Bits Bucket For October 7, 2010
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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WaPo is headlining a series of mortgage-trouble articles today. The chief article is a summary of the Mers-el-Kiber fiasco.
Now, as many of these loans have fallen into default and banks have sought to seize homes, judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title.
These fundamental concerns over ownership extend beyond those that surfaced over the past two weeks amid reports of fraudulent loan documents and corporate “robo-signers.”
The court decisions, should they continue to spread, could call into doubt the ownership of mortgages throughout the country, raising urgent challenges for both the real estate market and the wider financial system.
For struggling homeowners trying to avoid foreclosure, it could mean an opportunity to challenge the banks they argue have been unhelpful at best and deceptive at worst. But it also threatens to leave them in prolonged limbo, stuck in homes they still can’t afford and waiting for the foreclosure process to begin anew.
For big banks, “there’s a possible nightmare scenario here that no foreclosure is valid,” said Nancy Bush, a banking analyst from NAB Research.
Nancy Bush is a great name - something in it for everyone to hate!
“But it also threatens to leave them in prolonged limbo, stuck in homes they still can’t afford and waiting for the foreclosure process to begin anew.”
“… stuck in homes they still can’t afford …”
1. “Stuck”: They are not “stuck” anywhere. They can leave anytime they wish.
2. “Can’t afford”: If they can’t afford a home that they are not paying for then just what can they afford?
It appears they can only “afford” one that is appreciating rapidly enough to “cash-out” lavish lifestlye upgrades on a regular basis. Homeowner ship only works during the bubble for these people: “Why would I want a lousy house that can’t even pay my bills?”
+1 That’s awesome!
Those “molly and me, and the mortgage makes three” type of three income families.
Jim A,
Whilst things were still booming, I think we referred to the home as a “third income”? Can anyone recall its earliest use?
googling site:thehousingbubbleblog.com “three income” yields http://thehousingbubbleblog.com/?p=3031 as the earliest occurance.
Yup, what good is a “home” without a HELOC?
In Montana,
I’m sure that was a song, right? No, I think for me there was a disconnect between outrageous home prices and human impacts for a long time.
When the NYT’s coined the phrase “MEW-dads” I knew we were in trouble. Males that had been laid off were not only unafraid of their current employment situation, they actually celebrated it! Living re-fi to re-fi as it were.
Very, very good, press.
+1
Pretty pitiful how they are making these people out to be victims. The funny thing is - the only thing bad these people will end up with is a big credit hit. But that’s not even mentioned in the article!
Not saying that this isn’t a difficulty, but can’t MERS simply assign the lein to the servicer and register them at the local courthouse. I mean, the IDEA was that they could avoid this sort of expense, but the cost of a ~$200 filing at the courthouse pales compared with the remaining value of the property. This should slow down the already glacial foreclosure process, but I can’t see that it would make the foreclosure end. And of course for full recourse loans, you owe the money whether they manage to foreclose or not.
A bigger issue for the banks if they can’t prove clear title is that all securitizations could be fraudulent. The bank had to have clear title to sell the loan into the securitization, not having clear title would be a breach of the “representations and warranties” section of the prospectuses of these deals. Imagine if the banks had to buy back trillions in securitizations at 100 cents on the dollar.
Don’t worry about the banks, we’ve got their backs.
I get the feeling the country could look like a nuclear winter swept wasteland and all branches of every megabank would still be open with new”still lending, still strong” banners out front.
Heck, they’d be open even after an asteroid hit the Earth
The banks industrialized the packaging and selling of triple AAA MBS that were later determined to be junk. It wasn’t the banks fault - the rating agencies were to blame along with the greedy strawberry pickers who bought more house than they could afford.
Now it appears the banks had attempted to the industrialize the foreclosure process. So who will end up with the blame this time around? MERS, Bush, or perhaps there were too many regulations?
Maybe it’s this guys fault.
BofA Forecloses On Man’s House, Even Though He Has No Mortgage
http://tinyurl.com/37gqu66
hey folks, I was talking to a person who doesn’t believe in the theory of evolution and he asked me the question:
“if we came from apes, why are apes still here?”
I wasn’t sure what to say in response?
any suggestions?
Dogs evolved from wolves but wolves are still here.
You evolved from your parents but your parents are still here.
Just because your cousins never left backwoods Tennesse, and still chew tobacco doesn’t mean that:
a: you’re not related to them, and
b: your great grandparents aren’t dead.
Cool, Im gonna go with this line of logic (Combo, Oxide, Mike…) because its the simplest.
I was gonna tell him its because both apes and human came from a common ancestor that did die out (the so called “missing link” routine)
but that brings in another complicating element.
Thanks folks!
I think that is the more accurate explanation though.
I think dogs were technically “bred” from wolves, they appeared because of human intervention, not mutations or natural selection.
Bred with what?
Patience.
“Dogs evolved from wolves but wolves are still here.”
Doesn’t work, wolves and dogs can interbreed.
(NB - I am not a creationist)
The issue wasn’t whether one species or sub species could or could not breed with one another species or sub species, the issue was whether one species or sub species vanishes when that species or asub-species evolves into something else.
“You may think you are a descendant of apes but I think you are a child of God”
?
And what does this have to do with housing? Other than hijack a blog…
It all comes back to the development of the MBS. Evolution or Devolution?
See, you put five Wall Street bankers in Box #1……..
…and within 48 hours there will only be one left. And he’ll look rather bloated in the tummy.
We have Gorillas, why are Orangutans still here? There are Eagles, why are Sparrows still around? That’s a bs question to begin with.
If we have McMansions, why are trailers still here?
I saw a train hit and demolish a trailer once. Natural selection.
Excellent, Doug.
I had a rough night, and I hate the &*%^ Eagles, man…
“if we came from apes, why are apes still here?”
Mutation (telomere)
Whoops, centromere.
Freakin’ details.
Were you talking with Christine O’donnell? She asked the same question.
No, this is from a friend of mine who had his house taken back by the bank. He fought it and lost. Now he puts all his faith in God. We are still friends, be when we have discussions, a point always comes where he relies on faith instead of logic; and this is where I hafta end the discussion because he gets annoyed that I keep asking for facts and mechanics.
In this situation, I say something like this:
1. The *future* is unknowable to things that can make choices, therefore faith is fine for what is truly unknown/unpredictable. One must believe that one will make the right choices when presented with a conundrum.
2. Specific circumstances can be measured and predicted. Like having a tooth pulled at the dentist. This is when science is handy. Teeth do not make choices.
As a sidenote, I guess the bubble is showing econ as more of a seance than a science, eh?
Where did Nancy Pelosi evolve from? Proof enough alone to discredit evolution entirely.
Where did Nancy Pelosi evolve from? Proof enough alone to discredit evolution entirely.
….. earth populated by alien life forms (not necessarily superior alien life forms).
Nancy Pelosi may discredit evolution, but Henry Waxman is surely an example of recessive genes from a primitive lifeform coming to the surface.
Naw, see, Pelosi is a perfect example of mutation.
“No, this is from a friend of mine who had his house taken back by the bank. He fought it and lost. Now he puts all his faith in God.”
The Saint Joseph buried out front didn’t work? I’m shocked!
Guess God didn’t want him to have granite.
You ask for help from St. Joseph when you want to sell the house. You ask for help from St. Expeditus to keep it.
What sort of statue are you supposed to bury in the front yard to get the bank to approve your short-sale, or to hurry up and foreclose?
A statute of Ben Bernanke, ass-up, face down.
You ask for help from St. Joseph when you want to sell the house. You ask for help from St. Expeditus to keep it.
I thought you supposed to ask for help from the governement when you want to keep it.
If elephants didn’t evolve from mastodons and they didn’t exist when mastodons were roaming the Earth how and when does a Creationist suggest that elephants arrived? Creationism seems to imply many different Creation events along the timeline. The Creator gets tired of mastodons, wipes them out and creates a newer improved model, elephants. Same deal over the years with each “descendant” species. Popped into place intact except looking suspiciously like the model that just became extinct.
Threshold of survivability. I made it up. If during the evolution process a creature is capable of meeting the minimum requirements for survival, it will continue on in that form (ape)even as its improved mutations (human) further evolve. e.g. We still have a high percentage of really dumb people even though smarter ones have evolved.
Explain this: Why did God create so many horse’s asses and so few horses?
Which raises the question: With all of these horse’s asses running around, how did we end up with so much bull-$hit?
“if we came from apes, why are apes still here?”
We didn’t come from apes. Both apes and humans evolved from a common ancestor, which existed longer ago than your friend probably can imagine.
Stating theory as truth is an error in logic.
No, its the truth. Humans are really too dumb to even begin to understand the most basic concept of time. We can talk about millions of years, but really have no clue what we are talking about. A hundred years is even too much to really grasp.
Which part of what I said is not true?
I didn’t mean that anything you said was untrue, I implied that you state a popular possible explanation as Truth.
“…popular possible explanation…”
The generally accepted theory among professional biologists is very popular, indeed!
Blue, I know you are religious as well as an engineer (a good one, too, right?). Why does this bother you so much?
I like the idea of me starting as primordial soup and ending as a plastic eating microbe.
It is a practical theory and one which facilitates categorization, which biologists are fond of. The details are rather fluid though. I have a minor in Biology and can say that some of my profs enjoyed a questioning approach to the mysteries of the universe over the “accept the consensus” bludgeon. Others, can only defend their position in a conversation with personal ridicule.
Red, “it” doesn’t bother me. I subscribe to “it”, mostly. Having topics closed from discussion does bother me I suppose, especially among friends relied upon for intelligent observation from different viewpoints.
lloyd pye and starchild..will throw monkey wrench in
standard anthropology
went for 30k glendale
/4711-w-palmaire-glendale-az_rb/
850$rent
are we really going lower?
There is an awful lot of verifiable, solid evidence (fossil record, vestigial elements, etc) that supports evolution.
What evidence can you present that supports the notion of creationism?
I was told the earth is only eight-thousand years old and the Creator planted fossils in order to test the faith of True Believers.
Yes and the theory that the earth is round and revolves around the sun needs to be re examined too.
That is rather back of the hand, but I don’t think it detracts from my thought.
We should also reconsider the theory that the world rests on the back of a giant turtle, not to mention the one that the man’s face in the moon is made of green cheese.
Turtles. All the way down.
Dang PB - I posted something similar before I saw your post. There was a good PBS series recently on the subject.
Blue Skye - this of course is a very controversial subject; I think all this as “truth” is implied if you believe in evolution. Even if you don’t believe it happened - you can’t deny the existing evidence; in my mind the only question is how that evidence came about.
I’m currently doing a Bible study actually on Genesis. I’m certainly no expert (either on Genesis or evolution), but I do know that there are about 7-8 different theories that attempt to reconcile Genesis with the evolutionary evidence (including a purely atheistic theory which is that Genesis is hogwash). Which one(s) you may or may not believe is of course very dependent on your belief system. Regardless of your belief system though - IMO it’s still worth studying and knowing the purely secular evidence and theories.
I’ve long been a student of both science and the Bible. I don’t find them mutually exclusive. I do draw a distinction between what we know and what we believe and what we accept as practical.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
Mark Twain
“I’ve long been a student of both science and the Bible.”
Science and scripture study are not necessarily mutually exclusive, so long as you keep Gershwin’s Law* in mind when reading the Bible and you recognize that any scientific theory is subject to revision according to Keynes’ Law**. With a moment’s reflection, you come to the realization that evolution plays a major role in both science and religion.
* “It Ain’t Necessarily So”
** “When the facts change, I change my mind.”
sounds reasonable
Genesis always seemed like a scifi story to me. Eden seemed like it was really another planet and humans left to avoid a catastrophe(a ginormous alien housing bubble??). When it mentions the other humans that lived outside of Eden it sorta made sense then.
When I was younger, I actually met protestant ministers who thought Genesis was hogwash. Very refreshing.
The sad truth, is that out science, medicine, art and music comes from a tiny percentage of our population. They are intelligent, and thus by extension, so are the rest of us?
Maybe you could tell him that you don’t know. As in “I have no #$%&ing clue.”
I ate a doughnut. Why are doughnuts still here?
Fallacy of Composition logical argument error.
Consider the scenario:
I have 4 groups of flamingos. I lock each group in a seperate big box.
In box 1, I pour a toxic gas. Are flamingos extinct? No, but that population is no more.
In box 2, I pour a big pile of shrimp. The flamingos eat the shrimp and turn pink. Are all flamingos pink? No, but this population will be as long as they eat shrimp.
In box 3, I pour in a pile of something else edible that doesn’t effect flamingos in such a fashion…
In box 4, I turn down the average temperature that flamingos are used to by 20 degrees. Enough to survive but not enough for flamingos to thrive. I provide adequate chances for food. I now roll the clock forward 50,000 years. The flamingos with random mutations or genetic stock most suitable for surviving that 20 degree shift will have survived, mated, passed on mutations, had new mutations occur, and at the end of those 50,000 years, the populations in box 3 and 4 will most likely be significantly different.
Isolated populations, while not required, do allow faster change most likely due to a lack of the non-changed population interbreeding with the changed ones, diluting the change…
Brilliant post — made this whole hijacked thread worth the hijacking!
Man, what a waste of good shrimp.
Not if you eat the flamingos.
But where did the flamingos come from?
“But where did the flamingos come from?”
1) It’s flamingos all the way down
2) Baby Jeebus?
What came first, the flamingo or the egg?
An evolutionist would say the egg. If an almost-flamingo-like animal was one generation away from becoming a full-fledged flamingo, then the egg this creature laid would then hatch out a flamingo.
Florida
You so funny, alpha.
Out of the one of the boxes used to produce those particular flamingoes.
There was a good series on PBS recently on the subject - have it DVR’ed and have just started watching it.
Actually the apes we have today didn’t exist way back when, so even evolutionists don’t believe we “evolved from apes” if we’re talking today’s apes. Both us and the current-day apes evolved from ancestors that were different from each of us.
Also there were many branches to the evolution tree that just died off (e.g. Neanderthal).
Can we hope that Realators join that list?
Unfortunately the dying off of a species usually is caused by their environment changing in an undesirable fashion. However the politicians are seeing to it that the U.S. becomes one giant artificial-environment terrarium, where UHS thrive. The species known as “saver” however don’t do so well in such an environment.
(My attempt to un-hijack the thread.)
the politicians are seeing to it that the U.S. becomes one giant artificial-environment terrarium, where UHS thrive.
Where only government employees and unions survive…
I’d rather eat dirt than work for the government.
Easier to control the populace if they are all dependent on you to eat. Those that are not have to be kept so busy trying to scratch out a living and too tired by the end of the day that they don’t really have time to think about it or organize to do anything about it.
“I’d rather eat dirt than work for the government.”
You may get your wish! Or rather, we may all be stuck with that set of choices.
Because the “higher power” is the greatest artist, appreciates diversity & beauty and has the patience to enjoy the unfolding of the ultimate sculpture at it’s own deliberate pace?
Why does g0d have to be in a hurry?
“[I]f we came from apes, why are apes still here?” We did not evolve from apes. Rather, apes and humans evolved from the same origins.
it’s entirely possible that you evolved from an ape, and he was created by God. Now everyone can be happy
If God is truth, then science is the pursuit of understanding God while religion is just the opposite.
Why did God let them build all of those darned houses.
That was clearly the work of the devil. But why does god allow the devil to exist?
The theory of evolution is just a theory, nothing much. Now I am agnostic at best and have always believed in theory of evolution. A friend perplexed me some time ago with a pointed question “how can you believe (or want to believe) in god and at the same time believe in theory of evolution?” Couldn’t answer him coherently.
That’s easy…..evolution is just a process. Pointing out the process does not disprove the notion of a creator….like pointing out the car does not disprove the existence of the driver….or of the engineer who designed the car.
“like pointing out the car does not disprove the existence of the driver….or of the engineer who designed the car.”
Your example seems to require that some intelligent engineer designed the car. Nice try!
Well, yes. I’m attempting to answer the question “how can you believe (or want to believe) in god and at the same time believe in theory of evolution?”
In science, theory means something that is extremely well supported by the facts as they are known to exist. If you are looking for a word to describe something that might or might not be true in science, the word you need is hypothesis.
And evolution may well be the single best supported theory in the history of science.
There are flaws in some of the specifics of the theory but I think they got the basics right.
In science, theory means something that is extremely well supported by the facts as they are known to exist. If you are looking for a word to describe something that might or might not be true in science, the word you need is hypothesis.
Ehh…. not sure I’d phrase it that way. Theories are indeed supported by some set of empirical evidence; but the evidence may not really be “facts” - they may be just observations, and sometimes those observations are proven to be faulty; or rather should say the facts/conclusions drawn from those observations might be faulty. Not sure I’d use the term “extremely well supported” either. A theory can be created from a fairly small set of observations.
A good example would be the theory of a geocentric universe (earth-centered), as detailed by Aristotle/Ptolemy/etc. It’s valid to consider it as a theory (a since-disproven one) even though it was supported by a set of observations that were later proven to not actually be facts - e.g. the observation that the sun, the planets, and the stars revolve around the earth.
Another example would be Keynesianism. It’s a theory, but long since shown to be invalid. (
)
Despite their protests to the contrary, economics is not physics, chemistry, geology, or biology. It isn’t even medicine and that is often acknowledged to be at least half art, not science.
Seriously, if you can’t identify the inputs, you can’t run (or even observe) an experiment. That means that your predicitive powers are so limited as to put you outside real science. Not that you can’t be right occassionally. You can even predict tendancies, or directions or something like that when you have a huge margin for error. But if you end up saying, “Oops. I didn’t know I had to adjust the wealth effect from its traditional level of about 10% when people could extract 110% of that wealth in cash form with 20 minutes of paperwork,” then you aren’t dealing with a science.
In other words (as Yogi Berra would put it)…
Economics is half math, half science, and half psychology.
Right?
I have much too much respect for math to say it that way. Serioulsy. Applying math to a bunch of WAGs is just a way to make the WAGs look good. Math deserves more respect than that.
I’d attribute more of it to group psychology and sociology. Interesting for a lark, but not science.
A good example would be the theory of a geocentric universe (earth-centered), as detailed by Aristotle/Ptolemy/etc. It’s valid to consider it as a theory (a since-disproven one) even though it was supported by a set of observations that were later proven to not actually be facts - e.g. the observation that the sun, the planets, and the stars revolve around the earth
Oooh! Oooh! Mr. Kot-ter! Mr. Kot-ter! I got this one!
A scientific theory is required to stand up to observation and testing in a variety of settings. The geocentric universe theory was, therefore, never a ’scientific’ theory, for the reason that the planets do not appear to revolve around us. This was known to the earliest men (who had nothing to do at night other than watch the stars), who observed that the planets seemed to wander around, sometimes even appearing to reverse course. The word ‘planet’ comes from the greek words for ‘wandering star’. This was why the planets were thought to be gods, and ended up with god-names.
So the geocentric universe theory may have been a ‘theory’ in common-speak, but it never could have been considered a scientific theory- not as we use the term today. It didn’t explain observable phenomena.
Needless to say, the ancients came up with a million ‘theories’ as to what made the planets behave in such a manner, but none could rationally explain all the observable phenomena.
Response in 10/8 BB…
It’s late, butters, but if you’re reading this, the word “theory” in the scientific sense is not semantically aligned with the definition you learned in high school. A scientific “theory” is an explanation, not a posit.
Germ theory, Gravitational theory, are “theories” too. And they’re not “just” anything. They are fact.
Polly and alpha are, as usual, correct.
We didn’t “come from apes.”
Apes and humans have a common ancestor. That ancestor is extinct. Just like the common ancestor that you have with your 3rd cousins (a single great great grandparent) doesn’t exist anymore.
Careful, Polly — the Blue Skye police will getchya for stating theory as though it were fact.
PB, don’t hide under Polly’s skirt!
“At one point our species may have been down to as few as 2,000 individuals”
http://news.nationalgeographic.com/news/2008/04/080424-humans-extinct.html
And this gal:
http://en.wikipedia.org/wiki/Mitochondrial_Eve
That Eve article is pretty interesting. Kind of makes a matriarchal lineage seem most reasonable, like the Scots were inclined to.
“makes a matriarchal lineage seem most reasonable”
When mom is happy…
If PB keeps using the subjunctive properly (as he did in that sentence) he welcome to hide under my desk, if he so chooses.
I would, I if were him.
Doesn’t a pronoun after the verb “to be” in the subjective require the nominative/subject case rather than the objective case? As in, “I would too, if I were he?”
You guys are making my head hurt.
“if we came from apes, why are apes still here?” I wasn’t sure what to say in response? any suggestions?
Tell him when God created evolution, he made it really complicated.
I might get flamed but Wikipedia rules … Or at least you can take whatever it says there as a starting point …
“I put my faith in science to explain natural phenomena. You can choose to put your faith in magic to explain natural phenomena. Let’s see which one’s got a better track record for describing the universe.”
And then you can talk about the sun orbiting the earth and whatnot.
I’m starting to see pundits endorse my concept of taking the effects of inflation into taxing capital gains and interest on savings.
Like it or not, a house is a form of saving and, at the very least, any capital gains levied on its sale should only be taxed on an inflation-adjusted basis (if at all), a principle that should ideally be extended to all capital gains and, if interest on savings is to be taxed, to that too. If, net of tax and inflation, the real rate of return on saving is negative, that’s hardly the most compelling argument to go in for it.
http://www.nationalreview.com/corner/249015/saving-saving-andrew-stuttaford
By the same stroke, if the price of gasoline were to come down, would you surrender some of the cash in your wallet to the taxing authority?
Huh? I don’t understand your point.
I’m not arguing for the evils of inflation, but if you propose to exempt inflation gains from taxation, wouldn’t you also have to support taxation of savings should the CPI come down?
Interesting question. If there is deflation, then your savings suddenly become more valuable and could be considered a taxable gain (by the same logic).
That is an interesting commentary. I believe that Stuttaford is a former British investment banker/neocon who writes a lot for the National Review. I would expect him to be knee-jerk anti-tax, but it appears that he favors taxation of savings. I wonder how he feels about the estate tax.
‘neocon who writes a lot for the National Review. I would expect him to be knee-jerk anti-tax’
Neocons are all for big govt. Hell, they still think the US is an empire.
Yup, they are not conservatives at all. They are pretenders and have successfully fooled the masses.
Neocons are just a Fascist re-boot. (No pun intended)
Hardly Butters. Neocons seek to conserve. What’s to conserv? Big government of some form. I therefore include Obama, Reid, “Fwank,” Pelosi, George W. Bush, John McCain, Sara Palin, Newt Gingrich, William Bennet, Patrick Buchanon all in the same category of Neocons.
Some talk about reducing government but end up increasing it, particularly in regard to our private lifestyle issues. Others don’t talk about reducing government and end up increasing it.
JFTR, I never strenuously objected to the notion your -primary- res. be exempt from CG’s. It was the deployment of ‘multiple’ primary residences that I objected to.
Still, I’m reminded of Dennis’ own personal situation as a long-time home owner ( filing Single ) Assuming we do away w/ the CGE how ( other than leaving the area for cheaper digs ) is this in any way a ‘profit’?
( Ben, too funny! )
This is nothing new. It has been contemplated since capital gains were first taxed. No one has ever done it because 1) it would be a HUGE money loser and 2) it is next to impossible to administer.
2 is probably becoming less of an issue with the existance of computers. Just makes the math and record keeping easier.
1 is still an issue and then you have to decide how finely grained you make your assessment. What if you have a time period when houses went WAY up in price but inflation as measured by the index used to adjust Social Security is flat? Do you use a special index for houses? For stocks? For tech stocks? For gold?
Do you ever adjust the basis of the capital asset down? So if you bought a house for $100K and sell it at a later date for $95K, but there was 10% deflation in the meantime, do then owe capital gains?
This idea has a huge tick in the “is it fair?” column. So does indexing tax rates for the cost of living in a particular area. We aren’t doing that anytime soon either.
polly,
Good points all, what we’ve done here in OR ( SB blah blah ) is to assess it right at closing for RE transactions, for out-of-staters. Salem finally figured out that simply saying 9% was due “when you filed” just wasn’t working.
So true about those sticky indexes.
Parcel tax little grey shack vs mansion equally taxed?
More pain for CA
LA Times: Aerospace suppliers brace for defense spending cuts
Los Angeles Times | October 7, 2010 | By W.J. Hennigan
Nearly 5,500 California firms with a total workforce of more than 130,000 could be affected. Analysts expect many of these small shops to go out of business, merge with rivals or cut employees to survive.
Citing the end of combat operations in Iraq and the rising federal deficit, Defense Secretary Robert Gates said he is looking to trim $100 billion from the Pentagon budget over the next five years.
“The golden era of aerospace has passed,” said Tom Captain, principal of Deloitte’s aerospace and defense consulting practice. “There is now a siren call for businesses to transfer from a hardware-based machine shop to a software-based technologically advanced firm.”
hardware-based machine shop to a software-based
I translate that as “based in California” to “based in Mumbai.”
——
I read today that Northrup Grumman is entering into a deal with Gamesa (Spain) to test two 5 MW wind turbines off the East Coast. For reference, a power plant generates ~1000 - 1300 MW.
I guess companies are realizing that with a little adaptation and time, their workers can change from making buggy-whips to making engine belts.
Digit pushing can be off shored in a heartbeat. You’ll never recover from the loss of your mfg. Come to Ohio to see your future; more reliant on agriculture, an entitled government worker class, poorer, and fewer of you to tax. Sort of like things were in 1760 but better armed.
In 1760, in what is now Ohio, EVERYONE was armed.
“The golden era of aerospace has passed,” said Tom Captain
I thought it passed in 1993
Why cities and states will go bankrupt…plunder by their employees and unions
10 former San Diego city employees will split $61 million in pensions
California Pension Reform | 10/04/10
Ten former San Diego city employees will split $61 million dollars for the rest of their lives. Did they win the lottery? No – they will receive it in payouts from the City of San Diego pension system, according to CFFR’s president Marcia Fritz.
“I was shocked by what I discovered in the City of Bell, and I’m shocked by what I discovered in the City of San Diego. San Diego is just like Bell – only bigger,” said Fritz.
These are just two of several shocking revelations about the City of San Diego’s pension system contained in a report being released this morning. The report was compiled by Fritz – a CPA and the pension expert who revealed the outrageous pension payouts in the City of Bell.
The effort to loot the San Diego city pension plan was highly successful; meanwhile there is not enough dough left over to pay for services traditionally viewed as “essential.”
Reading through the latest CA budget, there’s extend and pretend, kick the can down the road, and let’s not forget the optimistic tax projections.
Calif. budget plan relies on accounting maneuvers
SACRAMENTO, Calif. — California lawmakers got their first look Wednesday at a proposal that attempts to end the state’s record-long budget impasse and close a $19 billion deficit, primarily through targeted spending cuts and a large dose of creative accounting.
For example, it counts on the state receiving $5.3 billion from the federal government, nearly $2 billion more than Schwarzenegger projected in May. Schwarzenegger and the legislative leaders also assume an economic recovery in California that would be robust enough to send $1.4 billion in additional tax revenue to state coffers.
The deal also would delay nearly $2 billion in payments to K-12 schools and community colleges until the next fiscal year.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, acknowledged last week that the budget negotiators had little choice but to engage in what he called “creative” accounting to reach a deal. That’s because Republicans refused anything that could be interpreted as a tax or fee increase, while Democrats were unwilling to cut more than $7.5 billion in spending.
To patch last year’s budget gap, the Legislature and Schwarzenegger agreed to temporary increases in the vehicle license fee and sales and income taxes. Voters rejected a proposal to extend those taxes during a May 2009 special election, leading Schwarzenegger to say he would not agree to higher taxes this year.
The assumptions used to reduce the $19 billion deficit in the current plan mean Schwarzenegger is leaving the budget mess to his successor, either Democrat Jerry Brown or Republican Meg Whitman, said Fred Silva, who spent 20 years working on budget issues in the state Senate.
He said the next governor likely will have to redo this year’s budget even as he or she proposes a spending plan for the next fiscal year.
“Calif. budget plan relies on accounting maneuvers”
Didn’t they do that last year?
The only defense the tax payer has to to move elsewhere. Unfortunately the possibilities are limited. Google “state and local tax burden rankings”
in 2008 (latest data available from The Tax Foundation):
1. New Jersey @ 11.8%
2. New York @ 11.7%
3. Conn. @ 11.1%
4. Maryland @ 10.8%
5. Hawaii @ 10.6%
6. California @ 10.5%
…
48. Wyoming @ 7.0%
49. Nevada @ 6.6%
50. Alaska @ 6.4%
This supposedly takes into account income tax, sales tax and property taxes as a percantage of the average income in that state. Mississippi has the lowest tax burden in absolute numbers @ $2834 but the percentage is 8.9% ‘cos everbody is dirt poor. DC has the highest absolute tax @ $7308 but also the highest income.
Not sure how accurate that data is. I am sure it varies from county to county depending on the culture of corruption.
“The only defense the tax payer has to to move elsewhere.”
If you live in San Diego, then rent a home, don’t buy. That way, when the realization hits the San Diego homeowner community that they are collectively screwed by terrible city governance, you will have a choice of buying a home on the cheap, continuing to rent or moving away to a place with more reasonable governance.
three stars PB!
Keep your stuff in one state, register it in another, buy it in a third and earn it somewhere else. None of these states BTW are called NY.
I’ve heard or read a surprising number of people snap that that’s the way NY is and if you don’t like it you can leave. I haven’t decided if it’s learned helplessness or if these particular knee jerkers are on the gov teat. In the meantime, I’ve decided there are too many people that are happy w/the status quo to ever expect change.
**********
None of these states BTW are called NY.
Saw your thread from yesterday from the NY Comptroller. Good read. He’s not ashamed to say there’s more pain on the way.
“learned helplessness” ( Good one! )
I’m beginning to take a shine to “self-disenfranchisement” myself?
NY doesn’t tax pension income.
Thank you for this comment Steve, I didn’t realize that. Apparently $20K of pension, 401K or IRA is exempted from NYS income tax. State penison totally exempt. Thanks to the NY Constitution!
OK, register the boat in Maine and live off the 401K in NY, while buying my clothes in PA, smokes in Virginia and booze in NH.
Retire in Binghamton. Housing is dirt cheap. Scenery gorgeous. It’s out of range of lake-effect snow. Near PA line for guns and fireworks. Close enough to Canada for a quick road trip for medication.
Oxide, I’m close to that in Watkins Glen. Actually also out of the lake effect band and above the Ohio Valley snow system. There is an advantage for me to Watkins over Binghamton, since I spend most of the year living on my boat.
A freind grew up one lake over, in Hammondsport.
That an interesting list, Mike in Miami. One thing to note is that the first 4 states on your list are among richest in the country when you look at median family income. When you look at the statistics for California, on the other hand, its median family income is something like 11% or 18% higher than the national average, which is really not that great, considering the higher cost-of-living. (Those numbers are a few years old, so CA is probably closer to the national average now.) I think that Californians have convinced themselves that they are a rich state, but it’s not really true.
What it doesn’t cover is
Fee’s
and Services
Some cities provide garbage and fire protection. Others make you pay for it. See story yesterday about the trailer burning to the ground. Some states it costs $50 to register a car, others over $500.
Note that the big abusers are NOT the rank and file union members, but managers. Labor and management and politicians are all in the scam.
Man, that’s like being a partner at GoldmanSachs.
No, it isn’t. Seriously. I heard (second hand, so very reliable) of a GS partner waxing poetical about $10M a year being the minimum a person needed to live life the way they really wanted. And this was in the 90’s.
I heard about Richmond Ca on the radio yesterday. One fire fighter made 300+ K a year, and pensions in the 100K for many city employee’s. Richmond is the murder capital in CA.
I guess they won’t be collecting those pensions for long then.
“Richmond is the murder capital in CA.”
That means it is a lot more expensive to hire qualified firemen to work there. Would you put out fires in a murder capital without adequate compensation to cover the risk of gunshot wound?
For the same reason that heirloom tomatoes can still exist along side Beefsteak, and a multitude of other “modern” tomatoes. Same with apples. Mutations occur which can be of benefit to an organism’s survival (selection) for one or several reasons. The ‘true’ line can still exist with very minimal changes so that both can coexist yet take advantage of slightly different or very different living conditions. Complicated, but, it is what it is. We are still mutating. For example, many humans do not have “wisdom” teeth; the way things are going we could lose them all. Slurpees rule!
I’m one of the lucky without wisdom teeth. I lack wisdom, but I never had to undergo the pain of extractions! One of my sons had five of them, the other has three. That reminds me, because he just graduated from college and is no longer on my dental insurance, I’ll have to pay cash if he needs to have them removed. I should have been more proactive! He’s looking for a fulltime job, but I doubt that he’ll get dental coverage. Young people don’t get anything nowadays.
I think we’ve got him until he is 26 according to Obamacare rules. Just email me the bill.
No, I’m pretty sure that the bill only covers medical insurance, not dental. And I’m the one paying his medical premium, not you, pressboard. It’s a pretty good thing, too, because he has several medical issues, and would find it hard to afford medical insurance. His older brother, a healthy 25-year-old, only has to pay $146/month for his health insurance.
Back when I lived in Pittsburgh, I had three wisdom teeth removed by an oral surgeon. (The other one had been removed by a plain ole dentist four years earlier. And the charge was all of $25.)
That oral surgeon dinged my University of Pittsburgh employee Blue Cross/Blue Shield policy any way he could. The bill was well into the three figures. Might have been four figures, but I don’t remember. This happened in 1987.
Any-hoo, sometimes an insurance policy can serve as an incentive to rack up the bill. It sure did in this case.
For entertainment purposes only…..
When it does, expect to see a stock market rally that will be breathtaking in its rise. Much like a rocket ship that takes months to prepare, fuel, then launch, the stock market will move higher at remarkable speed, maybe gaining as much as 1000 points in a day.
http://community.nasdaq.com/News/2010-09/why-the-next-rally-could-be-a-monster.aspx
“The best way to benifit: buy a small amount of stock in industries out of favor now such as the housing industry (only the strongest ones) or banking …”
How soon does he think that housing and banking will recover? Housing, ten years at best. Banking, hopefully would go back to what it used to be before it became a giant, sucking squid. Of course, with the unanimous Demopublican campaign contribution-fueled support of the big banks, they may not be a bad bet for stock-buyers, despite the opacity of their assets/debts.
Dow, 36,000!
Gold $36,000!
Diet Pepsi $36,000!
Sounds like pent up demand!
And made in China.
And made in China.
Is it really? Wow.
About the most amazing thing I ever heard was that some orange juice (major one - like Tropicana or the like - not sure which one though) was actually growing the oranges in the U.S., shipping them to China for processing into OJ, then shipping the OJ back for sale in the U.S. Gives an idea of how huge the wage differences are; to more than offset such a huge introduced inefficiency.
was actually growing the oranges in the U.S., shipping them to China for processing into OJ, then shipping the OJ back for sale in the U.S. Gives an idea of how huge the wage differences are; to more than offset such a huge introduced inefficiency.
I would think that the juicing process is a highly automated one and that labor would actually be a very small percentage of the cost.
Even automated processes need people to run the lines, to fix things when something goes wrong, to maintain the lines, to upgrade the lines when new equipment comes out; along with HR to hire such people, payroll people to pay them, maintenance people to maintain the factory building itself - etc. etc. All these people work for less in China/Mexico/etc.
All these people work for less in China/Mexico/etc.
that’s because the value of our labor is still higher than theirs. we are still more productive per unit of labor, so our labor will be paid more. if we ever become less productive than they are, we will get paid less than they do and have fewer jobs also.
what other countries pay their labor should not matter to us. how much we get paid depends on how productive we are. and productivity increases when taxes and regulations are lowered and when skill sets and technology advances.
we are still more productive per unit of labor, so our labor will be paid more.
I agree with that (maybe), however I disagree it’s why labor costs less in those countries. The implication there is that if workers in China etc. become as productive as Americans that they’ll be paid just as much, and therefore jobs will come back here. I disagree.
Their pay is more a function of their weak economies. China has a lot less wealth than us, and produces a lot less per populace (not per laborer), thus wages are less.
Think of it this way - if in China you had a super-productive worker, that could do a given job just as good as an American, and demanded an American salary - what would happen? They’d be replaced by two less-productive (but as productive sum-total) workers from a Chinese farm that would demand 1/4 the salary.
The wage difference is simply a function of the level of overall poverty - not of the productivity of the workers.
packman,
It’s not unusual for US semiconductor manufacturers to make the chips here, send the unpackaged “dies” over to some place like Indonesia or Malasia for mounting in a package, and return them to the US for sale.
I agree with that (maybe), however I disagree it’s why labor costs less in those countries. The implication there is that if workers in China etc. become as productive as Americans that they’ll be paid just as much, and therefore jobs will come back here. I disagree.
the implication that the jobs will come back here are incorrect. but the implication that if china becomes as productive as we are that they will get paid as much IS correct.
if we keep the value of our labor rising through rising skills and advancing technology, we will keep getting paid more and we will create more jobs. of course advancing skills and technology can be nullified by rising taxes and regulations.
———-
Their pay is more a function of their weak economies.
correct.
———
China has a lot less wealth than us, and produces a lot less per populace (not per laborer), thus wages are less.
the wealth we already have has nothing to do with wages. a billionaire looks to pay as little as possible, just like anyone else. the only time he pays more is to get more or to get what he wants. drop the wealth part and the rest of your sentence becomes correct.
————
Think of it this way - if in China you had a super-productive worker, that could do a given job just as good as an American, and demanded an American salary - what would happen? They’d be replaced by two less-productive (but as productive sum-total) workers from a Chinese farm that would demand 1/4 the salary.
that’s simply because they live in a less productive country. their aggregate labor gets paid less than our aggregate labor. they will naturally get paid less for doing the same job because they live in a country that values labor less because they are less productive as a country. the wage disparity between countries isn’t by accident nor is is bad. it’s an outcrop of productivity.
———
The wage difference is simply a function of the level of overall poverty - not of the productivity of the workers.
not of productivity the workers individually, but of the country as a whole.
Wages are determined by more than just productivity. The amount I’m willing to PAY for labor is determined entirely by productivity, but the amount a worker is willing to ACCEPT for labor varies based on their own circumstances and other available options. A worker on a factory line in China will be paid less than an equally productive worker on an equivalent factory line in the US because the worker in China is willing to accept less than the American worker for producing the same amount of value.
Wages are determined by more than just productivity.
wages are determined by the value of labor, which is related to productivity. the more productive you are (all else being equal), the more your labor is worth. but it is gauged by the economy of the area that you’re in.
the value of labor actually varies within the united states. some areas of the country have a stronger economy and they get paid more than the weaker areas do.
china is still weaker and less productive than we are. they get paid less for their labor. however, their economy is getting stronger and more productive. soon their workers will ask for more money and they’ll get it. they are going uphill while we are going downhill. soon our workers will be accepting less just to have a job.
——-
The amount I’m willing to PAY for labor is determined entirely by productivity, but the amount a worker is willing to ACCEPT for labor varies based on their own circumstances and other available options. A worker on a factory line in China will be paid less than an equally productive worker on an equivalent factory line in the US because the worker in China is willing to accept less than the American worker for producing the same amount of value.
producing the same amount of product doesn’t necessarily produce the same amount of value. the value of the production depends on the difficulty (regulations, skills and technology) in producing, and how much of it you get to keep (taxes). that’s why i said the value of labor is related to productivity. taxes, skills, technology, and regulations must all be taken into account also.
a strong economy has a high value of labor.
a strengthening economy has an increasing value of labor.
And of course if the Yuan was allowed increase in value, the cost of the labor of those in engaged in the creation of exports would increase in real terms, as would their own costs, since the labor of those producing non exports would also go up.
And of course if the Yuan was allowed increase in value, the cost of the labor of those in engaged in the creation of exports would increase in real terms,
yes
——-
as would their own costs, since the labor of those producing non exports would also go up.
the cost of the labor would go up, but the cost of raw materials and most everything else would go down because the yuan would buy more.
Well the cost of IMPORTED raw materials would go down, but I’m not sure about DOMESTIC raw materials. After all, they’re extracted with DOMESTIC labor.
Well the cost of IMPORTED raw materials would go down, but I’m not sure about DOMESTIC raw materials. After all, they’re extracted with DOMESTIC labor.
Jim, i believe even the domestic raw materials would go down in price. the increased value of the yuan means that prices for everything it purchases would have to decline (or they would be over paying). it is true however, that domestic materials would probably decline less. how much less, i don’t know.
cost can’t exceed the value of labor, but the cost of labor doesn’t determine its value. it’s just a benchmark that can’t be broken on the downside. the value of labor can have a wide range above its cost, so it can vary while the a currency is more stable. and labor is exchanged for currency, so it’s possible to have even wages fall as a currency gains value and still have a gain in the value of labor.
Dow 5000!
Gold $5000/oz!
Silver $300/oz!
why can’t we have silver $500? Please!
“why can’t we have silver $500? Please!”
First round is on me, if that happens. Drinks or .270 ammo, your choice. Eight more days ’til opening day in WY. Got two tags this year.
I’ll take you up on that, and I’ll buy the second round.
The .270 is also my caliber of choice.
Wow MrBubble, didn’t know you were there. I think my dad will be headed to the Bighorns next week to get ready for the 15th. I inherited a nice old .270 from him but generally prefer .308 due to the availability of large amounts of military surplus ammo.
Winchester model 70 in .270 with a variable Nikon scope perfect for wide open spaces.
My fav.
Aladinsane, if you are out there some where watching this play out, then I have a single word to say to you: CONGRATULATIONS!
Dollar Hammered as Nerves Fray
The dollar fell swiftly in European trading hours as the slow drip of nervousness over further monetary easing by the Federal Reserve turned into a flood.
.– …. .- - …. .- - …. -.-. ..- .-. .-. . -. -.-. -.– -.. . …- .- .-.. ..- .- - .. — -. .– .- .-. … .– .-. — ..- –. …. -
… — …
LOL - yes, that.
Unfortunately Wordpress likes to auto-translate stuff, so that didn’t come out right. Anyone know how to turn off auto-translation? (e.g. translation of three dots into a single … character)?
QLF packman.
Left foot code? I’m not a radio man, so not really sure what that means (had to look up QLF).
Just a joke since the word spacing in your Morse string got compressed. And yes, QLF is a tongue-in-cheek abbreviation that translates to, “Now try sending with your LEFT foot.”
Sounds like you guys have no sense of remorse.
ba dum bum
So - here’s how that was supposed to look…
.-- .... .- - .... .- - .... -.-. ..- .-. .-. . -. -.-. -.-- -.. . ...- .- .-.. ..- .- - .. --- -. .-- .- .-. ... .-- .-. --- ..- --. .... -
Nice…
If the dollar is getting hammered, why is gold down? It should be up, when priced in less-valuable dollars. Stocks too.
Since those initial posts - when gold went above $1,360 due to all the currency devaluation wars - many of the world’s central banks have issued statements such as this one from Japan:
Japan Says It Won’t Join Currency Devaluation Race
Japan won’t weaken the yen to become more competitive with other countries in trade and any currency intervention would be aimed at restraining excessive moves, Vice Finance Minister Fumihiko Igarashi said.
“It’s not our intention to engage in a currency- devaluation race for the sake of the national interest,” Igarashi said in an interview in Tokyo today. “We could conduct smoothing operations when movements are extremely volatile, that would be permissible.”
That being the case, the dollar isn’t getting hammered anymore today - it jumped back up from 77 to 77.6. (Noting of course that that’s against other currencies, primarily the Euro. Against non-fiat things like gold and oil, it’s up even more. E.g. Oil went from above 84 now down to 81.5.)
Whether or not the central banks’ stated resolve remains intact of course remains to be seen.
His presence is pretty obvious at another site.
Which one?
A Seattle Times article says CRE vacancy rates have flattened out.
Vacancy rates didn’t shift much during the third quarter. Neither did rents.
But, from a landlord’s perspective, that’s a big improvement over the soaring vacancies and free-falling lease rates of just a year ago.
“I think the worst is behind us,” said Tom Bohman, a senior director in brokerage Cushman & Wakefield-Commerce’s Bellevue office.
If he’s right, the days when tenants could negotiate rock-bottom rents and generous concessions also may be dwindling.
Cushman & Wakefield-Commerce pegged the third-quarter vacancy rate in greater downtown Seattle at 21.6 percent, compared with 22 percent for the second quarter and 21.1 percent at the end of 2009.
http://seattletimes.nwsource.com/html/businesstechnology/2013091869_office07.html
He may want to believe that, but I suspect that he is wrong.
Note that is is still above the levels of late ‘09, and not that far below the peak. Is this small dip signal or is it noise?
Not to mention that a rate above 20% is still HUGE.
Japan has been “mulling inflation” as a fix for two decades now, and after three or so rounds of QE, none has happened. Does the Fed have a better recipe, based on jawboning perhaps?
Fed Officials Mull Inflation as Fix
As the U.S. economy struggles and flirts with the prospect of deflation, some central bank officials are broaching a controversial idea: lifting inflation above the Fed’s informal target.
‘Does the Fed have a better recipe, based on jawboning perhaps?’
‘It is often said that as long as the Fed keeps liquidity available and rates low, the housing boom will continue. Those voices believe the central bank to have supernatural powers over market forces. For a check on the theory, lets look at Japan, which enjoyed a stock market and RE bubble.’
“The Bank of Japan on Thursday officially abandoned hope that the economy would return to inflation before March 2006. Given the bank’s commitment to keep interest rates at zero until deflation is eradicated, it implies a one-year extension of the zero-interest rate policy.”
“With interest rates at zero and markets flooded with liquidity, the bank had few tools beyond language to affect market expectations.”
‘Perhaps the reason the Fed and congress are doing nothing about the housing bubble is there is nothing they can do, but talk.’
http://thehousingbubble.blogspot.com/2005/04/few-tools-beyond-language.html
“With interest rates at zero and markets flooded with liquidity, the bank had few tools beyond language to affect market expectations.”
Maybe the Fed has more ‘tools’ than the BOJ has?
Not more tools, just bigger ones; or perhaps just more willing to use the bigger ones. Specifically - we’ve done far more QE than Japan has.
(Not that it’ll help much, especially in the long run - just putting that info out there)
If the ‘tools’ at the tyrannical Fed persist in creating inflation, we’ll soon see 3 and 4 dollar gas around the country.
If I recall correctly, 3 and 4 dollar gas contributed to the last recession, people abandoned their SUVs by the roadside and property values in the exurbs crashed.
If I recall correctly, 3 and 4 dollar gas contributed to the last recession, people abandoned their SUVs by the roadside and property values in the exurbs crashed.
No offense - but that’s quite a revisionist take. Gas prices perhaps played a minute factor, but it was just that - minute.
Yeah but the high gas prices were what got Main St. talking about the recession. Before that onslaught the PTB was having a little success in convincing them there was no recession in the offing.
Did Japan try to tie up defaulted assets in limbo indefinitely while leaving the buyer in posession payment-free? I am honestly curious if anyone could tell me the answer.
I’m honestly curious whether the Fed’s charter authorizes this, or whether the Fed openly admits it is doing this. I am also wondering if someone at the Fed or elsewhere has looked at the redistributional effects of these ‘asset tie up’ policies. It seems from where I sit like a rather blatant transfer of wealth from Main Street households into the hands of Wall Street investment banks, but I confess that I haven’t done any formal analysis.
One more thing:
Has anyone at the Fed considered that their unprecedented policy intervention may have effectively killed the invisible hand of Adam Smith’s free market? Was that their intention? Because I thought free market capitalism depended on the effective operation of the invisible hand?
I think I can answer all your questions with a simple answer:
Too big to fail.
Monopolies (or colluding oligopolies) kill the free market quicker even than the Fed.
So an FB is now too big to fail? Or… is he just in the right place at the right time?
No, if the banks hadn’t been too big to fail, they would have been vigilant enough not to create FB’s, just as what happened up to ~2000. Or at least they would have created fewer FB’s, and more slowly.
(Yeah, I know I know, personal responsibility and all that. But it’s the bank that had to initiate the offer before the “B” could “F” himself by signing the offer.)
Agreed, Oxide: You couldn’t have got all these FB’s without TBTF.
I think you are getting ahead of yourself oxide, trying to put the “B” before the “F”…
One more thing:
Has anyone at the Fed considered that their unprecedented policy intervention may have effectively killed the invisible hand of Adam Smith’s free market? Was that their intention? Because I thought free market capitalism depended on the effective operation of the invisible hand?
no, the invisible hand is still there and is going to give out the punishment for the interference of government. the free market is never defeated, even under communism. it just gets distorted into a black market. the more the government interferes, the more pain we all get. black markets are very painful. they are marked by high prices and shortages. as the government interferes less, the market starts to get better and lessen the pain.
we will learn our lesson eventually, but it might last a long time. the sooner we wise up, the sooner we begin to heal and life gets better.
The invisible hand isn’t visible right now, as it’s being drawn back and clenched into an invisible fist that will deliver a very visible smack at some point in the near future.
But not before giving the invisible one-finger-salute first.
Nice one, packman!
My belief is that the Fed wants the invisible hand to do its job, as long as it agrees never to smack a banker.
“… while leaving the buyer in possession payment-free?”
Property tax payment-free as well as mortgage payment-free.
Not that it’s such a big deal being all the states, counties, cities, etc. are flush with cash.
Property tax payment-free as well as mortgage payment-free.
On no - Cities do not play that game. They WILL foreclose with a tax lien within a few months and sell the place pretty quick to get their tax money.
Most people who stiff the banks with non-payments (cause they know they will not be kicked out for years) still pay taxes and utilities on time. They know what action will happen very quickly if they do not pay the electric bill or city hall…
The taxes are getting paid from somewhere. Look for yourself on Zillow -they have tax records. If you don’t trust Zillow look on county tax rolls. I have really looked into this phenomenon locally in FL and have found that without a doubt the taxes are always current on properties in default with the big banks. There is definitely a story here. This has got to be costing the banks an unbelievable amout of money, so much that I suspect shenaniagans with TARP etc. as the origin of the funds. I would love to find out more about this.
2banana,
One point is that a tax lien is generally for an amount way below the present market value of the house. So the county is pretty sure of collecting all their money from the sale. A mortgage lender, on the other hand, is pretty sure to come up “short” in today’s market.
Aren’t unpaid taxes settled at the time the bank sells the house? Not sure exactly how it works, but in AZ, unpaid taxes on a foreclosed property aren’t paid until the house is eventually sold to a “non-bank” buyer. The county puts a lien on the property for the unpaid taxes and it has to be settled before it can be sold. Again, not sure why the bank isn’t legally required to pay the taxes when they foreclose, but it doesn’t happen (at least in AZ).
Not sure exactly how it works, but in AZ, unpaid taxes on a foreclosed property aren’t paid until the house is eventually sold to a “non-bank” buyer. The county puts a lien on the property for the unpaid taxes and it has to be settled before it can be sold.
And that is exactly what happened to my landlady when she bought a foreclosed property on the courthouse steps in ‘98.
Previous owner had blown off paying property tax. So, Liz the Whiz had to pay off the lien before she could truly take possession of the property.
It is often said that as long as the Fed keeps liquidity available and rates low, the housing boom will continue.
I guess they never thought they’d run out of demand? And by “demand,” I mean a combination of desire+means.
I dunno. After doing this for years, I doubt the fed cares much about what happens down the road, just how to react day to day. It’s the media and others that spend a lot of time with the ‘tea leaves.’
‘Those voices believe the central bank to have supernatural powers over market forces’
We only have history to go by. The closest example, IMO, is what happened in Japan; a stock and then a real estate bubble, and the actions they took after that. But as the post from 2005 suggests, we are ignoring history, and you know what they say about that.
Seems to me they’ve just about run out of demand to pull forward with the liquidity and low rates. So what’s next besides refinancing when rates hit 3.75% for a 30 year mortgage.
Read the speach Bernanke gave in Rhode Island. He didn’t come across as someone who’s in control of the situation.
Maybe they thunk real estate always goes up?
Controlled Experiment:
In a perfect vacuum if one dropped a feather next to a house, the house would rot and need a new roof and extensive plumbing repairs before they both hit the ground.
“encouraging consumers and businesses to save less and to spend or invest more.”
While we’re already having a debt crisis? Sounds like a brilliant idea to me….
That quote you cited sure sounds like the spectre of deflation is haunting someone. Why would the PTB care if J6P got himself out in front of inflation? If inflation was in the bag, why make the inflation trade anymore crowded than it already is?
There are a lot of people out there buying stuff on the fear of inflation. Hey guys, look behind you.
For their sake I hope their choosing to buy the right “stuff”* -otherwise the dollar unspent is still the best dollar right now.
* could the right stuff be pm - maybe? is it (still) overpriced RE - no way!
I can’t recall the Wall Street Journal ever previously disagreeing this vigorously with a sitting Treasury Secretary.
* The Wall Street Journal
* REVIEW & OUTLOOK
* OCTOBER 7, 2010
Geithner’s ‘Cooperation’
Dollar devaluation is not economic leadership.
Treasury Secretary Timothy Geithner is finally waking up to the danger of currency protectionism, going so far yesterday as to invoke the Bretton Woods accord of 1944 that produced a generation of exchange-rate stability. Too bad Mr. Geithner’s idea of cooperation is to keep bludgeoning China to revalue the yuan so the U.S. can devalue the dollar and steal more global economic demand.
If Mr. Geithner’s speech was meant as a display of leadership, we doubt it will achieve its purpose. In advance of this weekend’s IMF-World Bank meetings, the Treasury Secretary merely put a highfalutin gloss on the same old U.S. policy that China’s “overvalued” currency is the source of all global economic ills. The Chinese are unlikely to bend to such public browbeating, and even if they did it would do nothing to spur U.S. growth.
The larger problem with Mr. Geithner’s remarks is that he refuses to acknowledge, or is oblivious to, the U.S. role in the world’s current monetary disruptions. As the reserve currency country, the U.S. has a special obligation to maintain the value of the dollar. Yet the overt policy of both Treasury and the Federal Reserve is to devalue the greenback to spur U.S. exports to make up for the failure of their spending stimulus policies of the last three years. It is this rampant dollar creation that is most to blame for havoc in global currency markets and the run-up in the price of gold to $1,350 an ounce.
…
I’ve been pleasantly surprised actually how the WSJ generally doesn’t seem to be a tool of WS/Fed/USTreas power triangle. At least overtly anyhow - it slams on all three regularly. Perhaps though it really is a tool and there’s a method to its madness (pick your tin foil hat accordingly), not sure.
Yeah, like the whole world hasn’t figured out what the U.S. game plan is by now. And I suppose TTT thinks they also can’t figure out that he wants to use the IMF to browbeat them into putting our interests in front of their own.
I can’t recall the Wall Street Journal ever previously disagreeing this vigorously with a sitting Treasury Secretary.
Their editorial pages have probably bashed most Democratic Treasury Secretaries over the past 40 years. The rest of the WSJ formerly had a better reputation. I only look at it a few times a month, but I get the feeling that the quality of the news pages have probably declined under Murdoch.
As the reserve currency country, the U.S. has a special obligation to maintain the value of the dollar. Yet the overt policy of both Treasury and the Federal Reserve is to devalue the greenback to spur U.S. exports to make up for the failure of their spending stimulus policies of the last three years.
Wow propaganda 101
The reason they are devalueing the greenback has nothing to do with the last 3 years. It has everything to do with the previous 20+years. Just gloss over the banks and the prior presidents who created the massive debt, and who supported policies that created bubbles and pulled demand forward so that now there is no demand.
Imaginative way to limit household consolidation. Toronto bylaw restricts homes to two cars parked.
http://www.thestar.com/news/article/871230–new-bylaw-restricts-driveway-parking
If you’re considering moving into Mom and Dad’s basement, forget about bringing your car.
As cold as it gets (and since it’s cold for much of the year), I would think most Toronto houses have garages. Two in the garage plus two in the driveway and you’re in compliance.
Don’t forget about that income suite.0
I don’t think they’re worried about Junior moving into the basement and eating Cheetos. They’re more worried about a front lawn and front curb lined with 5-6 beat-up Ford 150’s with dirty ladders in the back. And Tejano music coming from the back yard.
But, but, but I thought Canada was immigrant friendly!
It is, if you can rack up enough points to gain entry. Fluid in both English and French with a few college degrees and under 40 years old helps a lot.
Fluent. Not fluid. Guess I don’t qualify.
LOL. It helps if you have money in the bank too IIRC.
Bill Toughening Foreclosure Challenges Passes Quietly
www cnbc com/id/39550663
A bill that homeowners advocates warn will make it more difficult to challenge improper foreclosure attempts by big mortgage processors is awaiting President Barack Obama’s signature after it quietly zoomed through the Senate last week.
The bill, passed without public debate in a way that even surprised its main sponsor, Republican Representative Robert Aderholt, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.
The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.
“The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.”
Great, so its nobodys fault. Perfect.
I am amazed and pleased by this news. Is Obama expected to sign it? That would amaze and please me even more.
CNBC is trolling for ratings.
According to the article, this bill passed the House last April, long before the current foreclosure mess made the news. And it applies to all legal documents, such as divorces or rental leases or interstate banking. Looks to me like reporters jumped on the bill and asked for comments only on foreclosures. Where was all this journalistic zeal when MORTGAGES were being rubber-stamped by the thousands?
Who says bipartisanship is dead in D.C.
“Who says bipartisanship is dead in D.C.”
With this congress, any signs of bipartisanship are more reason for concern than comfort, more cover for the looters.
“The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.”
This is a bad piece of legislation that deserves to be vetoed. Why should the lenders be rewarded for their sloppy/fraudulent practices?
But if it is going to be made easier for them to overlook shoddy paperwork and foreclose faster, why not tie it to a provision that such foreclosures must be sold and reoccupied within a reasonable period of time?
It’s not as if they’ve moved quickly their existing foreclosures on the market. Why the rush now, unless they’d like to further constrict supply and drive up the cost of housing for everyone?
I don’t see the public interest in housing sitting vacant and further deteriorating or artificially constricting supply, inflating housing costs for everyone.
Obama vetoes bill to speed foreclosures:
http://money.cnn.com/2010/10/07/news/economy/pocket_veto/index.htm?hpt=T1
“President Obama won’t sign a bill that would make it easier for courts to clear foreclosures, the White House said Thursday.”
“However, housing advocates and attorneys warned that the bill might have made it more difficult to challenge the quality of foreclosure records at a time when reports of improperly foreclosed homes are increasing.”
Just a really OT observation, but I spend a lot of time on Ebay, at least an hour a day, every day. Based on what I’ve been seeing on bids on collectors’ items stuff (the ultimate in frivolous conspicuous consumption) one would never know this economy has been in the toilet 3+ years. Unless the buyers are overseas…
“…collectors’ items stuff (the ultimate in frivolous conspicuous consumption)…”
This is luxury consumption expenditure, not reflective of what Main Street wants or can afford to spend…
And we have among us citizens an inflation camp that is very willing to trade fiats for inflation hedges.
When the dollar collapses, y’all are going to trying to get your hands on my beanie babies.
Watch “hoarders” on cable sometime.
Try the furniture listings on Craigs List. A few years ago, every other listing was pleading people to buy their stuff as the new things were just about to arrive. Now? All pleading people to buy their stuff as they are downsizing and don’t have room for all of it in the new place.
David Callaway
Oct. 7, 2010, 12:01 a.m. EDT
Race to the bottom in currency markets
Commentary: Just another form of protectionism
By David Callaway, MarketWatch
SAN FRANCISCO (MarketWatch) — Avoid protectionism.
If there’s been one mantra among political and economic leaders since the financial crisis rocked the world two years ago, it’s been to avoid protectionist policies at all costs.
History tells us, if not Fed Governor Ben Bernanke, that it was the headlong rush among countries into protectionist trade policies after the stock market crash of 1929 and subsequent financial crisis that sent the world spiraling into the Great Depression in the 1930s.
With everybody hoarding their chips, economies from the U.S. to Europe and Asia effectively shut down. So that’s been what political and economic leaders have warned against in every speech and conference since Lehman Brothers collapsed. And that’s what they’ll warn against in this weekend’s International Monetary Fund meeting in Washington D.C. also.
But unless some historic agreement can be whipped up among the canapes and photo ops during the weekend, that’s right where the world is heading, pell-mell.
…
I think it is revisionist to say that tariffs caused the GD. I think it was rather a symptom. Collapse of credit bubbles causes depressions. On a personal level, when you are maxed out on credit, the day comes when you will DIY rather than buying out. The benefit of buying local cheese is obvious to everyone. Home Econonomics 101.
Tariffs will make us consume less, accumulate less debt as a country, reduce unemployment and waste less fuel, but that is only a bad thing for the Big Money International guys.
market pulse
Oct. 7, 2010, 9:20 a.m. EDT
Currency war not good for global economy: IMF
By Robert Schroeder
WASHINGTON (MarketWatch) — A currency war is “not for the good of the global economy,” IMF managing director Dominique Strauss-Kahn said Thursday. Speaking to reporters ahead of the annual meetings of the IMF and World Bank, Strauss-Kahn said there’s decreasing willingness among countries to work together on the global economy and urged more cooperation. “There’s no domestic or national solution to [a] global problem,” he said.
Asian currencies have been manipulated for a long time. The Indian rupee used to trade at 35 rupees to a dollar in 1998 now it’s at 45 to a dollar.
Does the Fed pretty much have to follow through with QE2 now? What would happen if they did not?
Currencies
Oct. 7, 2010, 8:45 a.m. EDT
Dollar dumped as prospects for stimulus rise
Euro, yen, sterling and the Aussie all move higher against greenback
By William L. Watts, MarketWatch
LONDON (MarketWatch) — Investors continued to shun the U.S. dollar Thursday as a result of ongoing worries the Federal Reserve will resume quantitative easing as early as next month, strategists said.
“Investors are fleeing the U.S. dollar for a number of reasons. Primarily because the Fed is looking to increase QE at the November meeting after the U.S. elections,” said Douglas Borthwick, managing director of Faros Trading in Stamford, Conn., in a reference to what’s known as quantitative easing.
…
LONDON (MarketWatch) — Investors continued to shun the U.S. dollar Thursday as a result of ongoing worries the Federal Reserve will resume quantitative easing as early as next month, strategists said.’
If you own dollar denominated bonds and the dollar falls how much money do you really make in a bond bull market ?
Or if interest rates have to go up to get new investors to buy your Treasuries because they fear buying a loser currency?
in the end we may have no jobs AND weak currency
in the end we may have no jobs AND weak currency
exactly!
No jobs means depressed wages.
Lower wages and a weak currency? Exactly how again, would inflation impart a sense of renewed wealth on Main St.?
Shadow Inventory article in Atlanta Journal:
http://www.ajc.com/business/more-metro-homes-taken-664045.html
Can’t wait to see the updated version of this report after China’s real estate bubble ‘unexpectedly’ crashes!
Oct. 6, 2010, 9:31 a.m. EDT
Real estate downturn could last 8 years: IMF
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — The prospects in the global real estate sector are “dismal,” with a downturn that could last eight years, the International Monetary Fund warned Wednesday.
The IMF sees problems both in the “bust” countries, such as the United States, Spain and Ireland, and the “rebound” economies, such as the Asia-Pacific region, most Scandinavian countries, and Canada.
…
These guys say CA properties won’t return to peak values until circa 2025.
http://firsttuesdayjournal.com/another-prediction-that-california-metro-area-price-peaks-won%e2%80%99t-return-until-2025/
TAMPA — Florida homeowners with their backs against the wall reached out to Peter J. Porcelli for reprieve as they fell behind on their mortgage payments and faced foreclosure.
Porcelli promised relief, but instead swindled the homeowners of their equity or stole their homes with a phony non-profit and a lending operation that violated federal law from the moment it cranked up in a Clearwater back office.
http://www.tampabay.com/news/courts/criminal/bellair-beach-millionaire-scam-artist-peter-porcelli-finally-faces-justice/1126506
How does one contend with unfundable future obligations?
When unusually uncertain, print faster.
Mexico is now issuing 100-year bonds, meaning forget about return of capital. How soon will the U.S. do the same?
Do they have 100 years of oil left?
Does anyone?
IIRC, the agave plant is also in trouble. No tequila, no oil, yikes!
IIRC, the will stop being able to export oil in another two years.
IIRC, the agave plant is also in trouble. No tequila, no oil, yikes!
Here in Tucson, there’s a critter called the Snout Nosed Weevil. And its actions are just as nasty as its name. What it does is attack blue agave plants, and then they collapse and die.
Happened to a couple of mine.
I still have one big blue out front, and it seems to be doing okay. It’s one of the few that’s still alive in this nabe.
“Mexico is now issuing 100-year bonds”
At yields of 6% - 6.125% too, which is pretty good considering the state of their country right now.
Cities’ budgets squeezed by housing crunch
Property tax receipts dropped nearly 2% last fiscal year and are projected to continue to plunge, according to a National League of Cities report.
By Nicholas Riccardi, Los Angeles Times
October 7, 2010
Even though the economy is slowly growing, the housing crunch is continuing to weaken cities’ budgets across the country, according to a report released Wednesday.
The report from the National League of Cities found that nearly 90% of municipalities were having trouble balancing their books this year.
…
Housing crisis a lift for rentals
Vacancy rates are down and landlords are charging more as homeownership falls.
By Alejandro Lazo, Los Angeles Times
October 7, 2010
In a sign that the nation’s foreclosure crisis is taking a toll, renters surged into the U.S. apartment market in the third quarter, pushing up rents and driving down vacancies.
The national vacancy rate fell to 7.2% in the third quarter from 7.8% the second quarter, one of the sharpest drops on record, according to New York-based real estate research firm Reis Inc. Rents increased 0.6% to an average of $980 a unit over the same period as landlords were able to cut back on free rent and other incentives that had been used to attract and retain tenants in a weak market.
Economists said they expected the trend to continue. Former homeowners who lost their properties to foreclosure are now pouring into the rental market. Meanwhile, tightened credit standards are making it tougher for potential buyers to qualify for a home loan, despite low interest rates.
The U.S. homeownership rate has declined swiftly. In the second quarter of this year, 66.9% of housing units were owner-occupied. That’s down from 69% in 2004 when millions of first-time buyers armed with easy credit flooded into the housing market.
“We are seeing a shift away from owning a home to renting,” Patrick Newport, U.S. economist for consultancy IHS Global Insight. “As it became easier and easier to get credit to buy a home … the homeownership rate just shot up … . Now it is reverting to where it was.”
…
The U.S. homeownership rate has declined swiftly. In the second quarter of this year, 66.9% of housing units were owner-occupied. That’s down from 69% in 2004 when millions of first-time buyers armed with easy credit flooded into the housing market.
“We are seeing a shift away from owning a home to renting,” Patrick Newport
Historically, the US homeownership rate has been in the 60-65% range. So, we’re heading back down to the long-term trend.
Question about all these foreclosure moratoria due to the inability to prove title. Can the current occupant prove title if the paperwork is that slipshod?
What happens when you have millions of homes no one can prove they own?
“What happens when you have millions of homes no one can prove they own?”
A favorite expression of a colleague at work comes to mind:
‘Possession is ninety percent of the law.’
Squatter’s rights rule!
“What happens when you have millions of homes no one can prove they own?”
Major title insurance companies have already said they won’t issue title insurance on such homes, since they have a major “cloud” on the title. So the current “owner” will only be able to sell to a cash buyer, since mortgage companies demand title insurance.
Actually, if you were a cash buyer, would you take the risk?
Oh, I think some cash buyers are taking the bait and they’ll provide us with some humorous stories down the road I’m sure.
I foresee a huge industry springing up throwing liens all over the place based on any paper they find to cloud a any title.
You can pay it off or for a few thousand dollars they can make it all go away…
“What happens when you have millions of homes no one can prove they own?”
You get spending stimulus for “an extended period of time”.
I don’t think the current occupant (i.e. FB) can prove title free of any mortgage - he doesn’t have any legal grounds for so asserting. The problem isn’t proving that A mortgage exists: it’s proving WHO presently holds the note.
If someone wants to prove they have legal title free of any encumbrances, they have to file a funny lawsuit called a “quiet title” action. They present evidence and let the judge decide. Typically this follows a claim under adverse possession. I’ve never heard how a quiet title case pans out due to the confusion as to the rightful identity of the note holder.
Don’t forget that the FB does have title. It’s merely encumbered by the “mortgage”. Most states don’t have true mortgages anymore, where the bank owns the title until the note is paid off. Most have “trust deeds” where the bank owns a foreclosable lien (or “security interest”) in the property, subject to paying off the note.
Economic Report
Oct. 7, 2010, 9:40 a.m. EDT
Initial jobless claims drop 11,000 to 445,000
Workers continuing to receive benefits fall slightly to 4.46 million
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The number of people who filed new claims for state unemployment benefits fell 11,000 to 445,000 in the latest week, the lowest level since early July, the U.S. Labor Department reported Thursday
Economists polled by MarketWatch had expected initial claims to rise to a seasonally adjusted 455,000 in the week ended Oct. 2. Claims for last week were revised up by 3,000 to 456,000.
The news was received positively by markets, as U.S. stocks rose in early trade on Thursday.
…
Bank foreclosure cover seen in bill at Obama’s desk
WASHINGTON (Reuters) - A bill that homeowners advocates warn will make it more difficult to challenge improper foreclosure attempts by big mortgage processors is awaiting President Barack Obama’s signature after it quietly zoomed through the Senate last week.
The bill, passed without public debate in a way that even surprised its main sponsor, Republican Representative Robert Aderholt, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.
The timing raised eyebrows, coming during a rising furor over improper affidavits and other filings in foreclosure actions by large mortgage processors such as GMAC, JPMorgan and Bank of America.
Questions about improper notarizations have figured prominently in challenges to the validity of these court documents, and led to widespread halts of foreclosure proceedings.
The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.
The White House said it is reviewing the legislation.
“It is troubling to me and curious that it passed so quietly,” Thomas Cox, a Maine lawyer representing homeowners contesting foreclosures, told Reuters in an interview.
O is Veto’ing it.
Foreclosure fraud? Ohio vs. GMAC may have ripple effect
USA TODAY
Ohio Attorney General Richard Cordray Wednesday filed a civil lawsuit against GMAC Mortgage and its parent, Ally Financial, alleging they used fraudulent affidavits and documents to mislead courts in hundreds of home foreclosures in the state.
Calling it a “grave situation,” Cordray said Ally Financial’s actions raise questions about the legitimacy of foreclosures in Ohio and 22 other states. He said the concerns extend to the practices of other major servicers across the country. Cordray’s lawsuit, filed in state court, also seeks a court order barring GMAC from proceeding with foreclosures in the state.
GMAC, JPMorgan Chase and Bank of America have recently suspended foreclosures in 23 states, including Ohio, where seizing homes requires court approval.
New York state and city want the U.S Department of Agriculture to ban the use of food stamps to buy sugary soft drinks for two years as a way to curb obesity-related diseases among the poor. Is it fair to deny food stamp recipients junk food?
Is it fair to deny food stamp recipients junk food?
It’s very fair - just more fair to some than to others.
(e.g. food companies that produce more healthy food)
Begs the question - who gets to define what “sugary” means? And can our weak economy really afford yet another layer of regulation - defining this value via research, arguing over what it is, publishing the rules for it, ongoing compliance with the rules, etc. etc.? Any why just two years?
Not that I’m not a huge proponent of healthy foods - I am. But can we really afford all this overhead for the government to define and force its idea of virtue on the public?
“Soft drink” means carbonated instead of alcoholic.
“Sugary” means “high fructose corn syrup” instead of “aspartame/saccharin/sugar alcohol.”
So I guess the poor can still drink Diet Coke by the gallon.
“Is it fair to deny food stamp recipients junk food?”
No one is denying them anything. They’re just going to have to pay for it with their own (earned or saved) money instead of with the taxpayers debit card. As Packman pointed out though, we have to pick our battles, and I don’t think this one ranks very high.
“No one is denying them anything”.
They are being denied the right to use their food stamp card to purchase the soft drinks of their choice. It’s no big deal because ‘they ‘ will figure a way around this waste of time and money rule.
One can decline the gift of the food stamp, no?
Should food stamps be used to buy bottles of ripple?
Back when I lived in Pittsburgh, I was a pretty poor little Slim. Working poor, actually.
At one of my jobs, a coworker and I got to talking about applying for food stamps. He’d already tried to do so, and his advice to me consisted of two words:
Forget It!
Apparently, it was very hard to get onto the program. So, I didn’t apply.
If people have already figured out how to convert food stamps to cash in the grocery parking lot so that they can buy smokes, you won’t keep them from getting Pepsi.
Our NY Governor has a real fetish about soft drinks. I wonder what they did to him as a child.
How do you do this now that everything is electronic?
My understanding is that one can make purchases with the Food Assistance card and hawk them in the parking lot at a discount. Kind of like a wierd farmer’s market. I have not seen this personally but doesn’t sound too difficult.
It would get a lot more difficult if the grocery store owner saw you underselling him in HIS parking lot.
How about oatmeal, beans, rice, and veg.
Got a 1-year supply of those ‘assets’ in my living room.
And there are quite a few people who have a one year supply of those assests on their…
(sorry, couldn’t resist)
Is it fair to deny food stamp recipients junk food?
Not if you’re Coke, Pepsi, Hostess or Drake’s.
I’m pretty sure Little Debby is categorized as a non-food item, though.
How do corn dogs fit into the equation? Thats the problem, how do you define junk?
Mortgage Rates Fall to Record Low of 4.27 Percent- AP
Rates on 30-year and 15-year mortgages fell to their lowest points in decades. Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans dropped to 4.27 percent, the lowest on records dating back to 1971.
You scaredy cats are stalling the economic recovery!
At least that’s the claim of Alan Greenspan.~ Fear Undermines Recovery
“Although rising moderately this year, US fixed capital investment has fallen far short of the level that history suggests should have occurred given the recent dramatic surge in corporate profitability. Combined with a collapse of long-term illiquid investments by households, they have frustrated economic recovery. These shortfalls, the result of widespread private-sector anxiety over America’s future, have defused much, if not most, of the impact of the administration’s fiscal stimulus. Moreover, the activism embodied in such programs has itself stoked the degree of anxiety.”
He apparently believes that a nice economic recovery would have resulted from the administration’s stimulus efforts if people weren’t so confounded hesitant to rush back to their old spending habits…the ones that got them into fiscal hot water in the first place.
Ignore Greenspan. Don’t use your home equity (if you still have some) as a source for cash. Spend less than you bring in. Cut debt to the bone. It’s not the end of the world. It’s only the end of a free-wheeling go-go episode in American history in which people were led to think they could borrow themselves “rich.”
Riddle me this Alan - if confidence = recovery, then why the F does the economy start to crash after consumer confidence reaches multi-year highs?
“Fear Undermines Recovery”
Ergo the housing bust has nothing to do with the Keynesian, Fed-funded, debt-fueled, unsustainable economic drinking binge that preceded it.
McDonald’s, 29 other firms get health care coverage waivers
Bloomberg Business News
Nearly a million workers won’t get a consumer protection in the U.S. health reform law meant to cap insurance costs because the government exempted their employers.
Thirty companies and organizations, including McDonald’s (MCD) and Jack in the Box (JACK), won’t be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.
The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn’t lose coverage from employers who might choose instead to drop health insurance altogether.
Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014.
So Obamacare is only paid in full by small businesses and individuals, not the big corporations and unions which work better “deals”. That’s probably not gonna work for long.
At some point, health coverage costs more than the employee pay. Bad insurance is better than no insurance, I guess. Maybe HHS figures they can hang on until 2013 when the Exchange kicks in.
I don’t think the exchange will be the ultimate problem-solver here. Instead, we’re going to see something called the Public Option marching back into view.
And, in my not-so-humble opinion, this will happen in the next year or so. Leading the parade will be drum major Barack Obama, and he’ll be doing so because he wants to get re-elected.
Not only that, he has to be painfully aware that the Public Option had (and probably still has) the support of 70% of the American people. If there’s anything a politician likes to do, it’s leading the parade toward passing a popular program.
That’s good news. McDonald’s only has a few employees at several remote locations.
The biggest single waiver, for 351,000 people, was for the United Federation of Teachers Welfare Fund, a New York union providing coverage for city teachers. The union asked for a waiver for its supplemental drug plan, which offers coverage up to $100,000 to pay for prescriptions, said union president Michael Mulgrew. The city of New York covers hospital and physician care for teachers and their families.
The waiver will buy the union time to figure out how to comply with the new limit. “We want to look at these costs and figure out exactly what they should cost us,” he said in a phone interview.
I don’t have time to read thru the blog to see if this has been posted yet, so here it is.
Each day it gets harder and harder to stomach our Government!
Bill Toughening Foreclosure Challenges Passes Quietly
http://www.cnbc.com/id/39550663/comid/1#comments_top
My faith has been returned on this one issue.
Obama to Veto Bill Affecting Foreclosures
WASHINGTON—President Barack Obama won’t sign into law an overlooked piece of legislation that critics say would make it easier for banks and others to process foreclosure proceedings without human signatures, a person familiar with the matter said.
Mr. Obama hasn’t yet issued a veto during his presidency. In this instance, he will send the bill back to Congress using a process known as a “pocket veto.”
His decision comes amid growing complaints from lawmakers that the administration and regulators haven’t done enough to intervene in a scandal tied to thousands of foreclosures that critics argue were processed with improper documentation.
Mr. Obama hasn’t yet issued a veto during his presidency.
WOW. Bush 2.0.
Presidents use vetos when they are fighting with the leadership of the House and the Senate. Otherwise, the bills they would veto don’t get passed.
More change you can believe in…
Data show 41.8 million people were on government nutrition assistance programs in July, up from about 32 million when Barack Obama took office. But most recipients don’t think of themselves as “moochers.” When their incomes fall below a certain level they believe it’s their right to turn to Mother Government for a handout. It matters not the money doesn’t come from government bureaucrats. It comes from the productive segment of society.
When you rob Peter to pay Paul - you get the vote of Paul…
When Peter stole from simpleton Paul no one was looking out for Paul.
When Peter stole from simpleton Paul no one was looking out for Paul.
looking out for yourself is a virtue because it lessens the chances you will have to depend on someone else.
What if you are so hooked on freebies you just can’t quit?
freebies are never really free. their toll will be extracted.
What if Goldman already rolled Peter for all he was worth before
he got approached by Paul?
“When you rob Peter to pay Paul”
Paul takes Peter`s money and goes to Vegas.
$69 million in California welfare money drawn out of state
Las Vegas tops the list with $11.8 million spent at casinos or taken from ATMs, but transactions in Hawaii, Miami, Guam and elsewhere also raise questions.
October 04, 2010
By Jack Dolan, Los Angeles Times
http://articles.latimes.com/2010/oct/04/local/la-me-welfare-20101004 - 28k
Farmers are the real moochers.
“Farmers are the real moochers.”
Agri-business are the real moochers. Fixed.
Pharmacy industry loses 6,000 jobs in September
The pharmaceutical industry shed more than 6,000 jobs nationwide last month, as total layoffs in the sector across the United States reached a high not seen since May, according to new numbers released Wednesday.
The outplacement consultant Challenger, Gray & Christmas said the 6,069 pharmaceutical jobs lost nationwide in September compares with 255 reductions in August.
The pharma sector nationwide has seen 43,334 job losses so far this year. The reductions already total more than for all of 2008, though the average monthly cut of about 4,800 workers is down slightly from a year ago.
Pfizer Inc., which employs nearly 5,000 people at its two Connecticut campuses in Groton and New London, did not respond directly to questions about whether it has reduced staff in the past month.
Pharma sales - sending hot chicks to nerdy doctors
I think the pharma development pipeline is empty. I recently saw a TV ad for a “new” gout drug called Uloric, despite the fact that Allopurinol has been around in cheap generic form for over 25 years and works just fine (I’m living proof; no gout attacks in over 5 years now).
“Uloric, taken once daily by mouth, is approved for the chronic management of hyperuricemia (elevated levels of uric acid) in gout patients.
“In 2005, the FDA refused to approve Uloric because there were slightly more deaths and heart problems in patients taking the drug than in patients taking allopurinol, another gout drug. As people with gout problems already are at higher risk of heart disease, the FDA issued an “approvable” letter, noting that Uloric could be approved if this safety question were addressed.
“Takeda Pharmaceuticals resolved the safety question by performing a large new phase III clinical trial that enrolled more gout patients than the two previous phase III trials combined. The new study found no more deaths and no more heart problems in patients taking Uloric than in patients taking allopurinol.”
Uh-huh.
Cancelled MTA contracts result in 850 layoffs
The Metropolitan Transportation Authority is terminating two contracts with companies that transport disabled New Yorkers.
New York, New York City, Queens, Maspeth, Brooklyn, Mill Basin
The city’s paratransit bus schedules are being disrupted with the closing of two companies that provide transportation for disabled passengers. Starting this month and continuing through year’s end, Maspeth, Queens-based Atlantic Paratrans of NYC Inc. will steadily lay off all of its 610 employees, and Progress Transit Inc. of Mill Basin, Brooklyn, will do the same with its 244 workers.
Both firms filed Worker Adjustment and Retraining Notification forms with the state, and each cited the loss of a contract with the Metropolitan Transportation Authority as the reason.
The MTA says it terminated the contracts for financial reasons.
link please. #1 son works for the company that builds the custom busses.
Here you go…
http://www.crainsnewyork.com/article/20101006/SMALLBIZ/101009915
thanks.
I sent the link, it did not post, I’ll try again.
Don’t expect us to pay benefits for unlimited babies, says minister - big families won’t be supported on welfare
pete smith ~ UK
Campaigners called Culture Secretary Jeremy Hunt’s insistence that state help for large families should not be limitless ‘abhorrent’. Mr Hunt said the Government’s proposed cap on benefits reflected the need for claimants to ‘take responsibility’ for their children.
We should do the same here, generational welfare that pays people who do nothing but squirt out child after child should be abolished.
The UK pays all families money for each child, regardless of income . This is not welfare.
“This is not welfare”.
So what word do they call their program and where does the money come from?
I think of it more like claiming a child as a dependent on you taxes. It’s based per child and doesn’t change on your income level. They are just getting it up front rather than the following year.
Read Theodore Dalrymple and be prepared to fall off your chair at his audacity. From his wikipedia entry, his themes include:
– The cause of much contemporary misery in Western countries - criminality, domestic violence, drug addiction, aggressive youths, hooliganism, broken families - is the nihilistic, decadent and/or self-destructive behaviour of people who do not know how to live. Both the smoothing over of this behaviour, and the medicalization of the problems that emerge as a corollary of this behaviour, are forms of indifference. Someone has to tell those people, patiently and with understanding for the particulars of the case, that they have to live differently.
– Poverty does not explain aggressive, criminal and self-destructive behaviour. In an African slum you will find among the very poor, living in dreadful circumstances, dignity and decency in abundance, which are painfully lacking in an average English suburb, although its inhabitants are much wealthier.
– An attitude characterized by ‘gratefulness’ and ‘obligations towards others’ has been replaced, with awful consequences, by an awareness of rights, a sense of entitlement. The result is resentment as, naturally, those rights are violated by parents, authorities, bureaucracies and others in general.
–Technocratic or bureaucratic solutions to the problems of mankind produce disasters in cases where the nature of man is the root cause of those problems.
– Criminality is much more often the cause of drug addiction than its consequence.
– High culture and refined aesthetic tastes are worth defending, and despite the protestations of non-judgmentalists who say all expression is equal, they are superior to popular culture.
– The ideology of the welfare state is used to diminish personal responsibility. Erosion of personal responsibility makes people dependent on institutions and favours the existence of a threatening and vulnerable underclass.
– Moral relativism can easily be a trick of an egotistical mind to silence the voice of conscience.
– Multiculturalism and cultural relativism are at odds with common sense and statistical evidence.
– The decline of civilised behaviour–such as: self-restraint, modesty, zeal, humility, irony, detachment–is a disaster for social and personal life.
– The root cause of our contemporary cultural poverty is intellectual dishonesty. First, the intellectuals have destroyed the foundation of culture, and second, they refuse to acknowledge it by resorting to the caves of political correctness.
– Beyond and above all other nations in the world, Britain is the place where all the evils summarized above are most clearly manifest.
Ted Dalrymple is a psychiatrist in London’s equivalent of the inner city.
He’s written at least one book about the behavior he’s seen in his hospital patients. To put it mildly, he doesn’t find said behavior to be endearing.
Youth in Asia?
Walmart is collaborating with vendors to offer even smaller sizes for under a dollar to win back customers who are heading to dollar stores to buy mini-size laundry soap and other items because they only have a few dollars left until the next payment. Earlier this year, Kmart began pushing $1 items on snack packs and other food items, timed a week before the 15th of each month to help customers stretch their budgets.
“This is the new normal,” said Richard Hastings, macro and consumer strategist with Global Hunter Securities. “This is going to be like this for many years to come.”
Not counting Social Security, one in six Americans now receives some form of government assistance, including food stamps, Medicaid and extended unemployment benefits.
These government payouts now account for about 20 percent of Americans’ total after-tax income, said David Rosenberg, an economist at investment firm Gluskin Sheff. The average over the past half-century is 13 percent..
The new teeny weeny sizes are a brilliant idea. Its going to change things.
These consumer contortions would not be necessary of housing prices were allowed to seek their own level.
Shhhh! Don’t even say that! You can’t talk out loud like that during the recovery.
“Walmart is collaborating with vendors to offer even smaller sizes for under a dollar to win back customers who are heading to dollar stores to buy mini-size laundry soap and other items because they only have a few dollars left until the next payment.”
Walmart is colluding with vendors to offer even smaller sizes with even less actual product and more wasteful packaging to prey upon customers who don’t have enough money to buy laundry detergent.
And in other news, little pink houses for you and me.
At some point there will be more people wanting to ride in the cart than are willing and able to pull the cart.
Merely sanctuary in disguise
Is the DREAM Act right for America? No way. It’s sanctuary in disguise and a Democratic attempt to lock in millions of votes, beholden to them. However, since these now brilliantly educated, motivated young men and women have so much potential, why not send them back to their birthplace? This will allow them to address the issues in their countries that made their parents flee in the first place
as the other poster said i sick and tired of this govt !!!! these are illegal aliens…wait undocumented workers, NO ILLEGAL ALIENS….
The difference between legal and illegal alien is just the opinion of one person, the consular.
At present, 27,788 city and county workers participate in one of three city-sponsored health plans. Coverage is free for employees, but not for their dependents. On average, these employees pay $1,804 annually for health insurance. If Proposition B is passed, the average annual cost would climb to $4,179.
“It is wrong to raise the price of children’s health care in order to solve” the city’s financial crisis, Mr. Ballard said in an interview. “Health care is to San Francisco as the Second Amendment is to Mississippi. We believe in it.” AS LONG AS ITS FREE,PAID BY THE TAXPAYERS.. this workers is probably grossly overpaid compared to the private sector,her contribution is not important,i hope all city workers get HUGE paycuts!!!
i pay 6200 a year for coverage for 3 people 2 adults 1 child,i am not complaining,sure i would like to pay less,but this is the price for excellent healt civ in the USA…..I NEED NO PUBLIC OPTION…
I pay less than $4000 per year to cover 4 people. $30 doc visits, $5000 deductible. This is all most people need.
agreed a smart sense plan from anthem will do the trick for most americans……this is fairly priced plan and provides great coverage with max out of pocket of $ 7500…..i sell health ins and this is the plan we all should buy……
i sell health ins
You really don’t want to admit this in public.
sold in 05
We pay $16K for 2 adults for Kaiser, and we aren’t happy there. Other than one or two depts, they stink.
We had Blue C and we had to have an Attorney coach us on an ER claim, which I had no control over, Staphylococcus aureus, that nasty bacteria.
We are changing in Jan, to ? Maybe we should become illegals, and then it’s free.
sold in 05
PBS Frontline Online “Sick Around The World” and “Sick In America” , but World was better. We need a public option. We already have socialized heath care for the criminal invaders. The rest of us sinking middle needs help.
We can agree to disagree. You’re great anyway. Where are you? (State)
Yeah, 05? Wait until you need to use it….
$7500? I scoff at your naivety.
Did anyone else notice how Eddie seems to always make himself scarce on days when the headline U.S. stock market indexes are tanking? DJIA = 12K or bust, Eddie!
Leading index of the DJIA for HBB day traders: Check whether Eddie is currently crowing about his investing acumen.
Who cares?
Can’t say I care much myself; just find the empirical regularity humorous. If you lack a financial sense of humor, then I suggest you ignore my posts, as I aim to get a laugh out of my readers.
In defense of PB, I find his humor in poking at the bulls rather funny myself.
The market always takes a breather while it’s going up. It’s a healthy sign. You should be afraid, be very afraid, when the market just goes up day after day.
As outlook sours, international tensions grow
WASHINGTON (MarketWatch) — The relative peace on economic issues seen when leaders of the world’s 20 top industrialized nations met in London two Aprils ago is nearly absent as annual meetings of the International Monetary Fund and the World Bank kick off here.
The disappointing economy and the moribund outlook, in particular for the U.S., Japan and Europe, has caused countries to retreat from cooperation to lick their own wounds and follow their own remedies, analysts say.
With the major developing countries limping along and emerging economies like China unwilling to do more, the Group of 20 has split into “different interests,” he said.
Geithner scolds China…again.
Currency trader, Chuck Butler, on Treas. Secy’s Geithner’s demand that China let its currency strengthen:
“Why can’t we leave the Chinese out of this? They have their country to run, and we have ours… If we had taken better care of our country’s finances, we wouldn’t be in this mess. I think we would be better off taking care of our own house, and leaving China to take care of theirs. If you rile them up too much, you risk the chance of them telling you to finance your own deficit!”
~ Daily Pfennig
Normally I’m a big fan of Chuck - but apparently he missed the fact that China already told us to “finance our own deficit” over a year ago.
(Being that they’ve been net sellers of U.S. treasuries since July 2009)
Agree though that we shouldn’t give a rats patootie what China does with their currency.
Telling them to strengthen their currency is just like going to all the local grocery stores and asking them to raise their vegetable prices, because you were thinking about growing your own, but it’s not cost effective unless they all agree to raise raise their prices on vegetables. Stupid.
The rhetoric is transparent. China uses tariffs. The US can use tariffs, but rather than tell us the rising prices is good for the country, the pols have to hold up a mock enemy.
Fed Officials Mull Inflation as a Fix
The Federal Reserve spent the past three decades getting inflation low and keeping it there. But as the U.S. economy struggles and flirts with the prospect of deflation, some central bank officials are publicly broaching a controversial idea: lifting inflation above the Fed’s informal target.
The rationale is that getting inflation up even temporarily would push “real” interest rates—nominal rates minus inflation—down, encouraging consumers and businesses to save less and to spend or invest more.
Jon Hilsenrath tells Simon Constable and David Weidner why the Federal Reserve may be ready to raise its target for inflation in an effort to stimulate the faltering U.S. economy. Plus, stocks and gold soar and Eebee takes aim at babies.
Both inside and outside the Fed, though, such an approach is controversial. It could undermine the anti-inflation credibility the Fed won three decades ago by raising interest rates to double-digits to beat back late-1970s price surges. “It’s a big mistake,” said Allan Meltzer of Carnegie Mellon University, a central bank historian. “Higher inflation is not going to solve our problem. Any gain from that experience would be temporary,” adding that the economy would suffer later.
“Fed Officials Mull Inflation as a Fix”
I suppose monetary hair-of-the-dog beats alcohol, and inflation as a fix beats heroin.
“Eebee takes aim at babies”
The meaning of that eludes me.
As for “hair of the dog”, I’d agree PB, except the “dog” was several decades of Ponzi debt pyramid building. I suspect the “hair” of QE is of a different animal, that will bite us quicker than the first.
I wonder when we will wake up to the fact that inflation is a tax levied upon us by the banking system, which in my opinion has no native right to tax us.
“…which in my opinion has no native right to tax us.”
It was either Raygun’s political genius or his stupidity to demonize and significantly reduce honest taxation, while ramping up the deficit, paying for it all through stealth tax measures such as the Fed’s printing press and a ginormous payroll tax hike. Raygun was one of those politicians for whom I could never figure out whether he was truly stupid or merely appeared to be so.
One of the questions I have asked myself as this train wreck screams down the track is how could people engage in such dark activities with so much potential harm?
We have made fun of the Trolls and Used House Sellers, Hedgies, and the entire REIC for years now, but at the core you have wonder what the heck was going on in their tiny little heads. And then there is the polarity of free market vs regulation which is kind of a meta topic of the tiny little heads issue.
Here is an interesting article that touches on some of this …
http://opinionator.blogs.nytimes.com/2010/10/03/hegel-on-wall-street/
“…what the heck was going on in their tiny little heads.”
Read snoopaloop’s post below for one variant…
Yes sir, there we have it. OMG!
Living in my house for free for since 2008 back doesnt have proper paperwork to foreclose.When they sent me court papers I hired an Attorney now Im living in my house for free for a long time m,aybe Ill even rent it out and make extra money.
Thanx Citi Bank
And there ya have it folks. That post (including the grammar quality) pretty much sums up the situation.
Anyone still think we’re not F****** yet?
(this assumes of course, that the post was legit)
No way is that legit! But even if it isn’t, I still think that we are mucked.
Is Snoopaloop a play on ropeadope?
To quote Aliens II. “Maybe you have not kept up with current events?”.
Of course this is going on. Thousand and thousands of homes.
I know a friend in that situation with a different bank. It is legit. The bank tried to foreclose several years ago but could not come up with the appropriate documents for the Florida court. Then late last year, they tried again with all the documents needed but after review, they were found to be in error. The dates were messed up. That allonge thing popped up. The robo-signer was involved. So my friend fought it and is still fighting it.
So do people live in houses for years without paying the mortgage and insurance. Yes. And they are very, very nice houses.
This whole fight started years ago when my friend wanted to contact the mortgage company to try and negotiate something. She never could find the company to talk to as it has been “assigned”. So when the foreclosure papers came, she just tried to trace it back out of curiousity. The paperwork had blatant, obvious errors and the mortgage was not “assigned” properly. So the fight began.
If the bank just had someone in the back office who would spend an hour going through the paperwork, then this would be resolved in the banks favor. But they don’t and I think it is because the documents were destroyed. There are no signatures anymore. Lots of smoke out there but my friend might have one the lottery.
What happened to jail time for deadbeats?
A libertarian who wants to bring back debtor’s prisons?
If you want to enforce a contract with a right to imprison someone for failure to pay, put it in the contract and pay for the prison yourself.
So you are saying that if I use a credit card to charge for a refrigerator, then I flee the state (with my refrigerator in tow), and never pay the credit card, that I should not be subject to relatiatory force for theft of property?
You are ignorant school marm. Ignorant of the libertarian principles. Retaliatory force is central in the libertarian philosophy. Initiation of force is central to non-libertarian philosophy. There is a big difference between “retaliatory” and “initiation.”
How about if I rent your house and decide not to pay you because I don’t think its fair?
I’m reading a very good book on this topic. It’s called Every Landlord’s Legal Guide, and I’m reading it for a friend who’s busily fixing up an old house she owns. She’s planning to rent it out (I shudder to say this here) until the market picks up again.
Any-hoo, book says that non-payment of rent can make the tenant subject to eviction proceedings.
The exception is when the landlord fails to maintain or repair the property so that it is fit for habitation. There may be others, but I’m still reading the book.
Landlord tenant law varies greatly by state. WAshington is very tenant friendly and it takes a very long time to evict a tenant for any reason. Idaho, is just the opposite.
I quit being a landlord for fear of Meth use in the rental, which can essentially make the unit uninhabitable until a very expensive clean up is undertaken. There are many houses in Spokane that are just boarded up because the clean up costs more than the house is worth.
m,aybe the back will get it`s paperwork strait and u will be living in a box for a long time. Then u could stand on a corner with a sign tht says, I LIVE IN A BOX and make extra money. Some call it Karma, I just say what comes around goes around.
FINALLY!!!!
SEC CHARGES INTERNATIONALLY SYNDICATED RADIO SHOW HOST WITH SECURITIES FRAUD SCHEME
LITIGATION RELEASE NO. 21690 / October 7, 2010
Securities and Exchange Commission v. Barbra Alexander et. al., Case No. CV-10-4535-PVT (N.D. Cal. filed Oct. 7, 2010)
SEC CHARGES INTERNATIONALLY SYNDICATED RADIO SHOW HOST WITH SECURITIES FRAUD SCHEME
The Securities and Exchange Commission today charged a talk radio show host and two other executives at a Monterey, Calif.-based firm with misappropriating $2.5 million of approximately $7 million they raised through the fraudulent sale of interests in two real estate investment funds.
The SEC alleges that Barbra Alexander, the former president of APS Funding, used her status as host of an internationally-syndicated radio show for entrepreneurs called MoneyDots to lure investors who thought their money would be used to fund short-term loans secured by real estate. Alexander along with the firm’s secretary/chief financial officer Beth Piña of Fairfield, Idaho, and vice president Michael E. Swanson of Seaside, Calif., instead stole investor money to pay themselves $1.2 million and finance MoneyDots and other unrelated businesses unbeknownst to investors. Alexander even used $200,000 of investor funds to remodel her kitchen.
According to the SEC’s complaint filed in federal district court in San Jose, Alexander, Piña and Swanson raised nearly $7 million from 50 investors for two investment funds managed by APS Funding. They claimed that the funds would make short-term secured loans to homeowners and yield 12 percent annual returns to investors. Contrary to what investors were told, $1.2 million of their money instead went directly to Alexander, Piña, and Swanson for personal use, and $1.3 million in investor funds was used to finance other businesses owned by Alexander and APS Funding, including MoneyDots.
The SEC further alleges that Alexander, Piña, and Swanson furthered the scheme by sending monthly account statements to investors reflecting fictitious profits and, in classic Ponzi scheme fashion, paying out purported returns that actually came from new investors.
In its federal court action, the SEC charges Alexander, Piña, Swanson, and APS Funding with violating Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. The SEC also charges Alexander, Swanson, and APS Funding with violating Sections 5(a) and 5(c) of the Securities Act. The SEC’s complaint seeks relief in the form of permanent injunctions against all defendants enjoining them from future violations of the provisions charged, an order requiring that they disgorge their ill-gotten gains, with prejudgment interest, and imposing civil penalties against Alexander, Piña, and Swanson.
http://www.sec.gov/litigation/litreleases/2010/lr21690.htm
Florida foreclosure firm’s title insurer won’t insure firm’s foreclosure titles
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 5:48 p.m. Thursday, Oct. 7, 2010
The title insurance arm of one of the state’s largest foreclosure law firms is refusing to cover properties foreclosed on by its own attorneys citing potential defects in court filings.
New House Title, which is owned by the same people who run the Tampa-based Florida Default Law Group, sent notice to a Boca Raton real estate attorney Wednesday that a 2009 foreclosure was off limits.
What Attorney Robert Feldman found interesting in New House’s denial for the Deerfield Beach condominium is the foreclosure was handled by the Florida Default Law Group.
“It is somewhat surprising that now they won’t even insure their own work,” Feldman said.
“It is somewhat surprising that now they won’t even insure their own work,” Feldman said.
Sounds like they’re admitting that they did a lousy job.
I thought of you all when I read this,
“Stealth activity on the part of the Fed – utilizing proxy institutions to generate limitless artificial demand for any and all U.S. Government Debt – effectively gives the Fed control of the long end of the interest rate curve [the bond market].”
http://www.financialsense.com/contributors/rob-kirby/the-federal-reserve-is-selling-paper-gold-and-buying-physical-gold
I kinda sorta get the idea of stimulus for debt people and for prisoners, but for DEAD PEOPLE!? Seems a bit on the optimistic side!!!
* U.S. NEWS
* OCTOBER 7, 2010, 10:02 P.M. ET
Stimulus Checks Sent to Dead, Incarcerated
By LOUISE RADNOFSKY
The Social Security Administration sent about 89,000 stimulus payments of $250 each to dead and incarcerated people—but almost half of them were returned, a new inspector-general’s report found.
The agency was charged with distributing the one-time payments, worth about $13 billion in total, as part of the economic-stimulus package passed in February 2009. Most of the payments were made in May 2009.
The inspector general found that about 72,000 payments were sent by electronic-transfer and as checks to people who would have qualified to receive them—had they still been alive.
The report Thursday said that of these payments, about 55,000 were sent because the recipients had died recently, and the Social Security Administration had not been informed of their deaths by states, families or funeral homes at the time the payments were sent.
The remaining 17,000 of the mistaken payments were attributed to the SSA failing to properly process death records that it did have.
Another 17,000 payments went to recipients who were in prison at the time the payment was made in May 2009. However, not all of those payments were necessarily against the letter of the law. While lawmakers intended to prevent payments to people in prison, the law included only a provision prohibiting payments to people incarcerated in the three months before the plan was passed—from November 2008 through January 2009.
…
* The Wall Street Journal
* REVIEW & OUTLOOK
* OCTOBER 8, 2010
The ‘Limited Inflationists’
Fed Chairman Ben Bernanke and his QE Street Band.
Federal Reserve Chairman Ben Bernanke is a student of monetary history, so perhaps he remembers Sumner Slichter. In the 1950s, the Harvard economist made his reputation as the leader of an intellectual band that Time magazine dubbed the “limited inflationists”—the idea that some inflation was good for an economy, and that the Fed should encourage a gradual rise in prices.
In a hearing on Capitol Hill, his views drew a famous rebuke from Fed Chairman William McChesney Martin, but Slichter’s ideas gained currency in the 1950s and 1960s and eventually laid the groundwork for the not-so-gradual inflation of the 1970s.
Slichter died in 1959, but he is staging a rebirth at none other than Martin’s former home, the Federal Reserve. A galaxy of Fed officials has fanned out to argue for another round of “quantitative easing,” or a further expansion of the Fed balance sheet to boost the economy. The “limited inflationists” are once again at America’s monetary helm, promising happier days from rising prices while downplaying the costs and risks.
In the first QE go-around in spring 2009, financial panic was still in the air and the Fed’s justification was to save us from Depression. Today, the panic is over and an economic recovery is underway. So the Fed’s new justification is that growth is still too slow, unemployment is still too high and prices aren’t rising fast enough.
The Fed’s Open Market Committee hinted at the inflation-is-too-low argument in its statement after its September meeting, noting that “Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.”
Last week, Chicago Fed President Charles Evans went further and put a specific number on it—inflation below 2% a year is undesirable. He was joined in his case for easier money by the New York and Boston Fed Presidents, among others. The clear message is that a Fed majority has come down on the side of QE2, and markets have concluded that the central bank will return as early as November to buying hundreds of billions of dollars of assets to ensure what Mr. Evans called a need for “negative interest rates.” Sumner Slichter rides again.
…
You are the weakest link. Goodbye!
* MARKETS
* OCTOBER 8, 2010
Dollar’s Fall Roils World
As Global Leaders Meet, Strains Rise Among Nations Competing to Save Exports
By TOM LAURICELLA
The dollar hit fresh lows against several currencies Thursday, raising pressure on global leaders to address worsening tensions among countries vying to keep their currencies weak and exports competitive.
The relentless rise of currencies from the Japanese yen to the Australian dollar is threatening to derail economic recoveries and global cooperation. In the six weeks since the Federal Reserve began discussing the prospect of further easing monetary policy, the dollar has fallen 7% against a basket of currencies.
Compounding matters are frustrations with the Chinese government’s unwillingness to allow its currency, the yuan, to significantly appreciate.
On Thursday in Washington, where finance ministers began gathering for the annual meeting of the International Monetary Fund, currency diplomacy was in the forefront for the first time in years. Ahead of the gathering, investors began speculating about the possibility of a global agreement designed to stabilize currency markets and manage an orderly decline of the dollar.
But officials played down the likelihood of any major coordinated steps to address key flash points, such as the dollar’s decline and China’s refusal to allow its yuan to rise as fast as other nations are demanding.
Investors who had been betting on the dollar switched their wagers in the past few weeks as they grew convinced the Fed will pump still more money into financial markets to bolster the struggling U.S. economy—essentially diluting the value of the dollar. Some of that money went into the euro, which has reached an eight-month high, and the rest found its way to currencies of commodity-focused or emerging-market nations.
A few months ago, the dollar was on the rise as investors focused on Europe’s government-debt crisis. But the prospect of another round of “quantitative easing” by the Fed has turned the dollar into the weakest link among the major currencies.
…
Now it sux rox to own MBS. Good luck at collecting from debt beats who can indefinitely delay foreclosure.
* BUSINESS
* OCTOBER 8, 2010
Foreclosure Bill Is Blocked
Obama Plans His First Significant Veto Amid a Debacle Over Banks’ Paperwork
By DAMIAN PALETTA
President Barack Obama plans to veto a bill whose opponents say would make it harder for homeowners to stop foreclosures.
The move marks the Obama administration’s most direct intervention so far into a growing debacle tied to how banks foreclose on homes, and the first effective veto of Mr. Obama’s presidency. The veto could make it more difficult for banks to complete paperwork and speed the foreclosure process, and could give homeowners more time to rework loans.
Several of the country’s largest banks, including Bank of America Corp., J.P. Morgan Chase & Co. and Ally Bank, have moved in recent weeks to halt thousands of foreclosures in 23 states amid revelations that the banking industry had used “robo-signers,” people who sign hundreds of documents a day without reviewing their contents.
The mess, with its echoes of the lax lending standards that helped spark the financial crisis, comes just two months after Congress passed a sweeping law to crack down on the financial industry.
“We believe it is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, because this bill can be finalized,” White House communications director Dan Pfeiffer said in a blog post.
…
Isn’t it a felony to steal someone else’s home? I hope whoever at Megabank of America is responsible for this story gets the book thrown at them.
Bloomberg
Man Who Had No Mortgage Faced Foreclosure Anyway
October 07, 2010, 9:18 PM EDT
By Ann Woolner
Oct. 8 (Bloomberg) — Jason Grodensky paid cash for a South Florida home last December. With no mortgage and full ownership, he had no fear of foreclosure.
And yet, Bank of America foreclosed on the house seven months later, according to the South Florida Sun Sentinel. The court-ordered foreclosure took place July 15.
Grodensky tried for months to get answers from the lawyers and lenders involved. He got nowhere until he contacted the newspaper which started poking around. Now, Bank of America says it will straighten out the mess at its own cost, the Sun Sentinel reports.
Banks that are suspending foreclosures in much of the country call mistakes in paperwork mere technical errors. This implies that the foreclosures, or most of them, were otherwise on solid legal ground and that any mistakes were the unintended result of trying to handle too many cases in too little time.
No harm. No foul, right?
Not true. A great deal of harm has been inflicted, and not just on the rare homeowner wrongly judged to be delinquent.
…
* Thursday, October 07, 2010
Pre Foreclosure Numbers Rise Despite Dem’s Foreclosure Moratorium
In the middle of escalating pre foreclosure numbers and endless questions about how they are being processed, it comes as no surprise that a coalition of consumer and civil rights groups has called for a national foreclosure moratorium on all bank seizures of homes on the brink of the mid term elections.
The latest action comes as President Obama recently declined to sign foreclosure related legislation into law because of the “unintended impact of this bill on consumer protections, including those for mortgages,” White House communications director Dan Pfeiffer said Thursday.
Ironically, the extended call for a freeze follows growing disclosures of alleged foreclosure processing irregularities, including lender’s mishandling of records in the foreclosure process. Included in the mass foreclosure moratorium, three major banks have already suspended foreclosures. However, only 23 states that process foreclosures through courts are currently included. In calling for a national foreclosure moratorium, the advocacy groups said that foreclosures unfairly skew pre foreclosure figures by targeting minority communities and tear apart neighborhoods.
…
Buying Beats Renting as Foreclosures Cut Home Prices in Texas, California
By Danielle Kucera - Oct 7, 2010 9:01 PM PT
The surge in Arizona foreclosures allowed Chris Escobedo, a 31-year-old college counselor with a wife and two children, to buy his first home — one larger than the house he had been leasing.
“We realized what kind of house we could get for the same amount we were paying in rent,” Escobedo said in an interview. Monthly costs including taxes and insurance for his new home, a foreclosed property near Phoenix, total $1,014 — just $14 more than the rent on his old place, he said.
Cities in Texas, California, Florida and Arizona offered the best deals for renters looking to buy in September as an increase in foreclosures, a decline in home values and an unemployment rate near a 26-year high kept prices down, San Francisco-based real estate data company Trulia Inc. said today.
Arlington, Texas, topped the list of the cities in which buying was a better value than renting, followed by Fresno, California; Miami; Mesa, Arizona; and Phoenix. Trulia compared the average rent on two-bedroom apartments and other rentals in its database with total homeownership costs, including mortgage payments, taxes and insurance, in the 50 largest U.S. cities.
Foreclosures are adding to a swelling U.S. housing supply as an unemployment rate of 9.6 percent and the end of a federal homebuyer tax credit dampen purchases. In August, home seizures rose 25 percent from a year earlier to 95,364, RealtyTrac Inc. said. Almost one-fourth of all U.S. home sales in the second quarter involved properties in some stage of mortgage distress, according to the Irvine, California-based data provider.
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If this national effort to establish a blanket foreclosure moratorium gains traction, won’t it provide incentive for myriad struggling home owners to simply stop paying their mortgages, under the assumption that blood-sucking banks have effectively been defanged and hence will not be able to foreclose?
General freeze on home seizures sought
Amid growing questions about banks’ handling of foreclosures, consumer and civil rights groups call for a national moratorium.
By Alejandro Lazo and E. Scott Reckard, Los Angeles Times
October 8, 2010
Amid escalating foreclosures and fresh questions about how they’re being conducted, a coalition of consumer and civil rights groups has called for a national freeze on all bank seizures of homes.
The action came as President Obama declined to sign foreclosure-related legislation because of the “unintended impact of this bill on consumer protections, including those for mortgages,” White House communications director Dan Pfeiffer said Thursday.
The call for a freeze follows growing disclosures of alleged irregularities, including mishandling of records in the foreclosure process, by lenders. Three major banks have already suspended foreclosures, but only in the 23 states that process foreclosures through courts. (California is not among them.) In calling for a national freeze, the advocacy groups said that foreclosures unfairly target minority communities and tear apart neighborhoods.
“This information about inaccurate records compounds an already existing problem,” said Hilary O. Shelton, director of the National Assn. for the Advancement of Colored People’s Washington Bureau. “There needs to be an opportunity for people to find other options to save their homes, and the beginning of that is to stop the foreclosures.”
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Frequent and long-time lurker. Sorry to ask, but what happened with Olympiagal? I saw a reference that made me thing she is no longer with us, could someone clarify? Thanks…