August 27, 2010

Bits Bucket For August 27, 2010

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Comment by wmbz
2010-08-27 05:16:45

Snapshot of economy about to get a lot bleaker
Government likely to confirm what many already know: the economy is on life support.

WASHINGTON (AP) — The government is about to confirm what many people have felt for some time: The economy barely has a pulse.

The Commerce Department on Friday will revise its estimate for economic growth in the April-to-June period and Wall Street economists forecast it will be cut almost in half, to a 1.4 percent annual rate from 2.4 percent.

That’s a sharp slowdown from the first quarter, when the economy grew at a 3.7 percent annual rate, and economists say it’s a taste of the weakness to come. The current quarter isn’t expected to be much better, with many economists forecasting growth of only 1.7 percent.

Such slow growth won’t feel much like an economic recovery and won’t lead to much hiring. The unemployment rate, now at 9.5 percent, could even rise by the end of the year.

Comment by pressboardbox
2010-08-27 05:56:49

I wonder how much GDP “growth” was due to investment banking “trading”? I am guessing quite a bit. Does Fed printing and spending count in GDP calculations?

Any government “number” is pure propaganda.

Comment by pressboardbox
2010-08-27 08:14:34

How much GDP was due to “Flash-Trades”?

American manufacturing output ranked by volume:

1) Smoke

2) Mirrors

3) Hot Air

4) Weapons/Aircraft/Crappy Cars

5) Rotten Eggs

Comment by DebtinNation
2010-08-27 10:50:37

You forgot semi-celeb reality TV.

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Comment by Professor Bear
2010-08-27 06:23:33

Stock market futures are rallying on the news that the GDP growth rate was “only” revised down to 1.6%: BETTER THAN EXPECTED. :-)

Comment by arizonadude
2010-08-27 06:24:41

I think it will sell off towards the close.

 
Comment by GrizzlyBear
2010-08-27 09:27:07

This rally is a joke.

Comment by OK_land_lord
2010-08-27 11:09:05

Un - Friggn beee–leavable..

It makes no sense. GDP downgraded significantly. Market Ralies????

Can someone please explain?

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Comment by RioAmericanInBrasil
2010-08-27 11:15:08

It makes no sense. GDP downgraded significantly. Market Ralies????

Can someone please explain?

Once upon a time, a long time ago, there was a simple, more honest form of free-market capitalism………

 
Comment by packman
2010-08-27 11:19:20

Can someone please explain?

The downgrade was expected, based on more recent data. However the published value ended up being higher than the expected downgraded value.

Seriously.

 
Comment by ecofeco
2010-08-27 13:16:38

Sounds about right.

 
 
 
 
Comment by aNYCdj
2010-08-27 07:02:24

wmbz:

my on the street observation…even spammers are not responding to my resume anymore, i used to get 30-40 even 70 “unlimited income” “be your own boss” “make $100K with a fortune 500 company your first year” type job offers a week….now its maybe 1or 2 a day…

Comment by DebtinNation
2010-08-27 10:53:07

You know, I had the same problem with my resume, until I went to this Russian website for cheap Viagra. You can join too and experience an instant increase in pleasure at *** dot com.

Comment by aNYCdj
2010-08-27 14:37:33

geez Bernake could use a little increase in blood flow to his………………………..brain?????

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Comment by GrizzlyBear
2010-08-27 09:25:56

Sounds like a good enough reason as any for a stock market rally!

 
 
Comment by wmbz
2010-08-27 05:19:14

Foreclosures Fall, but Early Delinquencies Rise ~ NYT

The foreclosure crisis might have finally peaked in the first half of this year, but with the continued weakness in the economy and the recent deterioration of the housing market, the gains may prove fleeting.

For the first time since 2006, the number of loans in the process of foreclosure fell in the second quarter, the Mortgage Bankers Association said Thursday. Some other measures of delinquency also dropped.

But the group’s chief economist, Jay Brinkmann, said in a news briefing that it was premature to conclude the improvements would persist. “It’s more of a hope than anything at this point,” he said.

The problem is no longer high-interest sub-prime loans, many of which have worked their way out of the system. The critical area now is prime loans, where defaults are driven by stubbornly high unemployment.

“It takes a paycheck to make a mortgage payment,” Mr. Brinkmann said.

Comment by combotechie
2010-08-27 05:25:38

“The critical area now is prime loans, where defaults are driven by stubbornly high unemployment.”

And then there’s that pesky mortgage reset chart.

Comment by Blue Skye
2010-08-27 05:59:06

Heading into the option arm resets. What inning are we in now?

Comment by Al
2010-08-27 06:28:12

I wonder how much of a difference option arm resets will make any more? I’m betting for a lot of them, payments aren’t being made anymore. Or they’ve been converted to another type of loan (IO, FHA, etc) which isn’t being paid anymore.

If I were a wagering type of guy, I’d wager we’re past the halfway mark for loan defaults, though quite early in the process of recognizing the defaults and losses.

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Comment by Blue Skye
2010-08-27 06:40:46

On the contrary, the option ARM was designed for those who could not afford the house. Hang in there with the minimum payments until the rising equity makes you rich. Large penalties for refinancing anyway. Hard to refinance when you’re underwater. House values have come down 30% since these things were written. A lot of these folks have less income now than when they signed. Huge potential ugliness.

 
Comment by SouthFL
2010-08-27 06:45:04

Most option arms had at least a one year refinance penalty - I know of several FBs here in Miami that had a $50,000 refinance penalty in the first year. So if they bought in 2007, they couldn’t refinance until 2008 but by then wasn’t the mortgage community on lockdown? I think the last days of mortgage disco was in 2007. I don’t think as many of these option ARMs in bubbly areas are refinanced as people might think.

 
Comment by oxide
2010-08-27 07:01:47

Blue Skye is right. The first-level thinkers in the MSM are going to blame foreclosures on high unemployment, but the truth is that these ARM’s were going to explode even if everybody kept their jobs. In fact, they would explode even if people kept their jobs AND got a raise.

And on a side note, number of foreclosures is being hidden in the shadow inventory. I’m more interested in the number of NODs, which would tell us the number of shadow squatters.

 
Comment by aNYCdj
2010-08-27 07:10:10

Ox Blue:

Contrary op: The monthly bill would not skyrocket as long as the feds have super low interest rates since most are tied to the fed funds or Libor……..sure you have to amortize but it would be a total nuclear disaster if fed funds were at 4%

 
Comment by Prime_Is_Contained
2010-08-27 08:16:10

“I’m more interested in the number of NODs”

Except that the number of NODs is manipulated as well. If they don’t file a NOD, you won’t see it in your stats, even if the FB is not paying.

I know of one instance of this in my circle of friends—rational default 9mo ago, but no NOD yet.

 
Comment by Northeastener
2010-08-27 08:30:36

It depends on what index the ARMS are based on… my ARM resets in Dec and is based on the US LIBOR 1yr index. My interest rate will drop to almost 3% when is resets. I’ll see a cosiderable savings for taking the risk of a variable rate loan.

Bottom line, traditional ARM resets may actually improve the economy because many will have more money in their budget after a reset and not have to incur the expense of a refi. Of course, that is predicated on whether they can afford the mortgage even after the reset and how upside down they are. And you still need an income stream to pay a mortgage…

 
Comment by drumminj
2010-08-27 08:52:37

My interest rate will drop to almost 3% when is resets. I’ll see a cosiderable savings for taking the risk of a variable rate loan.

My (now ex) g/f has a similar scenario, but with a HELOC as her 2nd. She got lucky that rates have been pushed this low, and is benefitting from ZIRP

 
Comment by Blue Skye
2010-08-27 09:00:57

Option ARM. keyword “option”. You have the option to pay less than the interest each month, letting the difference add to the principle. This is how many bought houses that they could not afford. When the “option” period is over, the thing is double unaffordable. It’s a time bomb.

 
Comment by DebtinNation
2010-08-27 10:58:52

“my ARM resets in Dec and is based on the US LIBOR 1yr index”

That’s all well and good, but I heard something like 80% of the people in CA that had option ARM’s were making the minimum payments. (Makes you wonder if the other 20% were making payments at all.) ;-)

Someone correct me if I’m wrong, but I believe if people are making just the minimum payments, not only does the interest rate reset (which in many cases wouldn’t be a big deal), but that the payment resets to become amortizing.

 
 
 
Comment by Jim A.
2010-08-27 06:20:51

Yes, the default level for prime loans is much lower than for much of that subprime poo, but there are LOTS more of ‘em and for the most part they’re bigger loans, so the total dollar value of losses is probably higher. Contained? - Not so much.

Comment by Ben Jones
2010-08-27 06:36:28

‘The critical area now is prime loans, where defaults are driven by stubbornly high unemployment’

It’s very interesting to watch the media and special interests spin every development this way and that. Sure, jobs and prime loans are playing a role here, but a lot of these people simply paid too much for the houses.

I was listening to NPR yesterday go on about why people aren’t buying houses. Well, the tax credit expired, we were told. But what about these historically low interest rates? Greg McBride from Bankrate came on to explain that a lump sum is more attractive than the benefits of low rates.

This was mentioned by a poster recently, but what about the fact that houses are still way too expensive in 95+% of the markets? No recall of the decade plus run-up in prices, or the fact that prices are 2,3 or more times what they were before the mania began?

Need I mention that the PTB are actually trying to keep the correction from running its course? Come on media! This is no head scratcher. You guys are letting us down.

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Comment by packman
2010-08-27 06:53:23

+1

The fact that prices are still high relative to historic norms is hardly ever mentioned in any place in MSM - really no where than I can recall recently. Only on the fringes of the media - opinion pieces, forums, blogs, etc. - is this mentioned.

 
Comment by oxide
2010-08-27 07:06:11

a lump sum is more attractive than the benefits of low rates.

There was a classic phych experiment from long ago, when the researchers asked children: would you like one cookie now or two cookies this afternoon? The kids invariably took the one cookie now. The tragedy is that adults aren’t much better.

But yeah, you would think that we would have broken out of the howmuchamonth mentality by now.

 
Comment by packman
2010-08-27 07:18:21

There was a classic phych experiment from long ago, when the researchers asked children: would you like one cookie now or two cookies this afternoon? The kids invariably took the one cookie now. The tragedy is that adults aren’t much better.

It would be interesting to see such an experiment done on people of various economic philosophical views.

I could guess the results.

(Yes I know - opening a big can of worms here.)

 
Comment by Al
2010-08-27 07:32:27

Of course both high prices and economic troubles work together; it’s not an either/or. For instance, if family income for my household were to drop 30%, the mortgage could continue to be paid indefinitely. Many folks that overpaid couldn’t take a 2% drop, or worse yet were reliant on 5% raises. The MSM should be talking about the high cost of housing, and how people who chose to buy left themselves vulnerable to even slight set backs.

 
Comment by Ben Jones
2010-08-27 07:35:02

‘The fact that prices are still high relative to historic norms is hardly ever mentioned in any place in MSM’

IMO, the govt/media have built this fantasy that the economy can be revived by people buying houses. It’s just not so. There have been some editorials along these lines, and I heard someone on NPR (yes, I know but that’s the only news I can get while driving) say that houses are an ‘over-leveraged, illiquid asset’. The host almost had a heart attack.

Once you get into this discussion, it becomes obvious that the entire govt economic plan is doomed to fail. Sure jobs are important. (I think that has been mentioned here a few times). But housing does not produce net jobs. The simple fact is that lower house prices are the solution, not the problem. How low? Stop messing with the purchase variables, supply/demand and let the consumer decide.

 
Comment by Ben Jones
2010-08-27 07:44:27

‘The MSM should be talking about the high cost of housing, and how people who chose to buy left themselves vulnerable to even slight set backs’

‘Many folks that overpaid couldn’t take a 2% drop’

This gets at something very important about the current govt policy. I have mentioned that Fannie and Freddie are offering zero down loans on the very houses they have foreclosed on! (There has to be a greek tragedy in there somewhere, but anyhoo).

So now we hear the Mark Zandi’s of the world telling us we are in a ‘double dip’ with housing prices. Guess what? These zero downers are toast and will be walking away by the thousands. So I ask AGAIN: how do thousands of additional foreclosures/ruined family balance sheets help this situation?

 
Comment by jetson_boy
2010-08-27 08:00:37

THANK YOU for re-stating the obvious. Indeed- home prices are still way too high, and especially in places like the Bay Area. I was even mentioning this here the other day. I even got a few responses stating that places like the area almost have a “right” to be expensive because they are special in x number of ways. But the point I was trying to make was that even so, the prices are still well above and beyond what even the typically higher salaries here can afford.

As I’ve mentioned my wife and I do fairly well financially. Enough so that we ’should’ be able to buy here. Yet even so, and even after a supposed ‘crash’ in values, it would still be extremely risky for us to buy. The only way we could do it and be somewhat safer is to put down the vast bulk of the savings we’ve made over the last 7 years on a down-payment. Even then, the mortage would still be uncomfortably large and at that point I could have easily just bought a much better place in another city and state outright with some leftover.

The fact is that we waited for years for the market to correct. With all the tax incentives as well as what I can’t help but feel is a large population of over-achieving risk takers who even now seem willing to buy a house as soon as they have even a tiny remote chance of miraculously squeezing into a loan they can only afford via putting down every penny and maybe borrowing from every family member, prices have not really come down all that much.

Yet if you listen to the news you’d think houses are all at screamin’ bargains everywhere and its this big ‘mystery’ as to why sales are as bad as they are.

The answer is simple. Prices must come down.

 
Comment by polly
2010-08-27 08:12:18

NPR did another segment of that series this morning. This time it was the personal angle. The main example was two people, formerly engaged, who bought a house together for $159K (I think). They subsequently cancelled the wedding, but neither can afford to move out and still pay for their half of the mortgage. She tried but realized she couldn’t afford it. He wanted to move to CA to try to get a job but didn’t want to leave her alone trying to cover the whole payment. I cannot for the life of me figure out why the reporter didn’t ask them if they had thought about walking away.

Oh, and it seems living with your former fiancee is a real damper on the dating life even if you now have separate bedrooms.

 
Comment by Prime_Is_Contained
2010-08-27 08:18:55

“Need I mention that the PTB are actually trying to keep the correction from running its course? Come on media! This is no head scratcher. You guys are letting us down.”

+1eGoogle.

 
Comment by The_Overdog
2010-08-27 08:27:27

There was a classic phych experiment from long ago, when the researchers asked children: would you like one cookie now or two cookies this afternoon? The kids invariably took the one cookie now. The tragedy is that adults aren’t much better.

——————–
This is modern society in a nutshell.
The kids take one cookie, and get lambasted for not taking two. ‘Eat in moderation- learn some control you fatty’ - ‘taking 2 cookies means you understand compounded interest’.

Homer Simpson: I’m sending mixed messages! I love you but I’m going to kill you boy!

 
Comment by polly
2010-08-27 08:27:32

I’ve said it before and I’ll say it again. The official governmetn sactioned refi’s, however many of them have actually have been approved, are supposed to be pegged to 31% of GROSS pay. On my current salary, 31% of my gross pay is two thirds of my take home (with certain expenses like health insurance, 401k, etc already taken out) if you only count two biweekly paychecks to each month (I mentally allocate the extra two per year to my Roth). I pay approximately half of that for rent and my heat, electricity, trash collection, water/sewer, security, package acceptance service, etc. is included.

People with more than 2 or 3 expenses like student loans, car payments, childcare costs, saving for college, uninsured medical costs, other transportation costs, costs related to caring for aging parents, house repairs, etc. will NOT be able to afford those payments long term if they don’t start getting significant, steady increases in income. It is not a sustainable payment. Not 31% of gross. Being in a lower tax state/county would help, but not enough. Using really cheap, low quality child care might help too. Oh, and abandoning all shopping and eating out and personal grooming services will help, but it won’t goose the economy.

I don’t know who designed the package, but they needed to run some actual numbers. If they did, then they needed to run more or pay closer attention to what they saw, because it is not hard to figure out the numbers don’t work.

 
Comment by measton
2010-08-27 08:36:53

A bird in the hand is worth two in the bush.

If your hungry a cookie now might be worth more than 2 cookies in the future.

Ben
The simple fact is that lower house prices are the solution, not the problem.

Correct, but unfortunately lower prices are not the solution for rich bankers.

 
Comment by cactus
2010-08-27 08:47:22

The only way we could do it and be somewhat safer is to put down the vast bulk of the savings we’ve made over the last 7 years on a down-payment. Even then, the mortage would still be uncomfortably large and at that point I could have easily just bought a much better place in another city and state outright with some leftover. ”

ditto

 
Comment by Lionel
2010-08-27 08:52:22

“There was a classic phych experiment from long ago, when the researchers asked children: would you like one cookie now or two cookies this afternoon? The kids invariably took the one cookie now. The tragedy is that adults aren’t much better.”

Kind of my field. I believe this experiment was done at Berkeley. The results aren’t as you write. Many children did chose to take the two cookies later. It was a longitudinal experiment, and what the results showed was that the children who waited to have the two cookies did MUCH better in life (jobs, relationships, etc.) relative to the children who ate the cookie immediately. The cookie experiment proved a much more accurate indicator of success than more traditional modes of assessment.

 
Comment by packman
2010-08-27 08:56:57

A bird in the hand is worth two in the bush.

That saying applies to risk factors - i.e. the benefit of two birds minus the risk of not being able to catch them is less than the benefit of 1 bird already caught.

In the case of the 1 vs 2 cookies experiment, I would imagine it was clear 2 cookies were a certainty. (At least I would hope, or else the experiment would be invalid).

So - not a good analogy IMO.

 
Comment by drumminj
2010-08-27 08:59:27

Oh, and it seems living with your former fiancee is a real damper on the dating life even if you now have separate bedrooms.

I don’t know…I dated a girl who was separated and in the process of divorce. Turns out she was still living with her (legally still) husband. It was a little weird, but she seemed to not be constrained. She simply asked him to leave when she planned to have me over…I even spent the night a time or two.

Yeah, I still kind of feel dirty about that whole thing, but….eh :)

 
Comment by packman
2010-08-27 08:59:29

polly - good point regarding mortgage vs. pay ratios. The traditional ratios are from years past, when there was a lot less overhead (e.g. taxes and fees for everything under the sun, plus all the debt payments you mention that were a lot less prevalent) than there is today.

 
Comment by packman
2010-08-27 09:00:30

Lionel - got a link to that experiment perhaps? Off the bat I don’t see it from a google search.

 
Comment by packman
2010-08-27 09:03:35

P.S. One of the three thesis in the book “The Road Less Traveled” is close to what’s being discussed - having more success and happiness by delaying gratification. Though in that book it proposes that just the act of delaying it brings long-term happiness, not the aspect of getting more later vs. less now.

The opposite of the “life is uncertain - eat dessert first” mentality.

 
Comment by polly
2010-08-27 09:09:16

Packman,

Plus many more households were receiving all their income from only one salary so the other adult, generally the wife/mother, had much more time available for child care, cooking, cleaning, etc. Heck my mother even made some of my clothes. Not the ones I was likely to wear mind you, but some of them. Also, a person who spends most of her time on household needs is much more likely to be price sensitive. If you have the time, you will go to the store where X is on sale. If you don’t have time, you either don’t know where X is on sale, or can’t take the time to go there. I use the internet to check what is on sale at the various grocery stores in the area, but I doubt that many of my colleagues do.

 
Comment by RioAmericanInBrasil
2010-08-27 09:25:57

the results showed was that the children who waited to have the two cookies did MUCH better in life (jobs, relationships, etc.) relative to the children who ate the cookie immediately.

But the kid who did the best, bundled and securitized a portion of the future 2 cookie pools and traded them to the 1 cookie kids for part of their cookie.

 
Comment by varelse
2010-08-27 09:34:07

“In the case of the 1 vs 2 cookies experiment, I would imagine it was clear 2 cookies were a certainty. (At least I would hope, or else the experiment would be invalid).”

Guaranteed by who? I was a born skeptic. I probably would have taken the one cookie now because I wouldn’t trust the 2 cookies later even if the person pinky sweared.

 
Comment by packman
2010-08-27 09:37:38

Plus many more households were receiving all their income from only one salary so the other adult, generally the wife/mother, had much more time available for child care, cooking, cleaning, etc.

Excellent point. I’ll add to that - many two-income families spend a lot on day care (often thousands of $$ per year). That’s not factored into any gross pay vs. mortgage equation - or even a net pay vs. mortgage equation.

 
Comment by aNYCdj
2010-08-27 09:45:46

This is why lots of peeps want to work at Walmart….they are open 24/7 to lessen those expenses.
================
day care (often thousands of $$ per year).

 
Comment by GrizzlyBear
2010-08-27 09:49:00

Ben Jones posted:

“IMO, the govt/media have built this fantasy that the economy can be revived by people buying houses. It’s just not so.”

I cannot count how many times I have heard “experts” in the MSM claiming that housing ALWAYS leads an economic rebound. I do not know where they are getting this info, but it is professed as the gospel.

 
Comment by Jim A.
2010-08-27 09:57:34

Jetson-boy– yes, in most markets, prices are still too high by almost any standard that you can measure them by. I’m don’t know much about the bay area, but I’d guess that the same thing is true there, especially in upper end markets because in most areas, the upper end has been slower to fall. But I never meant to imply that somehow in some areas there was some sort of “right” for prices to be higher. What I was trying to point out is that is some places (NYC and SF are the cannonical examples) a large number of people are willing to devote a larger percentage of their incomes on housing than is the norm nationwide. Landlords and sellers can’t charge more than renters and purchasers will agree* to pay. You have to live somewhere, but not in a particular neighborhood or even city.

*’cause the bubble is proof that some will agree to pay more than they are willing and able to pay.

 
Comment by GrizzlyBear
2010-08-27 10:08:29

“I dated a girl who was separated and in the process of divorce. Turns out she was still living with her (legally still) husband. It was a little weird, but she seemed to not be constrained. She simply asked him to leave when she planned to have me over…I even spent the night a time or two.”

Perhaps you can market that to the Jerry Springer show.

 
Comment by DebtinNation
2010-08-27 11:08:39

“The fact that prices are still high relative to historic norms is hardly ever mentioned in any place in MSM”

Packman, be grateful! Two years ago, they weren’t even mentioning a housing bubble! (They’re a little slow on the uptake).

“Many folks that overpaid couldn’t take a 2% drop”

Very true, and it’s inevitable that these same people living on the very margin of life never considered the “not IF but WHEN” scenario of a new roof, a two-week illness, etc.

 
Comment by Anonymous Coward
2010-08-27 12:56:17

Well, if the “cookie now” is still warm and there’s no guarantee of a fresh batch later, personally, I’ll take one fresh, warm cookie over two cold, slightly stale cookies later…

 
Comment by X-GSfixr
2010-08-27 14:21:48

When my company was bought out by a bunch of New York shysters, we were given the option of taking a buyout of out Vacation/PTO from our old company (one cookie now), or rolling it into our “new company” (cookie later)

I took the cookie now. Chief Pilot opted for the Cookies later.

Company files Chapter 11 in 16 months. Bye-bye “Cookies Later”.

Moral of the story: If you don’t have 100% control of it, you don’t “own it”.

 
Comment by aNYCdj
2010-08-27 14:42:00

Well lots and lots of people here don’t even have a drivers license, so no need for a car and they can devote more to rent.

————
NYC and SF are the cannonical examples)
a large number of people are willing to devote a larger percentage of their incomes on housing than is the norm nationwide

 
Comment by measton
2010-08-27 15:30:09

I took the cookie now. Chief Pilot opted for the Cookies later.

Company files Chapter 11 in 16 months. Bye-bye “Cookies Later”.

Moral of the story: If you don’t have 100% control of it, you don’t “own it”.

Yep,
Which child does better in life depends on what kind of country they live in. From the 1950′2 to 2000 you were mostly better off trusting to get 2 cookies later. I’m suspect that the two cookie in the future kids won’t fare so well in the near future.

 
Comment by Red Beach
2010-08-27 16:47:49

“I took the cookie now.”

Yeah, I think the kid/cookie experiment doesn’t address the possibility of the two cookies not being available regardless…

 
Comment by neuromance
2010-08-27 18:21:29

IMO, the govt/media have built this fantasy that the economy can be revived by people buying houses. It’s just not so.

They do it because they have no real answer. They want to feel like they are in charge, and they want people to believe they have the answers. If they came out and said, there’s going to be no real sustainable increase in standard of living until:

1) China unpegs the yuan from the dollar and
2) our domestic industry becomes more competitive and 3) Americans get some sustainable savings combined with sustainable spending

They’d all lose their jobs because none of those things are going to happen anytime soon.

 
Comment by Lionel
2010-08-27 19:22:51

“Lionel - got a link to that experiment perhaps? Off the bat I don’t see it from a google search.”

Here you go, packman. Good article.

http://www.newyorker.com/reporting/2009/05/18/090518fa_fact_lehrer

 
 
 
 
Comment by Arizona Slim
2010-08-27 07:50:17

“It takes a paycheck to make a mortgage payment,” Mr. Brinkmann said.

What? You mean that it doesn’t take a village?

Or that it doesn’t take magical thinking? As in, “I’m manifesting the mortgage payment in my thoughts.”

Comment by GH
2010-08-27 08:46:05

This is a big part of the current problem. With the houses bought after 2003 or so, it takes a HELOC to make the payment… Not so much any more! Even with a paycheck many of these are simply not supportable.

Comment by Jim A.
2010-08-27 12:45:07

Negatave ammortization on the installment plan. How could anybody NOT realize that this was going to crash and burn? Yet everybody either pretended that this was reasonable or that it wasn’t even going on.

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Comment by Kim
2010-08-27 08:49:46

“Or that it doesn’t take magical thinking? As in, “I’m manifesting the mortgage payment in my thoughts.””

I guess owning a copy of “The Secret” didn’t help underwater FBs.

 
Comment by Prime_Is_Contained
2010-08-27 09:19:20

“Or that it doesn’t take magical thinking? As in, “I’m manifesting the mortgage payment in my thoughts.””

You can laugh all you want, but I have just been given a free motorcycle for the second time in my life.

When I was a child, I manifested/wished/bargained/prayed for a free motorcycle REALLY REALLY hard! And I was very clear about the “it has to be free” part.

Coincidence? I dunno–you decide.

:-)

p.s. This lovely machine is the exact same model that I totalled some years back, and one year newer. Now I just need to get her running again. :-)

Comment by sfbubblebuyer
2010-08-27 09:58:47

Wait, people give you free motorcycles that you then total? Are you sure they’re not trying to kill you?

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Comment by hip in zilker
2010-08-27 10:38:13

Are you sure they’re not trying to kill you?

:lol:

 
Comment by Prime_Is_Contained
2010-08-27 12:37:02

:-)

Hmmm, I’ll have to give that serious thought, sfbubblebuyer…

Or maybe the Universe got annoyed and cranky at me due to all of my “manifesting”, and decided to do me in in a wonderfully ironic fashion. :-)

 
 
Comment by Rancher
2010-08-27 16:49:08

I asked God for a bike, but I know God doesn’t work that way. So I stole a bike and asked for forgiveness.

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Comment by swguy
2010-08-27 12:46:32

The neighborhood get together use to be who had the best barbeque grill or the best lawn on the block etc.Now it is all about lost value and idiots bragging they don’t make payments.
One young smart mouth told me he just bought a new car because he stop making payments.

My wife and I don’t attend any functions because my Italian temper may get the best of me. One more guy tells me how he is cheating the bank and losing me value……I think I will go water the wife’s garden and calm down.

Comment by RioAmericanInBrasil
2010-08-27 12:53:38

One more guy tells me how he is cheating the bank and losing me value……I think I will go water the wife’s garden and calm down.

Who’s wife’s?

 
Comment by wittbelle
2010-08-27 14:33:48

Today in my neighborhood, I watched an FB move out of his foreclosed house. Just one of many to come.

 
 
 
Comment by wmbz
2010-08-27 05:24:06

Newark submits plan to eliminate nearly 1,000 city jobs.

NEWARK — Newark submitted a layoff plan to the state Civil Service Commission this week, taking a crucial step toward the biggest purge of workers the city has seen in decades.

In the next two years, nearly 1,000 city jobs — a quarter of the current workforce — will be eliminated through layoffs and attrition, according to city budget officials and documents. Personnel costs comprise roughly 70 percent of the city’s annual spending. Since winning re-election in May, Mayor Cory Booker has sounded the alarm on reducing those costs, saying they are the single biggest contributor to the city’s persistent deficit.

“What we have to do right now is achieve approximately $200 million in personnel savings — period,” Booker said in a budget presentation earlier this summer, but added that because of severance packages, pensions, and unemployment insurance, “We won’t get the full credit of that until 2012, 2013.”

But Booker has already begun to take the blame.

The sanitation department — slated to lose 250 workers to privatization has been protesting regularly in front of City Hall since early August.

Comment by oxide
2010-08-27 07:08:33

“slated to lose 250 workers to privitization”

So the city is still paying for labor, just not public labor.
How much you want to bet that the new sanitation workers won’t speak English?

Comment by aNYCdj
2010-08-27 07:49:32

Probably so….and get $10 hr

I never understood why we don’t have just 1 day a week pickup in winter not many bugs grow below freezing…

Comment by Happy2bHeard
2010-08-27 16:35:35

You have more than 1 day per week trash pickup?!?!?

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Comment by aNYCdj
2010-08-27 20:06:22

everywhere i lived its always 2 days a week…here we get 4 trucks on satuday for recycling….each truck picks up different items…book papers,… glass plastic,… household items and then the garbage

Just for sanitary reasons 2 days a week in summer is a must…

 
 
 
 
Comment by scdave
2010-08-27 08:01:27

slated to lose 250 workers to privatization ??

Its about time…

 
 
Comment by wmbz
2010-08-27 05:26:12

Ben Bernanke under pressure to prop up US economic recovery
UK Times

• Bernanke faces toughest time yet after week of bad news
• Federal Reserve chairman’s speech will be scrutinised by markets
• Committee split over ‘QE-lite’ solution to double-dip fears

When Ben Bernanke addresses the annual symposium of central bankers in Jackson Hole tomorrow he does so against arguably the most challenging backdrop in his tenure as Federal Reserve chairman.

At the end of a week of gloomy reports, Bernanke faces mounting expectations from markets that the Fed will step in to prop up the US’s faltering economic recovery. News of stalling business activity and dismal home sales have fanned talk of a double-dip recession at a time when all the easy options have run out. At the same time, divisions appear to be emerging among his committee of policymakers.

Bernanke’s speech at the Wyoming symposium, entitled The Economic Outlook and the Federal Reserve’s Policy Response, will be scoured for any signs that he will live up to his nickname of “helicopter Ben” and scatter more money over the faltering US economy.

Comment by GrizzlyBear
2010-08-27 10:11:40

When are politicians going to wake up and realize Ben Bernanke is not the answer? Until we review trade agreements, get tough on the outsourcing of jobs and the importation of cheap, oftentimes illegal, labor, and answer the tough questions as to why we find ourselves where we are, we’re going nowhere.

Comment by Arizona Slim
2010-08-27 11:07:22

When are politicians going to wake up and realize Ben Bernanke is not the answer?

The answer? He isn’t even the question!

Comment by wittbelle
2010-08-27 14:34:51

“Pay no attention to that man behind the curtain”

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Comment by AbsoluteBeginner
 
 
 
Comment by JohnF
2010-08-27 14:34:50

Q. - When are politicians going to wake up and realize Ben Bernanke is not the answer?

A. - Never

 
 
 
Comment by wmbz
2010-08-27 05:27:47

Economy in U.S. Probably Grew at Slower Pace in Second Quarter
Aug 27, 2010

The U.S. economy probably slowed in the second quarter even more than initially estimated as companies reined in inventories and the trade deficit widened, economists said before a report today.

Growth cooled to a 1.4 percent pace from April through June, the smallest gain in the year-old recovery, rather than the 2.4 percent projected last month, according to the median forecast of 81 economists surveyed by Bloomberg News. The world’s largest economy expanded at a 3.7 percent rate in the first three months of 2010.

“It’s a much weaker recovery,” Julia Coronado, senior U.S. economist at BNP Paribas in New York. “The whole pickup is a lot less perky than we thought and that is very worrisome.”

Comment by scdave
2010-08-27 08:05:52

Growth cooled to a 1.4 percent pace from April through June, the smallest gain in the year-old recovery ??

And what about the third quarter ?? Around here, the third quarter has felt weaker than the second quarter…

 
 
Comment by 2banana
2010-08-27 05:34:46

How the Democrats lost the middle
August 27, 2010 - NY Post - Rich Lowry

The temptation is to substitute bel ligerence for thought, insist on a self-destructive purity, lash out at the American public and question the wisdom and viability of the country’s institutions. Indulging in these tendencies almost always makes a party’s position worse rather than better.

The Obama Democrats may be the first party to engage in this self-defeating behavior — borne of a frustrated desperation — while holding the presidency and both houses of Congress by substantial margins.

Through an accident of timing (a national election coinciding with a financial crisis) and the exhaustion of the Bush-DeLay Republicans (who lost power almost by default), liberals took the commanding heights of the federal government while remaining a minority disposition in our national life. In short, they became a rump majority.

Through President Obama’s alchemy, these temporarily enlarged congressional numbers were supposed to be transformed into a permanent realignment. It hasn’t worked out, obviously.

In the last 20 months, Democrats have had the power to do almost everything they want, except command the allegiance of the public. That has made them and their allies feel embattled, isolated and perpetually aggrieved. They act like a forlorn minority at the same time they control every lever of elective power in Washington.

In the midst of a catastrophic loss of the middle, Obama’s supporters exhort him to get more angry, insistent and ambitiously liberal. Having already pushed for a bridge too far, they want to go farther still. When they can’t, they conclude it’s a damning indictment of Obama’s failure of nerve and the nation’s ungovernablility.

There’s little acknowledgment that the country is in a different place than they are. To the extent there is, so much worse for the country, which is condemned for its backwardness and intolerance. The majority is not just wrong on immigration enforcement and the Ground Zero mosque, it’s contemptible. Who knew that the American public would get accused of bigotry more often after electing an African-American president than before?

As former Bush speechwriter Peter Wehner writes, liberals “are expressing deepening alienation from our nation and turning on the American people with a vengeance.” They thought they had a mandate from heaven in 2008 and can’t bear the thought that they deluded themselves. They’ve gone from triumphalism to a petulant and uncomprehending tantrum in less than two years. The rump majority looks more exhausted by the day.

Comment by butters
2010-08-27 06:53:54

Would it not be wise for people like Lowry to write about how the republican party managed to piss everyone in this country before they talk about democratic party?

Comment by oxide
2010-08-27 07:14:09

I have to agree, butters. The Obama Democrats are hardly the first party to try to pull the middle to the extreme end; it’s probably been happening since Burr killed Hamilton.

However, Lowry is being totally false when he says “Dems have had the power to do anything they want,” as if Dems were sitting on their butts actively refusing to listen to the base. I guess Lowry was asleep for the healthcare debate? No, Dems were about 4 senators and a whole lotta campaign contributions away from doing what they wanted.

Comment by exeter
2010-08-27 07:23:33

Rich Lowry? lmao…. this is the same guy who wrote this about Schizo Sarah Palin in 2008….

“I’m sure I’m not the only male in America who, when Palin dropped her first wink, sat up a little straighter on the couch and said, “Hey, I think she just winked at me.” And her smile. By the end, when she clearly knew she was doing well, it was so sparkling it was almost mesmerizing. It sent little starbursts through the screen and ricocheting around the living rooms of America. This is a quality that can’t be learned; it’s either something you have or you don’t, and man, she’s got it.”

Link to source at Atlantic Monthly

http://tinyurl.com/4a4fpv

And there you have it. The depth and breadth of the modern GOP.

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Comment by scdave
2010-08-27 08:17:01

+1 +1 exeter….

when Palin dropped her first wink, sat up a little straighter ??

Which makes you think which part of his anatomy he was talking about…Typical neocon…She’s an evangelical and great eye candy so lets make her V/P…

 
Comment by oxide
2010-08-27 08:21:58

Yup, I remember that… I know of someone who is an empty suit who is capable of only reading off a teleprompter, and it’s not Obama.

 
Comment by butters
2010-08-27 08:26:30

who is capable of only reading off a teleprompter, and it’s not Obama.

Can’t be Palin because she can’t even read off a teleprompter. It must be O. Please don’t tell me O has a twin brother.

 
Comment by GH
2010-08-27 08:50:17

I have heard Obama just dotes on Palin. To most moderates she comes across as a right wing Christian nut case, and I dearly want to see Obama out of office next election.

 
Comment by exeter
2010-08-27 09:21:23

“Typical neocon…She’s an evangelical and great eye candy so lets make her V/P…”

BINGO. Makes you wonder who their next empty-skulled gimmick candidate will be.

GOP Strategy=Throw anything on the wall and run with whatever sticks.

 
Comment by Arizona Slim
2010-08-27 09:47:11

I just finished reading Matt Lattimer’s book, Speech-Less. Among other things, he wrote about his time as a White House speech writer. After Palin was picked as McCain’s VP, Lattimer writes that President Bush remarked at how unprepared she was for the job.

 
Comment by GrizzlyBear
2010-08-27 10:23:39

I find it terrifying that guys would vote for Palin based on her looks. I don’t she’s electable, but god help us if she were.

 
Comment by hip in zilker
2010-08-27 10:40:07

next empty-skulled gimmick candidate

Rick Perry

 
Comment by butters
2010-08-27 10:41:14

To be fair to Bush, he had Cheney.

Palin can’t measure up to Cheney. No one is as evil as Cheney. Not even Palin.

 
Comment by butters
2010-08-27 10:42:54

Why does it surprise you guys voted for Palin for looks?

Plenty of women voted for Obama for the same reason, too.

There are plenty of men and women who only think with their……..

 
Comment by Arizona Slim
2010-08-27 11:08:56

Plenty of women voted for Obama for the same reason, too.

Sorry, but those big ears just don’t do it for me.

I know he likes a close-crop haircut, but, jeez, Barack. Your ears weren’t that noticeable back in your Harvard and Columbia days.

 
Comment by packman
2010-08-27 11:21:32

Plenty of men fell for his “Hope and Change” shtick too. Make no mistake - that’s verbal makeup every bit as much as Palin uses face makeup.

Jello presidents (and candidates).

 
Comment by scdave
2010-08-27 11:23:45

No one is as evil as Cheney. Not even Palin ??

+1…spot on about Cheney…

 
Comment by Jimmy Jazz
2010-08-27 12:48:04

Speaking as a liberal, Obama really isn’t. The narrative will be that “Dems went too far to the left”. The reality is that the economy is still awful (and yes, the policies of both parties have contributed to that) and there was too much emphasis on bailing out bankers and not enough on bailing out main street.

Obama has increased military spending and has continued Bush’s awful civil liberties assaults. We also got half baked health care “reform” that seems intended to maximize the profits of big pharma and the health care providers.

Meanwhile, Republicans have used the filibuster at a record setting rate, betting that Americans will simply blame “government” for failure to act.

http://abcnews.go.com/Politics/wireStory?id=9974807

For what it’s worth, this blog has opened my eyes to how folks like Dodd and Frank have manipulated the housing market to the detriment of the vast majority of Americans. I believe in a strong safety net but believe government has become far too intertwined with business.

 
Comment by RioAmericanInBrasil
2010-08-27 13:09:01

+1 JJ

 
Comment by scdave
2010-08-27 14:41:20

+1 +1…

 
Comment by aNYCdj
2010-08-27 14:44:43

YO slim does Ross Perot ring a bell?????

yes i got your blush last night

Sorry, but those big ears just don’t do it for me.

 
 
 
 
Comment by mikey
2010-08-27 07:37:34

Post all the RNC, GOP and neocon propaganda that Ben will let you side in here puke Boyz.

mikey doesn’t have much sway in here but he wouldn’t vote for a low-life, cheap labor repuke if his life depended on it.

I will be sitting on my coffin, smoking, joking and drinking Jack Daniels with the Devil, awaiting for the Grim Reaper with a firing squad, before I’d ever vote republican. End of story repukes

:)

Comment by butters
2010-08-27 07:55:17

But the leftist propaganda you espouse is ok, right?

Comment by Bill in Los Angeles
2010-08-27 08:20:06

Ha!

The “elected” lost the middle. Doesn’t matter which of the top two parties the “elected” is in. They reflect the American people. American people are very upset with the spending going on because we have to tighten our spending now. We no longer can spend more than we take in. And we see government doing exactly that and sending us the bill.

The leading edge on the graph of the political pendulum bodes well for those politicians who genuinely will work to get government out of our wallets and out of our bedrooms. This means the social conservatives will still have trouble getting support if they keep harping about prostitution, drugs, and abortion. Economic socialists are under more attack.

The American public is rightfully skeptical about the two major parties and they know neither party can be trusted to be like them. It could take well over a half a generation to win back the trust of the American people. Meanwhile I foresee a lot of Americans dropping out of voting out of disgust with the system that rewards dishonest politicians - like I dropped out. Remember Scott Brown a few months ago was a social liberal and fiscal conservative — then he quickly supported socialist causes. I’m extremely skeptical.

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Comment by REhobbyist
2010-08-27 09:08:24

It’s impossible to be a pure libertarian and get elected. Even Ron Paul admits that we need Social Security, the most socialist program in the U.S. But he’s more consistent than his son, who loves Medicare payments to physicians, because he accepts them. Ron Paul declines to participate in the program. I can respect that. Rand Paul, not so much.

 
Comment by Bill in Los Angeles
2010-08-27 09:11:58

I cannot help being a purest.

Bismarck started the concept of Social Security in Germany in the late 1800s. It was designed as a safety net, not retirement. In fact, the lifespan of the people back then was much less than now, so many people died before they could collect.

Social security benefit age should be increased to 70 or older.

 
Comment by packman
2010-08-27 09:41:58

Even Ron Paul admits that we need Social Security

No. Ron Paul is in favor of abolishing Social Security (you can look it up). However he’s stated (properly) that it can’t be done overnight, due to the obvious unfairness of doing so. It would need a long ramp-down period.

 
Comment by aNYCdj
2010-08-27 09:42:55

Bill:

I question I asked before…you were going to donate your $$$ to the heart and cancer societies…and fund their huge exec salaries..

Would you consider a trust to help very small businesses with micro loans?

 
Comment by Bill in Los Angeles
2010-08-27 11:36:59

aNYCdj,

possibly. It seems a very good idea. I am not sure if it would be done by a trust or by a foundation, but the charter should try to ensure the money is not squandered. I assume after I die the trust / foundation would click into action…

 
Comment by aNYCdj
2010-08-27 14:49:15

Well Banks aren’t lending …you could do a world of good for people….most home business don’t need $50,000…even a couple of thou would get some people off the ground coupled with business courses before the money is lent.

 
Comment by Bill in Los Angeles
2010-08-27 16:37:34

Sounds like you are thinking I am giving my deniro away very soon. I’m intending to do that in my will / trust and hoping I won’t have to give it away within the next 40 years! I’m still too young to give all my stuff away now!

 
Comment by aNYCdj
2010-08-27 20:14:33

No i knew you weren’t That old….but I got a little worried you had it set where the $$ was going…I just wanted to offer a alternative idea.

PBS had a few stories on this and how well it worked in India africa and south america, so why not here…

1 lady all she wanted was an electric sewing machine instead of the push with the feet one she had….and she tripled her output and bought a new sewing machine with the profits and then stared to hire people.

I just wonder if it would work here, and would our guvmint and banks cause trouble…

 
Comment by Bill in Los Angeles
2010-08-27 20:52:12

I think the Gates (Bill Gates of Microsoft) Foundation is into this.

Seems uncharacteristic of a “selfish” capitalist to want to foster business. But the key concepts include the fact that this is all voluntary and that it helps people get a start but not necessarily is a crutch for life of course. Private people without the gun held against their heads, can do a lot more good with their money than socialism.

Bill Gates did far more good than one thousand Mother Theresas.

 
Comment by aNYCdj
2010-08-27 21:34:16

Hey Bill agree about BG & mother T….and I think Gates does it overseas…but can it be done in your own “backyard” enlisting retired business people from Score…and the like…

I know if i had the extra dinero to give away, i would make sure my 9 yo nephew had a nice chunk to be used on college or other training and would grad with no debt….smart kid who knows… he gets good grades and is likeable…maybe he will get a scholarship…

 
 
Comment by scdave
2010-08-27 08:23:12

But the leftist propaganda ??

Why is it always left ?? That is the fundamental problem with you neocons…Your position is if you don’t “see it” or “believe it” my way then you are a LibbRal, Leftist…That’s why I left the party…The group that is there now are fear mongering, intolerant radicals…

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Comment by butters
2010-08-27 08:33:54

Nice. If someone disagrees with lefties, then they must be neo-cons, right? That game doesn’t work with me.

I hate the neocons, I hate the republicans, I hate the dems, I hate the libs and I hate the progressives.

 
Comment by RioAmericanInBrasil
2010-08-27 08:55:38

I think few even know what liberal or conservative really means. Here’s an interesting take.

Conservative vs. liberal, World Mag, Today’s News, Christian Views

http://online.worldmag.com/2010/01/20/conservative-vs-liberal/

This is why I struggle with whether I am liberal or conservative.

To conserve something, says Koyzis, means to keep it, maintain it, in the face of forces that might tend to eliminate it over time. A conservative fears that something is being lost with change that cannot be replaced. Conservatives tend also to regret nothing more than the loss of their own power and privilege. What makes someone a conservative is not so much one’s views on government but common attitudes toward tradition and change. Conservatives do not like change. Conservatives want to conserve their own traditions and institutions even if that means trading off innovation and progress.

Liberalism starts with the fundamental belief in human autonomy, which means being self-directed and free to govern oneself in accordance with rules in which one willingly submits. The most basic principles of liberalism, according to Koyzis, is that everyone possesses property in their own person and must therefore be free to govern themselves in accordance with their own choices provided that those choices do not infringe on the equal right of others to pursue the same. Human persons should be free from coercion that favors one person or group’s preferences for another. As such, true liberals have a consistent aversion to government coercion in ways that conservatives do not.

The liberal/conservative distinction may explain why many conservatives do not mind expanding the size of government to maintain their own values and traditions. Many conservatives have no problem using the coercive nature of government to enshrine “traditional values” in America in ways intolerable to liberals. For example, conservatives and liberals would disagree about having prayer in (former Protestant) public schools. Conservatives lament the absence of prayer while liberals see no place for prayer in that setting, or even the idea of public schools.

We saw this distinction clearly in the politics of Ron Paul during the last presidential campaign. Paul stood out among the other Republican candidates because he was more concerned about liberty than using government to preserve traditions and preferences. At the end of the day, I have more affinities with liberals than conservatives because there are some American conservative cultural traditions that America has benefited by extinguishing.

 
Comment by Carl Morris
2010-08-27 10:29:07

Wow, that liberalism sounds like a great philosophy. What party would I need to join to be surrounded by liberals per that definition?

 
Comment by exeter
2010-08-27 10:35:52

“Conservatives tend also to regret nothing more than the loss of their own power and privilege.”

Yet most who are swayed by the conservative rhetoric do not know it and cannot understand this basic fact.

 
Comment by hip in zilker
2010-08-27 10:43:47

The one that sees no place for even the idea of public schools?

 
Comment by butters
2010-08-27 11:54:26

The liberal described on the article sound like classic liberal.
Classic liberal or European liberal is totally different beast than the American Liberal.

 
Comment by RioAmericanInBrasil
2010-08-27 12:49:12

The liberal described on the article sound like classic liberal.
Classic liberal or European liberal is totally different beast than the American Liberal.

That holds some truth, however there are many classic liberals and many various shades of classic liberalism in the USA too.

 
Comment by Bill in Los Angeles
2010-08-27 21:02:19

Rio, I cannot believe you understand that lengthy post in this thread that you wrote. By that definition, I’m a liberal. Also GWB AND Barack Obama are conservatives. BTW I am by no means a traditionalist and I embrace change.

Through most of your posts, I see evidence that you wish to use the gunpower of government to thwart voluntary transactions if a one side of the transaction is “business.” I know of people who have corporations, mostly they are the sole employees. Somehow I don’t think you object to corporations of two employees. But if a corporation has 100,000 employees, I sense that you want to use the gunpower of government to control that corporation, even if all transactions are purely voluntary.

Also, I own 8,200 shares of my company stock. Does that make me a corporate fat cat?

Who calculates the dividing line between size, market cap, shares of stock of what is a good business and what is a thieving corporation? Self-elected Bono/Streisand/Gore types?

 
Comment by aNYCdj
2010-08-27 21:38:08

No… I think you know its undervalued and we at the HBB would appreciate it if you let us in on this, so we can buy some and pump the price……LOL

Also, I own 8,200 shares of my company stock. Does that make me a corporate fat cat?

 
Comment by RioAmericanInBrasil
2010-08-27 23:50:29

Rio, I cannot believe you understand that lengthy post in this thread that you wrote. By that definition, I’m a liberal.

I thought of that but, it doesn’t matter really. From your “lengthy posts” forever, I can’t believe that you don’t understand that,

Man proposes, but God disposes…

 
 
Comment by oxide
2010-08-27 08:30:34

In case you haven’t noticed, the left-leaners here rarely, if ever, post entire leftist articles. Once in a while, yes, we do post something (Rio’s globalization thread from yesterday, for example), but in general, the leftist propaganda is accompanied with our own thoughts. Hopefully I have been able to back up my thoughts with some reasoning.

On the other hand, nearly every day the Bitch Bucket is stuffed with conservative screeds from well-known righty sources like American Enterprise Institute or the Examiner or the editorialists at the Wall Street Journal, cut and pasted directly, often without comment or contribution from the poster.

And yeah, I don’t expect this post to make it through moderation either… :-)

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Comment by RioAmericanInBrasil
2010-08-27 09:16:39

Once in a while, yes, we do post something (Rio’s globalization thread from yesterday, for example),

Just a darn minute.

You are unintentionally misrepresenting my post from yesterday. My post was not in a vacuum. I personally commented on American job outsourcing on at least 3 other posts yesterday.

And there was nothing leftist about the globalization article I posted yesterday. In fact it is the definition “conservative” to want to keep American jobs in the USA.

And, the article, A Greater Threat Than Terrorism
Outsourcing the American Economy

was written by Paul Craig Roberts a big time Republican:

Paul Craig Roberts (born April 3, 1939, in Atlanta, Georgia) is an economist and a nationally syndicated columnist for Creators Syndicate. He served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as a co-founder of Reaganomics.”[1] He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. wiki

If Paul Craig Roberts is now a “Leftist” we have become truly fascist.

 
Comment by Ben Jones
2010-08-27 10:17:54

‘I don’t expect this post to make it through moderation either’

Ha ha. It went right through without moderation me thinks.

 
Comment by packman
2010-08-27 11:17:46

Going to go out on a limb here in many aspects -

oxide I agree to a great extent. I think that in general the bulk of conservatives tend to do more “parroting” than libs, that libs generally do more thinking about things that do the bulk of conservatives. It’s the nature of the beast. “Conservation” of existing things is simply easier than change. There’s less to think about.

I can’t tell you how many parrot emails I get from certain conservative relatives; it’s gotten to the point where I just delete all email from a certain someone (after repeated attempts to show they’re forwarding misinformation, e.g. via snopes).

However, that being said:

I think that generally applies to “surface thinkers” (If I may be so pretentious). Once you get deeper, I think the picture changes considerably. Obviously the mere parroting is gone - most ideas discussed still aren’t new, but they are original from the prospective of the person who writes them. They may draw upon existing past philosophies, but don’t parrot them wholesale, if they do parrot them it’s not without some significant thought.

Thus IMO you have to understand that parroting can be done in one of these two ways:
- No-thought “This comes from someone I agree with so I’ll forward it on” parroting. (e.g. what my one relative in particular does, and you sometimes see on this board)
- I’ve looked this through and thought about it and agree with it, and I’ll post it because it presents things in a better way that I can put it, plus I don’t want to plagiarize. (what I think you see a lot on this board)

As to who is right (conservative vs. liberal - if you follow such a polarization), that’s another question. Heck even the question of “who is right?” is subjective - right for who? Myself? The U.S.? All of Humanity? The world (including non-human)? And right for what time period? This year? The next few years? Our lifetime? Forever?

From my non-objective view point (knowing I’ll get slammed here by some who disagree) - I personally think when it comes to economic issues the Austrian School pretty much has it right, when it comes to the greatest good for humanity. I see incredibly deep thought there with regards to the “big picture” view of human nature/interaction. I believe the mostly-opposite Keynesian view is more shallow; not taking into account the true long-term societal/psychological effects of its policies, not the least of which is grossly underestimating the power of corruption. Not that I believe that free-market economics is not also subject to the same corrupting influences - the key difference being the two though being the ability to forcefully exercise that influence - through private enterprise (less able) vs. public enterprise (more able).

 
Comment by Al
2010-08-27 11:52:48

” Not that I believe that free-market economics is not also subject to the same corrupting influences - the key difference being the two though being the ability to forcefully exercise that influence - through private enterprise (less able) vs. public enterprise (more able).”

I wonder, though, how much more forceful would some private enterprises be in the absence of a strong public enterprise (govt)? Could private enterprises even exist without a strong govt?

On a semi-related note, is a Warlord in Afghanistan who runs an opium ring a government or a private business?

 
Comment by packman
2010-08-27 12:05:40

Could private enterprises even exist without a strong govt?

Depends on the definition of strong. As we see in many places (Afghanistan, Somalia, etc.) private enterprise does need some kind of government strength. Seems like it needs to be “strong enough to prevent rampant corruption - weak enough to not actually be or spread the corruption.” It’s a tough balance for sure.

Though “corruption” is itself certainly subjective. E.g. some view the mere existence of competitive advantage as corruption.

 
 
Comment by mikey
2010-08-27 09:11:18

Call me what you like.

I paid and pay my dues, been around, served honorably, bleed a little for my country and been called worse by your high-end so-called “patriotic” little neocons because I rejected and refused to jump on your grand repuke bandwagon.

Any attempted insults from the likes of you or your kind is an honor because I’m still here, see right through you, I’m hardcore and I ain’t going anywhere.

:)

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Comment by varelse
2010-08-27 09:47:45

“and I ain’t going anywhere”

And neither is your opposition, thank God.

 
Comment by mikey
2010-08-27 09:54:31

The “God’s” have nothing to do with this…

It isn’t their fight.

;)

 
Comment by mikey
2010-08-27 11:09:45

It’s Friday and I’d love to hang around but I have to clear out some paperwork and then I have an important date to keep with an ex Marine huey doorgunner. I will have a date with this quadriplegic man who is flat on his back ever night for the next 2 weeks or until the VA sends him home safely to his family and friends 160 but miles away.

Just think of it, a captive gyrine that can’t excape and an a talkative old RECONDO paratrooper. Life is Good.

He has my home and cell phone numbers at his bedside and needs nothing but a friend and some company. He needs nothing, his family and I see to that. This my honor and priledge to spend some time with this fine man.

This is the same VA that Bush couldn’t even do a drive, by when he was hob nobbing with Tommy Thompson, Bud Selig and the all of the GOP big shots when they opened Miller Stadium a few hundred yards away while the entire staff and all the patients were standing by and waiting to see the new President and he “didn’t” have the time. Just 2 or 3 hundred yards away.

It’s almost Friday night and I know where I will be.

Do you know WHERE the all of the GOP, RNC, neocons, war hawks, sunshine patriots and big talkers will be tonight?

They won’t be with the two of us, of that, I will guarantee you.

“Semper Fi’ and “Airborne ” and to All a Goodnight !

:)

 
Comment by Arizona Slim
2010-08-27 11:15:29

He has my home and cell phone numbers at his bedside and needs nothing but a friend and some company. He needs nothing, his family and I see to that. This my honor and priledge to spend some time with this fine man.

Kudos to you and your friend, mikey!

 
 
 
Comment by exeter
2010-08-27 09:26:06

Get’em Mikey!!! lmao. :highfive:

I love Fridays at the HBB.

Comment by scdave
2010-08-27 10:29:23

You go guy Mikey….

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Comment by jetson_boy
2010-08-27 08:10:20

Its a little more simple then that. Basically, it didn’t matter who got elected. We’re in a recession and Americans will automatically blame whatever administration is in power for the current status-quo. If anything, Republicans should be jumping up and down with glee because all they have to do is sit around and do nothing ( which they seem to be succeeding at) and their constituents will come to the simplistic conclusion that if the Democrats can’t fix the economy, then surely the Republicans will. The likely outcome will be that Republicans will probably have a President in power at about the same time the economy starts to recover and wallah- Americans will be happy again.

Comment by scdave
2010-08-27 08:31:51

The likely outcome will be that Republicans will probably have a President in power ??

The Independent middle is growing very fast and they recognize their power to decide elections…I think we are moving closer to a legitimate third party candidate….He/She will likely be supported by a billionaire or two since the shackles are off campaign funding…I honestly think Mayor Bllomberg would have a legitimate shot unless there is some bad baggage I am unaware of…

Comment by measton
2010-08-27 08:53:41

The Independent middle is growing very fast a

My take is that the independent middle is just as manipulated and gullible to MSM propaganda and fear mongering.

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Comment by scdave
2010-08-27 10:31:04

independent middle is just as manipulated and gullible to MSM propaganda ??

Not this Independent….

 
Comment by Rancher
2010-08-27 17:03:15

Amen brother

 
 
Comment by jetson_boy
2010-08-27 09:02:15

So far I fail to see any real third party potential. If the true middle were to be swayed that would mean the creation of a moderate party. As we can see the only attempt at any so-called new “party” has basically been anything but moderate.

My statement above was basically indicating that most Americans are simply too shortsighted to base their political decisions on anything other than the immediate status-quo whether good times or bad.

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Comment by Arizona Slim
2010-08-27 09:49:32

Here in AZ, the Republicans still hold a lead over Democrats in the registered voters derby.

However, our state’s fastest growing form of affiliation is Independent. We’re about a third of the registered voter pool.

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Comment by scdave
2010-08-27 10:36:23

our state’s fastest growing form of affiliation ?

And don’t forget the Generation coming…Say, 25-35….I would say most that I know (and I know a lot of them) “are not” to the right…Not going to offer if they are center or left or a blend but they are definitely not to the right…

 
Comment by Arizona Slim
2010-08-27 11:13:50

Not going to offer if they are center or left or a blend but they are definitely not to the right…

Likewise, our current crop of teenagers. Wouldn’t describe them as being to the right.

 
Comment by exeter
2010-08-27 11:46:44

The youth in our church categorically reject the conservative ideological extreme, much to the dismay of some of the parents. They know war, violence and death is in direct conflict with the church. Social justice for the poor and oppressed is their focus (as that is precisely what the religion is about) And they know it intuitively so it makes one really wonder about the parents.

 
Comment by scdave
2010-08-27 14:44:58

Excellent post exeter…What would Jesus say is what I tell some of my neocon friends…

 
Comment by wittbelle
2010-08-27 15:21:03

Don’t forget, too, that because of media coverage and societal acceptance, more gays are coming out sooner and, with first person exposure, our youth are starting to realize that, contrary to Biblical and fundamentalist church teachings, homosexuality is not an abomination of God and a sinful lifestyle choice but a biological phenomenon. This sets up an inherent conflict between the two beliefs which forces a lot of Christian youths to rethink their beliefs.

 
 
 
Comment by butters
2010-08-27 08:48:24

I doubt republicans will gain presidency so soon.

People might be happy with O’s 2nd term provided that at least there’s a divided government.

The problems with republicans is exactly like you said. They are not showing any remorse for their mistakes when they had power. They had basically sat tight and let dems destroy themselves. It has worked beautifully but people will want more than that from a political party IMO.

The main thing is people will want to know how’s the new republican admin will be different from the past? The answer is no it will be no different at all.

Comment by jetson_boy
2010-08-27 10:23:54

The thing the Republicans have going for them is the well-oiled, highly focused, highly profitable right wing media machine. Just about anything you hear from conservatives these days as points to any “political” argument tend to be what they’ve heard verbatim via their AM talk shows. The listenership to these shows is enormous. Most who listen to them seem to believe just about everything they’re told. Thus whatever message Republicans seem to want to get out is being delivered successfully by the right wing media outlets and no matter how silly the latest claim is, it is believed wholesale.

That isn’t to say left-leaning media is not doing the same thing, but rather I’d say the right wing media outlets are a lot more successful.

If I were to see problems with the Republican party its that they’ve once again decided to try and game the system by focusing on social issues versus more pressing economic issues. All that does is appeal to the same base and turns off independents who see more immediate concerns as more important.

I’ll admit I voted for Obama. But I have serious doubts he will get re-elected given the state of the economy because like I said- if things are bad, whatever party is in power automatically gets blamed.

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Comment by exeter
2010-08-27 10:44:35

“Just about anything you hear from conservatives these days as points to any “political” argument tend to be what they’ve heard verbatim via their AM talk shows.”

And this speaks directly to the mindlessness and lack of critical thinking skills of their angry listeners.

 
 
Comment by scdave
2010-08-27 11:29:11

Exactly Butters…Just wait…They will nominate someone no different that the last two groups…

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Comment by REhobbyist
2010-08-27 09:15:07

If unemployment starts to recover before 2012, Obama will be reelected. If not, I predict Mike Pence or Paul Ryan could win the presidency. The Repubs have to come up with someone acceptable to the middle, but it’s hard when the party faithful have moved far right. If Sarah or Newt is the candidate, Obama will win regardless of the economy.

One interesting outcome: if the economy doesn’t recover by 2012, this will be the second Great Depression. If the Republicans control government in 2012, we will at last learn if the New Deal was the correct medicine, assuming that the Republicans follow supply side philosophy.

 
Comment by varelse
2010-08-27 09:51:23

Actually the best bet for the repubs in this election is to play up the fact that they can stop Obama/Pelosi/Reid’s agenda, not enact their own.

Yes, the republicans $-u-c-k. When you remind us of this, you seem to be suggesting that the democrats can do no wrong. “The republicans $-u-c-k so bad that the democrats could not possibly be worse” is a false narrative.

 
 
Comment by Kirisdad
2010-08-27 10:09:04

The republicans are making the same mistakes as the Dems by going too far to their ideological extreme. As many on this blog have pointed out, there are many ignorant conservatives that are dependent on gov’t services and hand outs. Wait till the causes and effects of the college tuition bubble become evident (specifically student loans). If you think people hate the banks now…

 
Comment by lavi d
2010-08-27 11:28:55

The temptation is to substitute bel ligerence for thought, insist on a self-destructive purity, lash out at the American public and question the wisdom and viability of the country’s institutions. Indulging in these tendencies almost always makes a party’s position worse rather than better.

The Obama Democrats may be the first party to engage in this self-defeating behavior — borne of a frustrated desperation — while holding the presidency and both houses of Congress by substantial margins.

I’d say the Obamacrats are in office precisely because the Republicans “substituted belligerence for thought, insisted on a self-destructive purity, lashed out at the American public”

We have a Democrat-controlled congress (’06) and a Democratic White House (’08) BECAUSE of the corruption, ineptitude and indifference shown by the previous Reublican-controlled congress and White House.

The American people want leaders and problem-sovlers - not partisan hacks focused only on self-enrichment and greater glory.

 
 
Comment by wmbz
2010-08-27 05:35:02

Weak Firms Pile On Debt—and Trouble ~ WSJ

For America’s weakest companies, today’s credit markets are a miracle drug allowing them to cheat death.

Many firms with speculative-grade credit ratings are tapping a record high-yield bond market to repay existing debts. They also are refinancing their loans, pushing out maturities and nabbing lower interest rates. This “kick the can” approach has paid off for companies that investors left for dead just 18 months ago, including Rite Aid Corp., MGM Resorts International and auto supplier Tenneco Inc.

These companies’ fundamentals still give cause for concern. MGM, for instance, recently posted a wider second-quarter loss of $883.5 million.

Comment by combotechie
2010-08-27 06:11:24

“Many firms with specualtive-grade credit rating are tapping a record high-yield bond market to repay existing debts.”

Borrow cheap money today to repay yesterday’s expensive debts?

This will work until it won’t.

Doom awaits these companies.

Comment by polly
2010-08-27 10:47:30

But isn’ this the exact thing that the low interest rates are meant to accomplish? It is a form of lowering your fixed costs (assuming they are refinancing, not borrowing a ton more with no productive place to put it). It alllows them to continue to function even if their cash flow is lower than it would need to be to stay afloat with the same debt owed at higher rates.

I’d say it is good move for them. The personal finance people will all tell you never to pay off debt with new debt. But that is advice for fairly unsophisticated private people who react to money emotionally. If you can get a bunch of number crunchers to figure out that the costs of issuing the new debt and retiring the old debt don’t eat up all the benefits of the new rate, it isn’t a bad idea at all. (Assuming that they didn’t decide to do it because it was on their accomplishment list for bonus season and the numbers really don’t make sense.)

Not that it will fix everything if you really have too much debt to handle at any rate, or if you can’t get your cash flow where it needs to be to support bond payments at the new rates, but it is one legitimate tool of the corporate finance department.

Comment by combotechie
2010-08-27 17:02:56

“But isn’t this the exact thing that low interest rates are meant to accomplish?”

Yes, it is. But that’s not my point: My point is these companies are doomed to fail. They are kept on survival mode not because they are making money from their operations but because they are saving money on their interest payments. At some point their ability to refinance will vanish and then they will have to make do as a going concern on the money they make doing whatever it is that they do to earn operating income, which probably won’t be enough - that’s why they are called junk and have to pay junk-bond interest rates.

Most of these companies came into being or were kept alive by by the cash-out boom of the past several decades. But they were barely kept alive; Most were always operating on the financial edge. That’s why they had to carry such enormous debt and a junky credit rating that went with the debt.

Now the boom times are gone and the Great Contraction has arrived in its place. Soon these companies will be gone and when they leave they’ll take an awful lot of investor’s money with them.

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Comment by Rancher
2010-08-27 05:35:55

The “real” deficit -
including non-budgetary items like unfunded liabilities of Medicare,
Medicaid, Social Security and the defense budget - is actually $202
trillion, the professor and author calculates; or
15 times the “official” numbers.

“Congress has engaged in Enron accounting,” says Kotlikoff

U.S. Is Bankrupt and We Don’t
Even Know It.

Yet, the debt market continues to have an insatiable appetite for U.S.
Treasuries; heading into Monday’s session, the yield on the 30-year Treasury
bond (which moves in opposition to its price) was at its lowest level since
April 2009.

Kotlikoff says that’s because the market is focused on the “mole hill” of
official debt. In time, the U.S. will have a major inflation problem to
rival that of Germany’s post World War I Weimar Republic, he predicts. “We
have to think about the fact that unless the government gets its fiscal act
in order we’re going to have the government printing lots and lots money to
pay these enormous bills that are coming due over time.”

America is in need of major reform of the health-care, retirement, tax and
financial system, Kotlikoff continues. “We need (to perform) heart surgery
on this economy, not putting on more band-aids which is what we’ve been
doing.”

Barring that, your hard-earned dollars will soon be worthless, he

Comment by Blue Skye
2010-08-27 06:14:48

Or, as our host puts it, these things will never get paid.

 
Comment by Professor Bear
2010-08-27 06:59:59

“Congress has engaged in Enron accounting,”

Is this supposed to be news?

 
Comment by RioAmericanInBrasil
2010-08-27 09:36:54

Barring that, your hard-earned dollars will soon be worthless, he

In light of that probable development, then should we not be the 1-cookie-now kid instead of the 2-cookie-later-kid?

 
Comment by GrizzlyBear
2010-08-27 10:56:02

All the banks are using Enron style accounting, too. In fact, isn’t it now the standard practice?

 
 
Comment by scdave
2010-08-27 05:37:42

Google this;

The CDO Daisy Chain - ProPublica

Banks’ Self-Dealing Super-Charged Financial Crisis - ProPublica

Comment by Hwy50ina49Dodge
2010-08-27 16:21:11

Many Tankxs scdave

 
 
Comment by scdave
2010-08-27 05:44:07

Google this;

The CDO Daisy Chain - ProPublica
Here’s how the Wall Street Money Machine worked in the run-up to the financial collapse:

Banks’ Self-Dealing Super-Charged Financial Crisis - ProPublica

 
Comment by wmbz
2010-08-27 05:46:06

GDP Revised Lower; US Economy Grew 1.6% in 2Q- Reuters
This pace was slightly better than economists expected.

This better than expected news will be just what the DOW needs today to get back over 10,000. It is amazing how this stuff just happens. The PPT can take the day off and hit the links.

Comment by pressboardbox
2010-08-27 06:10:06

Better than expected corruption in all levels of our government.

Comment by pressboardbox
2010-08-27 07:56:57

Equates to a slower than expected decline in stock market and housing market.

 
 
 
Comment by 2banana
2010-08-27 05:46:40

Obama and the dems - the most fiscally irresponsible government in American history.

——–

The Most Fiscally Irresponsible Government in U.S. History
US News and World Report - August 26, 2010 - Mort Zuckerman

Current federal budget trends are capable of destroying this country

There is an instinctive conclusion among the American public that President Obama’s stimulus package has failed to create a sustained recovery. Unemployment has increased, not declined; consumers have retrenched; housing starts have crashed along with mortgage applications; and there is a fear that a double-dip recession may very well be in the pipeline. The public perception, reflected in Pew Research/National Journal polls, is that the measures to combat the Great Recession have mostly helped large banks and financial institutions, and that’s a view common to Republicans (75 percent) and Democrats (73 percent). Only one third of either political leaning thinks government policies have done a great deal or a fair amount for the poor.

There is another instinctive conclusion among the American people. It is that the national deficit, and the debts we have accumulated, are of critical political importance. On the national debt, the money the government has spent without the tax revenues to pay for it has produced mind-numbing numbers so large as to be disconnected from reality. Zeros from here to infinity. The sums are hard to describe; it is hard to describe an elephant, but you know one when you see one. The public knows that, shuffle the numbers as you may, the level of debt is unsustainable.

People see the stimulus, fashioned and passed by Congress in such a hurry, as a metaphor for wasted money. They are highly critical about the lack of discipline among our political leaders. The question that naturally arises is how to forestall a long-term economic decline.

There is no sign of that happening this time around. Households and businesses have kept their hands in their pockets. And so while many think that the only way to revive the economy and to inject more money into it is through governmental spending, the general feeling is that we can’t afford that right now. The government will be writing more IOUs on top of those we already can’t afford. Why plan a second stimulus if the first stimulus couldn’t prevent high unemployment?

There are two warning signs of a budget crisis: rising debt and the loss of confidence that the government will deal with it. This administration is on the verge of fulfilling both conditions. In fairness, there is no majority coalition in Congress for deficit reduction today. It is also true that the growth of public debt has been driven by a dramatic diminution of tax receipts due to the recession, the extra spending to avoid sinking into a self-perpetuating depression, and all those billions we invested to save the financial sectors from their sins. Voters see the politicians most vociferous about reining in the federal budget as those who are out of power and want to use it against the majority party. Too many politicians claim they are all for balanced budgets—but only by reducing the other party’s priorities. Republicans want to reduce social spending. Democrats want to reduce military spending. It is Washington as usual.

But let’s not forget, current budgetary trends are capable of destroying the country. As Bowles pointed out, according to a Washington Post report, we can’t just grow our way out of this. We can’t just tax our way out of this. We have to do what governors do—cut spending or increase revenues in some combination that will begin to pull us back from the cliff.

Obama must know that if he doesn’t address this, he will be the president who drove us toward a debt crisis. And so too must Congress, for both have now participated in the most fiscally irresponsible government in American history.

Comment by Lip
2010-08-27 06:31:56

Great article, thanks for posting.

Rather than considering the value of our argument, they would rather revert to attacks on our character. This shows how weak their argument really is

Comment by RioAmericanInBrasil
2010-08-27 09:45:23

Great article, thanks for posting.

Rather than considering the value of our argument,

I will consider the value of your argument but I’m having a hard time finding any argument you could be proud of in this article. Is it here?

In fairness, there is no majority coalition in Congress for deficit reduction today. It is also true that the growth of public debt has been driven by a dramatic diminution of tax receipts due to the recession, the extra spending to avoid sinking into a self-perpetuating depression, and all those billions we invested to save the financial sectors from their sins. Voters see the politicians most vociferous about reining in the federal budget as those who are out of power and want to use it against the majority party. Too many politicians claim they are all for balanced budgets—but only by reducing the other party’s priorities. Republicans want to reduce social spending. Democrats want to reduce military spending. It is Washington as usual.

Or here?

The public perception, reflected in Pew Research/National Journal polls, is that the measures to combat the Great Recession have mostly helped large banks and financial institutions, and that’s a view common to Republicans (75 percent) and Democrats (73 percent). Only one third of either political leaning thinks government policies have done a great deal or a fair amount for the poor.

Comment by Lip
2010-08-27 15:18:21

Rio,

You are correct. I read two articles and I got them mixed up in my post. I will exile myself for the next couple of days.

The article I was thinking about was by Charles Krauthammer in the Washington Post today titled “The Last Refuge of a Liberal”

Peace.
Lip

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Comment by butters
2010-08-27 06:57:43

Morty is such a tool. Did he not see this coming when he supported Obama. If he is this dumb, he deserves to lose all his money.
He’s not happy with O because O hasn’t attacked Iran period.

Comment by Lip
2010-08-27 07:42:43

Perfect, you demonstrate my point exactly. “Morty is a tool”. What about the words that he wrote. Please explain ” why” you disagree with rather than attacking him.

 
 
Comment by measton
2010-08-27 09:04:39

Obama must know that if he doesn’t address this, he will be the president who drove us toward a debt crisis. And so too must Congress,

A quick look at zfacts .com will show you that the car has been speeding toward a debt crisis for some time. The breaks won’t stop us and we’re nearing dead mans curve.

It doesn’t matter what O or congress do at this point. It wouldn’t matter if McCaine was in the drivers seat. In my opinion the only thing that would save the country would be slowing down globalization. This would drastically slow the deflationary trend and create jobs. It would kill the rich and help the middle class thus it won’t happen. People will say look at the Smoot Hawley Act. Back then we actually produced things and thus shutting down trade hurt us. Now we produce little and I think it would help reverse ugly trends in this country.

Comment by CrackerJim
2010-08-27 09:44:49

I cannot believe that I agree with something you say, but there it is. Buy US Made wherever and whenever possible!

Comment by measton
2010-08-27 15:22:10

I suspect there are many things we agree on.

1. Housing, that’s why we are here.
2. Barney Frank and Dodd are pigs, Sumners, TTT and most of the inner circle are pigs.
3. Others we may agree on
a. Support of 2nd amendment
b. Anti welfare and unemployment - (although I support works programs)
c. Free markets and capitalism (although I don’t think there are free markets in medicine, or with oligopolies, or businesses that control conduits)
d. The FED

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Comment by aNYCdj
2010-08-27 20:46:38

Measton:

This is something I know about, from previous paralegal jobs and my bro, and neighbors…

These Back To work welfare and UI programs are a waste of taxpayers money because all they do is force people to lie cheat and play the system.

The biggest failure is …If you really wanted to get your moneys worth, you need to look at the 1 thing that people need, is a recent job in your field on your resume.

With all the aspects of government, and they actively do hire “interns” If I was to collect UI or welfare then put me to work in say the NYC city owned radio tv stations…or heck in the legal affairs office. Not in the parks dept picking up trash and mowing lawns

Now these programs do work for a lot of people that don’t have a resume….they Need a first or second job they need a place to work after getting out of jail….for those it seems to work ok….but not for anyone that had real jobs and a real education…

Just to force people work for works sake is more punishment then help.

b. Anti welfare and unemployment - (although I support works programs)

 
 
 
Comment by RioAmericanInBrasil
2010-08-27 09:48:38

In my opinion the only thing that would save the country would be slowing down globalization. This would drastically slow the deflationary trend and create jobs. It would kill the rich and help the middle class thus it won’t happen. People will say look at the Smoot Hawley Act. Back then we actually produced things and thus shutting down trade hurt us. Now we produce little and I think it would help reverse ugly trends in this country.

I agree but “slowing down” is not enough and “it won’t happen” has been uttered by many prior to “it” happening.

 
Comment by Rancher
2010-08-27 17:17:35

“Back then we actually produced things and thus shutting down trade hurt us. Now we produce little and I think it would help reverse ugly trends in this country.”

We can’t produce those things anymore, we don’t have the physical infrastructure to do it. Our
last lumber milled closed this week and will never
re-open. The plywood mills are closed and the
machinery was auctioned off for pennies on the
dollar. A new plywood press is over a half a million dollars and no one has the capital to buy
equipment like this because the demand is dead.

 
 
Comment by rms
2010-08-27 11:29:00

“Obama and the dems - the most fiscally irresponsible…”

Larry Summers’ bailout plan was in-place before most people knew who Obama was. The U.S. is a one party system consisting of two factions, the Business Party with the Democrats and Republicans. The theatrics that resemble representative government are simply window dressing much like professional wrestling.

 
 
Comment by FB wants a do over
2010-08-27 05:48:10

The bond market appears to be one of the last vestiges of the safe haven “paper” markets. When it pops and everyone heads for the exits, where will the money move to? Commodities, precious metals, ???? Suspect it won’t be depreciating or non appreciating assets like real state.

Comment by combotechie
2010-08-27 06:20:44

Mattresses?

 
Comment by michael
2010-08-27 06:27:05

what is it gonna take to pop that bubble?

a collapse in the chinese real estate market perhaps?

Comment by packman
2010-08-27 06:49:55

No. The Chinese are net sellers of U.S. treasuries for the past year. The Japanese, Brits, and U.S. Fed have picked up the slack, and then some.

Comment by scdave
2010-08-27 08:38:11

The Japanese, Brits, and U.S. Fed have picked up the slack ??

And many Boomers I might add…

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Comment by packman
2010-08-27 09:07:40

No I don’t think so. IMO the mantra of fear driving “investors” to treasuries and out of stocks is mostly a myth; otherwise the stock market would probably be around 3,000 by now. I don’t believe the average Joe boomer investor is migrating to treasuries at all - it’s the banks and Fed; mostly new money.

 
Comment by CrackerJim
2010-08-27 09:48:33

“…I don’t believe the average Joe boomer investor is migrating to treasuries at all..”

I know that I cashed out of the market in October 2007 and I am still in treasuries (mostly) and bank CDs regardless of the return. Many of the people in my circle have done the same thing although most were not fortunate enough to have done it at the time I did.

 
Comment by Arizona Slim
2010-08-27 09:51:34

I know that I cashed out of the market in October 2007 and I am still in treasuries (mostly) and bank CDs regardless of the return.

I got most of my moola out of the stock market in mid-2008. (Thank you, HBB!) And the bulk of it is now in Treasuries and CDs.

 
Comment by packman
2010-08-27 10:48:29

Yes but most HBBers such are yourselves (and me) are not average Joe investors - in fact we tend to be quite opposite of them.

Even so, note your two statements - you got out of stocks and into treasuries in 2007 and 2008. As such - I do believe that fear in the fall of 2008 is what drove the treasury spike up (yield spike down). However that correlated exactly with a huge spike down in the stock market. This time there is no such correlation - the stock market remains flat while treasuries spike up.

And this is despite the fact that there are now $4.3 Trillion worth of additional treasuries out on the market that weren’t there in October 2008.

Of that:
- $1.1 Trillion is from overseas
- $300B is from the Fed

From where comes the other $2.9 Trillion?

From looking at the Fed’s flow of funds report, it looks like lots are coming from pensions (private and public) and insurance funds (e.g. . So in that respect yes you’re right - lots is coming from boomers. Makes you wonder though what happens over time as the boomers start really drawing down those pension accounts.

There is the still-unexplained “miscellaneous” pool of about $540 Billion though.

 
Comment by FB wants a do over
2010-08-27 11:25:03

Read up on the Japanese bond market and the pattern appears similiar. Flow of funds are coming from pensions (private and public) and insurance funds.

 
 
 
 
Comment by 2banana
2010-08-27 06:29:56

To well run company’s stock thats pay a dividend and to well run company’s debt .

Today, look at what companies like MO, BP (yes, BP), HNZ, etc sell their debt for. Then look at what Greece, Ireland, Spain, etc, sell their debt for.

It will not be any different when Treasuries go pop.

Comment by FB wants a do over
2010-08-27 07:01:34

To some extent you might be right about $$$ flowing to well run companies.

However, Greece, Ireland, Spain, Etc are small potatoes compared to the U.S. bond market. If just a small portion of the outflows from U.S. bonds flowed to commodities, then one could make a case for extreme stagflation or instant hyperinflation.

 
 
Comment by Blue Skye
2010-08-27 06:31:00

“Poof”.

The biggest credit expansion in history is on life support.

 
Comment by Professor Bear
2010-08-27 06:42:34

Gold!!!

Except everyone has already made the move you describe. Gold’ price was $35/oz in 1968, $1241/oz as I type — a 97% devaluation of the gold-denominated value of a dollar over four decades.

Which reminds me, it can take bubbles a VERY long time to deflate.

Comment by packman
2010-08-27 07:14:14

Except one thing - gold’s value in 1968, inflation-adjusted since 1900, was $90. It’s official “price” didn’t matter, since we weren’t able to freely own and exchange it.

When Americans were actually able to freely own gold again, in 1975 (due to Public law 93-373), it instantly shot up to its inflation-adjusted value of $140.

Of course with a few years it overshot, due to inflation expectations. The inflation expectations turned out to be founded in reality, but overestimated at the time.

It remains to be seen if that’s true this time or not.

 
Comment by FB wants a do over
2010-08-27 08:23:51

Some would say gold is in a bubble. What happens if the safe haven bond market pops and money flows into commodities and gold?

Is there a viable mechanism available today that could be used to slowly deflate the bond market? At a minimum, the government would first need to stop borrowing so much $$$.

Comment by Blue Skye
2010-08-27 08:57:15

hmmmmm…….raise interest rates?

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Comment by FB wants a do over
2010-08-27 10:23:38

Could that be considered a viable mechanism given all of the government debt?

 
 
 
 
 
Comment by wmbz
2010-08-27 05:52:13

Chile Deploys `Strata 950′ in Unprecedented Bid to Save Miners.

Chile is preparing a 40-ton drilling machine called Strata 950 to bore through 700 meters (2,300 feet) of rock and free workers trapped in a collapsed copper mine.

Workers aim to begin drilling tomorrow after anchoring the bore in about 40 cubic meters (1,400 cubic feet) of concrete, said Enes Zepeda, director of the supervisors union at Codelco, Chile’s state-owned copper company, which is aiding the rescue.

“This has never been done before anywhere in the world,” Zepeda said in a telephone interview yesterday. “We’ve been looking for documentation on this type of rescue and it simply doesn’t exist.”

Codelco transported the machine from its central Chilean mines, where it’s used to build ventilation shafts. The government estimates the tunnel at the San Jose mine will take three months to complete, making it the longest ever mine rescue, according to the Uniontown, Pennsylvania-based U.S. Mine Rescue Association.

Comment by pressboardbox
2010-08-27 06:05:07

3 months! I thought Chile’s only had an hour wait?

Comment by 2banana
2010-08-27 06:31:32

Do the miners get time and half for 24/7 for 3 months? ;-)

Comment by X-GSfixr
2010-08-27 15:10:11

They will fire them, and then send them bills for their rescue.

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Comment by In Montana
2010-08-27 07:20:52

lol…I was scrolling by and thought, that HAS to be pressboard…

Comment by pressboardbox
2010-08-27 09:06:56

Thanks, Montana… not sure if its a compliment! I will continue posting as long as they don’t cut the internet connection to my room in the Psych-Ward…

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Comment by DennisN
2010-08-27 09:03:12

Codelco, Chile’s state-owned copper company

I thought state-owned businesses would take better care of all workers than those miserable private enterprise businesses.

 
Comment by JackRussell
2010-08-27 10:03:08

Consider this for a moment:

Even though the miners have undoubtedly lost a significant amount of weight, Chilean officials are trying to ensure they don’t bulk up before their rescue. They say the miners will have to be no more than 35 inches (90 centimeters) around the waist to make it out of the tunnel.

The escape tunnel will be about 26 inches (66 centimeters) wide — the diameter of a typical bike tire — and stretch for more than 2,200 feet (688 meters) through solid rock. That’s more than 80 inches (207 centimeters) in circumference, but rescuers also have to account for the space of the basket that will be used to pull the miners to safety.

Most Americans couldn’t meet the 35-inch limit. The average U.S. waistline is 39.7 inches for men and 37 inches for women, according to the Centers for Disease Control and Prevention.

How many of you would fit into this thing? I am pretty sure I wouldn’t.

Comment by Arizona Slim
2010-08-27 11:18:34

I could fit into it.

Comment by JohnF
2010-08-27 14:58:27

Hence the moniker…Arizona Slim…..

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Comment by RioAmericanInBrasil
2010-08-27 11:26:58

The average U.S. waistline is 39.7 inches for men and 37 inches for women,

But do those size jeans make our butts look fat?

Comment by packman
2010-08-27 11:32:22

LOL.

“Does this rescue tunnel make me look fat?”

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Comment by butters
2010-08-27 11:59:50

No the fat makes you look fat……..

 
 
Comment by GrizzlyBear
2010-08-27 11:53:32

“The average U.S. waistline is 39.7 inches for men and 37 inches for women.”

That’s disgusting.

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Comment by Happy2bHeard
2010-08-29 15:46:49

My hips wouldn’t fit. Not even if I got down to 100 pounds.

 
 
Comment by sfbubblebuyer
2010-08-27 10:28:37

At 3 1/2 months work to rescue them, they’d be fiscally better off giving the soon to be widows and family some blood money and capping the mine.

 
 
Comment by wmbz
2010-08-27 05:53:42

Blockbuster to file bankruptcy in September
Source says that video retailer could close 500 to 800 of its stores

Comment by pressboardbox
2010-08-27 06:02:34

I hope they miss the deadline to file and have to pay a late-fee.

Comment by arizonadude
2010-08-27 06:27:27

The business model is dead.hollywood video went under too.More commercial space going vacant.

Comment by Arizona Slim
2010-08-27 07:55:24

Here in Tucson, a vacant Hollywood Video store space is being filled by a Five Guys Burgers. Yup, the same burgers that the president adores.

I’m not sure I’d call this progress: An outpost of a going-extinct industry (video rental) replaced by fast food.

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Comment by pressboardbox
2010-08-27 08:29:14

That’s funny, Slim. Here in FL (Daytona Beach) two Fazoli’s restaurants recently closed and are being quickly occupied by… Five Guys Burgers and Fries.

 
Comment by oxide
2010-08-27 08:36:31

Oh but don’t you know: assembling burgers is a “manufacturing” job!

 
Comment by Kim
2010-08-27 08:59:41

“Five Guys Burgers”

Average and overpriced IMO. Kind of like Blockbuster was, I guess.

 
Comment by GrizzlyBear
2010-08-27 11:45:33

I’ve been hearing a lot about this “Five Guys” burgers place. Seems they are busy opening store after store after store. While people are raving about their quality, they are purchasing their beef from the mass producers just like all the big corps do. They almost have to. I’ll go with the local burger joint, thank you.

 
Comment by Arizona Slim
2010-08-27 12:18:10

Seems they are busy opening store after store after store.

Just like Krispy Creme did a few years ago.

I remember when they announced the opening of their first Tucson store back in ‘02. Judging from the local reaction, it was if we were about to have the Second Coming.

 
Comment by Carl Morris
2010-08-27 12:51:48

Just like Krispy Creme did a few years ago.

And Boston Chicken before that. It’s easy to blow the competitor’s quality away when you’re in “growth mode” and can take a loss without scaring off the investors. As soon as the market is saturated and the stock has been dumped on the public at a high price, then the economics will kick in and the efficiency experts will reduce the quality and it’ll all crash and the founders will be on a beach or kicking into gear on their next big idea.

So if it really is that good, enjoy the food while the quality stays high but don’t hold the stock for too long.

 
Comment by JohnF
2010-08-27 15:02:04

Just opened a Five Guys here in Thousand Oaks, CA….never heard of them before. I had no idea they were national…..

 
Comment by awaiting wipeout
2010-08-27 20:05:44

John-
Hey, we’re in T O too. Howdy neighbor!

 
 
Comment by scdave
2010-08-27 08:43:02

More commercial space going vacant ??

Yep…And many are in those little neighborhood corner strip center of maybe 15,000 square feet of which Blockbuster occupied 7,000…It “was” the anchor generator supporting all the other little shops particularly food service…

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Comment by Prime_Is_Contained
2010-08-27 08:59:45

I actually thought Blockbuster had the potential to _beat_ Netflix as the business model changed, in the early days of their online Netflix-equivalent service.

Initially, you could get three movies at a time from Blockbuster, but get WAY better service. After you were done with each movie, you could simply trade it in for a free rental at the store.

As a customer, this was awesome–you were never at a loss for something to watch while waiting for three DVDs to make the round-trip through the mail. It was WAY better than Netflix.

Blockbuster saved big $$$s on postage by doing this, since they could bundle many many DVDs together and ship them back to their online distribution centers that way.

They also saved big on this because customers were in much LESS of a rush to return them–after all, each DVD had “value” to them even after it was watched, so their total demand for online swaps was reduced.

When I first started using this service, I _loved_ it, and thought that Blockbuster was going to give Netflix a run for their money.

Then they changed the rules and threw all of that advantage away. The started new plans that did not have the in-store exchange option, and jacked the prices up on the plans that did. And they started limiting you to some small number of in-store swaps even for the plans that did have that option.

As a customer, I immediately voted with my wallet and went back to Netflix. I did write them a feedback letter telling them why it was a huge mistake, but I doubt that it made it up to the levels at which this “strategic” failure of a decision was made.

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Comment by Prime_Is_Contained
2010-08-27 09:01:32

p.s. RIP Blockbuster; I will not shed a tear for thee in your self-inflicted backruptcy.

 
Comment by Hwy50ina49Dodge
2010-08-27 09:26:03

RIP Blockbuster ;-)

Hey buster, here’s another “buster” that can bite-the-dust!

Dave & Busters

 
Comment by scdave
2010-08-27 10:43:06

Dave & Busters ??

You know Hwy, I had never heard of them until my son said something to me about it…Took the wife one Sunday, had some lunch and walked around the place…Although I came away impressed with the size of the place I also came away with severe reservations that you could pump enough quarters into a joint that big to make a go of it….

 
Comment by Hwy50ina49Dodge
2010-08-27 16:11:03

Dave & Busters

Ha, they should had you a package of ear-plugs, & offer you 3 cents back for every 25 cents wasted…you think all those plastic toy trinkets the kids get to “win” comes from China?,… you know all the sh!t they’ll “treasure” ’till they graduate in physics @ MIT… :-)

Just thinkin’ ’bout the past experience inclines me to wanna vomit…

 
 
Comment by Sean
2010-08-27 09:17:59

Why not lease out all that space to Red Box? Put a few dozen machines in there - because it’s a real pain when you have to wait by one of those machines.

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Comment by Hwy50ina49Dodge
2010-08-27 16:12:57

That’s exactly what happening in Costa Mesa, CA :-)

 
 
 
Comment by Mugsy
2010-08-27 06:29:23

Or maybe they’ll forget to rewind and the bankruptcy court will really stick it to em!

Comment by Bill in Carolina
2010-08-27 07:33:33

Creative destruction at work. Wikipedia has a great article under that title.

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Comment by JohnF
2010-08-27 15:06:35

I heard that the federal government will step in and get the bankruptcy court to stiff the Blockbuster bondholders because the company is a national treasure and is necessary for the economic future of the country……just like Chrysler……

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Comment by packman
2010-08-27 07:19:35

I hope they miss the deadline to file and have to pay a late-fee.

LOL. Line of the day.

 
 
 
Comment by Mugsy
2010-08-27 05:58:29

Woohoo! I.6% revised GDP! Welcome to the summer of recovery!

Comment by wmbz
2010-08-27 06:06:24

Hip,hip Hooray! I just knew “they” could do it! Always trust gubmint numbers.

Comment by Mugsy
2010-08-27 06:27:42

The GDP number is almost as good as those kick-*** unemployment numbers from yesterday! Houses should start selling like hotcakes :)

 
 
Comment by Blue Skye
2010-08-27 06:24:59

My company is writing off a lot of invoices this year. Getting paid for what we sell is a challenge. Do these write offs ever hit the GDP? Our experience cannot be unique.

Comment by Arizona Slim
2010-08-27 07:56:24

I haven’t had to write off any invoices, but I have experienced more than a little foot-dragging. Including requests for spread-out-the-payment plans.

Comment by scdave
2010-08-27 08:46:15

but I have experienced more than a little foot-dragging ??

Ditto here….

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Comment by CrackerJim
2010-08-27 09:53:56

Extremely ditto here and our customers are large stable industrial companies. They are flexing their muscles in a competitive environment among their vendors and contractors.

 
 
 
 
Comment by Professor Bear
2010-08-27 06:58:10

That’s the first “better than expected” data release in what — 100 years?

OCCASION FOR CELEBRATION!

 
 
Comment by wmbz
2010-08-27 06:24:07

Now, death threats against the Tea Party?
Sounds like political factions are preparing for bloody conflict .

One of Washington’s principal supporters of the Tea Party movement, former GOP Majority Leader Dick Armey’s FreedomWorks, has been receiving death threats and profanity-laced phone calls as it gets involved in the fall elections. The number and intensity have reached such heights that the organization is leaving its downtown location near the FBI and moving to a high-security building near the U.S. Capitol.

“FreedomWorks and Dick Armey receive dozens of threatening and harassing calls and E-mails each day. Many imply violence and use of weapons,” says spokesman Adam Brandon. “As we get closer to the election we expect the harassment to increase.”

Comment by Jeffers
2010-08-27 06:32:42

So says Dick Armey’s spokesman. How credible.

Comment by wmbz
2010-08-27 06:36:09

I know, in today’s world no one any where has any credibility.

Comment by wmbz
2010-08-27 06:56:07

I should add, unless of course you agree with them.

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Comment by scdave
2010-08-27 08:48:33

How credible ??

Exactly…”We are a victim”…..Persecution of the evangelicals !!!

 
 
Comment by measton
2010-08-27 09:51:18

It’s possible many of those threats are from within the tea party itself. I read somewhere many members weren’t happy with his attempted take over.

 
Comment by RioAmericanInBrasil
2010-08-27 10:41:38

Now, death threats against the Tea Party?
Sounds like political factions are preparing for bloody conflict .

If so, which faction is preparing more and are both factions equally prone to violence? Would preparing involve preemptive propaganda? What type?

Comment by DennisN
2010-08-27 17:45:58

Well from my long experience, liberals tend to lose their temper and become violent much more easily. On the other hand, conservatives like me are much more heavily armed. You can see how another revolution would pan out…..

 
 
 
Comment by wmbz
2010-08-27 06:26:32

Health facilities that see $300 million per month get IOUs this week.

Scores of medical providers that rely on the Medi-Cal program for funding are now getting “value of claims” statements in lieu of payments.

The Medi-Cal agency ran out of funding for providers that typically see $300 million per month from the state, said Anthony Cava, a spokesman with the Department of Health Care Services, which runs Medi-Cal.

He said about $188 million of that typically goes to health clinics.

Carmela Castellano-Garcia runs California Primary Care Association, a nonprofit that represents about 800 of the state’s health centers and clinics that serve about 4 million patients, mostly uninsured. She said the facilities tend to get half to 80 percent of their funding from the program for low-income residents.

Comment by Bill in Carolina
2010-08-27 07:37:15

Those health providers should start giving out IOU’s in lieu of actual treatment, as in “IOU one dental cleaning and exam,” until Cali starts paying up again.

 
Comment by DennisN
2010-08-27 09:07:51

A college friend of mine is the CEO of a hospital in northern California. I’ll bet he’s going to have a hard time making payroll next month with all those IOUs from the state.

Comment by JohnF
2010-08-27 15:11:32

A college friend of mine is the CEO of a hospital in northern California. I’ll bet he’s going to have a hard time making payroll next month with all those IOUs from the state.

Tell him to endorse the IOU’s over to the CA Franchise Tax Board as payment for his state income tax withholding, state disability withholding and state employment training tax liability…..they are as good as real money…..right??

 
 
 
Comment by Kim
2010-08-27 06:34:28

Good article:
www americanbanker com/issues/175_165/foreclosures-modifications-california-1024663-1.html

Procrastination on Foreclosures, Now ‘Blatant,’ May Backfire

By postponing the date at which they lock in losses, banks and other investors positioned themselves to benefit from the slow mending of the real estate market. But now industry executives are questioning whether delaying foreclosures — a strategy contrary to the industry adage that “the first loss is the best loss” — is about to backfire. With home prices expected to fall as much as 10% further, the refusal to foreclose quickly on and sell distressed homes at inventory-clearing prices may be contributing to the stall of the overall market seen in July sales data. It also may increase the likelihood of more strategic defaults.

It is becoming harder to blame legal or logistical bottlenecks, foreclosure analysts said.

Some servicing executives acknowledged that stalling on foreclosures will cause worse pain in the future — and that the reckoning may be almost here.

Defaulted borrowers were spending an average of 469 days in their home after ceasing to make payments as of July 31, so the financial attraction of strategic defaults increases.

One possible way banks are dealing with that last threat is through what O’Toole calls “foreclosure roulette,” in which banks maintain a large pool of borrowers in foreclosure but foreclose on a small number at random. O’Toole said the resulting confusion would make it harder for borrowers to evaluate the costs and benefits of defaulting and fan fears that foreclosure was imminent.

Comment by michael
2010-08-27 06:50:30

time tested market fundamentals FTW!

i like this quote that they post up on itulip.com.

“It’s almost worth the Great Depression to learn how little our big men know.”
- Will Rogers

Comment by measton
2010-08-27 09:53:44

It’s almost worth the Great Depression to learn how little our big men know.”
- Will Rogers

I think they know a lot more than we think.
The proof would be examinging each of the elites finances before during and after the recent crash. My bet is that the real elite knew not just what was going to happen but when.

Comment by packman
2010-08-27 11:25:07

+1

But with the caveat - certain big men. Some certainly knew, some - just as smart but not as properly connected - were blindsided.

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Comment by measton
2010-08-27 15:09:55

The percentage that knew what was going to happen was probably large, the percentage that knew when it was going to happen was likely much smaller.

I’d love to see the investments of the FED gov, GS and MS management, and of course many of our politicians around this time.

Hank Paulson was clearly in the know. Converted all of his GS stock tax free to treasuries before the crash. This was his payment for TARP.

 
 
 
 
Comment by Professor Bear
2010-08-27 07:16:18

“Procrastination on Foreclosures, Now ‘Blatant,’ May Backfire”

The promised recovery may not be come until years into the future. Foreclose and sell now, or ride a falling knife all the way to the ground…

 
Comment by Al
2010-08-27 07:38:37

The article could have got into how individual properties are declining in value due to lack of maintenance as they sit. But on the lighter side for bankers, at least they can keep ignoring their losses (and collecting bonuses) for the forseeable future.

 
Comment by REhobbyist
2010-08-27 07:55:05

In 2009, foreclosures were priced cheaply and sold quickly. Today they are priced high and sitting on the market. Price reductions are small and rare. Frustrating.

 
 
Comment by Professor Bear
2010-08-27 06:44:43

It seems TTT is not the only tax cheat out there on the take these days.

Tax cheats costing state $6.5 billion

Franchise board’s website lists 250 worst scofflaws

By Michael Gardner, UNION-TRIBUNE

Thursday, August 26, 2010 at 9:16 p.m.

The tax gap

The problem: The state Franchise Tax Board says unpaid taxes amount to $6.5 billion.

The humiliation approach: Delinquent Taxpayers list, which shows the top 250 individual and business taxpayers with state income tax liens who owe taxes.

The good news: Nearly 90 percent of taxpayers pay the taxes they owe.

Comment by scdave
2010-08-27 08:51:29

Tax cheating in My area is a pandemic…I suppose its that way through out the state and Nation…

 
Comment by Hwy50ina49Dodge
2010-08-27 09:04:17

The good news: Nearly 90 percent of taxpayers pay the taxes they owe

Ha, then there are those who pay $$$$ “others” to figure out the taxes they owe, or rather,… to-figure-out-how-not-to-pay-quite-so-much-that-they-might-otherwise-have-to-owe. ;-)

 
Comment by DennisN
2010-08-27 09:13:27

I wonder if states other than California post a deadbeats list.

 
Comment by Zak
2010-08-27 13:52:53

Normally I don’t post on forums but I had to contribute to this thread. I am supposedly one of the delinquent taxpayer. After several attempts I finally cleared up my tax bill with FTB today. I will state the facts and let you decided who is correct.

I had received a huge tax bill from FTB based on what they thought my income had been. On top of that they had added a huge fine and interest for non-payment of taxes. The only problem is that I don’t live or work in California. Yes, please read the previous sentence again. I am neither a resident of California nor employed there. I did not even go for a vacation to Disneyland.

After several calls I was able to convince one of the FTB agents that I did not owe them any taxes. However this was a very scary ordeal for me. From what I understood, they could come after my paycheck, my car and even my house. Most agents made sure that I understood this fact. I can finally have a peaceful weekend.

Based on my experience I find it hard to believe that there are people that can get away without paying taxes in California. If the FTB is working hard sending out random tax statements to people all over US asking them for money, I am sure they are equally working hard to go after real tax offenders. Then again what would I know about how California and FTB work.

 
Comment by Zak
2010-08-27 13:55:57

Normally I don’t post on forums but I had to contribute to this thread. I am supposedly one of the delinquent taxpayer. After several attempts I finally cleared up my tax bill with FTB today. I will state the facts and let you decided who is correct.

I had received a huge tax bill from FTB based on what they thought my income had been. On top of that they had added a huge fine and interest for non-payment of taxes. The only problem is that I don’t live or work in California. Yes, please read the previous sentence again. I am neither a resident of California nor employed there. I did not even go for a vacation to Disneyland.

After several calls I was able to convince one of the FTB agents that I did not owe them any taxes. However this was a very scary ordeal for me. From what I understood, they could come after my paycheck, my car and even my house. Most agents made sure that I understood this fact. I can finally have a peaceful weekend.

Based on my experience I find it hard to believe that there are people that can get away without paying taxes. If the FTB is working hard sending out random tax statements to people all over US asking them for money, I am sure they are equally working hard to go after real tax offenders. Then again what would I know about how California and FTB work.

Comment by scdave
2010-08-27 14:54:17

From what I understood, they could come after my paycheck, my car and even my house. Most agents made sure that I understood this fact ??

The FTB in California are like Nazi’s…

Comment by JohnF
2010-08-27 15:25:03

We had a client who moved from CA to Nevada and the FTB sent agents to Nevada to rummage through his trash and call his business associates (some of whom were potential customers) telling them that he was under investigation and wanting information. He lost a lot of business because potential clients didn’t want to get mixed up with a “tax cheat”.

Why did the FTB do this? Because he moved his operations out of California and they felt that he had come up with his ideas in CA so he owed CA taxes on the future profits even though his business was now located in Nevada……

They aren’t quite Nazi’s (no camps set up…..yet) but they are pretty unbelievable…..

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Comment by Professor Bear
2010-08-27 06:56:35

Did Der Gubernator do something to decouple California’s fortunes from the real estate bubble which was somehow missed by the main-stream media?

Maybe Gollum’s candidate could do better as a Republican governor?

Which Calif. governor has had the best job growth?
One hint: He’s never been known as Der Gubernator

By Dean Calbreath, UNION-TRIBUNE

FILE - In this Friday, Oct. 25, 1974 picture, Jerry Brown , Jr., the Democratic candidate for governor, shakes hands during a luncheon sponsored by the Watts Labor Community Action Committee where he spoke. Meg Whitman and Jerry Brown want the same job, but that’s where the similarities end for the two candidates running for California governor. (AP Photo, File)

Which of California’s five recent governors had the best job growth during his tenure in office? And which had the worst?

Michael Bernick, an employment specialist affiliated with Santa Monica’s Milken Institute, has come up with one method of figuring that out - and the answer has already generated a little dustup on the campaign trail.

Bernick added up the number of jobs that were added during each tenure and then compared California’s growth rate to the nation’s growth rate. Since California represents around 11 percent of the nation’s population, any number above 11 percent means we’re outpacing the rest of the country.

It’s probably no great surprise that the state’s worst growth came under the current governor, Arnold Schwarzenegger, which arguably had much less to do with his policies than with the state’s close ties to the real estate bubble and burst.

Since Schwarzenegger was elected through a recall election in October 2003, the state has lost 561,000 jobs, even though the nation added 153,000. Even though all four of his predecessors dealt with recessions, Schwarzenegger was the only governor to come to the end of his term with fewer jobs than in the beginning (unless there’s some dramatic burst in employment between now and the inauguration of the next governor).

Comment by sfbubblebuyer
2010-08-27 12:57:20

Asked about those jobs, the Governator replied “Dey won’t be baaahck.”

 
Comment by rentor
2010-08-27 13:01:12

Imagine if the EBAY lady follows this clown on steroids? From what i’ve heard and seen Jerry Brown is the better choice. If he gets a chance at a do over, we all might be NICELY surprised.

 
 
Comment by 2banana
2010-08-27 06:59:32

Officials say a share of the $6.5 billion can be traced to the underground economy, where people barter or simply do not report income from providing services, such as home repairs.

When any form of government raises taxes to confiscatory levels, institutes massive/insane regulations on businesses and spends with reckless abandon to buy votes - whose fault is it really when an underground economy grows and grows…?

Comment by Professor Bear
2010-08-27 07:09:45

“whose fault is it really when an underground economy grows and grows…?”

I dunno — illegal drug users perhaps?

Comment by Bill in Carolina
2010-08-27 07:42:36

Our underground economy is miniscule as a percentage when compared to a country like Greece. But we’re trending in their direction.

Comment by rentor
2010-08-27 13:05:48

Bill,
do you have any idea how many fast food franchises (BK, Mcd, Taco Bell, Pizza hut) employ illegals? In CA I know of several joints who encourage illegals to invite friends and family to join. Think of a few million illegals working to support their families in the states and places like Mexico and India.

I don’t think you have any idea how big the problem is, I don’t think anyone in government wants to know either.

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Comment by Arizona Slim
2010-08-27 13:34:18

And to think that, back when I was in high school, I worked a few months at MickeyD’s. A lot of other kids from my high school and the local state college worked there too. I don’t recall having any coworkers who were non-American.

Mind you, that job sucked rocks, and I wasn’t upset for very long when I got fired from it. It turned me off to fast food for life. It also made me understand why subsequent generations of teens would turn up their noses at “burger-flipping jobs.”

But, since MickeyD’s is still in business, those burgers still needed to be flipped. If American teens are no longer interested, guess where the work force has to come from. In a word, elsewhere.

 
Comment by X-GSfixr
2010-08-27 15:05:45

This is sweet….. A/S and I have something in common.

Of course, there is some debate whether I was actually fired from MickeyDs, or if it was an “official” resignation when I walked out…….. :).

 
Comment by Carl Morris
2010-08-27 15:20:49

If American teens are no longer interested, guess where the work force has to come from. In a word, elsewhere.

Fine with me as long as they’re legal. Otherwise pay needs to go up until interest is generated among legal workers.

 
 
 
 
Comment by aNYCdj
2010-08-27 21:22:15

Yup Bush was the Best pres for creating underground jobs….I always had cash flowing…

 
 
Comment by wmbz
2010-08-27 07:01:27

Bullish Sentiment Plummets to Credit Crisis Low
CNBC

The number of individual investors who have a bullish outlook on the stock market for the next six months plunged to 21 percent, from 30 percent last week, according to a widely followed sentiment survey.

What’s more, this is the lowest weekly reading from the American Association of Individual Investors since a March 2009 level of 19 percent, which occurred just before the S&P 500 collapsed to a 12-year low of 676.

So effectively, individual investors feel as good about stocks as they did at the very depths of the credit crisis, even though the S&P 500 is still more than 50 percent higher than that low.

Looking at the events of the past five days (the survey is completed every Wednesday) not much comes to mind that would trigger such a surge in pessimism. There was the record plunge in July existing home sales on Tuesday, but the stock market actually almost finished higher that day as traders speculated that was just the after-effects of a tax credit that pulled sales forward.

 
Comment by Professor Bear
2010-08-27 07:05:13

Major battle underway between HFT flash crash computers and liquidity pumps, as BB gives a speech.

Got popcorn?

 
Comment by wmbz
2010-08-27 07:08:06

This guy is a total dip sh!t clown… “if” economy falters? LOL!

Benanke: Fed Will Take Action if Economy Falters- AP

Federal Reserve Chairman Ben Bernanke says the Fed will consider making another large-scale purchase of securities if the slowing economy were to deteriorate significantly and signs of deflation were to flare.

Comment by pressboardbox
2010-08-27 08:00:10

Lets just hope they keep the fake positive GDP numbers coming at Heli-Ben and he wont have an excuse to print and buy crap.

 
Comment by pismoclam
2010-08-27 22:06:27

PIMCO’s chief wants him to buy some crappy bonds.

 
 
Comment by wmbz
2010-08-27 07:10:16

S&P Heading to 950: Stick With Bonds, Gold + Cash, Says “Very Concerned” John Roque of WJB Capital.

 
Comment by exeter
2010-08-27 07:16:43

Get what you can get for your house today because it’s going to be less tomorrow……. for many years to come.

 
Comment by Professor Bear
2010-08-27 07:35:55

Gollum’s candidate has taken the lead… government of the people, by the banks, for the banks on the way for any remaining people of California…

* August 26, 2010, 4:19 PM EDT
* The Elections home page

Whitman pulls ahead in California, thanks to funds

Billionaire Meg Whitman has pulled ahead of Attorney General Jerry Brown in the race for California governor, according to the latest survey from Rasmussen Reports.

Whitman, a Republican and former chief executive of eBay Inc., now leads Brown, who was the state’s Democratic governor in the 1970s and early 80s, by a margin of 48% to 40%. Rasmussen points out that Whitman benefitted from momentum off the state’s Republican convention.

Other reports note that Whitman also has collected — and likely spent — far more than her opponent. The California Secretary of State’s office says Whitman has collected $97 million since the first of the year, much of that total from herself. Brown, meanwhile, has taken in $21.4 million, or roughly one-fifth of Whitman’s war chest.

The gap between the two is much greater when it comes to funds collected since the June 8 primary. Brown’s take during that time has been $2.4 million. Whitman reported collecting $18.4 million during that period — including a $13 million contribution from herself — or roughly eight times that of her opponent.

Comment by Hwy50ina49Dodge
2010-08-27 08:57:21

Meg / 2010
Beg / 2011

:-)

Comment by scdave
2010-08-27 10:47:03

LOL…..

 
 
Comment by rentor
2010-08-27 13:08:56

Her radio ads say she will go after fraud and waste to close the gap. Sounds like a line from Obama healthcare.

Comment by Professor Bear
2010-08-27 14:24:17

As a former GS director, I am sure she will know fraud when she sees it…

 
 
 
Comment by Boise IDaho
2010-08-27 07:36:20

I rarely watch the news anymore. The news is too depressing and the politics makes me think I need medication.

 
Comment by dude
2010-08-27 07:44:23

Just a bit of personal news. I became a grandpa last week. Cutest little girl ever IMHO.

Comment by Arizona Slim
2010-08-27 07:57:54

Yaaaaaaaaay!

 
Comment by REhobbyist
2010-08-27 08:00:25

Congratulations, dude. I got a photo from a close friend who became a grandma this week. My kids are very close to my mom, their only remaining grandparent - a very special relationship. I look forward to being a grandmother,but I won’t start dropping hints until I retire in two years (my son and his girlfriend are only 25), because I want to babysit. Our house is across the street from a park with a zoo, kiddie amusement park, and pony rides - perfect!

Comment by oxide
2010-08-27 08:39:40

but I won’t start dropping hints

How polite of you.

Comment by REhobbyist
2010-08-27 09:22:45

LOL, oxide. I remember when my mother had three 30-ish, married daughters. She called us weekly to find out if we were pregnant yet.

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Comment by aNYCdj
2010-08-27 21:44:59

Dropping hints and they are unmarried????

I thought that was the best reason for umm …shackin up

was grandma and pa didn’t want illegitimate kids and they kept quiet …………..my times have changed.

 
 
Comment by Kim
2010-08-27 08:01:06

Awwww… congratulations, Dude!

 
Comment by Arizona Slim
2010-08-27 08:02:51

I’ll be eternally grateful to Grandpa (my father’s father) for what he taught me: The rules and strategy of baseball. (Thanks, Grandpa!)

 
Comment by Hwy50ina49Dodge
2010-08-27 08:31:57

Congrats dude,…see, Mother-Nature sure has a clever way to force one to do those lower back exercises,… with a smile!. ;-)

 
Comment by scdave
2010-08-27 08:53:31

Good for you… :)

 
Comment by SanFranciscoBayAreaGal
2010-08-27 10:16:59

Congratulations Grandpa. :)

 
Comment by dude
2010-08-27 16:41:32

Thanks all.

 
Comment by awaiting wipeout
2010-08-27 18:42:42

dude-
That’s great news.
What did they name the little noise maker, with eyes that melt you?
Does she remind you how old you’re getting?
(My husband says kids are noisy time keepers- you see time slipping away, as you watch them grow up.)

Comment by dude
2010-08-28 14:36:53

Elizabeth. I don’t feel any older, but then I was a young early twenties father and my daughter is a young early twenties mother. I will say though that I miss this baby and want to see her again soon more so than even my dear wife who is with them to help with the transition.

 
 
Comment by hip in zilker
2010-08-27 18:58:37

Congratulations Dude. Grandparents are great!

 
 
Comment by Arizona Slim
2010-08-27 08:01:19

Someone around here has a very interesting sense of humor.

Yesterday afternoon, I had to ride down to the food co-op so I could replenish the larder here at the Arizona Slim Ranch. En route, I passed by a partially renovated, boarded up house. It’s been in that state for, oh, a couple of years.

Attached to the mailbox post — from which the mailbox had been removed about a year ago — was a “For Rent” sign. But there was no contact info on the sign,

Comment by DennisN
2010-08-27 09:18:16

Might have been a drive-by humorist.

It always annoys me to read a Craigslist ad for something I want with no contact information. Don’t people ever learn proofreading?

 
Comment by Prime_Is_Contained
2010-08-27 09:24:44

LOL, Slim! I wonder whether they bothered to finish up any of that renovation or not before listing it for rent. Would be awesome if they are trying to rent it “as-is”. :-) :-)

Comment by Arizona Slim
2010-08-27 09:54:24

The renovations appear to be on permanent hold. And the OSB sheathing is going to have to be replaced, as it’s been exposed to the elements for far too long. (Say, about two years.)

Comment by Prime_Is_Contained
2010-08-27 12:40:25

OMG, this is almost too good to believe: listing it for rent with the OSB sheathing as siding??? Priceless!

Slim, I think we need a pic for the HBB photos gallery. This one could be a classic…

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Comment by REhobbyist
2010-08-27 08:02:45

I put in an offer of $40,000 for a condo yesterday. 600 sq ft, one bedroom, $230/month HOA. It’s for my younger son. Feel free to talk me out of it, HBBers.

Comment by pressboardbox
2010-08-27 08:06:57

What are you, Nuts!!? You wanna be priced-in forever?

 
Comment by packman
2010-08-27 08:14:49

Feel free to talk me out of it, HBBers.

1

2

Comment by The_Overdog
2010-08-27 09:19:28

Man, there’s no need to be cruel!

My advice would not be to buy your son a tiny single condo, and I’m assuming he’s somewhat single and of college age and not hit by rough life circumstances. Make him rent with a roomie. It’s better for his sanity and will better teach him how to get along with the rest of the world.

My $.02.

Comment by REhobbyist
2010-08-27 16:25:06

He graduated from college and is working now. He has always had roommates. Some of you may recall that I bought a little REO house in Jan 2009 for the kids. It’s crowded now with my other son’s girlfriend and my younger son’s friends and girlfriends. I thought they’d all get along better if each had his own place. They have two bedroom condos in the complex but frankly I don’t want him to take in any of his needy buddies.

If he moves away it would be easy to rent.

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Comment by Hwy50ina49Dodge
2010-08-27 08:20:01

Opps, sorry… misplaced post

Geez, who’d thunk that you could find a mortgage payment less than the monthly HOA? ;-)

Plan A:
4.750% Interest rate / 5.317% APR
Monthly payment: $166 + $230 HOA = $496.00
Lender fees: $1,995
0 points

Plan B: KOA
$25.00 per night x 30 = $750.00
No HOA, No upkeep, No yearly taxes

Comment by Hwy50ina49Dodge
2010-08-27 08:52:21

Monthly payment: $166 + $230 HOA = $496.00

2nd cup of coffee rewrite:

Monthly payment: $166 + $230 HOA = $396.00

 
Comment by scdave
2010-08-27 08:56:03

Plan B: KOA ??

You crack me up Hwy… :)

 
Comment by Prime_Is_Contained
2010-08-27 09:27:42

“Plan B: KOA
$25.00 per night x 30 = $750.00
No HOA, No upkeep, No yearly taxes”

You’ve hit on a hot-button of mine, Hwy: it pisses me off to no end that camping fees (event at state campgrounds) are so high now that they typically exceed the rent on a decent in-the-city apartment. WTF? How much can it cost to maintain a small piece of dirt on which to pitch a tent???

Thanks, but I’ll backpack instead, where the camping fees are typically zero.

Comment by Hwy50ina49Dodge
2010-08-27 10:42:28

Prime, I’m not suggesting that $25.00 is OK, as Hwy50’s hole-in-the-wall gang are heckava BIG time campers&packers

(incidentally, in CA even parking at a vista or trail head requires “wilderness permit” $5.00)

Two years ago whilst “researching” in a remote area of Northern Nevada, we found a beautiful campground x12 sites, no one there, (xceptin critters)…attached to a water spigot was a hand-written note from the Ranger:

“If the water pipe is frozen, reduce your fee by 50%” Since we have the National Park/Forest yearly pass our site cost was $3.00 per day :-)

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Comment by 2banana
2010-08-27 08:26:47

Rule of thumb:

$40,000 / 100 = $400 per month or less - it would make sense to rent.

Did you check into the HOA fees? Any “special assessments” coming? Are all the condo owners paying? How many empty units?

Taxes + insurance + HOA + P/I + upkeep = what? More or less than renting the same place?

If the numbers are close and it is a nice place and your son loves it - Go for it!!!

Comment by REhobbyist
2010-08-27 09:53:51

I love you, Banana. Based on your questions I did a little more investigation. The complex was built in 1990, but sales records for every unit begin in 2005, and every one-bedroom condo sold for $187,000! That tells me that it was a condo conversion, and that every single unit is destined to default. I had incorrectly assumed that there were long-time owners there. Wrong. Several sold in 2009 for $90,000. Asking price is $50,000, and I offered $40,000. But special assessments will be inevitable. I will back out.

I owe you a beer, Banana. But you have to promise not to talk politics - only housing! ;-)

Comment by Hwy50ina49Dodge
2010-08-27 10:26:47

2005, and every one-bedroom condo sold for $187,000!

$187,000…to…$50,000…in 5 years time? wow…

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Comment by 2banana
2010-08-27 11:08:27

1 beer

But it must be made in a right-to-work state, the beer company recieved no TARP funds, the beer company has no SIV or off-balance sheet accounts, the beer company does not own a sub-prime lender and all profits of the beer go to the owners/shareholders of the company.

So if GM made a beer - it would be a no-go.

:-)

It actually sound like you dodged a bullet. Every one of those $187K condo is going to default. Can you say “HOA special assessments on whoever is left out the wazoo for the next ten years….”

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Comment by Prime_Is_Contained
2010-08-27 12:44:35

“Every one of those $187K condo is going to default. Can you say “HOA special assessments on whoever is left out the wazoo for the next ten years….””

And while those condos are in limbo (e.g. depending on how long the banks put off foreclosure), none of them will be paying HOA dues…

Eventually any buyers should pay them up current at closing, but in the meantime, the HOA could fall upon some serious hard times.

 
 
Comment by WT Economist
2010-08-27 11:09:41

Well, there you go.

My advice with condos is…buy the entire building, or else get hit with the operating costs of the whole thing due to rolling defaults.

There will be an opportunity to score cheap housing for groups of people who can buy together, and thus ensure they don’t end up being the lone sucker.

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Comment by Arizona Slim
2010-08-27 11:31:27

Speaking of buying the building, this would be a wonderful opportunity for the cooperative approach. Have you ever lived in a housing co-op? I have, and it was a truly wonderful experience.

 
Comment by Carl Morris
2010-08-27 12:55:14

Have you ever lived in a housing co-op?

No, but I’d love to with the right group of people. I actually miss the army barracks, at least when we were being left alone.

 
Comment by Hwy50ina49Dodge
2010-08-27 13:12:39

Have you ever lived in a housing co-op? I have, and it was a truly wonderful experience.

Berkeley / Julie / pianist / music / wine… ;-)

Hutterites / Montana / beer / …not quite the same

 
Comment by hip in zilker
2010-08-27 19:42:21

I never lived in a proper ‘institutional’ co-op, but I lived in communal housing late in undergrad years - 13 of us lived in a former frat house.

Everyone helped look out for my cats, who loved the situation. (With that many students, there was always someone who was napping - good kitty company.)

What made it interesting was that besides two of us who were “academic” - the rest were all theater majors!

It was different. Constant drama, constant performance, constant one-upmanship. A nice counterbalance to my life as a drudge.

We gathered weekly to listen to Firesign Theater on the radio.

 
Comment by DennisN
2010-08-27 20:05:07

Ruthlessly!

I wonder where Ruth is?

…..

Rignad Kcin!!!!

 
 
Comment by neuromance
2010-08-27 18:47:09

Wow - if a rather astute HBB’er was going to take the plunge, imagine how little chance civilians have :-0

There has got to be a better way to buy real estate in this country, than to rely on the tender mercies of the NAR and the banks.

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Comment by DennisN
2010-08-27 09:23:22

My HOA on a large SFH is $25/month, and that includes free irrigation water. That $230/month sounds high to me.

Comment by Prime_Is_Contained
2010-08-27 09:30:17

Condos _should_ have higher HOA fees than an area of SFHs; after all, the condos HOA has to cover maintenance, cost of a new roof every so many years, etc etc etc. Your HOA probably does not put a new roof on your SFH for you.

 
Comment by scdave
2010-08-27 10:50:08

That $230/month sounds high to me ??

Not if its a conversion DennisN….Hi reserve requirements for a conversion…

 
 
Comment by DennisN
2010-08-27 09:26:07

What city? We can’t make fun of you without knowing the city. ;)

Comment by REhobbyist
2010-08-27 09:56:38

Sacramento, DennisN. I raised two sons and therefore have learned to enjoy being made fun of.

It is a nice complex - nice pool, workout room, party room. Nice for a young guy like my son.

Comment by scdave
2010-08-27 10:52:02

And for $40,000. you got him out of the house..Sounds like a screaming bargain to me.

:)

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Comment by REhobbyist
2010-08-27 16:32:36

You read my mind, scdave. Buying foreclosed properties so that my husband and I can enjoy peace and quiet every night is heavenly. They often come over for dinner, but they always leave!

I’m not a car person, but I love buying real estate.

 
 
 
 
Comment by WT Economist
2010-08-27 11:07:09

Where is it, and what is the comparable rent? I’d buy it in Brooklyn, but not in Las Vegas.

 
 
Comment by pressboardbox
2010-08-27 08:08:59

Lost phrase of the bubble: Snapping Up

Remember every article about housing was rife with “investors snapping up houses and condos”?

Comment by Al
2010-08-27 09:28:11

I’d love to hear some talking head used the word ‘contained’ about something. Maybe, “The economic recovery is being contained to the banking industry*.”

 
Comment by DennisN
2010-08-27 09:34:35

Whenever I hear someone “snapping up” I tend to think along these lines…..

http://www.capitalpunishmentuk.org/hanging2.html#long

 
Comment by Professor Bear
2010-08-27 09:40:05

They’ve been snapping up stocks like hot cakes after BB’s speech…

Comment by wmbz
2010-08-27 10:40:12

Funny how that works, like anyone with a grain of sense doesn’t know that BB will keep the presses running. “If” there’s a problem!

 
 
Comment by sfbubblebuyer
2010-08-27 13:15:24

They should be talking about how investors are choking on and barfing up those same investments they snapped up earlier.

 
 
Comment by Hwy50ina49Dodge
2010-08-27 08:18:33

Geez, who’d thunk that you could find a mortgage payment less than the monthly HOA? ;-)

Plan A:
4.750% Interest rate / 5.317% APR
Monthly payment: $166 + $230 HOA = $496.00
Lender fees: $1,995
0 points

Plan B: KOA
$25.00 per night x 30 = $750.00
No HOA, No upkeep, No yearly taxes

 
Comment by Hwy50ina49Dodge
2010-08-27 08:49:45

Google raises stakes with disruptive calling service Company to plant phone booths in retro pitch to promote Internet service:

By John Letzing, MarketWatch SAN FRANCISCO

“Google Voice was met with sharp criticism last year from traditional telecom giants such as AT&T Inc. which argued with the U.S. Federal Communications Commission that it should be regulated as a traditional telecom service. Google countered that as a free Internet service, Google Voice is exempt from such regulation.”

The Mountain View, Calif.-based Internet major is also deploying a related marketing campaign, which will have it placing at least five custom-made phone booths at airports and college campuses around the U.S., where potential users can pick up a hand set and sample the service.

Google on Wednesday unveiled its Gmail voice service, which enables users to call any phone on Google Voice directly through their email account. Calls made to phones within the U.S. and Canada are free, at least until the end of the year, while charges for international calls are billed at rates as low as 2 cents a minute.”

Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)

AT&T = “These f@!king Guys!,” Blockbusters Jon Stewart. ;-)

 
Comment by Professor Bear
2010-08-27 09:42:04

The Big Interview with Robert Shiller
Aug. 27, 2010

Robert Shiller, Professor of Economics at Yale University, sits down with Simon Constable to discuss the sharp falloff in home sales, the likelihood of a double-dip recession and what the Federal Reserve should do to stimulate the U.S. economy.

Comment by awaiting wipeout
2010-08-27 10:21:51

Shiller suggests growing govt jobs and adding to the bureaucratic tower of govt agencies. Yeah, why not dig deeper, when you’re in a hole! He’s a clueless twit, imho.

 
Comment by WT Economist
2010-08-27 11:06:00

Well, I thought the idea was infrastructure, so future generations would get something for the money that is being borrowed to stimulate the economy, and since construction and industrial workers are a high share of those unemployed.

I see union politics as a big obstacle here. Federal projects have to be “prevailing wage,” which means the richest union contracts signed at the height of the bubble, even though most earn far less. And requirements to make sure the contracts are “fair” to this group or that stall action, and don’t always make things fair anyway. You didn’t have all these self-imposed obstacles when stuff got built during the Great Depression.

 
 
Comment by SV guy
2010-08-27 09:53:55

Such hostility amongst the blog today.

I would think by this stage the vast majority of us can see the two party charade for what it is.
Polecats on both sides of the aisle.

I am at my Montana property right now. Almost no time for the web right now.

REHobbyist, Good luck in beating BC. My mother had a bad go of it and succumbed to the disease 7 years ago.

Packman, I missed the “new” home sales part of the post yesterday.

I’ll check in when I can

Comment by Hwy50ina49Dodge
2010-08-27 10:19:28

I am at my Montana property right now

Where ’bouts geographically?

What type property?

 
Comment by awaiting wipeout
2010-08-27 10:25:04

There are 6 known types of BC, and evidently REHobbyist has a curable one. Might I add, there is a study going on to find the relationship between gut flora and BC. I’m hooked on Probiotics!

Comment by awaiting wipeout
2010-08-27 10:32:43

Correction on gut flora (good and bad bacteria mix). The study is to find out if there is a relationship, and if so, what is it. So far, it’s leaning towards evidence that there is. I just read about it this week.

 
 
Comment by packman
2010-08-27 11:31:21

I would think by this stage the vast majority of us can see the two party charade for what it is.

I think majority can and does. There are some holdouts who just can’t get past their partisanship.

Somebody should do a study (I might sometime, no time now):
- Go through a few weeks’ worth of HBB threads.
- Find the first time someone mentions a specific political party (implicitly or explicitly) in each thread/subthread.
- Keep a tally of poster names and counts.

That’d probably be a good gauge. We could even have a “most partisan poster” award.

Comment by sfbubblebuyer
2010-08-27 13:18:31

Penalize anybody who mentions Ayn Rand with a flogging while you’re at it.

Comment by packman
2010-08-27 13:40:56

Then we’d have to throw in Keynes, FDR, Beck, Limbaugh, Mises, Jackson, etc. etc. A bit overkill for the discussion.

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Comment by drumminj
2010-08-27 18:25:14

We could even have a “most partisan poster” award.

so long as the “trophy” is a cone of shame :)

 
 
Comment by REhobbyist
2010-08-27 16:36:46

Thanks, SV guy. I’m sitting in the infusion chair right now, getting my fourth chemo treatment. I won’t have to succumb. I only had one small positive lymph node and the primary tumor was small. All of this treatment will almost guarantee that it won’t come back for at least ten years. So it’s worth it.

That said, the chemo really wipes me out for a week.

 
 
Comment by wmbz
2010-08-27 10:36:29

Thousands seeking mortgage help line up at Palm Beach County Convention Center this morning. ~ The Palm Beach Post

WEST PALM BEACH — Thousands of people are lined up this morning outside the Palm Beach County Convention Center - some arriving by the busload, hoping the Neighborhood Assistance Corp. of America will help them save their homes.

They are here from throughout the country, including Detroit and California.

“I’m here because I have to be,” said P. Reed, who drove all night from South Carolina. “They put me in foreclosure last week.”

The non-profit group opened the doors at 9 a.m. to begin a five-day marathon of around-the-clock loan modifications. The event, which is free, aims to get homeowners cheaper monthly mortgage payments through interest rate reductions, extending the life of the loan and a reduction in loan amount.

To be first in line, Lizandra Garcet, of West Palm Beach, arrived Thursday morning to set up her beach chairs at the front entrance of the convention center.

But she was too late to take the top spot in the queue. Someone, who came on Wednesday, got that.

Lizandra, 16, is helping her mother, who doesn’t speak fluent English, through the process.

They came on the last day of the event when NACA was in West Palm Beach in February, but it was too late to get help.

This time they wanted to make sure they got in.

“We’ve been here the whole night,” she said, as rain clouds threatened to soak those in line. “We just don’t want to lose our home.”

Comment by sfbubblebuyer
2010-08-27 13:25:48

I believe these were the exact same people waiting all night in line to put in offers on the new condos that went up in 2005.

 
 
Comment by Professor Bear
2010-08-27 11:10:01

New game plan: Make overly pessimistic forecasts, to help the stock market rally on ‘better than expected,’ though still negative, data releases.

Economic growth slows to 1.6 pct. in the spring
By CHRISTOPHER S. RUGABER (AP) – 2 hours ago

WASHINGTON — The economy grew at a much slower pace this spring than previously estimated, mostly due to the largest surge in imports in 26 years and a slowdown in companies’ restocking of goods,

The nation’s gross domestic product — the broadest measure of the economy’s output — grew at a 1.6 percent annual rate in the April-to-June period, the Commerce Department said Friday. That’s down from an initial estimate of 2.4 percent last month and much slower than the first quarter’s 3.7 percent pace.

Shortly after the revision was announced, Federal Reserve Chairman Ben Bernanke said the Fed will consider making another large-scale purchase of securities if the slowing economy deteriorates significantly.

But the Fed chief stopped short of committing to any specific action.

Bernanke described the economic outlook as “inherently uncertain” and said the economy “remains vulnerable to unexpected developments.”

Comment by sfbubblebuyer
2010-08-27 13:27:34

You’ll know it’s true when Obama mentions off hand that they expect California to fall off the earth in 5 seconds. Wait… wait… WHEW! It didn’t! Everybody stock market rally!

Comment by X-GSfixr
2010-08-27 14:58:12

Doctor: “Good news, we only have to remove one of your ‘nads.”

X-GSR: “Man that is good news. Makes me want to invest in the stock market”.

 
 
 
Comment by wmbz
2010-08-27 11:12:17

Environmental Protection Agency Reviewing Petition to Ban Lead Bullets
Will the EPA infuriate gun owners–and seal the fate of Democrats on November 2?

Will Environmental Protection Agency Administrator Lisa Jackson make a back door move to ban lead bullets the day before the November 2 elections?

Several environmentalist groups led by the Center for Biological Diversity (CBD) are petitioning the EPA to ban lead bullets and shot (as well as lead sinkers for fishing) under the Toxic Substances Control Act (TSCA). Although EPA is barred by statute from controlling ammunition, CBD is seeking to work farther back along the manufacturing chain and have EPA ban the use of lead in bullets and shot because non-lead alternatives are available. But here’s the catch: the alternatives to lead bullets are more expensive. A ban on the sale of lead ammunition would force hunters and sport shooters to buy non-lead ammunition that is often double the cost of traditional lead ammunition. A box of deer hunting bullets in a popular caliber could be upwards of $55.

Comment by packman
2010-08-27 11:38:15

Interesting this just came out. Just the other day I watched a Modern Marvels (recorded months ago) on bullets. They mentioned the lead-free bullets, and how now army and police teams are doing quite huge cleanup work on their firing ranges due to all the lead there.

I could see it being a problem at firing range. However lead is generally only toxic when breathed in, in powder form. That’s why lead paint on houses isn’t really a problem until you attempt to remove the paint by sanding it (scraping or power-washing generally isn’t a problem). Unless perhaps you eat high quantities of it of course - but generally when someone eats lead it’s because someone wants them to die.

Comment by Hwy50ina49Dodge
2010-08-27 12:12:50

That’s why lead paint on houses…

Really?, ever see what a infant does with it’s fingernails? Guess where they put what’s in their hands 99% of the time?. How old are you? Reckon you figure every slumlord in America uses Sherwin-Williams designer eco-friendly paints to refurbish their low-income units.

(Hwy50’s, older brother (The Millionaire) nearly died in Kansas 1953, on accounts our mother sits him in a chair on the farms front porch, darned if he didn’t figure a way to lean over and start gnawin’ on the post supporting the porch roof…seems thar b lead in the stain…got blood poisoning)

Comment by X-GSfixr
2010-08-27 14:54:01

Not much to do out here. Still chewin’ on posts myself….. :)

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Comment by hip in zilker
2010-08-27 18:30:27

:lol:

You’re lucky, X-GS, you live in eastern Kansas where there are posts to chew!

Where I grew up in western Kansas the posts were made of limestone. We didn’t have anything to chew on but tumbleweeds.

 
 
 
 
Comment by Arizona Slim
2010-08-27 11:47:29

I am of two minds on this issue.

I’m an almost-lifelong shooter, and I don’t think I’ve ever used non-lead bullets. Something about the cost.

But I’ve helped my dad make bullets, and I couldn’t help but think that those molten lead fumes weren’t the best thing to be around. Made me wonder about putting it into the ground behind the target stands at the range.

Comment by Hwy50ina49Dodge
2010-08-27 12:17:01

I am of two minds on this issue.

America don’t need no stinkin’ Condors…

 
Comment by X-GSfixr
2010-08-27 14:52:25

No problemo

Public ranges around here dig up and hauls off the berm periodically, recycles the lead.

Comment by Arizona Slim
2010-08-27 15:58:11

My dad and I used to did the lead out of the dirt behind the target stands at the range. That’s how we got enough lead to make our bullets.

(Comments wont nest below this level)
 
 
 
Comment by DennisN
2010-08-27 17:13:31

A real problem with steel shot and copper bullets is that they tend to wear out the barrels more quickly. That’s another cost-driver with your $1,200 shotgun or rifle.

 
 
Comment by wmbz
2010-08-27 11:18:02

The Most Fiscally Irresponsible Government in U.S. History
Current federal budget trends are capable of destroying this country
By Mortimer B. Zuckerman ~ U.S. News

There is an instinctive conclusion among the American public that President Obama’s stimulus package has failed to create a sustained recovery. Unemployment has increased, not declined; consumers have retrenched; housing starts have crashed along with mortgage applications; and there is a fear that a double-dip recession may very well be in the pipeline. The public perception, reflected in Pew Research/National Journal polls, is that the measures to combat the Great Recession have mostly helped large banks and financial institutions, and that’s a view common to Republicans (75 percent) and Democrats (73 percent). Only one third of either political leaning thinks government policies have done a great deal or a fair amount for the poor.

There is another instinctive conclusion among the American people. It is that the national deficit, and the debts we have accumulated, are of critical political importance. On the national debt, the money
the government has spent without the tax revenues to pay for it has produced mind-numbing numbers so large as to be disconnected from reality. Zeros from here to infinity. The sums are hard to describe; it is hard to describe an elephant, but you know one when you see one. The public knows that, shuffle the numbers as you may, the level of debt is unsustainable.

Comment by Hwy50ina49Dodge
2010-08-27 12:29:44

posted by & already discussed, where you been?:

comment by 2banana 2010-08-27 05:46:40

Wait a least 15 minutes before you post it…again…and again.

“…trends are capable of destroying…”

Yikes, we’re not going to make it 2012 even! ;-)

 
Comment by WT Economist
2010-08-27 12:42:38

So Mort, should we raise your taxes or cut senior benefits for younger generations?

What? You want to cut benefits for younger generations only? Forget it. The sooner the ship goes down, the more likely your generation will still be on it to share the experience.

Comment by X-GSfixr
2010-08-27 14:50:35

Current Republican leadership……long on bi#ching, short on ideas other than “cut taxes/regulation”.

 
 
 
Comment by wmbz
2010-08-27 11:28:36

12% of Houston homes underwater
Houston Business Journal

About 12 percent of residential properties in the Houston-Sugar Land-Baytown are underwater, according to a recent report from financial and real estate data provider CoreLogic.

The report says 111,311 mortgaged properties in Houston-Sugar Land-Baytown are in a situation where the mortgage value is higher than the home’s actual value.

The report attributes most of the declines in equity to foreclosures.

CoreLogic says another 5.9 percent of mortgage holders in the same sub-market are nearing a point where they also will be classified as upside down.

Nationwide, Nevada had the highest percentage negative equity with 68 percent of all of its mortgaged properties underwater.

“Negative equity continues to both drive foreclosures and impede the housing market recovery. With nearly 5 million borrowers currently in severe negative equity, defaults will remain at a high level for an extended period of time,” said Mark Fleming, chief economist with CoreLogic.

 
Comment by GrizzlyBear
2010-08-27 11:58:10

The moment crude oil approached $70 per barrel last Thursday, it started rocketing straight back up and is now over $75. Given fundamentals, it should be priced below $30. I’m wondering if we’ll soon reach a point when there are simply no more tankers and tank farms to hold all the excess oil.

Comment by packman
2010-08-27 12:28:15

Given fundamentals, it should be priced below $30.

Yep. Per the EIA - crude oil stocks are way, way above average right now. We’re running at 360M barrels, whereas the “normal” range for this time of year is 295-330M barrels.

Seems like this may be a case of all that new money trying to find a home.

 
 
Comment by GrizzlyBear
2010-08-27 12:02:09

US government subsidizing frankenfood. Big brother wants to poison you to enrichen fat cat CEO’s.

http://www.organicconsumers.org/gefood/govtsoyloans.cfm

Comment by sfbubblebuyer
2010-08-27 15:28:39

Every commercial crop is genetically engineered regardless of whether it occured in the field over generations or in the lab over a few years. This knee jerk branding of tech advances as bad are ridiculous. Go back to gathering wild berries and throwing rocks at rabbits if you don’t want to eat ‘engineered’ food.

That being said, if you want to slam a particular company in the food industry for specific practices, be my guest.

Comment by GrizzlyBear
2010-08-27 16:03:37

It’s this kind of mindless garbage that is so dangerous to our survival. You obviously have no clue what genetic engineering is, let alone what it is doing to our heirloom crops, and the danger companies like Monsanto, etc. pose to society and the environment as a whole. It’s hard to imagine why somebody would say something so stupid as you just did.

 
 
 
Comment by wmbz
2010-08-27 12:05:35

The street is all wee-weed up because bull$hit Ben Bernanke sez, whatever it takes boyz. I’ll keep printing, you guyz keep lining your pockets and the serfs will get the shaft and the bill. See how easy it is, nothing to it, even a little jerk like BB figured it out. Bitness as usual!

Comment by sfbubblebuyer
2010-08-27 15:29:48

The poor will always be poor… they won’t even notice if we hose them more in order to keep our pockets brimming with filthy lucre!

 
 
Comment by wmbz
2010-08-27 12:19:58

Clipped from: The 5 Minute Forecast

With oil sitting comfortably at $73 a barrel this morning, we cast a nervous eye toward the Middle East… where some little-noted developments are setting the stage for a return to triple-digit prices. Maybe very soon.

On the surface, this looks like a pretty routine Iraq story: An ambush there yesterday killed six members of a Sunni militia known as the “Awakening Councils.”

But the background the media didn’t supply makes this much more interesting — and ominous. See, the Awakening Councils are Sunni Muslims the U.S. government paid off in 2007 so they’d stop shooting at U.S. troops.

This was part of Gen. David Petraeus’ “surge” strategy: He promised the militiamen that in return, they’d get a seat at the table in Iraq’s new government, dominated by Shia Muslims. Problem is, Petraeus never got the Shia to buy into this.

What’s more, Iraq’s new Shia leaders have close ties to Shia-dominated Iran; in fact, several of them lived there in exile during Saddam Hussein’s rule. Our eyes perked up a bit at the location of the attack yesterday — within spitting distance of the border.

We don’t want to jump to conclusions about who’s to blame for this attack. Still, we take note because Iraq is the first of three flashpoints Byron King has identified in what he sees as a “New War” shaping up between Sunnis and Shia in the Middle East.

We might be willing to chalk this up to coincidence, except that…

Comment by Hwy50ina49Dodge
2010-08-27 12:36:29

Liberated female Iraqi politician who controls the oil, …controls Iraq.

Cheney-Shrub Legacy Policy #4: Shazam!-Islam-is-a-gonna-be-Democracy-any-day-now-just-you-all-wait-n-see ;-)

 
Comment by Jimmy Jazz
2010-08-27 12:58:56

“What’s more, Iraq’s new Shia leaders have close ties to Shia-dominated Iran; in fact, several of them lived there in exile during Saddam Hussein’s rule.”

This alone should have been enough to convince everyone what a horrible idea the invasion was….

Comment by scdave
2010-08-27 15:02:10

This alone should have been enough to convince everyone what a horrible idea the invasion was ??

Everyone did not matter…We had the decider and Darth Vader calling the shots…What the majority of the people thought was irrelevant…Were going to show-um Shock and Awe…

 
 
 
Comment by Red Beach
2010-08-27 12:20:51

Wow, I’m getting that ping in my gut again — I’m nervous for what’s about to happen next, but I want it to happen. I just hope my family can financially survive (AKA keep our jobs) this whole clustercrunk.

I can’t eat any more popcorn, just get to the part where Brad Pitt realizes his wife’s head is in a box.

Comment by Carl Morris
2010-08-27 13:03:21

Oh, you’ll eat more popcorn. You’ll be hungry lots of times again before we get to the good part. I thought I was too sick of it to eat any more three years ago, but here I am chomping away.

Comment by Red Beach
2010-08-27 19:21:43

“Oh, you’ll eat more popcorn.”

I can’t, I’m stuffed! No more!

 
 
 
Comment by wmbz
2010-08-27 12:29:26

What’s with all this jobs crap, don’t the masses know this is a jobless recovery? Besides if people would just get back to buying and selling houses to each other the problem would be solved, it’s really not complicated.

Housing’s new nightmare

NEW YORK (CNNMoney.com) — In another ominous sign for the economy, the number of people falling behind on their mortgages for the first time is on the rise.

This grim statistic is only the latest bad news for the reeling economy. Home sales are in free fall, initial jobless claims remain high and the gross domestic product slowed to a near halt in the second quarter, government reports issued this week showed.

The increase in short-term delinquencies is leaving some experts wondering whether a new round of foreclosures is on the horizon, even as the current wave begins to ebb.

Some 3.51% of borrowers were 30 days late in their loan payments in the second quarter, up from 3.31% at the end of last year, according to new data from the Mortgage Bankers Association. The shift is a stark reversal from the steady decline in short-term delinquencies during 2009.

The blame lies in the sputtering labor market, experts say. More people are losing their jobs, as evidenced in the steady rise in initial unemployment claims, and this is prompting them to default on their mortgages.

 
Comment by wmbz
2010-08-27 13:15:59

156,061 homes in N.C. ‘underwater’
Charlotte Business Journal

An estimated 6.6 percent of the residential properties with mortgages in North Carolina are “underwater,” meaning the property is worth less than what is owed on the loan, according to a report by CoreLogic Inc.

That works out to 156,061 homes statewide, CoreLogic says.

The figures are as of the end of the second quarter.

Nationwide, nearly 28 percent of all residential properties with a mortgage are underwater or in “near negative equity,” CoreLogic says.

“With nearly 5 million borrowers currently in severe negative equity, defaults will remain at a high level for an extended period of time,” says Mark Fleming, chief economist for Santa Ana, Calif.-based CoreLogic (NYSE:CLGX).

The highest concentrations of negative equity in the U.S. housing market are in Nevada, with 68 percent of the mortgaged residential properties underwater; Arizona, 50 percent; Florida, 46 percent; Michigan 38 percent; and California, 33 percent.

Comment by Hwy50ina49Dodge
2010-08-27 13:47:41

1860… 4 million (Non-Homemoaners) cotton-pickin’ slaves in these states:

Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas, and Virginia

2010…34 million folks “shackled to their debt”, wailin’ & moanin’… wailin’ & moanin’:

“we ain’t done nutin’… now the master said to us all: “Dis the best time ever to buys yourself some stucco”, …bestus grab hold of some whiles ya’ll havin’ the chances to”,… “Oh Lordy, we got’s ‘em keys but the door they’s open,…don’t lead us to freedom, no siree, we’s just plain stuck in the stucco mud, might as well just start a hurlin’ it on someone. Now’s everyone in these here parts, theys plum full of “TrueAnger™” why there’s a chorus of pain a risin’ clear from Charleston, South Carolina, clean past the West Texas sagebrush…they’s ALL awailin’ & moanin’…even them Yankee’s up North & out West: “Dis all the “gubmint’s” fault!” , …wailin’ & moanin’: “do somethin’ to help us!”,…all’s we’s wants now is someone, anyone to…set us FREE!

(Historians have estimated that one million slaves were moved west and to the Deep South from the Old South between 1790 and 1860. Most of the slaves were sold or transported from Maryland, Virginia, and the Carolinas, where changes in agriculture decreased demand. Originally the points of destination were Kentucky and Tennessee, but after 1810 the states of the Deep South: Georgia, Alabama, Mississippi, Louisiana and Texas received the most, and the Border States joined in selling “excess” slaves. This corresponded to the massive expansion of cotton cultivation in that region, which needed labor.

In the 1830s, almost 300,000 slaves were transported, with Alabama and Mississippi receiving 100,000 each. Every decade between 1810 and 1860 had at least 100,000 slaves moved from their state of origin. In the final decade before the Civil War, 250,000 were moved.)

 
 
Comment by wmbz
2010-08-27 13:18:34

Nearly 400 StarKist Co. cannery workers lose jobs (AP)

PAGO PAGO, American Samoa — About half of the 800 workers that StarKist Co. plans to lay off at its tuna cannery in American Samoa will lose their jobs this weekend.

StarKist Samoa General Manager Brett Butler told lawmakers in the U.S. territory Thursday that the first phase of layoffs will affect 380 workers on Saturday.

Butler testified before the House Commerce Committee, which called the hearing to learn about the status of the planned layoffs. The Pittsburgh-based company announced in May that it would reduce its work force at the cannery by the end of the year.

StarKist has had to contend with federally mandated minimum wage increases. Butler says other costs are also rising in such areas as utilities and transportation.

Comment by aNYCdj
2010-08-27 22:49:28

what crapola…

they went to a 5 oz can from what used to be 6 1/2 ounces just a few short years ago……and they beeatch about minimum wages???

 
 
Comment by wmbz
2010-08-27 13:21:02

Mullen: National Debt is a Security Threat
National Security Aug 27, 2010

The national debt is the single biggest threat to national security, according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit.

“That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending.

“We’re going to have to do that if it’s going to survive at all,” Mullen said, “and do it in a way that is predictable.”

He also called on the defense industry to hire veterans and become more robust in the future.

“I need the defense industry, in particular, to be robust,” he said. “My procurement budget is over $100 billion, [and] I need to be able to leverage that as much as possible with those [companies] who reach out [to veterans].”

Comment by X-GSfixr
2010-08-27 14:44:00

Sounds like someone is worried about having a bunch of people with military training not being able to find jobs.

No problemo……just announce new benefits, and put them in college on Uncle Sam’s nickel for 4 years, training for non existant jobs. Just keep kicking the can.

I don’t know about any of you, but I’m tired of dealing with all these gung-ho military retirees. They come out of the military, and start trying to rebuild the “civilian world” into the military world they just came out of. And of course, they all seem to be Limbaugh Republicans, where all the problems of the world are due to lazy freeloaders.

You’ll find out eventually that there is no “loyalty down” from your typical civilian chain-of-command.

Latest buzzword spewing from the Feds is “Safety Management Systems”. Another damn manual with a $hitload of procedures that need to be followed, under penalty of death (or worse, FAA enforcement action) for non-compliance. Of course, all the time needed to come up with an operator-specific manual comes out of my free-time.

Or hire consultants to develop one, who just so happen to be the same pukes who lobbied the FAA to mandate these programs.

Either way, we’ll spend 4 months developing the manual, and put it on the shelf, right next to my “TQM” and “Six-Sigma” paperwork.

Comment by REhobbyist
2010-08-27 16:52:33

The worst job I ever had was working for a retired military guy. I typed physician dictations at a hospital. For some reason they hired this guy to “supervise” us. He would literally sit at a desk watching us type our reports and tell us when to take a break. We had to ask his permission to use the bathroom. What a useless bag of skin! I typed at other hospitals without supervision. It was a great job - I worked on my own, did my work, and left when I was finished. Stress free.

 
 
 
Comment by wmbz
2010-08-27 13:22:43

Ground Zero Muslim center may get public financing.

NEW YORK (Reuters) - The Muslim center planned near the site of the World Trade Center attack could qualify for tax-free financing, a spokesman for City Comptroller John Liu said on Friday, and Liu is willing to consider approving the public subsidy.

The Democratic comptroller’s spokesman, Scott Sieber, said Liu supported the project. The center has sparked an intense debate over U.S. religious freedoms and the sanctity of the Trade Center site, where nearly 3,000 perished in the September 11, 2001 attack.

“If it turns out to be financially feasible and if they can demonstrate an ability to pay off the bonds and comply with the laws concerning tax-exempt financing, we’d certainly consider it,” Sieber told Reuters.

Spokesmen for Mayor Michael Bloomberg, Governor David Paterson and the Islamic center and were not immediately available.

The proposed center, two blocks from the Trade Center site in lower Manhattan, has caused a split between people who lost relatives and friends in the attack, as well as conservative politicians, and those who support the project. Among those who support it are the mayor, civic and religious groups, and some families of victims.

Comment by Hwy50ina49Dodge
2010-08-27 13:34:28

The Muslim center planned near the site of the World Trade Center attack could qualify for tax-free financing…

“George W. Shrub speaks about his faith-based initiative on the campaign trail in 2000. The initiative was at the center of the Hein v. Freedom From Religion Foundation case.”

In Hein v. Freedom From Religion Foundation (2007), the U.S. Supreme Court limited the power of federal courts to enforce the Establishment Clause’s restrictions on government funding of religion. In Hein, the high court ruled that unless a legislative body has directly authorized such funding, citizens do not have the right as taxpayers to bring a suit in federal court alleging that the funding violates the Establishment Clause.

How did the Hein case get to the U.S. Supreme Court?

The Hein case involved a constitutional challenge to conferences promoting the faith-based initiative, which was created by President George W. Bush in 2001 to eliminate obstacles that religious social-service organizations faced in competing with secular organizations for federal funding. At these conferences, President Bush and other government officials gave speeches praising the effectiveness of faith-based organizations in providing social services. Members of the Freedom From Religion Foundation, a church-state watchdog organization, brought a lawsuit alleging that these conferences had violated the Establishment Clause by promoting religion.

A U.S. District Court dismissed the suit on the ground that the members of the watchdog group lacked legal standing, meaning they did not demonstrate a personal interest in the case. The 7th U.S. Circuit Court of Appeals reversed the District Court’s decision, finding that the group’s members, as federal taxpayers, did have standing because the conferences promoted religious activities with federal tax dollars. Administration officials then asked the U.S. Supreme Court to hear the case, and the high court accepted the request.

BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)

pewresearch / what-limits-remain-on-government-funding-of-religion

 
 
Comment by wmbz
2010-08-27 13:25:04

Banks back switch to renminbi for trade

“We’re now capable of doing renminbi settlement in many parts of the world,” said Chris Lewis, HSBC’s head of trade for greater China. “All the other major international banks are frantically trying to do the same thing.”

HSBC and StanChart are among a slew of global banks – including Citigroup and JPMorgan – holding roadshows across Asia, Europe and the US to promote the renminbi to companies.

The move aligns the banks favourably with Beijing’s policy priorities and positions them to profit from what is expected to be a rapidly growing line of business in the future.

The phenomenon will accelerate Beijing’s drive to transform the renminbi from a domestic currency into a global medium of exchange like the dollar and euro.

Chinese central bank officials accompanied StanChart bankers on a roadshow to Korea and Japan in June. The bank held similar events in London, Frankfurt and Paris.

Lisa Robins, JPMorgan’s head of treasury and securities services for China, said there had been a “spike in interest” from international clients.

Comment by packman
2010-08-27 14:36:33

Wow - big news. Thanks for the post.

 
Comment by Hwy50ina49Dodge
2010-08-27 16:36:08

renminbi

:-)

Gold! Gold! Gold!
Wheat! Wheat! Wheat!
Bonds! Bonds! Bonds!
Coffee! Coffee! Coffee!
Renminbi! Renminbi! Renminbi!

Buy! Buy! Buy!
Flee! Flee! Flee!

“Chinese central bank officials accompanied,…bankers on a roadshow to..”

BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)

 
 
Comment by RioAmericanInBrasil
2010-08-27 13:26:26

It’s about time or just window dressing?

Feds arrest 370 immigrants in raids that include Missouri, Kansas
The Associated Press

Read more: http://www.kansascity.com/2010/08/27/2180635/feds-arrest-370-immigrants-in.html#ixzz0xq8ksE00

Federal officials in Chicago say they’ve arrested 370 immigrants who were in the U.S. illegally or were convicted of other crimes.

They say the arrests were made over three days in 10 states. Those arrested fall into three groups: legal immigrants with convictions that make them eligible for deportation, illegal immigrants who have been convicted of other crimes, and immigration fugitives, who are wanted just for being in the U.S. illegally.

 
Comment by wmbz
2010-08-27 13:40:41

Calif. gets $1.2B for teacher salaries
Silicon Valley / San Jose Business Journal

California will receive $1.2 billion to fund about 16,500 teaching jobs, according to an announcement Friday by Speaker Nancy Pelosi and Congressman George Miller.

Pelosi and Miller said the U.S. Department of Education approved the state’s application for the money through the Education Jobs and Medicaid Assistance Act.

“This is great news for California’s struggling economy, and it’s a critical win for California’s families, teachers and students. This investment ensures California’s students do not become victims of this economy,” the two said in a prepared statement.

Comment by jeff saturday
2010-08-27 19:08:28

Funny, they just took $400 million away from New Jersey schools for 1 mistake on 1 page of a 1000 page application. I wonder why?

Comment by aNYCdj
2010-08-27 23:07:36

And the NJ guv fired him…………

one tiny mistake and its curtains…..

OH the agony of defeat……..

I’ll never trust a Harvard grad who scored 800 on the English SAT again…what a waste of money

These people are trained to dot every I and cross every T…..

 
 
 
Comment by wmbz
2010-08-27 13:53:55

Currency expert Chuck Butler checks in from St. Louis.

“The Initial Jobless Claims yesterday were being ballyhooed by the media for ‘falling to 473,000′… Again, get a grip media! Do you really believe that having 473,000 NEW people file for unemployment last week was a good thing? Sure it wasn’t 504,000 like the previous week, but still 473,000 isn’t anything to be happy about! Especially if you are one of those 473,000! Or one of the 1,465,000 that have filed in the first 3 weeks of August! UGH! That’s nearly 4,700,000 this summer alone!”

Comment by wmbz
2010-08-27 14:06:57

Hey Chuck, this is exactly what Dingle-Barry and his moron side kick promised! A jobless recovery! I’ve been around for 54 years and I’ve never seen one like this, and it’s very exciting. Finally someone on the golf course to show us little people how it’s done. Go team Barry! Perhaps we can stay the course and have millions more unemployed by Christmas, just think how prosperous we’ll be then.

 
 
Comment by sfrenter
2010-08-27 14:11:21

Probably already been posted but nice to see this in the MSM (NY Times):

Pierce the Housing Bubble

Updated August 27, 2010, 04:55 PM
Dean Baker is an economist and co-director of the Center for Economic and Policy Research.

Virtually the entire economics profession insisted on ignoring the housing bubble as it expanded to ever more dangerous levels. Remarkably, even after the bursting of this bubble wrecked the economy and has given us the worst downturn in 70 years, most economists are still determined to ignore the bubble.

We will have to find alternative sources of demand to replace the demand generated by over-valued housing.
The basic story is very simple. For a hundred years, from 1896 to 1996, nationwide house prices just tracked the overall rate of inflation. This is a very long period in a very big market. If we see a trend like this persist for a hundred years it is reasonable to expect it to continue into the future, unless something big in the fundamentals changes. And, no one has produced any evidence that passes the laugh test that anything in the fundamentals of the housing market has changed.

This means that we should expect house prices to continue to fall, with nationwide prices dropping another 15 to 20 percent to complete the process of deflating the bubble. This price decline is inevitable and in many ways desirable. I don’t know why any of us would be happy if our kids had to pay more to buy their first house.

Trying to delay this adjustment process with schemes like the homebuyers’ tax credit were a pointless waste of money. Our government got millions more people to buy homes at bubble-inflated prices, ensuring that many will lose money when they sell. That is not good policy. Trying to sustain a bubble in the housing market is like having an agricultural price support program, except it is far more costly with far less benefit.

The housing bubble did support the economy prior to the recession. We will have to find alternative sources of demand to replace the demand generated by over-valued housing.

It is actually easy for economists to think of ways to generate demand. We can have public jobs programs, we can rebuild the country’s infrastructure, we can have tax cuts oriented toward low and middle-income people who will spend the money quickly.

We can also have the Fed be more aggressive with its monetary policy, targeting an inflation rate in the 3-4 percent range. We should also push down the value of the dollar to get our trade deficit down to a more reasonable size.

Unfortunately, all of these policies face serious political obstacles in Washington. However, the job of economists should be to explain the problem to policymakers and the public and to berate those who seek nonsense solutions like re-inflating a housing bubble.

Comment by measton
2010-08-27 14:54:31

We can also have the Fed be more aggressive with its monetary policy, targeting an inflation rate in the 3-4 percent range. We should also push down the value of the dollar to get our trade deficit down to a more reasonable size.

Unfortunately, all of these policies face serious political obstacles in Washington. However, the job of economists should be to explain the problem to policymakers and the public and to berate those who seek nonsense solutions like re-inflating a housing bubble.

Aren’t these two paragraphs contradictory. Doesn’t aggressive monetary policy encourage speculation and bubbles.

 
 
Comment by Professor Bear
2010-08-27 14:46:23

New Age Paradox of Thrift:

Spend yourself into a hole buying expensive housing and cheap crap made-in-China, only to find yourself at the mercy of bankers who borrow from the Fed at zero percent and lend to American households at “market rates.”

Save now, or pay unaffordable interest rates forever!

The Financial Times
‘Epidemic of thrift’ hampers growth
By Francesco Guerrera in New York
Published: August 27 2010 18:36 | Last updated: August 27 2010 18:36

“Central bankers alone cannot solve the world’s economic problems.”

Ben Bernanke’s aphorism, uttered in a long-awaited speech at the Jackson Hole economic symposium on Friday, sums up the challenges faced by his Federal Reserve as it labours to prevent the US from taking a double dip into recession.

Despite huge efforts by the central bank and the Obama administration to stimulate the private sector, consumers, banks and businesses remain reluctant to give the economy a much-needed boost in demand for goods and services.

The dilemma confronting policymakers is that this new-found love of thrift by households and financial institutions is precisely what the Fed wanted after their prodigal ways plunged the country into the crisis. Yet it also puts the brakes on economic activity at a time when the US is in desperate need of a driving force to kickstart its stalling recovery.

Household caution holds back consumer spending, while business caution holds back employment, reinforcing each other,” said Nigel Gault, chief US economist at IHS Global Insight, the research group, in a recent note. “The ‘epidemic’ of thrift may be good news for the long-term health of the economy, but in the short term it spells painful deleveraging and weak growth in demand.

Comment by pressboardbox
2010-08-27 15:35:19

Well, you wouldn’t want to be faced with Armageddon, would you? IIRC the only two choices were pay the evil megabanks who created the mess whatever they demanded or have our throats slit by marauding anarchists.

Me, I’ll take the obscenely-large bonus for the fat arrogant banker, of course. Maybe he will pay me to wax his yacht.

Sarcasm is king.

 
 
Comment by jeff saturday
2010-08-27 15:06:42

Thousands seeking help with mortgages jam Palm Beach County Convention Center

By Kimberly Miller Palm Beach Post Staff Writer
Updated: 3:08 p.m. Friday, Aug. 27, 2010
Posted: 6:52 a.m. Friday, Aug. 27, 2010

WEST PALM BEACH — The Palm Beach County Convention Center filled again today with tales of mortgage woe.

Before dawn, with a plump moon overhead, a line of desperate homeowners trailed around the outside of the building. They slept in beach chairs or on blankets on the ground, refugees from a bad economy, bad loans, or bad decisions.

They stayed even as the rain poured down on them.

Because for most of the people in the queue, the Neighborhood Assistance Corp. of America is the end of the line. The last chance to save their home.

The non-profit group will be at the convention center through Tuesday helping people get lower monthly payments through loan modifications. At least 1,000 people arrived before the doors opened.

“If the banks won’t come to you, you go to them,” said Detroit resident Brian Kelley, 44, as he blinked rainwater from his eyes.

Kelley, a Ford Motor Company employee, whose salary has been cut nearly in half, flew into Fort Lauderdale on Thursday, got a ride to the Tri-rail station, and took the train into West Palm Beach.

He had a cooler with sandwiches and water, anticipating a long day.

“Desperate times take desperate measures,” Kelley said.

He’s not the only desperate one.

More than 50,000 people are expected to attend the 5-day, around-the-clock event, said Bruce Marks, the CEO of the Boston-based NACA. Considering many people come in pairs, that could mean as many as 25,000 home loans will be worked on by the army of NACA counselors, who wear yellow T-shirts baring the NACA slogan; “Loan Sharks Beware.”

During the group’s visit to West Palm Beach in February, NACA reviewed 24,000 loans, modifying, at least temporarily, 16,097.

NACA brings hundreds of bank representatives to its “Save the Dream Tour” events. Borrowers first meet with a NACA counselor to settle on an affordable mortgage payment, typically something that is 31 percent or less than their gross salary.

They are threaded through waiting stations, filling in rows of seats like a line for a roller coaster.

Finally, the borrower speaks face-to-face with the bank representative.

The typical successful result is a new fixed interest rate as low as 2 percent. Some people also receive principal reductions on their loans.

Marks said he doesn’t use the federal Making Home Affordable program, which allows lenders to extend a loan to 40 years and award a modification with a 5-year expiration date.

Instead, he said he negotiates deals with banks that work with him because “it makes good business sense.”

“We get the job done, and we get it done in one shot,” said Marks, whose group has received $41.5 million in federal aid from the National Foreclosure Mitigation Counseling Program.

NACA also gets a $500 payment for every permanent modification that results in three successful mortgage payments, Marks said.

Marks has harsh words for banks, such as Chase, that refuse his advances.

In a cavernous convention center ballroom, hundreds of people sat Friday waiting to see a counselor. Marks had the microphone.

“We are suing Chase,” Marks said to uproarious applause from the crowd. “We want to make Chase the example of don’t mess with NACA and don’t mess with homeowners.”

Chase, which has two permanent customer service centers in Palm Beach County, is conducting a similar loan modification event in Orlando this week.

By 10:30 this morning, new arrivals to the NACA event were being directed to park at CityPlace, because the 1,100-spot convention center lot was full.

“I would encourage everyone to be patient because NACA is really doing a great job,” said West Palm Beach resident Jean Kercius, 38, who was pulled to a podium in the center of the convention center floor to announce his successful loan modification.

Kercius, who recently lost his job as a nursing assistant, got a fixed 2 percent interest rate and a principal reduction that cut his monthly payment from $1,333 to $716.

“I am overwhelmed and overjoyed,” he said.

243 COMMENTS here is 1

I attended the Save the Dream event NACA held in Phoenix AZ in 2009. I slept on the sidewalk the night before to make sure I had my place in line, and still ended up spending about a day and a half in line slowly going through their process. When I got to the IndyMac representative at last, I was offered a solution that exceeded my expectations, and I left very happy. I still haven’t seen that solution, but I am still in my house, very behind on my mortgage, and still processing.
Will A
2:52 PM, 8/27/2010

Comment by Hwy50ina49Dodge
2010-08-27 16:26:06

“Save the Dream Tour” = Nightmare before Christmas

(Hwy50 cherishes the head-spinning mayor)

 
 
Comment by Professor Bear
2010-08-27 16:33:29

Categories: Housing, Finance
How Wall Street Made The Mortgage Crisis Worse
by Adam Davidson
04:00 am
August 27, 2010

Planet Money partnered on this story with the investigative reporters at ProPublica. For more, see ProPublica.org.

I’m going to cut to the chase and tell you our conclusion first.

We believe we can show that some Wall Street bankers had evidence, a year or two before the financial crisis hit, that there were serious problems with subprime mortgage investments.

Rather than wind down this business, they sped it up using financial trickery. These people earned huge bonuses for their actions. They also made the crisis considerably larger and more damaging.

The folks we’re talking about work in the CDO department of big Wall Street banks — “the sexiest place to work on Wall Street,” in the words of Jake Bernstein, one of the ProPublica reporters who worked on this story.

CDOs — collateralized debt obligations — were the primary way that big banks turned those subprime mortgages into what we now think of as toxic assets. But back in 2006, they were just the hot new part of the industry. The people working on CDOs could make millions of dollars a year, but their income depended on how many CDOs they sold.

I think of a CDO like a sausage. Take meat nobody wants, toss it in a grinder, and out comes something delicious.

With CDOs, you buy a bunch of unattractive bonds backed by subprime mortgages, put them all together, then sell off pieces of this new structure. And, like sausages in a diner on Sunday morning, CDOs were incredibly popular.

“CDOs, they are the heart of the American boom,” says Jesse Eisinger, the other ProPublica reporter on the story. “Everyone wants them. Pension funds, insurance companies, small banks around the world.”

For about five years, during the housing boom, CDOs grew dramatically. Then, in the summer of 2006, the market started to cool. For the first time, lots of customers started saying no to the bankers selling CDOs. Customers like Peter Nowell, with the Royal Bank of Scotland.

“There were a lot of things that were being relaxed on a credit perspective over that time as people wanted to push out more and more deals,” he says. “Too many California mortgages. Too low credit scores.”

Comment by Professor Bear
2010-08-27 20:16:27

“Rather than wind down this business, they sped it up using financial trickery. These people earned huge bonuses for their actions. They also made the crisis considerably larger and more damaging.”

Was it legal?

 
 
Comment by Get Stucco
2010-08-27 16:36:20

Housing Market Woes Bring Familial Strife
by Yuki Noguchi

August 27, 2010

Until recently, homeownership was celebrated as a hallmark of upward social mobility. Today, many millions of people who owe more than their homes are worth feel it’s become quite the opposite. It prevents many people from being able to seek a better job. And in many cases, it’s taking a harsh emotional toll on families who find themselves stuck.

Among those frozen in place is Kelly Christensen, who was set to marry her longtime love, Joel Nerenberg. They bought a house in Burnsville, Minn., three years ago. They had wedding invitations printed. Then they broke up.

Two years later, they still own their home. Christensen’s wedding dress now hangs in her ex-fiance’s closet. He lives across the hall.

“Every time I’d come home, it was heartbreak,” Christensen says. It was both awkward and painful to mourn the loss of a shared future, yet still share a joint fate because they could not afford to sell their home, which still continues to lose value.

“There’s no way I would have thought this would happen, and no way I would have thought that my every day was defined by the fact that I owned this house somewhere that I don’t want to live,” she says.

 
Comment by neuromance
2010-08-27 18:34:16

It occurs to me that financial bubbles are like drugs. They feel great while you’re under their influence, but when they go away, the person crashes. They try to get more drug (bubble) but eventually, they can’t get high anymore. Eventually, they spiral in, winding up like toothless, broken-down meth-heads.

Deficit spending became a part of life with the US government after Carter. It’s like heroin. There are “disciplined” heroin users who able to hold jobs. But become undisciplined, and it kills quickly. I think the government has gotten undisciplined.

Keynesianism says the government should spend money to stimulate economic growth, to fill the gap when the private sector is contracting as malinvestment is burned away. But what if a significant chunk of the economic activity was unsustainable, fraud-based activity (dealing in bad debt?).

Has the current government spending done its job? Gotten us through the worst patch? And now this is the new normal?

 
Comment by jeff saturday
2010-08-27 19:04:19

Just a joke

Three Dog Night Never Been To Spain lyrics

Well I never been to Spain
But I kinda like the unions
Say the pensions are insane there
And they sure know how to use it
They sure abuse it
There gonna lose it
I can’t refuse it

Well I never been to England
But I kinda like the Muslims
Told them they could build there mosque here
I filled the country with Islamo fear
Can you feel it
It must be real it
Feels so good
Oh, feels so good

Well I never been to heaven
But I think I been to Kenya
Well they tell me I was born there
But I really don’t remember
Down on the border, there is no order
What does it matter
What does it matter

Well I never been to Spain
But I kinda like the unions
Say the pensions are insane there
And they sure know how to use it
They sure abuse it
There gonna lose it
I can’t refuse it

 
Comment by oc-ed
2010-08-27 20:17:39

Finally!!! The NYTimes sees what we have been saying on HBB for years.

“You have to wonder sometimes what they’re smoking over there at the National Association of Realtors.”

“Clearly, Mr. Yun needs to get out a little more often.”

“The second reason is that, Mr. Yun notwithstanding, most people simply do not believe that housing prices are even close to hitting bottom.”

“If the housing market is like an airplane on a runway, it is far more likely to crash at this point than it is to take off.”

http://tinyurl.com/25jgc4c

 
Comment by Professor Bear
2010-08-27 20:37:40

The Economist
Housing sales
Grinding to a halt
Loss of a credit collapses the market

Aug 26th 2010 | Washington, dc

THERE was always some concern that the Obama administration’s attempts to prop up the housing market with a generous housing-tax credit could end badly. Opponents of the policy—worth up to $8,000 for first-time buyers—argued that it would merely move sales around, from after the deadline to before, and could produce a slump when the deadline passed. Such fears helped clear the way for an extension of the programme from its first 2009 deadline to April of this year.

Despite some effort, Congress in the end decided against a second extension. With the support of the credit gone, a period of housing-market weakness was inevitable, but the actual decline has been distressingly bad.

On August 24th the National Association of Realtors reported that sales of existing houses for the month of July—the first in which most sales were started after the deadline—fell 27% from the previous month. Single-family houses sold at the slowest rate since 1995.

Those grim figures may not be a one-month fluke. New home sales are counted when contracts are signed, which means that July was the third month of data after the credit had expired. It was also the worst on record (the previous low came in 1981). Sales of new houses were down 32% year-on-year and down 80% from July 2005.

These rock-bottom sales figures indicate that housing markets in some cities have all but ground to a halt—despite extraordinarily low mortgage-interest rates. They may also presage a new period of declining prices. Falling prices could drive more homeowners into foreclosure, which is the last thing most markets need. At current low sales rates, it may take a decade to clear the backlog of houses owned by the banks.

If there is a bright side, it is that these numbers may force policymakers to reconsider a housing-policy approach that has clearly come up short. In the meantime, any hope that housing construction and employment may begin contributing to growth has been soundly squashed.

United States

Comment by Professor Bear
2010-08-27 20:42:48

“At current low sales rates, it may take a decade to clear the backlog of houses owned by the banks.”

Maybe if the banks would put more homes on the market instead of hoarding them, that inventory could shrink more quickly, and Realtors™ could get back to work as well. As things currently stand, there are so few homes on the market that would-be buyers have little choice, and also face the risk of overpaying due to said lack of choice.

Comment by oc-ed
2010-08-27 22:42:03

“…the risk of overpaying due to said lack of choice.”

The lenders are holding out as long as they can in the hope that the market will come back. By holding back as much REO inventory as they can they are also trying to prop up the wishing prices of what they do put up for sale as you said. All of this is supported by the gov and central banks because of the CDO/MBS leveraging that multiplied the original mortgage debt from 1.5 trillion to from 30 to 60 trillion held worldwide. (http://en.wikipedia.org/wiki/Credit_derivative)

As I see it is the number of clueless FB’s is diminishing as this drags out. The psychology of the housing market turned some time ago and despite Herculean efforts at cheer leading by the REIC, Gov and Housing Bulls the force of financial gravity seems to be the strong hand. And with that strength comes broader awareness that the trend is negative for housing. Will we see capitulation? I do not know. We all have been watching this train wreck long enough to know that desperate measures have been and will be used to avoid a full on price collapse.

 
 
 
Comment by Professor Bear
2010-08-27 22:49:18

Aug. 25 2010 - 10:42 am
Are slow housing sales always a bad thing? Hell no.

By STEPHANE FITCH

The stock market plunged yesterday, driven largely by concerns over news of a 26% slowdown in the pace of home sales reported by the National Association of Realtors. But before we all conclude that there’s nothing good about huge drop in sales of used homes, that it absolutely must be terrible news, let’s stop and think.

I’d like to propose a simple idea: The drop in sales volumes is good news, even great news.

Whenever thinking about economic data that is universally regarded as a harbinger of horrible things to come, I try to consider an opposite scenario. What if the data had said housing sales were at a blistering pace? Well, that would have been greeted as good news. And in fact, the last time that the Realtors were reporting that homes were trading at an all-time record pace was…

Well, by golly, that was during the housing bubble. The housing market of 2005-2006 was a model of poor health—prices out of whack with rents and median incomes, Fannie, Freddie and the banks giving away debt to anybody with a pulse—yet the vast majority of folk (not everybody, but most) were citing the rapid pace of sales back then as great news.

So couldn’t all the people pointing at the super-slow pace of sales now be wrong when they say that housing and the economy is forever doomed, just like they were wrong when they were citing rapid home purchases as a sign of good economic footing back in 2005 and 2006? Hell yes, they’re wrong.

I think the slow pace of home sales represents, above all, a sign that homeowners, home sellers and home buyers are coming to their senses. A market full of sober, careful players is a good thing.

 
Comment by Professor Bear
2010-08-27 22:59:11

Obviously politicians prefer “stimulate now and screw your successor” feel-good Keynesian strategies to “an ounce of prevention outweighs a pound of cure” prudence of Austrian economics. Besides that, currency debasement is a great way to generate the campaign contributions needed to get politicians elected.

* The Wall Street Journal
* BUSINESS
* AUGUST 28, 2010

Spreading Hayek, Spurning Keynes

Professor Leads an Austrian Revival

By KELLY EVANS

Peter J. Boettke, shuffling around in a maroon velour track suit or faux-leather rubber shoes he calls “dress Crocs,” hardly seems like the type to lead a revolution.

But the 50-year-old professor of economics at George Mason University in Virginia is emerging as the intellectual standard-bearer for the Austrian school of economics that opposes government intervention in markets and decries federal spending to prop up demand during times of crisis. Mr. Boettke, whose latest research explores people’s ability to self-regulate, also is minting a new generation of disciples who are spreading the Austrian approach throughout academia, where it had long been left for dead.

To these free-market economists, government intrusion ultimately sows the seeds of the next crisis. It hampers what one famous Austrian, Joseph Schumpeter, called the process of “creative destruction.”

Governments that spend money they don’t have to cushion downturns, they say, lead nations down the path of large debts and runaway inflation.

Eight decades ago, in the midst of the Great Depression, the Austrian school and its leading scholar, Friedrich A. von Hayek, fell out of favor relative to the more activist theories of John Maynard Keynes. The British economist’s ideas, which called for aggressive government spending during recessions, triumphed then and in the decades since, reflected most recently in measures like the $814 billion stimulus package. Austrian adherents were marginalized, losing influence in prominent journals and among policy makers.

But as the economy flounders, debt mounts and growth—revised downward Friday—flags, Mr. Hayek and his Austrian-school adherents like Mr. Boettke are resurgent as their views resonate with more people.

What I’m really worried about is an endless cycle of deficits, debt, and debasement of currency,” Mr. Boettke says. “What we’ve done is engage in a set of policies that’s turned a market correction into an economy-wide crisis.

 
Comment by Professor Bear
2010-08-27 23:03:00

The recent plethora of ‘worse than expected’ data releases has a silver lining for those seeking a new version of Hope and Change:

* ECONOMY
* AUGUST 28, 2010

Democrats Face Economic Facts: Updraft Unlikely

By LAURA MECKLER

WASHINGTON—The string of bad news about housing, employment and economic growth has led Democrats to an inescapable conclusion: the economy is not likely to improve in time to help them in the fall elections.

Congressional Democrats and the White House will continue their attempts to enact policies they believe will boost the economy—and which are also aimed at persuading voters they are working to make things better. But some officials acknowledge it is too late for these initiatives to change the economic situation ahead of the Nov. 2 elections.

“We begin early voting in about 33 days. It would be hugely unrealistic to anticipate some kind of monumental economic turnaround between now and when people start casting our votes,” said Ohio Gov. Ted Strickland, who faces a tough re-election race. “I’m having to deal with the reality of what is. You can’t wish it away. What is, is.”

Democrats won big in 2008, partly because they were able to blame Republicans for economic woes. And while the economic situation remained dire when President Barack Obama took office in January 2009, most Democrats assumed that the economy would rebound by the time they stood for office this year.

A series of disappointing economic reports has made clear that won’t be the case. The most recent one came Friday, when the government reported that the economy grew at a much slower pace in the second quarter than previously estimated. The gross domestic product, a broad measure of economic output, grew at a 1.6% annual rate, down from an initial estimate of 2.4%, and slower than 3.7% in the first quarter.

Republicans say the Democratic agenda is to blame for the bad economic news.

“Today’s disappointing GDP report caps off another week’s worth of evidence that President Obama must change course and abandon his job-killing policies to end the uncertainty that is keeping people out of work,” House Minority Leader John Boehner (R., Ohio) said Friday.

 
Comment by Professor Bear
2010-08-27 23:07:44

* REVIEW & OUTLOOK
* AUGUST 28, 2010

The 1.6% Recovery
The results of the Obama economic experiment are coming in.

To no one’s surprise except perhaps Vice President Joe Biden’s, second quarter economic growth was revised down yesterday to 1.6% from the prior estimate of 2.4%, which was down from first quarter growth of 3.7%, which was down from the 2009 fourth quarter’s 5%. Economic recoveries are supposed to go in the other direction.

The downward revision was anticipated given the poor early economic reports for the third quarter, including a plunge in new home sales, mediocre manufacturing data, volatile jobless claims and even (after a healthy period) weaker corporate profits. Many economists fear that third quarter growth could be negative. Even if the economy avoids a double-dip recession, the current pace of growth is too sluggish to create many new jobs or improve middle-class living standards.

As recently as August 3, Treasury Secretary Timothy Geithner took to our competitor’s pages to declare that this couldn’t happen. “Welcome to the Recovery,” he wrote, describing how the $862 billion government stimulus was still rolling out, business investment was booming, and the economy was poised for sustainable growth.

We all make mistakes, but the problem for the American people is that Mr. Geithner’s blunder is conceptual. He and President Obama and their economic coterie really believe that government spending can stimulate growth by triggering private “demand,” that tax rates are irrelevant to investment decisions, that waves of new regulation can be absorbed by business with little impact on costs or hiring, and that politicians can assail capitalists without having any effect on the movement of capital.

This has been the great Washington policy experiment of the last three years, and it isn’t turning out too well. If prosperity were a function of government stimulus, our economy should be booming. The Fed has kept interest rates at near-zero for nearly two years, while Congress has flooded the economy with trillions of dollars in spending, loan guarantees, $8,000 tax credits for housing, “cash for clunkers,” and so much more. Never before has government tried to do so much and achieved so little.

Now that the failure is becoming obvious, the liberal explanation is that things would have been worse without all of this government care and feeding. The same economists who recommended the stimulus are now producing studies, based on their Keynesian demand models, claiming that it “saved or created” millions of jobs, even as the overall economy has lost millions of jobs. The counterfactual is impossible to disprove, but the American people can see the reality with their own eyes.

 
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