Bits Bucket For December 17, 2010
Post off-topic ideas, links, and Craigslist finds here.
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
Location:Northern Arizona, United States
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Lenders leave condos in limbo to avoid fees
Some lenders won’t foreclose on condos so they don’t pay dues
http://www.marketwatch.com/story/lenders-leave-condos-in-limbo-to-avoid-fees-2010-12-17?link=MW_related_stories
…
According to a study by the Alexandria, Va.-based Community Associations Institute, more than seven out of every 10 bank-owned houses and apartments are not making regular assessment payments to the government-like boards that operate the projects in which the properties are located.
…
Enter the Association Law Group, a Miami Beach firm which has come up with a strategy associations can use against non-paying lender-owners. The ploy, officially known as a “quiet title action” but dubbed the “Mortgage Terminator” by partner Ben Solomon, won’t solve all an association’s money woes, but it will at least force a lender’s hands after an association forecloses on an owner to collect unpaid assessments. And I presume individuals like you could use it in the same way.
In too many cases, lenders are failing to foreclose on troubled assets, no matter who owns them, a troubled borrower or a secondary lien holder. In many cases, they are either waiting for the market to clear so they can sell the distressed assets at a better price or they don’t want to pay the dues and/or assessments owners are required to pay.
Whatever the reason, lenders which drag their feet are leaving associations in the lurch. But with the Mortgage Terminator maneuver, says ALG partner Solomon, associations can take title to the property and then force the primary lien holder to initiate its own foreclosure proceeding or release its mortgage so the association can sell the unit to cover what it is owed.
Three times now, Florida courts have confirmed the tactic, which Solomon calls “a legal strategy that finally gives banks a legal ultimatum.”
…
The banks wouldn’t have this luxury without massive taxpayer-funded government intervention. This is really bullshit.
Actually, with FDIC in place, there is going to be big tax payer funded intervention one way or another. Either we step in and shut them down, liquidate their assets, have the FDIC take massive loans from the treasury to make depositers whole….. or we prop up the banks, delay and pray, and let them drag their feet in hopes we’ll magically be able to return to creating new debt at 3x the sustainable rate.
New bubble or bust… of course, new bubble and bust too, but that will be later, not now… and not now is better than now.
SEVEN out of TEN? holy criminy..
Banks Push Fed to Curb Borrowers’ Right to Rescind Mortgages.
(Bloomberg)
Mortgage firms are pressing the Federal Reserve to curb homeowners’ right to invalidate loans based on flawed documents — a right consumer groups say is one of the few weapons borrowers have to battle unfair lending.
Consumer groups and industry lawyers say a rule under consideration by the central bank would make it harder for borrowers to exercise their right of “rescission,” which forces a lender to relinquish a lien on a mortgaged property. They said the number of rescissions has grown in recent years as a result of the foreclosure crisis and allegations that mortgage documents were fabricated or processed improperly.
“Consumer groups and industry lawyers say a rule under consideration by the central bank would make it harder for borrowers to exercise their right of “rescission,” which forces a lender to relinquish a lien on a mortgaged property.”
Is the Fed planning to take over the legislative branch of government now?
Is the Fed planning to
take overimplement its Advise & Consent of the legislative branch of government-by-us now?“Is the Fed planning to take over the legislative branch of government now?”
Why not? The Banking Clan already owns us lock, stock and barrel.
If a power can be abused, it will be abused.
What? A law that favors the little guy over the big guy? Yeah, there’s gotta be something wrong with that. How can big business function properly if it can’t steamroll the little guy?
“When you refrain from raising someone’s taxes, you are not ‘giving’ them anything. Even if you were actually cutting their tax rate you would only be allowing them to keep more of what they have earned.”
~Thomas Sowell
Unfortunately, too many people are knuckleheads, parroting the “progressive’s” slogan that tax cuts are giveaways.
Tax cuts, without spending cuts, are the road to insolvancy.
Spending cuts are doom for the lower class, middle class, and elderly.
Tax cuts have lead us to the brink of disaster, and more tax cuts will be the shove that pushes us over the cliff.
We don’t need no stinkin’ economy, as long as the rich can keep getting richer. Afterall, money doesn’t exist to allow for a smooth functioning econmy… everyone knows money exists so that a select few individuals can toy with peoples lives and be the true masters of the universe.
Darrell,
When is the last time you got a job from a lower or middle class person?
We don’t have a revenue problem. We have a spending problem. Government needs to live within their means as they could tax us for everything we own and we would still have a deficit.
Lip
“When is the last time you got a job from a lower or middle class person?”
I assume you meant lower or middle income person. That aside, half my family is in plumbing and construction and they get most of their work from lower to middle income people. Many manufacturing jobs require that group to purchase what they make. It’s actually hard for me to envision many jobs that don’t require that group to be healthy.
I did! (From a middle class person). I work at a small start up founded by middle class people (who were laid of from their Corporate America jobs).
Those super rich people only seem interested in creating jobs in countries with slave wages. Tax cuts have given them zero incentive to create jobs in the USA (they could pay ZERO taxes and still offshore the jobs), and I doubt they’ll move to thoise countries where their low wage slaves toil. They like Europe and the USA much better.
“I doubt they’ll move to thoise countries where their low wage slaves toil.”
If I were king, they’d be required to move to those countries where they moved jobs, and barred from doing business in the US.
“When is the last time you got a job from a lower or middle class person?”
And who will need employees once all demand has totally dried up because all the money is in very few hands?
For 40 years we haven’t had to worry about whether customers had money, because customers had access to debt. No more.
Now customers have money becasue the government is giving it to them in the form of $1.5T a year deficits. That is temporary.
Eventually, we’re either going to have to get money into hands of customers, or there will be no customers, and then there will be no jobs.
Poor and middle class don’t create jobs, therefore, we don’t need to worry about them having money? Oh really? Because in the end, DEMAND creates jobs, and if the poor and middle classs ain’t gots no money, there will be no demand.
Let’s get all the money into the hands of the 1% richest Americans, and then imagine how great the economy will be!
Darrell, where’s your other brother Darrell.
ummm…250K of earned income a year in DC/San Fran/Manhattan and other places is NOT super rich.
When is the last time you got a job from a middle class person? The last time a middle class consumer created demand by buying something. That would 70% of the American economy. And I’m not even sure that includes necessities. [For example, I get my job from the large group of middle and lower income consumers who buy electricity.]
When is the last time you got a job from a middle class person?
In the last job that I had, bicycle seller and mechanic, the boss was from a poor/working class background. Born on a farm in Indiana where the doctor didn’t show up until several days after he was born.
His early-years poverty forced him to become quite handy. And that guy could fix anything. I learned a lot from him.
“If I were king, they’d be required to move to those countries where they moved jobs,”
Nice make the punishment fit the crime solution.
It’s good to be the king…
Lip
Low middle and upper middle income people are the vast majority of customers. So I’d say that plenty of us owe our jobs to them.
When our company hired our first employee, we had to offer a higher salary than I could pay myself. It wasn’t until we hit 10+ head count where I could finally pay myself more than any rank & file employee. The reality is the majority if new jobs is created by small businesses and few of them make over 250K taxable for the owners. This talk about only the rich creating jobs is pure delusion — egos gone wild.
“When is the last time you got a job from a lower or middle class person?”
Anyone who pays taxes provides for government worker jobs.
And anyone who is owed money in dollars pays dilution tribute for ‘upper class person’ bonus payments, through the magic of too-big-to-fail bailouts of systemically risky banks.
“When is the last time you got a blowjob from a lower or middle class person?”
Never, sir! And I resent the accusation!
Low income…”The Poor”……middle class…”The Rich”. These are all just words.
In my book, there are just two “types” of people-
Those that take out more than they put in are “Parasites.”
Those that put in more than they take out are “Producers.”
I think you meant “Suckers” not “Producers.” At least in this day and age it seems to be true.
Zeus Matuze,
Well… they’re not -just- ‘words’ but they’re certainly prone to abuse ( see above )
True, everyone needs electricity, carpets cleaned, dog groomed etc. but by and large, no (1) individual will make or break it.
Additionally, those that -became- employed by middle-class start-ups ( and more power to those good folk ) didn’t do so w/ an eye toward ‘becoming’ Lower Class!
Go ahead, plug the book! Please!
Having spent my entire adult life (except for several post-collegiate years as a ski bum) being “productive”, I am currently planning on joining the “parasites.”
Seems less stressful.
At several points in our lives, we will all be “parasites”.
And if we don’t match the tax cuts with massive spending cuts including heafty cuts to social security, Medicare/caid, and DoD, then we’ll bankrupt the nation.
And if we do make massive cuts to spending, the unemployment rate will skyrocket and we’ll be right back in recession heading to depression.
We can’t keep spending unless we start collecting more.
Obama should have made his deal for 18 months, not 2 years. Then the cuts could expire in midsummer 2012. Republicans are promising jobs, many many jobs; if only they could keep a little more of the money they earn and have “certainty,” they could hire people — cross their hearts and hope to die.
Then, when the rich use the money to buy their private islands instead of creating jobs, Obama could have had a few months in late summer to hammer and hammer… “You promised jobs, where are they…hmmm? In India? Oh, well, I guess I’ll just have to veto any bill that would make those cuts permanent…no more deals.” That alone would get him re-elected.
The Republicans held a gun to the head of the economy… They said, you give us tax cuts for the rich for another 2 years when we’ll hold all 3 houses, or we will kill the economy with tax increases for everyone and no more unemployment extensions.
Democrats refused to call.
Yeah, another $1 trillion in national debt!!!!
Is the gun the same one that was held to the head of the economy when Hank Paulson threatened society with “Armageddon” unless the banks immediately received $Trillions in FED/TARP funds with no strings attached? That gun doesn’t get fired very often. Who is it registered to: The Banksters or the Rich Politicians?
There is no tax cut bill up for consideration now, Darrel.
SPENDING causes deposits, not any tax cut.
Try to see reality at least once today, it will help your judgement.
As long as the tax package resulting in more spending, more money for constituents, there should not have been any question of it not passing.
The congress shot themselves in the head when they didn’t have a budget ready for October 1. It has gotten to the point where tehy are not expected to. Then commentators can say things like “lame duck legislating into the future” when what was really happening is that the congress suddenly remembered that they WERE supposed to have authority over Oct 1, 2010 to Sep 30, 2011 spending.
“Oh shit! We ARE in charge, but only for 10 more days! Run in circles, scream and shout!”
“Obama could have had a few months in late summer to hammer and hammer… “You promised jobs, where are they…hmmm? In India?”
Obama could have made that argument now. We’ve just had the worst decade of job creation since the 1930’s. We don’t need another 18 months or 2 years to know those tax rates are utterly ineffective as a means of job creation.
Obama did make the argument, but the Fox Dittoheads and the Tea-Partiers didn’t believe him (or hit the mute button), and the Republicans hadn’t really used the job creation as a talking point.
Now, there are scores of Republican congresscritters and pundits on videotape, saying quite clearly: “You can’t raise taxes in a recession! [clutch pearls] Pleeeeeze, cut our taxes and we’ll create jobs.” In 2012, if jobs are not forthcoming, the campaign ads will write themselves.
However, I think the economy will recover a bit as the housing works itself out, and Obama’s renewables programs kick in. This alone will create some jobs, which Repubs will immediately, incorrectly, and deliberately, attribute to the tax cut extension.
The same Repubs who successfully voted against ending tax breaks for offshoring jobs?
Those jobs?
ummm…250K of earned income a year cannot afford a private island.
(sorry to keep pointing out the obvious)
I don’t know where you guys shop, but there are plenty of islands under $250k.
http://www.privateislandsonline.com/sale-price-under-250K.htm
$69k
PIGEON ISLAND - CAYO PALOMA
1 - 5 Acre Lots Available. Could have lot configurations altered to suit. Remaining acreage to be occupied by current owners. If the island is sold in parcels the size and layout would still offer great privacy for all buyers.
All reasonable offers to purchase the whole Island ( 7.2 acres) will be considered. Property Highlights:
Unique - Protected Marina Type Bay. Valuable - Limited Quantity of Islands Worldwide. Solid - Mountainous Island of Rock. Inspiring - 360 Degree Views.
This is a rare and affordable opportunity to purchase a parcel (lot) on a mountainous island of rock surrounded by the waters of the Caribbean, agates, sea turtles, birdlife, and world-class fishing on one of the Caribbean Coasts last frontiers; where on the mainland across from the island is undeveloped white sand beach and vacant land as far as the eye can see. Having multiple ownerships on Pigeon Island would give the added benefit of increasing the security there. Each lot would be independently responsible for the installation of their water, septic, and electricity improvements.
As an offshore island and with the recorded wind measurement data, there exist excellent wind turbine/solar conditions for complete self sustainability and life without mosquitoes or white flies. There are several buildable sites and areas that could be made into buildable sites.
The island has its own protected bay, great vistas, and tons of beautiful rock for potential use in concrete construction. There are two fresh water wells and some concrete shoreline walling; otherwise this property is raw vacant land. In close proximity to the city of Bluefield’s (15 miles south of), but yet far enough away from the bulk of its muddy run-off waters (unless there has been substantial rainfall); Pigeon Island is truly a unique utopia with great value and potential.
Foreigners have the legal right to purchase property in Nicaragua (without Nicaraguan citizenship).
I am quite familiar with the DC area, and if you’re making $250K a year, you can afford a $4-5 K more a year in taxes. IMO, if you weren’t smart enough to know taxes would go up* and plan for it** then what are you doing making $250K a year?
————–
*Geez, cable “news” and Brian Williams have been talking about little else for the past month.
**This is one case where the Applebee’s Sacrifice can be effective. A few fewer SBUX, a new laptop every three years instead of every year, a few less pizzas for Junior in College, take your lunch a few days a week — or better yet, eat half portions and lose that weight — and you can find $4K very quickly.
How many years/decades until those islands are literally underwater???
Regardless of what you think is causing it, sea levels are rising.
The point isn’t buying the private island, but being able to live on it, which generally entails spending a LOT of money, without having a job.
Then, when the rich use the money to buy their private islands instead of creating jobs,
No when the rich start buying up state resources for pennies on the dollar as states are forced to liquidate, when they capture the tax payer via lease back options, toll roads, parking fees etc. When they continue to invest in China and slave labor countries instead of the US. When they continue to use their wealth to control out government thus taking an even larger slice of the economic pie, note that they are at record levels now.
The purchase of an island is the least of our problems.
Republicans might use the old Obama argument. We created or “saved” this many jobs from the tax cuts.
The month Obama took office, we lost 650K jobs and increasing… When the stimulus passed, we immeidalty began seeing large drops in job losses and within 6 months were under 150K jobs being lost per month.
Despite that data, those with a political dogma that Democrats are evil, were unable to see the data.
What data are the Republicans going to get? Instead of creating 30K jobs a month before the extension, we started creating 32K jobs a month???? That data will be less compelling that the drastic slowing in that rate of job loss after stimulus passed.
In fact, as stimulus ends, we’re likely to see jobs being lost again. We may see the 30K jobs a month created prior to the extension turn into 100K jobs a month being lost as stimulus ends.
Will the stimulus still not have created any jobs if those jobs go away as stimulus ends?
Let’s see, The Democrats control the house, senate and the Presidency. So it’s the Republicans that are writing and passing the legislation? And twisting Obama’s arm to pass it. Is that right?
I know you read the stories in the Media about how the Republicans are controlling everything, but they don’t take control of the HOUSE until next month…..and the Democrats are passing the bills with some support from the Rep’s and some defections from the Dem’s.
So. Please tell me how the Republicans are creating such chaos in Congress.
Thomas Sow-ill reasons with rich broad strokes don’t he?
“…you would only be allowing them to keep even more of what they have been allowed to earn as-decided-by-their-bored-of-directors.”
Hmmm… how much could you earn if you were born in Haiti? Well that amount is 100% from your blood sweat and tears. The difference between that and what you are earning now is from your good luck in being a citizen/resident of the U.S. To say that is solely yours is ignoring the fact you used the country’s infrastructure/laws/education/market/consumers/credit to earn your living.
If you don’t agree, you can try to prove your skills in Haiti or Liberia or someplace similar.
+10, Mossy! Ye olde Somalia argument. 100% capitalism.
And don’t forget the advantages you have if your parents had money. Better neighborhood, better schools, more connections, less stress.* This is the REAL reason the rich don’t like the estate tax. The Masters of the Universe know that their sons and daughters could never make it on their character alone. We pretend to be a meritocracy, but money will always talk.
———-
*There was even a study that found that a child’s IQ develops through early childhood. Stressed young kids are literally dumber.
I don’t get this fetish about wanting to hand more money to government. It’s not like the government does a good job of distributing it correctly. Do you seriously want to keep the theft/fraud/waste and these immoral wars to continue?
It’s not like the government does a good job of distributing it correctly.
Yeah, we just found that out with the tax deal, didn’t we? Hundreds of billions in tax breaks just to save $30 billion in unemployment. The only people who benfit are the very rich and the cable TV stations who suck up all that campaign donation money to run ads.
Tax cuts are fine, but only with corresponding spending cuts. Deficit spending just means taxes will be even higher down the road to pay principle and interest.
One reason I don’t have kids… they’re the ones that will be totally enslaved by the debt being run up now.
+1, Russ. Everyone wants to make this a black/white argument.
I think the cuts should NOT have been extended. But I also agree that it IS a SPENDING problem. So, reinstate those taxes for 10 years (or pick a number) while simultaneously slashing the budget for 10 years (or pick a number). THEN cut taxes for everybody.
I have to dial people back to when the cuts took place. How can you support huge tax cuts coupled with increased spending? And if tax cuts spur the economy so well (as we keep hearing), we wouldn’t have had the layoffs we did in ‘08-09. So, cut the crap (and the debt and deficit).
Why not extend the tax cuts AND make huge real spending cuts annualized to 10 percent per year until only those constitutional roles of government (provide defense, justice, and administration for defense and justice) are funded? Fund it all only with tariffs and a national lottery. Abolish all other taxes.
You can argue policy about the tax rate and what programs should be cut.
But the quote I was responding to implies taxes are never good. Only 0% is an acceptable rate because earnings always belong to an individual because they did it all by themselves.
(The reality of course is those who believe this most fervently usually have the most government welfare — eg, parasites/producers guy taking 1M in farm subsidies.)
I started a small business that created jobs for many others and now I pay a nice chunk of taxes. The difference is I *KNOW* I stood on the shoulders of others. There is no such thing as doing it alone.
The reason they don’t like the estate tax is that they know Wall Street is still in bubble territory. Any draining of money from Wall Street, and they bubble will deflate and they’ll all be broke.
It is a Ponzi. They need more money coming in than going out, and the estate tax drains money out.
country’s infrastructure/laws/education/market/consumers/credit
You sound like somehow we don’t pay for these services individually already. What you are asking for is double taxation.
Agreed. The problem is spending, and the less the gov’t gets from me the better.
I’m not rich and I still hate the concept of an estate tax. I have a family and I intend/hope to be able to save money during my lifetime to pass to my kids. That money has already been taxed once - why should it be taxed again simply b/c I didn’t spend it?
And these tax cuts are no longer ‘Bush tax cuts.’ His expire on 31 Dec - these belong to the new guy who signed NEW cuts into law. If he thought they were so terrible he could have ended them with some of his ‘change’ during the last two years when his party controlled Congress. The excuse train for Obama just doesn’t seem to end … two years and still running strong. Just like Gitmo.
Really? Can you show an itemized bill proving you’ve paid every cent you owe? Let’s go with an easy example.
How much do you owe for even posting on the internet? You’ve paid for your computer and internet service of course. But did you know the internet was *started* by the government? Google up DARPANET — without the government’s initial funding, the internet would be 2 decades behind what it is right now (according to the opinions of internet “founders”). Perhaps it might not even exist as why the hell would disparate businesses decide to hook their networks up?
So have you paid for this? The government borrowed money in the past to fund this and with the debt/deficit still growing, that money obvious has not been paid back yet.
Perhaps we should switch to the fee for service model you like so much then? Every time you use the internet for business or pleasure, you should pay a fee to the government.
You paid every cent you owed if you never evaded taxes.
Senate Dem leader drops nearly $1.3T spending bill
WASHINGTON (AP) - Democrats controlling the Senate have abandoned a 1,924-page catchall spending measure that’s laced with home state pet projects known as earmarks and that would have provided another $158 billion for military operations in Iraq and Afghanistan.
Nevada Democrat Harry Reid gave up on the nearly $1.3 trillion bill after several Republicans who had been thinking of voting for the bill pulled back their support.
GOP leader Mitch McConnell threw his weight against the bill in recent days, saying it was in his words “unbelievable” that Democrats would try to muscle through in just a few days legislation that usually takes months to debate.
that Democrats would try to muscle through in just a few days legislation that usually takes months to debate.
But it’s okay to muscle through a tax cut deal…
81-19 vote is not “muscled through”
Really, because I’m guessing that a lot of large wealthy campaign contributors called their congressman and let them know what would happen if they didn’t vote for the bill.
saying it was in his words “unbelievable” that Democrats would try to muscle through in just a few days legislation that usually takes months to debate
Looks like Mitch McConnell is about to vomit forth another GOP hairyball:
“tatatatatatata…tatatattttaaataaatatatat…tartartartarrrppp…TATA TARP“
Now Mitch back to what your kind Kitty Galore does best, lick your “TruePurity™” self clean again.
“Looks like Mitch McConnell is about to vomit forth another GOP hairyball:“tatatatatatata…tatatattttaaataaatatatat…tartartartarrrppp…TATA TARP
Let me get this straight. Republicans, angered by G. Bush becoming such a “progressive” president and passing massive new tax bills like no child left behind and free prescription drug coverage decided to VOTE OUT the Republican Stooges that went along with these programs.
So, since DEMOCRATS got control of BOTH HOUSES of Congress, and a large portion of Republicans voted against Tarp, it was a victory for the GOP????
Are you even sane? Republicans could pass NOTHING, without Democrats pushing the Bill. Democrats were in large favor of more spending and pushed this bill through.
Since Obama took office, his first act was STIMULUS SPENDING BILL, about twice the size as “TARP” and lots of other give-aways.
And yes, the Democrats had full control of both houses.
So, how is it the Republicans came up with this??
I suppose they pushed through ” free health care for everyone”, too.
GOP’ers like Cornyn and Thune larded it up with earmarks they said they needed to be able to vote for it, then said they couldn’t vote for it because of those earmarks. Clearly they still have no interest in a budget passing.
Clearly they still have no interest in a budget passing ??
But they will !!! They are headed home to eat, drink and sing Kum-by-ya for a few weeks….But, when they get back, the “ugly frog” will still be in the room but a little fatter with deficit ingestion…
Keep your eyes on the ball folks…Don’t be deeked by the head fakes….Tax reform cometh “Big Time”…There are going to be a lot of losers and very, very few winners if any, IMHO….
Cornyn really doesn’t want to bring the bacon home to Texas to punish Gov Perry.
In the Region | New Jersey
A ‘Shadow Inventory’ Dampens Winter Market
By ANTOINETTE MARTIN
Published: December 10, 2010
NEW statistics provide a glum holiday-time snapshot of the real estate market: shrunken sales pace, bloated inventory and a “shadow inventory” of foreclosed homes looming menacingly in the background.
Right now, according to one report, New Jersey has the largest shadow inventory in the country: 41 months’ worth of homes to sell — and they aren’t even on the market yet.
The foreclosure process is complete on these nearly 98,000 homes; a National Association of Realtors committee made the state-by-state count. But the banks or other lenders have not yet released them for sale.
http://www.nytimes.com/2010/12/12/realestate/12njzo.html -
Hehh hehh….. Wasn’t it just a few weeks ago that a report indicated that Maryland has some of the highest inventory in the US? NJ? MD? NY?
The controlled collapse is moving along nicely. Welcome the housing price collapse mid-atlantic and new englanders.
I suspect most of that Maryland inventory is condos. Condos have limited appeal, especially when the pretty young things start noticing their biological clocks. They will want SFH and will commute to get it.
From
A ‘Shadow Inventory’ Dampens Winter Market
Even among houses that have been vacated, Mr. Flagg said, very few sales have gone ahead for the last two months. Fannie Mae, Freddie Mac and lenders put a hold on them during the flurry of legal challenges nationwide to alleged “robo-signing” of foreclosure documents, and other malfeasance imputed to foreclosure officials.
Fannie and Freddie recently indicated that they would release the hold on most of the properties they own through foreclosure.
Mr. Flagg said that the shadow inventory would “explode” onto the market in the next few months and that he was making plans to add staff members to handle business when that happened.
I know it’s not officially counted in “shadow inventory,” but there are a lot of accidental landlord-owned properties that could be coming to market soon. Reason: Landlord burnout. Best way to cure it is to get rid of that headache-house (and its tenant problems) once and for all.
Wikileaks U.S. Embassy Cable
Monday, 17 March 2008, 18:27
C O N F I D E N T I A L LONDON 000797
SIPDIS
NOFORN
SIPDIS
EO 12958 DECL: 03/17/2018
TAGS ECON, EFIN, UK
SUBJECT: BANKING CRISIS NOW ONE OF SOLVENCY NOT LIQUIDITY
SAYS BANK OF ENGLAND GOVERNOR
Classified By: AMB RTUTTLE, reasons 1.4 (b) and (d)
1. Since last summer, the nature of the crisis in financial markets has changed. The problem is now not liquidity in the system but rather a question of systemic solvency, Bank of England (BOE) Governor Mervyn King said at a lunch meeting with Treasury Deputy Secretary Robert Kimmitt and Ambassador Tuttle. King said there are two imperatives. First to find ways for banks to avoid the stigma of selling unwanted paper at distressed prices or going to a central bank for assistance. Second to ensure there’s a coordinated effort to possibly recapitalize the global banking system. For the first imperative, King suggested developing a pooling and auction process to unblock the large volume of financial investments for which there is currently no market. For the second imperative, King suggested that the U.S., UK, Switzerland, and perhaps Japan might form a temporary new group to jointly develop an effort to bring together sources of capital to recapitalize all major banks.
Systemic Insolvency Is Now The Problem
END SUMMARY
2. King said that liquidity is necessary but not sufficient in the current market crisis because the global banking system is undercapitalized due to being over leveraged. He said it is hard to look at the big four UK banks (Royal Bank of Scotland, Barclays, HSBC, and Lloyds TSB) and not think they need more capital. A coordinated effort among central banks and finance ministers may be needed to develop a plan to recapitalize the banking system.
3. King said it is also imperative to find a way for banks to sell off unwanted illiquid securities, including mortgage backed securities, without resorting to sales at distressed valuations. He said sales at distressed values only serve to lower the floor to which banks must mark down their assets (mark to market), thereby forcing unwarranted additional write downs. He said we need to find an auction system where banks could move paper they want to sell without fear of stigma that the market views selling at a low price as a sign that a bank is in trouble. King said, however, he did not yet know how to structure such an auction and that further dialogue was needed. Kimmitt acknowledged the need to find ways to unblock these markets and said we should remain in touch bilaterally as well as in the G-7, the Financial Stability Forum, and the central banks.
A Possible Approach To Recapitalization
That wikileaks guy should get a bullet between the eyes. I refuse to read ANY of the national secrets he is revealing to our enemies.
What are the chances that Julianleaks has a digital Dutch cartoon that shows Osama-i-still-b-hidin’ with his head anatomically stuck someplace in an extreme military yoga position?
I think you got that wrong. He is exposing the secrets of our enemies, not to our enemies. You know, the people that send our sons and daugthers of to fight some ridiculous wars in far flung corners of the globe. The people that used the financial system to strip mine wealth from the American people. The people that are taking away our rights and freedoms with the “Patriot Act”. Those people are the enemy, got it?
The loyalty of the American sucker to the person fleecing him is awe inspiring.
Assange and Wikileaks need to make a decision:
Are they serve as Espionage Central and reveal “classified” national security info?
Or are they going to serve as Whistleblower Central and reveal “proprietary” business secrets?
IMO, the latter is OK, the former is not.
You have that right. The gov’t/State Department is used to dealing with embarassing leaks - it’s part of what they do. The banks on the other hand…
The NY Times is also revealing National Secrets. Should they be shut down? Should CNN also be shutdown?
Should we put Joe Lieberman in charge of shutting down business that deal with leakers?
Those things were kept secret for the benefit of those in power, not for the benefit of the American people. Assange’s efforts are heroic.
i tell people that if i trusted my government…i would not trust assange.
+1000 Michael.
No kidding! Besides, I think it’s common knowledge to most of the world that the Western nations are in deep doo doo - it’s not at all news to them.
We have to remember here that the people of other nations have had different experiences with “the West”. Many of them are better equipped to understand the shenannigans of the central bankers than most of our neighbors.
<>
I don’t care if it’s the truth, I ‘aint reading it. LA LA LA LA LA (fingers in ears).
Yeah, and after we shoot Assange between the eyes, lets get rid of public education entirely - don’t need no stinkin’ educashun - and then woohoo!! how ’bout getting rid of that pesky First Amendment??
“For the first imperative, King suggested developing a pooling and auction process to unblock the large volume of financial investments for which there is currently no market.”
Let the unfettered free market discover the equilibrium price, and the ‘missing markets’ will magically reappear. So long as the central bankers keep propping up prices to save fools from realizing their investment losses, liquidity will not happen.
They loaned money to people that can’t and won’t pay it back. It has always been an insolvancy problem.
But easing FASB157 to encourage everyone to lie about the value of the assets on their balace sheet sure worked wonders for the value of those assets…. until they actually default and then have to be disposed of for pennies on the dollar.
One person’s money is someone elses debt. I the debt doesn’t/isn’t getting repaid, the money needs to go away. Otherwise, we’re asking for mass inflation.
The problem is now not liquidity in the system but rather a question of systemic solvency…
Oh, for pete’s sake! Haven’t we been saying the same thing, out in the open space of the Internets, since Ben first started this blog back in 2004?
Yep…it was an insolvency problem all along. Odd that someone starting to understand that would still phrase it as though it was just now morphing from a liquidity problem to a solvency problem.
More recently than 2004, Martin Weiss called it an insolvency problem. Here’s a summary of his 2009 presentation at the National Press Club in Washington, DC:
Dangerous Unintended Consequences:
How Banking Bailouts, Buyouts and Nationalization
Can Only Prolong America’s Second Great Depression
and Weaken Any Subsequent Recovery
His white paper is well worth reading. Much of what he predicted has come to pass.
What changed since September 2009?
Singletary: Americans living on financial fault lines
Michelle Singletary
Posted: 12/15/2010 02:49:02 PM PST
Sometimes it helps to see the data that prove the uneven financial ground you’re standing on is occupied by a lot of other people as well.
So while the results of a study released this week by the Rockefeller Foundation aren’t surprising, the conclusions are nonetheless sobering. Americans have been shaken by economic tremors that have left them both deeply worried about their financial situation and suffering from the hardship, according to findings in “Standing on Shaky Ground: Americans’ Experiences with Economic Insecurity.”
One would expect people to have experienced economic hardship following the recession, but this report suggests how widespread the financial insecurity became. Here’s some of what people experienced:
From March 2008 to September 2009, 93 percent of households saw either a substantial decline in their wealth or earnings, or a huge increase in spending, most often for medical expenses or assistance to family members.
Twenty-three percent of households reported a drop of at least a quarter of their household income.
More than half of families with incomes between $60,000 and $100,000 who experienced a job loss or medical expenses said they were unable to meet at least one basic economic need.
The survey results also found that Americans weren’t adequately prepared for financial trouble. A little more than 29 percent reported that their household could go six months or longer without experiencing hardship if their earnings were to stop tomorrow. However, nearly half of households could go no longer than two months. One in five could last no more than two weeks
http://www.contracostatimes.com/ci_16867037?source=most_viewed - -
Quick, everyone to the “Healthy / Wealthy” corner of the chart!
I love the graphical illustrations, but after 200 years of fast-forwarding…having a minimal human population left resisding in the poverty / poor corner reminds me of the Bill Russell joke about statistics:
“My dad said he knew a 6′ 7″ man who drowned in 4″ of water”
http://singularityhub.com/2010/12/09/hans-rosling-shows-you-200-years-of-global-growth-in-4-minutes-video/
That was really neat….
Definitely neat. And interesting to think of global economics as a ‘non-zero sum game’ like he does.
A pdf of the report and a video presentation and panel discussion are available on the rockefellerfoundation(dot)org.
Interesting reading/viewing.
You know what we really need? More debt, another massive speculatve asset price bubble that makes a few people insanely rich and costs the masses their life savings, more job offshoring, larger trade deficits, an ever wider gap between the ubber rich and the serfs in the lower and middle classes..
What we really need to do is to keep doing what brought us to this point. We need more lies. We need to continue the smoke and mirrors economy, and kick the can of having to deal that our manufacturing base has been dismantled and shipped over seas.
Oh happy day. Another $1 trillion in debt will make all our problems go away…
I know, it feels hopeless. And then we get people who cheer on more of this insanity.
Of course it doesn’t help that the Dems are a bunch of spineless cowards. Why didn’t Obama use the bully pulpit when the GOP opposed ending tax credits for offshoring jobs?
Why didn’t Obama use the bully pulpit when the GOP opposed ending tax credits for offshoring jobs?
Because it’s more fun to watch 86 dominions fall than just x9, when is the next baptism dunking? Oh yeah,…2012
I think Obama doesn’t realize that he *has* a bully pulpit.
Matter of fact, he reminds me of people I’ve met in my own neighborhood/community organizing efforts. They come in with all sorts of ideas about bringing the neighborhood together, achieving consensus, and working as a unified group that improves things. You can almost hear “Kumbaya” playing in the background.
Well, I’m here to tell you that bringing neighborhoods together is all but impossible to achieve. Ditto for achieving consensus and working as a unified group.
Usually, neighborhoods are improved by a small group of cranky people who just don’t give up. You know the type. You’re playing your music too loud and they’re banging on your door, telling you to turn it down. Even at 3 a.m.
Or they go up and down the street picking up litter and glaring at the other people just sitting there and doing nothing to help. Or they’re calling 911 a dozen times a day until they get the cops to come out and do *something* about those gangbangers that have taken over a corner of the neighborhood park.
By contrast, the “Kumbaya” people tend to find the neighborhood too scary, and they move out at the first opportunity. Too bad, because if they had a porcupine spine, they’d be able to tough it out and enjoy the neighborhood after it improves.
I was in one of those neighborhood groups. We started it up, but the main players were longtime activists and as soon as that got that good govt or university job they were outta there. Group dissolved within a year. The real old timers didn’t want much to do with us, aside from the initial mass meeting.
I hear ya, In Montana! Here in Tucson, we’ve had a number of neighborhood/community activists who’ve taken jobs in the offices of various city council members.
But they don’t stay in these jobs for very long.
Why not? Because their lofty dreams of creating change at the city and societal level tend to run into the hard reality of of what a city council office job *really* is.
In a nutshell, it involves handling a lot of constituent service problems — potholes, street lights, sidewalks, that sort of thing. And, somehow, the activists just don’t feel inspired.
Because Obama = Bush= Clinton= Reagan
The Dems had an opportunity to force the vote on the tax break before the election. This would have pointed out that they wanted to push a bill with tax breaks for the middle and upper middle class and the GOP wanted to push them for elite bankers. What better platform to run on. Dems chose not to do this because they wanted an excuse for handing large tax breaks to the elite. The GOP also wants to increase debt and spending and bail out the elite. Just look at their record, but now with the compromise they can say we had to do it to save the economy.
Maybe they did, but they don’t control MSM do they?
All most people know is what MSM tells them. And MSM in this country is owned by just 6 corporations.
+1 - but then they couldn’t blame the Repubs for everything
I feel your frustration, Darrell. Nothing we can really do but watch in horror.
“…another massive speculatve asset price bubble”
there is a bubble in u.s. treasuries.
Wrong.
A bubble is not any overpriced asset. A bubble is when people are buying overpriced assets becuase they beleive a greater fool will come along to pay more.
People were buying treasuries, not becuase they thought they’d make money in them. They were buying treasuries because they believe they are more likely to lose more money elsewhere.
Return of equity, not return on equity does not a bubble make.
A bubble is a Keynesian beauty contest, aided, abetted and exacerbated by easy money.
thank goodness there is no easy money in treasuries right now.
‘A bubble is when’
I gave up on that a while ago. Everything is a bubble, everything is a bailout, it’s a great time to buy. Oh, and bankers are evil!
The population votes people in, who promise a Buick in every driveway and a chicken in every pot.
The population refuses to vote in people who say, “If you vote me in, I’m going to vote for spending cuts and tax increases. Your standard of living may well decline, and unemployment will probably go up in the short run. But - after a few years, we can return to honest sustainable growth.”
The people keep voting for people who offer easy answers with no costs.
Now it’s up to the House of Representatives
The U.S. Senate yesterday passed the tax package that will save millions of Americans thousands of dollars in higher taxes for the next two years. In addition, it extends payments to the unemployed and reduces FICA taxes. It also insures the continuation of immense budget deficits - another exercise in “kicking the can down the road.” The House took up the measure today but delayed a.vote on the controversial bill.
With one eye on Washington the other gazes toward Brussels and the tension-filled meeting concerning the European debt crisis. (We’ve held all along that heavy debt leads to trouble…for nations as well as individuals.)
European leaders must also deal with German Chancellor Angela Merkel’s unwillingness to consider measures that may require additional German funds. Other members of the EUuropean Union are becoming anxious.
What would YOU do if you were Angela Merkel?.
You’re a day late. House passed it and sent it to Obama at midnight D.C. time last night.
CNN dot com. Has a story on it today. Interesting quote:
“A number of conservatives, including likely 2012 GOP presidential candidate Mitt Romney, were challenging the deal because it doesn’t permanently extend the Bush-era tax cuts and would add to the deficit.”
Romney wants the deal to be permanent, but then he doesn’t want the deal because it would add to the deficit?
Yes, well, Romney is the genius that gave us the foundation of the healthcare bill, which is hopefully on life support. People unfairly call it “Obamacare”, but it is really “Romneycare”.
Romney’s angling for a presidential run. A dream that hopefully will be destroyed.
“Romneycare”
It’s the orphaned baby that Mitt left sitting on the Democrats’ doorstep.
A dream that hopefully will be destroyed.
In 1966, Romney left for France for 30 months as a Mormon missionary, a traditional duty that his father and other relatives had done before him. He arrived in Le Havre with ideas about how to change the French Mission and better market their presence; he approached his duties with zeal, while facing physical and economic deprivation for the first time in his life in the mission’s cramped quarters. Rules against drinking, smoking, and dating were strictly enforced. Like most Mormon missionaries, he failed to gain many converts, with the nominally Catholic but secular, wine-loving French people proving especially resistant.
He became demoralized, and later recalled it as the only time in his life when… “most of what I was trying to do was rejected.”
Yes, well, Romney is the genius that gave us the foundation of the healthcare bill, which is hopefully on life support. People unfairly call it “Obamacare”, but it is really “Romneycare”.
Indeed it is on life support. And, in the most recent election, the voters of Massachusetts approved a single payer initiative. The vote was almost 2-1 in favor.
If Romney had gone to Vietnam he would have found out what demoralizing really was.
But, then again I am sure the jungles were quite spacious.
Romney’s father DID go to Vietnam, where he was famously “brainwashed”.
I guess what he wanted was perminant tax cuts for the rich and expiration of the tax cuts for the pesky middle class.
The middle class doesn’t create speculative bubbles or make huge donations to politicians. Therefore, we need to get the money out of their hands and into the hands of the masters.
You know, most Mormons I’ve met, regardless of their political views, were at least thoughtful internally consistent people.
This guy is like a used car salesman, and unlike Ronald Reagan, he can’t claim he doesn’t know any better.
There are several famous historical figures who were “thoughtfully internally consistent.” I am going to stop there.
carter?
“Romney wants the deal to be permanent, but then he doesn’t want the deal because it would add to the deficit?”
He’s practicing up on his propaganda skills, in case by some chance he ever makes it into the WH.
Obama could still veto it!
It would be hilarious for Obama to propose the compromise then veto it. I know they had a veto proof senate vote, but I’m not positive about the house. I know it passed by a lot, but I don’t think it was veto proof.
“What would YOU do if you were Angela Merkel?”
I’d probably pretend to oppose bailouts but secretly support them, knowing how many German banks would lose money if PIIGS were not bailed out.
what romney wants is to remove the now here, 10 year sunset on the current tax rates. he doesn’t count not raising those taxes as adding to the deficit.
he does count the few hundred billion of additional spending in the bill as adding to the deficit.
he wants the current tax rates permanent without having to increase spending to get the deal.
Luckily for the hapless unemployed, Romney is not the President.
This tax package as a jobs stimulus is a political fantasy based on false assumptions and lies. It will do NOTHING to create jobs. Same old sh!t, different day.
1. Hey Bill, how are you liking Tampa? IIRC you are single and enjoy dating. If so, you are probably really enjoying Tampa. My wife’s parents recently divorced, and her dad is, uh, well, really, really enjoying living in Tampa. So basically every week we have to act surprised and happy to meet whomever he’s dragged home. We have a, “you can’t hold our kids” policy with those ladies. Anyway, if you like to get outdoors, I strongly recommend kayaking Weeki Wachee river in Hernando county. There is nothing else like it.
2. After the holidays I interview for a risky job that will basically double my salary. I still haven’t decided if I am going to take it, but I figure there is no harm is going all the way to an offer. I’ve passed 2/3 interviews. I’m waiting to see how our Gov. elect is going to “reform” education before I decide.
3. A friend of mine is having some serious relationship and money problems related to housing. I feel sorry for him, but I also don’t. This stuff is so easy to see — pain and failure are great teachers.
4. I asked the magic 8 ball, “Is our future iPads and farming?” The 8-Ball’s response: Absolutely!
It SNOWED in Sarasota thursday morning!
“3. A friend of mine is having some serious relationship and money problems related to housing. I feel sorry for him, but I also don’t. This stuff is so easy to see — pain and failure are great teachers.”
-I think all of us know this guy and have similar feelings.
And are related to them.
Or, to a minor extent, ARE them.
Your 8ball is faulty. Clearly our future is financial innovation (inventing new ways to loan money to people that can’t pay it back) and retail….
Article on AZCentral this morning about how the AZ economy is turning around because retial hired a lot of temp holiday workers and other businesses added a lot of temp labor.
“(inventing new ways to loan money to people that can’t pay it back)”
Oh, do you mean people who spend every cent they can lay their hand on? Are those the people you are talking about?
You seem to infer that people have no choice in their decisions to spend money that they don’t have.
Recent history has taught us that that there are tens of millions of Americans that will borrow against every cent of equity that they happen to come across and will then take this borrowed money and fritter it away on useless junk.
And these tens of millions of Americans who find themselves in financial disarray have convinced themselves that none of it is their fault.
So whose fault is it? The lender who knows he’ll get a bail out when the loans default or the borrower who knows he won’t be paying the loan back? They sound like two sides of the same coin to me.
and thank goodness they do. They are the only thing keeping our economy going. Their willingness to borrow back the trade deifict… and peoples’ willingness to lend them money, is the engine that makes the economy go.
Combo, I respect you greatly, but I disagree here. Personal circumstance. Back when I was stuck in the declining Northeast, slugging it out with the other 250,000 middle managers who got rightsized in the 90s, buying groceries on credit was not off the table (so to speak).
When the cookie crumbles it’s a structural event, divisions are dissolved, the numbers are such that landing on a sustainable remnant is a crapshoot. I consider myself fortunate to have gotten out of Dodge.
Article on AZCentral this morning about how the AZ economy is turning around because retial hired a lot of temp holiday workers and other businesses added a lot of temp labor.
Yup, that’s Arizona economic development for you. If it doesn’t involve worship at the altar of finance/insurance/real estate, there’s always retail.
4. I asked the magic 8 ball, “Is our future iPads and farming?” The 8-Ball’s response: Absolutely!
Farm land prices = +58% increase in the last 8 years
ipad/iphone = 2 Billion $$$$$$$$$$ Mfg income for China…sold in US of A
http://memegenerator.net/Foghorn-Leghorn/ImageMacro/887752/Foghorn-Leghorn-boy-i-say-boy-I-think-yer-on-to-something.jpg
The Dept. of Education and the public schools are getting their azzes kicked by “The School of Hard Knocks.”
European Indexes Slip After Downgrade of Ireland
By REUTERS
Published: December 17, 2010
Indexes declined on Friday after Moody’s downgraded Ireland’s rating by five notches, showing just how uneasy the market remained even as European officials seek a solution that would bring stability.
Moody’s Investors Service slashed Ireland’s credit rating to Baa1 from Aa2 and warned further downgrades could follow if Dublin was unable to stabilize its debt situation. The downgrade followed one last week by another agency, Fitch. Standard & Poor’s still has Ireland rated as A, the top band, but on review for a possible downgrade.
The ratings agency also put Greece’s credit rating on review for a possible downgrade.
…
http://www.chicagobusiness.com/article/20101211/ISSUE01/312119977/crains-investigation-unpaid-wages-a-growing-problem-for-chicago-area-workers#ixzz18NJitq8r
Researchers at the University of Illinois at Chicago released in April the
results of a landmark survey of 1,140 low-wage workers in Cook County.
Based onthe survey, UIC estimates that almost half the county’s approximately 310,000
low-wage workers had experienced a pay-related violation in the previous week.
Worker advocates call these violations “wage theft,” a broad term encompassing practices like skirting minimum wage or overtime, forcing employees to work off the clock or not paying workers at all.
Worker advocates call these violations “wage theft,” a broad term encompassing practices like skirting minimum wage or overtime, forcing employees to work off the clock or not paying workers at all.
Where are those annoying unions when you need them?
Unfortunately, all a union can do is go on strike. And going on strike means going to China. It’s no accident that the only real union left is the Service Employees. And the gov workers — because the US government is one of the last employers out that who hasn’t exported work. (although, with more emphasis on contracting, some of that work is probably at least partially exported.)
The IRS outsourced some its tax return processing to… India.
Th military buys its uniforms from… China.
There is a very long list of the government offshoring our jobs.
U.K. Consumer Confidence Declines to 20-Month Low as Budget Squeeze Looms
U.K. consumer confidence fell to a 20-month low in November as the looming government budget squeeze dented Britons’ outlook for 2011, Nationwide Building Society said. Photographer: Chris Ratcliffe/Bloomberg
U.K. consumer confidence fell to a 20-month low in November as the looming government budget squeeze dented Britons’ outlook for 2011, Nationwide Building Society said.
The index of sentiment slipped 7 points from October to 45, the lowest since March 2009, the customer-owned lender said in an e-mailed report today. The gauge has now fallen for three consecutive months. The measure of consumers’ future expectations fell 9 points to 61, also a 20-month low.
We had about 20 potential customers in Europe that we were submitting RFPs(Request for Proposal) for. In the last 6 months, all have been cancelled.
I thought the customer issued the RFP. Anyway, very telling detail there.
As though the will of the rich had nothing to do with the tax bill’s passage…
Dec. 17, 2010, 7:19 a.m. EST
What the new tax bill means for you
There’s a little something for everyone — even the rich
By Jennifer Waters, MarketWatch
CHICAGO (MarketWatch) — The new tax bill now on its way to President Obama for his signature will save every American from a number of tax hikes that would have begun Jan. 1 and will add more than a year of benefits for those who are long-term unemployed.
But there are plenty of other tax perks in the bill, most of which extend breaks already in place. Here’s a rundown:
…
There’s a little something for our kids in there, too. Ballooning debt!
No worries, if there is a problem we’ll just transfer an azz load of bucks from The Bernake.
(Reuters) - The head of the International Monetary Fund said on Thursday he was worried that EU leaders’ piecemeal approach to Europe’s debt crisis was encouraging markets to pick off weak countries one by one.
Dominique Strauss-Kahn appeared to endorse the idea of common euro bonds, saying they could be a useful tool, but added the political will to give power to the center of Europe was the main hurdle to their creation.
“I am worried, and that’s why I am urging the Europeans … to provide a comprehensive solution because this piecemeal approach … obviously doesn’t work,” Strauss-Kahn told Reuters. “The markets are just waiting for what’s next.”
Nigeria drops bribery charges against former US VP Cheney, others after settlement
LAGOS, Nigeria (AP) — A spokesman for Nigeria’s antigraft body says they have dropped charges against former U.S. Vice President Dick Cheney and his former company Halliburton.
Economic and Financial Crimes Commission spokesman Femi Babafemi says the charges against Cheney and other executives of Halliburton and its former subsidiary KBR were dropped Friday after a plea-bargain deal was reached. Officials did not describe the settlement.
Authorities said the charges stemmed from a case involving as much as $180 million allegedly paid in bribes to Nigerian officials from 1995 to 2004.
Cheney was named as he led the company during a period when the bribes were allegedly paid.
I wonder who Cheney had to bribe to get the charges dropped?
Bribery? He probably sent Joe Pesci to have a “discussion.”
Drop the Cheney. Take the cannoli.
Audit the Federal Reserve Corpooration!
Buy GOLD! Buy GOLD! Buy GOLD!
Buy Silver! Buy Silver! Buy Silver!
Mars Attacks! Mars Attacks! Mars Attacks!
Filed under: “Stop-the-planet-I-wanna-get-off!”
http://www.boston.com/news/globe/west/WileE.jpg
December 17, 2010, 8:57 am
‘Prudent Vigilence’ Sought On Synthetic Life
By ANDREW C. REVKIN
“…including a comic book, exploring the implications of this field:
As I’ve written many times before, the planet, on many levels, is increasingly what humans choose to make of it. And the results — for better or worse — will be shaped by a mix of values and technology.
The work that is under way in artificial biology is essentially inevitable given the human thirst to press the frontiers of understanding and technological possibility.
The challenge, particularly because corporate interests are involved, is to sustain sufficient transparency and peer and public review that the odds of unintended consequences are kept as low as possible.
Anyone want to guess where this end? Or how many jobs will be gained or saved?
A Rate Which Lives In Infamy (USA Will soon have the world’s highest corporate tax rate)
Investor’s Business Daily | 12/17/2010
Fiscal Policy: President Calvin Coolidge famously said that the chief business of the American people is business. Now it seems that the chief business of Congress is to make sure American businesses are taxed at a punitive rate.
Earlier this week, Japan quietly announced it was cutting its corporate tax rate by 5 percentage points next year. That will leave the U.S., where the average combined federal and state corporate rate is 40%, with the highest rate in the developed world
I believe that it has already been documented on this blog that large corporations do not pay the “rack rate” and that many pay no income tax at all, courtesy of custom tailored loopholes in the tax code (which their bought and paid for congresscritters provided).
umm - yeah.
Internation corporations (like even liberal “do no evil” Google) avoid high tax counties like America legally.
They do so by keeping their revenue and earnings outside America in lower tax rate countries.
These countries then get the benefit of that capital for investments, hiring, etc.
Kinda like workers and small business owners leaving California. Texas sure likes it.
They can do that on revenue they generate from sales overseas, or with production that is based overseas and exported back home (that has been cracked down on somewhat).
But a lot of that income is still generate here in the goold old US of A and is still taxable here, and yet many corps pay no income tax thanks to the many, many loopholes and credits that exist in the tax code and which were created just for them.
And even if there was no income tax at all, why would that be an incentive to invest at home? They could invest overseas and just report all their global income as US income.
August 2008 report by the Government Accountability Office (GAO), “Statutory tax rates do not provide a complete measure of the burden that a tax system imposes on business income because many other aspects of the system, such as exemptions, deferrals, tax credits, and other forms of incentives, also determine the amount of tax a business ultimately pays on its income.” Indeed, World Bank and GAO data indicate that the U.S. effective corporate tax rate is lower than 35 percent and lower than several developed — including some European — economies.
In its August 2008 report, the GAO estimated that “[t]he average U.S. effective tax rate on the domestic income of large corporations with positive domestic income in 2004 was an estimated 25.2 percent.”
Of course this does not include the money they earn but call foreing earnings. This is how Google and Exxon get away with paying no corporate taxes. Thus the total effective rate is much lower than 25%.
Now look at the effective tax rate after most of the profits are cycled through loopholes.
2008, latest year I could find, personal income taxes were 45% of federal tax revenue, payroll tax another 36%. Corporate taxes were only 12% of total tax revenue.
This means we could get rid of the corporate income tax, and it would be half as much money as the tax cut that Obama is about to sign.
It would cause mass unemployment amongst accountants though.
2008 is probably not the fairest year to use to point out how small corporate income taxes are. it was the year of the great recession after all.
(Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.
The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.
More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.
During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.
Higher Ed’s P/E ratio looks like Nevada housing circa 2007.
This is gonna end. As predicted by the HBB people.
———————-
The Coming College Education Bubble Forbes | 12/17/2010 | Jerry Boyer
The overwhelming cultural consensus of the post-WWII generation was that if you are middle-class, then you simply must own your own home and your children must go to college. Out of that cultural consensus emerged a complex system of tax breaks and special lending deals designed to make sure that the number of Americans who bought houses and bachelor’s degrees was as high as possible–or maybe more so.
Many people now understand that this system of tax-and-lend has created a multigenerational housing bubble. But only a few have noticed that a very similar tax-and-lend system has also created a multi-generational higher education bubble.
…
Voilá, our P/E is 100. Is that a good deal? Not really. Even if one argues that the difference, the College E, grows over time, so what? So do stock earnings. If you think that the E grows quickly over time, then you can think of a degree as a growth stock and compare a 100 P/E to that. It still doesn’t look very attractive.
And let’s keep something very important in mind: A college education contains a risk factor that no stock or bond does: zero liquidity. For good or for ill, you’re stuck with it. You can sell a security back to the market, but you can’t sell your degree back. Every college in the country hangs out the same invisible sign: No Refunds.
The “solution:” U.S. colleges will be occupied by wealthy foreign students, as Americans will no longer be able to afford them.
Wealthy families are likely to turn up their noses as American schools. More likely, the Chinese government will send their poor but semi-smart kids on scholarship.
And yes, there are “no refunds” on college ed. Nor is the debt dischargable in bankruptcy.
UC Berkeley is increasing admission quota for foreign and out of state students since they pay more. The losers are Californians, who built the school and is still paying for its operation.
I’m not that far out of college, and I’m flabbergasted by how expensive it has gotten.
We already half way to six figures saved up for our 2 kids (oldest is 2) set aside in a college account, and we’re not sure it will be enough.
We already half way to six figures saved up for our 2 kids (oldest is 2) set aside in a college account, and we’re not sure it will be enough.
It will be enough - for one year.
better to just be an electrician and spend a few years wander the world after high school. college is really f’n fun, but no guarantee of a career these days.
Go to the article and check out Raymeica Kelly. She can’t afford heat in Georgia, but can afford a big-screen television (bigger than mine), an X-Box, and cable.
————————
Funding cuts leave many without home heating assistance in Macon Macon.com | Dec 16, 2010
Showing her Georgia Power bills in the one warm room of her home, Raymeica Kelly explains how her mother, sister and herself were turned away from the Energy Assistance Program on Wednesday morning after standing in line for four hours. All three complained that the system the Macon-Bibb County Economic Opportunity Council uses to give out the assistance needs improving.
http://www.macon.com/2010/12/16/1379464/funding-cuts-leave-many-without.html
Should read
Funding cuts leave many without assistance to power flat screens and X-Box in Macon
Please.
Last I heard, you didn’t have to sell every last one of your household possesions to get aid/unemployment. In fact, you won’t need any assistance if you are living in a cardboard box under an overpass.
If you are cheerleading for the total meltdown of the USA, so you can buy stuff at the “Going out of Business” sale for pennies on the dollar, just say so. Anyone with that worldview is no different than the Banksters, IMO.
Just admit it, and quit wrapping it up in this Puritanical cloak by saying stuff like “They deserve what’s coming to them” and “We’ve got to let the system fail to fix it”
What a joke. None of the banksters are going to jail, or even lose their bonuses over this fiasco. But as usual Joe/Jane/Juan6Pack are going to get to fix it.
My unemployed sister doesn’t qualify for food stamps in Florida because she and her husband pay rent in the form of a mortgage payment to a bank every month, therefore they “own” a home. But if they choose to default on their mortgage (because they’re probably underwater on said mortgage and used homes are a dime a dozen anyway) and rent a house somewhere for the same price, they would qualify for food stamps. Total BS.
“Last I heard, you didn’t have to sell every last one of your household possesions to get aid/unemployment.”
Sorry, X-GS, I gotta say that I do find it offensive to see someone complaining about not getting home-heating assistance when they clearly have felt free to buy whatever toys they wanted in the recent past. I wouldn’t mind having those toys, but I don’t allow them to myself, because I’d prefer to have reserves against being laid off—ya know, so I could keep paying the rent, keep putting food on the table, and not have to go begging.
What ever happened to saving for a rainy day? This country used to respect people for having the sense not to eat their sees-corn.
BTW, comparing this to unemployment is a poor comparison to begin with. UI is _insurance_, and you only qualify if you had a job that was above the table and paid in. Home-heating assistance is not.
I think it is reasonable to hope that people are not abusing the system (e.g. buying toys and then complaining of having no money for heat).
“or even lose their bonuses over this fiasco”
I heard that the Bear Sterns bonuses are going to be double the amount of last year’s ….
Government has got to stop cutting checks and start handing out actual stuff. The poor shouldn’t starve, freeze, or bleed to death, but they shouldn’t be comfortable either.
That’s why I like donating to places like “Second Harvest” foodbank. The poor get stuff, not credit cards.
Salvation Army is one of the best…
Camper resident facing eviction plans move
http://www.wishtv.com/dpp/news/local/north_central/camper-resident-facing-eviction-plans-move
they want those extorsion fees for permits.So much for freedom?
Freedom is not free. It is costly to rebel against the states minions and voting clearly does not work(for the non-state people). The cost of freedom is simply too high for Americans.
Leaving the USA for one that is more tolerant of property rights would be a great way to go.
Rebelling against state’s minions? Try rebelling against the rich.
And you won’t find a state more tolerant of property rights than the USA. Try keeping your property in any other country. In Europe they will take your property in the form of taxes, in Somaila/Haiti/third world robbers will take your actual property with no authorities to help you, and the rest of the countries will generally take your freedom.
oxide,
Are you pretending not to have read the article I just presented?
In INDIANA a man is being thrown off property that he owns and pays taxes on. Last I checked Indiana is part of the USA and clearly is not respecting any property rights in this case whatsoever.
Do you also believe that the USA is still the bestest?
If so then America will continue to worsen until all wealth has been completely taken by the state.
Americans have no idea what real confiscatory taxation is.
Americans have no idea what real confiscatory taxation is ??
But we may soon find out….
Lint,
They are not taking his land. He is violating zoning laws, so they have forced the sell of the land. He’ll get the procedes from the sell, which he can then use to go buy some land in a location with looser zoning laws.
Property rights does not give you the right to violate zoning laws on that land.
Yes, I read it. But what if this same man lived in another country? In Europe they would have probably taken the land somehow. In the lawless countries, the lawless would have taken the land at gunpoint. In other countries (middle east?) they would have pegged him for sedition and taken the land anyway. I guess they really don’t want to just leave people alone.
btw, the article states that tinyhouseblog is following the story too. I like the tiny house movement. They like to live in houses that are 200-300 sq ft or so. Turns out that a building that small is not legally considered a house, and so cannot occupy land by itself as a dwelling (something like that). So the tiny house folk build the tiny houses as travel trailers and live on a friend’s land. As for me, I calculated that one needs at least 500 sq ft to fit in the appliances. But there are some very cute 300 sq ft homes.
So now you are going to be forced to living in a non-mobile mobile home where you rent space, an overpriced apartment where you’re stuck with a lease, or a depreciating home? What’s wrong with living in your rv? That was my next plan, as it fits in with bill of Tampa’s mobile worker m.o., and with HBBers’ “don’t catch a falling knife” warnings.
True story from up the street:
About a decade ago, a young lass graduated from the University of Arizona. And, since she had a job in Tucson and wanted to stay here, she bought a house a couple blocks away from the Arizona Slim Ranch.
She married her beau a short time later, and they went into home renovation mode. To put it politely, their place needed a lot of work. Which they did a great job on.
Now, you’ve probably gathered from my stories that I’m sort of a neighborhood busybody. As in, if I see or hear something that isn’t up to snuff, I say something, do something, whatever needs to happen.
Well, compared to this couple, I’m a real slacker. I once had a conversation with the young lass while she was pulling Bermuda grass away from her curb — and everyone else’s on her block. She just didn’t like the place getting overrun with B-grass, which is considered to be an invasive species here.
Any-hoo, she got a job in another city, and she and her husband sold at the top of the market in the summer of 2005. They went to the other city, the job wasn’t to her liking, so she quit.
They had enough money left over from the house sale to finance an extended RV tour of America. They had the time of their lives, took great pictures, and then grew tired of the road.
They’re back in Tucson, fixing up another house, and, sotto voce, I heard that they were living in the RV while they were ripping out the interior of the house. Place was that rundown. But, if history is our guide, they’ll do a wonderful job of fixing the place up.
Nothing is wrong with living in your RV, as long as you follow local zoning laws and regualtions. For better or worse, many cities and counties aren’t going to let you live in substandard conditions, without water or heat. And they aren’t going to let you dump untreated sewage into a hole in the ground unless you are truely in the wilderness.
living in an RV sounds kinda fun, just get a great gym membership with it some where on the coast.
It’s crazy busybody gubmint stuff like this that makes me sympathize with libertarians.
Seriously. From the picture, I don’t see that he’s dumping raw sewage or anything around the property. He’s on 30 some acres, so he’s not impacting ANYBODY living in a trailer.
But he is breaking the rules and must be punished so say all the obedient American slaves.
Revealed is the fact that one cannot own property in America.
Ownership is held by the state exclusively.
Only an owner can kick a man off land for (pick a reason).
Well I know it’s Friday and all but I’m really upset. I wanted to make another batch of homemade yogurt but I was out of milk. There are many brands of milk in Brazil but the one I like to use for yogurt is the Godam brand of milk. http://www.godam.com.br.
So I get up this morning and look in the pantry and noticed I was out of the Godam milk and that made me mad. So I put a food list together in my mind and went to the supermarket to get the Godam milk, and I started seeing all this different kind of stuff you see in Brazilian supermarkets like salted codfish, and salted pigs feet. Today I even saw salted pig’s ears I think but I didn’t really want to take the time to ask if they were pigs ears so I didn’t, but I got distracted thinking about it and I bought some stuff and came home.
Well now as I’m putting my groceries away, I’ve just discovered that I forgot to buy the Godam milk!
Well now as I’m putting my groceries away, I’ve just discovered that I forgot to buy the Godam milk!
A big joke with the kids is when we visit or drive by an actual dam we say:
There is the dam parking lot. And there are the dam trees. And where are the dam bathrooms? Is that a dam truck?
The wife does not think it is so funny.
The Denver Art Museum couldn’t resist either: “D.A.M. That’s good art!”
(one of my favorite museums.)
That is awesome.
salted codfish ??
Got to love them por-tow-gee’s…:)
This is a MUST WATCH. May have already been posted here on HBB, but here is a short clip from C-Span, 11/22/10
Of course, WE all know this already - but still, seeing it spelled out in a congressional hearing is satisfying.
Senator from CO admits that it would be impossible and foolish for the gov’t. to prop up all the underwater housing and asks why the banks don’t just get their acts together so everyone can “get on with their lives”.
Professor from Georgetown University explains that the banks are stretching out the foreclosure periods so as to not recognize losses.
and here’s the money shot:
If the 4 largest banks (BofA, Chase, Wells, and Citi) “started writing off all their 2nd lien mortgages, they would have no capital left, THEY WOULD BE INSOLVENT”
end quote.
My links never come through, but go here:
youtube.com
/watch?v=EjTZOekaQlE
There were a couple houses across the street from me taken by the banks. One was purchased mid-bubble for about $200K but the mortgage was only for $170K. The banks took it and sold it for $130K.
Another house that was taken had set the high water mark for the neighborhood at $270K with a $0 down piggyback for the full amount. It has been sitting empty, no sign, not listed on MLS… just sitting empty. Someone comes around every few months and sprays the weeds. This house is a tad smaller, and lacks the pool that the $130K house sold for, so would probably have a hard time selling for more than $100K, maybe $110K.
It seems they are willing to eat a $40K loss, but not a $160K loss.
Professor from Georgetown University explains that the banks are stretching out the foreclosure periods so as to not recognize losses.
He’s not the only prof who’s saying this. The famed 1980s S&L cleaner-upper William K. Black is saying the same thing.
extend and pretend.Bunch of phony books out there right now.
Just the second mortgages? What about the first mortgages?
All the more reason I’m glad I’m with a small bank. I pay $5 a month for a checking account, and it’s worth it.
“What about the first mortgages?”
My thought as well. I recognize there are some mighty big seconds, but how many mortgages are of the 85:15 financed variety?
Well, in theory the seconds are gone 100% in that scenario. The firsts should have SOME return. If you have an 80-20 on a house that lost 30% of the value, you’ve got a larger loss on the second than the first. On a 125k house, the second loses 25k (total wipeout) and the first loses 12.5k (assuming no transactions costs, which is bull.)
It’s still grim, since if the seconds would wipe the banks out, the firsts probably would to. And let’s not think about the firsts AND seconds taking full losses all at once.
How does this tax cut make the american worker more price competative on a global wage market?
Does this tax cut make it possible for businesses and households to return to growing debt at 3x the sustainable rate as they’ve been doing for the last 40 years?
Does this tax cut measure plug the massive trade deficit that drains money from our economy?
All this tax cut deal does is generate another $1 trillion in debt. What do we do when interest rates skyrocket as investors begin to lose faith in the dollar?
Is this good for business in CA, really?
http://www.azcentral.com/arizonarepublic/news/articles/2010/12/17/20101217calfornia-greenhouse1217.html
Does this tax cut measure plug the massive trade deficit that drains money from our economy?
All this tax cut deal does is generate another $1 trillion in debt. What do we do when interest rates skyrocket as investors begin to lose faith in the dollar?
The dollar looses value, thus making American labor more competetive. The middle class becomes poorer and thus they purchase less from China. The elite become wealthier and gain even greater control over gov, eventually gutting environmental labor and safety regulation. We start to look more and more like China. What was formerly considered poverty in the US will be the new middle class.
“All this tax cut deal does is generate another $1 trillion in debt. What do we do when interest rates skyrocket as investors begin to lose faith in the dollar?”
Fire up the printing presses and brace ourselves for hyperinflation.
Silver is the answer to inflation.
That, and farmland, according to this guy:
http://www.stansberryresearch.com/pro/1011PSIEND49/PPSILC32/PR
To find the answers:
Well, a one-year subscription, including everything I mentioned here, normally costs $99 per year – that’s what many others have paid.
But right now, you can try my research, for HALF-OFF the normal rate. You’ll pay just $49.50 for an entire year.
The answer is to start your own research subscription and charge proles for access! That IS a good answer!
Yep, instead of making money on your great idea, make money on giving people “access” to that great idea. Where have we seen that recently?…
Unemployment rates rise in Palm Beach County, Treasure Coast
By Jeff Ostrowski Palm Beach Post Staff Writer
Posted: 10:44 a.m. Friday, Dec. 17, 2010
So much for a holiday hiring spree. Unemployment traditionally falls in November as employers go on a pre-Christmas hiring binge, but jobless rates spiked last month in Palm Beach, Martin and St. Lucie counties.
Palm Beach County unemployment rose to 12.3 percent in November from 11.7 percent in October, the Florida Agency for Workforce Innovation said this morning. The spike was caused by the combination of more people were seeking work and fewer people working.
Martin County’s jobless rate jumped to 12.5 percent from 11.7 percent, while St. Lucie County unemployment climbed to 15.2 percent from 14.8 percent.
The county figures are not seasonally adjusted. Florida’s seasonally adjusted unemployment rate rose to 12 percent from 11.9 percent, well above the national unemployment rate of 9.8 percent.
More than 1.1 million Floridians were seeking work in November.
1 million in Florida. That’s the size of a city.
50 million are out of work. That’s the size of.. 50 cities.
This is how we’re losing it. Not by individuals, but by the population of entire cities.
Unemployment climbs in 21 states
NEW YORK (CNNMoney.com) — The unemployment rate in 21 states and the District of Columbia rose last month, according to a government report out Friday, signaling the persistent joblessness that has plagued the recovery.
The Labor Department’s monthly report also showed that 15 states posted lower unemployment rates in November. Unemployment remained unchanged in 14 states.
AZ is one of the states where unemployemnt fell, because of retail hiring for Christmas. So… we’ll be taking the hit in January.
“Comment by michael
ummm…250K of earned income a year in DC/San Fran/Manhattan and other places is NOT super rich.”
Then the cost of living in those areas is going to have to come down. $250K is the top 2% of wage earners. If that isn’t a confortable living in some areas, then it is a cost problem, not a wage problem.
Exactly. And at that income level, nobody wants to hear any whining about how poor you are.
Because that’s all it is. Whining.
For big Wall Street trading firms “dumb money” is a significant source of profit. What’s “dumb money”? That’d be you!
http://news.yahoo.com/s/nm/20101217/ts_nm/us_markets_dumb_money
yep.retail investor always on the wrong side of the trade.When they are buying the smart money is selling. Isn’t insider selling at very high levels right now?
If you read thearticle, it isn’t about dumb money being on the wrong side of the trade. It is just small orders that aren’t big enough to move markets.
Let’s say you want to sell 100 shares of BoA. You send a small sell order to ETrade. Before sending the sell order to NYSE, they send it to a wholesaler. The wholeseller sees the highest buy is 45.20 and lowest sell is 45.22. They agree to buy from you for 45.201. So instead of you getting $4520, you get $4520.10 - $9.99 fee. Instead of them paying $4522+NYSE fees, they pay $4520.10 + $1 to Etrade. ETrade, instead of sending a portion of your $9.99 to the NYSE, they get to keep your full $9.99+ the $1 the whole seller paid them.
Everybody comes out ahead, except the NYSE… oh, and we “lose real price discovery” as fewer of the orders actually trade on the public market.
To me, this article really seemed like fear mongering… Ohs no… the more trades that happen off market, the less marekt data we get to drive market price. I don’t see it as an issue since the wholesellers have to check the market and pay a higher price or sell for lower. All trade haveto between market buy and sell, otherwise, they are rejected by the wholeseller and end up at the market anyway. We’re talking fractions of a penny here.
when retail gets in wall street licks it’s chops.Retail has sucker written all over them regardless of what article says..
I’m not saying you are wrong. I just said that isn’t what this article is about.
Man you have to have some brass balls to be long in this market imo. I’m not sure the FED can keep this market levitating for much longer.I don’t care how many times cnbc wheels out cramer.
I’m looking at QID and SRS.There could be some money to be made there.
In the Town Where I Live:
According to Zillow’s Real Estate Market Reports for October 2010, Mesa home values were down 2.5% compared to September 2010 and down 17.9% compared to October 2009.
Howzzat for a green shoot???
Sounds more like a brown squirt to me.
I’m in Glendale, across town. This city is at $109K, down 1% from from the prior month, down 12% from last year, and down 58% from May 2006.
We purchased in 2003 pre-bubble for $140K. Comps put us at about $120K now.
” Comment by Xiaoding
There is no tax cut bill up for consideration now, Darrel.
SPENDING causes deposits, not any tax cut.
Try to see reality at least once today, it will help your judgement.”
1) Don’t be an Azz. You’ll get no where with insults.
2) Bull. The bill passed by congress and sent to the president just SS tax by 2% for a year. Sure, they call it a “contribution”, but if you don’t pay it you go to jail, so I call that a tax.
AND, taxes will be lower Jan 1 because of this bill, than they would have been if it does not become law. That is another tax cut.
3) Spending causes deposits? What? I’ll assume you mean deficits.
Okay, let’s cut 50% from defense, 30% from SS and MC, and 20% from everything else to balance the budget without tax increases… add another 5% to unemployment, riots in the streets, more old and poor people dieing from treatable disease, more defaults and foreclosures, return to full collaspe mode….
Tell me, how well is the economy going to function when 100% of the wealth is held by the top 1% instead of just 90% owned by the top 10%?
We need to stop thinking about traxes and money philosophically, and as if nothing effected your income except you. We need to start thinking about money pragmatically, how it is really debt, how it needs to keep moving for the economy to function, and if how if no one has any, there will be no demand to make the economy function.
Money doesn’t exist so a select few billionaires can toy with peoples’ lives as if they are puppets. Money exists to allow the economy to function, and to fulfill that purpose, it can’t be pooled all into the hands of a select few people. It needs to keep moving.
I’m not sure why rich people are getting more tax cuts?The fed is already pumping up their portfolios with funny money so whats the deal here?I can see cuts for the middle class but this giveaway seems a bit ridiculous as the US govt is 14 trillion in the whole.
We can’t drain the funny money back out? How are they supposed to inflate a new bubble if the government drains any of the air out. You can’t pay real taxes with fake profit…
The fed is bubbleicous. They have no clue how to fix this economy for the middle class. Everytime sh@t hits the fan they create another asset bubble so the rich get richer.Wall street has one hand on bernake’s nutsack and the other on obama’s.
I think the reason they have no clue how to fix this for the middle class is because there is no way to fix this for the middle class.
In 1970s we faced the Kobayashi Maru scenario. Cheap global wages threatening our standard of living. We decided to cheat by using debt to increase our standard of living despite loss of middle class jobs.
It worked fine until we maxxed out debt, hit 0% interest rates, and were forced to tighten lending standards to reduce fraud.
Now we are using government as the borrower of last resort to avoid reality for just a little londer.
Soon we’ll be forced to face the no win scenario.
“Bank Trek II; Wrath of J6P”
“Prayer……the Banksters don’t take prisoners.”
“What you are looking at is the only Bankster to win the no-win scenario”
“I fudged the numbers in order to make the IBs appear solvent”
“You cheated”
“I distorted the facts to make it looks like us Banksters are blameless….”
“I’m laughing at the “Superior Intellect”…….”
darrell …agree with your above post 100% . The Politicians should only be giving tax breaks to Billionaires and Corporations if they prove they created a job in America ,otherwise their words are empty that giving
these tax breaks are for the benefit of job creation . Again ,the Politicians are not requiring proof of actual intent and arguments from the Fat Cat so-called job creators .
The Congress Critters made this same mistake when they gave bail outs
to the Banks /Investment Houses /Middle Men without making requirements .
It’s just real simple …you get a tax break if your benefit the USA job and tax base and create the circulation of money that actually creates jobs .
One of the reasons the Great Depression was so ugly was the lack of circulation of money .
Currently Corporations are simply taking advantage of the employees and potential USA workers by using this cheap foreign labor in which
the Politicians don’t charge a penalty for moving our cash flow out of this Country . Other Countries protect their jobs .
They are not going to create jobs. They are just going to create another price bubble.
Exactly.
Also, the details of ending the tax breaks for offshoring jobs included transferring those tax breaks to ONSHORE businesses who hired.
But the Repubs shot it down.
Ask yourself, why would they do that?
Another good question to ask is why are the Repubs hellbent on turning this nation into a criminal nation? Patriot Act 1 & 2. DMCA. Der Fatherland Dept of Security. Sending jobs offshore, thereby forcing more people to turn to the underground economy if not outright crime?
Why are they doing this? Why are they trying to turn us all into criminals AND destroy opportunity for the average person?
“Okay, let’s cut 50% from defense, 30% from SS and MC, and 20% from everything else to balance the budget without tax increases… add another 5% to unemployment, riots in the streets, more old and poor people dieing from treatable disease, more defaults and foreclosures, return to full collaspe mode….”
Straw man much?
Although the bill has some tax cuts in it, as well as tax increases, everyone knows only liars are going around saying “TAX CUTS”!
Your dodge does not work. The bill was actually a tax HIKE, an INCREASE, that Obama had to cave in on at the last moment, due to those evil beings, the American People, using their sinister WILL ray.
“AND, taxes will be lower Jan 1 because of this bill, than they would have been if it does not become law. That is another tax cut.”
Again, not true, the death tax is re-instated, which is an increase. SS goes down a tad…but the argument could be made that that is not a tax!
Tax cuts do not cause deficits, SPENDING causes deficits. Denials of reality do not change reality. Try to climb out of your tub once a day, really, their is a whole world of truth out there, that you can’t even imagine.
“Again, not true, the death tax is re-instated, which is an increase.”
I do not believe that is true. The death tax reprieve was slated to expire, so the death tax was being re-instated with or without this bill. Since it is being re-instated at a lower rate (35% over $5M, vs the older 55% over $1M), it is a tax CUT.
Not in his reality free world, it isn’t.
One last time and then my patience is at an end with you.
The tax cuts were TEMPORARY and set to automatically EXPIRE. This was created by the a Repub administration.
They did not vote to increase taxes, they voted on whether or not to EXTEND the TEMPORARY tax cuts.
Dictionary. Find one. Use it.
Reality is kicking in fast for the buyer of that auction house a few days ago (bought for 176, put on market for 240 the next week). Well they just came down from 240 to 220, the same price it was listed before it went to auction.
It didn’t sell at 220 before, let’s wait and see what happens THIS time! Because you know they just did *sooooo much* to improve it in 3 weeks…
Rusty,
where is this again? Most of the guys I know who’ve been doing this awhile are only buying at 40-50% of ARV. And they are calculating ARV to be .90 of market value (market value being actual value of comps in the area of the subject house) Don’t know the comps on the place you describe, but if its $200k that means they’d LIST it, at best, for $180k and BUY it for, at best, $72k-90k. Ouch.
BTW, if it isn’t clear, the reason for .90 x market value stems from wanting to have a list price that is 10% less than other houses on the market…
220 x 7% (for the cost of the sale) = 15.5
That leave 204.5
Minus cost of the place leave about 28.5
Minus one month carrying costs and any minor “improvements” leaves about 20
They have $20k of “wiggle” room (or a $200,000 sale price) before thet lose money (or walk away).
In today’s market - a HUGE gamble.
banana,
Not to mention that few but the choicest places have 1 month time on market.
But the bigger issue is that most lenders now require seasoning of the title for 90 days (don’t know if that is a requirement based on location or just in general) before they’ll agree to touch it, due to all the cases of fraud in the past few years. So, in most cases you have to figure 3 months of carrying costs…at a minimum.
tax cut passed. That’ll unleash a new wave of buyers with pent-up demand. Heck, there might even be a bidding war..
Gosh, no, no tax cut passed. Perhaps you are referring to that other bill, which keeps tax rates the same. That one passed.
sorry, i meant tax cut EXTENSION passed.
The avg 2k the middle class will be getting isn’t even enough for a down payment on a new car these days.
I have been on Jury Duty so I haven’t been posting lately .You wouldn’t believe how many people wanted to get out of Jury Duty based on financial hardship because their Corporation/Employer wouldn’t pay for their time away . In the past a lot of Corporations would pay for Jury Duty time away at the employees normal wages ,but now they are expecting the employee to carry the burden . That leaves the stand -by Government workers that are
covered and seem to end up with a lot of jury service .
One lady said her car just wasn’t going to make it that many days to Court .
Anyway ,you could tell that people where concerned about being away from work for any amount of time .Anyway ,this is another example of
how Employers could care less about any kind of duty to the American system,contrary to the attitudes of prior decades .
I’d better not get called for a trial involving bank robbery. They might find it hard to get a conviction.
The job of the employer is too employ, not be anyone’s mommy.
Also, not to pay for time away. What about the INDIVIDUALS responsibility?
In any event write your congressman!
I have every sympathy, for people who can’t afford jury duty. The courts are a disgrace, they should be torched and started again from scratch.
Experts say its a great time to buy stocks:
http://www.usatoday.com/money/perfi/stocks/2010-12-16-usa-today-investment-roundtable_N.htm
What does it take to be an expert on the economy?
“What does it take to be an expert on the economy?”
A pulse.
The difference is a employee might go broke if they were on a long trial and a Big Corporation would most likely be able to contribute to this need for law and order ,which Corporations as well as employees benefit from .Corporations probably benefit even more than individuals regarding a law and order Society.
By the way ,I believe that the financial hardship excuses were valid
and the Judge dismissed those people .
I’m just saying if you try to divorce yourself from all functions of Society as a Corporations with only having the objective of profit making you are missing the boat on the function of the healthy
survival of the entire Beehive . If your customers are starving and
underpaid ,and the street are crime infected ,you are going to lose
more in the long run as a Corporation .But of course the emerging idea is that Corporations will sell to emerging markets in this new Global game after they have had a field day in the USA for years .
Up yours, I got mine.
Don’t know where you live Housing Wizard, but in my city, companies stopped paying for jury duty decades ago.
And that $34 the court pays a day barely covers parking now.
Mall shooting suspect is Army veteran; served in Afghanistan
Friends say the man lived with his wife in Springfield and served multiple tours overseas
By Jack Moran
The Register-Guard
Published: Friday, Dec 17, 2010 06:00AM
A former Army soldier shot by police after he allegedly fired several gunshots in a crowded Valley River Center parking lot on Wednesday clung to life Thursday at a Springfield hospital, officials said.
I never have and never will support US troops.
Excerpt from an interview with Salvatore Giunta, the first living Medal of Honor recipient since Vietnam:
Interviewer: Tell me about the moment you got the call from the president?
Giunta: President Obama called me on September 9, 2010, and notified me that he had approved the Medal of Honor for my actions on October 25, 2007, in the Korengal Valley. My heart was just pounding. I don’t even remember what I said, but there was a Mr. President in there.
Interviewer: It’s quite a story. The guy who listened to a recruiting jingle while mopping floors in a Subway sandwich shop is talking to the President.
Giunta: I’m just another American dude. I’m nothing special, trust me.
http://www.vanityfair.com/online/daily/2010/11/medal-of-honor-winner-salvatore-giunta-on-bravery-brotherhood-and-the-korengal.html
There’s a wide range of soldiers, from the craven, to the criminal, to the selfless to heroic. Many are doing difficult, dangerous, dirty work in the support of what they believe is the national interest. It’s a complex view. I err on the side of safety and support “The American Soldier”. When they find a rotten one, I also support prosecuting that one to the fullest extent of the law. There is a tendency of some to romanticize them, there is a tendency of some to caricaturize them.
Video of the Interview with SSG Giunta:
http://restrepothemovie.com/
The military has forced many of their soldiers to not only serve multiple tours, but longer than normal tours as well.
They are treating Iraq and Afghanistan as if it were WW3.
Heres to hoping these two suits are the tip of Megabank, Inc’s legal liability iceberg.
Two states sue Bank of America on mortgage servicing
By Dan Levine
SAN FRANCISCO | Fri Dec 17, 2010 5:32pm EST
SAN FRANCISCO (Reuters) - The states of Arizona and Nevada sued Bank of America Corp on Friday, accusing the largest U.S. bank of routinely misleading consumers about home loan modifications.
The two lawsuits, filed by each state attorney general in Arizona and Nevada state courts, seek potentially massive fines against the bank and compensation for customers.
Arizona accuses Bank of America of violating a 2009 consent judgment in which it committed to widespread home loan modifications. The bank failed to follow through, leaving borrowers in limbo, according to the suit.
The bank is also accused of violating the state’s consumer fraud act.
Arizona is seeking $25,000 per violation of the consent decree, and up to $10,000 for consumer fraud breaches. Both states also ask that Bank of America pay restitution to customers.
The lawsuits could complicate Bank of America’s efforts to quickly resolve inquiries into its mortgage foreclosure practices. The probes include a 50-state investigation that is also looking at JPMorgan Chase & Co, Ally Financial and other major mortgage servicers.
…
this circus continues.
Does this mean that Bank of Amerika and their cronies in Finance will still be able to borrow ZERO RATE money from the Fed, lend it out at 18% on Credit Cards and stuff every agreement with massive fees for services?
If so, to cover the cost of these lawsuits, I can probably expect $50 late fee (up from $29) charges on $14 purchases, increase in rates to 40%, as i believe the rate on late charges now approaches 35%.
Yes, all that free government (taxpayer) money to keep the Banks from collapsing and still we get less than 1% in interest and charges that exceed all the annual interest in a single fee for late or overdrawn or teller charges, or ATM charges, or fees for a statement, fees to review you statement, fees to confirm they haven’t stolen all your money, fees to re-instate your credit, after they misplaced your records, incomplete address, or mis-spelled business name, or any damned excuse you can find to charge you money. I’m expecting charges for receipts really soon.
And to boot, we will see the biggest bonuses every imagined skimmed off by these leeches for shuffling around paper and making bad bets. It’s enough to make you flippin’ mad.
The Secret Plan To Fix The Dollar
03:15 pm
December 17, 2010
There’s a global currency war brewing, and the U.S. thinks China isn’t playing fair. But, so far, the U.S. hasn’t been able to do much to change China’s currency policy.
It didn’t used to be this way. It used to be that the U.S. could convince the world to follow its lead on currency issues. It used to be that one U.S. official could get a few people in a room, and they could change the course of the global economy.
That’s basically what happened on September 22nd, 1985. It was a secret plan. And the U.S. official responsible for the secret meeting was David Mulford, undersecretary for international affairs at the U.S. Treasury.
Here was the problem Mulford was trying to solve: Japan was growing fast. Really fast. They were selling all sorts of things to the rest of the world that the U.S. used to sell. The U.S. was upset about this. (To apply to this story to today, just replace “Japan” with “China.”)
Mulford went to four other rich countries and said the world needed to find a way to let Japan grow, but not so fast, and not in a way that hurt everybody else. And everyone — even Japan — agreed to get together and make a plan.
Mulford says he thought the plan would work, on one condition:
On September 22nd, 1985, finance ministers from the US, Germany, Japan, the UK and France sat around a big wooden table at the Plaza Hotel in New York, overlooking Central Park.
Here’s what they decided: They would sell a lot of dollars, out of the blue, all at once. This would lower the value of the dollar, strengthen the Japanese yen, and make American exports cheaper.
And it would have an immediate effect. Gary Dorsch was working as a trader for a firm on the Chicago Mercantile Exchange. He, like traders all over the world, remembers that night well:
The plan worked. In fact, it worked too well. The dollar fell, and fell some more. In two years, the dollar fell around 40% from its peak.
…
A Dying Investment Banker Makes Best Of Odds
by NPR Staff
December 17, 2010
The big question in Gordon Murray’s life is about knowing the odds and making the best of them.
After a long career on Wall Street, Murray co-authored a slim, smart book of investment advice for people on Main Street: The Investment Answer. In it, he advises investors to be passive: It’s not about making the killer investment that beats the market; it’s about buying wisely into the market and taking advantage of its inherent strengths.
Murray, who was diagnosed with a malignant brain tumor two years ago, is also facing the odds in his personal life. When he was diagnosed, Murray underwent surgery. He had a recurrence of the cancer this year — and six months ago, he was told he has six months to live.
In talking with NPR’s Robert Siegel, Murray is full of realism and even humor. He says now people want to hear what he has to say.
“We hit a chord with people — there’s something about ‘dying banker’ [that] probably most people think is a good thing,” he says.
…
I don’t have any problem with bankers per se. It’s the crooks at Goldman Suchs, Citigroup, JPMorgan, Bank of Amerika, and Wells Far-to-go, that stole our money via the FEDERAL RESERVE illegal acts of money printing and have ladled themselves mult-billions of dollars for gambling their Companies into bankruptcy.
You should remember, also, that Goldman, was not even a bank prior to the “crisis”. It was a stock brokerage firm. They were given special permission under Paulson and Co. to become a “bank holding company” so they could ladle up the TARP and the various other “lending programs”.
Then, when the Financial Reform Bill was passed, limiting company pay, so long as they owed the borrowed money, they borrowed more, paid off the “TARP” loans and BEN BERNANKE went and BOUGHT their bad assets and put then on the Taxpayer. He can Constitutionally buy up “government debt” based on the FED Act.
He cannot buy private loans. He broke the law. He should be tried and imprisoned.
It won’t happen because they control the government because they can have the Treasury print up some more money.
I sold my house in July 2009. Zillow says it lost $120k since then. Does that make me feel good? Yes sir!