Bits Bucket For August 25, 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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Low prices and rates can’t slow fall in home sales.
WASHINGTON — Home prices in many parts of the country scream bargain, and mortgage rates haven’t been this low for decades. So why are houses across the nation sitting on the market for so long?
Sales of previously occupied homes in the United States fell 27 percent in July, the weakest showing in 15 years, the National Association of Realtors said Tuesday. It was the largest monthly drop in the four decades that records have been kept.
Potential buyers are hesitating because they think home prices still have further to fall. Potential sellers — those with the stomach to put their homes on the market at all, anyway — are reluctant to lower their prices.
“It really is a self-fulfilling prophecy,” said Aaron Zapata, a real estate agent in Brea, Calif. “If all buyers perceive that home prices are coming down, then they will stop making offers — and home prices will come down.”
“If all buyers perceive that home prices are coming down, then they will stop making offers — and home prices will come down.” said Aaron Zapata
Soooo, is Mr. Zapata implying that somebody has to step up and take the hit? If so, do they need to bring their own money, or will Uncle Sugar’s do instead? Everyone has a price I suppose, we just found out who is worth $8,000. Will Uncle Sugar try to up the bid? Can he even up the bid? Stay tuned, shortly we will see just how harebrained that $8,000 gimmick was - and there’s more to the fallout than yesterday’s used house sales figure.
“If all buyers perceive that home prices are coming down, then they will stop making offers — and home prices will come down.”
So if buyers just stopped making offers entirely, then we could finally achieve the ever-elusive goal of affordable housing?
COOL!
Soooo, is Mr. Zapata implying that somebody has to step up and take the hit? If so, do they need to bring their own money, or will Uncle Sugar’s do instead? Everyone has a price I suppose, we just found out who is worth $8,000.
+1 Nice way to put it.
Potential buyers are hesitating because they think home prices still have further to fall.
That’s right, it’s the buyers fault. It has nothing to do with people be maxed out on debt, or being out of work, or bad credit ratings. Nope it’s the buyers fault.
It can’t be the buyers fault… there aren’t any.
Bargain? What bargains? All I see in my hood is overpriced crap. $700,000 homes in a neighborhood with household incomes around $70-120k. Prices *do* have further to fall, especially at the high end. Anyone who tells you otherwise is trying to sell you something!
All I see in my hood is overpriced crap. $700,000 homes in a neighborhood with household incomes around $70-120k.
South Bay!
Specifically, they’re trying to sell you a house.
All I see in my hood is overpriced crap. $700,000 homes in a neighborhood with household incomes around $70-120k.’
Thousand Oaks
catus
Add to that Simi Valley, too. Some older stuff on nice lots are just overpriced, period. Most of the stuff we like in T O have liquefaction. We’ll pass.
Moorpark does have an ideal micro climate, but it’s a fugly town.
Most of the stuff we like in T O have liquefaction.
Simi’s worse and much of Moorpark is in a 100 year flood zone
You got that right. In three or four years from now prices of houses will be “more reasonable” as REALITY will rule the true market for houses. Common sense will be the new in word, not government pricing, not polish politicans, not commission realtors, lenders etc all on the feed lots of fast money.
Jerry-
You’re right, but we’re paying 4 rents right now, trapped in this engineered housing nightmare. (apt, office, storage units) We are we’re no loan contingency buyers, who we can’t wait it out long term, but aren’t in duress either. This sucks, doesn’t it!
DC/NoVA !!!
All I see in my hood is overpriced crap. $700,000 homes in a neighborhood with household incomes around $70-120k.’
Costa Mesa!
“Home prices in many parts of the country scream bargain”
Maybe in Ohio but not in the Bay Area and much of California. The truth that seems to not be talked about a great deal is that while prices did come down a bit here, if you want even a small starter home in the Bay Area you’re still looking at $500,000 or so. Even if you make a good income that’s a overly steep price. It might still as well be 2005 as far as I’m concerned. Home prices in my East Bay hood were around $250,000-$300,000 in 2003 and they’re still pushing $500,000 now.
So yeah… maybe prices scream bargain elsewhere but we still have a long way to go here. I doubt they’ll come down enough to make me look and that’s probably why I have Texas on my mind.
A small starter house in east Palo Alto or East Menlo Park is down to 200k.
Yeah… the same is true in West Oakland, the less than flattering parts of Richmond, and other areas with the same notoriety. 200k is a lot for living in an area infested with crime. 200k gets you a NICE house in a safe, pleasant neighborhood in about 90% of the country. Like I said- a home you’d actually want to live in anywhere in the Bay Area is going to set you back 500k.
Places like San Francisco, NYC etc will always be disproprotionately expensive compared with the rest of the country. If you wait for them to be as cheap as Boise, you’re going to die first. The question is, what is the cost of purchase vs the cost to rent. The rental housing market adjusts to supply and demand much more quickly than the purchase market. The crazy thing about the housing bubble was the degree to which the purchase price became completely divorced from the price for rentals. It became cheaper to rent money than housing.
I don’t totally buy that argument- that the Bay Area is rightfully disproportionately expensive, especially not for the prices still being asked when compared to overall median incomes. Like I said- even if you make great money, home prices here are insane. I and my wife make well into a 6-figure income. Yes- we could afford to plunk down a pretty good down payment on a “starter” home- aka, a 2 bedroom crappy fixer-upper from the 40’s where some little ole’ lady lived for 60- years and made no upgrades. Even if you were to put down a $100,000 down payment on a $500k house, you’re still looking at a total expenditure of around $2,800 after all the taxes and fees are spoken for. That’s totally stupid. That alone would consume about 50% of our income meaning if either one of us lost our jobs we would lose the house if no new job were found within say- a year, which given this job market is somewhat not out of the question.
I’ve been investigating other equally cool, hip, techy, cities. I visited Austin last year. You can buy a decent place there for under $200k. What’s more, the incomes are only about 15-20% less than that in the Bay Area. Truth be known we could afford to move and buy outright in Austin if we wanted to. But the job market sucks so thus we stay and continue to rent cheap and save, which I suppose isn’t a bad thing.
I understand certain areas demand a premium. But the premium here is way the hell out of whack.
East Palo Alto has consistently been a bad place to live. West Menlo Park has consistently been a great place to live.
EPAs (and places like them) have crashed to prices consistent with inflation adjusted increases from the prior trough in the mid-90’s.
Menlo Parks (and places like them) have not fallen in line with inflation growth from the prior trough.
There will be more pressure downward on higher priced homes. Less so on lower priced homes.
Places that are desirable to live, in terms of long-term conditions, will always be more expensive than others. This definitely applies to the SF bay area.
Generally this applies to natural setting, e.g. usually a place on the coast (or to a lesser extent on a lake), a place near multiple beautiful natural settings (e.g. the coast and mountains, as is most of CA), etc.
It also applies to places that are centers of key high-paying industries. In the SF/San Jose case that’s tech. It applies to NYC for finance, to parts of Texas for oil, etc. These factors may change slowly over time, but generally that’s decades at the least, but very often only over the course of multiple centuries.
SF has the quadruple whammy of being:
- The west coast center of finance
- Very scenic
- Near the center of the computer world (albeit slowly spreading out as it is).
- Very land-limited, being on a peninsula. Yeah you can commute in, but it’s a b**** to do it.
Thus it’s reasonable for prices to be very expensive there, essentially forever (same as Hong Kong, Tokyo, etc.). Yes prices did go overboard 3-4 years ago, but don’t expect them to come down to prices found most other places in the U.S., or even close to it.
Yeah I wouldn’t confuse SF with Bay Area. I still love SF after all these years but knew I could never afford to live in the city proper.
Yes… I don’t disagree that “desirable” areas will be more than… “undesirable” areas. But that doesn’t mean they should have prices that totally ignore even basic financial principle. Like I mentioned- we make a pretty good income. Way more so than the stated local median in our area. Yet buying a home here would be a very risky maneuver.
Lastly… are places like NYC and SF more desirable? Everyone’s idea of paradise is different. My parents still live in rural NC and have traveled to Italy, The Mediterranean, All over Spain, Greece, California, the east Coast, and many other places and would never dream of living anywhere else because they love where they live. And why not? They’re only 30 minutes from the mountains or a large lake. They can walk to town. They own a pretty comfy house on some land and their jobs- though they pay far less than mine- enable them a high standard of living when compared to the one I live here. Perhaps the term of being more desirable is really an oxymoron when applied to such supposed paradises as the Bay Area- where the weather us nice but the commutes, cost of living, crowds, budget woes, schools, and so on are absolutely terrible.
If I could pry my wife out of the bay area, I would definitely consider Austin.
Also, many areas of SC and the mid-east coast are vibrant, tech job riddled, and cheap compared to the Bay Area.
Tech is very mobile.
We moved out of the Bay Area last year primarly because of housing cost…. secondary because of the rising cost of living, and finally because of the complete failure of government.
Yes, living in California or desirable areas is going to be more expensive, but it shouldn’t be 10x to 20x more expensive. Used to be that the cost of living in California was 30% to 40% above average. Now, its just insane.
We now are in Columbus, OH and buying a house. Austin was one of our choices as well, but as someone previously said, the job market wasn’t as good as I hoped it would be. All I can say is, it is wierd how normal life is away from CA.
Other great locations we visited and considered are Salt Lake City, Raleigh, Atlanta, Denver, and even Seattle.
California has just managed to turn itself into a $#!thole. The only people that will be left there are the uber-rich, the destitute poor, and the poverty line poor (those who make $120,000 a year while living in a 600 sq ft. apartment). Only in CA can you be considered poor and still make 6 figures, but hey just ask the state housing authority.
And for anyone who doubts how bad it is there, they just don’t get it. People there have learned to treat bankruptcy like an expected stage in one’s life. Got college, get a job, buy a ton of shit, go bankrupt, get a boyfriend, don’t have kids, and life sucks, but hey at least it is always sunny.
We actually just got back from Denver. Wow. My first time to CO and the place is just stunning. I’d gladly put what we saw in CO has being every bit as beautiful, and perhaps more so than California. Its possibly on my list except I can’t stabnd snow. It wasn’t dirt-cheap. But it wasn’t insane either.
I hear you on Austin. I was laid off for 5 months and actually put in a lot of resumes there in my search. I was a little disappointed because not only did many of the jobs pay a LOT less, as in 40-50% less, but there were a lot less total jobs period. That and it seemed that I wasn’t the only Californian doing the same thing. Of the 2 companies I got an interview with, they said probably 40% of the applicants were from Cali. There were like 100-150 applicants per job on average. Competition is fierce. Forget getting any help on relocation. 95% of the companies wouldn’t even look at out of state resumes. So yeah- Austin seems nice. I would love to live there. But its definitely no Bay Area.
I ultimately got a job here in the Bay Area. But I believe if I want to get a job in another state I’m probably going to have to get a fake mailbox, or perhaps even just cut the cord and move there.
The conclusion I came up with is that we should continue to do what we’re doing: Live cheap, rent cheap, save a lot of cash, and when the day comes, move to wherever and probably get crappy little jobs. It won’t matter because we’ll have the cash to just buy a place and really have no debt. The job will basically be incidental and perhaps provide healthcare and a measly pension. I have no idea how long it will be. The job market is super bad and I’m reluctant to move now. All I can say is that I’ve hated the Bay Area for years. I can’t wait to get out of here.
“Home prices in many parts of the country scream bargain”
I’m calling extreme bullsh!t on this comment. Even in the markets which have melted down the most, prices hardly “scream bargain.” If anything, they scream “closer to historical affordability, but not there yet.”
I keep hearing MSM shills and housing mouthpieces screaming what a great time to buy it is, but I have yet to see any city, town, etc. where it’s a better time to buy now, than it was before this whole bubble started. I see a lot of ghetto area houses selling at large discounts, but they are still priced higher that they will be once the higher end finally capitulates. I’m just not seeing that yet.
Also, I have not seen any meaningful capitulation in raw land. In fact, I’ve seen raw land parcels priced equal to what a house on the same sized parcel sells for. Somebody is sitting on massive amounts of raw land, refusing to face reality. Apparently, there are a lot of deep pockets out there.
“So why are houses across the nation sitting on the market for so long?”
Because the snakes on Wall Street sold J6p’s job to a guy in India while his government was busy guarding the “Freedom Fries ?”
The lay down buyer of the past is history, of course there is always the “stupid seller wants to meet a stupid buyer,” but for the most part sellers are still in denial.
Over priced houses by the public and the builders are killing the recovery. Even with a jump in jobs paying a price for a home that is still beyound most peoples pay check will be the problem for years to come unless common sense prevails good luck with that.
Credit card debt drops to lowest level in 8 years
NEW YORK (AP) — The amount consumers owed on their credit cards in this year’s second quarter dropped to the lowest level in more than eight years as cardholders continued to pay off balances in the uncertain economy.
The average combined debt for bank-issued credit cards — like those with a MasterCard or Visa logo — fell to $4,951 in the three months ended June 30, down more than 13 percent from $5,719 in the same period a year ago, according to Trans-Union.
The credit reporting agency said it was the first three-month period during which card debt fell below $5,000 since the first quarter of 2002.
Credit card debt remained the highest in Alaska, but slid 7 percent there to $7,148. A total of 22 states recorded debt higher than the national average.
Residents of Alabama paid off the most debt, dropping their average balance by 27 percent to $4,753.
I’d like to see a breakdown of these balances by % paid off every month. I have $10K+ of cc balance every month. I use my cc to pay everything I can. $10K/month with a 1-2% cashback adds up to a lot of money for doing nothing.
I also pay the balance off in full every month and never pay a cent of interest. Yet someone looking at my balances every month would think I’m in debt and struggling.
And also does the lower balance indicate people are paying debt off more quickly? Or does it indicate people are paying off the debts at the same rate, but just not adding more to the balances?
What about interest rate? Are the high rate cards getting paid off more than the low cards?
Just saying people have $X balance is kinda meaningless without putting that $X into some kind of context. But that’s what the MSM is there for. Provide stories with no context.
It’s especially meaningless when its a MSM-serving fabricated fake-recovery-supporting lie.
That’s quite the cash flow, Eddie.
omg
He spends quite a bit at Applebees.
FOS
All hat, no cattle.
I agree. FOS up to his/her/whatever eyeballs. (Don’t get me wrong, not implying that all brown eyed people are.)
My net worth is probably just a little bit higher than most, and I am charging way less than $1k/mo on my cash back CC.
I just now got of the horn with CitiBank new accounts, and the lady in Mumbai told me that the cash back is limited to $300 per calendar year. Based on 1%, your cash back would be maxed out at 2.5k/mo, and even less since some items are cashed back at 2%. Other cash back CCs have similar limits.
Not the bonanza that the pretentious types (like this jackass) want us to believe it is.
check out chase and american express - both of these cards offer me no limit cash back
I thought the same as I also put about 10K/month and pay in full plus collect my thousands in cash back!!
> I have $10K+ of cc balance every month. I use my cc to pay everything I can. I also pay the balance off in full every month and never pay a cent of interest.
So you spend $10k/month or $120k/year. WTF is your income?
Christ, if you had that kind of cash flow, you’d be better off with 1% compound interest and NOT spending it all every month.
Most of the expenses are for air travel, hotels, utilities etc … it adds up quickly when you are running a small family business
“A total of 22 states recorded debt higher than the national average.” Ergo, 28 states reported debt lower than the national average. What was the point of this info, I wonder?
“Residents of Alabama paid off the most debt”…because it comes first in the atlas. (Makes as much sense as much of what is reported in the article.) “Credit card debt remained highest in Alaska” because it comes second in the atlas?
But seriously…look for CC debt to slide like crazy under Fin Reg.
25 states reported debt higher than the national median. (or 24, depending on how you call the split.)
Such useful information!
How much of this is due to write-offs, I wonder.
Most of it, I bet.
That, plus its a little easier to pay down the credit card bills when a person isn’t making a mortgage payment.
+1
Why haven’t we thought up a word describing these individuals? Foreclosure-rich, bubble-squatters, misfortune-opportunists?
I think “bubble squatters” has a nice ring to it.
That, plus its a little easier to pay down the credit card bills when a person isn’t making a mortgage payment.
Earlier this summer, I read a Business Week article that suggested that increases in consumer spending may have something to do with non-payment of mortgages. My apologies for not recalling which BW issue, but I just wanted to let everyone know that the MSM is starting to catch on.
Not so much write offs. They are not paying mortgages.
Gotta keep the CC, damn the house……
I wonder how much is people choosing to pay off debt at 14% rather than save at 1%.
Meanwhile, credit card rates keep rising.
http://www.npr.org/blogs/money/2010/08/23/129373873/credit-card-rates-keep-rising
This is mainly due to the legislation passed last year.
“Meanwhile, credit card rates keep rising.”
And they should too; no respect for money these days!
Half of the states recorded credit card debts above the median state credit card debt.
HA! (someone had to laugh at that)
Yeah but many of the states are below the median state credit card debt. A very significant portion, in fact.
The same portion as are above; no more and no less.
Credit card interest rates are going up. (I posted a link to this earlier but it hasn’t shown up.)
Those who have the cash get to pay down their cards; Those without the cash are forced to carry expensive credit card debt or (the horror) are forced to take on more expensive credit card debt.
The credit card lenders have the cashless just where they want them.
I’m not so sure about that, combo. Those with the cash (ie those still with jobs) can get outta Dodge, leaving the credit card companies holding the high-risk pool, most of whom will default — later if not sooner. Banks will likely never recoup what they lent via CC’s. But that’s OK; Larry Summers
will bailout the MRS division of the bank and the bank will use it to cover CC losses.
Ox:
That’s why my idea for a $3000 CC bailout per person, or maybe a zero interest rate for 5 years on everybody’s card, would be a direct shot of a stimulus that might actually work.
No. No No No No No.
dj - you see like a good guy. Please don’t turn into a candy-crappin’ unicorn. We have too many of those already.
LOL….just tryin to get my piece of the bailout….
You know us renters are at the bottom of ohBAHma’s list.
PS We really should have bailed out CIT and not AIG, cit provided funding for small businesses and letters of credit for the shipping industry which froze….forcing this “recovery” to be non existent IMO.
I see what dj is saying: If Uncle Sugar is going to bail out the CC divisions of banks, why not stipulate that the bail out go directly to the account holders?
My guess is allocation of funds: dj’s proposal would put bail out money in the hands of those who were going to service the debt anyway, while those who default would only be partially covered.
Hopefully, after the dust has settled we will never again collectively look at CC’s the way we have become accustomed to: as “income extenders”.
You don’t make something that is wrong into right just by making yourself the benificiary.
Blue:
I want MINE…so pfft!…….
LOL
In a land, far, far away and long ago, the little people of the land had productive jobs with living wages, the promise of bright futures and maybe and if they were good and busy little workers, even a cosy, yet modest affordable NAR approved house for them and their families for their efforts.It wasn’t quite a fairytale land but then it wasn’t too shabby either.
The land had many laws and rules, some good, some bad.
Even their old banksters had the Rule of Seven for savers when interest rates were high and times were good(money doubles in 7 years at 10%)
There were even Laws against Usery, the older smerfs knew and understood the good and evil of simple and compound interests and leverage and things. Nobody ever paid for $16.55 for two fancy coffees and a couple of “French Cookies”, regardless of how big and good the cookies were with a piece of plastic. It’s my story and Mom’s made cookies and gave them away for free.
Hell, the even had a thing called cash and a new fangled invention called checks with a registry to acually know how much money they had and were spending. It was really a strange and wonderful land.
But Alas, there was a very small gang of rich, lazy and very unproductive people that who wanted to become bigger, more important and richer people.”Why should we accept a little money over a long period of time when we can change a few things and make and demand vast amounts in a short amount of time?” they all cried. They got together, the rich, middlemen, investors and a few bad witches and hatched a grand plan.
They changed a lot of laws and regs, started some stupid and useless wars and shipped out the good jobs and cut wages while the workers argured who was most patriotic and bought bigger houses as investments in the new cottage industry.
Fear reigned throught the country. People bought plastic, duct tape while kiddies looked out of their bedroom windows at night for Drones of Death(these were suppoused like the common grey dragons only they went “Pop” when they landed) while the evildoers pilaged the land.
You can see where this Fairytale is going…but if you don’t like it, you can use your imagination and make up your own Nightmare when you tuck in the little kids tonight…
Banks are predators. They consume the weak. Our politicians are the Pilot Fish.
By raising credit card rates to usurious levels, the bankers have helped the economy, as consumers discouraged from using their credit cards tend to save more.
So they’re hoisting themselves onto their own petard? Very efficient…
Here in Tucson, I’m seeing small businesses that are, shall we say, encouraging their customers to pay with something other than plastic. Matter of fact, our local food co-op’s general manager said as much in a lengthy newsletter article about credit card interchange fees. Seems that those fees really take a bite out of the co-op’s margin.
I needed to get my car out of a bad mechanic’s shop so AAA could tow it to a good mechanic’s shop. Miserable so and so wanted to charge me a lot more than I wanted to pay for not fixing my problem (he did work on it, just didn’t do what was really needed). Cash got me out of there for $120 less than he wanted. Still too much money for not getting a car fixed, but way better than paying what he wanted. New shop did a great job. Glad to have found them. Almost worth it.
yeah Polly a great mechanic is a wonderful friend to have, since most of the newer cars are not easy to work on, I used to do a lot of work on my older cars…
PS i even have a mechanic that takes payments…no kidding i drove out owing $700 once….well my landlord uses him for the last 25 years so he knows where i live.
I miss my Jersey City mechanic like crazy. Awsome guy. I actually called him when the car got sick to get his opinion on just a verbal run down of the symptoms. The bad mechanic was the one who didn’t want to do what he suggested. The good one was the one who immediately upon hearing the description suggested the same solution the Jersey City guy did. I feel like I should send the Jersey City guy a $50 check or something as a consulting fee. If he hadn’t explained what was going on, I might not have known how bad the bad mechanic was or been able to identify the new good one.
Polly, since you are a AAA member, you should use their automotive service referral. They guarantee the work for 12 mos. or 12,000 miles on approved shops. I enlisted AAA help years ago and got a refund on shoddy workmanship. Lovin’ the AAA!
The AAA membership is fairly new and, yes, I called them when I figured out the bad mechanic was bad (the shop was recommended by a co-worker but it didn’t work out for me), and they gave me the three closest recommended shops. I called the two that were most convenient for me and picked one. Then got car towed to the new place. Not my favorite afternoon, but I survived. Could have been much, much worse.
“I miss my Jersey City mechanic like crazy.”
Sheesh…you lived in Jersey City Polly?
Wow…that DC area mechanic is very lucky he wasn’t found bobbing face down underneath the 14th St. bridge by the early morning Georgetown U Rowers.
Yeah. I lived in Jersey City. Ya wanna make something of it?
No, really. I’ve lived in Jersey City, downtown Brooklyn and 119th Street in Manhattan (before Bill Clinton moved to Harlem). 119th Street was the only place that was actually dangerous, but my windows faced away from Morningside Park, so you couldn’t really hear the gun shots.
My mechanic is the hubby. If he doesn’t understand something, he calls some old buddy who does. Some things he won’t do, like put in a new clutch, but at least when it gets to that point I know I’m not getting ripped off.
I’m one lucky gal.
Remember when merchants used to offer a “cash discount”?
Many still do actually - it’s quite common. We often get that on big-ticket items.
But you’re right it used to be a lot more common - e.g. I remember when all Exxons did, and some other gas stations.
And payoff any balances more quickly. Last fall Citibank elevated my interest rate to 29.9. When I called to ask why considering I had no late payments nor any other nasties that would trigger such usery the nice man from Bangledesh told me that the bank needed to increase revenue in these very tough financial times. My response, seeking further clarity was, “So to simplify this, you guys made a lot of bad risky investments that did not work out and now you have to try to recoup your losses by penalizing those of us who played by your rules?” His response was a meek, “That is correct sir…”
Needless to say that account was immediately paid off in full and I have not used that card since. Many folks are not in a position to pay off their balance in one fell swoop, but I will bet they pay more each month to speed up their exit.
The folks at these CC companies are compounding their RE mistakes with the usery and it will not work as they are alienating their customers. Stupid is and stupid does. Must be a flaw in the MBA core curriculum.
Economy Caught in Depression, Not Recession: Rosenberg
~ CNBC
Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.
Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.
But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.
Rosenberg calls current economic conditions “a depression, and not just some garden-variety recession,” and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered “euphoric response.”
“Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times,” he said.
We remember Rosenberg when he was Merrill Lynch’s chief North America economist, and was loudly calling for a housing bust. Too bad for ML that their CDS/CDO dealers weren’t listening.
Vis-a-vis the substance, it will be interesting to see whether the upcoming turn away from Keynesian responses will make our depression shorter or longer. I am sure everyone on this board has a definite answer to that. (Collective answer mixed 50%.)
Vis-a-vis the substance, it will be interesting to see whether the upcoming turn away from Keynesian responses will make our depression shorter or longer. I am sure everyone on this board has a definite answer to that.
Actually, who cares if it makes the depression longer or shorter statistically? These days depressions/recessions can “end” while Main Street is hammered. Unlike before, it’s typical to show positive “growth” in the economy while the middle-class sinks. Therefore the important thing is to give aid and support to small-businesses and the middle-class. This was not accomplished by the bail-outs.
I think turning away from Keynesian responses to directly help Main Street now is unjust in light of the fact that trillions of taxpayer money was spent to protect banks, Wall Street and the richest of the rich.
I think turning away from Keynesian responses to directly help Main Street now is unjust in light of the fact that trillions of taxpayer money was spent to protect banks, Wall Street and the richest of the rich.
Exactly. We’ve tried the *monetarist* approach- flooding the financial system with cash. Maybe we should try some Keynesianism now, see if it doesn’t work a little better.
So you don’t consider an $862B stimulus package Keynesist? If not, can you state what is your criteria?
My criteria is that the government pay for goods and services *to be delivered* rather than *already delivered*. Bailing out the banks through TARP was for sins already committed.
So you don’t consider an $862B stimulus package Keynesist? If not, can you state what is your criteria?
That a decent percentage of the money actually makes it to main street.
We coulda had a major payroll tax holiday for a year or two with what’s been spent on “stimuli” and every penny woulda gone straight to Main Street.
Problem is, that kinda solution provides no opportunity at all for graft, or for ginnin’ up campaign contributions. Therefore, it didn’t happen.
however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times,” he said.
Hard to read that line without chuckling.
At first I misread your comment as “Hard to read that line without choking,” and I though “choking whom?”
Recession, depression whatever. For the segment of society that has no desire to work or contribute or take responsibility for themselves (a bigger piece of the pie than any of us would like to admit) times have never been better. The bottom half are having a boom-time like they have never had in their lives, including system-gamers of every socio-economic level from the mansion squattter right down to the guy selling his food-stamps for crack. Even the average government worker is having a very good year relative to those in the past. Its only a depression for the hard-working responsible Americans in the private sector trying to do the right thing.
what he said
Testify, brothah!
Exactly.
For the segment of society that has no desire to work or contribute or take responsibility for themselves (a bigger piece of the pie than any of us would like to admit) times have never been better. The bottom half are having a boom-time like they have never had in their lives,
You guys are all wrong. Bottom half “boom time”? What planet do you guys live on? Do you understand math?
The part of America that “has no desire to work” is small. If not, why did we have a 4.5% unemployment rate when times were good?
Huh?
Why do we have 4,000 people applying for 130 crap jobs? Huh?
You guys have been brainwashed with falsehoods, falsehoods that take your eye of the ball that we’ve been had by the super-rich.
Yea man, the poor and lazy caused all our problems.. Geez
The part of America that “has no desire to work” is small. If not, why did we have a 4.5% unemployment rate when times were good?
Well - one contributing factor is unemployment benefits expired after 26 weeks then instead of 99.
Don’t confuse “desire to work” with “desire for income”.
How do you explain the massive lines at job fairs, etc?
Don’t confuse “desire to work” with
“desire for income”. there are no jobs .Do you really think hyperbolism makes a good case?
Monster.com has at least 1000 jobs posted for almost every state. I say 1000 because that’s the max number of listings they’ll show for any given search.
Even just a few random ones of various cities:
Raleigh, NC - over 1,000 jobs
Columbus, OH - over 1,000 jobs.
Des Moines, IA - 613 jobs.
Stockton, CA - over 1,000 jobs.
etc. etc.
In other words B freaking S. Everyone stop saying “there are no jobs”. There ARE jobs.
Wow 1000 jobs per state? how many are temp jobs?
How many unemployed per state??
My recollection is that undoctored stats have unemployment at 15-20%. I think there have been a few here looking for work. Any unemployed want to comment on the job market. I know 3 people I play hockey with that have been spending every day looking without success.
As someone who was unemployed for 4 months I can definitely tell you its extremely difficult to find work these days. I put in seriously over 300 resumes before I landed something. It used to take me 5 or 10. Times are tough.
Pack;
Sorry buddy there are NO jobs, unless you want to “work” for FREE…and even major companies are vastly abusing the “Intern” description…violating labor laws, and then demanding you have an wifi apple laptop with Legal Final cut pro software
Think about that one….
Ill also bet a vast majority of those are commission only “jobs” I get 30 a week
Will you please ask OH to guarantee me say $400 a week and a New apple laptop so I can work for free on commission…
In other words B freaking S. Everyone stop saying “there are no jobs”. There ARE jobs.
OK, sorry.
How ’bout There ain’t no jobs.
People are not spending because they have no jobs or are afraid they will lose the one they have. Business is not hiring because demand is weak, among other issues. MarketWatch 8/24/10
David Rosenberg: Prepare For Another 4-5 Million Job Cuts Business Insider 8/24/10
Lack of jobs could stop lone parents returning to work
ILM, 24 August 2010
Extent of state’s decline in jobs surprised economist Denver Post 8/22/10
There are no jobs for four out of five unemployed workers 8/11/10 Michigan Job Search
Mort Zuckerman: Unemployment Rate Is Worse Than It Looks US News 8/20/10
According to an analysis by the Economic Policy Institute, the total number of job openings in June was 2.9 million, while the total number of unemployed workers was 14.6 million. That created a 5-to-1 ratio of unemployed workers to job openings, up slightly from May’s ratio of 5.1-to-1.
America is suffering the largest employment drop since World War II. In 2007, approximately 63 percent of adult Americans had jobs. Today, only 58.4 have jobs—a decline of nearly 5 percentage points. Applied to the 230 million non-institutionalized civilian adults of working age, this decrease means we have nearly 12 million fewer jobs today than we would have if the employment-to-population ratio were still at the 2007 level of 63 percent. This would be the grimmest loss of jobs over the last 60 years.
US News 8/20/10
People need on the books job..for SS, credit and other normal reasons…….I’ll bet most of those 1000 are working…
How do you explain the massive lines at job fairs, etc?
Every time there is some sort of job fair here in my neck of the woods thousands turn out to apply for menial $10/hr p/t jobs. And our official local UE rate is < 7%!
The ubiquitous “Help Wanted” signs that were common in my town just a few years ago are now an endangered species.
And I too know people who have been searching for a non menial job for months.
Folks - I never said there are many jobs, relative to historic norms. I said - there aren’t “no” jobs.
1982 U3: 10.8%, Mean duration 20 weeks
2010 U3: 9.5%, Mean duration 33 weeks
(I would compare U6, though it wasn’t around back in 1982)
That to me says people are being lot more picky about jobs this time around. Sorry if for some of you this feels like an indictment. It’s not an indictment of any person - it’s a generality.
I’m still waiting for you to explain the giant lines of people who turn out for mediocre jobs at new walmarts and the like. How does that square with your belief that people are being too picky or lazy to get a job?
Not worth explaining it to you - you wouldn’t understand.
“1982 U3: 10.8%, Mean duration 20 weeks
2010 U3: 9.5%, Mean duration 33 weeks”
Wasn’t U3 computed differently in 1982? Real unemployment now is greater than in 1982 and of much longer duration, pushing depression levels.
My roommate, who was unemployed for most of two years, now finally has one part-time job averaging less than 8 hours a week. There do seem to be more jobs available than a year or two ago, but it’s nowhere near enough to bring back to “full employment” all those that want to work.
The unemployment situation IS RELLY BAD, that would explain the long lines at job fairs, etc. That does not address and is completely separate from the phenomenon that I am describing about the portion of the population that does not desire to work and is enjoying the benefit of all of the government-handout programs recently expanded much to their delight. The people willing to work are still somewhat unrealistic regarding their expectations for wages and jobs they feel comfortable doing which further burdens the system. Its all just a big old mess.
How many of those jobs on Monster are fishing expeditions and not real jobs? How many of them require a very specific set of qualifications, including years of experience that cannot be gained overnight?
I think for most people jobs are extremely scarce. But there are a few and the trick is to keep looking and get lucky.
I see plenty of job opportunities on Craigslist:
1) Secret Shoppers wanted
2) Postal Jobs: Now available
3) Make Millions in Real Estate with no money down!
4) etc.
What is everyone’s problem?
What about different skillsets?
A friend said he was in the northeast for a Ruby programming meeting. Before it started, he said there had to have been 30 minutes of people begging for people looking for jobs to come join them. He was sad there aren’t many around here.
I have friends with skills and they are stuck because of many job opportunities. Also, google has been interviewing lots of people (no one I know has been hired tho.)
In other words B freaking S. Everyone stop saying “there are no jobs”. There ARE jobs.
Skipping the rest of the thread, but yes, there certainly are SOME jobs. My company is looking to hire - in fact, we can’t find enough good candidates.
I make no claims about other companies, but there definitely exists at least one company that is hiring quite a few people, and has been for the past year.
But what kind of qualifications? Do they do a credit check mine was perfect till the crash…..
Do they want only recent college graduates..aka age discrimination?
there are jobs for highly skilled workers not always the same as highly educated and with skills in demand now for example “mixed signal engineers”
Middle class skill set has been out- sourced this is the great leveling of living standards that will go on for some time I guess. Partly because of computers and the internet easy to outsource work.
And when you get this high skill job you will work 12 hour days
“Folks - I never said there are many jobs, relative to historic norms. I said - there aren’t “no” jobs.”
True, but we all know that “there are no jobs” is a euphemism for “jobs are extremely scarce and hard to find”
I think what rankles people like me are the ones who whine that there are no jobs - now - but they weren’t working back during the boom either. There was a time here when anyone could have found work. I mean, anyone. It was a time to jump on and try to make something out of it. People who could have temped out or found SOMETHING, coming up with sorry ass excuses because they were scared of work and someone like a parent had been propping them up most their lives.
Now they wait for an inheritance or to get on SSD, or to win the lottery.
There will always be jobs available. People die, retire, get sick, quit, etc. But, there are NOT ENOUGH JOBS for those who want to work. I’m not sure how this is escaping those who continue to erroneously claim that there is a job for everyone who wants to work. What part of 1 job for every 6 people looking are you not understanding? I read a story about a Kohls which was opening in northern NV, and there were ~1500 people applying for 130 part time, low paying jobs w/out benefits.
One question for you, Rio: Why are there millions of people in Brazil (the new land of opportunity, by the way) living under blue tarps and in cardboard boxes? Why, Rio?
Because that is all that they can afford. That is just the way it is. Nobody is holding their hand, giving them stuff.
One question for you, Rio: Why are there millions of people in Brazil (the new land of opportunity, by the way) living under blue tarps and in cardboard boxes? Why, Rio?
Because that is all that they can afford. That is just the way it is. Nobody is holding their hand, giving them stuff.
OK I guess, but I don’t understand the question. Brazil is very complicated. And there are people “giving them stuff” such as small business loans, jobs and food for the poor.
Brazilian Middle Class Expands As Economy Surges
http://www.npr.org/templates/story/story.php?storyId=120940918
The country’s center-left president, Luiz Inacio Lula da Silva — who as a boy shined shoes on the street — has led a crusade against poverty.
Innovative state programs, along with the economic growth, are lifting millions of Brazilians into the middle class and making the country a model for the developing world.
But today, Brazil is surviving the global economic downturn better than just about any country in the world. Once again, the economy is poised to grow by 5 percent.
Nonetheless, Brazil remains a country with desperate poverty and, in its poorest slums, untold violence…bureaucracy….corruption…
(But) Brazil is now the world’s eighth-largest economy, and that growth is trickling down — with 8.5 million jobs created since 2003, and 32 million people joining the middle class,
But it’s not just the healthy economy that is helping Brazil’s masses. Programs such as Bolsa Familia provide food payments to millions. In exchange, recipients must make sure their kids are in school. There are also low-interest loans for new homebuyers and for small businesses.
Even the average government worker is having a very good year
Yeah, the gov worker is doing ok NOW. What about in the past, when private sector was the place to be to make the big bucks? Nobody was resentful fo government workers then, oh no precious. They were too busy being all capitalist and king of the hill.
Gov workers quite conciously chose security and stability over the high/low roller coaster when they signed up. They lived low in the high times; you shouldn’t complain when they are living low in the very low times.
“Even the average government worker is having a very good year”
Not directed at you, Oxide, but that’s a load of crap. If still having a job with a pay that doesn’t keep up with inflation and doing more work because vacancies are held open, then the standards of “very good year” have fallen quite a bit.
I didn’t say government workers were having a “very good” year. I was quoting Pressboard Box. It’s true that gov workers are having an OK year, but that’s because they chose to have an OK year every year, instead of riding the capitalist roller coaster.
Only now, an OK year seems very good when compared to the low of the roller coaster. Of course, the Dittoheads of the world are all jealous that they didn’t chose stability too.
Oxide is saying that Government jobs are “fixed” and pay kind of crappy, but you won’t ever have to be worried about being laid-off, or fired for doing $hitty work like in the private sector. It may be a slow train, but once you climb aboard you are “set”. I get it (wink, wink).
Oxide,
I know you didn’t say that. My criticism was definitely not directed at you. I agree with what you say.
A steady existence looks comparatively good these days. Those criticizing government workers too often supported policies that led to their own demise. There’s not much satisfaction in watching their demise because there still needs to be a functioning private sector.
Pressboard, you are trolling. Period.
To say that government workers are just doing OK is to spew a big load of B.S.
The three best-off groups in this country are:
1) Wall Street banksters
2) Government workers
3) Retirees
Govt workers have salaries that, for the most part, equal those in the private sector. But their benefit package, including paid time off for every conceivable reason, FAR exceeds the packages that are now the norm in the private sector. Plus, as others have said, you are fire-proof unless you do something really egregious. Not showing up for work regularly is not a sufficient reason.
Not the retirees trying to live off interest on savings, with no ‘defined benefit’ pension. We are totally hosed by government edict.
Retirees?!
Uh, no. And no matter what your little skinflint heart is telling you, they damn well earned it.
“they damn well earned it.”
Private sector retirees yes. 20 and out retirees, not so much.
Retired with no pension. Some savings without ROI. FUBAR!
Wow. If you consider having to sell your food stamps for crack the definition of a “boom time” I feel really sorry for you. You must have had some hard knocks in your life to think that is anything but incredibly pathetic and the very definition of “hitting bottom”. And CRIMINALS will find a way to work the system no matter what condition the overall economy is in. Prisoners kite stuff all over cell blocks, including cash, weapons, drugs and orders to kill other prisonsers. The criminal mind never stops, even when it’s locked up. The job market is very tough right now. Businesses are closing all over the place. Everywhere I go, there are empty storefronts and empty commercial buildings with huge “For Lease” signs. Even in the big shopping malls, every third store front is empty and this is Southern California. If people don’t want to work, they won’t, but there is no denying the fact that right now there are fewer jobs available for the people who do.
Well, they used to have to work or at least steal something to get their crack. Now, they can simply trade something the government gives them for the drugs. How is that not an improvement in their standard of living? Geez, you act as if you have never hustled for crack before.
lol. I know, huh? I feel so sheltered. And, I’ll have to admit, a little pampered. If I want drugs, I can just call up the local dispensary. Just call me “princess.”
Yeah! Livin’ large on $300 a week.
And BTW, ALL state unemployment agencies work full time to kick you off their payroll. So if you think the states are just LETTING those people have money, you really need to get your nose away from Limbaugh’s nether regions.
Do you have any idea how much your brainwashing is showing? Of course not.
I have a coworker whose husband was long term unemployed (he finally found a full time job). The UE office made him jump backwards through hoops to qualify for any extensions and he often went weeks without a UE check.
“Economy Caught in Depression, Not Recession”
Why bother splitting hairs? Whether it’s a Depression, a Recession or a Contraction, it’s anything but Great.
How about the Horrific Housing Bust?
That’s too narrow. The bust of the housing bubble was anticipated by most who comment here, including me. But the degree to which that bust has brought the rest of the economy down with it WAS “unexpected,” at least by me. I was unaware of the degree to which the great credit bubble had fostered the illusion of a growing economy even as our manufacturing base continued it’s long decline. I had certainly expected the busting of the housing bubble to cause a recession, but not the extended near-panic that has characterized the economy for the last year and a half.
The root problem isn’t the shoddy and unsustainable quality of the the patch of government intervention over the last two years, but the shoddy and unsustainable quality of the expansion of credit over the last ten.
“But the degree to which that bust has brought the rest of the economy down with it WAS “unexpected”, at least by me.”
Well, it wasn’t by me. A seventy-percent consumer-based economy powered by strawberrypickers borrowing seven-hundred thousand dollars with no proof on income, no down payment, no collaterial whatsoever - and maybe even getting cash back on the loan - HAD to fall.
And there’s more to come.
The extent to which the consumer economy was fueled by home equity extractions combined with the continued erosion of the rest of the real economy meant the collapse of the housing market would collapse the economy and that collapse would be severe, broad, and long-lasting. There was no other possible outcome.
If we don’t do much more to address our energy needs and to build a new, sustainable economy, the current “bad” times will look like good times in 5 or 10 years.
Nothing Unexpected here. (although I am somewhat amazed by the level of corruption/collusion of our government on behalf of the megabanks and the accpetance by the sheeple of their lies)
Ditto … never thought our government would deviate so far from those who pay the bills
I saw it coming, though I did not foresee the magnitudes of the bailouts, nor the willingness to execute them.
“That’s too narrow.”
How about The Calamitous Credit Collapse?
but the shoddy and unsustainable quality of the expansion of credit over the last forty.
Fixed it.
Wasn’t unexpected to me. Nearly all college tuition was paid with home equity. In fact, colleges EXPECT parents to pay with home equity. Credit card debt didn’t matter, they would just HELOC every three years. This disaster was totally expected.
“In fact, colleges EXPECT parents to pay with home equity.”
The college bubble is going to burst. We are over leveraging the last productive people in our economy.
Wasn’t unexpected to me. Nearly all college tuition was paid with home equity. In fact, colleges EXPECT parents to pay with home equity. Credit card debt didn’t matter, they would just HELOC every three years. This disaster was totally expected.
A point that’s also being railed against on the EduBubble blog.
“The college bubble is going to burst. We are over leveraging the last productive people in our economy.”
State Unis are in an especially “interesting” place. Most are losing their state funding and are being forced to raise tuition dramatically at a time when their “customers” can least afford it.
Their saving grace will probably be the exodus of students from 2nd and 3rd tier private schools.
Even when I applied to college the colleges considered home equity to be a parental asset when they figured out how much your parents “had” so they could figure out your scholarship needs. This is for schools that only considered financial needs for scholarship money (nothing for athletic prowess, academic talent, etc.). I don’t know if this was always the case, but if it wasn’t, then the transition (whenever it happened) would have been the start of the pressure to increase student loans amounts at least in these schools which are sometimes trend setters in the rest of the industry. When I was in school the government guaranteed amounts were very very low for undergraduates. I’m afraid I didn’t follow the development of all the other programs very well. Oh, and my loans were actually guaranteed by my father’s employer, not the government. Saved me 0.5% of fee or something like that.
And the new proposal (haven’t heard about it in a while) to cap student loan repayments at 10% of income for 10 years and the rest is forgiven no matter what the original amount borrowed wass has the possibility of causing a new surge in the tuition bubble, not a collapse.
And the new proposal (haven’t heard about it in a while) to cap student loan repayments at 10% of income for 10 years and the rest is forgiven no matter what the original amount borrowed wass has the possibility of causing a new surge in the tuition bubble, not a collapse.
I agree.
And, once again, I’d like to express my gratitude to my frugal parents. For their diligence in saving for my college education from when I was a little Slim.
And for their continuing to be frugal — and bust their butts at their jobs — while I was in college. You enabled me to graduate debt-free.
What if the debt wasn’t forgiven, but deducted from the institution granting the degree?
Yeah I can go to law school run up 150K…work for legal aide for $30K hmmm $3k x10 years…pay $30K wipe out $120K….mighty tempting polly
aNYCdj ESQ ?????
to cap student loan repayments at 10% of income for 10 years and the rest is forgiven no matter what the original amount borrowed wass has the possibility of causing a new surge in the tuition bubble, not a collapse.
I got two perfect 800 scores on the math SATs back in 1970. For this among other things I received dozens of honorary “scholarships”. My dad was furious with me as none of these came with any money. I tried to explain to him there was a big difference between a “scholarship” and a “stipend” but he wouldn’t listen. So I brought home the financial aid paperwork for him to fill out.
He was making about $40K a year in 1970 and had a large mostly-paid-off big house in San Jose. I didn’t even qualify for government-backed student loans.
At least UC was only $725 a quarter back then.
dozens of honorary “scholarships”
National Merit Finalist?
DennisN: your dad was acting like a jerk. What parent would be upset with their teenager for getting an 800 on the SAT and not getting a scholarship?
The point of my post was that even back in 1970 the value of the parent’s house is considered in awarding financial aid. The performance of the student is a distant second consideration.
The prettiest award was the Bank of America one, which had a nice embossed certificate presented in a leather slipcase. But of course, no money.
Error…UC was only $229.50 a quarter back then. Even cheaper.
My dad was like Huck Finn’s dad. I lived in fear of bringing home a “good” report card, as my alcoholic father would get into a drunken rage and shake his fists in my face, shouting “quit smarting-off to your old man!”
Just a a couple of years ago posters here like nhz were able to snidely ask “Where are the deflationists now?” There were only a few.
All economic downturns in the U.S. were called Depressions until the 1930s. The first “recession” was in 1937. The government has been using that term ever since for any economic downturn.
I thought they were called “panics” before, and “depression” was a euphemism like “recession” is now.
Commercial Property Owners Choose to Default ~WSJ
Like homeowners walking away from mortgaged houses that plummeted in value, some of the largest commercial-property owners are defaulting on debts and surrendering buildings worth less than their loans.
Companies such as Macerich Co., Vornado Realty Trust and Simon Property Group Inc. have recently stopped making mortgage payments to put pressure on lenders to restructure debts. In many cases they have walked away, sending keys to properties whose values had fallen far below the mortgage amounts, a process known as “jingle mail.” These companies all have piles of cash to make the payments. They are simply opting to default because they believe it makes good business sense.
“We don’t do this lightly,” said Robert Taubman, chief executive of Taubman Centers Inc. The luxury-mall owner, with upscale properties such as the Beverly Center in Los Angeles, decided earlier this year to stop covering interest payments on its $135 million mortgage on the Pier Shops at Caesars in Atlantic City, N.J.
Taubman, which estimates the mall is now worth only $52 million, gave it back to its mortgage holder.
“Where it’s fairly obvious that the gap is large, as it was with the Pier Shops, individual owners are making very tough decisions,” he said.
Put keys in envelope, send by certified mail, save $83 million.
Doesn’t sound like a “tough” decision to me.
yes - but is it the “moral thing” to do…
Luckily in a business to business transaction such touchy-feely things like “morals” won’t enter the picture. Two calculations will be made and the cost of default will be determined (possibly including some quantified loss of “goodwill”, and penalties to leaseholders for inconvenience suffered). If the cost of default is negative, default will happen. Indeed default should happen - that is the fiduciary responsibility of the board.
Which is why as I remarked on this board several days ago, commercial real estate is more “honest” and less of an unknown risk than housing.
under this mentality business equates to theft. i think many use the separation of business and personal as a justification to harm others legally and “morally”
LLC’s don’t have a conscience. Walking away is a good business decision.
stop covering interest payments on its $135 million mortgage
Interest, no principle? Did commercial RE take out interest-only loans too? If that’s the case, then the banks are in real trouble.
Yes, most CRE loans were IOs. On top of that, they were underwritten using pro-forma rents going forward, so income growth that was highly inflated. The CRE equivalent of a “liar loan”.
Thank you, Bean. Now I’m afeared that some TARP-like plan will be used to bail out the CRE sector of Citi or BoA. Oh, they won’t SAY CRE, they’ll just keep bailing out MBS, hiding under the cloak of keeping people in their homes.
I wonder how the lawsuit for a deficiency judgement will turn out.
These companies all have piles of cash to make the payments.
Suuure they do. I guess if they quit making all their payments but kept collecting rent, they might have a little pile, but it’s obviously not enough.
I love the continuing meme that companies have more cash than they know what to do with. I bet their creditors have some ideas.
These companies all have piles of cash to make the payments.
Companies with piles of cash aren’t spending because CEO’s want to make sure there is enough in the bank to pay their bloated salaries.
The 8K credit was a big success in the residential space. What, you don’t believe me? Just ask Congress and the President.
Perhaps the government should offer a 30K credit for first time commercial buyers? That’ll fix everything.
2011 is going to make 2010 look like Pleasantville. Savvy citizens are trying to dump their debt load as quick as possible before the big “double dip” hits. And as we head into the fiscal maelstrom, the hucksters on Wall Street are frantically trying to dupe the rubes into gambling in their shell game.
I firmly believe that a “cooling off” period of 5 working days, during which an “investor” could cancel his purchase or sale for any reason, would end the computerized trading and insider shenanigans immediately.
That would end or diminish Wall Street corruption.
To end political corruption, the first thing to do would be to end the federal/state withholding tax. It was started in WW2 to end the war and was supposed to be “temporary.”(look it up).
If people had to write out their tax checks on election day instead of April 15th, the whole government mess would flush out in one voting cycle.
You’re right. We’d all just buy as much stock as possible. After 5 days we’d cancel any purchases that lost money and keep the ones that didn’t. We’d all be rich!
+1.
(But I reserve the right to change this to -1 next Monday.)
LOL, az!
Better yet, buy the stocks on margin. If the price change doesn’t go your way then just walk away from what you owe.
They’re doing it all the time in real estate deals, why not with stocks?
How about a 5 day return on lottery tickets, too?
Don’t forget about a 5 day return policy for blackjack, roulette, and the slots in Vegas.
Yes.
Mail-order brides?
How about just renting?
How about prostitutes?
5 day wait - Worst. Idea. Ever.
But I agree with the withholding tax scam. There are people out there, more than a few sadly, who think if they get a refund from the IRS it means they pay no taxes.
Can’t people opt-out of witholding any time they want? Just claim max exemptions, go home with a full paycheck, and pay it all on April 15.
[my understanding is the illegals do just that, only they don't pay the owed tax because they are "in the shadows."]
Plus penalties and interest. Why don’t you try it and see how it turns out?
Years ago you could do this. It was a form of
float because the interest penalty was so low
you could make money by NOT paying.
Penalties and interest ONLY if you actually file an income tax return.
Underwitholding means that you have to pay interest and penalties.
I suspect that underpaying quarterly results in interest and penalties, but I never got hit with penalties having too little withheld from monthly wages.
Why do you guys speculate when the information is readily available?
http://www.irs.gov/publications/p505/index.html
Actually the move to mandatory withholding was a one-time trick so they could collect TWO years worth of income tax in a single year during WWII. IIRC it was in 1943, when they collected taxes due for 1942 AND ongoing taxes for 1943.
Unfortunately there’s no politically feasible way for them to “back out” of this situation. They would have to forego collecting ANY taxes for a year, which is not going to happen. A government with the taxpayers’ interests in mind could perhaps lower withholding say 10% over a 10 year period, but that would require political will and planning.
The “making work pay” act did reduce the withholding - and it expires soon. Something most J6Ps have probably already forgotten.
And of course few current taxpayers were the victims of the double taxation of 1943. Also, for most taxpayers, 75% or more* of the double taxation was “forgiven.” And hey, there was a real war on, the government was going to collect as much as it could through taxes, if they hadn’t collected extra through a “double tax year,” they would simply have raised the rate.
*total forgiveness for those with a tax burden of less that $50, 75% forgiveness for those with a tax burden of greater than $50.
if they hadn’t collected extra through a “double tax year,” they would simply have raised the rate
I suspect that FDR found it easier to push “double tax year” through Congress than simply raising taxes.
Hey, it’s all FDR’s fault.
umm… you do remember that there was a war on, don’t you. And not the sort of guns and butter war that we’ve seen of late. The US produced more than 300,000 military aircraft; more than 88,000 tanks, self-propelled guns, and tank destroyers; 22 full-sized aircraft carriers along with 121 escort carriers; and created a HUGE infrastructure to research and produce nuclear weapons.
Yes, there was some political resistance to the idea of forgiving taxes from 1942 but really they weren’t leaving much on the table. The war meant that the government was spending money at a completly unprecedented rate. Just like today, what they didn’t tax, they borrowed. We really weren’t going to spend any less if they’d forgiven all of the 1942 taxes. If they hadn’t raised the rates for 1943, they certainly would have had to raise the rates by 1944 or 1945 to make up for that lost revenue, when borrowing became more difficult.
The govt wouldn’t have to forgo anything. Taxes are paid by employers quarterly. Instead of withholding taxes for employees, make employees pay their own taxes quarterly as well. Even paying quarterly taxes in one shot vs. every two weeks would be a hueg wake up call to most Americans as to how much they actually pay.
To end political corruption, the first thing to do would be to end the federal/state withholding tax. It was started in WW2 to end the war and was supposed to be “temporary.”(look it up).
As a self-employed person, I have to write estimated checks to the gov four times a year. And, if I owe federal income tax, I also have to cough that up on 4/15.
If everyone were required to write quarterly esti-tax checks, you can bet your sweet bippy that they’d care about where their money was going and how it was being spent.
I think zeus posted this tongue-in-cheek. He couldn’t really be that stupid.
YOU GO GRRRLLL!!
“Laurie Salaman has been trying to sell her home in New York for a year so she can move to the suburbs. She’s had no offers, even after cutting her listing price on the three-bedroom Bronx home from $475,000 to $449,900.
She notes that she has upgraded the kitchen and bathrooms, refinished the basement and put in new decks and patios. Her goal is to take about $100,000 from the sale and put it toward the purchase of the new house. She said she won’t lower the price again.
“That’s my bottom price,” Salaman said. “If I don’t get that price, then I will hold off until the market gets a little better.”
She forgot to say - “Cause I am not going to give this place away!”
Do you have a link for that very relevant post?
TIA
PS- Laurie Salaman’s sense of entitlement makes my blood boil.
Of course she’s not giving it away. Her house is special!
“That’s my bottom price,” Salaman said. “If I don’t get that price, then I will hold off until the market gets a little better.”
I hope she likes all the upgrades shed did as she may have more than a few years, maybe a few decades, to enjoy them.
If she can afford to not cut the price and never sell, and the agent can afford to never make a commission, then all the power to them. Personally, I’m calling BS on most of these types. I’ve seen enough “I don’t have to sell(s)” go into foreclosure to see right through these people’s lies.
Just plain common sense, which is sorely lacking in the cesspool.
Economy Like a ‘Drunk That Keeps Drinking’: Langone ~ CNBC
The struggling U.S. economy, held up by “artificial” stimulus, is not unlike a “drunk that keeps drinking,” Ken Langone, former director of the New York Stock Exchange and co-founder of Fieldpoint Private Bank and Trust told CNBC Tuesday.
“We have not begun to take the cure,” Langone said. “We should have taken the cure a couple years ago…we’ve prolonged it by the stimulus packages.”
Langone also dismissed growing worries that the United States will slide into a second recession—chiefly because the banker doesn’t believe the U.S. economy ever really recovered.
“It’s not a double-dip—we never came out of it,” Langone said. “We were artificially propped up.”
“We’ve got a lot of problems to address and the sooner we get started…the better we’re gonna be,” he added.
Why does everybody have to belittle our Recovery? It’s the only Recovery we’ve got.
I liken the US economy/financial system to a crack whore, but that’s me.
You’re a crack whore? ;-P
Never could have seen this coming; a Yale educated (Eddie approved) member of the ruling elite sticking it to the lowly taxpayer:
The swindlers who run the Florida Marlins got exposed Monday. They are as bad as anyone on Wall Street, scheming, misleading and ultimately sticking taxpayers with a multibillion-dollar tab. Corporate fraud is alive and well in Major League Baseball.
A look at the leak of the Marlins’ financial information to Deadspin confirmed the long-held belief that the team takes a healthy chunk of MLB-distributed money for profit. Owner Jeffrey Loria and president David Samson for years have contended the Marlins break even financially, the centerpiece fiscal argument that resulted in local governments gifting them a new stadium that will cost generations of taxpayers an estimated $2.4 billion. They said they had no money to do it alone and intimated they would have to move the team without public assistance.
In fact, documents show, the Marlins could have paid for a significant amount of the new stadium’s construction themselves and still turned an annual operating profit. Instead, they cried poor to con feckless politicians that sold out their constituents.
The taxpayers paying for a multi-billion stadium so multi-millionaire players can run around and chase a ball.
Why I hate professional sports.
One of the biggest scams in America.
College sports is an even bigger scam. Exploiting kids for four years even though most will not get a degree and will pump gas or flip burgers after their eligibility is up.
Thank you, Bill!
And, I would be remiss in my role as the HBB Librarian if I didn’t recommend a book or two. One would be Beer and Circus by Indiana University prof Murray Sperber. Yup, that’s the same Sperber who questioned all of the Bobby Knight worship on his campus.
Another would be Intercollegiate Athletics and the American University: A University President’s Perspective by James Duderstadt. He used to be president of the University of Michigan. Among other things, this book proposes that college sports teams be spun off as for-profit subsidiaries. And, yes, the athletes would be paid.
Interesting proposal, but it would never fly. Colleges need those alumni donations and stadium contracts (e.g., exclusive Coke concessions, stadium names) that the athletic departments bring in. And it would shortchange all the other athletes who actually do play for fun, like field hockey or men’s volleyball or non-pro tennis.
“and will pump gas or flip burgers after their eligibility is up.”
And its not just the college kids either.
A few seasons ago the Broncos suddenly ran out of healthy running backs. So they tracked down a guy who had played for them the previous season who ended getting cut from the team.
He was selling cellphones at a kiosk in a local shopping mall. So he went from making at least 500K per year (probably more) to what? 30K?
Penthouse -> Outhouse -> Penthouse
Exploiting kids for four years
Starts earlier then that,…thus the post-lingering effects of growth hormone’s / steroids / parents with $$$$$$$$$ sign eyes & ego’s.Then there are those long summer doldrums of spent youth blissfully goofing off and not going to those 12 hours per day 6 days a week credit-card prepaid group sessions of professionally coached “skills-improvement” training regiments regardless if it’s 98 degrees with 92% humidity.
See in the “‘hood”: 2010 lexus suv bumper-sticker: “Anything your kid can do,…MY kid can do BETTER!”
I hear ya, Hwy. I’ve heard stories of parents holding their 5-year-old back a year so that when they get to junior high, they a growth year ahead of the other kids and were more likely to make a sports team and be “discovered.” The kid doesn’t have to be good enough to go pro, just good enough for a college scholarship. It also explains the rise in kids doing obscure sports. After all, most state schools have to fill a fencing team, right?
I hear ya, Hwy. I’ve heard stories of parents holding their 5-year-old back a year so that when they get to junior high, they a growth year ahead of the other kids and were more likely to make a sports team and be “discovered.”
And to think that my parents put me into first grade when I was five years old. Mom decided that I was ready, and that was that.
For the rest of my school career, I was friendlier with kids who were a year behind me. Just had more in common with them than I did with the kids in my own class.
But what difference does all of that make now? None. I’m not lumped in with just one age group now. (And what adult is?)
OMG, Hwy’s making sense.
I used to love spectator sports, now I hate them. My alma mater turned into a football school in the last 25 years since I graduated and I am so sick of the hype and the thugs they recruit for the teams.
“It also explains the rise in kids doing obscure sports. After all, most state schools have to fill a fencing team, right?”
That works for girls, but for the guys the football team often gobbles up most of the mens athletic budget.
For example, here in the Centennial State, none of the 3 big public U’s (CU, CSU or UNC) has a men’s soccer team.
If free college, free tutoring, free food, a run of the place, and an under the table salary is ‘exploiting’, then sign me up!
After four years at Oklahoma State, Dexter Manly left that institution illiterate. Not sure if he ever received a degree.
I believe illiteracy with pro athletes is a bigger problem than people realize.
Also the Jail population and I’ll bet ya, 90+% of them know every hip hop and rap song ever made…..coincidence…or by design?
——————————–
I believe illiteracy with pro athletes is a bigger problem than people realize
Yup.
And they could learn from socialist europe in how to run sports business.
the centerpiece fiscal argument that resulted in local governments gifting them a new stadium that will cost generations of taxpayers an estimated $2.4 billion. They said they had no money to do it alone and intimated they would have to move the team without public assistance.
Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)
Field of Schemes…Give me a sports logo, some cable/tv bid money, & a couple of million arm-twisted taxpayers, have it delivered to my suite in time for my 7th inning massage, have someone from city-hall bring it all up the express elevator, unseen like.
This is very common. Pay for our stadium or we’ll move our team — and we’ll accuse you of hating Mom and Apple Pie too. You wouldn’t want Little Timmy and Little Susie to be deprived of going to a game in their youth, would you?
I think at least one least one team (Minnesota Twins?) tried this tactic. The politicans showed the numbers to the public. The public voted, no thanks, go ahead and move the team. The team stayed. I guess no one else wanted a stadium either.
There are plenty of sports for Little Timmy and Susie to attend. Like the local college.
OK, I’ll defend professional sports. These guys have talent and reached the top by working hard. I don’t begrudge them their riches anymore than I begrudge great singers or actors. I enjoy watching a well-played game of any kind.
And sports were a great outlet for my sons, who are athletic (not from me, my husband - I throw and run like a girl.)
I do begrudge Snookie, however.
I whole heartedly agree with your sentiments EXCEPT for the taxpayer support in any way of such hero worship.
I enjoy watching a well-played game of any kind.
opps…
S/B:
I enjoy watching a well-played game of any kind.
Me too!
(Hwy, glances at monitor flashing/scrolling ScottTrade Data)
“…swung a deal in which it would pay only $155 million of the $634 million stadium complex. Meanwhile, Miami-Dade County agreed – without the consent of taxpayers – to take $409 million in loans loaded with balloon payments and long grace periods. By 2049, when the debt is due, the county will have paid billions.”
“We paid BILLIONS!” …shout the “TrueLoyalFan™” members of “Keyhole” seating section.
(Meanwhile back at the PepsiAT&TMcDonaldsGeicoBudweiserBofATacoBellVerizon taxpayer subsidized Stadium,… yet another 2.4 season veteran/old-timer “TrueLoyalPlayer™” strips his current favorite city uniform and heads to the airport to join his “new” favorite team-mates & “TrueLoyalFans™” in Peoria Il for tomorrows next game against his former team-mates.)
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Worked out well for my SF Giants, who got a star Marlin, Cody Ross.
Some judges don’t like working for corporate, fascist oligarchies?
U.S. Judges Sound Off on Bank Settlements
http://finance.yahoo.com/news/US-Judges-Sound-Off-on-Bank-nytimes-918828238.html?x=0
WASHINGTON — Everything was rolling along traditional lines. A bank broke the rules. The government found out. The company agreed to pay a fine and improve its behavior.
And then the judge assigned to approve the deal blew his top.
In a scene that is becoming increasingly common, Judge Emmet G. Sullivan of Federal District Court chewed out federal prosecutors at a hearing in Washington last week for a proposed settlement with Barclays.
“Why isn’t the government getting tough with banks?” he asked.
Just one day earlier in the same courthouse, Judge Ellen Segal Huvelle refused to sign a settlement between the government and Citigroup, demanding, “Why would I find this fair and reasonable?” She ordered government lawyers to return with answers next month.
The scoldings from the bench are a striking departure from a long tradition of judicial deference to settlements formulated by federal agencies, reflecting broad disenchantment not just with Wall Street, but with its government overseers.
In a scene that is becoming increasingly common, Judge Emmet G. Sullivan of Federal District Court chewed out federal prosecutors at a hearing in Washington last week for a proposed settlement with Barclays.
“Why isn’t the government getting tough with banks?” he asked.
Just one day earlier in the same courthouse, Judge Ellen Segal Huvelle refused to sign a settlement between the government and Citigroup, demanding, “Why would I find this fair and reasonable?” She ordered government lawyers to return with answers next month.
A close family friend is a federal judge in Philadelphia. She has long had a reputation as a no-nonsense, don’t give me any guff judge.
She could give those DC judges some lessons in how to be stern.
I see from Judge Sullivan’s wiki page he was appointed to judicial posts by presidents Reagan, Bush senior, and Clinton.
Huvelle was a Clinton appointee.
Next stop for judges — start banning those ridiculous settlements where the corporation “paid a fine but admits no wrongdoing.” THE HELL!! I know coporations have the same rights as people,
:roll: 
but even people can’t buy their way to what is effectively a not-guilty verdict (except maybe OJ Simpson). Make these pukes pay actual damages.
The only company that’s actually paying for its sins is BP. $20 billion isn’t chump change on anyone’s scale.
I once got shafted by a former employer who dipped into the ESOP disbursement funds to tide the company over.
A nice brief from me to the IRS ensued. After raking the company over the coals for a year by the IRS, we got a letter - and a check - stating that “the company admits no wrongdoing but here’s the money we took from you”.
I don’t think those guys like me anymore.
My check was for $22K which was helpful at the time.
I’ve seen my share of tough Judges, I’ll never forget, very early on, marching into court, file in hand to handle an appearance on a matter negotiated by my supervisor, still in awe of it all and having the Judge sternly ask me “Ms. SLB can you explain to me why your office is giving away the circus for a peanut?”
Perhaps more Judges should be asking that question regarding these ’settlements.’
Perp walk for Sleazer Homes exec?
http://www.charlotteobserver.com/2010/08/25/1641574/former-beazer-executive-faces.html
New microbe chows down on spilled oil ~ USA TODAY
Researchers have discovered a previously unclassified species of microbe that appears to be happily gorging away on the long plume of oil left by the BP drilling rig disaster in the Gulf of Mexico. It’s turning the toxic mixture into non-toxic microbes about twice as fast as had been expected, scientists reported Tuesday in the journal Science.
This could mean that nature is able to clean up oil spills on its own more quickly than had been realized, at least in the Gulf.
The microbes are related to known cold temperature gamma-proteobacteria, says Terry Hazen, a microbial ecologist with Lawrence Berkeley National Laboratory and lead author on the paper.
Now all of those wonderful microbes won’t have to go hungry. The BP oil spill was the greatest thing to ever happen, almost a miracle of sorts!
Can’t you just hear all of those microbes, burping and chirping, as they chow down on the oil spill?
Cute, happy little fellas! I hope we have some dessert to feed them — maybe dump some radioactive waste in the gulf for the little guys…
We’ll have to reopen the leak so they don’t starve to death!
Thank Darwin for evolution!
Thank BP for rescuing as starving microbe species.
Now all we need to find is a fish that will eat this microbe and voila the world’s food problems can be solved too!
Now all we need is a mutant strain of bacteria that devours FBs….
You mean they don’t have that already?
I believe the scientific community refers to them as “realtors”.
what oil are you talking about?
The teensy, ween-sy, little bit left that didn’t miraculously evaporate or disappear outright right after the well got capped.
…happily gorging away on the long plume of oil left by the BP drilling rig disaster..
And who says that BP is “going green”?
The previous thread is exhibit A of why I love the HBB.
+1
Economists who confuse the purchase of clunkers, which typically cost a fraction of one-year’s worth of pretax household income, with the financing of McMansions, which in many instances cost more than ten-years worth before considering insurance, taxes, interest, maintenance, etc, are confused.
Last Updated: August 25. 2010 1:00AM
Home sales plunge as fear grows
Brian J. O’Connor / Detroit News Finance Editor
A bigger-than-expected drop in July home sales renewed fears Tuesday that the U.S. economic recovery is stumbling and could be heading for a fall.
Sales of previously occupied homes in the United States fell 27 percent in July, the weakest showing in 15 years, the National Association of Realtors said. It was the largest monthly drop in the four decades that records have been kept.
The dismal news on home sales sent stocks sliding for a fourth straight day. The Dow Jones industrial average dipped briefly below 10,000 for the first time in seven weeks and has now lost 375 points since the four-day slump began.
Markets have been jittery for weeks, fearing the economy will falter and start shrinking again. Nationwide, unemployment continues to hover near 10 percent, foreclosures are growing, and many analysts fear a double-dip recession is unavoidable. Consumer confidence has withered, and another drop in home sales and values could panic shoppers into locking up their purses even tighter.
For the Midwest region, home sales were even worse: a 35 percent drop. The association doesn’t track individual states, but data from the RealComp II multiple listing service showed Metro Detroit sales dropped 19.4 percent from June to July.
The weakness follows a strong spring, when now-expired $8,000 government tax credits sparked sales, especially among first-time buyers of lower-priced homes.
The tax credits caused many of those buyers to speed up their home purchases. Sales have weakened since the credits expired on April 30, dropping 2.2 percent in May, on a seasonally adjusted basis, and 7.1 percent in June. The consensus among economists polled by the Bloomberg news service was that sales would fall 13 percent for July.
Economists were divided about whether the larger fall-off was temporary or would drag on for many months.
“It’s an echo of the ‘cash for clunkers’ program for car sales,” said Dana Johnson, chief economist for Comerica Bank. “People rush in to take advantage of a short-term opportunity provided by the government. Then the opportunity goes away and sales crash for a while.”
Johnson expects home sales to dry up for a month or two, but come back just as auto sales did after a three-month pause when the cash for clunkers frenzy ended. He pointed out that while sales were off in July, the total number of homes on the market in the United States was down 1.9 percent from July of last year.
…
And how much did it cost us to shift those sales a few months? I’m no tea-party government is bad kind of guy but that program is the sort of concentrated stupid that should piss EVERYBODY off.
My town reported sales excise taxes (from RE sales) dropped to near zero for July.
Home refinancing demand up, rates hit new lows
By Julie Haviv
NEW YORK | Wed Aug 25, 2010 7:05am EDT
NEW YORK (Reuters) - Mortgage applications rose last week as record low rates lifted demand for home refinancing loans to its highest level in over 15 months, a development that could provide a much-needed jolt to the economy.
Home loan refinancing puts extra cash into consumers’ hands that they can save, use to pay off existing debt or funnel into the economy through extra spending.
With worries of deflation and a double-dip recession rising, an uptick in consumer spending could be just what the flailing economy needs.
The Mortgage Bankers Association on Wednesday said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended August 20 increased 4.9 percent. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 5.0 percent.
The MBA’s seasonally adjusted index of refinancing applications increased 5.7 percent, reaching the highest since the week ended May 1, 2009.
“The volume of refi applications last week was up 26 percent over their level four weeks ago,” Michael Fratantoni, the MBA’s Vice President of Research and Economics, said in a statement.
“With rates this low, many borrowers who refinanced in the past two years may well have an incentive to refinance again, and this is likely increasing refi application activity,” he said.
…
Related News
* U.S. 30-year mortgage rates rose in week - Zillow
Tue, Aug 24 2010
* UPDATE 1-US mortgage rates hit record lows - Freddie Mac
Thu, Aug 19 2010
* US mortgage rates hit another record low-Freddie Mac
Thu, Aug 19 2010
* Home refinancing demand at highest in 15 months
Wed, Aug 18 2010
* One-fourth of renters will never buy a home: survey
Wed, Aug 18 2010
Tears on my Zillow
Is DJIA = 10K Wall Street’s new Maginot Line? Why do computers need an “excuse to resume selling,” anyway?
* AUGUST 25, 2010, 7:54 A.M. ET
BEFORE THE BELL:
US Stock Futures Down Before Durable Goods Data
By Polya Lesova
U.S. stock futures slipped Wednesday, as upcoming reports on new-home sales and durable goods kept investors on edge with worries that the data will show more evidence of a slowdown in the economic recovery.
Futures on the Dow Jones Industrial Average dropped 29 points to 9994, breaking below the key 10,000 level. S&P 500 futures fell 2.20 points to 1047.60, and Nasdaq 100 futures declined 5.75 points to 1768.
“That big 10,000 level for the Dow will be closely watched, as a sustained break lower here could prove damaging psychologically, with traders on both sides of the Atlantic using it as another excuse to resume selling,” said Ben Critchley, sales trader at IG Index in London.
…
Is Eddie going to ride this baby all the way down, like Major “King” Kong, or has he already bailed out?
You should see me out in France wearing my tin hat
With shot and shell it’s worse than – well it’s even worse than that
Now imagine me in the Maginot Line
Sitting on a mine in the Maginot Line
Now it’s turned out nice again
The Army life is fine
French girls make a fuss of me
I’m not French as you can see
But I know what they mean when they say “oui, oui”
Down on the Maginot Line
Now imagine me in the Maginot Line
Sitting on a mine in the Maginot Line
Now it’s turned out nice again
The Army life is fine
At night, myself to sleep I sing
To my old tin hat I cling
I have to use it now for everything
Down on the Maginot Line
“It is impenetrable.”
- Field Marshal Petain, speaking of the Ardennes Forest
Kids are already back to school in Texas, so you knew this was coming:
5-year-old boy found safe after man inadvertently picks up wrong child from Dallas school
12:40 AM CDT on Wednesday, August 25, 2010
By RICHARD ABSHIRE and TAWNELL D. HOBBS / The Dallas Morning News
A 5-year-old boy was permitted to leave a Love Field-area elementary school with a stranger Tuesday, in a case of mistaken identity that was initially feared to be a child abduction.
http://www.dallasnews.com/sharedcontent/dws/news/localnews/stories/082510dnmetabduction.86c86aa4.html
Would never happen in my family. I’m the spittin’ image of my father, and my voice and gestures are carbon copies of my mother’s.
It is gonna be another downer day!
DOW 5000 by Jan 1st? A Black - Monday or Tuesday or Wednesday or Thursday ro Friday coming up? How long can the PPT keep this thing above 10,000 (until the Nov elections)?
————
CNBC | 8/25/2010
“New orders for long-lasting U.S. manufactured goods rose far less than expected in July and, excluding transportation equipment, posted their largest decline in 1-1/2 years, according to a government report on Wednesday that pointed to a slowdown in manufacturing.”
“The Commerce Department said durable goods orders rose 0.3 percent after a revised 0.1 percent fall in June. Excluding transportation, orders dropped 3.8 percent—the biggest fall since January 2009—after rising 0.2 percent in June.”
“Analysts polled by Reuters had forecast orders increasing 2.8 percent last month from June’s previously reported 1.2 percent fall.”
“Analysts polled by Reuters had forecast orders increasing 2.8 percent last month from June’s previously reported 1.2 percent fall.”
When I grow up I want to become an analyst. No matter how many times your predictions are proven wrong you still get to keep the title of analyst.
Root word anal. I don’t think you qualify.
Much like how Therapists aren’t stripped of their titles no matter how long their subjects stay crazy.
I say we combine the two jobs. New Title : Analrapist.
(Everybody on this board should watch Arrested Development)
Arrested development…now There was a promising group that fizzled out in the 90’s because they were not ghetto.
http://www.myspace.com/arresteddevelopmentmusic
“DOW 5000 by Jan 1st?”
DJIA = 10K or bust.
My guess is they want the market down for the elections.
Wall STreet and the elite want a gov unable to agree on anything. They want an evenly split 2 party system so that members on both sides can be purchased for chump change.
Also you are hearing more and more about having the FED/gov make massive purchases of MBS.
This is the next TARP. They will need another 9/11 type financial event as cover to get this money.
http://www.amazon.com/Prince-Dover-Thrift-Editions/dp/0486272745
+1 Dennis. And I didn’t even have to open the link.
The 701 homes mentioned in this story sold for an average price of $400,100,000/701 = $571,000
I guess if they only sold 350 homes next quarter, they could sell them at a still-higher average price?
Toll Reports Its First Profit Since 2007 on Tax Benefit, Fewer Writedowns
By John Gittelsohn and Peter Woodifield - Aug 25, 2010 3:41 AM PT
…
The builder raised its estimate for the number of homes it will deliver by the end of the fiscal year on Oct. 31 to at least 2,500 units, compared with a minimum estimate of 2,200 homes made three months ago.
Priced Goal Raised
The average selling price will likely be $560,000 to $570,000, Chief Financial Officer Joel Rassman said in the statement. In May, Rassman estimated average selling prices in the fiscal second half would be $540,000 to $560,000.
Buyers signed contracts for 701 Toll Brothers homes with a total value of $400.1 million in the quarter. A year earlier it sold 837 homes worth $447.7 million. Revenue fell 1.6 percent to $454 million.
…
“Buyers signed contracts for 701 Toll Brothers homes”
Irrefutable proof that there really is a sucker born every minute.
Who are these incredibly stupid 701 people?
There cannot be that many deaf, blind, and rich in this country?
Wouldn’t you love to know how many of those 701 used FHA financing and/or the $8K first-time home buyer tax credit?
1.5% is definitely not inflationary…
Union mechanics reject American Airlines contract
…
The company had offered pay raises of 3 percent this year and 1.5 percent in 2011 and 2012, and lump-sum payments of 6 percent of annual pay to its employees at its maintenance bases.
http://www.dallasnews.com/sharedcontent/dws/bus/stories/082510dnbusaacontract.274597a.html
Way more of a raise than anyone I know is getting.
I have a friend whose employer is having “A Big Meeting” next week. Round Three of layoffs is probably the more desired news. I didn’t have the heart to tell her that I think they’ll announce the pulling of the plug. They’re heavily dependent on state and local government largesse, and we all know how that’s working.
I’m reading up on how to become a federal contractor. And I’m not seeing anything that says “Base your business on federal contracting.” Instead, I’m seeing lots of advice on including the federal government in your clientele.
No kidding. My last raise was .84%.
Just a passing thought, is it concievable that political parties intentionally lose elections to discredit the other party? Witness the nominees such as Kerry and McCain. A vulnerable GW Bush and a horribly messed up economy and foreign policy nightmare..enter the unelectable John Kerry. The impending economic collapse and housing bubble burst..enter McCain and the election throwing choice of Palin?
With the two party system guaranteeing at least a minority position of power to the loser and completely playing partisan politics to regain power in an endlessly repetitive cycle, how can this trend be broken?
The trick is to support a weak candidate on the OTHER PARTY so he will be the candidate your guy gets to run against.
Or, better yet, support a third party movement in the OTHER PARTY that will divide the other party and thus divide the other party’s votes.
There was a third party movement for the last 36 years - the Libertarian Party. Economic freedom, no war mongering, and civil liberties. Americans rejected that political party because they want something for nothing.
The reason is rolling back regulation on corporate giants is not economic freedom. And people realize that there are some benefits of effective regulation, note recent oil spill and salmonella outbreak. In an environment of no regulation and monitoring how many would die when salmonella infected eggs sold onto the market, how many more oil spills would we have? There would be no mechanism for identifying the problem or of forcing a recall. I’m all for the no war mongering and civil liberties issues, and social libertarian as well. Don’t get me wrong the corporatism we have now is not what I want either. The supreme court has cemented the power of the rich by equating corporations with individuals.
BS, the US has regulations up the ying-yang. However, the enforcement is spotty, politically motivated, and as always for sale to the highest bidder or current PC crisis.
The trick is to support a weak candidate on the OTHER PARTY so he will be the candidate your guy gets to run against.
Not he. She. Republicans wanted to run against Hillary because there’s a lot of dirt on her. Dems want to run against Sarah because she IS dirt.
Or, better yet, support a third party movement in the OTHER PARTY that will divide the other party and thus divide the other party’s votes.
Ralph Nader and Ross Perot, anybody?
People thought at the time that Kerry was electable - he was a Vietnam vet and a US senator with great hair! What could go wrong?
What could go wrong?
He windsurfed and could speak French.
Probably asked for Grey Poupon.
Hell no! Grey Poupon is a KRAFT product, not a Heinz product.
The Democrats should have nominated “Fightin’ ” Joe Lieberman. He was vetted as the VP nominee and could go toe-to-toe with Bush 43 on foreign affairs.
I actually re-registered Democrat in 2004 so I could vote for Joe in the primaries.
Why Small Businesses Aren’t Hiring (hit hard by the collapse of housing price)
The American | 08/24/10 | Scott Shane
In the recoveries from the previous two recessions, small businesses led job creation. This time, however, small businesses aren’t hiring. That about-face has left a lot of economic prognosticators scratching their heads. I think the reason is clear. The collapse in home prices is holding back small-business hiring. And unless we fix the residential real estate mess, we won’t see small business hiring anytime soon.
The weak residential real estate market is keeping small businesses from hiring in five ways:
snips…
1. Declining house prices have softened demand for small businesses’ products and services. The 29.5 percent drop in home values from the first quarter of 2006 until the end of the first quarter of 2010 has led to a huge drop in household wealth, which has led to reduced consumer spending.
2. Small businesses are overrepresented in the real estate-related industries that have been decimated by the residential housing market collapse.
3. Small business owners use their homes to obtain business credit.
4. Banks have tightened lending standards in response to a rising share of non-performing real estate loans.
5. Small business owners were major customers of residential real estate loans during the boom, making them among the consumers hardest hit from the collapse in home prices.
Slightly more than half (50.2 percent) the private sector works in small companies. If the residential real estate mess keeps the small business sector from hiring, it will be awfully difficult to reduce our unemployment rate to a reasonable level.
“If the residential real estate mess keeps the small business sector from hiring, it will be awfully difficult to reduce our unemployment rate to a reasonable level.”
Ummm, is Mr. Shane implying that house prices need to be supported in order to enable job creation? If so, this would be a very dangerous fallacy to let loose.
Small business owners use their homes to obtain business credit.
Hmmmmmmmmm….
Why is it that more than one of my business advisors warn against such things? As in, “Slim, don’t take out a loan against the Ranch!”
And, as for hiring employees, has it ever occurred to these writers that businesses create jobs because they need to have work done? And that the cost of having an extra pair of hands around is more than offset by the additional revenue brought in?
‘Don’t bet the ranch on it’ used to be a common expression in America. Maybe it’ll make a comeback?
“He bought the farm” is another common expression in America. All too common these days.
What he SHOULD be saying is “This downturn will result in a retrenching of small businesses to be less centered around real estate and provide more productive services.”
I keep reading that a lot of small business troubles relate to the real estate sector. Seems like they’re suffering the majority of the small business hurt. (Cue up the snark, everyone!)
Me again. My previous comment beat around the following bush:
Bubble Sectors Account for Bulk of Job Losses
While the above article focuses on San Diego, I’ll bet it also rings true for other areas.
Excuse the political query here, but WTF is wrong with Arizona that their Republicans nominated McCain again? Jeebus, Arizonans are cruel. McCain needs a nice, calm retirement. Why prolong his torture? He was already tortured enough as a POW.
Could it be….The moron you know is better then the one you don’t??
Well, Slim’s here with some observations:
JD Hayworth just didn’t realize the juggernaut he was up against. McCain still has quite a bit of cachet with Arizona Republicans. Quite a few of them admire him for his toughing it out as a POW.
Which tells you a lot about the age of Arizona Republicans. As a general rule, they skew to the over-50 demographic. The same can also be said for the Democrats.
As for the younger folks, they tend to run toward registration as Independents — the fastest growing affiliation in AZ.
In short, the general election will be interesting. It’s the McCain Juggernaut on the Republican side vs. Rodney Glassman, who didn’t even complete one term on the Tucson City Council.
JD was a VERY flawed candidate. He faced ethics investigations while in Congress and was defeated for re-election. Since then, he’s been a radio talk show host. MClame spent over 20 million, and put on his “conservative” suit to win the base over, flip flopping on all his prior RINO votes. Plus, the GOP establishment all lined up behind him. Now that he won, he’ll revert back to the same old RINO ways. He voted for every one of Barry’s stimulus boondogles, supported amnesty for illegals, and was an embarrassment in 2008.
I almost hope he loses in November.
Sad thing is, McCain is up against a very weak candidate.
I mean, come on. Rodney Glassman didn’t even finish one term on the Tucson City Council. And our council isn’t exactly known as something that its members have to escape from before their terms are over.
Methinks that, even if the DNC pours megabucks into this race, it won’t help Glassman. Outside of Tucson, he’s an unknown quantity. Inside Tucson, he’s known as a wealthy young whippersnapper who’s trying to move up without paying his dues.
I’ve never hear of Glassman, I’ve lived in AZ 38 years.
“WTF is wrong with Arizona that their Republicans nominated McCain again? ”
Stupidity combined with the fact that his primary opposition also represented the establishment.
Greek 2-year back up to 11.91 and rising quickly.
Bailout FAIL.
“Bailout FAIL.”
= Failout.
Four business days left in August, maybe a weekend default?
Yeah but if you read some people, they say it’s the austerity that failed.
Upside down world…..
When your revenue base is just taxing back a portion of your total expenditures, cutting your expenditures isn’t going to reduce your need for borrowing. Austerity doesn’t work in that situation. Same for Ireland. Same for America.
We’re going to have to rethink the system.
When have austerity measures ever stopped a depression?
I am hoping for some austerity measures so that my great grandchildren may escape a depression; after all it is their money being spent!
I am hoping for some austerity measures so that my great grandchildren may escape a depression; after all it is their money being spent!
You could be right but I don’t think it will work like that.
But if it does work like that your great-grandchildren will mostly be paying for us Americans enriching the top 1/10 of one percent of the people in America.
When have austerity measures ever stopped a depression?
When have austerity measure ever been implemented? They certainly haven’t been in Greece, in any meaningful fashion (see my post below).
When have austerity measure ever been implemented?
The mantra of the austrian schooled: ‘it’s never really been tried yet!’ And yet they’re so sure it works…
Here’s an interesting example of Keynesian stimulus working almost too well, sorry you can’t find an example of your method ever working anywhere at any time in history:
wikipedia
“The Japanese economy shrank by 8% during 1929–31. However, Japan’s Finance Minister Takahashi Korekiyo was the first to implement what have come to be identified as Keynesian economic policies: first, by large fiscal stimulus involving deficit spending; and second, by devaluing the currency. Takahashi used the Bank of Japan to sterilize the deficit spending and minimize resulting inflationary pressures. Econometric studies have identified the fiscal stimulus as especially effective.[56]
The devaluation of the currency had an immediate effect. Japanese textiles began to displace British textiles in export markets. The deficit spending, however proved to be most profound. The deficit spending went into the purchase of munitions for the armed forces. By 1933, Japan was already out of the depression. By 1934, Takahashi realized that the economy was in danger of overheating, and to avoid inflation, moved to reduce the deficit spending that went towards armaments and munitions. This resulted in a strong and swift negative reaction from nationalists, especially those in the Army, culminating in his assassination in the course of the February 26 Incident. This had a chilling effect on all civilian bureaucrats in the Japanese government. From 1934, the military’s dominance of the government continued to grow. Instead of reducing deficit spending, the government introduced price controls and rationing schemes that reduced, but did not eliminate inflation, which would remain a problem until the end of World War II.
The deficit spending had a transformative effect on Japan. Japan’s industrial production doubled during the 1930s. Further, in 1929 the list of the largest firms in Japan was dominated by light industries, especially textile companies (many of Japan’s automakers, like Toyota, have their roots in the textile industry). By 1940 light industry had been displaced by heavy industry as the largest firms inside the Japanese economy.[57]“
“When have austerity measures ever stopped a depression?”
The depression of 1920.
Yeah but if you read some people, they say it’s the austerity that failed.
What austerity measures? Greece has done nothing meaningful.
They don’t even get deficits below 3% of GDP until 2014.
They didn’t implement across-the-board public pay cuts. This is after salaries have risen an average of 30% per year since 2006.
The didn’t stop public bonuses across the board; only targeted to some areas.
Back when the bailout was first announced, I had a strong desire to short the Greek bonds, in anticipation of an ultimate “Bailout FAIL.”
Wish I had turned that desire into action.
If you believe that default is in their future, it could still be a great trade.
market pulse
Aug. 25, 2010, 9:31 a.m. EDT
COMING UP: New home sales for July
WASHINGTON (MarketWatch) — The Commerce Department’s estimate for sales of new homes is scheduled to be released at 10:00 a.m. Eastern. Economists expect new home sales rose 2.7% in July to 339,000 units. While this would be the second straight monthly increase, it is not really good news. Sales remain very low by historical standards having hit a record-low level in May.
Yawn…
market pulse
Aug. 25, 2010, 10:00 a.m. EDT
July new home sales plunge to record low pace
By Greg Robb
WASHINGTON (MarketWatch) - U.S. new home sales plunged to a new all-time low in July, the Commerce Department estimated Wednesday. The decrease in new-home sales to a seasonally adjusted annual rate of 276,000 was well below the 339,000 pace expected by economists surveyed by MarketWatch. New-home sales in June rose a revised 12.1% to a 315,000 level compared with the previous estimate of a 23.6% rise to 330,000. New-home sales are down 32.4% compared with a year ago. The months’ supply of homes on the market rose to 9.1 months in July from 8.0 months in June. Median sales prices have fallen 4.8% in the past year to $204,000. The average sales price has fallen 13.2% over the same period to $235,300.
Home prices jump
Home prices in July rose 10.7 percent to $155,000 in San Bernardino County compared to the same time last year, according to a report released Tuesday. http://www.sbsun.com/rss/ci_15884311?source=rss
The illusion that home prices are rising is created by sales falling off a cliff. If you know how to draw a Marshallian demand curve, then you know that demand slopes down. Lower quantity of sales implies a higher average sale price — Economics 101.
I think that’s a backwards understanding. P&Q are related in such a way, but only in the manufacturing/purchase decision. Lower Q doesn’t have to imply higher P once all the inventory is already out there (like homes). We could easily have low Q and the lowest P ever, on a good that has become outdated and winds up at Big Lots.
Also, homes are a bad Q, since they are of varying quality and type. I think the rise of 10% has more to do with an increase in the sale mix (or perhaps the tax credit).
“I think that’s a backwards understanding.”
You certainly are entitled to your own views regarding whether demand curves slope downwards or not.
“P&Q are related in such a way, but only in the manufacturing/purchase decision.”
In every economics text book I have ever opened, demand depends on households; manufacturers and purchasers have nothing to do with it.
But you are free to invent your own flavor of economics if you don’t like the version taught in universities the world over.
I’m not debating downward sloping demand curves. I’m sayinig that the equilibrium point they determine is the manufacturing Q/ purchase price P point. I’ve heard plenty of economists say something to the effect of “Producers will provide quantity Q at Price P.”
Given that we have massive inventory of homes, the supply curve is vertical/horizontal depending on which axis you use for Q. Lower demand for housing should imply lower prices under these curves. Curve shifts inward.
Anyway, to the error I’m trying to point out to you, take your reasoning to an extreme. Suppose just one person bought a house. Does that imply a high sale price? No.
“Suppose just one person bought a house. Does that imply a high sale price? No.”
Your story implicitly assumes the reason that only one person bought a house is due to a drop in demand. Mine assumes a drop in supply, due to, say, efforts by would-be sellers to withhold inventory when they expect prices to go up in the foreseeable future. The truth is probably more complicated.
The first-time-buyer tax credit would appeal to people for whom $8K would make a difference in their purchase decision. Would-be buyers for whom $8K would not affect their purchase decisions tend to be relatively wealthier, live in more expensive areas, or both. Knocking out the part of demand which was driven by $8K in stimulus to buy left behind few buyers. This select subpopulation possesses the wealth and confidence to buy at a point when anyone lacking in job security or savings is sidelined; those left standing are willing and able to buy more expensive homes than the $8K first-time-buyer credit pool bought.
“The illusion that home prices are rising is created by sales falling off a cliff.”
My belief is that it is actually due to foreclosures moving up-market. They started with the weakest hands folding first (e.g. lowest price-point and worst neighborhoods), but are moving to the stronger hands now that they have either burned through reserves or realized that it is a losing battle.
“…home prices are rising is created…”
You remind me of another possible explanation occasionally brought up here, which is that when a lender ‘takes back’ a home that won’t sell at auction, it can (misleadingly) show up as a ’sale’ in transactions data, at a ‘price’ equal to the outstanding value owed on the defaulted loan.
A significant level of this kind of misreporting of ’sales’ could throw average home sale price statistics way out of whack.
* REVIEW & OUTLOOK
* AUGUST 25, 2010
The Housing Mirage
Homeowner subsidies have only delayed the day of reckoning.
Yesterday’s news that sales of existing homes fell a record 27% in July did not trigger the end of civilization. Instead, while stocks generally declined on the news, shares of home building companies rallied on the chance that this market has finally found a bottom.
We make no predictions on whether the expected rebound in August or autumn sales will come to pass, after more than four years of a declining market and numerous federal programs delaying the inevitable correction. The trigger for yesterday’s decline was the expiration of the $8,000 first-time home buyer tax credit, a political gimmick that altered the timing of some sales, provided a larger tax benefit to many people who were going to buy anyway, and did nothing to change the fundamental supply and demand for housing.
In helping to postpone an inevitable real estate reckoning, while temporarily creating a mirage of a recovering market, the tax credit followed in the distinguished footsteps of George W. Bush’s Hope Now, Barney Frank’s Hope for Homeowners, and Barack Obama’s Home Affordable Modification Program (HAMP), among many other policy lowlights.
If a housing recovery is finally upon us, it will be no thanks to Washington’s serial interventions, nor to the home builders who have cheered so vigorously for them. Together with the Realtors and mortgage bankers, the home builders form a lobbying army of the Potomac. The mission is to secure ever higher federal subsidies for housing. The strategy is to convince politicians of both parties that a robust economic recovery can only occur if residential real estate is booming again. This is false.
With the exception of temporary bubbles caused by reckless monetary policy, rising home prices are merely a symptom of a vibrant economy, not a cause.
…
The government has been pretending that troubled borrowers, even if they have numerous debts beyond the mortgage, can become reliable borrowers by tweaking the home loan. Washington also participates in spreading the fiction that recovery depends on keeping people in homes they can’t afford.
What people really need are jobs, and what the economy needs to create those jobs is for Washington to stop force-feeding investment to politically favored goals and let investors find the most productive uses for their money.
What people really need are jobs, and what the economy needs to create those jobs is for Washington to stop force-feeding investment to politically favored goals and let investors find the most productive uses for their money.
Bingo!
+10
Right now the most productive use of money is to hide it under a mattress. This won’t create many jobs.
Ban microsecond stock trades, institute public option health care, put a REAL fence on the Mexican border, tell companies “no more H1-B, if you want workers, ask the community college,” tax the living crap out of outsourcing services, and make other countries adhere to the same environmental standards as in the US.
Jobs will come back…FAST.
(oh, I do something about imported food. I don’t mean French wine. I was in the store the other day, and even the frozen veggies were from all over the map. What, we can’t grow our own damn peas and carrots?)
“put a REAL fence on the Mexican border,”
Thats racist!
CNN ticker tape headline read “75 bodies found on ranch in Mexico”
Build fence before they run out of ranches.
“put a REAL fence on the Mexican border,”
Thats racist!
It is not racist because it will stop the Swedes coming in from that way too.
A mine field would be cheaper and more effective.
The coyotes would just run their charges through until they were all detonated.
tell companies “no more H1-B, if you want workers, ask the community college.
I think it should read tell politicans “no more H1-B, if you want workers, ask the community college.”
I think Buffet or Cramer said make bids good for 1 ONE second, and that should eliminate the problem
Ban microsecond stock trades…..1 freakin second!
I would like to see wide open boarders but no social safety nets; no free school, no free health care, no social security, nothing for free. Come, work and take care of yourself.
Unless the most productive use of the money isn’t in investments that create American jobs…
Secure jobs for the long/medium haul, not something that can be outsourced after you train your replacement. The pay Americans take home will determine the payment they can afford for an American home.
What people really need are jobs, and what the economy needs to create those jobs is for Washington to stop force-feeding investment to politically favored goals and let investors find the most productive uses for their money.
I always find such opinions amusing when they come from the newspaper (WSJ) of the politically favored. But I guess it’s fun to fool the fools. And obviously profitable.
Why does not Americanism trump partisanship?
Will Americans Rescue America In Time?
http://thebulletin.us/articles/2010/08/24/commentary/op-eds/doc4c73e3a04b872228668147.txt
“The two American political parties are much more alike than different, they keep the American population focused and fighting on/about the parties respective differences,… the real people in charge, the ones buying access to the legislature are moving their agenda forward regardless of which political party is running Washington.
We can see it clearly in two related areas - first the so-called Health-Care Reform Bill - a bill which the insurance industry all but authored and the Prescription Drug benefit program that the pharmaceutical companies authored. Both were huge moneymakers for the respective industries, legislating millions of new clients. Both were passed with little input from the citizens or real debate - one bill with a democratic president and Congress, the other bill with a republican president and Congress. In both cases, the loser is the American people. American corporate interests have co-oped the process and they own it, lock, stock, and barrel.
The bottom line is that in 2010, it truly does not matter which party or person we elect to any public office.
I am not against the American corporation per se - but if the American government does not protect the consumer and the corporations are making the laws governing their business environment (regulation, enforcement, market share), then who is left to pay the bill for both? We have seen that American businesses do not have the best interest of the country as their mandate of good business
the American political class has not solved a single serious problem with our nation in decades. It does not matter who is in charge. We have not been able to fund Social Security, Medicare, we have not had anything that remotely resembles a national energy policy, we have not dealt with escalating medical costs, our completely unprotected borders, our educational systems, the decaying infrastructure, the undisciplined spending, or the unbalanced budgets
Instead, we, as a nation, remain focused and divided on non-productive “issues” such as abortion, gun rights, tax brackets, and gay marriage.
It is obvious that very few corporations, persons, politicians, religious leaders, and/or business leaders have the long-term future of this nation as a priority.
The America consumer-citizen must begin to exercise the only powers that he/she has left - the power of the purse strings and the power of the vote.
Imagine if you purchased from only companies that do not retain a lobbying firm in Washington, D.C., companies that do not outsource American jobs, companies that operate sustainable business models and, finally, companies that hold the long-term interests of this nation as their own. If you believe that a plan of this type is time wasted, one need only to look at the current difficulties that Target is having after the nature of the top executive’s political support was disclosed. … Imagine this type of economic boycott on a national level, by all the citizens of this country - the impact would be felt globally. Not only would this effect the company, it would “trickle down” to the lobbyist, the politicians, and other policy makers. No profit, no money to buy votes - simple.
Secondly, exercise your right as a citizen to vote. … The citizens of America have much more in common with each other than they do with the power elite in Washington, D.C. Stop buying the line that the problem is “very complicated,” It is not. …Start giving every politician at local, state and national level just one term to solve the problems that you elect them to resolve. Once the political class, and, more importantly, the lobbying mechanisms realize that they have no job security, the course of the nation will have to change.
Or keep doing what you have been doing and hope for a different outcome.
Let me counter with the MSM message
Stem cells, ABORTION, national anthem, evolution, FLAG burning, Terrorism, Communists, Facists. You must vote now for the established candidate or all is lost.
Paid for by the corporatation for the corporate elite.
“Or keep doing what you have been doing and hope for a different outcome.”
I think I’m going to drive to WalMart in my imported Korean car to purchase a Chinese made “Save American Jobs” bumper sticker.
“I think I’m going to drive to WalMart in my imported Korean car to purchase a Chinese made “Save American Jobs” bumper sticker.”
LOL!!! Good one, In Colorado!
I bought a plastic storage container to put an Apple IIGS in. I got it from Walmart. I decided to compare the Rubbermaid to the others to see where they were made. All of the ones I found were made in USA.
“Or keep doing what you have been doing and hope for a different outcome.”
Sometimes that works. Circumstances can change or you simply get so good at it that you finally succeed.
“Today it’s being reported that the US Gov’t has,…Revoked 100% the Corporate Charter to engage in ANY business in the US of A from: MONSANTO”
(Suddenly Hwy drops his garden spade, stands up and stares blankly at his heritage grape tomatoes…speechless)
“In other news, it’s being reported that Xe Corporation has won yet another “non-bid” contract to protect un-named US Gov’t officials from being harassed by their local constituents…”
The only people who seem to think we’re focused on abortion, gun rights and gay marriage are the ones who keep saying we shouldn’t focus on abortion, gun rights and gay marriage. No one I know talks about those but about the economy, bailouts and taxes.
I talk about guns sometimes. Obama has managed to avoid messing with them so far, so I don’t complain about him the way I did with Clinton. I hope it stays that way…it allows me to avoid voting Republican out of a sense of duty.
My fundy/evang relatives talk about NOTHING besides abortion and gay marriage. Not that these are not topics worth discussing, but it’s the ONLY thing they care about.
One of them was certain that aborion would skyrocket if Obama was elected. When I suggested that nothing would change in that regard if he were elected I was given the evil eye.
My fundy/evang relatives talk about NOTHING besides abortion and gay marriage.
If you want to confuse them, calmly mention that abortion is unheard of in gay marriages.
Confuse them more
What you don’t support MONOGAMY? That’s all gay people want ….just like you and mom have.
I honesty don’t get the fundy/evang mindset.
So, some man loves another man. Or a woman has had an abortion. Big deal. It’s as if the fundy/evang folks are incapable of thinking of people as anything other than sexual beings.
They also tend to be right up there with politicians and pro golfers when it comes to getting caught in the act with hookers.
I did my civic duty and voted in our primary last night, and as I was leaving the polling place a worker handed me one of those “I Voted Today” stickers. At the bottom, in a bold white font, it read “Phoenix Association of Realtors.” Imagine–the real estate industry corrupting politics. Or maybe it’s the other way around…
It rained cats and dogs here yesterday. Between storms, I strolled over to the polling place at our neighborhood rec center. Got one of those “I Voted” stickers, but I didn’t notice any sort of real estate promo on it.
BTW, the turnout was pretty steady, so people still vote if offered the opportunity. Even on days when Tucson gets close to an inch of rain.
Turnout here was thin. We had rain too, but mostly north and east of the valley, so that wasn’t really a factor. It was obvious that McCain and Brewer were going to win big, so no doubt it was the lack of any real horse race that kept people home.
I think that the gubernatorial election will shape up to be quite the donnybrook. Goddard’s discovered his inner attack dog, and he’s really going after Brewer.
As for McCain, I can’t help thinking that this will be his last term in the Senate. The guy’s getting on in years, and he’s had some real health problems (like cancer) recently.
I shook hands with McCain at a book signing a few years ago. As soon as I took his hand I had this feeling I need to be careful not to hurt him. He struck me as extremely frail and fragile.
He struck me as extremely frail and fragile.
I’ve never met McCain. But I’ve heard the same thing about him from others. So, thanks, Cassandra, for yet another data point.
Another reason to flee the Big Apple:
PHILADELPHIA (Reuters Life!) – New York has more unwanted nocturnal guests than other urban areas and has been named the most bedbug infested city in the United States.
It surpassed Philadelphia, Detroit, Cincinnati and Chicago, which rounded out the top five cities, according to extermination company Terminix, which compiled the list based on call volume to its offices around the country so far this year.
“In the past, offices might get a couple of calls a month for bedbug eradication,” said spokesman Clint Briscoe. “Now, some of them are getting several dozen a week.”
The company blamed international travel for the bugs’ return 60 years after they were thought to have been eradicated in the U.S. But it said the appearance on its list of smaller cities shows the insects that live in furniture, clothing and luggage, are getting a grip on the U.S. heartland.
“It’s the bedbug problems in cities like Dayton and Louisville that prove bedbugs are back and can pop up anywhere,” said Paul Curtis, the etymologist for the company, referring No. 8 and No.13 on the list.
Briscoe said over the last three years the company’s commercial bedbug business has more than doubled, while calls from householders are significantly higher.
New York City Councilwoman Christine Quinn admitted last month that the Big Apple had been hit hard by the blood-sucking insects after the city announced it would spend $500,000 raising aware about the pests, which don’t carry disease but are difficult to eliminate.
Former U.S. President Bill Clinton has battled an outbreak at his Harlem office, along with lingerie outlet Victoria’s Secret, teen clothing store Hollister and countless hotels which have lost thousands of dollars in revenue fighting the bedbug.
Terminix said the bugs tend to hitch a ride from one location to the next, so are particularly fond of hotels, airplanes and cruise ships.
It was eradicated by DDT….thanks EPA for wanting them back
Bedbugs? Sounds like a third world problem.
Oh, wait!
Government agents can sneak onto your property in the middle of the night, put a GPS device on the bottom of your car and keep track of everywhere you go. This doesn’t violate your Fourth Amendment rights, because you do not have any reasonable expectation of privacy in your own driveway - and no reasonable expectation that the government isn’t tracking your movements.
That is the bizarre - and scary - rule that now applies in California and eight other Western states. The U.S. Court of Appeals for the Ninth Circuit, which covers this vast jurisdiction, recently decided the government can monitor you in this way virtually anytime it wants - with no need for a search warrant
Time to start riding your bike??
wow! If true, we should give up and install an RFID chip in our foreheads and be done with it
Or have a locked and alarmed garage???
Oh yes the Court of Appeals for the Reversed Circuit as we lawyers call it.
This is why I am a huge fan of Spy Chips and their mission to wake the masses up about RFID and our privacy:
http://www.spychips.com/
and Katherine’s personal website:
http://www.katherinealbrecht.com/
(She’s not only pretty, she’s smart and pro-active.)
Sweet! Put them on politicians and other VIPs cars. Two can play.
Yet another reason to go out and hug a progressive.
“What about: stocks, renting, buying on margin, lottery, casino gambling, brides, prostitutes?”
Thanks to all for completely validating my theory. Hopefully, y’all got the point and are just playing “rope-a-dope.”
For those who DIDN’T get the point: Don’t get involved in a transaction unless it is good for both parties and is not just a gamble.
( With the new strains of clap, Prostitution/Keynesianism is a perfect example).
Enough of the “RE only goes up”, “the stock market has trended UP since 1929” and “She knows how to rock your socks” stuff !
I don’t know how you can realistically calculate a ‘good for both parties’ value with just a 5 day waiting period. If you care what your stocks you purchase over 5 days, you are just as much of a gambler as the person who owns it for 5 minutes. It’s just a slight matter of degree.
I think the first comment pointed out why the waiting period was not a good idea, unless you are also going to change so that the market only trades once every 5 days.
What difference does it make if tons of trades are done by computer or by a large group of trader slaves? Maybe we would increase employment marginally, trading highly paid jobs for minimum wage button clickers.
Morgan Stanley Says Government Defaults Inevitable
Investors will face defaults on government bonds given the burden of aging populations and the difficulty of securing more tax revenue, according to Morgan Stanley.
“Governments will impose a loss on some of their stakeholders,” Arnaud Mares, an executive director at Morgan Stanley in London, wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” the report said.
Borrowing costs for so-called peripheral euro-region nations such as Greece and Ireland surged today, resuming their ascent on concern that governments won’t be able to narrow their budget deficits. Standard & Poor’s downgraded Ireland’s credit rating yesterday on concern about the rising costs to support nationalized banks.
Plugs Bite-Me sez…
At an event where he was to unveil a report analyzing the impact of the Recovery Act, Biden broke from prepared remarks to react to the House minority leader’s speech in Cleveland today. What was billed as a major economic address for Boehner offered no new policy other than to fire the White House economic team, Biden said.
“[That's] very constructive advice and we thank the leader for that,” Biden said sarcastically.
“Biden conceded that the economic recovery was not proceeding as fast as the administration had hoped, but claimed there was “no doubt we’re moving in the right direction.”
It’s a little late but,
Dow 10,000!
Twice, once up the downside, once on the upside, so far today.
When was the first time? Kind of like Dow 1,000, eh?
Looks like its gonna close up. Looks like the PPT will not allow it to close below 10,000 no matter what the bad news is. At this point I think that not even a mass terrorist attack would do it.
If we close below 10k, the terrorists have won.
Headline at money.cnn.com:
“Stocks recover from housing blues”
And unemployment blues…
And failing bank blues…
And falling wage blues…
And sovereign debt blues..
etc.
If we have such high persistent unemployment shouldn’t we stop H1-b and L1 for all but exceptional people making over 250K a year?
The objective is to bring American wages down to 3rd world levels. Just ask Eddie if you don’t believe me. Oh and if we need to poison our air and rivers along the way, so be it.
I wonder how many people this benefits on our side of the pond?
“I wonder how many people this benefits on our side of the pond?”
I’ll give you a hint: None of them are part of the middle class.
Americans are overpaid. If an Indian is willing to work for $20 an hour why should anyone hire an American for $60? What makes Americans so damn special that they should get paid more than everyone else in the world for performing the same labor?
What makes Americans so damn special that they should get paid more than everyone else in the world for performing the same labor?
You know why. You’re just trolling.
New home sales hit lowest level
By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, August 25, 2010; 11:51 AM
Sales of newly built homes dropped to their lowest level since the government started tracking the numbers more than four decades ago, with demand for home purchases down in all four regions of the country.
The Commerce Department reported Wednesday that new homes sold in July at an annual rate of 276,000, down 12.4 percent from June and down 32.4 percent compared with the same time last year.
Housing experts attribute the weak results to the expiration of a federal tax credit April 30. They said the program probably lured people into buying homes earlier than they had planned, thereby eating into future sales.
But many economists say July’s dismal results, which add to grim sales data released Tuesday on existing homes, suggest that the problems go beyond the tax credit.
“There’s clearly something more at play here,” said Mark Vitner, a senior economist at Wells Fargo Securities. “The economy is backsliding a little bit. While it’s too soon to tell if that’s going to result in another recession, it seems clear that consumers are holding back on committing to major purchases, such as buying a home.”
…
There’s clearly something more at play here
Yeah, give us a few more years to study it and we should be able to come up with a solid hypothesis. Hopefully we’ll figure it out before it leads to “another” recession.
Try not to catch yerself a falling knife, buying either houses or housing-related stocks.
The Buzz
Housing’s a wreck. Builders rally. Huh?
By Paul R. La Monica, editor at large August 25, 2010: 12:31 PM ET
NEW YORK (CNNMoney.com) — Stop me if you’ve heard this before. The housing market is still in shambles.
Existing home sales plummeted in July. New home sales sunk as well, hitting a record low. And even though luxury homebuilder Toll Brothers reported a surprise quarterly profit Wednesday, that was largely due to a tax break. Sales were down slightly from a year ago and orders dropped 16%.
Despite this, some investors appear willing to once again bet that the housing market has hit bottom. Shares of Toll Brothers (TOL) were up more than 2% in early afternoon trading.
…
Don’t forget. The “experts” are predicting a “housing shortage” in the future (along with a candy crapping unicorn in every household!)
I’m predicting a “buyer shortage” in the future.
But wouldn’t that just cause a preciptous drop in the price of candy?
It depends on how much it costs to feed a Unicorn.
Selling your house?’
First, pay the builder’s fee
You’d have to be an idiot to agree to a fee like that at all, let alone for a 99 year term. Its already illegal in some states, as I understand.
That being said, if I could buy the house of my choice (specifically a REO or short sale house) for significantly below current comps, I would cheerfully agree to give the seller a special lein that would entitle them to 50% of the upside “profits” (if any) if I resold the house within a very short and fixed time, say, three years. Upon the three year anniversary of purchase, the special lein would expire.
That might not be legal either, but if the details could be worked out, the possibility of a “dividend” (if you will), might inventivize the banks/lenders to turn those non-performing and deteriorating assets into cash a little more quickly than they are doing right now.
you will probably never see good job production, and high salaries, as long as the government forces the employer to provide so much protection for the worker.
My daughter has to pay $1,000 a month for an employee’s health insurance, $500 a month for her workman’s compensation, 9% for social security, and then hand a worker a $2,000 check.
She could hand her worker a check for $4,000 if she didn’t have to pay the other items!
So think of where the money goes!
Too the insurance company, to the worker’s compensation fund, to the government for social security, and to the government for income taxes.
No wonder the workers don’t have any money to spend.
That seems odd:
“$1,000 a month for an employee’s health insurance”
For a single employee? Where I work it’s $300 a month (for a single employee). And most places these days don’t pay for dependents or they only pay for a fraction of their coverage.
“$500 a month for her workman’s compensation”
What is this, a dynamite factory?
“9% for social security”
Last time I checked SS & Medicare combined were less than 8%.
who cares I could easily live on the $2000 a month after all that is deducted.
This story is why I think that the employment-based health insurance system needs to go bye-bye. The cost of the insurance is hard to control — all we hear about are rates going up, up, and up.
And, as I’ve said here before, I don’t think these rate increases are due to health care costs going up. It’s because the insurance companies have the power to raise rates, and to hell with the rest of us if we don’t like it.
Then there’s the personal angle: What’s happening to one of my cousins, who lost her job during cancer treatment. She’s been dealing with a recurrence of breast cancer, and the cancer has spread to her bones. Trying to get care without insurance has been, let’s put it nicely since this is a family blog, a challenge.
Az Slim
My heart aches for your cousin. I hope all of us in the “Army Of Women” (prevention, treatment, and cure - we sign up for the researchers to use us) can end this horrible epidemic. Next time I meet a Chemist who puts down the Environmental Working Group, I’m going to slap them silly. (That meet up just happened.) Any way to hook her up with the City Of Hope in So Ca? (They take no insurance cases.) You might email Dr. Love’s Foundation, and see if they can direct your cousin. I’m sad to hear about your cousin. Truly.
Az Slim-
The City Of Hope will take the case if you have no money to pay, IIRC. Check them out on your cousin’ behalf. Drugs and treatments are discovered there. It’s an amazing place.
Thanks wipeout, for letting us know about the Army of Women and the City of Hope.
hip-
If you see this, you’re welcome and it was my pleasure.
I was part of the Breast Cancer Action (fantastic non-profit, btw) writing campaign, to get growth hormone milk out of some brands of yogurt. We won our cause. I don’t know any women who doesn’t know someone, who hasn’t had BC touch their lives. I am BC Free, but I have a duty as a woman to turn this nightmare around.
My daughter has to pay $1,000 a month for an employee’s health insurance, $500 a month for her workman’s compensation, 9% for social security, and then hand a worker a $2,000 check.
She could hand her worker a check for $4,000 if she didn’t have to pay the other items!
There it is. The math. If we had universal health-coverage (at around $3500 per year in Canada, France, Germany, Japan source: NPR)
She would be taxed at about $292 per month but your daughter would be able to pay her $1,000 more per month leaving the said worker with
A NET GAIN OF $708 per month!
However, that $708 per month would not be going into Blue Cross’s marketing budget, their lobbyists, insurance broker middlemen, and CEO’s outrageous pay. Rather it would be going into the worker’s pocket.
Labor Day travel seen up nearly 10 percent: AAA
NEW YORK (Reuters) - The number of Americans expected to travel during the Labor Day weekend this year will rise 9.9 percent from 2009 as some aspects of the U.S. economy show signs of improvement, travel and auto group AAA said Wednesday.
Close to 34.4 million travelers will venture at least 50 miles away from home, compared with 31.3 million last year when the recession curbed holiday plans, AAA forecast.
About 10.3 percent more Americans will go by car this holiday weekend, while the number traveling by air will rise by 4.6 percent, AAA predicted.
The group said that while some economic indicators such as job growth have proved disappointing recently, positive signals for the U.S. economy from gross domestic product, household net worth and improved consumer confidence were prompting more Americans to take trips over the Labor Day holiday.
“While media reports on the state of the U.S. economy are mixed, many Americans are still interested in taking one more trip as the summer travel season comes to a close,” said Glen MacDonell, director of AAA Travel Services.
We recently discussed the decline in the amount of, ahem, junque mail coming to us. Well, it seems that movement of communications from print to electronic format has the printing industry all up in a lather.
Quote from the above linked story:
“The USPS filed an exigency rate case to increase postal prices on July 6, 2010. Their reasoning for this is that the recession couple with the continued migration of postal mail to electronic communications represents an “exceptional or extraordinary” circumstance that requires busting the price cap set forth by Congress in 2006.”
Methinks that, in the coming years, there won’t be as many printers. And I wouldn’t be surprised to see 6-day mail delivery go down to 3-day.
No kidding. I am IN the printing field, and our numbers are shrinking by the day. It is a rare week that we do not hear of one of our competitors closing their doors. You would think the bankruptcies would result in more work for the remaining firms, but not so. The work seems to be disappearing into the ether. Everyone at the plant just took a 30% pay cut and we have slashed our prices to the bone, and we are still losing money. The firm carries no debt and we own our building. Even so, the handwriting is on the wall …
I spend hundreds on printed business cards for myself. Last week my son’s girlfriend designed an identical card on a website and ordered 250 for fifteen bucks. I was amazed. Printers will be obsolete as soon as the rest of the geezers like me figure it out.
Unless you’re the one with the website and the streamlined setup.
slim, not much mail anymore pay all things on line… so 3-4 days a week delivery is ok, there will always be express mail.
But what they will cut is the Saturday window services just when people have the day off to mail things…making dropping a package at UPS a better deal
They already cut back my fav PO to 5 pm it used to be 7 pm during the week and 8 during the holidays, made it easy to jump in the car and mail a package after work…but no more everything is UPS nice free parking lot…I only use the USPO for media mail…
Good News! Don’t have to worry about starving:
Food price inflation lowest since 1992: USDA
http://finance.yahoo.com/news/Food-price-inflation-lowest-rb-3475577603.html?x=0&sec=topStories&pos=1&asset=&ccode=
(Ben) Something must be done about this! (/Bernanke)
Democrats move to shore up faltering recovery
A rapidly weakening economy threatens to undermine President Obama’s assertion that he has set the nation on a path to prosperity and, with barely two months until congressional midterm elections, Democrats find themselves with few options for reviving the faltering recovery.
The latest sign that the economy is losing steam: Home sales fell 27 percent in July, the steepest one-month drop since figures were first compiled in 1968, according to a report released Tuesday. Analysts had expected sales to decline following the expiration of a federal tax credit for home-buyers this spring, but the drop was nearly twice as large as forecast.
The housing report punctuated a wave of bad news that has been building all summer. The number of jobless claims has risen in each of the past four weeks and last week hit its highest point in nine months. Private-sector job creation is trending well below the level needed to keep up with population growth. Retail sales have also been disappointing.
Economists generally do not expect a dip back into recession, although many say the risk has grown with each new piece of disheartening data.
Obama and congressional Democrats have been working frenetically to counter the trend, winning a series of relatively small initiatives to extend unemployment benefits, avert state layoffs and cut taxes for firms that hire unemployed workers.
Home-builder Debt Carries Fewer Investor Protections.
Home-builders, beset by almost five years of declining sales, are proving the most likely U.S. industry to sell junk bonds without provisions typically included to protect buyers, Moody’s Investors Service said.
Lennar Corp., the third-largest homebuilder by revenue, and Los Angeles-based KB Home are among companies that sold high- yield, high-risk bonds since 2008 and didn’t include restrictions on the companies issuing new debt or curbs on dividends they could pay, Moody’s New York-based analysts Matthew Musicaro and Alex Dill said yesterday in a report.
Surging investor demand for higher returns allowed builders to omit typical investor safeguards even as their bonds underperformed the broader market, the analysts said. U.S. companies have sold $159.5 billion of junk-rated debt this year following a record $162.7 billion in 2009, according to data compiled by Bloomberg. Yields on the bonds are near the lowest since 2007.
“When the downturn began, banks gave homebuilders one waiver after another when they were violating covenants,” Joseph Snider, a New York-based analyst who covers homebuilders at Moody’s, said in a telephone interview. “When your most restrictive lender is giving you waivers right and left, you’re not going to agree to tighter covenants” for bondholders, he said.
“Surging investor demand for higher returns allowed builders to omit typical investor safeguards even as their bonds underperformed the broader market.”
“Omit typical investor safeguards? Now there’s a selling point, especially in this economy.
Sign me up! I’m going all in!
* COMMERCIAL REAL ESTATE
* AUGUST 25, 2010
Commercial Property Owners Choose to Default
By KRIS HUDSON And A.D. PRUITT
Like homeowners walking away from mortgaged houses that plummeted in value, some of the largest commercial-property owners are defaulting on debts and surrendering buildings worth less than their loans.
Angela Pruitt explains why some of the largest commercial-property owners are defaulting on debts and surrendering buildings worth less than their loans, just like homeowners walking away from mortgaged houses that plummeted in value.
Companies such as Macerich Co., Vornado Realty Trust and Simon Property Group Inc. have recently stopped making mortgage payments to put pressure on lenders to restructure debts. In many cases they have walked away, sending keys to properties whose values had fallen far below the mortgage amounts, a process known as “jingle mail.” These companies all have piles of cash to make the payments. They are simply opting to default because they believe it makes good business sense.
The Cannery at Del Monte Square in San Francisco, on which Vornado recently stopped making payments. Like homeowners before them, some companies are choosing to default on debt or to surrender buildings.
“We don’t do this lightly,” said Robert Taubman, chief executive of Taubman Centers Inc. The luxury-mall owner, with upscale properties such as the Beverly Center in Los Angeles, decided earlier this year to stop covering interest payments on its $135 million mortgage on the Pier Shops at Caesars in Atlantic City, N.J.
Taubman, which estimates the mall is now worth only $52 million, gave it back to its mortgage holder.
“Where it’s fairly obvious that the gap is large, as it was with the Pier Shops, individual owners are making very tough decisions,” he said.
These pragmatic decisions by companies to walk away from commercial mortgages come as a debate rages in the residential-real-estate world about “strategic defaults,” when homeowners stop making loan payments even though they can afford them. Instead, they decide to default because the house is “underwater,” meaning its value has fallen to a level less than its debt.
…
Atlantic City made the list of 10 dead cities in the U.S.
“Now known mostly for its gambling business, Atlantic City was dying before legislation allowed gaming companies to operate there. The city was created as a tourist location in the 1880s and a number of massive hotels were built there. Atlantic City’s hospitality industry also made it a favorite for trade shows and conventions. The Democratic National Convention was held there in 1964. The city’s appeal to tourists was damaged primarily by two things: the first was the availability of inexpensive air travel to southern resorts areas like Florida. Vacationers could fly from New York to Miami, Ft Lauderdale, and Palm Beach in less time than it took to drive to Atlantic City. The second,the rise of Las Vegas as the gaming capital of the world, made it the preferred destination for many conventions. Atlantic City got into the gambling industry in 1978–too late.”
~ David Stockman
“[N]ow there is no discipline, only global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve”.
Stockman also condemns the growth of the financial sector:
“The combined assets of conventional banks and the so-called shadow banking system (including investment banks and finance companies) grew from a mere $500 billion in 1970 to $30 trillion by September 2008″.
“But the trillion-dollar conglomerates that inhabit this new financial world are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could never have survived, much less thrived, if their deposits had not been government-guaranteed and if they hadn’t been able to obtain virtually free money from the Fed’s discount window to cover their bad bets”.
“Kotlikoff focuses more on the total of US debt, including unfunded “unofficial” debts and obligations. He puts the total at $202 trillion - an amount that clearly can’t be paid”.
“Let’s get real. The US is bankrupt. Neither spending more nor taxing less will help the country pay its bills”.
“Let’s get real. The US is bankrupt. Neither spending more nor taxing less will help the country pay its bills”.
And it continued:
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.
Stocks Recover in Later Trade; Dow Holds on to 10,000- (AP)
Bargain hunters picked through a beaten-down stock market Wednesday, helping major indexes recover from another slump triggered by disappointing economics reports.
~ Headline near years end: Dow holds 8000 thanks to bargain hunters, who really aren’t finding bargains, just think they are. While the big dogs skin them again.
The Financial Times
Focus sharpens on Fed chairman
By Robin Harding in Washington
Published: August 25 2010 19:32 | Last updated: August 25 2010 19:32
In the main hall at the Federal Reserve’s gathering in Jackson Hole, Wyoming, this weekend the theme will be the next decade of macroeconomic challenges, but in the corridors of the mountain resort all the talk will be of the next six months.
A steady decline in the economic data, coupled with sharp falls in the markets since the Fed’s surprise move on August 10 to stop shrinking its balance sheet, mean a ferment of interest in what the US central bank will do next.
The spotlight on Ben Bernanke, Fed chairman, will therefore be even brighter than usual when he opens the conference on Friday morning with a half-hour speech on the economic outlook and the Fed’s policy response.
To add to the drama, the Bureau of Economic Analysis is likely to highlight the faltering recovery just before Mr Bernanke stands up to speak, by revising second-quarter growth sharply downwards. Weak numbers on business inventories and construction spending – plus higher net imports than previously thought – mean that growth is set to be cut from the previous estimate of 2.4 per cent to as little as 1 per cent.
One priority for Mr Bernanke will be to explain the move to reinvest the proceeds of repayments from the Fed’s portfolio of mortgage-backed securities into Treasury bonds. He will want to emphasise that the Fed has not panicked about the outlook.
Most Fed officials agree with what James Bullard, president of the St Louis Fed, said recently: “The US outlook has been downgraded, but still remains positive – continued expansion is the most likely course going forward.”
…
EDITOR’S CHOICE
Sales of new US homes hit record low - Aug-25
Lex: US consumers: reining in spending - Aug-25
Video: US housing woes - Aug-24
US stimulus boosted growth by up to 4.5% - Aug-24
US home sales plunge to 15-year low - Aug-24
Editorial: Government-sponsored mess - Aug-16
Damn right! We needs mo QE. Burn this mutha down…
O’Neill Says `Disappointing’ U.S. Data May Spur New Fed Easing
Goldman Sachs Chief Global Economist Jim O’Neill said a spate of “disappointing” U.S. economic reports may prompt the Federal Reserve to embark on a fresh round of quantitative easing.
Recent reports on jobless claims and manufacturing point to slower growth in the world’s largest economy. Sales of existing houses plunged by a record 27 percent in July, figures from the National Association of Realtors showed yesterday.
“If we carry on with data like this, yes, it’s coming,” O’Neill said, referring to quantitative easing. He spoke in an interview on Bloomberg Television’s “InsideTrack” with Deirdre Bolton today. “September might be a little bit soon, but by October I would say for sure if the data carries on being as disappointing as it’s been.”
Yo wmbz:
How come they wont QE Credit cards rates…..what are we lepers or somthin’?
“O’Neill”
Isn’t he the Asian decoupling dude?
Markets don’t seem too decoupled just lately; more like they are all tethered to a lead wait that was dropped into the deepest part of the sea.
waitweight (never type when kids are fighting in the background…)Governments DO NOT default, they reschedule and declare that a solution. Problem solved.
Of course that is BS, but it takes a while for the market to figure it out.
Morgan Stanley Says Government Defaults Inevitable
By Matthew Brown – Aug 25, 2010 12:10 PM MT
Investors face defaults on government bonds given the burden of aging populations and the difficulty of increasing tax revenue, according to a Morgan Stanley executive director.
“Governments will impose a loss on some of their stakeholders,” Arnaud Mares in the firm’s London office wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” he wrote.
Rather than miss principal and interest payments, governments may choose a “soft” default in which they pay back debts with devalued currencies resulting from faster inflation or force creditors to take lower returns, Mares said in an interview.
Borrowing costs for so-called peripheral euro-region nations from Greece to Ireland surged today, resuming their ascent on concern that governments won’t be able to cut their budget deficits. Standard & Poor’s lowered Ireland’s credit rating yesterday on the rising cost of supporting nationalized banks.
Population trends may be a better predictor of the ability to meet obligations rather than debt as a percentage of gross domestic product, which doesn’t reflect governments’ available revenue and is “backward-looking,” Mares wrote.
From Jim Sinclair’s Mineset
“Circumstantial evidence, like when you find a trout in your milk.”
Taxable sales plunge set record in ‘09
August 25th, 2010, by Jan Norman, small-business OC Register
The 19% decrease in California taxable sales in the second quarter of 2009, compared to a year earlier was the largest ever recorded, according to the August edition of Economic Perspective from the State Board of Equalization.
California taxes retail sales of most products, such as furniture, cars and toys. A few categories that are excluded such as food, drinking water and purchases made with food stamps.
Taxable sales declined 20% in Orange County in the second quarter of 2009 compared to the same period in 2008.
To show how dire that three-month period was in this state, the second steepest drop was the first quarter of 1958, when California taxable sales dropped 7.3%. And that would have been on a much smaller dollar amount.
Yeah, these numbers are a year old, but it takes months sales tax data to be reported and processed.
The lost sales have been a problem for almost three years because California taxable sales have declined every quarter since the recession started in December 2007, the board says.
Taxable sales plunged 21.6% in Southern California from the second quarter of 2007 through the second quarter of 2009. The loss was higher in the Sacramento area, down 22.8%. The statewide average decline was 20.8%. Here are the regional comparisons:
“No major region escaped the Great Recession of 2009 unscathed,” the board reports.
Silly rabbit, you`re not in a union.
As president visits auto plants, he should address Delphi pensions
But amidst all the hoopla, 20,000 retired and current salaried employees of Delphi Corp. (spun off by GM in 1999) want to remind the president that we paid an added, unfair price. In the government’s preoccupation with getting GM quickly through bankruptcy, it decided last summer that our pension plan had to be seized by the Pension Benefit Guaranty Corp. (PBGC).
The pensions Delphi salaried employees worked a lifetime for — mostly during our careers at GM prior to its 1999 spin off of Delphi — have been slashed by as much as 70 percent for some of us. This has occurred at a time in our lives when it’s essentially impossible to adjust our retirement plans, sell our homes and downsize to free up equity to pay bills, and/or find jobs to offset the lost pension.
http://www.vindy.com/news/2010/jul/29/as-president-visits-auto-plants-he-shoul/ - 72k -
The miraculous market turnaround seemed way too quick. More carnage soon to come?
Stocks recover following weak home sales report
By STEPHEN BERNARD (AP) – 7 hours ago
NEW YORK — Stocks recovered from an early slump and are ending higher after traders picked through the market for beaten-down stocks.
The Dow Jones industrial average is ending up 20 points Wednesday after having been down as much as 102 points. The market opened lower following weak reports on new home sales and durable goods orders.
According to preliminary calculations, the Dow closed up 20, or 0.2 percent, at 10,060. The Dow had lost ground over the past four days.
…
San Diego prices still seem way overvalued to me, but to each his own I suppose.
It might be helpful to realize that five years ago, this writer was describing her hunt for Florida housing investment deals in the tailwinds of hurricanes.
It might also be useful to note that CA housing did not bottom out in the last cycle until 1996 or so — five years after the end of the recession. Since unemployment in San Diego just ticked up from 10.3% to 10.8%, I see little sign the current recession has ended. So I would wait five years or so, just to make sure I wasn’t catching a falling knife.
The Wall Street Journal
HOUSE TALK
AUGUST 25, 2010, 2:01 P.M. ET.
Should House Hunter Delay Purchase?
By JUNE FLETCHER
Q: I’m house-hunting, but with all the bad news coming out about the housing market, I wonder if I should wait a few months or even years. Do you think I should?
—San Diego
A: If you need a home, then keep looking. If you find a home that suits your needs and is reasonably priced compared to similar homes, make an offer. It doesn’t make sense to try to time the market—because nobody can. Unless you plan to stay in your home for only a year or two, you eventually will accrue some equity, even if you buy before housing in your area hits bottom. In the meantime, you will enjoy federal tax breaks, and avoid the rent hikes that are inevitable as demand for rental housing grows, fed by millennials entering the workforce, former homeowners who have gone through foreclosure and would-be homeowners like yourself who are waiting for home prices to fall.
Moreover, there are hopeful signs in the San Diego housing market. If you consider the July data for existing homes released by the National Association of Realtors, San Diego is performing better than the country as a whole—partly because it was one of the first markets to fall when the bubble burst. In the U.S., sales were down 25.5% in July and prices up 0.7% from a year earlier, but in San Diego, sales were down 15.2% and prices up 4.6%. Similarly, according to RealtyTrac, San Diego County is doing much better than the rest of the country when it comes to foreclosure filings, a leading indicator of a market’s health. In July, the county’s foreclosure filings, which include default notices, scheduled auctions and bank repossessions, reached 5,032, a 37% drop from a year earlier. By comparison, foreclosure activity nationwide fell only 10%.
Still, it’s premature to declare that San Diego’s market is definitely on the upswing, especially since consumer confidence remains shaky in the face of a weak job market. While the country’s overall unemployment rate stayed flat at 9.7% in July from the previous year, San Diego’s crept up to 10.8% from 10.3%. Other statistics are troubling, too: According to the San Diego Association of Realtors, the available inventory of unsold homes rose 23.3% in July from the year before, while the number of days homes remained on the market in July increased to 87 from 72 a year earlier for attached homes, and 71 from 69 for single-family homes for the same period. Meanwhile, affordability remains a problem. San Diego remains one of the most expensive markets in the country, with an average attached home price of $266,899 and single-family price of $506,540.
As you can see, the picture is too mixed for me—or anyone for that matter—to say with certainty where San Diego is in its housing cycle. But rest assured that it is a cycle, and that when it does become clear that the market is headed up, buyers will jump off the fence, prices will stabilize and interest rates may rise. So you may as well take the plunge now.
“San Diego’s crept up to 10.8% from 10.3%”
Did she mean to say ‘leapt up’? 0.5% is not a small increase over one month.
“It doesn’t make sense to try to time the market—because nobody can.”
I’m guessing I am not the only poster here who doesn’t buy into this hogwash. The U.S. housing market is inefficient and corrects at a snail’s pace. I have already timed it successfuly twice in my life, and I plan to continue timing it as long as I have a functioning brain and seeing eyes.
Rule Number 1 to timing the housing market: Ignore articles like the above that primarily serve to lure greater fools to make a poor financial decision. Use your noggin, exercise extreme patience and pay close attention, and you, too can successfully time the housing market.
Professor Bear, are you still awake?
So what’s your take on Brahms? For me it’s hard to imagine a more profound and emotional experience. His German “Requiem” is not really a Requiem at all but rather a choral affirmation of the human spirit.
Der Gerechten Seelen sind in Gottes Hand
Und keine Qual ruhret sie an!
Building again and again in the fugue.
“So what’s your take on Brahms?”
He is my favorite composer. My wife and I heard Ein Deutsches Requiem performed by the St. Louis Symphony Orchestra on one of our first dates. Last spring I heard Pinchas Zukerman and his wife perform the Brahms Double Concerto with the Oregon Symphony Orchestra.
So I guess you could say I disagree with the late-19th century BSO critic’s take on Brahms’ music.
Your comment about heading for the exits inspired my question.
I made the pilgrimage in 1985 when I took a vacation in Austria. I stopped at the open air market over the covered portion of the Wien river in Vienna to buy some flowers and then took the tram to the great cemetary to the SE of town. It all seemed familiar to me, probably because portions of the film The Third Man were filmed there. You turn a corner and there it is, the musician’s special place. Beethoven is buried there, and about five graves over is Brahms. A group of Lehars and Strauses fill out the area, and there is a statue erected to the memory of Mozart because no one really knows where he’s buried. IIRC Haydn is buried down at Esterhazy.
It’s difficult to put flowers on Beethoven’s grave because it is so covered with them by the faithful. It is somewhat easier to find a spot on Brahm’s grave. I set up my camera on a tripod, set the timer, and took a picture of me placing flowers on Brahm’s grave.
Vienna is my favorite city in Europe. Unlike Rome, it was the center of an empire within human memory. I was traveling alone and single people don’t get their own table in Europe. One evening I was seated with an elderly couple and spoke with them as best I could with my limited high school German. She was a young girl in the closing days of WWI and actually saw the last Hapsburg Emperor Carl go by in his carriage. She recalled how handsome he was. Vienna was indeed the center of empire within human memory.
Denis:
I listened and it sounded so depressing….7 movements…this I can follow along with..
http://www.youtube.com/watch?v=hZ9qWpa2rIg
Brahms was one of the most important “crossover” musicians of all time, melding Germanic structure with Hungarian folk music memes. If you are unfamilar with his work, probably the best introduction is his set of Hungarian Dances.
Since you are a fan of zydeco music, may I suggest the greatest of all violin concertos, the Brahms violin concerto in D Major opus 77? Much of it, especially the finale, is written in what one could call “hot licks fiddle music” style. Brahms would probably resonate with a fan of bluegrass or klesmer music more than a fan of zydeco but give it a try.
Thanks Dennis:
I am Hungarian so i do know about our folk history, Quite a few years ago I asked a neighbor pick out 2 hours worth of great classical music to make a cocktail and dinner cd for some really high end weddings i was doing.
Of course I knew about Bach from the LP Switched on Bach by Walter Carlos done on the moog synth. So i wound up with some great cd’s and we programmed it like a radio station 3 songs that build up then 1 slow one like the Requiem
He was really hot on this gal though:
http://www.youtube.com/watch?v=zhFcBGQLehw
D Major opus 77
The Associated Press
August 25, 2010, 4:21AM ET
China shares retreat as housing curb fears linger
SHANGHAI
Chinese shares retreated Wednesday following Wall Street’s losses, led by real estate developers as concern about government curbs on housing sales lingered.
The benchmark Shanghai Composite Index fell 53.73 points, or 2 percent, to close at 2,596.58. The Shenzhen Composite Index for China’s smaller second exchange dropped by 2.1 percent to 1,111.52.
Investors were spooked by U.S. data showing July sales of previously occupied homes hit a 15-year low and possible new moves by Beijing to cool China’s housing market. A vice premier spoke twice this month about the need to curb speculation and news reports Tuesday said the government is studying a tax on property sales, which might hurt developers’ profits.
“It showed the government’s determination to cool housing prices remained,” said Huang Xiangbin, an analyst for Cinda Securities in Beijing.
…
Bill Black rails on the banksters. Thank you, Bill Moyers, for staying true to principles of investigative journalism which your profession has largely abandoned.
Systemic Wall Street fraud
Where’s my pitch fork!???
Zillow.com chief economist estimates there are approx 3.8M Americans who have a pent up demand …. to liquidate their homes, and that they will do so at the first sign of the housing market stabilizing. This amounts to a year’s inventory on top of the existing year’s inventory out there (which does not include the shadow inventory held by banks who let them trickle out).
http://www.bloomberg.com/video/62409982/
Geithner and Bernanke’s Possibly Criminal Roles
Lehman Brothers Scandal Rocks the Fed
By Mike Whitney
March 15, 2010 “Information Clearing House” — After a year-long investigation, court-appointed bank examiner Anton Valukas has produced a deadly 2,200 page report which details the activities that led to the Lehman Brothers bankruptcy. The report is a keg of dynamite. The question now is whether anyone in government has the nerve to light the fuse. Valukas provides powerful evidence that Lehman executives were involved in “balance sheet manipulation” by implementing an arcane accounting procedure called “Repo 105” which masked the bank’s true financial condition from investors and regulators.
According to Valukas, Lehman was “Unable to find a United States law firm that would provide it with an opinion letter permitting the true sale accounting treatment” using Repo 105. So, Lehman executives went outside of the country in an effort to enlist the support of a London law firm that would approve the procedure.
It is impossible to overstate the significance of Valugas’s findings. The report exposes the opaque but central role of the repo market which provides essential short-term loans for financial institutions. (Lehman used repos to conceal the full extent of its collapse, by dint of the amount of leverage it was using, meaning the pitiful asset anchor tethered to a vast zeppelin of debt) More importantly, it shows the cozy and, very probably criminal relationship between the country’s main regulatory bodies and the Wall Street behemoths. The activities of the New York Fed (NYFRB), which at the time was headed by Timothy Geithner, is particularly suspect in this regard. The report should trigger an immediate Congressional investigation, probing the whole affair and most importantly the role of the Fed.
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AIG Probe May Lead to Criminal Coverup Charges, Barofsky Says
By Richard Teitelbaum - Apr 27, 2010 9:01 PM PT
…
The TARP watchdog has also criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of the process by which insurance giant American International Group Inc. was saved from insolvency in 2008, when Geithner was head of the Federal Reserve Bank of New York.
The secrecy that enveloped the deal was unwarranted, Barofsky says, adding that his probe of an alleged New York Fed coverup in the AIG case could result in criminal or civil charges.
In Senate Finance Committee testimony on April 20, Barofsky said SIGTARP would investigate seven AIG-linked mortgage-related securities similar to Abacus 2007-AC1, the instrument underwritten by Goldman Sachs Group Inc. that is at the center of a U.S. Securities and Exchange Commission lawsuit filed against the investment bank on April 16.
Leading the Charge
“I’ve been in contact with the SEC,” he told the committee. “We’re going to coordinate with them, but we’re going to lead the charge. We’re going to review these transactions.”
Barofsky and Geithner’s offices have gone toe-to-toe over AIG, alleged lax oversight of TARP funds and even over the question of whom Barofsky reports to.
Barofsky, a former federal prosecutor who was once the target of a kidnapping plot by Colombian drug traffickers, says he’s also looking into possible insider trading connected to TARP. He says his agency would want to know if bankers bought stock in their companies before it was made public that their institutions would get TARP money, for example.
“There was a time when, if you got that word the stock price would go up, and if you were to trade on that information prior to the public announcement, that would be classic insider trading,” Barofsky says.
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I hope the Fed runs out of ammo soon, so market forces can finally catch up with the banksters who inflicted this financial disaster on the American people.
* OPINION
* AUGUST 26, 2010
The Fed Is Running Low on Ammo
It still has options if more monetary easing is needed. But they’re not very effective.
By ALAN S. BLINDER
You may have noticed that the complexion of the U.S. economy has turned a bit sallow of late. The Federal Reserve definitely has. At its Aug. 10 meeting, the Federal Open Market Committee (FOMC) shifted attention away from its former concern—how to tighten a bit—and toward a new concern: how to loosen a bit. By central bank standards, this turnabout came at warp speed.
Chairman Ben Bernanke has told the world that the Fed is not out of ammunition. It still has easing options, should it need to deploy them. The good news is that he’s right. The bad news is that the Fed has already spent its most powerful ammunition; only the weak stuff is left. Mr. Bernanke has mentioned three options in particular: expanding the Fed’s balance sheet again, changing the now-famous “extended period” language in its statement, and lowering the interest rate paid on bank reserves. Let’s examine each.
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WSJ Blogs
MarketBeat
* Housing Data Stink. Home-builders … Rally?
* Data Points: Europe
* August 25, 2010, 11:34 AM ET
Holding Below Dow 10000 a Tall Order
By Tomi Kilgore
The funny thing about the stock market is that if it seems a little too easy, there’s probably something wrong.
With all the negative news on the economy out lately, it’s no surprise that the Dow Jones Industrial Average dipped below the psychologically significant 10000 level before rebounding again. While a close below that level would seem to open up the downside for a quick test of support at the July 2 low of 9614, bears have good reason to tread cautiously.
As of Tuesday, the Dow had made 24 forays below 10000 since the beginning of the year, but closed below that level just 11 times. Of those 11, nine were concentrated in a four-session stretch from June 4 to June 9 and a five-session streak from June 29 to July 6. Each time, however, the sub-10000 level was rejected viciously, with the Dow soaring 273 points on June 10 and 275 points on July 7.
As RBC Wealth Management technical analyst Bob Dickey says, while all the fundamental and technical indicators make it seem pretty obvious that stocks will be heading lower, “the market is a sneaky beast that seldom performs in a way that the majority expects.”