed!
Drunk? I don’t blame them.
market pulse
Aug. 12, 2010, 10:07 a.m. EDT
Freddie Mac: Fixed-rate mortgages at record lows
Related stories
* Fixed-rate mortgage rates drop for sixth week (July 29)
* Fixed-rate mortgages hit record lows: Freddie Mac (Aug. 5)
* 30-year fixed-rate mortgage lowest since 1971 (Aug. 5)
* Freddie Mac: 30-year mortgage at record low 4.54% (July 29)
By Sue Chang
SAN FRANCISCO (MarketWatch) — Freddie Mac(FMCC 0.40, +0.01, +2.05%) said Thursday the 30-year fixed-rate mortgage average fell to record low of 4.44% with an average 0.7 point for the week ending Aug. 12. In the previous period, the average was 4.49%, and the year-ago average was 5.29%. The 15-year fixed-rate mortgage average also slid to a record of 3.92%. “Interest rates for fixed mortgages and 5-year hybrid ARMs again broke record lows this week following reports of a sluggish job market. Private payrolls increased by 71,000 jobs in July, below the market consensus forecast, and revisions shaved June’s growth by 34,000 workers. The Federal Reserve also noted in its Aug. 10 policy statement that the pace of recovery in output and employment slowed since its last meeting in June,” said Frank Nothaft, Freddie Mac chief economist, in a statement.
Has there ever before been a major swoon in the U.S. stock market during a banking crisis, accompanied by persistently high unemployment, after the point when housing had already bottomed out? I am frankly quite puzzled by how confident the housing market bottom callers have become as of late, as it seems less obvious than ever at the moment that the U.S. housing market has bottomed out. Maybe they know of some as yet unannounced plan at the Fed to make sure housing goes up again — damn the torpedoes!
They don’t know squat. It’s all pump and dump.
Can someone please explain to me the nature of this so-called ammo of which Fed-watchers speak? I am particularly interested to know what it means to say they are “out of ammo,” given the apparent absence of a macroeconomic budget constraint on a central bank with a printing press technology?
Double-dip likely
There’s more than a 50% chance the economy’s heading for a double-dip, economist Robert Shiller says. And the Fed is already out of ammo to fight it.
Maybe they mean “Out of ammo that won’t lead to massive devastation and possible revolts?”
They still have the a-bomb of monetizing every dime the government owes to ‘cut taxes’.
Mortgage Rates Hit New Low of 4.44 pct.- AP
Mortgage rates sank to the lowest level in decades this week, pushed down by the Federal Reserve’s move to buy up government debt in a bid to lift the economic recovery.
Bigger Bailout for Unemployed Borrowers
http://www.cnbc.com/id/38662809
“The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.”
Are we bailing out the guy who was going to walk away anyway…or the BANK?
you mean bailout for banks, right?
Let’s see, do any other countries depend on “consumers” for their economic recovery?
Europe’s consumers will decide strength of economic recovery by willingness to spend
PARIS (AP) — As Europe makes a wobbly recovery based largely on selling goods overseas, the key question for its economy is: Are shoppers at home ready to start spending again?
Growth in the 16 countries that share the euro was just 0.2 percent in the first quarter, and analysts say the recovery can only really take root if consumers in France, Germany and elsewhere forget their fears of unemployment and more turmoil — and open their pocketbooks.
Second quarter data to be released Friday are widely expected to show a modest acceleration, thanks to strong export-led growth in Europe’s economic engine Germany. The figures will show eurozone growth rebounded to 0.8 percent quarter-on-quarter in the April to June period, estimates Jonathan Loynes, chief European economist at Capital Economics.
The whole world economy has been based on selling stuff in the Big PX.
The US Government didn’t control it, or even negotiate quid pro quos, because the idiotic “free trade is a universal good” crowd has been in charge of policy.
BINGO
Free Trade has been good for stock holders and CEO’s mostly CEO’s. It’s been good for Hedgefund managers and Wall Street.
Everybody else lost out.
Eventually the shortsighted elite will regret this.
The Marie Antoinette of this world, regret anything?
You’re dreaming. They will go to hell blaming everyone but themselves.
Bust it
This here’s a tale for all the fellas
My wife sees a house and she gets so jealous
Don`t buy now ’cause you’re over zealous
We be next years victim, or so they tell us
She`s on a mission and you’re wishin’
Someone could cure your homeless condition
Lookin’ for a house in all the wrong places
No good deals, just ugly places
From frustration, first inclination
Is to rent another year and leave the situation
But every dark tunnel has a light of hope
But don’t hang yourself with a 30 year rope
Open House showin’, so you’re goin’
Kinda pissed bout the day you’re blowin’
Suzanne walks in to start the show
She says they aint making more land you know
She’s dressed in yellow, she says “Hello
Look at these granite tops, you fine fellow”
So you run out a the greatest of ease
And what comes next, hey sign the lease
But I want it, you`ll get it
But I want it
Next year, baby you`ll get it
Just sign the lease
Wife is poutin, sometimes shoutin
Lookin at all the great deals that there toutin
But if we got no money, and we got no car
Just a big house payment, we won`t go far
Just sign the lease
“But it had granite”
Just sign the lease
“We`ll never own a house”
Just sign the lease
But I want it, you`ll get it
But I want it
Next year, baby you`ll get it
Just sign the lease
Break it down for me, fellas
I love it!!!!! How soon will it be on You Tube???
Flashbacks (independent of words applied) to a bar called Mt Olys in Cincinnati, OH circa 1989…
Thanks, Jeff!
Gold has been cut free of its $1200/oz peg today. Does bad news on the jobs front normally result in a spike in the gold price?
Metals Stocks
Aug. 12, 2010, 10:44 a.m. EDT
Gold tops $1,200 mark on economic uncertainty
Prices destined for $1,300 in the next six months, Goldman forecasts
By Cynthia Lin, MarketWatch
NEW YORK (MarketWatch) — Gold futures brushed past the $1,200-an-ounce mark Thursday, gaining more than 1% after a government report showed U.S. jobless claims rose last week and as investors remained jittery about the health of the global economy.
Trading near its session high, gold for December delivery recently changed hands at $1,215.30 an ounce, up $16.10, on the Comex division of the New York Mercantile Exchange.
…
Letting the dollar price of gold float up a bit should help prop up nominal prices of U.S. housing and stocks.
Atlanta Police Arrest Man in Connection With Mich. Serial Stabbings
August 12, 2010 | Associated Press
ATLANTA — An Israeli who is a possible suspect in a string of 20 stabbings that terrorized people across three U.S. states and left five dead was arrested at an airport as he tried to board a plane to Tel Aviv, officials said Thursday.
Israeli man?
So much for the theory of him being a Nazi.
hmmmm…
His name has not been released and he is described as a “citizen of Israel.”
Most “citizens of Israel” living in the Flint area are Palestinian Arabs.
Why do I think there is more to this story…?
Couldn’t we just have given him a list of “Friends of Angelo” and let him go about his business?
It’ll be interesting to see. Most people don’t realize that about 20% of Israeli citizens are actually Arabs (this includes some Christians, incidentally; as well as Muslim and even some Samaritans).
Glad they apparently caught the guy. One less scum on the loose is a good thing.
Abuelazam is his name.
Now we get to feed & house him for the remainder of his life….
The press is reporting he was a bad dude over there, so they shipped him over here, where he might fit in. But it didn’t work. Had he assimilated, he would have shot 50 people instead of stabbing them.
Probably would have just winged ‘em all, though. He’s not very efficient at being a bad guy.
17*300,000 = 5.1+ million foreclosure filings over the past 17 months. How many of these homes have already found new owners at this point?
MarketWatch News Break
Aug. 12, 2010, 9:23 a.m. EDT
RealtyTrac: No foreclosure peak until 2011
If you’re waiting for relief on the foreclosure front, keep waiting. RealtyTrac says foreclosure notices rose 4% last month, the 17th straight month filings have exceeded 300,000. And RealtyTrac’s Rick Sharga tells MarketWatch News Break that foreclosures may not peak until 2011. Listen to News Break and find out what states are still suffering. You may be surprised.
AIG commercial:
http://www.youtube.com/watch?v=XOKXQZ9ir3w
Oh yeah! Now little juniors future is safe!
Consumer spending was tepid in July, MasterCard says
NEW YORK — Shoppers dug in their heels in July, bad news for the stalling economy and worse for struggling retailers.
Excluding gasoline and autos, U.S. retail sales rose a meager 0.1% last month from June, according to figures released Thursday by MasterCard Advisors’ SpendingPulse, which estimates spending in all forms including cash. Excluding autos, sales fell — 0.9%.
The Commerce Department releases its July spending figures Friday.
RealtyTrac: Ohio foreclosure activity up 23% in July
Business First of Columbus
Foreclosure activity in Ohio got off to a rough start in the second half of the year, jumping more than 20 percent in July as filings declined nationwide, according to new data from RealtyTrac Inc.
Irvine, Calif.-based RealtyTrac, which compiles and sells foreclosure data, said Thursday that it tracked 13,511 default, auction and repossession filings in Ohio last month. That’s up 27 percent from June and 23 percent higher than July 2009.
On the commercial side, there has been a surge in foreclosures rather than “extend and pretend” in Washington DC, the strongest office market in the U.S. Why?
Perhaps because if they can turn around and sell the building for enough to limit their loss, the lenders don’t have to pretend, and have less incentive to extend.
Well in housing, through massive subsidies we have (in theory) an upturn in prices — and also an upturn in foreclosures.
Is it at least possible that federal efforts to support housing prices not only screwed younger generations (through prices they have to pay and debts they have to pay), which everyone who matters in the U.S. in favor of, but also gave the banks an incentive to foreclose on older HELOCkers?
Yes. Kick out the old house debtors and bring on the new ones.
I know it will never happen, but I would love to see the political I.Q. of this country jump up, and realize both parties are screwing them. Just a dream, I know, to many dumb asses that can vote.
Grim Voter Mood Turns Grimmer ~ WSJ
Pessimism Rises on Economy and War; Bad Reviews for Both Democrats and GOP.
Americans are growing more pessimistic about the economy and the war in Afghanistan, and are losing faith that Democrats have better solutions than Republicans, according to a new Wall Street Journal/NBC News poll.
Underpinning the gloom: Nearly two-thirds of Americans believe the economy has yet to hit bottom, a sharply higher percentage than the 53% who felt that way in January.
The sour national mood appears all-encompassing and is dragging down ratings for the GOP too, suggesting voters above all are disenchanted with the political establishment in Washington. Just 24% express positive feelings about the Republican Party, a new low in the 21-year history of the Journal’s survey. Democrats are only slightly more popular, but also near an all-time low.
A new WSJ/NBC News poll found that Americans are becoming grimmer about the economy with nearly two-thirds believing that the economy has yet to hit bottom. Peter Wallsten and David Weidner discuss. Also, Scott McCartney finds that some airlines are more fuel efficient than others, and others are gas guzzlers.
The results likely foreshadow a poor showing in November’s mid-term for Democrats, whose leaders had hoped the public would grow more optimistic about the economy and, as a result, more supportive of the party agenda. Now, despite the weak Republican numbers, the survey shows frustrated voters on the left are less interested than impassioned voters on the right to in the election.
Union nixes concessions, braces for layoffs at Queens libraries
August 12, 2010
The city’s budget may have saved the Queens library from massive cuts, but it was not enough to save the jobs of nearly four dozen employees.
The union that represents those workers said the 46 layoffs are planned for Sept. 3. John Hyslop, president of Local 1321, said administrators gave the union an offer that would have resulted in no job losses, but they would have had to make permanent concessions.
Under that deal, which the union rejected in a 297-50 vote July 20, annual vacation time would not be carried over to the next year and there would be five days of furloughs.
Hyslop said that although the union thought the concessions were not too severe for his members, who include librarians, office aides and other personnel, they balked at approving them because the library would not guarantee that there would be no layoffs next year.
Under that deal, which the union rejected in a 297-50 vote July 20
Lemmie guess -
297 union brothers throwing the 50 union brothers with the least seniority under the bus…
The made guys are letting the button men get run through the meat grinder.
I’m sure their payscale and bennies are great. We haven’t had any layoffs at our local public library (in fact, it’s going through an expansion).
Of course, our librarians only make 35-50K and don’t get pensions. Clerks and pages make even less.
Yep…Brotherhood my a$$…
Foreclosure Crisis Spreads Across U.S.; Idaho Defaults Mount
Aug 12, 2010
Nan Holmes, a senior escrow officer at a title insurer, says her insider’s view of the local market gave her the confidence three years ago to pay $370,000 for a new home in Boise, Idaho. She got a price she liked from the builder and 100 percent bank financing.
That was before the bottom fell out of the housing market in California, Nevada and Florida as borrowers with bad credit began defaulting in record numbers, setting off a recession. Holmes, who had earned $150,000 a year when real estate was booming, saw her compensation shrink by half when business cooled, forcing her to dip into savings and sell jewelry. She stopped paying the mortgage in April and has put the house on the market for $145,000 less than she owes the bank.
“How long will it take for the market to turn so I can just break even?” Holmes, 55, said as she sat in her house in Boise’s tree-lined Collister neighborhood, four miles (6.4 kilometers) from the state capitol.
Home foreclosures are climbing in the Northwest and Midwest, areas that had earlier dodged the worst of the mortgage crisis, according to real estate data firm RealtyTrac Inc. With 14.6 million Americans out of work and consumer spending declining, further weakness in housing could push the economy back into recession, former Federal Reserve Chairman Alan Greenspan said Aug. 1.
“Idaho Defaults Mount”
Idaho was a bubble capital? Who’d've thunk?
Would DennisN care to offer comment?
I just spoke with a visiting Construction Inspector this afternoon who said their mortgage is now upside down; he didn’t say how much, and I didn’t ask. He said they liked Boise, ID though — better than Phoenix, AZ.
GM’s Whitacre Steps Down as CEO
Aug. 12 (Bloomberg) — General Motors Co. Chief Executive Officer Ed Whitacre said on a conference call he’s stepping down as CEO on Sept. 1. Dan Akerson, a GM director, will succeed Whitacre. Bloomberg’s Margaret Brennan reports. (Source: Bloomberg)
Incoming General Motors Co. CEO Dan Akerson
General Motors Co. Chief Executive Officer Ed Whitacre said on a conference call he’s stepping down as CEO on Sept. 1 and will be replaced by director Dan Akerson. Whitacre will stay on as chairman, Akerson, Carlyle Group Inc. managing director, said on the call.
“Ed and I share a common vision,” he said today.
Whitacre joined the Detroit-based automaker in July 2009, the month it emerged from bankruptcy, and he replaced Fritz Henderson as CEO in December.
GM, 61 percent owned by the U.S. government, reported second-quarter net income of $1.54 billion on increased vehicle sales and production as the automaker prepares for an initial public offering.
Dude did not even give 30 days notice. I smell a Jeff Skilling dash for the door.
He said his mission was accomplished, they/he had saved and turned GM around. He looks forward to a huge success with the IPO, so that the stigma of being called GM - government motors will become a thing of the past.
This fellow is a miracle worker, he should jump from bidness to bidness saving them. With an open gubmint check book for back up of course.
I once with with a fellow who gave his two day notice.
He said “I am leaving too day”
It’s never,ever enough!
Williams: $8 million won’t stop layoffs.
BUFFALO, N.Y. (WIVB) - Uncle Sam is sending $8 million from a federal jobs bill to avert more layoffs in Buffalo schools, but is it enough to stem the tide of red ink in Buffalo?
Dr. James Williams usually has all of his school administrators in place by July 1st. That’s not the case this year, mainly because of the district’s financial problems.
“We have six vacancies of principals we have to replace,” explained Dr. Williams.
By law, the district must replace principals and special education teachers. But more layoffs in other areas could still be on the way.
Dr. Williams said, “To receive $8 [million] from the feds doesn’t change our situation. I need $34 million.”
I’m sorry to hear this. My mother’s from Buffalo, and she got a first-class public school education there.
“first-class public school education”
That’s looking more and more like an oxymoron these days. Many public schools have become youth warehouses, free lunch and ADHD med dispensaries, mental health clinics, gang recruiting stations, counselling centers, etc.
And my mother, who taught in the public schools for 22 years, would be the first to agree with you. Especially on the youth warehouses part. That and dealing with the prima donna parents motivated her to retire several years before she planned to.
How many 99ers in Buffalo?
Here’s something to make your blood boil:
http://www.nytimes.com/2010/08/12/business/12treasury.html
$50K “loans” to unemployed home debtors!
I’m not without compassion for the unemployed. But I’d rather have a program that, say, reimbursed $5,000 of moving expenses (as an outright gift) and/or legal expenses to get these people moved out of a house and into something they can afford.
Then the house can go on the market for a reduced price, making housing more affordable for others.
Buying votes ain’t cheap.
Stop it Reuven… common sense is not allowed in America anymore
“$50K “loans” to unemployed home debtors!”
That’s to “buy” the banks more time.
Top Iraq general: U.S. army ‘must stay’ until 2020
LONDON — The commander of Iraq’s military is calling for U.S. forces to stay in the country for another decade, reinforcing his stance that his country’s military won’t be able to secure the nation on their own after U.S. troops leave.
“At this point, the withdrawal is going well, because they are still here, but the problem will start after 2011,” Gen. Babaker Shawkat Zebari said at a defense conference in Baghdad, according to the BBC.
“The politicians must find other ways to fill the void after 2011… If I were asked about the withdrawal, I would say to politicians: the U.S. army must stay until the Iraqi army is fully ready in 2020,” the BBC reported.
Has anyone told the general that we’re gonna run out of money long before then?
Whomever “controls” the Iraq oil fields…”controls” the Iraq nation.
Perhaps I have that bassackwards?
let me re-write it:
Whomever “controls” the Iraq oil fields…”controls” the Iraq nation.
Yep, thought so.
Ooooooh, FULLY ready. There’s the misunderstanding. I thought they were supposed to be “ready” years ago. Turns out they need to be “FULLY ready.” Got it.
Clipped from the Agora 5min.Forecast…
Sometime early next year, the Obama administration will propose how to revamp the U.S. mortgage market. Next Tuesday, the White House will hold a “summit” on the issue.
It’s safe to guess that none of the invitees will suggest the government should simply get the heck out of the mortgage market… so this morning, we’re left to speculate which options are more likely to be tried, and to tease out the resulting investment implications.
First, some relevant data: 325,229 U.S. properties got a notice of default, auction, or repossession last month — down 10% from the previous year, but up 4% from the previous month.
92,858 properties were repossessed — up both month to month and year to year, indeed setting the second-highest total since RealtyTrac started keeping numbers in early 2005. So banks are working through their foreclosure backlog before sending out a truckload of new notices.
The numbers will “get a lot worse unless we see some job creation,” says RealtyTrac’s Rick Sharga, pointing out the obvious. Whoops, no luck on that score…
First-time jobless claims “unexpectedly” grew last week to a five-month high, the Labor Department reports this morning.
Home sellers are cutting their asking prices at an accelerating pace. 25% of the listings on the market as of Aug. 1 have had at least one price reduction, according to Trulia.com. This is the fourth straight month in which price cuts have grown. As in so many other things housing these days, Vegas leads the way…
“If buyers are unqualified to buy, it doesn’t matter how low interest rates are or how discounted a home is,” says Trulia’s CEO, also pointing out the obvious. Thus…
Mortgage applications (both purchase and refinance) rose a meager 1% last week, despite rates on a 30-year fixed falling to 4.57% — a record low in 20 years of record keeping by the Mortgage Bankers Association.
“The homebuyer tax credit pulled forward future demand into late 2009/early 2010,” our stock market vigilante Dan Amoss explained in this space last Friday. “Now that the tax credit has elapsed, demand is snapping right back to a very depressed level.” Record-low rates aren’t enough to get people in the tent. Nor will still lower rates that might result from the Fed’s plan to roll over its maturing mortgage securities into Treasuries.
Just yesterday, we saw a handful of initiatives that offer a hint of the direction things are going.
The White House plans to spend another $2 billion in unspent TARP money to help homeowners in 17 states with the highest unemployment
HUD will launch a $1 billion program offering unemployed homeowners a zero-interest loan of up to $50,000 for up to two years.
Wrapped in the language of “helping the unemployed,” the real aim of these programs is to prolong the extend-and-pretend games that keep the mortgage market from looking even more sickly than it is.
And they probably won’t even accomplish that, judging by the latest developments with the White House’s signature Home Affordable Modification Program. HAMP aims to help 4 million homeowners, but only 1.3 million have qualified for trial modifications… and a mere 390,000 have been granted permanent modifications.
It gets worse: Treasury reported last month that 8% of permanent modifications from Q3 2009 were 60 days delinquent, and 2% were 90 days delinquent. Then Treasury fessed up last week that Fannie Mae used “flawed methodology.” The actual figures are that 20% of the permanent mods are 60 days delinquent, and 15% are 90 days in arrears.
So the new initiatives amount to Band-Aids. The Washington crowd knows this. So they’re thinking bigger.
An update from the nabe: I’ve been doing some research on rent-to-own deals.
It’s of interest because, as I noted the other day, that’s what the owner of the house behind me is trying to do. (And thanks to all of you for weighing in on what you think of that property. All I can say as that our great HBB minds think alike.)
Any-hoo, the house appears to be occupied now and then. Meaning that there’s at least one person overnighting there, but not every night. Someone left a light on all night on Tuesday night, but not last night. And the weeds and motley collection of lawn furniture (including one relatively new easy chair) remain.
In the course of my research, I found that only 5% of R2O deals actually come to fruition. Does this figure square with the collective knowledge and experience of HBB-ers?
So to succinctly summarize your post, the housing market has bottomed out, and real estate only goes up from here.
Right?
Democratic Rep. Yarmuth criticizes White House economic team for focusing on Wall Street.
LOUISVILLE, Ky. (AP) — Democratic U.S. Rep. John Yarmuth lashed out at President Barack Obama’s economic team Thursday, saying they show more concern for Wall Street than average Americans in a blunt election-year assessment from an Obama loyalist frustrated by a tepid economic recovery.
What started out as a bashing of Senate Republican leader Mitch McConnell by union activists, who pressed for more public transportation projects, shifted gears briefly when Yarmuth took aim at Obama’s inner circle of economic aides.
“I’m not real happy with our economic team in the White House,” Yarmuth said. “They think it’s more important that Goldman Sachs make money than that you make money. And that’s where we’ve got to change the attitude of this country.”
A perfect summation.
BO is surrounded by Wall Street.
Every whisper in his ear is from some dark GS offspring.
Youth Unemployment Hits Record High
12 Aug 2010 | CNBC
Global youth unemployment has hit a record high following the financial crisis and is likely to get worse later this year, the International Labor Organization (ILO) said Thursday.
The report from the ILO says 81 million out of 630 million 15-24 year olds where unemployed at the end of 2009, some 7.8 million more than at the end of 2007.
Thursday marks the first day of the UN International Youth Year; the ILO warned these trends will have “significant consequences for young people as upcoming cohorts of new entrants join the ranks of the already unemployed.”
The world risks a crisis legacy of a “lost generation” of young people who dropped out of the job market, the organization added in its report.
Bond king Bill Gross, who will attend the White House summit on Tuesday, says he won’t buy mortgage bonds without a continued explicit backing by Uncle Sam.
“Without a government guarantee, as a private investor, I’d require borrowers to put at least 30% down, and most first-time home buyers can’t afford that,” he tells the Financial Times.
We might not know what the government’s going to do… but at least we know where one of the biggest non-government players stands.
“…and most first-time home buyers can’t afford that,”
Can’t afford 30% of what?
Of anything? Doesn’t matter if houses come down to 100K in price if a 30% down payment is required and you don’t have it.
Heck, I recall from 25 years ago in San Diego how all the ex military guys boasted that they could buy a house with no money down with a VA loan. That was supposed to be the proverbial “getting on the first rung of the ladder.” Then it was “wait for it to appreciate and start trading up.”
Greek recession deepens as austerity cuts kick in.
ATHENS (AFP) – Greece is in the grip of deepening recession, official data showed on Thursday, as a stinging austerity programme agreed with the EU and IMF in exchange for a debt rescue package begins to bite.
The national statistics office said the downward spiral accelerated in the second quarter as a barrage of wage and pension cuts plus tax rises sapped consumer demand.
A “significant” fall in consumption and lower investment saw the economy shrink 1.5 percent, it said, following a contraction of 0.8 percent in the first quarter to extend a recession that began in the middle of 2009.
The latest figures put the economy on track for a forecast contraction of 4.0 percent this year.
On a 12-month comparison, Greek output was down 3.5 percent in the second quarter after a fall of 2.3 percent in the first.
Coming soon to a country near you.
Having to choose between the lesser of two evils is a b****.
‘Pentagon Will Cut Thousands of Jobs,’ Says Gates.
The Pentagon has stated its intention to cut thousands of jobs. According to an article titled “Pentagon belt-tightening will cut thousands of jobs” (msnbc.com), the troubled economic times “require that [Gates] shutter
a major command that employs some 5,000 people around Norfolk, Va., and begin to eliminate other jobs throughout the military.”
This announcement begins the loss of employment for thousands of government workers. It seems that there is absolute certainty in Gate’s words. The need for job cuts has arisen out of the Pentagon’s desire to “find $100 billion in savings in the next five years,” which will help alleviate debt.
I bailed out of a military town in the 1990s. The same town and the house I bailed out of has been gearing up for doubling the workforce on the military base, the larget employer of that community. The house I sold for $79,000 in 1996 is “zillowed” at $200,000. And for all I know, the hordes of people expected to move there have yet to show up. The BRAC has been on hold.
And this announcement be Gates will be interesting. Another round of base closures is overdue.
I also saw that APG in northern MD has been gearing up for expansion a couple years ago. Not sure what the situation will be after Gates’ announcement now.
Stay footloose and fancy free.
A peer who certifies my work was showing me an email he launched from one of his honeypots. “See if you qualify for free education grants from the government” titles, which opens a website that requests all sorts of personal information to apply. Gotta wonder how many desperate folks fall for this scam?
Ever applied for a government grant? I do business with university faculty members who have. Every one of them says that Uncle Sam is a pretty tough guy. He doesn’t hand out grants like Halloween candy.
I’m seeing an inexplicable divergence today between the prices of two commodities which have both traditionally served as inflation hedges:
Gold 1,217 +18 +1.49%
Oil 75.75 -2.27 -2.91%
What gives, and which group of gamblers is going to regret today’s bets?
Simple - the perception is we’re now closer to a SHTF scenario. If that happens, oil is a lot messier to carry in your pocket.
But physical gold is a lot easier to steal.
That’s when it’s nice to also have some lead.
Scientists find new superbug spreading from India.
(Reuters) - A new superbug from India could spread around the world — in part because of medical tourism — and scientists say there are almost no drugs to treat it.
Researchers said on Wednesday they had found a new gene called New Delhi metallo-beta-lactamase, or NDM-1, in patients in South Asia and in Britain.
U.S. health officials said on Wednesday there had been three cases so far in the United States — all from patients who received recent medical care in India, a country where people often travel in search of affordable healthcare.
NDM-1 makes bacteria highly resistant to almost all antibiotics, including the most powerful class called carbapenems. Experts say there are no new drugs on the horizon to tackle it.
“It’s a specific mechanism. A gene that confers a type of resistance (to antibiotics),” Dr. Alexander Kallen of the U.S. Centers for Disease Control and Prevention in Atlanta said in a telephone interview.
With more people traveling to find less costly medical treatments, particularly for procedures such as cosmetic surgery, Timothy Walsh, who led the study, said he feared the new superbug could soon spread across the globe.
“At a global level, this is a real concern,” Walsh, from Britain’s Cardiff University, said in telephone interview.
“No one had ever seen a national real estate bubble,” said Keith Leggett, a senior economist with the American Bankers Association. “We would love to change history so more conservative underwriting practices were put in place.”
We actually had a big real estate bubble in the 1920’s - but its crashing was masked by the crashing of the bigger stock bubble.
Yep. The Great Florida Land Boom ended in 1926, three years before the Great Crash on Wall Street (Oct 1929).
Similar timing is playing out this go round (RE bubble popped in 2006, Wall Street tumbled Fall 2008).
Here is one of my all-time favorite Wikipedia entries:
Florida land boom of the 1920s
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The Florida land boom of the 1920s was Florida’s first real estate bubble, which burst in 1925, leaving behind entire new cities and the remains of failed development projects such as Isola di Lolando in north Biscayne Bay. The preceding land boom shaped Florida’s future for decades and created entire new cities out of the Everglades land that remain today. The story includes many parallels to the modern real estate boom, including the forces of outside speculators, easy credit access for buyers, and rapidly-appreciating property values.[citation needed]
By the 1920s, its economic prosperity had set the conditions for a real estate bubble in Florida. Miami had an image as a tropical paradise and outside investors across the United States began taking an interest in Miami real estate. Due in part to the publicity talents of audacious developers like Carl G. Fisher of Miami Beach, famous for purchasing a huge lighted billboard in New York’s Times Square proclaiming “It’s June In Miami”,[1] property prices rose rapidly on speculation and a land and development boom ensued.[2] By January 1925, investors were beginning to read negative press about Florida investments. Forbes magazine warned that Florida land prices were based solely upon the expectation of finding a customer, not upon any reality of land value.[3] New York bankers[who?] and the IRS both began to scrutinize the Florida real estate boom as a giant sham operation. Speculators intent on flipping properties at huge profits began to have a difficult time finding new buyers. The inevitable bursting of the real estate bubble had begun.
On January 10, 1926, the Prinz Valdemar, a 241-foot, steel-hulled schooner, sank in the mouth of the turning basin of Miami harbor. The old Danish warship had been on its way to becoming a floating hotel.[4]
The Prinz Valdemar, capsized and blocked the port of Miami for several weeks in January of 1926, helping to usher in the end of the real estate boom. Florida Photographic Collection
The railroads, already strained by the burden of transporting both food and building supplies, had already begun raising shipping rates. When the sea route to Miami was blocked, the city’s image as a tropical paradise began to crumble. In his book Miami Millions, Kenneth Ballinger wrote that the Prinz Valdemar capsize incident saved a lot of people a lot of money by revealing cracks in the Miami façade. “In the enforced lull which accompanied the efforts to unstopper the Miami Harbor,” he wrote, “many a shipper in the North and many a builder in the South got a better grasp of what was actually taking place here.”[5]
In October 1925, in an effort to improve Florida’s clogged rail system, the railroad companies placed an embargo on all railway goods other than food, which further contributed to Florida’s skyrocketing cost of living.[citation needed] New buyers failed to arrive, and the property price escalation that fueled the land boom stopped. The days of Miami properties being bought and sold at auction as many as ten times in one day were over. The first Florida real estate bubble had burst.
The next year brought the 1926 Miami Hurricane, which drove audacious Biscayne Bay development projects such as Isola di Lolando into bankruptcy. The 1928 Okeechobee Hurricane and the Wall Street Crash of 1929 continued the catastrophic downward economic trend, and the Florida land boom was officially over as the Great Depression began. The depression and the devastating arrival of the Mediterranean fruit fly a year later destroyed both the tourist and citrus industries upon which Florida depended. In a few short years, an idyllic tropical paradise had been transformed into a bleak, humid remote area with few economic prospects. Florida’s economy would not recover until World War II.
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There’s that wily character again, Mr EZ Credit.
Deflation’s Coming, Says Gary Shilling, And It’s Going To Clobber The Stock Market~ Aug 12, 2010 by Henry Blodget in Investing, Recession
All through the market rally and budding economic recovery of the past 18 months, most people concluded that the crisis was over and it was time to start worrying about inflation again. But strategist Gary Shilling of A. Gary Shilling & Co. stuck by his guns:
It was DEFLATION we needed to worry about, Gary said. And it was BONDS, not stocks, that investors should be buying.
Well, Gary’s bearishness on the stock market caused him to miss a nice run, but he has been dead right about bonds. And he has also been right about the potential for deflation–as evidenced by the recent Consumer Price Index numbers and the fact that most other strategists have come to agree with him.
So what’s Gary’s current outlook?
Same as it ever was:
Prepare for chronic deflation, buy bonds, and sell stocks.
Why is Gary still expecting deflation? Because consumers still have way too much debt, and this debt will take decades to work off. Also, consumers are saving money again, which means they aren’t spending it. Banks have plenty of cash and reserves, but the demand for money just isn’t there. And when consumers are strapped and credit is contracting, prices tend to fall.
“Deflation’s Coming”
These doomsters seem to never mention the Fed’s choices over whether or not to take measures to combat deflation and how, and what tradeoffs constrains the Fed’s choice.
Thinking’s hard.
They also treat “deflation” as if the economy is some big homogeneous thing. No one seems to be willing to discuss, or even admit, the granularity of different asset classes, or even of prices vs. wages.
“No one seems to be willing to discuss, or even admit, the granularity of different asset classes, or even of prices vs. wages.”
It is difficult to get a man to understand something when his salary depends on his not understanding it. — Upton Sinclair
I think that’s where guys like Schiff have gone wrong. What they say is correct, but they continue to underestimate the willingness of the Fed/Treasury to muddy up the waters.
A growing powerful political force.
99ers to rally Thursday on Wall Street for Tier 5 benefits and jobs: Will media cover the rally?
A hopefully large group of 99ers will be gathering Thursday August 12, 12 –1 p.m. Federal Hall, 26 Wall St. (map) to demand that Congress act immediately to help the growing ranks of 99ers – benefit exhaustees. This rally is being coordinated by Unemployed Workers Action Group. The Mission of UWAG is:
We hope to organize the millions of Unemployed Workers into an Action Group that will wield the power of our organization to demand that our government do everything in their power to create more jobs, end age discrimination by employers, and aid us in our ability to survive with dignity until we do find work.
This is an important moment for 99ers and the unemployed community at large. This event must be widely attended and widely covered by the media for it to have the most impact. Benefit exhaustee numbers range from 1.5 to 4 million and are increasing at a rate of 50,000 a week. Starting the end of September, that weekly rate of increase will be 90,000. And there will be millions more benefit exhaustees if Congress doesn’t extend unemployment benefits again at the end of November for those currently collecting unemployment.
The UWAG is organizing this event to demand that Congress immediately pass legislation that creates jobs, extends unemployment benefits and stops job applicant credit checks.
It’s starting.
Back when I lived in Pittsburgh, there was a group called the Mon Valley Unemployed Committee. It drew heavily from the ranks of displaced steelworkers in the Monongahela River Valley.
I seem to recall that it was a highly respected local group. And those guys weren’t looking for handouts. They were Pittsburghers, after all. They wanted to go back to work.
I heard Lawrence Yun on DC news radio this morning solemnly intoning that the bottom is in, and it’s all up from here. They introduced him as the Chief Economist of the NAR. I thought, more like the Chief Bullsh-tter of the NAR.
I believe he has been intoning that stopped-clock bottom call already for months on end, if not years…
Lawrence Yun has no shame.
Not fluent in English, you been overloaned, boned a real estate mogul dethroned, can`t get no satisfaction on da phone, not to worry. They`re ba-ack
Loan modification event returning to West Palm Beach Aug. 27-31
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 4:09 p.m. Thursday, Aug. 12, 2010
The loan modification mavericks are back.
The non-profit Neighborhood Assistance Corporation of America _ hero to the struggling homeowner, bully to big banks _ announced during a Thursday news conference that it will hold its third South Florida mortgage counseling extravaganza in West Palm Beach Aug. 27 to Aug. 31.
In assembly-line fashion, the 24-hour-a-day nationwide events process thousands of borrowers who fly across the country, wait for hours, even sleep in folding chairs, to plead their case for a lower monthly mortgage payment.
The Boston-based group often touts an 80 percent success rate in winning payment reductions, crediting much of the achievement to hundreds of bank representatives who attend its programs, meeting face-to-face with homeowners.
The event this month will be held at the Palm Beach County Convention Center.
“I’m very grateful NACA came here and helped us,” said Jean Smith Saintvil on Thursday, speaking on behalf of his cousin Marie Ambroise, who is not fluent in English.
COMMENTS from Loan modification event returning to West Palm Beach arcticle in PB Post
8 COMMENTS Comments
I post this whenever they come to town but I can’t help myself. NACA rules. They help regular people stay in their homes. If you are a swindler, a speculator, a scammer, or a screamer, they won’t work with you. Wait a minute, that’s half of South Florida. Now I see when you’re not getting loan modifications. If you have a decent job, can make a fair payment, and were a legit victim of this economy, NACA is very helpful and straightforward. Thank you NACA for saving our homes!
NACA Rules
4:28 PM, 8/12/2010 REPORT ABUSE
Modification? not sure. My household had a significant income loss, became 3 months late on payment. Never late beefore on 10 year mortgage. Bank reduced payment by half for 6 months and approved for lower interest rate in the end but charged me interest amounting to more than $15000.00 during this time. So Yes, I got a lower interest rate, but increased my mortgage $15,000.00 So now I owe more, with taxes and insurance, its virtually the same monthly payment…Any advice out there?
Struggler
4:32 PM, 8/12/2010 REPORT ABUSE
How about a program in Indian River County. Or is this just for Palm Beach?
Lois
4:57 PM, 8/12/2010 REPORT ABUSE
Kool-aid…round three.
nemo
6:24 PM, 8/12/2010 REPORT ABUSE
I want me some obama bucks!!1
mike
7:29 PM, 8/12/2010 REPORT ABUSE
Educator,
Sounds like good news for u. U are probably the first in line.
Nemo, I respect all your comments. U are so correct in all your posts. Thank U Nemo. God Bless our beautiful free country.
Frank
7:32 PM, 8/12/2010 REPORT ABUSE
Not fluent in English, you been overloaned, boned a real estate mogul dethroned, can`t get no satisfaction on da phone, not to worry. They`re ba-ack
Loan modification event returning to West Palm Beach Aug. 27-31
jeff saturday
8:01 PM, 8/12/2010 REPORT ABUSE
NACA is very upfront… They tell you verbally and in print that you MUST be prepared and willing to Advocate for yourself to assure that the bank follows through with the deal they offer.
I got a great deal at a NACA event. However, the bank (Wells Fargo) had one administrative snafu after another that I had to overcome. But finally (in August) I got the bank to actually implement the offer they gave me at a NACA event last October!. It was well worth the wait.
NacaAlum
8:06 PM, 8/12/2010
http://www.marketwatch.com/story/story/print?guid=C387638C-41A3-499B-9315-5AF8940C47DD
Reagan Republican David Stockman: the GOP should file for bankruptcy
“Stockman rushes into the ring swinging like a boxer: ‘If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt … will soon reach $18 trillion.” It screams “out for austerity and sacrifice.” But instead, the GOP insists “that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.’
“In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: ‘Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too.’
No more. Today there’s a ‘new catechism’ that’s ‘little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes’ making a mockery of GOP ideals. Worse, it has resulted in ’serial financial bubbles and Wall Street depredations that have crippled our economy.’ Yes, GOP ideals backfired, crippling our economy.
Stockman’s indictment warns that the Republican party’s ‘new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one.’
Amen to that! And lest anyone accuse me of partisanship, the Democrats are even worse.
Reagan Republican David Stockman: the GOP should file for bankruptcy
Amen to that! And lest anyone accuse me of partisanship, the Democrats are even worse
Good balance maybe but I don’t understand the worse part. Are you saying that the Democrats are worse than the Republicans in their betrayal of Republican values or have the Democrats betrayed Democratic values worse than the Republicans have betrayed Republican values?
The problem is not that taxes are too low.
The problem is that Republicans and Democrats have kept boosting spending. Shame on Stockman.
The tax money is OURS to begin with.
http://www.indenvertimes.com/former-janus-manager-faces-million-dollar-loss-on-house/
Rule Number 1 for Beating Deflation:
Try not to catch yerself a falling knife.
* The Wall Street Journal
* WEEKEND INVESTOR
* AUGUST 7, 2010
How to Beat Deflation
Strategies to protect your portfolio from—and take advantage of—the dreaded ‘D’ word.
By JANE J. KIM And ELEANOR LAISE
The markets are signaling that a bout of deflation may be coming. Many economists still dismiss the threat. But if they are wrong, and deflation does set in, what would it mean for stocks, bonds, gold and other investments?
The last time deflation fears gripped the markets was in 2003, when the economy was recovering slowly from the dot-com recession. The worries of a sustained fall in prices across the economy turned out to be overblown as growth snapped back, prices for oil and other commodities jumped, and inflation rose enough for the Federal Reserve to begin tapping on the monetary brakes in 2004.
But the signs seem more ominous this time around. The core inflation rate rose just 0.9% in June from a year earlier—among the lowest levels seen since 1966.
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Fed Chairman Ben Bernanke has said the central bank would do whatever it can to prevent significant deflation in the U.S. In a now-famous 2002 speech, while he was a Fed governor, he said, “The U.S. government has a technology, called a printing press … that allows it to produce as many U.S. dollars as it wishes at essentially no cost,” and thus fight deflation.
Of course, if the Fed were to turn on its money machine full blast, that could spark inflationary pressures over the longer term, bringing a whole new set of investing challenges.
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If deflation does kick in over the next several months, here is how it might affect your portfolio, from stocks and bonds to cash and real estate:
Stocks
Deflation is generally bad news for stocks, since a period of falling prices and weak demand tends to weigh down corporate earnings and, therefore, share prices.
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That Sinking Feeling
Deflation
Deflation
Deflation
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One sector that warrants caution: financials. As borrowers struggle to pay off debts, lenders could face more defaults. And as loans are paid down, there may be little demand for new borrowing. Both would hurt profits.
Bonds
In a deflationary environment, longer-term government bonds tend to do well. As investors rush to the safety of Treasuries, yields drop and prices jump, resulting in higher total returns. Hence the recent rally.
Bond-fund manager Jeffrey Gundlach—who thinks yields on the 10-year Treasury note could fall to 2%—has about 40% of the DoubleLine Total Return Bond Fund’s assets in longer-term government debt, such as Ginnie Mae securities. If yields on 10-year Treasurys fall to 2% within a year, investors could reap total returns of 10% to 12% as the price of the securities jump, he says.
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Conversely, inflation-linked securities such as TIPS (Treasury inflation-protected securities) and I Bonds (inflation-linked savings bonds) could lose value in a period of sustained deflation. When the consumer price index turned negative in 2009, for example, rates on I Bonds temporarily dropped to 0%. Investors could see the value of their TIPS decline, since any negative change in the CPI would be applied to TIPS’ principal, reducing the interest earned. (If investors buy TIPS at auction and hold the bonds until maturity, the Treasury pays the inflation-adjusted principal or the original principal, whichever is greater.)
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Cash
Cash is king in a deflationary world. While investors may not earn much interest, cash gains in value as prices fall. “If you’re concerned about deflation in the short-term, cash gives you the best flexibility,” says Greg McBride, senior financial analyst at Bankrate.com.
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Hard Assets
Deflation generally means falling prices for commodities, real estate and other hard assets. But as with stocks, investors shouldn’t write off the category altogether.
Gold, which many investors consider an inflation hedge, also can be a useful deflation-fighting tool, analysts say. The government tends to respond to deflationary concerns by printing money, which in turn can spark fears of inflation and drive up the price of the metal. Gold is a hedge against financial stress, and “the source of stress doesn’t matter, whether deflationary or inflationary,” says Joe Foster, manager of the Van Eck International Investors Gold Fund.
In a deflationary period, investors should be especially wary of commercial and residential real estate and the real estate investment trusts that invest in such properties, analysts say. Much of the value of real estate is predicated on an ability to raise rents, says Morningstar’s Mr. Peters. A lack of inflation, little rent-raising power and low occupancy rates, he says, “could come back to hammer this group a second time.”
Debt
Deflation generally isn’t kind to debtors. “If you have $1,000 in debt, and if prices are falling, it will cost you more in terms of forgone goods and services,” says Kris Mitchener, an economics professor at the Leavey School of Business at Santa Clara University.
To the extent that you have to take on any debt, opt for as short a term as possible, says David Hultstrom, a financial adviser in Woodstock, Ga., who would counsel clients to pay off their mortgages and invest in long-term bonds if they expect a deflationary environment. “You don’t want to get locked in.”
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